Standing's expected value.

• Author: Nash, Jonathan Remy
• Position: Introduction through II. Incorporating Expected Value into Standing Analysis, p. 1283-1316

This Article argues in favor of standing based on expected value of harm. Standing doctrine has been constructed in a way that is oblivious to the idea of expected value. If people have suffered a loss with a positive expected value, they have suffered an "injury in fact." The incorporation of expected value into standing doctrine casts doubt on many of the Supreme Court's decisions in which it denies standing because the relevant injury is too "speculative" or is not "likely" to be redressed by a decree in the plaintiff's favor. This Article addresses this shortcoming in standing jurisprudence by proposing a theory of expected value-based standing. It argues that the Constitution presents no obstacle to expected value-based standing, that the "injury-in-fact" test requires only a positive expected value, and that the prudential barrier to generalized grievances is the sole obstacle to expected value-based standing.

TABLE OF CONTENTS INTRODUCTION I. IGNORING EXPECTED VALUE II. INCORPORATING EXPECTED VALUE INTO STANDING ANALYSIS A. An Overview of Traditional Standing Jurisprudence B. The Proposal for Expected Value-Based Standing C. The Basic Consistency of Expected Value-Based Standing with Current Understandings of "Injury in Fact" D. The Implications of Expected Value-Based Standing III. OBJECTIONS AND CRITICISMS A. Are Courts Competent to Evaluate Expected Value-Based Standing? B. Does Expected Value-Based Standing Extend Standing Doctrine Too Far Beyond Its Existing Constitutional Moorings? C. Is Expected Value-Based Standing Desirable? 1. Is Expected Value-Based Standing Consistent with the Goals of Standing Doctrine? 2. Does Expected Value-Based Standing Intolerably Enlarge the Set of Cases as to Which There Is Standing in Federal Court? CONCLUSION INTRODUCTION

Suppose that Jones has an investment worth $10. Suppose that the government takes action that renders the investment worthless. Has Jones suffered an "injury in fact"? The answer is clear. Jones has lost an asset, and if the government takes that asset, it has injured Jones. (1)

Now suppose that Jones has another investment. It is far more likely than not that the investment will turn out to be worthless. But there is a small chance--1 in 10,000--that the investment will be worth $1 million. Suppose that the government takes action that renders the investment certainly worthless. Has Jones suffered an "injury in fact"? Under existing standing doctrine, the answer is fairly clear. Jones has lost an asset, the expected value of which is $100, and if the government takes that investment, it has injured Jones. (2)

Now suppose that Smith faces a mortality risk of 1 in 100,000. Smith wants the Environmental Protection Agency ("EPA") to eliminate that risk, which he believes it is legally required to do. The EPA refuses to act. Has Smith suffered an "injury in fact"? Under existing doctrine, the answer is not entirely clear; confusion over whether to classify the injury as procedural or substantive muddles the issue. (3) But using monetary figures for the value of life the government itself has used, the expected value of a mortality risk of 1 in 100,000 is $60. (4)

Whether a plaintiff can establish that he or she has suffered an "injury in fact" is critical to whether the plaintiff can pursue his or her legal action in federal court. Traditional Article HI standing jurisprudence requires that a plaintiff demonstrate (1) "injury in fact," (2) a causal link between that injury and the conduct complained of, and (3) redressability, (5) "Injury in fact" is a necessary antecedent to standing analysis--without injury, there is no causal link between the plaintiff and the challenged conduct, and there is nothing to redress.

My principal claim is simple: standing doctrine has been constructed in a way that is oblivious to the idea of expected value. If people have suffered a loss with a positive expected value, they have suffered an "injury in fact." It is unhelpful to say, as courts often have done, that an injury is "speculative" or "conjectural" (6) when it has a positive expected value. A 1-in-10,000 chance of losing $100,000 is the equivalent of a $10 loss (assuming risk neutrality (7)), and a $10 loss is an injury. A small risk of death is an injury in the sense that rational people would pay to eliminate the risk. (8) Indeed, the federal government treats small risks of death as injuries calling for a regulatory response. (9)

These points cast doubt on many of the Supreme Court's decisions in which it denies standing on the ground that the relevant injury is too "speculative" or is not "likely" to be redressed by a decree in the plaintiff's favor. (10) Speculative risks have a positive value; to suffer them is to suffer an "injury in fact" If victory by the plaintiff would give the plaintiff an asset with a positive expected value, then the plaintiff's injury would be redressed by a decree in his favor.

