"On one level, civil liability concerns torts and the compensation for damages. That is its private aspect. And that is what the courts do most of the time. On another level, civil liability deals with the prevention of harm, in accordance with society’s regulatory needs. This is the public aspect of civil liability. It is what the courts do from time to time, and what the legislature and administrative authorities do frequently. If you focus solely on one aspect or the other, you end up failing to appreciate civil liability as a whole.”
This is the central idea of the recently published essay by the Italian-American jurist Guido Calabresi—co-authored with Spencer Smith—entitled “On Tort Law’s Dualisms.”1 The stated goal of the paper was to serve as a harmonizing “bridge” in the doctrinal clash between, on the one hand, John Goldberg and Benjamin Zipurski and, on the other, Catherine Sharkey. This prestigious duo—whom Calabresi refers to in the text by their initials, “GZ” —has long been influential in American civil liability philosophy with their theory of “civil recourse,” emphasizing primarily the plaintiff’s right to redress and the role of the state in granting the plaintiff claims for damages against those who have violated their rights. More recently, GZ updated the theory to the term “wrong and redress”2. However, in her review of GZ’s book, Sharkey argues that there is still a gap in this theory—namely, a convincing explanation of what constitutes a civil wrong is still lacking. In her view, Calabresi’s “cheapest cost avoider” theory3 would be essential to fill this gap, as would other instrumentalist theories of civil liability.
Hence, at the age of 90, the Professor Emeritus at Yale Law School felt compelled to join the debate. According to Calabresi, the opposing arguments of GZ and Sharkey can be reconciled based on two premises: first, civil liability operates on two levels. There is the case-specific level and the structural level. Second, civil liability operates in two directions. What constitutes a civil tort most often derives from society’s regulatory needs and, therefore, often from the desire to hold the “cheapest cost avoider” liable. However, what is “cheap” and what constitutes “cost” are concepts derived from society’s values, which are influenced by the current set of civil torts. This reverse link—which is sometimes lost—may represent the future of civil liability. And this is precisely because civil liability must respond to society’s regulatory needs.
a) The case-level and the structural level
NYU Professor Emerita Catherine Sharkey begins her review4 of GZ’s book by discussing the 2019 U.S. Supreme Court decision in Air & Liquid Systems Corp. v. DeVries,5 in which both the majority opinions and the dissenting opinions embraced the “cheapest cost avoider” reasoning based on economic deterrence. Even though they reached different conclusions, the SCOTUS justices started from the same question: Who is in the best position to reduce the risk of harm? According to the majority opinions, the manufacturer of the “bare-metal” product has a duty to warn the public when the product requires the incorporation of asbestos-containing parts because “it will be in a better position than the parts manufacturer to warn of the danger posed by the integrated product.” For the dissenting opinions, however, the legal standard that “makes the most sense today” is the one that imposes the duty to warn on the party “best positioned to understand and warn users about the product’s risks,” which would be the manufacturer of the asbestos parts.
In its counterargument, GZ points out that the DeVries case not only refutes Sharkey’s position but also supports their own, insofar as both the majority and the dissenting opinions in the ruling apply the “cheapest cost avoider” analysis based on economic analysis of the law, but in a way that does not explain or justify the outcome, since they reach opposing conclusions, demonstrating that the concept lacks substance and clarity. In short, the Supreme Court’s decision reinforces the key point that courts are not competent to engage in “law and economics” reasoning.
As Calabresi notes, the fact that some judges disagree on how to implement the principle that civil liability should minimize the costs of accidents does not mean that the concept lacks substance or clarity (in fact, the same is true for any other approach to civil law, including those based on moral responsibility.) However, the fundamental point is that it is a mistake to think that the search for the “cheapest cost avoider” turns every single judgment into a cost-benefit analysis. If that were the case, we would indeed have to worry about the feasibility and costs of such a system. The scheme would not be worth the effort.
GZ is correct in that the theory of “civil recourse” is what courts do in most cases, based on a practical approach that takes civil liability literally within its relational plaintiff/defendant framework (although, with the growth of social insurance, it is often less relational than GZ insists). This is the private side of civil liability.
However, there are also the “landmark” cases that make the law, as well as the more common cases in which the courts, in dialogue with other courts, legislatures, and administrators, shape the direction the law takes. The fact is that the law works with categories. Common to these cases, for instrumental reasons, is the deliberation over where we direct these categories. This is the public side of civil liability.
