Torts (Levmore 1998-99)

If A kicks B, A pays

Vossburg v. Putney – pussy knee

Ex delicto, actual damages, apply (eggshell, thin-skull) – you pay for what you cause

Alternate possible rules:

  • Typical or average damages
  • Actual with upper limit of average
  • Restitution (disgorge the benefit you received from your bad behavior)
  • Mars rule: disgorgement + 10% (so that it is always better to not do the bad thing) – could create a trust fund system too

Deterrence

  • Actual damages functions as best deterrent, all other rules under-deter (or over)

Restitution for unambiguous benefit provided

Not usually allowed, except for emergency situations:

  • No recovery:
  • I run around the parking lot and install airbags in everyone’s car
  • Barry v. Barbour – house sitting case – must allow for greatest degree of choice, must step into shoes of person being aided
  • Recovery:
  • Fire-extinguisher case
  • Leebov—guy with dump trucks saves insurance claim
  • Mohr v. Williams – doctor gave benefit to plaintiff while engaging in battery
  • Brown v. Kendall—one guy breaks up dogfight and hits plaintiff – no recovery because defendant was providing a benefit

Negligence vs. Strict Liability

Courvosier—no recovery for cop when guy shot him in self-defense – only wrongdoers pay – negligence

  • To show negligence we have to show an UNTAKEN PRECAUTION -- Cooley v. Public Service Co.—no recovery for plaintiff because no such untaken precaution was shown

Vincent—boat tied on to dock against dock-owner’s will and damaged it – recovery – causers pay – strict liability

THE RULE DOES NOT MATTER for how parties will behave:

  • Boat of price B is to dock at dock of price D
  • If B>D then boat will dock (negligence rule – no recovery------strict liability – recovery)
  • If B<D then boat will not dock (negligence rule – recovery------strict liability recovery)

General average contribution – admiralty rule

Negligence is our default rule because we like to make wrongdoers pay

The Coase Theorem – people will bargain around the rule

Golf v. 84 Lumber

Bolton v. Stone—cricket case, woman and cricket team could bargain around the rule if they so wished

  • A ruling for either side will not result in a change in behavior because if they can both bargain then either party can pay the other to do what is the cheapest option for them both

In a crowded world – it takes two to tort

Factors that make such bargaining difficult:

  • Multiple parties (creates holdout problems)
  • Communication problems

The Offer-Asking Problem: occurs when a party will pay one price for a right and would sell it only at a different price – wealth, or initial endowments affects the outcome of any bargaining

The rule is unlikely to matter if offer-asking differentials are small

Rylands List – Strict Liability

Win-win (both sides, as a class, want this result)

  • Vincent—boat owners want there to be docks, dock owners want money when their docks are damaged
  • Government taking corn—government wants there to still be corn to take, farmers want money for corn the government takes
  • If the government did not have to pay for the corn they took then we would have an allocation problem (people would get the government to take for free and then transfer property to the more politically influential)
  • CalTex – Government does not pay for factory in Manilla that was about to be taken by the enemy – this is a good example of incremental liability
  • Straying/grazing cattle – cattle-owner wants the neighbor to not put up a fence, neighbor wants to be compensated for cattle eating his grass

Information-forcing rule (Hadley v. Baxendale) – evidence problem, either it is destroyed or exclusively in the possession of the “wrongdoing” party – we cannot deter wrongdoers if we cannot prove they were bad

  • Olde fires
  • Blasters
  • Innkeepers (theft)
  • Common carriers for freight
  • Madsen (in the negative) – no recovery for owner of minxes for their peculiarbehavior (that owner should have known about, but defendants did not) when blasters blasted
  • Kingston – fires that join with suspicious fires
  • Rylands – guy owns mine and causes water to flow under plaintiff’s house – recovery on strict liability

Res Ipsa Loquitur (the thing speaks for itself, plaintiff wins 99% of the time because event could not have happened really without the defendant being negligent)

