Understanding law through the decision of who decides.
We are going to make a diagram:
| A | B | C |
| D | E | F |
| G | H | I |
So let's say that E is Atlantic Cement. We do some research, on behalf of the Boomer group, and there are two torts avaiable:
Let's say we can only use nuisance (that's what the case assumes). But note that the remedy for both is injunction, so it generally doesn't matter what "physical invasion" means in this case, because the remedy is the same. Damages is an alternative remedy, generally, but the law in NY at this point says injunction.
So if the defendant makes an offer, and the plaintiff says, "not enough," what do we tell the client about our chances at winning? Well, based on history, we'd say "slam dunk:" the law says injunction, and the plant costs $45M. So we'd expect them to pay a lot more to avoid an injunction. But our job as lawyers is to tell our clients what is going to happen, not what has happened in the past.
Now generally, by the way, injunctions are preferred in these property cases because property isn't fungible: location, location, location. But there's nothing cast in absolute stone that says it absolutely must be so. Although as it happens, trespass remains inviolate.
So is there anything that might make us suspect that damages might be the remedy in this case? Well, closing a $45M plant over chump change is a wasteful piece of law. Well, it's enough not to be de minimus, but even so.
What if, because of a surveying mistake, a house gets built partly on the wrong side of the property line, and this doesn't get noticed for years? Is injunction the reasonable remedy: require them to cut off part of the house? Can we imagine a court issuing an order so wasteful, when another remedy is available? Well, an injunction is just the enforcement of a private right: chances are that money would change hands to purchase the right to use the wrongfully-improved land.
Was it this way with Boomer? No, had there been no change in the law, there'd have been an injunction. Atlantic Cement would have had to negotiate with numerous parties, each of whom might have strong feelings on the subject, and each of whom could potentially veto the settlement. And more parties could come along at any moment (see the dissent: worried about everyone in the whole valley), so even though a settlement would cap liability with these plaintiffs, it wouldn't protect against others.
So because we have a shift in numbers, we get a shift in the law. We had this institutional rule of decision, but we saw that it didn't work well in this contect. So it's numbers mostly, but also a little bit of complexity. We're changing the law on the basis of what the implications are of the various available options. Defendant: if you have an injunction, you are closing plants that are worth far more than the harm they are causing, and damages are a great remedy because if the problem is bad enough it'll drive us out of business the same way that the injunction would. But this is facile: people with small claims aren't even going to know about the harm or bother to file.
The court recognizes this problem, so they say that the problem of actually addressing everyone (i.e., air polution at large) is best handled by the legislature.
Stay tuned for air pollution class action next week.
OK, so why not sue in trespass, if we think there's weakness in the nuisance argument? After all, physical particles are landing on our property. One thing that a lawyer should always think about is stretching categories.
If we have a syllogism like "if X then Y," we can "reverse the causality. If physical invasion, then trespass and if trespass then injunction. So if we're worried about the remedy of injunction, then we should be worried about whether this is trespass: the court is likely to say this isn't a physical invasion in order to duck the duty of issuing an injunction. So any time you see "if X then Y," and X has funny terms or conditions about it, then ask yourself if Y is a likely outcome. So "if it's a fundamental right, then we apply strict scrutiny." "Strict Scrutiny" means the court makes the decision. So if that's an undesirable result, then it's likely the court will say it's not a fundamental right.
So where is the law & economics here? The core of that philosophy is comparing benefits and costs/impacts. The only way we could get an injunction is to show that the benefits of the injunction are greater than the costs of the injunction.
If Law & Economics is balancing, we're trying to study who the balancers are/should be. What Boomer says is that we're going to move from the market to the courts for moderate numbers, but when numbers get really big, we should move to the political process.
Property rights: at low numbers and complexity, we have much stronger property rights. The market decides, basically, bargaining in the shadow of the law-- you can sell it for the price you want. When numbers and complexity go up, the remedy changes, and that means your rights change: your sale price is not decided by you, but rather by the courts, in the intermediate stage. It might even be that you have no remedy (i.e., access to the courts is too expensive to justify action). Numbers and complexity determine the extent of property rights. We'll see this in takings as well.
"Participant-based" means focus not so much on the rules, but on who is going to be invested in the problem: will people who might have a claim actually sue? will potential political participants be motivated to act? And so on.