NARRATOR: Thanks for joining this episode of the No. 86 lecture series, in which Professor Richard Epstein discusses various issues in tort law, such as strict liability, intentional harm and negligence. This lecture is part of a series with Professor Epstein on how simple Common Law principles give us tools we can use to deal with complex technological and social challenges. Professor Epstein is one of the most prominent legal scholars of our day. He is the inaugural Laurence A. Tisch Professor of Law at NYU School of Law, a Senior Fellow at the Hoover Institution, and Professor of Law Emeritus and a senior lecturer at the University of Chicago. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. - PUBLIUS: How does Tort Law stabilize the arrangements made by Property Law and Contracts? What is the difference between strict liability, intentional harm, and negligence? What sort of circumstances complicate or blur the categories? What role should the government play in regulating competitive market activities? RICHARD EPSTEIN: In speaking about legal relationships we've talked about those which are in general productive. How it is that you have individual autonomy, how it is that people can acquire property and how it is that they enter into contracts. It sets boundaries between various kinds of parties and the major function of the tort, well is to make the boundaries are not altered by strangers to their advantage in ways that will compromise the productive labor of those people who own public property or who have accessed the private property. So the law of torts essentially is divided into two parts that matches this. So, for example, there is a body of law under study today, known as the Law of Public Nuisance and what it is designed to do, is to make sure that common ways are left unimpeded. And so the law of Public Nuisance it says that you cannot block a public right of way, and if you do, you're going to be subject to a fine. In addition, going back to the middle ages, actually 1535, the rule was if somebody suffered special damage from a public obstruction, what happened, that person could sue for it's own private damages, even as the fine managed to cover the general losses. What an illustration of special damages? The key case is somebody is injured while driving a car into an obstacle where everybody else is just slowed down. And this division between general and special damages shows a very nice way in which you can cover what is a public remedy, by the state, and what's a private remedy, by the parties. The other half of the law of torts on the boundaries situation has to deal with private parties. And this in turn is divided into two halves. The Traditional Law of Trespass said that no one party is allowed to enter the land of another person, no one party is allowed to take or destroy the child of another person, no one party is allowed to commit personal injury against somebody else. And the hallmark of trespass was the direct application of force to the personal property of another individuals.Think about this as a boundary altering type explanation. So, if you deal with an, a trespass, you look at the map, and all of the sudden, if you thought you knew what the boundaries of a part of land are they're gonna be forcable changed by the unilateral actions of other individuals. If you look at the improvements upon the land, some of them are whisked away by strangers. So the early tort while heavily concentrated on the way in which the legal system prevented these kinds of direct threats to social order. If you're dealing with trespass, you have to worry about nuisance. And so, analogous to Public Nuisance is the Law of Private Nuisance. I may not enter your property by way of trespass, but if I commit various kinds of wrongs, which smoke out neighbours, cause pollution to neighbours and so forth, these two things will also be subject to protection. So essentially what the Law of Tort is designed to do is to prevent people from changing the boundaries to their own advantage. What the Tort Law does is to stabilize the arrangements that are created by property and enhanced by contract, and in the early cases it was these stranger relationships was the focus of the law. This was true on the Roman Law, and it was true on the Anglo-American Law, all the way through, I would say, in the end of the nineteenth century. As a matter of social order, the stranger cases are clearly the most vital. But from the earliest time, when people entered into contractual arrangements, many things could happen that would go wrong. Some of them things like simple non-delivery of goods. But in other case, for example, in the provision of medical services, somebody who got them might be injured. And the question under these circumstances, is could they sue for the damages they suffered, and if so could they sue in tort. The theory was that this was a contract to be sure, but the harm in fact made it look like as though it were a tort arrangement, and from a very early time, um, there was what they called concurrent actions, you can sue in contract, or you can sue in torts. But there's a lot of difference between the two cases. In the stranger case, the basic rule or reliability tended in early days to be strict. You entered my property, it didn't matter if you thought it was your own or not, the boundaries had to help. As time goes on, there are other cases of consensual arrangements that have to be dealt with. There are cases where people invite other people into their property. Those are called occupier liability cases and generally speaking if you invite somebody into your home and there's a latent defect so they fall down, you might be well responsible for the injury. Later on, we start talking about product liability cases. These arise when A sells goods to B, and then B sells them down to C, so there's no direct contract relationship between A and C, and the early Law of Product liability said if you create a trap or a late defect in the thing that you sold, even in the absence of privity you could be responsible for the harm that was caused. Note that in the consensual cases the easiest line of defense is one of self-help: you don't have to buy somebody's product, you don't have to enter into their home. So that the consensual arrangements are more concerned with making contract arrangements PUBLIUS: Can you talk about situations where strict liability might not apply? RICHARD EPSTEIN: When we talked about the problem of Tort, what we did is draw a kind of a distinction between stranger cases on the one hand, and those cases that arise when people enter into a consensual arrangement with one another. And it turns out that this line is sometimes vexed and it's important to understand why that matters. So one of the famous cases in Torts is a case called Brown and Kendall, where,um, there are two dogs, one owned by the plaintiff and one owned by the defendant. It turns out under these circumstances, the defendant takes a stick in order to prevent the two dogs from fighting. As the plaintiff moves closer to the plaintive, he gets poked in the eye and the question is whether or not he could sue for the harm in question. So let's start with this is a strange case at first. If it turned out that you raised your strick--stick, and you happen to hit