Jefferson meets Coase: land-use torts, law and economics, and natural property rights.

AuthorClaeys, Eric R.

This Article questions how well standard economic analysis justifies the land-use torts that Ronald Coase popularized in The Problem of Social Cost. The Article compares standard economic analyses of these torts against an interpretation that follows from the natural-rights morality that informed the content of these torts in their formative years. The "Jeffersonian" natural-rights morality predicts the contours of tort doctrine more determinately and accurately than "Coasian" economic analysis.

The comparison teaches at least three important lessons. First, a significant swath of doctrine, Jeffersonian natural-rights morality explains and justifies important tort doctrine quite determinately. Second, this natural-rights morality complements corrective justice theory by the substantive rights that tort's corrective-justice features seek to rectify when wronged. Finally, standard economic tort analysis cannot prescribe determinate results without making simplifying assumptions more characteristic of moral philosophy than of social science.

INTRODUCTION I. THE RIVALRY BETWEEN ECONOMICS AND JUSTICE IN TORT A. The Economic Indictment B. Explanatory Doubts II. AMERICAN NATURAL-RIGHTS MORALITY IN LAND-USE TORTS . A. American Natural-Rights Morality B. Political Morality and Corrective Justice C. The Argument III. LAND-USE TORTS AND NATURAL-RIGHTS REGULATION A. The Natural Right to Labor B. The Plaintiffs Possessory Interest and the Defendant's Harmful Act 1. Boundary Rules and the Rights to Use and Enjoy. 2. Trespass 3. Nuisance 4. Non-Nuisances C. Causation D. Scienter E. Affirmative Defenses F. Rights-Securing Qualifications 1. Qualifications and the Interest in Labor 2. Nuisance 3. Trespass 4. The Philosophical Bases for Reordering Civil Property Rights IV. ACCIDENT LAWS AND ECONOMICS RECONSIDERED A. The Tension Between Private Ordering and Expert Supervision B. The Historical Pedigree of Accident Law and Economics C. Conceptual Property Theory D. Normative Assumptions About Social Control E. A Simpler Alternative? CONCLUSION INTRODUCTION

Economic analysis has taken over tort law and scholarship. Before economic analysis came on to the scene, lawyers assumed that tort law secured personal rights grounded in moral interests. Philosophical tort scholarship still tries to defend this commonsense view. Yet over the last generation, tort's moral pretensions have taken the academic equivalent of a drubbing. Even leading tort philosophers concede, "frankly, ... that the legal community has found various economic approaches more persuasive or compelling than those based on corrective justice," the main philosophical approach to tort. (1)

This perception seems convincing because economic analysis claims it can explain the law more determinately than philosophical analysis. When tort cases appeal to moral terms, economists say, their arguments seem "mush--lacking in clear or persuasive guidelines for determining what conduct counts as 'wrongful.'" (2) Only economic analysis, it seems, can claim an "impressive level of fit with case outcomes" and a "comparatively high degree of determinacy." (3) As a result, "philosophers have marveled in contemptuous amazement as the apparently dead body of economic [legal] analysis took its seat at the head of the legal academic table and reigned unchallenged as the predominant theoretical mode of analysis in private law scholarship and pedagogy." (4)

From a longer time horizon, however, this debate is surprising. People often assume that American tort law used to have content focused enough to be described as "individualistic"--that is, organized "to specify and protect individuals' rights to bodily integrity, freedom of movement, reputation, and property ownership." (5) These observers assume that the morality that used to inform the law was determinate enough to generate predictably "individualistic" results. (6) In addition, if economic criticisms are true, the various bodies of law that have now merged into the field of "tort" were incoherent for several centuries until economists came along and tidied them up. (7) It may sound naive to say, but that claim seems a little presumptuous. So do contemporary comparisons of tort economics and philosophy fairly reflect the merits of tort doctrine, economics, and philosophy? Or do they instead reflect passing academic prejudices?

