This Article explores the divergence in law and convergence in economics in dealing with harms and benefits. While tort law usually makes the injurer internalize wrongful harms through damages, restitution law does not enable the benefactor to internalize the benefits she confers on others without their request. In both harm and benefit cases, however, internalization seems to make economic sense for the same reason: injurers and benefactors alike will behave efficiently if they internalize the externalities that they create. The Article’s main goal is to develop eight liability rules for harm and benefit cases and to point out the symmetry between the rules relating to harms and the rules relating to benefits. It also provides an explanation for the legal divergence between tort law and restitution law and makes the claim that the gap between these two fields should be narrowed. Finally, the Article relates these eight rules to the main relevant categories of harm and benefit cases in positive law and appraises their advantages and disadvantages.
From Volume 92, Number 4 (May 2019) Convergence and then Downstream Divergence in Torts and other […]
In this Article, we show how the biggest tort reform of the last decade was passed through the back door with the blessing of its staunchest opponents. We argue that the widely-endorsed “apology law” reform—a change in the national legal landscape that privileged apologies—is, in fact, a mechanism of tort reform, used to limit victims’ recovery and shield injurers from liability. While legal scholars overlooked this effect, commercial interests seized the opportunity and are in the process of transforming state and federal law with the unwitting support of the public.
On December 31, 2013, a car accident killed one and injured two pedestrians. The deceased: a six-year-old girl. Her family brought suit in San Francisco against the driver for wrongful death and personal injuries and against Uber Technologies, Inc., Rasier LLC, and Rasier-CA LLC on a theory of vicarious liability. The driver had a contract with Uber and Rasier-CA LLC when the accident occurred and at that time was allegedly waiting to “match” with a passenger through Uber’s app. The question of Uber’s liability centers around whether it should be liable for the acts of its driver at all, and if so, whether it should be liable for the acts of a driver when no passenger is yet in the vehicle. Uber answered the complaint claiming that because it is not a transportation carrier, has an independent contractor relationship with its drivers, and the driver-defendant was neither transporting a passenger nor en route to pick up a passenger, Uber was not liable for any damages.
Looking to curb potential liability and comply with regulatory standards, many large-scale injurers offer nearby residents to purchase their property and help them relocate to safer areas. Because the relocation of potential victims reduces the risk of harm and saves litigation costs, buyouts have been viewed favorably by commentators and have been supported by state and government agencies. In contrast to this favorable perception of buyouts, this Article shows that buyouts may be used by injurers to exploit victims and reduce social welfare. When injurers’ activities are subject to cost-benefit standards, buying out potential victims may enable injurers to avoid taking socially desirable precautions. We show that injurers could increase their profits—and further reduce social welfare—by adopting a divide-and-conquer strategy and by fostering competition among victims. The Article concludes by considering ways for identifying and preventing exploitative buyouts.
In 2011 and 2012 alone, a defunct NASA satellite, a defunct German satellite, and a defunct Russian space probe all crashed to Earth. While falling space junk gained more media attention, space debris that remains in orbit is even more dangerous. Manmade space junk is polluting the orbits around the Earth, causing damage to satellites and other spacecraft, and threatening future space activities. And the space debris problem is getting worse. For example, in 2007, millions of new pieces of space debris were likely added to the already significant body of debris when China intentionally destroyed a defunct weather satellite.
Allocating liability for damage caused by space debris is also problematic. International treaties regarding space liability are ambiguous and underdeveloped. Only one claim has ever been brought under an international space liability treaty, and it was eventually settled, eliminating the opportunity to test the treaty’s effectiveness. And even if a clear set of laws existed, the liable party that created the debris is often unidentifiable due to the limited ability to track space debris.
New technology may help solve this identity issue. A new tracking system for space debris, Space Fence, may be able to track smaller debris and help determine who created it. With the possibility of fewer identity issues hindering space debris damage claims from arising, space-liability law should be further developed.