a perfect stranger behind you, with no ownership interest in his situation, the traditional earlier rule was that the liability was strict. Meaning in effect, even though you hab no intention to harm the party and even though you were not negligent with respect to that party, if in fact you damaged a spa-, a stranger the loss will fall on you, not upon the other individual. The alternative rule was to say that you were only liable in the event that you meant the harm to occur or were careless in the prevention of that harm. So the stranger case actually puts the point very clearly in Brown and Kendall. And what Chief Justice Shaw, in this case, is he treated as though it were a stranger case, thought that liability would be unfair under the circumstances and so therefore found the rule which was again, dating back to Roman times, that there was no strict liability in Tort for personal injuries inflicted by one party upon a stranger. But the other way in which to understand this problem is to put yourself into the position of the plaintiff. This plaintiff was not a stranger, this plaintiff was somebody who, in fact, benefited from the actions that the defendant did. And this was a person who constantly came closer to the action. And so there are two ways in which you can displace the strict liability rule that are particular to this case, but do not apply in stranger cases. One of them, is to introduce the notion of plaintiff's conduct. You assume the risk by going closer to the situation, so the strict liability rule does not apply, and the intuition here is very clear. You had full view of the situation, the other guy was preoccupied, you're the one who is in the better position to take precautions and if you decide to venture too close to the situation, shame on you, you should be responsible. And the other element is as follows: normally when people act, they act dor their own benefit. But in this particular case, he was acting for the benefit of both parties, trying to preserve both dogs. So the argument is when somebody's tried to confer a benefit upon a stranger the strict liability rule is now unappropriate and a negligence rule is appropriate, because essentially you want to give a break to the fellow who's tried to provide a benefit, in whole or in part, to another individual. So, the way I think that it's best to think about these cases is to first treat every case of an injury as if it's a stranger case. And then, after you do that, ask whether not there's an affirmative defense based upon the plaintiff's conduct, which otherwise alters the outcome in the case. The analysis that was given in Brown and Kendall all assume that the particular injury in question was accidental. Meaning neither the party inflicted the harm wanted to do it, nor the party was injured wished to accept the risk. The situation that arose how do you think about situations in which there's a deliberate harm? I think the correct answer to that is to superimposed it upon the doctrines that have already been applied . So if you go back to Brown and Kendall, and now you just change one fact, and assume that you have a defendant who in wielding the stick has some kind of animus towards the plaintiff and knows that he's falling behind. So at this particular point the intentionality completely changes the nature of the action. The question how ought that to be incorporated. And the best way is to go back to traditional views associated with pleading. And those do not simply divide the world into a claim on the one hand and a defence on the other. What they do is they rely on the notion of defeasibility. Defeasibility is a notion which says there's always a connection between the prima facie case and the ultimate issue. So it's one thing for me to hit you and it's another thing that I've committed trespass against you. If I hit you it means there are opportunities for defenses, if I say it's a trespass it means that we've already concluded that it's a wrong. So the prima facie case of trespass with respect to the person is in fact that I hit. The affirmative defence that we allow, is that you assumed the risk when you started coming for. Now, once you allow that defence, it too should be defeasible and the way in which it turns out to be beaten or overcome is to show that the defendant knew about the dangerous situation in which the plaintiff was located and decided to inflict the harm in question. And so therefore when you can say is we now have a way of putting a strict liability for accidents into harmony with intentional harms. But it's absolutely critical to keep these particular stages involved because we certainly don't want to require that there be proof of intentional harm in these cases where there was no form of assumption of risk whatsoever. And then, just to finish the story, if you go back to the cases in which you are dealing with accidents which cause surgical wounds, the argument runs as follows: the prima facie case is that you cause a particular wounded distress in question, the obvious point is if there's a surgery, you, the patient, take the risk of accidental harm. Then question is what's the understanding between the two parties if the harm in question is not purely accidental, but in fact, the subject of some degree of culpability by, um, the defendant physician. Almost everybody agrees that deliberate harm by a surgeon is utterly intolerable and will be held liable, and the question then is what happens when there's some form of culpability which is less than deliberate harm. Either ordinarily negligence or recklessness. The recklessness case is generally regarded as pretty clear and the defendant will be held liable if he's utterly indifferent to the wealth and welfare of his patient. Nobody would ever accept surgery, if they knew that the doctor could be cavalier in the way in which he or she was treated. The ordinary negligence case is much more complicated, because everything depends on what the standard of care is. There are two candidates here. The first candidate is you do this in accordance with the custom of the trade. And that was the traditional standard for a great deal of time. The logic was that the plaintiff can certainly expect that the defendant does what other people in the business does, and the defendant is perfectly willing to undertake an obligation which by virtue of the fact that is constantly imposed means that it's not impossible for him to discharge. And what happens thereafter is, if you have somebody who is sufficiently trained to do the work, knowing that that person has to be held to the responsible level of a customary standard of care, he'll just decline the service and you'll go to somebody else. The second version is to say what we do is a cost-benefit analysis to see whether or not the physician, all things considered, exercised the optimal level of care. On that view, custom is evidence of what should be done, but independent stuff could be taken into account. The shift between these two systems is absolutely critical. Under a customary system you'd have a frame of reference which is pretty easy to resolve and so cases will be expeditiously dissolved--decided. When you decide to say it's just an open ended cost-benefit analysis, the plaintiff can always refer to a and additional precaution that could have