  • Res ipsa always involves personal injury – we fear the moral hazard created by allowing it in property cases
  • Wild animals goring someone
  • Pfaffenbach—driver on the wrong side of the road
  • Byrne v. Boadle—barrel flying out of window
  • Colmenares Vivas—elevator lurching – we must have confidence that the probability of injury is a lot greater with negligence than without
  • Levmore’s take on res ipsa is: if the defendant could have done something to increase our information in this situation…
  • Rodeo case – he could have issued tickets
  • Gearhart Industries – they could have kept the X-rays
  • Ybarra—something happened during operation and doctors and nurses have all the information, because patient was unconscious

Vicarious Liability

  • Employers are strictly liable for the negligence of their employees as well as for intentional torts committed by employees if the employer is directly negligent.
  • Generally not liable for intentional torts by employees – exception when the relationship is military, because they have more control:
  • Bushey—Coast Guard liable for servicemember breaking dock when he was drunk
  • “Guam” case – similar facts, guy bought alcohol and torted somebody off-base
  • Independent contractor exception – not liable for the tort of an independent contractor unless it is “hazardous activity” = hazardous activity that affects your neighbor.
  • Hardy—doctor not independent contractor for purpose of vicarious liabilty when hospital held themselves out as offering emergency services which he provided

Workers’ Compensation

Wealth Redistribution Effects With Strict Liability

  • If water company is strictly liable to homeowners for damage, rich guy has house worth 4 and poor guy has house worth 1, but their usage is about the same. Rich guy and poor guy won’t insure, but this saves the rich guy more than it saves the poor guy, whereas their recoveries are the same – it redistributes wealth from poor to rich

Behaviorialism vs. Moral Intuitionism

Custom

The T.J. Hooper

  • Defendant tug-owner did not equip his tug with a radio – in the business it was customary to not have such equipment
  • Court holds that custom is no defense to a gross violation of Carroll Towing
  • Mayhew – mine shaft case, custom no defense to anti-CT behavior

Custom is a valid defense when:

  • Communication, the plaintiff knew what they were getting into
  • Choice, they could have, and did, make a selection
  • Component, the thing in question is a major part of the choice

A custom defense is really a statement that markets work

Internal standards violations as clue to negligence– custom used as a sword rather than shield. If plaintiff makes a market choice based on extra safety measures (especially if they are advertised) then defendant should be held to that standard.

  • Even better to use average industry standards
  • Lucy Webb Hayes National Training School v. Petit – hospital not liable for suicide of patient even though their own codes were violated – if codes had been used by all hospitals different result

Doctors (Brune, Canterbury)

  • Seem like they could go on the Rylands list for information-forcing problems.
  • BUT, pre-existing conditions make strict liability impossible (you were dying when you came in, and low and behold, you died)…SO
  • Custom defense allowed, but we add the extra communication requirement of informed consent

Updating Custom – Retroactive Law

  • Trimarco v. Klein—shower door case – should landlord have upgraded the glass in all of the doors
  • Generally speaking we do not allow retroactive criminal law, but we do allow retroactive civil law
  • Pro retroactivity:
  • Operates like an information forcing rule – innovators should put safety measures in sooner rather than later
  • Makes lobbying against new regulations unprofitable – you will pay in the end anyway
  • Anti retroactivity:
  • Manufacturers could keep innovation secret

Statutes

Why have fines and tort liability?

  • Fine-tuning
  • Compensatory-system – we like victims to be compensated
  • Regulations cannot cover everything

Statutes can provide a short-cut to a negligence determination (evidence thereof, but not proof, unless the legislature says so) – Osborne is the cite for this proposition

  • Brown v. Shyne—medical licensing statute provides shortcut to negligence determination when random licensed doctor would have been better than the unlicensed doctor you got

Purpose of Statute/Enforceability

  • Gorris v. Scott—sheep case, crowding of sheep on boat violates Contagious Disease Act, but we don’t need that to show negligence, as if the sheep get disease we will know pretty easily – legislative purpose fulfilled without recovery for negligence
  • Ross v. Hartman – liability for leaving car unlocked and thief took it – most cases go the other way
  • cf. Stimpson v. Wellington Service Corp. – truck is too heavy under statute, and damages roads and pipes – statute was designed to protect roads, but not the pipes – recovery here because the violation is not easily detectable and such recovery fulfills the legislative purpose of the statute
  • Vesley v. Sager—remote vendor liability for drunk driving, statute is not self-enforcing
  • This was later overruled by statute.

