Torts Outline

Torts- Don Herzog- Fall 2012, University of Michigan
 
Tort– A civil wrong. Not a misfortune. Addresses wrongs done to private groups/individuals.
§  Is this a wrongà if it is, is it the type of wrong the law cares about?àIs there a private right of action?
 
Tort of Miscellaniaà bring a tort that hasn’t been recognized yet.
 
Civil v. Criminal law — Criminal law conceives of a crime as an injury against society at large. 
 
3 typologies regarding separation of tort law
a) Intentional torts = battery, assault
b) Negligence = unintended, carelessness, you are still responsible
c) Strict liability = You weren't careless, you didn't intend it, but the fact that what you did harmed another person. Products liability is current area that is most concerned with this.
 
Miscellaneous torts we discussed briefly or not at all
a.       Libel—do not need to prove severe emotional distress, just that is a writing that is communicated to a 3rd party that is false and hurts a person’s standing
b.      Injurious Falsehood—when a person who w/malice publishes a false statement as to cause pecuniary loss (loss of business) but does not need to hurt another’s reputation
      a) Invasion of Privacy
      b) Misuse of Legal Procedures
      c) Wrongful Imprisonment
      d) Alienation of Affection
      e) Loss of Consortium
      f) Fraud, Misrepresentation, Negligent Misrepresentation
 
Pattern important in law
·         Step One: legal rule is stated
·         Step Two: case-periphery principle, does core principle control or not?
·         Step Three: Identify the justification for the rule, does it still properly apply in the case at hand.
 
Two opposite structured arguments:
a) slippery-slope argument–don't take the first step down this road, or terrible things will happen
b) Genius of the common law, defensible distinctions argument (Herzog approved)
 
A. VERY FEW INJURIES ARE ACTIONABLE
1. Injury (not just misfortune – someone is to blame)
Sense of insecurity
Others think less of you – dignitary harm, nothing to do with whether or not victim actual feels bad violation of person, emotional distress
 
Cardozo in Palsgraf: “But bodily security is protected, not against all forms of interference or aggression, but only against some.”
 
B. “NOBODY’S PERFECT” – NICE TRY BUT NO DEFENSE
1.  You will get nowhere in a tort defense by claiming that you are:
            a. normally a very careful person who just slipped up this once
 
2.  For instance, even if you are an extremely careful driver with a perfect record, your carelessness on one occasion may make you liable.
 
C. FAIRNESS & JUSTICE THROUGH TORT LAW (PUBLIC POLICY CONCERNS)
 
1.  Prosser – there is no doctrine, courts do what they want. Duty is the sum total of considerations of policy. However, Herzog wants to leave us with this: There are better and worse arguments. Too easy to say you can do what you want. There's always room to say one side is better than the other.
            a) Two types of laws: Rules vs. Standards
i. Rule = Clear and precise, not a lot of room for debate. -Speed limit is 65 mph
                        ii. Standards = Nothing crisp about the line here and always debate. -“Drive safely”
How to make arguments about rules and standards and the gray area in between, that is important.
 
2.  Two perspectives on tort law
a) Private law, backward looking.  What happened in past and what arises from that?
b) Tort law is really public law and it is forward-looking (The “Economic” perspective)
 
It puts people in the future at large on notice of what the rules are.
What incentives does tort law give you?  Public policy concerns figure here.
Existence of tort law can change people's incentives and change what people do. Is this an effect?
Can we justify tort law doctrines based upon their public policy implications?
Courts can change the current of social practice and opinion if they so choose.
 
D. TORT LAW AND ECONOMICS
 
1. The Doctrine of the “Cheapest Cost Avoider”–Determine who can “right the wrong” at the least cost. Give the duty to whomever can implement it most cheaply. Sometimes gives terrible results.
Bec there are transaction costs, you want the law to assign the duty to the party that can do it the cheapest (efficiency)à tort law doesn’t care who can do it cheapest—who has the duty? Looks for blame rather than efficiency.
 