been taken, that wasn't taken, the defendant will then try to say that it's to costly or creates complicated situations. And what you have to do is to try, at a cost of a trial, after an injury, to reconstruct what was rational conduct before him. My own view, is that this particular approach, though common today, it's extremely costly to do and be extremely unreliable when you do it, and see largely disruptive of the contractual arrangements, because owing to the high potential for liability under this so called cost-benefit situation, you will start to see physicians in hospitals declining service. So I think that the third part of the situation, using customary care in professional cases, makes the system complete. What is the complete system? Strict liability in stranger cases, reasonable care standards with respect to the situations in which you're taking on care obligations and third a strong prohibition of deliberate harms in those situations where people have assumed the risk of accidental injury. Thus far, in speaking about the stranger cases I've talked about the relationship between strict liability, negligence and intentional harms. But there's always another element lurking in these particular cases. Is given that you've not met the established standard of care applicable, did your particular actions caused the harm in question? The modern view on this subject is to invoke a two part test. The first is called but-for causation, the second is proximate cause. Under the first part somebody asked the question is - but for the negligence of a particular defendant or but for the action of a particular defendant, with the harm of the plaintiff happen. And if the answer to that question is no, then the defendant turns out to be out. Turns out this test is simply too capacious because there could be all sorts of events. Like I woke up in the morning, two hours earlier than usual, I then went out and drove on the highway, two hours earlier than usual and I hit nobody with no wrong in the way in which I conducted my car. Everybody would say that since the early treatment did not increase the risk of probability or harm, it has to be irrelevant. So if you start with a but-for system, you then you always develop a system of proximate cause, a limitation as to what particular injuries that you do cause you're not responsible for and you develop either a foresight or a directness test. A simple way of looking at this is it actually go back to the traditional common law and Roman law solutions. You don't start from any previous condition. What you do is to start with the closest relationship and then slowly go back. And so, if you think about this in a literal fashion, the word proximate cause means the nearest cause, how does this start to operate. The early cases of trespass give the clue to how it is proximate cause is done. If, in fact, you do what was said to be in the Roman system, causation corpore corpore, which is fancy Latin for by the body, to the body, causation begins with a punch to the face. Or a kick in the leg. And the connections here are very tight. And everybody therefor understands what's going on and there's no dispute about it. What then happens is can you go beyond those particular cases, the five other situations in which liability ought to be done. And so what you then try to do is to go backwards from the immediate cause to see if there's something else in the cycle which you want to take into account. So suppose it turns out that what happens is that B happens to run on to A's land. Now there's a C in the background, and what C did was to chase A on to, rather chase be on to A's land. Under those circumstances, C is certainly entitled to say, I did not enter your land, I did not tramp on your crops. But everybody says that to the extent that you imposed coercion upon an intermediate actor, you should be treated as though you're responsible for the harm, as if you did it yourself. And so what you say is actions done under coercion by a third party mean that the actions of the third party are not quote, unquote too remote. Note that, at this particular point in time, the definition of proximate cause it's oddly contradictory. It started with meaning the closest cause and now the question is to figure out how remote causes can be held responsible. and the way in which this is correctly stated into the traditional doctrine is the action of B, when subject to the coercion of C means that, in fact, it did not break the causal connection. The issue is can you go beyond all of this. And here again the early Roman cases picked up by the English cases are very instructive. So to take the Romans' examples at first. Suppose it turns out that I wished to engage acts to poison you. One of the things that I can do is simply jam the poison down your throat by force and everybody will say notwithstanding that there's a chemical reaction at the end of this, that it was by the body and to the body. But suppose I don't want to have to fight, you know, what I do is set poison in front of you and I can seal it into some mint tea, so you can't taste it. And under those circumstances now you drink it in ignorance of what's going on. And the question is can the fellow who put the poison inside the pot say I'm not responsible for the harm, because I didn't make him drink it. And the answer that everybody in every legal system gives to that question is that given the fact that the person who drank the thing, did so under a fundamental mistake as to the danger, meant that his activity was not voluntary with respect to that risk, so the remote actor is responsible. Change the situation just a little bit and assume the middle party actually knew that it was poisonous and was not subject to force of any kind or any sort of threat. At that point if he decides to drink it's his own fault because you have an assumption of risk. And so, what you now do is you have a system in which you allow recovery for direct harms and you also have recovery for indirect harms. This can be extended beyond the cases of poison to other areas. So suppose it turns out that generally speaking somebody runs you down with a truck. And what they point out is while they were riding down the highway they managed to come on a board which was weakened by a third party so that they lost control of the vehicle. And that this was a latent defect in the high-, in the highway. It is generally been universally held that the party who created the defect in question so that the other fellow ran off the road would in fact be responsible because that hidden defect that gave it the voluntariness of the particular action in question. It then becomes even more complicated because you assume, suppose that the middle man, if he had paid more attention, could have discovered the defect in the road and have avoided the situation. And here the general answer is that the negligence of the intermediate party does not sever causal connection to the remoteness guy, but in effect now there may be some way in which those two parties, um , the person who ran you off the road and the person who created the dangerous condition have to essentially divide the loss. You take the third case,um, there is something in the road which is dangerous, somebody sees it and says "Aha, this is perfect cover. I