Democratic Answer/Alternative/Defense/Argument

Bolton v. Stone—the government put the road there next to the cricket ground

911—no recovery by victim if 911 doesn’t answer your call – because otherwise there would be no 911

ConEd—don’t want judges to make little decisions

Blyth v. .Birmingham Water Works—city had contracted with defendant to provide services, work done by statute

Fontainebleau—city had allowed addition to hotel to begin by approving it

Tacos For North Korean Toddlers

People Who Live Near Airport v. Airport—public nusiance

Hammontree—epileptic seizure case, he had a drivers’ license and the state knew he was an epileptic

Multiple Tortfeasors

Generally – no recovery where plaintiff could do more information-gathering to finger the right guy

Smith v. Rapid Transit – plaintiff was hit by a blue bus, A has 80% of the buses, B has 20% -- damages = $100

  • Possible Rules
  • No recovery – “naked statistical evidence alone is insufficient to support a legal action” ERROR = $100
  • Preponderance of the evidence – A pays $100. ERROR = (0.8)($0) + (0.2)($100+$100) = $40
  • Probabilistic – A pays $80, B pays $20. ERROR = (0.8)($20+$20) + (0.2)($80+$80) = $64
  • Partly Probabilistic – A pays $80. ERROR = (0.8)($20) + (0.2)($80 + $100) = $52
  • The P.O.E. rule is the error minimizing rule in most cases.

Summers v. Tice—two guys shoot a third, we don’t know which one’s bullet shot the eye out – joint and several liability

  • All rules end up with the same error!
  • Tie-breaker: The fact that both defendants were negligent leads us to choose the probabilistic rule or full recovery from one – this is joint and several liabilty
  • Same facts, three shooters:
  • No recovery & (p.o.e.) – ERROR $100 (full damages)
  • Probabilistic – ERROR = $66+$33+$33 = $132
  • No recovery is the error-minimizing rule here!

Sindell – DES case, many makers of the drug, all negligent

  • This is a repeating case. Say it happens 100 times on 100 days ($1 damages each time). A has 80% of market, B has 20%
  • No recovery – ERROR = $100
  • Probabilistic rule – ERROR ~ $0 if we think that A did it about 80 times
  • P.O.E. – A pays $100. ERROR = $20 + $20 = $40
  • The more repeating cases we have the more likely the probabilistic rule is error minimizing.

Plaintiff’s Conduct

Gyerman—contributory negligence fish meal case, longshoreman fucked up by not reporting accident correctly – but still recovery

Otherwise deterred

  • We can use plaintiff’s conduct as an excuse to say no recovery if we think that the defendant will be “otherwise deterred” from behaving wrongfully
  • Casino Arena—expert skaters get hurt on badly-maintained ice…no recovery because we know that if the ice is still badly maintained then the next person to get hurt will not be an expert
  • The repeat players must be “normal” people for this to work – this is why we have recovery in Gyerman – the plaintiff there was an expert, and no one else who ever had to deal with that system was going to be anything but another expert
  • Also Gorris v. Scott(sheep case)

Both parties badly behaved – the rule does not matter

  • LeRoy Fibre—railroad sparks hit haystack – rule doesn’t matter – no recovery and the farmer will move his stacks back and railroad is otherwise deterred anyway – recovery and the farmer will still keep his stacks at a safe distance from a non-negligently operated train

Fireman’s rule – rescue workers not able to recover in tort for negligence of the rescued (we want people to call the fire department when there is a fire)

  • Donahue—exception to rule, recovery for accident during unannounced inspection (fits with our theory, though)

Contributory Negligence

  • LeRoy Fibre
  • Deheim v. Fiorito Co. – seat belt defense of contributory negligence rejected

