The distributive foundation of corrective justice.

• Author: Dagan, Hanoch

INTRODUCTION

There are two, apparently conflicting, approaches to private law theorizing. One approach -- by now, dare I say, the prevailing approach -- analyzes private law through the lens of its social, economic, cultural, or political meanings and ramifications.(1) For the purposes of this Article, we may call the proponents of this approach the "social values school." Other theorists, those who take a corrective justice approach, insist that the adjective "private" is significant and should be the starting point for any understanding of "private law."(2) They claim that this starting point inevitably generates a radically different understanding of private law. Organized around the Aristotelian concept of corrective justice, private law, as they envision it, is a realm with its own inner intelligibility, which appear to be isolated from the social, economic, cultural, and political realms.(3)

This Article is an attempt to evaluate the corrective justice approach to private law by concentrating on the accounts of one area in private law -- the doctrine of restitution for wrongs and especially for appropriations. In Unjust Enrichment: A Study of Private Law and Public Values,(4) I offered a theory of this body of law, which clearly belongs to the first approach to private law theory. Recently, in Restitutionary Damages as Corrective Justice, Ernest Weinrib -- the most eloquent advocate of the corrective justice approach to private law -- has offered a competing account.(5) This Article confronts these accounts (briefly presented in Parts I and II, respectively) in order to address the competing approaches to private law.

Part III of this Article attempts to isolate from Weinrib's account a valuable lesson for any attempt at private law theorizing, including my own. I find persuasive the assertion that correlation between the defendant's liability to the plaintiff's entitlement is an indispensable component of private law. I concede that by overlooking this implication of the "private" nature of private law the social values school has too frequently blurred the distinction between private law and regulation. Moreover, I acknowledge that correlativity may require a refinement of my earlier account. In particular, I counsel caution towards any measure of recovery that vindicates not only the plaintiff's claims to well-being and/or control, but also society's condemnation of antisocial behavior.

Nevertheless, I maintain in Part III that Weinrib is wrong in his claim that private law has an inner intelligibility that can be deciphered without recourse to public values. An account such as Weinrib's that attempts to explain and justify private law in isolation from its surrounding social values is question-begging at best and oppressive at worst. Correlativity is essential to private law, but it is situated on a distributive foundation.

Finally, Part IV examines the doctrinal implications of both Weinrib's and my own accounts. In particular, I look at three specific issues within the law of encroachments -- joint infringements, fiduciary duties, and misappropriation of body parts -- and illustrate how while correlativity is a necessary aspect of the restitutionary claim, it does not absolve us of the more fundamental distributive question which determines private law's initial entitlements.

1. UNJUST ENRICHMENT AS A DISTRIBUTIVE SCHEME

   Unjust Enrichment studies cases in which A holds a resource that B appropriates, to her own advantage and to A's harm. This paradigmatic case covers a wide variety of resources: land and chattels; copyrights, trademarks and patents; trade secrets, contractual relations and performances and precontractual expectations; individual reputation and dignity, commercial attributes of personality, and even identity and physical integrity. Unjust Enrichment searches for the normative underpinnings of these appropriation cases. The explanatory power of its theory is examined both intraculturally (across these resources within American law) and interculturally (through a comparative study of Jewish law and international law).(6)

   The measures of recovery that are available in cases of appropriation range from requiring that A receive compensation for the harm she has suffered to awarding A the profits realized by B at A's expense; and they also include several intermediate possibilities, most significantly, awarding A the fair market value of the resource involved. The various remedies accomplish varying degrees of protection of the plaintiff's entitlement. I claim that the legal choice among these pecuniary remedies is not a matter of legal technicality, but rather requires a choice among varying conceptions of the plaintiff's entitlement. This choice, in its turn, is a normative choice that implicates the prevailing background ethos of the society at issue and is deeply influenced by the society's complex conceptions of self and of community.(7)

   For example, a profits remedy discourages potential invaders from circumventing the bargaining process and appropriating the protected interest without first securing its holder's consent. Thus, the measure of profits deters nonconsensual invasions. Entitling the resource holder to any net profit the invader may have acquired from the appropriation effectively undoes the forced transfer. Therefore, a profits remedy implies that transfers are legitimate only by obtaining the plaintiff's ex ante consent, thereby vindicating the cherished libertarian value of control over one's entitlements.

   Prescribing a remedy of fair market value is importantly different. Fair market value is what the defendant would presumably have had to pay to the plaintiff had she not circumvented the bargaining process, even if we take the plaintiff's consent to the transfer for granted. As a remedy, it does not deter appropriations (at times, it may even encourage them). Rather, fair market value measures -- since no better proxy is available -- an entitlement's (objective) level of well-being or utility to its holder. It aims at securing for the plaintiff (merely) the value of the utility that the appropriated resource embodies. Thus, an award of fair market value vindicates the utilitarian value of well-being.

   Finally, limiting recovery to compensation for the harm suffered allows B (the appropriator) a share of the entitlement of A (the resource holder), as long as B does not actually diminish A's estate. A harm pecuniary remedy vindicates, I maintain, the value of sharing. It is a form of limited institutionalized altruism: a legal device that calls for other-regarding action and seeks to inculcate other-regarding motives.(8)

   By defining the cause of action, the law of restitution prescribes which nonconsensual resource appropriations are wrongful and thus justify monetary recovery. Conversely, it also determines which appropriations are permissible, such that the invasion does not necessarily require a remedy. Moreover, in cases of impermissible appropriations, the doctrine further allocates the appropriate measures of recovery. In all these respects, the rules of restitution affect the ability of each individual to make specific claims regarding resources, constituting a society-wide distribution of burdens and benefits, i.e., a distributive scheme.(9)

   The justification for any allocation is rooted in the underlying rationales identified above -- control, well-being, or sharing -- which serve as the criteria according to which entitlements in resources are distributed to their holders. But once these rationales are identified, one can readily see that the distributive scheme constituted by our doctrine is far more subtle than the one sketched in the previous paragraph. It does not only assign claims regarding the use of some specific resources. Rather, it also allocates claims to certain primary social goods with respect to these same resources: individual (negative) liberty, individual security in one's wealth, and social responsibility (i.e., responsibility for other members of one's society) for one's fate. Unjust Enrichment claims and demonstrates that there is an important correlation between this second-order distributive scheme and the larger normative ethos of the society at issue: the distributive scheme underlying the law of unjust enrichment corresponds with the level of control, well-being, and sharing that the relevant legal community seeks to accord its members.

   As a final refinement, my account explains (and demonstrates) that differences in the social perceptions of particular resources yield different measures of recovery. Resources are protected to differing degrees because a community regards different resources as variously constitutive of their possessor's identity. Thus, the more closely a resource is attached to its holder's identity in her society, the greater emphasis society places on negative liberty. In contrast, as resources are viewed merely as valuable assets that have no direct bearing on the identity of their holder, the focus shifts toward the other-regarding standpoint of the agent, and correspondingly, the applicable rationale is closer to the sharing pole.

2. UNJUST ENRICHMENT AS RECTIFICATION

   Weinrib's Restitutionary Damages as Corrective Justice is the first full-blown attempt by a leading corrective justice theorist to conceptualize the law of restitution in terms of corrective justice.(10) From his account, I have distilled three fundamental theses about the nature of private law: the significance of correlativity to private law, the isolation of private law from social values, and the idea of property as the doctrine's nonideological premise. Weinrib derives at least two specific (and important) doctrinal propositions from these three foundational theses: that gain-based recovery should not be available as a remedy for all torts, and that different measures of recovery should apply for unauthorized alienation and...