really want to hurt this party." and then he deliberately uses that condition to lose control of the vehicle and hammer the third party. Under these circumstances, the general opinion is that the harm is now too remote because the intermediate party had complete control over the situation when it tried to cause a deliberate harm. And then finally there’s an easy case on the other side to show that remoteness of damaged is not a simply an unprincipled ad-hoc concept. Suppose it turns out there a whole on the road and then somebody fixes the whole. At that particular point if someone else decides to recreate that whole the first fellow is out from under the situation. It's very important in Torts to understand these cases because the model intellectual approach to the subject is everything about proximate causation cannot be reduced to principles, it's all ad-hoc and it's a matter of social policies to whom would be rather held responsible to whom. And if in fact you have clear conceptions of causation, you don't have that degree of judicial discretion and you cannot sort manufacturing, liability and remote partes like those people who paved roads and so forth for the harms that are caused by others. And it's interesting to see what the division is. Uh the great believer in limited causation was a book by Hart and Honore called “Causation and Law.” And then the great positions on the other side were taken by a number of other people, the most famous perhaps is a man named Wex Malone. And the one guy said "causation is a principle to inquire, we just have to understand it" and the other fellow said "it's just a shield for policy and we’re always thinking about something else". What's that something else? Laws redistribution, deciding ways to milk somebody with a deep pocket and the like. And if you switch to that type of situation, essentially the Tort Law becomes unravelled bacause people are now held responsible for what they did not do, which means that they will have to invest money to prevent injuries when somebody else in the chain of activities is in a much better position to prevent the losses in question. That is proximate cause in three minutes. It turns out that in virtually every Torts case once the standard of liability has been established you have to ask whether the conduct of the defendant is sufficiently connected up with the loss of the plaintiff, that it's appropriate to charge him with losses. That are two ways to do this. The modern way starts with very remote causes and then tries to narrow the situation down. The traditional way starts with immediate causes and then tries to move the system backwards. So that under the traditional vision you always start with trespass and then you start to move with indirect losses which can occur by setting traps for example or setting poisons in front of other individuals. If you're actually try to trial a case before a jury, using the traditional methods it's much clearer, and if you use the modern methods, what happens is the jury simple does not know what it means to talk about necessary and sufficient causes of harm. So starting tight and going broad it's the way it's done. And once you do that, what you're looking for, it's not whether injuries are quote, unqoute ""reasonably foreseeable" , you're trying to ask whether this some event which intervenes between what has the defendant has done and what has happened to the plaintiff. And one can explain that in great detail with particular cases. That doesn it, right? One of the things that's commonly done today in the law of Torts is to use a system of negligence law with respect to strangers. And this leads to very profound distortions in the way that the system operates. Take the simplest case possible. Somebody it's playing cricket, it's an exceptionally long ball, out of the field and in effect damages the woman standing on the public road. This was the english case of Bolton and Stone. And the English judges decided under these circumstances that the defendant should not be liable because the probability of an accident at the time of the beginning was so low that it could be safely disregarded. This is a terrible mistake. The probability of the injury being low does not influence the question of who should pay for it, one or the other. It may well be that the defendant is perfectly rational to take this particular risk, but it hardly follows that if the risk is rational he ought not to pay the plaintiff who is injured in consequence of what had happened. So how should the matter be looked at? Well the first thing is this is a simple case of you hit me, with respect to the individual batsman who hits the woman. And people will then come back and say, "You know this seems rather odd that the batsman should be responsible. Why not put the responsibility either on his team or on the owner of the grounds?" And the answer is the common law had a way to do this and that was a system of vicarious liability. If you were an employee of if you were the owner of premises on which other individuals acted, the basic rule was anybody who acted within the scope of employment or was lawfully on your premises, their actions could be yours to answer. So what would happen is, after you have strict liability for the individual player, you have vicarious liability to both his own team and to the home owners. This is far better than what happened in Bolton and Stone. Saying that you can never sue the batsmen, what they tried to do is to figure out whether not there was negligence in the way in which you designed the park. And this led to a wild goose chase. You ask how do they lay out the cricket field forty years before. Was the boundary line too close to the street, should it been moved, should they have raised the wall? If you decide they have to raise the wall, how do you know that the wall would have been raised high enough so as to block this particular ball and so on. So what strict liability does, is it keeps the problem of causation into manageable proportions and then the doctrine of vicarious liability is a much better way to get remote actives. And interestingly enough, in the Bolt and Stone situation, the cricket club let poor Miss Stone keep the injury. It was said to be a matter of ethical compensation, not legal compensation. But if you knew what the strict liabilities required, and how the vicarious liability rules worked, it was both legal and ethical, um, compensation, so that you would now be able to adjust a, the legal rules to meet ordinary social expectations, which is something that the negligence system cannot do. PUBLIUS: Is Tort Law only concerned with physical harm or injury? RICHARD EPSTEIN: All right. Thus far in speaking on the law of torts the concentration it' been on three kinds of harms: there is harm to persons, there is harm to chattels or animals, and there is harm to land. But it turns out there's a huge division of responsibility about intangible harms. These could be to either reputation, or to competition or to business affairs of one kind or another. And it's important to understand how these things work. To begin with it's very important to have the same framework for dealing with these kinds of relational interests or intangible harms that you have with respect to physical harms. And that means what the attention