The floodgates of strict liability: bursting reservoirs and the adoption of Fletcher v. Rylands in the Gilded Age.

• Author: Shugerman, Jed Handelman

In the standard historical interpretation of American tort law, the era of laissez-fake and pro-industry fault liability dominated the nineteenth and early twentieth centuries,(1) and the mid-twentieth century marked the gradual rise of strict liability.(2) Scholars and judges presenting this narrative have focused on the reception of Fletcher v. Rylands,(3) an English case from the 1860s in which a reservoir used for supplying water power to a textile mill burst into a neighbor's underground mine shafts. In one of the most significant and controversial precedents in the strict liability canon,(4) the English courts held that proof of negligence was not required for "nonnatural" or potentially "mischievous" activities.(5) Scholars point to a series of decisions rejecting Rylands to conclude that American courts adhered to the fault doctrine and repudiated strict liability in the late nineteenth century, and the consensus has been that Rylands was not accepted until the mid-twentieth century.(6) Many prominent works on American legal history feature this supposed rejection of Rylands as a centerpiece for their historical claims about the dominance of the fault doctrine as a subsidy for emerging industry.(7)

In fact, a significant majority of the states actually accepted Rylands in the late nineteenth and early twentieth centuries, at the height of the "era of fault." While New York's highest court famously declared, in Ives v. South Buffalo Railway(8) in 1911, that due process of law categorically required proof of fault, courts around the country had been applying Rylands over the previous three decades. A few states split on the validity of Rylands in the 1870s, but a wave of states from the mid-1880s to the early 1910s adopted Rylands, with fifteen states and the District of Columbia solidly accepting Rylands, nine more leaning toward Rylands or its rule, five states wavering, and only three states consistently rejecting it.(9) Just after the turn of the century, the California Supreme Court declared, more correctly than not, that "[t]he American authorities, with hardly an exception, follow the doctrine laid down in the courts of England [in Rylands]."(10) In the following years, some states shifted against Rylands, but an equivalent number of new states also adopted Rylands.(11) Accordingly, a strong majority of states has consistently recognized this precedent for strict liability from about 1890 to the present.

In addition to presenting the new evidence about Rylands's adoption, this Note also explores the various factors influencing the adoption: broad social changes, economic patterns, political shifts, and a series of reservoir accidents and floods. While urbanization, economics, and politics played a role, this Note concludes that a series of tragic dam failures, particularly the Johnstown Flood of 1889, was the most direct and substantial cause. By focusing on particular disasters, this account seeks to challenge the previous assumptions that either long-term socioeconomic forces or academic and political elites primarily caused Rylands's adoption in the mid-twentieth century.

Part I presents an overview of Rylands v. Fletcher and then discusses the phases of the American response: the initial acceptance; the Northeastern rejections in the 1870s, which have been the basis for the erroneous scholarly conclusions; and the overlooked tide of acceptances across the country, beginning in the late 1880s and increasing in the 1890s. Part II places this wave of acceptance in its historical context of changing social forces, although these brief sketches are not the primary emphasis of this Note. First, during a period of rapid urbanization, a small number of courts sought to protect residential areas against the risks of industrialization.(12) Second, courts adopted or rejected Rylands partially in response to business cycles: The phase of rejections in the 1870s loosely corresponded to the depression of the 1870s, when courts would have been most eager to subsidize industry, and the subsequent industrial boom in the 1880s and early 1890s corresponded with the wave of acceptances.(13) However, this economic link is undermined by a closer examination of the timing of these cycles and the patterns of rejection and acceptance. The initial rejections occurred before the onset of depression in the 1870s, states generally resisted Rylands for most of the 1880s boom, and Rylands continued to prevail during the depression of the mid-1890s. In terms of politics, the adoption of Rylands corresponded with the rise of populism and an emerging legislative consensus to begin regulating industry, most prominently in the Sherman Antitrust Act of 1890.(14) However, the influence of populism is also questionable, because Rylands fared better in Republican states than in the more populist states. Each of these forces played an underlying role in Rylands's adoption, but this Note demonstrates that these broader economic, social, and political trends are flawed and insufficient explanations. As a result, these factors are more accurately described as background conditions merely setting the stage, rather than as the direct causes of the adoption.

