THIS WEEK IN TORTS

Today we’re going to take another stop on our abridged tour of theories of tort law with a look at Social Utility Theory. To this point we’ve talked a lot about why people sue or don’t sue, but you can’t really understand tort law without understanding why people win or don’t win. In theory, people should win based on the merit of their claim, fairness, justice, equity, righting wrongs, etc. But we’ve all seen or heard about cases that seemingly defied equity and did not go in the way of justice. When that happens, often it is because the court is focused on more than just the parties before them. It is debatable whether they should be in the business of looking outside the courtroom, but judges do sometimes focus on what is best for society at large. And when they do, it is an expression of what we’re calling Social Utility Theory.

On July 13, 1977, the lights went out in New York. The city that never sleeps was rendered a convoluted mess. People got stuck in elevators, people got stuck in trains. Traffic snarled as all the signals went blank. Looters emerged and violence erupted. The health care system plunged into chaos, as patients lay on the operating table with only emergency backup lights to guide their surgeons’ hands. There were around 7 million people living in New York City in 1977, and you can imagine far more than 7 million instances of damage and loss due to that blackout.

But when injured parties tried to sue Consolidated Edison, the city’s electric company, they were largely shut out from recovery. In Straus v. Belle Realty Company and Consolidated Edison Company, a man fell down the stairs in his apartment building’s darkened stairwell as he attempted to recover his emergency water supply in the basement. The man sued both his landlord and also ConEd on the theory that both of their negligence led to his injury.

The court determined that while ConEd may have owed a duty to the plaintiff, it should not be held liable due to policy concerns about overextending liability:

“... while the absence of privity does not foreclose recognition of a duty, it is still the responsibility of courts, in fixing the orbit of duty, ‘to limit the legal consequences of wrongs to a controllable degree’... and to protect against crushing exposure to liability. ‘In fixing the bounds of that duty, not only logic and science, but policy play an important role’... The courts' definition of an orbit of duty based on public policy may at times result in the exclusion of some who might otherwise have recovered for losses or injuries if traditional tort principles had been applied.”

The court in Strauss basically said that while the plaintiff has a reasonable case in theory, in practice it would establish a precedent that might create boundless liability that would ultimately be injurious to society at large. For the torts system to work, the scope of liability must be limited to certain bounds. This line of reasoning has a long history, exercised by some of the most distinguished judges ever to don the robe. The classic example is the opinion by Benjamin Cardozo, a Lion of the Law™ if there ever was one, in Moch vs. Rensselaer. In this case, the defendant, the Rensselaer Water Company, had a contract to supply water to the city of Rensselaer. While the contract was in force, a building set on fire and the fire spread to the plaintiff’s warehouse and destroyed it. The plaintiff sued the water company for failing to supply them with enough water to put out the fire and prevent the destruction of their property. However, the court disagreed, explaining that allowing the plaintiff to recover in this case would overextend liability:

“We are satisfied that liability would be unduly and indeed indefinitely extended by this enlargement of the zone of duty. The dealer in coal who is to supply fuel for a shop must then answer to the customers if fuel is lacking. The manufacturer of goods, who enters upon the performance of his contract, must answer, in that view, not only to the buyer, but to those who to his knowledge are looking to the buyer for their own sources of supply. Every one making a promise having the quality of a contract will be under a duty to the promisee by virtue of the promise, but under another duty, apart from contract, to an indefinite number of potential beneficiaries when performance has begun. The assumption of one relation will mean the involuntary assumption of a series of new relations, inescapably hooked together. Again we may say in the words of the Supreme Court of the United States, ‘The law does not spread its protection so far.’”

Both Moch and Strauss involve liability stemming from the failure of public utilities (water and electricity), but we might argue that the entire field of law and economics adopts similar legal reasoning. Law and economics is a gigantic field full of people who think very deeply about these things, and we cannot possibly do justice to describing the bounds of the field. But put most simply, law and economic theory states “that law is best viewed as a social tool that promotes economic efficiency, that economic analysis and efficiency as an ideal can guide legal practice.”

