SUBSTANTIVE REMEDIES.

• Author: Daga, Hanoch

INTRODUCTION 514 I. REDISCOVERING BOOMER 519 A. Happy Collectivization or a Wrong Turn? 520 B. Boomer Redux 521 C. Boomer and Equity Distinguished 523 II. SUBSTANTIVE PRIVATE LAW REMEDIES 525 A. Relational Justice at the Level of Primary Rights 526 B. Between Rights and Remedies 528 1. Avoiding Remedy Reducdonism 529 2. The Missing Category of Substantive Remedies 533 C. Second-Looking Remedies 534 D. Substantive Remedies in Action 538 1. The Remedial Toolkit 538 2. Between Precise Rules and Open-Ended Standards 540 3. Four Factors 542 III. JUST REMEDIES 545 A. Crushing Liability 547 B. Collateral Sources 550 C. Structured Payments 553 D. Loss of Earning Capacity 555 E. Thin-Skull Rule 558 CONCLUDING REMARKS 560 INTRODUCTION

So much has been written (1) on remedies law's classic Boomer v. Atlantic Cement Co., (2) but virtually nothing has been said about the disdnctive regime of remedies to which it maps on--substantive remedies. Substantive remedies do not aim at restoring primary rights; nor do they seek to change them. Instead, substantive remedies adjust the remedial response for a right violation so as to ensure post-wrong justice in a manner that takes seriously not only the setback to the plaindff but also the predicament of the defendant going forward.

The Boomer court, announcing that its role is to "do jusdce between the contending parties," (3) declined to enjoin a large cement plant despite the finding that its operation amounted to a nuisance as to seven owners of nearby properdes, and notwithstanding the property damage it inflicted on these properdes in the form of dust and vibradons. (4) Instead of invoking the "drastic remedy" of injunctive relief the court awarded "permanent damages" that aim at reflecdng the "total economic loss to [plaintiffs'] property present and future" caused by the nuisance.'' In that, [pounds sterling]oor

Rather than either looking back at the plaintiffs' primary rights or looking forward at the general interest of society in order to determine what remedy to grant, the court took a second look at the respective condidons of the plaintiffs and the defendant at the post-wrong stage.(9) The remedy in Boomer, therefore, is neither about what the plaindffs had all along nor is it about what society should have; instead, it concerns the ex-post predicament of the injurer as well as the setback to its vicdms. An important factor in taking a second look was the extreme disparity in the consequences of enjoining the plant: whereas the total property damage to the plaindffs amounted to $185,000 (which at a later stage ended up being $710,000), the loss on the defendant's side came down to 300 employees and an investment in excess of $45,000,000. (10)

We argue that Boomer exemplifies a disdnctive regime of private law remedies--of substantive remedies--and that this regime and its important doctrinal implications have gone virtually unnoticed in the theory and practice of remedies law. Remedies are substantive when they go beyond looking back at the infringed underlying rights in order to adjust the remedial response for a right violadon so as to address both the plaindff s setback and the defendant's predicament. Substantive remedies are, therefore, important in and of themselves, that is, apart from remedies' traditional role of enforcing or vindicadng primary rights. (11) At times, as in Boomer, a second look at the parties' post-wrong respective conditions affects the type of remedy awarded; in other cases--where the doctrines of crushing liability, collateral sources, or structural payments apply--it imposes a ceiling on the plaintiffs recovery; and in yet other cases, such as the ones dealing with loss of earning capacity or with the thin-skull rule, it sets a compensatory floor below which recovery should not go.

This Article shows that these seemingly disparate rules and doctrines are not embarrassing deviations from the make-whole principle, in which "the primary remedial goal" is to try to restore "however imperfectiy" the plaintiffs "rightful position." (12) Rather, they all manifest a distinctively liberal conception of remedies, founded on the twin commitments of the liberal legal order to substantive freedom and equality (as opposed to negative liberty (or independence) and formal equality). These commitments serve as the regulative ideals for the legal construction of respectful interactions at the remedy stage between victims and wrongdoers (and, more generally, plaintiffs and defendants).