Indeed, notwithstanding the Court's traditional oblivious attitude toward it, the notion of expected value-based standing is consistent with the essence of existing standing doctrine. Extant doctrine implicitly embraces expected value by allowing standing in settings where the harm is far from certain, and indeed merely probabilistic. For example, standing in declaratory judgment actions necessarily assumes that relevant conduct will probably come to pass. And standing in overbreadth challenges--in which a speaker challenges a government speech restriction as possibly chilling the protected speech of parties not before the court--presumes both that the government would prosecute actions that come near the margins of a statute and that others, as a result, likely would not engage in such actions in the first place.

What, then, might explain the pattern in the rest of existing standing law, which has had such difficulty in understanding a simple point about expected value? I suggest four possibilities. The first possibility is that courts are simply confused. They do not understand that a small risk of a significant harm is equivalent in value to a certain loss of a harm of a specified magnitude. The second possibility is that in refusing to hear cases in which plaintiffs complain about a loss of positive expected value, courts are relying on common law conceptions of injury--conceptions that poorly fit modern regulatory law. The third possibility, related to the second, is that some of the key cases are not about "injury in fact" at all. They are grounded instead in the (unarticulated) judgment that no relevant source of law should be taken to grant the plaintiff a cause of action. The fourth possibility is that some of the relevant decisions are based on judicial concerns over the generalized nature of the harm. In some cases, millions of people face a loss with a positive expected value. In such cases, there should be no problem with establishing an "injury in fact"; millions of people have been injured (in fact). If a problem exists, it is that widely generalized harms should not be judicially cognizable (at least when Congress has not explicitly said that they should be)--the problem is not that Article III bars suits with a less-than-certain likelihood of injury occurring. (11)

There is no reason to say that Congress lacks the power to channel into federal court cases in which future harm is probabilistic. Nor does the injury-in-fact test bar courts from hearing such cases. If the plaintiff has lost a small chance to gain a large amount, the loss is equal to an amount that would unquestionably be a basis for standing. To be sure, the prudential barrier on generalized harms might apply in some cases. But, so long as the expected-value test is met, there is no reason to hold, as some courts have, that Article HI poses an obstacle to standing for probabilistic harms.

My argument overcomes objections that the Supreme Court has suggested in settings of possible probabilistic standing--statements hinting at substantially certain injury (or even almost absolutely certain injury) as a prerequisite for standing. (12) It also provides a theoretical basis for the constitutionality of probabilistic standing. Finally, it provides a guide to clarify the existing, muddied lower court jurisprudence that generally recognizes probabilistic standing, though in different ways and without consistent theoretical underpinnings. (13)

An added benefit of my proposal is that it provides a solution to a conundrum that has flummoxed courts and commentators in cases of procedural harm: should the injury for standing purposes be considered the failure of the government to adhere to the proper procedure or rather some substantive result that arguably flows from that failure? (14) The latter conception of injury bears a closer resemblance to a typical "injury in fact"--and perhaps even more importantly is the likely motivation for the lawsuit--but it is also usually not the case that some particular substantive result will necessarily result from a change in procedure. For example, the government's preparation of an environmental impact statement ("EIS") in deciding whether to undertake an action, as required by the National Environmental Policy Act ("NEPA") (15) does not mean that the government will reach a different decision than it would have had it not prepared an EIS. (16) Insofar as my proposal explicitly applies to harms that may or may not come to pass, it is compatible with an understanding of the injury as the possible change in substantive outcome.

Other commentators have advanced arguments on the topic of probabilistic standing. Professor Elliott relies on the notion of probabilistic harm to argue that large organizations challenging government action logically can--and should--have standing even when their individual members might not. (17) Professor Hessick argues that, while the Supreme Court has consistently rejected probabilistic standing, Article...