It would be reasonable to say that the law and econ movement saw its genesis when Lion of the Law™ Learned Hand created the “B<PL” formula in United States et. al. v. Carroll Towing Company. When assessing duty, hand stated that:

“[T]he owner's duty, as in other similar situations, to provide against resulting injuries is a function of three variables: (1) The probability that [a harm will happen]; (2) the gravity of the resulting injury...; (3) the burden of adequate precautions.”

That is, multiply the gravity of an injury and the burden of adequate precautions the defendant could have taken, and compare that to the probability of an injury. By including the burden of taking precautions into account, Hand seems to have formally introduced social utility into the courtroom.

We might see a modern example in McCarty v. Pheasant Run. In Pheasant Run, a woman was assaulted in her room at the Pheasant Run Resort, by an intruder who entered the room through a sliding glass door behind a drawn curtain. Judge Richard Posner, yet another Lion of the Law™, explicitly pursued a BPL analysis even though it was not the law in Illinois, which he was supposed to apply. Posner looked at the cost of better locks and the burden of the hotel installing the locks relative to the harm suffered by the plaintiff. Even though hotels owe a heightened duty of care to their customers in Illinois, the judge still found that the hotel had not violated its duty by neglecting to lock or check the lock on the door. Basically, the plaintiff was out of luck because Poser determined it would have cost the hotel too much to install adequate locks. It is an outcome that many might dispute, but is at least theoretically based on some kind of analysis that promotes the best outcome for society.

Cases like Strauss, Moch, and Pheasant Run show that in our torts system social utility and justice can sometimes seem opposed to one another. It is always important to remember that our torts system is a creation of humans and of our society. People in another place could choose a completely different system that might create a better, or at least different, balance between justice and social utility. In our upcoming fifth and final installment of Theories of Torts, we leave these shores altogether and travel to middle Earth (aka New Zealand) which has a novel approach to torts.

If you were to take a look at a zoning map of the town where I grew up, you’d see that the vast proportion of plots are zoned residential, with a small cluster of commercial land in our shopping district. But smack dab in the middle of town you’d see one vast parcel that is zoned completely differently from the rest: it is my family’s ancestral land, and it is zoned for agricultural use. The town I grew up in is now a wealthy commuter suburb but once was dotted with farms. Somehow my family’s business was the only entity to survive the introduction of nearby commuter rail stations in the first half of the 20th century and the highways and advent of suburban living during the second half of the 20th century. In a town of bankers, we were farmers.

And I was proud of that distinction. While my friends had a house, we had shops and garages and barns and forests. Where they had a few trees, we had forests and fields and lakes and streams. And where they had lawn mowers and rakes, we had industrial-scale payloaders and tractors. For a kid, the tractors were amazing, with their size and power and diesel-soaked roar. But that’s exactly the sort of thing that might annoy a neighbor, especially if they heard it at 7am.

And if the neighbors had a serious problem, they could have a remedy in tort. Specifically the tort of Nuisance. Boiled down, the law of nuisance says that you can do anything you want with your private property so long as it doesn’t interfere with somebody else’s ability to do whatever they want with their private property. It is an extraordinarily old tort (even older than negligence!), with known cases dating back to the turn of the century--the 12th century. In one example from 1201, Simon of Merston petitioned King John for compensation when his neighbor, “Jordan the miller,” raised the water level of his pond in a way that could damage Simon’s property. King John ordered that the pond be destroyed and awarded Simon three shillings in damages.