No single article can voice such a doubt comprehensively across the entirety of tort, and this Article will not try. But this Article can suggest that the doubt is well grounded in reference to a fair point of contact: land-use torts. "Land-use torts" refer to the grounds for liability for trespass to land, nuisance, and negligence claims involving an accidental but trespassory invasion of land. They include cases about cattle trampling on crops, (8) doctors building offices near noxious baking machines, (9) and trains emitting incendiary sparks onto crops or haystack fields. (10)

In other words, land-use torts cover all the chestnuts that Ronald Coase used to illustrate the lessons of his landmark article The Problem of Social Cost (11) (hereinafter "Social Cost"). Social Cost is the most-cited law review article ever. (12) It has contributed to many economists' general impression that philosophical argument seems "rigid" in its attachment to a harm-benefit distinction, a "pristine idea of right colliding with wrong." (13) Tort economists now routinely use fact patterns involving cows, smokestack pollution, or train sparks to teach or to build on the main lessons of Social Cost. (14) If there is any set of cases where "Coasian" tort analysis should demonstrate its explanatory superiority, the land-use torts treated in Social Cost belong in that set.

It is thus big news to learn that economic tort scholarship does not explain foundational features of the rules regulating liability in trespass, nuisance, and land-use negligence. The relevant liability rules of those torts are better explained and justified as an application of "American natural-rights morality." American natural-rights morality refers here to an amalgamated political morality that informed American law and politics considerably from the founding of the United States until 1920 and, to a lesser extent, since. According to this morality, the law's overriding object is to secure to citizens the natural rights to which they are entitled by general principles of natural law. This morality is "Jeffersonian" in the sense that it is a tolerably well-articulated version of the theory of unalienable and natural rights set forth in the Declaration of Independence. (15) This morality explains basic features of trespass, nuisance, and land-use-related negligence better than "Coasian" economic tort analysis. In the process, Jeffersonian morality anticipates and highlights problematic features of Coasian economic analysis. (16)

If this comparison is an accurate indicator, the philosophy-versus-economics debate in tort has been off track for a generation, in at least three important respects. First, if philosophical tort scholarship suffers a bad reputation, this impression exists because too many onlookers conflate tort philosophy with corrective justice. Corrective justice is the species of practical moral philosophy determining in what circumstances wrongs to a victim's rights should be annulled or rectified. (17) Corrective justice has much to teach about the institutional structure of tort--for example, why it pits an aggrieved "plaintiff' against an allegedly aggressive "defendant" in a suit to recover for "wrongs." But, corrective justice (or, at least, the best-known aspects of corrective justice) do not supply the content of those wrongs--particularly the scope of the plaintiff's rights, or the defendant's duties in relation to those rights. That content comes instead from a controlling local political morality. American natural-rights morality therefore focuses and complements tort's corrective purposes. (18)

Second, existing philosophical tort scholarship has not done enough to learn how American natural-rights morality informs the moral content of particular torts. (19) Since natural-rights principles were influential in period when "tort" was coming together, it is quite reasonable to suspect that these principles explain and justify foundational tort doctrines. It is also reasonable to suspect that contemporary judges may continue to be influenced by inchoate expressions of the policy commitments associated with those principles. This Article confirms both suspicions in relation to basic land-use torts. In the process, American natural-rights morality also helps dispel a more general unfounded impression, that theories of moral philosophy are incapable of making tough-minded policy tradeoffs. American natural-rights morality makes the tradeoffs land-use tort law needs to get up and running.

Finally, this Article suggests that conventional economic tort analysis is not capable of making those same tradeoffs--at least, not without taking significant shortcuts. (20) The case comparison offered here highlights a problematic aspect of standard economic tort analysis that is often overlooked: To explain tort doctrine as determinately as conventional wisdom supposes, economic tort analysis must make informed hunches more characteristic of moral philosophy than of social science. In the words of one leading introductory law and economics casebook, where lawyers and judges decide legal issues "by consulting intuition and any available facts," economists use "scientific" approaches including "mathematically precise theories (price theory and game theory) and empirically sound methods (statistics and econometrics)." (21) But if the land-use torts provide an accurate point of contact, these generalizations are overdrawn. Conventional economic tort analysis can provide precise accounts of parts of land-use doctrines, but not of doctrines in their...

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