you used to do, is to develop the connection between force and fraud and the kinds of intangible injuries that you have. And so were gonna talk about that in the following sequence. We’re gonna deal with defamation, we're gonna deal with privacy, we're gonna deal with competition, we're gonna deal with inducement to breach of contract and interference with advantageous relationships. Dealing with defamation, the basic defamation tort is exceptionally complicated, because it always involves three parties. There is the defendant that makes false statements to mister X. Essentially the misrepresentation induces miss X to believe that it is foolish for her to enter into the transaction with mister Y, when in fact it's false. Now it turns out that under these circumstances it's extremely difficult for mister Y to sue miss X because they haven't entered into any contract at all. But essentially the argument of defamation is that the false statements to the third party created losses to me. These losses are not too remote, because they we're done under the principle of mistake, which as we noted in physical injury cases, do not sever causation. And so the law has from the earliest time, always allowed defamation actions. Can you make this more concrete? The answer is you surely can do so. So , just make the following type situation and you could see how it becomes dramatic. What you do is you tell the King that mister X is in fact engaged in treasonous act. And it's not that the King just refuses to do business with you, as I mentioned before, what he does is he has you executed. Under these circumstances the harm is perfectly physical and very powerful and it would be unconscionable that the person whose fraud induced this particular situation should escape scott free. And the law of defamation is gonna give you an answer. To give another case suppose what you do is you make a public fraud to lots of people, that turns out a candidate for president of the United States has committed a felony and you're announced that two days before the election and people refuse to vote for that candidate. Here again the defamation is even more deadly, because it's not a single third person to whom the misrepresentation made. It turns out to be a whole host of people. And so again the temptation, and it's the correct temptation, is to allow a direct action by the person who lost the advantageous relationship against the party who created the defamatory statement. Defamation therefore is a consistent libertarian tort. The next question about defamation is what to do with respect to defences. And this too, is extremely complicated, so take the basic situation and just change it by one fact. Assume that as you make a misrepresentation about a situation to the intermediate party, you do so because you were requested in confidence to give some evaluation of that person. So I'm thinking of hiring somebody and I know somebody who was a former employer. I ask in confidence that that person give me a candid arrangement. And the rule has always been that this creates a privilege given the request so that there's an innocent misrepresentation that causes the candidate to lose the job. They cannot sue the defendant, who answered in response to what was called a quote "qualified privilege". But if it turned down that you knew about the situation, you knew what the truth was, then the strong distinction between accidental and deliberate harms that applied in the physical injury cases carries over here. So that the qualified privileges, as called, would not apply in that particular case where it turns out that there is a deliberate falser. And you can go even one step further. If it turns out that the reason you lie and give information to somebody else is you know that the third person isn't likely to attack you, and that you're doing this in self-defence, that would be a justification. It's pretty clear that justifications like this are pretty hard to come by, so it's not a very important part of the law of defamation. Second part of the law of defamation has to deal with the complicated distinctions between the various types of defendants in a case. And this is the intersection with the First Amendment. And so suppose it turns out you're a newspaper and you publish something, which you believe to be true and it turns out to be false. The Modern Supreme Court, ru-, ruled under a case called New York Times against Sullivan says "unless you have actual malice, here defined to be knowledge of the falsehood or reckless indifference to it's truth, you cannot be held liable". I've always regarded that rule as a mistake. Because it turns out that sometimes it's strict questions of fact that are mistaded and they could be devastating to and individual who loses a job or a promotion in virtue of what is said. The older rule I think was correct, which said that if what you are doing is a false statement or fact the suit can be brought. But if it's a false statement of an opinion, I think that X is a bad person for this job, then that particular situation would be protected so long as the defendant gave the factual basis on which it was made so people who heard the statement could decide for themselves whether it was true or false. But the modern law on this point turns out to be extremely powerful and the actual malus defence has proved so successful in recent years that defamation suits brought by public, um, officials against media defendants have disappeared. Now the second variation on this has to do with public figures, athletes and so forth an they're subject to the same rule as public officials. Moving on, the second area that you have to deal with, with these relational harms, has to do with the torts in the invasion of privacy. And these are divided into multiple parts, of which there are two which essentially turn out to be of great importance. One of these has to do with a situation, where what you do, is you reveal a confidence that you've received from somebody else to a third party. So you go to your doctor and say I've a serious kind of condition, the doctor agrees to treat it and not to tell a third person, and then what the doctor does is, in breach of confidence, tells the third person who then runs away. The key difference between this and the defamation case, is that the information that is conveyed to the third person is true, and the tort of privacy essentially here says if there is a reach of a confidential relationship to a third person, that becomes actionable. And the law of trade secrets is the same thing with respect to recipes and trade lists and lots of other types of situations. Um, the second case where things turn out to be extremely important, are not so much privacy, as the right of publicity. So it turns out you take Michael Jordan's name and you decide to put it on your sneakers, but you don't give him any credit. He can say what you've done has appropriated my name and my likeness for your particular business, this is an asset that I'm entitled to have, you can be enjoying its use, and in effect this tort is widely recognised virtually everywhere as subject of one important carry out. You certainly can, if it's newsworthy, show a picture of Michale Jordan wearing Air Jordans if you're reporting on a sporting event of which he is a participant. So