Common modern examples of a nuisance include a dog that incessantly barks, a pig farm that incessantly smells, or an assembly line that incessantly clangs. There are both public and private nuisances--a public nuisance being one that affects an entire community rather than just an individual. Public nuisance law has evolved to encompass activities that are considered “indecent” or “offensive to the senses” (Richard Epstein, Torts (1999) 357). So if your neighbor is running a prostitution ring or a gambling joint, the city might have a case for nuisance because of the offensive nature of these types of activities and the cast of characters they might invite to the neighborhood. One of my favorite recent nuisance disputes involves the culty hot sauce Sriracha. It seems that for a brief period every year Huy Fong, the producer of the hot sauce, would have to process hot chile peppers in a way that caused some of the capsaicin to get into the air. Neighbors would complain about burning eyes, sore throats, and other maladies. It was an classic nuisance, and has been the subject of litigation for several years.

While these cases may seem clear-cut, nuisance cases are rarely so straightforward. In fact, according to William Prosser, a bona fide Lion of the Law™, “there is no more impenetrable jungle in the entire law than that which surrounds the word nuisance” (Prosser, The Law of Torts (3rd ed. 1964) 592). Perhaps this is because, by definition, the tort seems to clash with the classic American tradition of promoting property rights.

Another American tradition is the reverence of farmers. We have been putting the noble agrarian on a pedestal since the days of Thomas Jefferson. What is more American than staking out a plot of land, getting your hands dirty, and emerging with a crop? But farms are dirty and messy and smelly. They can pollute and tarnish our environment. Who among us would actively want to live next door to a pig farm? As a result, farmers are often the target of nuisance suits by abutters whose quality of life has been diminished by their neighbors’ activities.

This sort of thing is particularly acute in towns like the one where I grew up, towns where the agricultural land is surrounded not by other farms but by people who simply want to have a peaceful refuge from their daily grind when they come home. It would seem that the days of farming in these communities is numbered. But local governments have stepped in to save the day, at least from the perspective of the farmers, in the form of “right to farm” statutes.

A right to farm statute is a law that specifically states that noises, smells, and other nuisances incidental to traditional agriculture cannot be the basis of a nuisance lawsuit against a farmer. For the sake of illustration, here is the text of the Right to Farm statute in Chelmsford, Massachusetts (which is based on a MA state model):

“The right to farm is hereby recognized to exist within the Town of Chelmsford. The above-described agricultural activities may occur on holidays, weekdays, and weekends by night or day and shall include the attendant incidental noise, odors, dust, and fumes associated with normally accepted agricultural practices. It is hereby determined that whatever impact may be caused to others through the normal practice of agriculture is more than offset by the benefits of farming to the neighborhood, community, and society in general.” Chapter 127-3: Right to Farm Declaration

Right to Farm statutes represent government and legislation staking a claim on matters traditionally reserved for the common law. When I think about these laws I can’t help but think of that property map from my hometown, the one where my family’s property is an island of agriculture in a sea of residential homes. The right to farm, it seems, is meant to protect families just like mine. And in towns all across America, that is exactly why Right to Farm statutes exist.

But more and more, the phrase “Right to Farm” has become associated not with protecting the noble farmer but instead massive agribusiness. That’s because the newest wave of Right to Farm statutes don’t just prohibit nuisance lawsuits against a farmer with a flock of confident roosters. These new statutes can also prohibit local governments from enacting and enforcing new environmental regulations, such as those limiting the use of certain hazardous pesticides. I am always wary of a good idea being co-opted by the powerful to promote their interests, and it seems that may be happening here. As a person who owes his college tuition to agriculture, I generally support the concept of Right to Farm statutes. But I am very, very wary of where they may be headed.

I asked my father recently if he could recall a time when our family was the subject of a nuisance complaint as the result of maintaining our little island of agriculture. To my surprise, he said he wasn’t aware of that ever happening, despite all the trucks and tractors and fertilizers we employed over the years. It seems that our town did not need a Right to Farm statute. Instead, our neighbors naturally adopted the notion that our presence outweighed any negative side effects of our agricultural activities. Last year, after a century of planting and growing, selling and kids playing, my family finally sold our business so that my parents could retire. Generations of my relatives owe so much to that place. And I’d suggest we also owe at least a tip of the cap to our neighbors, who graciously accepted and embraced our little island of agriculture amidst their sea of suburban homes.

-Ellis & Acton