Risk, everyday intuitions, and the institutional value of tort law.

• Author: Persad, Govind C.

INTRODUCTION I. RISK, EVERYDAY INTUITION, AND COST-BENEFIT ANALYSIS A. Incoherence, Intransitivity, and Context-Sensitive Judgments B. Loss Aversion and the Doing-Allowing Distinction C. Dreaded Risks, Self-Conceptions, and Expressive Rationality D. The Normative Respectability of Everyday Intuitions II. THREE APPROACHES TO RISK: TORT, LEGISLATIVE COMPENSATION, AND REGULATION A. Tort Law and Risk Regulation: Courts Versus Agencies B. Tort Law and Legislative Compensation: Judge and Jury Versus Expert Panel C. The Hybrid Approach: Mass Torts III. TORT'S INSTITUTIONAL VALUE A. Preemption, Institutional Perspective, and Inviolability B. No-Fault, Escape into Torts, and Ex Post Compensation CONCLUSION INTRODUCTION

This Note will argue that the intuitions and values of ordinary people regarding the problems of mass risk and mass harm deserve a place in our legal system, and that part of traditional tort law's enduring appeal as a way of addressing the problem of mass harm, and compensating victims, derives from the distinctive way in which tort can give voice and force to these intuitions and values. Alternative attempts to address mass harm, such as risk regulation and no-fault compensation, have tended to prioritize experts' views about risk and harm and to deemphasize laypeople's perspectives. (1) While the perspectives of expert scientists, physicians, and policymakers matter, other perspectives matter as well, and often matter equally--particularly where values, rather than facts, are in dispute. (2) The need to incorporate lay as well as expert perspectives has implications for the intersection of tort law with both risk regulation and no-fault compensation schemes. Recognizing the importance of the lay perspective, and tort's ability to capture that perspective, should lead us to resist widespread preemption of the tort system by regulation or the total bypass of tort by no-fault.

Part I will explore several ways in which laypeople's intuitions about risk diverge from the findings that cost-benefit analysis and other expert-driven methods suggest. Laypeople's intuitions often capture values that experts miss or find difficult to adequately represent within their preferred framework. More generally, the difference between lay and expert intuitions about risk and harm often reflects a difference in values or normative judgments about the existing facts, rather than a difference in belief about what facts exist.

Part II considers how tort has dealt with this divergence between lay and expert perspectives. It also evaluates how tort's approach has differed from that of public law approaches to accident law, such as legislative compensation and risk regulation by administrative agencies.

Part II will argue that the differences between tort law, on the one hand, and no-fault and risk regulation, on the other, show that tort law is worth preserving. Tort tends to be more willing to privilege the intuitions of non-experts--including both judges and juries. There is value in retaining this perspective as part of our societal arsenal of responses to risk and harm. While risk regulation and legislative compensation are important parts of a systematic societal approach to the problems of risk and harm, they should not be allowed to totally drive tort law from the scene.

Part III considers the consequences of the earlier analysis for two current territorial disputes at the boundaries of tort law. One of the most prominent arenas where expert-driven analysis has recently competed with tort for the same turf has been that of preemption, where state tort law and Food and Drug Administration (FDA) regulations prescribe different consequences. Recognizing the importance of everyday intuitions justifies a restrained attitude about preemption, one that accords with the majority view in the Court's recent decision in Wyeth v. Levine. (3) Tort also overlaps with no-fault compensation schemes, particularly in medical contexts; here, everyday intuitions support allowing access to a tort alternative in vaccine compensation and other no-fault schemes, rather than requiring that such access be waived. Ultimately, while the methods of risk regulation and no-fault compensation have clear value, tort retains a distinctive ability to reflect and give force to public intuitions about risk and should not be eliminated or totally bypassed in favor of other approaches.