Our conception of private law remedies carries important explanatory and critical implications. As a matter of explanation, we show that contrary to the competing theoretical accounts of remedies law, the commitments to self-determination and substantive equality find ample support in current doctrine. For instance, we develop a principled case for excusing tort defendants from certain instances of crushing liability and in this way providing normatively superior foundations for the actual workings of the law. (13) Concerning criticism, our liberal conception of private law remedies helps to identify doctrinal confusions and failings. For instance, we criticize the longstanding practice of assessing loss of earning capacity by reference to the victim's race or gender (among other immutable traits), arguing that true commitment to substantive freedom and equality in remedies law precludes race- and gender-based damage computations. To this extent, our accoimt provides a source of internal critique that can propel the law to make good on its latent commitment to putting participants at the remedial level in a position of relating as genuinely free and equal persons.

A pathbreaking contribution of our account of substantive remedies relates to the remedy's impact on the post-wrong predicament of the defendant-wrongdoer. A familiar way to introduce the matter is to consider the application of the make-whole standard to a tortious encounter between an economically poor student who inadvertendy caused some damage to the ridiculously expensive property of an unusually rich person. (14) A major area of remedies--compensatory damages--remains explicitly hostile to admitting evidence as to the defendant's situation in making remedial decisions. (15) Tort theorists often take the matter to reflect a deeper point, namely, that a tort victim is entitled to full compensation irrespective of whether she needs the entire award to get her Hfe back on track as it is hers as a matter of right; and the wrongdoer is correspondingly required, independently of how blameworthy her wrongdoing is, to pay the entire award even when it will certainly get her life dramatically off its current track. (16) As we argue below, overlooking the defendant's predicament in such a case may even seem inevitable from the perspectives of some influential efficiency theories as well as corrective justice accounts. (17)

Our account, by contrast, rejects such a blanket disregard of the defendant's self-determinadon and the inequality that results if, and when, the remedial response puts her in an impermissible state of unfreedom. In fact, we show that the actual practice of remedies law exhibits a more ambivalent approach to the defendant's post-wrong condidon than is commonly believed. Consider these: the legal construction of an expansive category of judgment-proof defendants, (18) a trend among personal injury lawyers to limit collectable compensatory damages to the sums available under the defendant's liability insurance, (19) the rise and spread of liability insurance, (20) the growing trend toward abolishing the collateral-source rule, (21) and the likely tendency among juries of adopting a more forgiving stance toward individuals as opposed to business corporations. (22) As in many practices, this list consists of a hodgepodge of doctrines and conventions, not all of which can, or should, be part of a principled account of substantive remedies. But it does cast doubts on the common view that the defendant's post-wrong condition is irrelevant. We argue that oftentimes it is relevant, and set out to specify under what conditions it should be so as a matter of right. (23)

We commence our discussion with Boomer, which has earned its place in "the legal canon" (24) as the exemplar of a proper "liability rule," namely, a form of entitlement protection, which is arguably conducive to economic efficiency. (25) Contrary to both its champions and cridcs. Part I argues that a closer reading suggests that Boomer emhodies the nodon of substantive remedies while denying the accounts of both law and economics and corrective jusdce. Part II systemizes the lessons of this illustradon by developing the normative framework that illuminates the Boomer decision. It also defends our position on the nature of the connecdon between primary rights and remedies, and explains why a liberal conception of remedies law cannot measure the post-wrong conditions of the plaindff and the defendant solely in terms of the make-whole principle. In that, we defend a bifurcated architecture of remedies law: there are remedies whose essential role is that of enforcing or vindicadng--what we call looking back at--the terms of the interaction prior to their violation; and there are remedies that instantiate a revised determination of--a sort of second-looking at--these terms. In the course of doing so we elaborate on how persons' needs and interests in subsistence, self-determination, and convenience bear on a liberal framework of private law remedies. Part II also begins to address the complex operational challenge which this requirement entails, discussing both the way it might offend the rule of law and the possible strategies for addressing this concern.

Part III shifts from theory to implications, showing how our account of substantive remedies solves doctrinal puzzles and offers critical revisions in tort remedies law (the reasons...