that what you do is, you qualify the tort of right of publicity to cover only those cases where the publicity is used in a commercial context, in order to sell goods one way or another. And this leads to certain kind of heart-rendering cases, the most famous of which is called Sidis against the, a New Yorker, and what happens is our good friend Sitters was a child prodigy who in to his older years lapses into a kind isolated life, selling and collecting streetcar transfers. James Thurber wrote a famous story about him. He actually died in consequence of this shame. And it turned out that the law associated with the revelation of past events unrelated to current affairs is now generally protected under what we call the newsworthiness, um, privilege. So that the areas of action that are most important in this area are breach of private confidences and in effect trhe use of the right of publicity per advertisement purposes. The third type of situation that one starts to deal with is essentially inducement in breach of contract. And the famous case on this is a case called Lumbley and Guy and Bettini and Guy, there are two cases together. And it turns out there was a great soprano named Johanna,um, Johanis Wagner, and what happened is that she was under a contract to sing for one of two impresarios. And this was the case in which she was singing for a fellow named Gar, and what mister Lumbley does is he now discovers that his rival has decided to offer her more money to sing for him than he was offering. Now he has a breach of contract action against the singer, because she's violated a long term contract and that action in effect will both for damages on the one hand, and for an injunction against her singing for the rival. It will not allow for her to get specific performance to sing for him. The more controversial action that you started to have was the action that was brought by the innocent impresario against the fellow who induced the breach of contract and what happened in the English cases of um Lumbley and Guy was that the third party who induced the breach of contract knowingly was held responsible in tort. Early on it was a puzzle, as to why it is you needed two actions if you can get damaged from a solvent singer and enjoin her from singing. But later on, the tort of inducement of breach of contract, became essentially irrelevant in dealing with major label disputes. And so the famous case is Hitchman call against Mithcell. What happens there is a large number of workers agree to work for a miner and they say they will not join a union or promise to join a union so long as they're working for you. If they wanna join a union they have to quit first. They're in breach of their promise, they join the union, and the union then wants to call them out on strike, which will disrupt the coal's mine operation. And what the Supreme Court held is you do not have to bring hundreds of actions against individual workers for breaching contracts at will. You could bring an action for injunction against the union that induces the breach of contract and stop the problem that way. This shows you just how powerful public and private law questions intervene with one another because this action was so reviled by the labor movement that essentially, in 1932, under the Norris La Guardia act, the action for inducement in breach of contract in labor disputes was rendered against American public policy. I'm an old line person, and I tend to think that the rules that work for opera singers work for labor unions, I'm very much against the fragmentation of contracts into different classes with different sets of rules. One of the great advantages of the Common Law as against the Modern Regulatory alternatives, is that general principles tend to apply to large number of cases. Now the last case in which actionability is allowed involves interference with advantageous relationships by use of force. Rightly understood this class of cases should be paired with the defamation cases, it being understood that defamation is a hell of a lot easier-- sorry. It rightly bein understood that defamation is a lot easier way to disrupt arrangements than using force. But he famous case on this, was essentially a very old case, and it envolved two school masters. And one of them wishes to get the scholars that are attending another school, and what he does, is he shoots at the students as they're going to the school and drives them away. Everybody understands that this is an attack on the students, but many of them will find other ways to go and since they weren't physically injured they don't want to bring suit. But this particular situation completely disrupted the prospects of the other school, who lost all of it's scholars. And at a very early time they said if you use force to disrupt voluntary arrangements , it turns out that you could be sued for interference with prospective advantage. Note that this is a straight libertarian tort. What it says in effect, is that the use of force that disrupts potential voluntary gains, shall be treated as if it were a use of force against the person itself. And what typically happens in these cases is you need the second best remedy. Against the person who's not shot at. Because the first best remedy will not be ceased upon for transactions cost reasons. The harm to the individual scholars is too low, the cost of litigation is too high, the ability to coordinate activities is too low, so they'll just let the whole thing fall aside. And the early English actions in this particular area created an important area with respect to tort. Now having put all of these things together we come to the last question. PUBLIUS: Your last example was about competition between two private parties. How does Tort Law handle ordinary competition? RICHARD EPSTEIN: One defendant decides to sell goods or services at a price lower than another particular party, and the plaintiff says "Aha, you've now engaged in an unlawful activity which is today called predatory pricing". And there was a famous case in England in 1889, called Mogul and McGregor which adapted this particular problem. What does this case consist in? What you did is you had a very heavy competition on the China to England tea run. And one company announced at the outset that it would carry pri-, tea at a very, very low price, arguably below its cost, and essentially, the argument therefore was that the competitor was going to be severely disadvantaged at this and so it was going to sue in order to make sure that it could recover it's economical losses caused by this competitor behaviour. The Roman law and the Common law on this point was extremely clear. If there is no fraud, that is no defamation, if there is no force and there's just simply competition then it was called a case of damnum absque injuria. that is double talk. What it means in effect is you've got a real palpable injury, that's the damnum , but there's no legal injury. And then the question is why. And the answer is unless you allow the interplay of competitive forces a system essentially will be brought to stagnation because incumbents can keep out new supplies of goods and services. So the basic rule is if somebody wants to lower their rates, then you can lower your rates to meat them or forfeit the business. The question