2. Economic Theory = Judge Posner, Univ. of Chicago.
            Economists think purpose of law should be the following:
 
                                    WORLD ONE              WORLD TWO
            Jim                   100                              150
            Jane                 80                                70
            Tom                 110                              50
            Dorothy           90                                170
            TOTAL            380                              440  
 
In second state, Jim and Dorothy have enough that they could compensate Jim and Tom for being worse off while Jim and Dorothy are still better off. Winners could compensate the losers. Even if they don't compensate, economists will still say world 2 is more efficient. Kaldor-Hicks efficiency is controversial.
efficiency — getting the most output for the least input, most output for given level of input, or least input for certain level of output
[Kaldor-Hicks] efficiency–way of judging social utility; application of utilitarianism; completely insensitive to distribution concerns.
Pareto optimality–If you move from world one to world two, each individual must be at least as well off as they used to be.
Ex above is not pareto-optimal. However we do not sell and buy everything (like babies), even though it would be pareto-optimal
Deadweight loss–If you stay in world one, there is a Kaldor-Hicks inefficiency of 60.  But it is not indefensible to stay in world one, even though “society as a whole” is better off.
Descriptive claim = Economic theorists say that tort law actually does promote KHE
Normative claim = And they also say that's what it should be doing.
 
Tort law shouldn't be promoting a lot of deadweight loss. Some pressure in theory toward egalitarian distribution, depending on whether you calculate in utility units. Why markets are efficient means of  distribution as opposed to central command/socialism is a source of a long history of economic theory.
Big economic theory question: What is Torts law up to?
·    Can argue it has theoretical underpinnings. Despite Don's misgivings, law and economics is currently the leading explanatory theory.
·    Can argue that Torts is just a weird laundry list of actions that grew up over centuries of common law – it has no conscious design or function
 
Pareto Optimality:
·    Descriptive/Positive Criterion: A situation is Pareto optimal if it is impossible to change it to make one person better off w/out making another person worse off.
 
·    Normative Criterion: A change is Pareto optimal if and only if the change leaves everyone else at least as well off as they were before the change; if someone is left worse off, then those who gained must compensate the losers – thus, total gains must exceed total losses if compensation requirement can be fulfilled
 
Kaldor-Hicks Efficiency:
·    Descriptive/Positive Criterion: A distribution is efficient if and only if maximizes wealth across the population – the distribution of wealth is irrelevant
 
·    Normative Criterion: Total gains must exceed total losses for Kaldor-Hicks efficiency to obtain, but those who gain are not required to compensate the losers
 
·    Deadweight Loss: difference between a distribution that is not Kaldor-Hicks efficient and a distribution that is Kaldor-Hicks efficient
·    See Hand Formula –Posner says is a real formulaà relative units=money
 
Coase Theorem:
·    When transaction costs are zero, an efficient use of resources results from private bargaining, regardless of the legal assignment of duties (meaning whoever can do it cheapest will do it regardless of where duty is assigned); when transaction costs are high enough to prevent bargaining, the efficient use of resources will depend upon a proper assignment of duties
o   If owners need to protect from trains, even if law assigns duty to land owners, they will just pay RR to do it as the cheapest cost avoider—so most efficient outcome happens naturally
 
o   Only matters where law assigns duty bec those ppl will have the transaction costsàbut it won’t change who actually does the duty.
 
·    In the real world, transactions do have costs, so properly assigning duties is necessary for promoting Kaldor-Hicks efficiency
 
Normative component of Law and Economics
·    Adherents to law and economics (Posner) argue that legal duties should be assigned in such a manner as to produce Kaldor-Hicks efficiency (failure of Coase Theorem indicates that efficiency depends upon assignment of duties rather than bargaining). We learned two answers as to how assignments of duty may maximize Kaldor-Hicks efficiency – the subsidy thesis and the cheapest cost avoider thesis:
a)   Subsidy Thesis: Ct should examine the importance of each party (and similarly situated parties) to macroeconomic hea