This is what Calabresi understands as the dual level of civil liability. There is the micro-level—that is, the level of the individual case—which is often, though not always, “private” in some sense, and which is often—though not always—explained by the tort/remedy association. But there is also the macro level—that is, the structural level—which is often “public” in some sense, as it is frequently explained by various instrumentalist considerations, such as the distribution of risks or losses.
Occasionally, judges seek to bridge the gap between these levels. They steer the ruling toward the public aspect of civil liability while deciding a case based on the private aspect—that is, the assessment of damages based on the tort. An example of this is the 1928 case of Palsgraf v. Long Island Railroad Co. In summary, a man jumped into the open space at the end of a railcar as the train was leaving the station. Two railroad employees attempted to stabilize him by pulling him back into the train, accidentally dislodging a package wrapped in newspaper that the passenger was holding under his arm. The conductors did not know that the package contained fireworks, which fell onto the tracks, exploded on impact, and caused a loud boom that echoed throughout the station. As a result, a large metal scale, located on the platform about ten meters away from where the package fell, toppled onto Ms. Palsgraf, a customer who was waiting for another train. She sued the railroad for negligence. GZ argues that the lesson of the Palsgraf case concerns the relational requirement of “substantive legitimacy” in civil liability, granting the plaintiff the standing to seek relief against the railroad. Nevertheless, Sharkey argues that the renowned Judge Benjamin Cardozo did not appear in this case to be the same Cardozo who, in 1916, wrote the majority opinion in MacPherson v. Buick Motor Co.,6 on which occasion he was expressly instrumentalist, noting that: “The principle that the danger must be imminent does not change, but the things subject to the principle do. They are whatever the needs of life in a developing civilization require them to be.” Furthermore, in MacPherson, Cardozo reasoned in terms of the “cheapest cost avoider.” However, in the Palsgraf case, Cardozo applied the principle “the loss should lie where it falls,” deeming it appropriate to let the damage remain where it fell—on Mrs. Palsgraf, who was certainly not the party that could have avoided the accident at the lowest cost.
As Calabresi explains, Palsgraf is a wonderful example of the public/private law dynamics of civil liability. Nearly 100 years ago, Justice Cardozo lived in a world where the attribution of damages for negligence—rather than strict liability—was the prevailing logic. It is obvious that in the Palsgraf case, the Long Island Railroad Company was not negligent. There was nothing negligent about pushing the man carrying fireworks onto a train that was already in motion. Cardozo addresses the issue of negligence to frame the case within the public aspect of civil liability, without violating any principles of private law. The unfortunate Mrs. Palsgraf had no right to compensation from the Railroad Company under any principles of civil liability then in force because the Company was not negligent.
These are examples of a judge pushing the law toward the public aspect of civil liability while preserving the established private outcome. This is a deliberate, step-by-step process that reconciles the private and public needs of the law. At some point, another judge will find himself at the top of a ladder “built” by a predecessor, leading him to the macro level—and presenting him with the opportunity to reshape the law. Then, he will be back at the micro level. Not so far removed from Dworkin’s “chain novel.”
b) The “reverse link” of civil liability.
As Calabresi points out, while civil torts derive in principle from society’s regulatory needs, civil liability ultimately operates in two directions. The judges who gradually shaped civil liability began with a small collection of basic torts. From time to time, they refined and revised the collection, which features both “classics” and important new works. One can imagine them as works of art of similar genres, grouped in thematically organized rooms. Occasionally, new rooms are added to house new torts. Civil liability is like this: a gallery built from a curated collection of torts. However, just as a curator selects works based on society’s values, in selecting works the curator ultimately shapes society’s values. The “gallery” of civil torts is, therefore, a reflection—and a foundation—of our collective values.
Consider, for example, punitive damages. They reflect a desire to multiply compensation in such a way that the expected sanction for wrongful conduct equals its social cost. In certain contexts, such damages may also reflect a desire to normalize the transfer of rights, so as to prioritize the “property rule” over the “liability rule.” Over time, the imposition of punitive damages for certain unlawful conduct encourages people to perceive and regard such conduct as more costly—and therefore more worth avoiding. In other words, as a result of how such conduct is treated in liability cases and people’s expectations of compensation, certain behavior will come to be viewed as more expensive. And this, in turn, will affect the “cheapest avoiders,” who seek to avoid these costs.