This Note attempts to take the extensive legal scholarship on tort, no-fault, and preemption, as well as work in behavioral economics and moral philosophy on everyday intuitions about risk, in a different direction than the existing literature. Much of the existing work either defending or criticizing the tort system in comparison to alternatives focuses on other differences between tort and its competitors--for instance, federalism and separation of powers concerns. (4) The scholarship that focuses on cost-benefit analysis and behavioral economics, such as Cass Sunstein's and Howard Margolis's work, has primarily used the cost-benefit perspective to criticize tort law. (5) Finally, although some philosophers have attempted to normatively criticize the behavioral aspects of cost-benefit analysis, their work has not focused specifically on the legal arena. (6) In contrast, this Note attempts to bolster the tort system via a normative critique of cost-benefit analysis, one informed by deontological moral theory.

1. RISK, EVERYDAY INTUITION, AND COST-BENEFIT ANALYSIS

   The differences between expert judgments and ordinary intuitions often reflect differences that are at least in part differences about values, and not merely differences in understanding facts. Within the realm of values, ordinary people are sometimes right and experts wrong.

   Cass Sunstein has been one of the foremost proponents of a cost-benefit approach to risks. Sunstein argues that "people's intuitions about risk are highly unreliable. Some of those intuitions do serve us well in ordinary life. But even so, they lead to ineffective and even counterproductive law and policy." (7) Sunstein discusses several such commonplace intuitions about risk in his work. His claims and examples are paradigmatic of the cost-benefit critique of commonplace intuitions, and as such will serve as an entree to the project of understanding the normative basis for these intuitions.

   1. Incoherence, Intransitivity, and Context-Sensitive Judgments

      Sunstein asks us to consider the following situation:

      Suppose that you are asked to say, without reference to any other problem, how much you would be willing to pay to protect [against] certain threats to coral reefs. Now suppose that you are asked to say, without reference to any other problem, how much you would pay to protect against skin cancer among the elderly. Suppose, finally, that you are asked to say how much you would be willing to pay to protect [against] certain threats to coral reefs and how much you would be willing to pay to protect against skin cancer among the elderly. Empirical evidence suggests that people's answers to questions, taken in isolation, are very different from their answers to questions when they are asked to engage in cross-category comparisons. (8) Sunstein assumes that the differences between willingness to pay in these different contexts are "a form of incoherence." (9) And incoherence, or unreflective assumptions about facts, may often be what explains these differences.

      But there is also a normatively respectable explanation for ordinary people's different intuitions in these cases: their preferences may not be incoherent, but simply intransitive. And intransitive preferences are often perfectly sensible. Consider this example, from Bruce Chapman:

      Suppose, for example, that someone is offered a choice of fruit at the end of a dinner. If only a large apple, A, and a large orange, O, are offered to her, she would choose the large apple. Both fruits are large and, all else equal, she prefers apples to oranges. However, if she is offered A, O, and a small apple, a, then different considerations arise. For now there is an issue of etiquette to be addressed. The rule, let us say, is that one should never choose the larger of two items of the same kind. Our chooser now reasons that, in the choice from the set (A, O, a), she cannot now choose A, because that would be in breach of the rule of etiquette. She therefore chooses O, a piece of fruit that is larger than a, but a fruit of a different kind. (10) As Frances Kamm has argued, intransitivity can be justified by our different reasons (here, etiquette and taste) for each of the dominance relations. (11) This intransitivity is perfectly comprehensible:

      [D]espite this apparent "irrationality," what is happening in the etiquette example is hardly incomprehensible to us.... We simply understand the choice situation (A, O, a), where both A and a are present and etiquette is at issue, differently from the choice situation (A, O), where a is absent and etiquette is not at issue. (12) Returning to Sunstein's example, then, we could imagine that people are willing to pay $10 million for coral reefs and an equal amount for protecting against skin cancer among the elderly when they consider these options in isolation. But, following Chapman, they may have good reason to pay more for the elderly when the options are considered together, because the combination of options in a choice set makes new reasons relevant. In particular, it may be inappropriate or disrespectful to prefer an aesthetic or abstractly environmental value like the beauty of a coral reef over human life in a situation of direct comparison. (Consider this example: One might have good reason to give one's nephew more money for his fifteenth birthday than his seventh, considered in isolation. But if you have both a seven-year-old and a fifteen-year-old nephew, it would be the foolish uncle who gave more money to one nephew than the other: the...