Finally, and most importantly, Part III suggests the direct cause by connecting a series of bursting reservoirs and floods in the 1880s and 1890s to a decisive breakthrough of adoptions. In his study of Rylands in its English context, A.W. Brian Simpson persuasively argues that Rylands was the product of British reservoir accidents in 1853 and 1864.(15) Similarly tragic disasters occurred in California and Pennsylvania in the 1880s, with similar legal results. After a series of powerful floods and a long political and legal battle over destructive hydraulic gold-mining techniques, California adopted Rylands in 1886. In 1889, an artificial recreational lake owned by a club of the wealthy elite (including business titans Andrew Carnegie and Andrew Mellon) burst through a poorly built dam, destroying Johnstown, Pennsylvania, and killing 2000 people. The nation's media and courts focused intently on the Johnstown Flood, and perceived, mostly inaccurately, that the fault doctrine prevented recovery through the tort system. Two months after the Flood, one of the most influential law publications in the country, the American Law Review, focused on the tragedy and argued that the fault doctrine unjustly prevented recovery in such cases. The Review concluded that courts should adopt Rylands, rather than the flawed and abuse-prone fault doctrine. Thereafter, state courts began adopting Rylands for a wide array of unnatural activities. Whereas Simpson contended that Rylands's rule was anomalous and applied to only a narrow set of cases, American state courts applied Rylands expansively across a wide spectrum of industrial and nonindustrial problems. In these courts, the bursting reservoir was not treated as legally unique, but as part of a broader problem of industrial age hazards.(16) Perhaps the most surprising part of this trend is that three of the states most widely recognized for their rejection of Rylands--New York, New Jersey, and Pennsylvania--reversed their stance on Rylands in the 1890s, soon after the Johnstown Flood.

The story of Rylands's acceptance offers a new perspective on the history of strict liability and illustrates the responsiveness of state courts to industrial accidents and popular fears, which this Note discusses in Part IV. While American courts initially subsidized the industrial revolution,(17) the late nineteenth century's rapid urbanization, incredible economic success, and political reform set the stage for broad legal changes, but these forces were insufficient. Ultimately, a series of terrifying experiences with the revolution's darker side made the industrial age's risks more salient and triggered a wide imposition of strict liability. These dramatic events, combined with broad social changes, seem to have tapped into an inchoate notion of the "cheapest cost avoider,"(18) though the courts did not yet articulate this understanding in any explicit way. This account also sheds light on the errors of the "legal science" scholars of the early twentieth century, who over-conceptualized doctrine, as well as those of more contemporary legal historians and constitutional scholars, who have over-conceptualized historical eras. Finally, federal courts generally ignored Rylands over this period.(19) This Note offers this discrepancy as an example of the different dynamics of the two judicial systems, and of the significance of Erie Railroad v. Tompkins(20) in bringing the federal courts back into line with state common law.

1. RYLANDS IN THE CENTURY OF FAULT

   1. Fletcher v. Rylands: The Case

      Rylands is perhaps as renowned for its bizarre series of events as for its sweeping declaration of strict liability. John Rylands, an extremely successful entrepreneur,(21) needed to provide an additional source of water for his huge steam-powered textile mill, so he hired a contractor to dig a large ditch and create a reservoir. In 1860, the reservoir burst through an abandoned coal-mining shaft, which connected with neighboring active coal mines owned by Thomas Fletcher.(22) The reservoir water flooded the interlocking maze of mines, causing Fletcher to abandon his coal mines permanently.(23)

      Fletcher sued Rylands in the Court of the Exchequer, but this trial court relied on the common law's limitation of recovery to trespass, negligence, and nuisance, and ruled that Fletcher's case met none of these causes of action.(24) Fletcher then appealed to the Exchequer Chamber and won. Writing for a unanimous court of six justices, Justice Blackburn announced a broad statement of liability, beyond the established grounds of trespass, nuisance, or negligence:

      [T]he person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if...