A similar story can be told regarding compensation for emotional distress, for which civil liability imposes substantial limitations. Such damages are often not compensated. Why? Could it be that the victim of such damages is considered the “cheapest avoider” of such harm? If so, the more a society compensates people for purely emotional harm, the more people will feel emotionally harmed and, in a sense, will experience more harm and seek more compensation. Calabresi does not intend to suggest that purely emotional harm is not real. They are real and must be recognized in some way. But in deciding whether—and how—to legally recognize emotional torts, a society may also be considering their effects. Some, such as the anguish felt upon seeing a loved one die, society will readily accept. Others—such as the sense of anguish we all feel when witnessing a tragic traffic accident—society may prefer to minimize by denying any possibility of redress, since compensation affects costs, which in turn affect the right to redress.
Calabresi concludes that it is precisely because of these back-and-forth dynamics between the private sphere—my right to seek redress for a tort—and the public sphere—a tort is what society decides must be remedied and how—that civil liability becomes the fascinating field that it is.
Far from “weighing in” on a clash among the heavyweights of American tort law, I have only this to add, from a Brazilian perspective: in our country, the private aspect of civil liability has been properly developed, with a focus on the principle of full compensation. It is now time, through necessary deliberation, to turn the spotlight on its public aspect, so that we may develop the Latin maxim “casum sentit dominus,” or, as the English prefer, “let the loss lie where it falls.” Only in this way will we reconcile the fundamental right to compensation and the protection of the injured party’s legal interests with the protection of the wrongdoer’s freedom of action, based on criteria of social utility that govern the regime for attributing damages arising from tort. After all, as Oliver Wendell Holmes[7] proclaims, “it is good policy to let losses lie where they occur, except when there is a special reason to intervene.”
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- CALABRESI Guido & SMITH, Spencer. On tort law's dualisms. Disponível aqui.
- GOLDBERG, John C.P; ZIPURSKY, Benjamin C. "recognizing wrongs", Harvard University Press, 2020.
- Theory developed in the 1970 work, “The Cost of Accidents”: “The search for the cheapest avoider of accident costs is the search for that activity which has most readily available a substitute activity that is substantially safer. It is a search for that degree of alteration or reduction in activities which will bring about primary accident cost reduction most cheaply”. When an accident can be prevented by either party, it seems obvious to place liability on the party that could have prevented the accident at the lowest cost.
- SHARKEY, Catherine M. Modern Tort Law: Preventing Harms, Not Recognizing Wrongs. Disponível aqui.
- Under maritime civil liability law, a product manufacturer has a duty to warn if its product requires the incorporation of a part produced by a third party, the resulting fully assembled product is likely to be dangerous for its intended uses, and the manufacturer has no reason to believe that users of the product would be aware of that danger. In a 6-3 legal opinion authored by Justice Brett Kavanaugh, the Court held that Air and Liquid Systems had a duty to warn the plaintiffs about the danger posed by the ship’s components, even though the Navy—not the manufacturer—had added the asbestos-containing parts. Three approaches emerged regarding the duty to exercise reasonable care in warning potential users about a product that requires the subsequent incorporation of a hazardous part for the assembled product to function as intended. Of these three, the Court chose the approach that imposes neither the narrowest nor the broadest liability on manufacturers, finding it most appropriate for the maritime context, which recognizes “a special concern for the welfare of seafarers.” Justice Neil Gorsuch wrote a dissenting opinion, joined by Justices Clarence Thomas and Samuel Alito. The dissenters would adopt the “bare-metal” defense approach, consistent with traditional common law civil liability law.
- In MacPherson v. Buick Motor Co., the plaintiff, bricklayer Donald C. MacPherson, was injured when one of the wooden wheels on his 1909 “Buick Runabout” collapsed. The defendant, Buick Motor Company, had manufactured the vehicle but not the wheel, which had been manufactured by another party but installed by the defendant. It was admitted that the defective wheel could have been discovered upon inspection. The defendant denied liability because the plaintiff had purchased the automobile from a dealer, not directly from the defendant. According to Judge Benjamin Cardozo, “if the nature of a thing is such that it is reasonably certain to endanger life and physical safety when used negligently, then it is a dangerous thing. Its nature warns of the consequence to be expected. If, in addition to the element of danger, there is the knowledge that the thing will be used by people other than the purchaser—and used without further testing—then, regardless of the contract, the manufacturer of that dangerous thing has a duty to make it carefully. If the manufacturer is negligent where the danger should have been foreseen, liability will ensue.”
- HOLMES, Oliver Wendell. The common law, American Bar Association, 2009, p. 42.