Failure-to-warn cases represent a significant portion of product liability law, yet the core concepts of this body of law are poorly developed. In particular, the standard tort requirement that the injured party demonstrate a causal connection between the defendant’s violation of duty and the injury simply does not work in the vast majority of failure-to-warn cases. A substantial body of social science literature demonstrates that, in all but extreme cases, it is impossible for an injured party to demonstrate by a preponderance of the evidence—and thus for a court credibly to conclude—that the party would have acted differently had a warning been provided. Thus, a rigorous application of the causation requirement would result in defeat for most injured parties. Yet, some injuries certainly could be prevented by effective warnings, even if those beneficiaries cannot be easily identified. A legal system that denies recovery to virtually all injured parties because it cannot ascertain which parties’ injuries would have been prevented undercompensates victims and underdeters dangerous practices by product manufacturers and distributors, and thus does not fulfill the goals of the tort system. Some courts and commentators have recognized this problem and have put forth a variety of mechanisms to resolve it. Those mechanisms—such as “heeding presumptions” and enterprise liability—suffer from the opposite problem: they compensate injured parties without regard for whether there is a causal connection between the lack of a warning and the injuries. The result is overcompensation of plaintiffs, overdeterrence of manufacturers, and underdeterrence of risky consumer conduct. This too fails to fulfill the goals of tort law. In this Article, the authors propose eliminating causation as an independent requirement in most failure-to-warn cases and instead determining an injured party’s recovery by allowing proportional recovery, taking into account both the severity of the manufacturer’s fault in failing to warn of the dangers associated with its product and the likelihood that the plaintiff’s injuries would have been prevented by a warning. Such a system would recognize that some failures to warn are more egregious than others and would generate a closer match between aggregate compensation and aggregate injuries caused by a failure to warn.
This Article proposes that the value of statistical life (“VSL”) be used to set the total damages amount needed for deterrence when punitive damages are warranted in wrongful death cases. The appropriate level of total damages should be achieved by adjusting the value of punitive damages. Compensatory damages should not be distorted to establish the total damages level needed for efficient deterrence. Attempts to introduce hedonic damages as a compensatory damages component, and proposals to use the VSL on a routine basis when setting compensatory damages awards, are misguided and will undermine the insurance and compensation functions of compensatory damages. The U.S. Supreme Court’s focus on punitive damages ratios is misplaced, as it is the total damages amount, not the ratio, that is instrumental. The criteria for evaluating punitive damages in bodily injury cases should be different from the criteria used in property damage cases. The composition of compensatory damages is especially important in bodily injury cases. Empirical analysis of current state court awards in bodily injury cases shows the desired positive relationship between punitive damages awards and the nonpecuniary loss.
For decades, foreign nationals alleging human rights abuses were frustrated by their inability to receive their idea of adequate redress in the courts of their own countries. Beset by ills such as environmental pollution triggered by aerial drug eradication programs, the murder of union leaders by right-wing paramilitary groups allegedly financed by multinational corporations (“MNCs”), and torture and deprivation in countries like South Africa, these plaintiffs were offered a glimmer of hope by a series of rulings in U.S. courts, which had purportedly opened up to them relief through a statute passed by the American Founding Fathers themselves. But that relief has often proven elusive, as courts have hesitated to grant redress for claims brought under what they see as an outdated statute.
The concept of duty in tort law remains in turmoil. Courts say and do things that seem wildly inconsistent, sometimes proclaiming the existence of a general duty of reasonable care and then, often in the same case, engaging in a full-scale inquiry into whether the defendant owed the plaintiff a duty. Duty is often said to be categorical, and yet duty decisions sometimes appear to be narrowly dependent on the specific facts of the case at hand—although so far the duty inquiry has not turned on the color of the parties’ eyes. Academics also continue to battle over the proper role for duty in contemporary tort law. The Restatement (Third) of Torts (“Third Restatement”) confronts the duty question head on, but has received stinging criticism for failing to restate the law. To a significant extent, the credit or blame for the current state of duty law belongs to the California Supreme Court. Through much of the latter half of the twentieth century, the California Supreme Court played a leading role in the development of the modern law of duty (indeed much of contemporary tort law), first sweeping aside a variety of no-duty impediments to liability and then reinvigorating duty (more accurately, no-duty) as an instrument for limiting liability as the expansion of tort law ground to a halt and reversed course in the 1980s and 1990s.