often arises: can predation work? And the answer, generally speaking, is no. And it's important to understand why. If you lower the price of your goods below your costs, you will attract all sorts of customers in the short run and you will end up carrying huge quantities of goods, at a substantial loss, because as your needs for capacity expand, you're going to have to bring less and less efficient units into production, so your costs skyrocketed as your revenues drop. The other fellow, what he's going to do, is simply sit aside for a while, and indeed when predation was attempted on the railroads, in the nineteenth century, in America, what people did, is they started to ship their own goods as railroads, on somebody else's line in order to increase their losses. The scheme that existed in Moggle and MacGregor in fact collapsed for exactly these reasons. So what the modern economic analysis says is that if you're dealing with predation cases you cannot find any resource misallocation, because the problem it's going to be self corrected. It's important to contrast this with the cartel cases that were talked about before in connection with the anti-trust law, because if you don't intervene in a situation where multiple competitors each agree to reduce price rather, excuse me, where each or say it's important to contrast this situation with predation cases. No. I'm gonna do it again. It's important to contrast the predation cases with the cartel cases. In the cartel situations, what a bunch of sellers do is agree to essentially restrict output and to raise prices and to increase their profits in the short run. So they’re willing to do this so long as they can enforce the agreement. Um, there's no short term losses which are gonna be offset by long term gains which never come, so this arrangements are stable. And hence, if you look at the modern law, it turns out that allowing proving actions for the cartels it's still allowed under the Sherman Act, but often what happens is the government brings criminal prosecutions against these things and after it wins the prosecution, private parties use the information gleaned from the criminal case in order to bring their own action. So what happens, if you want to summarize the entire body of Tort Law in a single sentence, this is the sentence that you would ask. If there's the unuse of force and fraud by all means consider some kind of remedy. If it turns out you're dealing with monopolization and cartelization, by all means, consider some remedy, but if it turns out it's pure competition, where somebody tries to undersell somebody else, the best thing that the law can do is to ignore the harms in question. Is this Modern Policy? The answer today is no, There is industry after industry where what you do, is you place minimum price constraints on sale, restraints on entries in order to prop up the prices that could be received by encumbers. And in the great case of Nebby against New York, what the Supreme Court held was that it was consistent with the public interest to prop up a cartel by preventing the sale of goods, in this case milk, below a fixed price. And one of the great dangers of going beyond the tort law is what you do, is license cartels, which create huge economic losses, the common law rules which essentially said that pure competition is to be preferred or vastly superior and the worst thing that you could possibly do, is to prop up cartels, because now you're spending positive dollars in order to create a very elaborate, administrative system that hurts social welfare. It turns out that when you look at new deal innovations that deviate from the Tort Law, all of them, whether they're in agriculture or in labor, or in airline pricing and so forth, have the same model. What we do is we strict the output and raise the prices, hurt consumers far more than we benefit producers. And that is something which the Tort Law would never do. And it shows, I think, in the most vivid form why there is an incredible conflict that takes place between Common Law conceptions of wrong and the Public Law conceptions, which starts with the new deal displacement. The Tort Law is not just about ordinary private disputes, it has a huge message to say about how the largest systems of social organization should be constructed. NARRATOR: Thank you for listening to this episode in the Common Law unit of the No. 86 lecture series, where Professor Richard Epstein looks at long-established common law and regulatory patterns, and lays out six core principles as building blocks. His approach has roots in Roman Law, Anglo-American Common Law, and early Constitutional practice. These rules regulate human interactions in ordinary social life, and deal with individual autonomy, property and first possession, freedom of contract, and tort. The spirit of debate of our Founding Fathers animates all of the No. 86 content, encouraging discussion and critical reflection relative to how each subject is widely understood and taught in law schools and among law students. Subscribe to the No. 86 Lecture series on your favorite podcast platform to have each episode delivered the moment it’s released. You can also go to fedsoc.org/no86 for more lectures and videos on Property, Contracts, and the Common Law. Thanks for listening. See you in class! - Transcript [for YouTube - no speaker names/verbatim] Thanks for joining this episode of the No. 86 lecture series, in which Professor Richard Epstein discusses various issues in tort law, such as strict liability, intentional harm and negligence. This lecture is part of a series with Professor Epstein on how simple Common Law principles give us tools we can use to deal with complex technological and social challenges. Professor Epstein is one of the most prominent legal scholars of our day. He is the inaugural Laurence A. Tisch Professor of Law at NYU School of Law, a Senior Fellow at the Hoover Institution, and Professor of Law Emeritus and a senior lecturer at the University of Chicago. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. - How does Tort Law stabilize the arrangements made by Property Law and Contracts? What is the difference between strict liability, intentional harm, and negligence? What sort of circumstances complicate or blur the categories? What role should the government play in regulating competitive market activities? In speaking about legal relationships we've talked about those which are in general productive. How it is that you have individual autonomy, how it is that people can acquire property and how it is that they enter into contracts. It sets boundaries between various kinds of parties and the major function of the tort, well is to make the boundaries are not altered by strangers to their advantage in ways that will compromise the productive labor of those people who own public property or who have accessed the private property. So the law of torts essentially is divided into two parts that matches this. So, for example, there is a body of law under study today, known as the Law of Public Nuisance and what it is designed to do, is to make sure that common ways are left unimpeded. And so the law of Public Nuisance it says that you cannot block a public right of way, and if you do, you're going to be subject to a fine. In addition, going back to the middle