Comparative Negligence

  • Li v. Yellow Cab Co. of California – court judicially adopts comparative negligence as the rule in tort in CA
  • American Motorcycle Association – minor injured in race – one party was judgment proof the share of fault for judgment proof party is distributed between remaining solvent defendants
  • Dissent/more common rule —negligent plaintiff should share in making up for shortfall
  • The more we think that solvent negligent defendant knew that the other was judgment proof, the more comfortable we are shifting that share fully onto the solvent defendant
  • Many possible rules:
  • Two factories A and B pollute, $100 in damages
  • A could pay $10 for no damages
  • B could pay $20 for no damages
  • A could pay $4 and B could pay $1 if they worked together for no damages
  • Obviously, if communication is easy, they will choose the third option.
  • Comparative negligence solutions:
  • Pay according to ideal solution (A pays $80 and B pays $20)
  • Pay according to single-payer solutions (A pays $33 and B pays $66)
  • Pay according to sum (A pays $40 and B pays $60)
  • You might think that the reverse should be true (make the guy who could pay less pay more in damages because he is more “wrongful” – BUT in close cases this will create a disincentive for the other guy to do anything):

Say A could pay $51 to stop damages and B could pay $49

If we say that A is only liable for $49 and B for $51 (because B is “more wrongful” then A should just not take the precaution!

  • Output solution (if an Escort and a Suburban crash then you make the Suburban pay more because they are heavier) – in this case this divides $50/$50
  • The comparative negligence solution is sufficiently uncertain in terms of how it will be applied that we expect each of them to take the minimum precaution

Settlement Rules – Amoco Cadiz

No contribution – encourages settlement because no one wants to be left holding the bag – lowest administrative costs – plaintiff always recovers full amount (sometimes over-recovers)

Contribution – competition not to settle, since a settling defendant does not buy peace and can still be called upon to contribute – plaintiff gets actuarially correct amount of damages (the pro tanto rule – you set aside the absolute amount of settlement from amount plaintiff can recover)

Contribution plus settlement bar – encourages settlement because defendant buys peace but higher administrative costs—court may be called upon to investigate bona fides of a settlement (this may require a mini-trial on the merits to determine whether a settlement was reasonable)

Claim reduction or Apportioned setoff (full sharing) – very high administrative costs, defendants want to settle but plaintiffs might not because settlement costs them a portion of their claim (the pro rata rule, you set aside the proportion of the claim represented by settling defendant’s share of the fault)

Causation

But for causation required (Grimstead – lack of life-preserver did not necessarily cause drowning of P) – lack of but for causation Martin v. Herzog

But also proximate causation – “foreseeable” or “likely result” or what?

WAGON MOUND – an exercise in assigning fault

  • D spills oil around P1’s boat – P1 (seeming negligent himself) then lights oil on fire – oil then destroys P2’s boat further out in harbor
  • Wagon Mound 1 – no recovery for P1 against D
  • Wagon Mound 2—recovery for P2 against D
  • Explanation: Judges knew about WM2 and also knew that P1 was negligent in bringing about the fire. They want to punish both D and P1 and so they don’t let P1 collect in WM1 but they do let P2 collect from D in WM2
  • In other words, D was otherwise deterred by WM2 case, so no need for recovery in WM1 which allows us to immediately deter P1
  • Note: This would all be somewhat obviated by a comparative negligence system.

Levmore’s Causation Flow Chart:

Palsfraf v. Long Island R.R.—Cardozo

  • B carrying bomb trying to get onto train. D train operator pushes him onto train, he drops bomb, which explodes, injuring P.
  • No recovery – D is otherwise deterred from pushing people by language of opinion, which says they will be liable when someone is injured in a straightforward fashion by this practice. Suggestion that P should sue B to collect for her injuries.
  • In the alternate universe where there is recovery – we say that B is otherwise deterred from carrying a bomb because he cannot always rely on the negligence of D to protect him from liability for being a dumbshit

Incrementalism

  • If D’s negligence puts P into a situation that makes him obviously worse off ex ante then recovery.
  • D railroad let P off at wrong stop:
  • Hines—P had to walk home two miles in the dark and was assaulted – recovery
  • Price – P went to hotel and was burned in fire
  • Walking home at night is more dangerous than being at home, whereas being in a hotel isn’t appreciably more dangerous than being at your house.
  • D’s tort puts P in hospital where he is treated negligently by doctor D2?

Recurring Misses/Lost Chance