ages, actually 1535, the rule was if somebody suffered special damage from a public obstruction, what happened, that person could sue for it's own private damages, even as the fine managed to cover the general losses. What an illustration of special damages? The key case is somebody is injured while driving a car into an obstacle where everybody else is just slowed down. And this division between general and special damages shows a very nice way in which you can cover what is a public remedy, by the state, and what's a private remedy, by the parties. The other half of the law of torts on the boundaries situation has to deal with private parties. And this in turn is divided into two halves. The Traditional Law of Trespass said that no one party is allowed to enter the land of another person, no one party is allowed to take or destroy the child of another person, no one party is allowed to commit personal injury against somebody else. And the hallmark of trespass was the direct application of force to the personal property of other individuals.Think about this as a boundary altering type explanation. So, if you deal with an, a trespass, you look at the map, and all of the sudden, if you thought you knew what the boundaries of a part of land are, they're gonna be forcable changed by the unilateral actions of other individuals. If you look at the improvements upon the land, some of them are whist away by strangers. So the early tort while heavily concentrated on the way in which the legal system prevented these kinds of direct threats to social order. If you're dealing with trespass, you have to worry about nuisance. And so, analogous to Public Nuisance is the Law of Private Nuisance. I may not enter your property by way of trespass, but if I commit various kinds of wrongs, which smoke out neighbours, cause pollution to neighbours and so forth, these two things will also be subject to protection. So essentially what the Law of Tort is designed to do is to prevent people from changing the boundaries to their own advantage. What the Tort Law does is to stabilize the arrangements that are created by property and enhanced by contract, and in the early cases it was these stranger relationships was the focus of the law. This was true on the Roman Law, and it was true on the Anglo-American Law, all the way through, I would say, in the end of the nineteenth century. As a matter of social order, the stranger cases are clearly the most vital. But from the earliest time, when people entered into contractual arrangements, many things could happen that would go wrong. Some of them are things like simple non-delivery of goods. But in other cases, for example, in the provision of medical services, somebody who got them might be injured. And the question under these circumstances, is could they sue for the damages they suffered, and if so could they sue in tort. The theory was that this was a contract to be sure, but the harm in fact made it look like as though it were a tort arrangement, and from a very early time, um, there was what they called concurrent actions, you can sue in contract, or you can sue in torts. But there's a lot of difference between the two cases. In the stranger case, the basic rule or reliability tended in early days to be strict. You entered my property, it didn't matter if you thought it was your own or not, the boundaries had to help. As time goes on, there are other cases of consensual arrangements that have to be dealt with. There are cases where people invite other people into their property. Those are called occupier liability cases and generally speaking if you invite somebody into your home and there's a latent defect so they fall down, you might be well responsible for the injury. Later on, we start talking about product liability cases. These arise when A sells goods to B, and then B sells them down to C, so there's no direct contract relationship between A and C, and the early Law of Product liability said if you create a trap or a late defect in the thing that you sold, even in the absence of privity you could be responsible for the harm that was caused. Note that in the consensual cases the easiest line of defense is one of self-help: you don't have to buy somebody's product, you don't have to enter into their home. So that the consensual arrangements are more concerned with making contract arrangements Can you talk about situations where strict liability might not apply? When we talked about the problem of Tort, what we did is draw a kind of a distinction between stranger cases on the one hand, and those cases that arise when people enter into a consensual arrangement with one another. And it turns out that this line is sometimes vexed and it's important to understand why that matters. So one of the famous cases in Torts is a case called Brown and Kendall, where,um, there are two dogs, one owned by the plaintiff and one owned by the defendant. It turns out under these circumstances, the defendant takes a stick in order to prevent the two dogs from fighting. As the plaintiff moves closer to the plaintive, he gets poked in the eye and the question is whether or not he could sue for the harm in question. So let's start with this stranger case at first. If it turned out that you raised your stick--stick, and you happened to hit a perfect stranger behind you, with no ownership interest in his situation, the traditional earlier rule was that the liability was strict. Meaning in effect, even though you have no intention to harm the party and even though you were not negligent with respect to that party, if in fact you damaged a spa-, a stranger the loss will fall on you, not upon the other individual. The alternative rule was to say that you were only liable in the event that you meant the harm to occur or were careless in the prevention of that harm. So the stranger case actually puts the point very clearly in Brown and Kendall. And what Chief Justice Shaw, in this case, is he treated as though it were a stranger case, thought that liability would be unfair under the circumstances and so therefore found the rule which was again, dating back to Roman times, that there was no strict liability in Tort for personal injuries inflicted by one party upon a stranger. But the other way in which to understand this problem is to put yourself into the position of the plaintiff. This plaintiff was not a stranger, this plaintiff was somebody who, in fact, benefited from the actions that the defendant did. And this was a person who constantly came closer to the action. And so there are two ways in which you can displace the strict liability rule that are particular to this case, but do not apply in stranger cases. One of them is to introduce the notion of plaintiff's conduct. You assume the risk by going closer to the situation, so the strict liability rule does not apply, and the intuition here is very clear. You had full view of the situation, the other guy was preoccupied, you're the one who is in the better position to take precautions and if you decide to venture too close to the situation, shame on you, you should be responsible. And the other element is as follows: normally when people act, they act for their own benefit. But in this particular case, he was acting for the benefit of both parties, trying to preserve both dogs. So the argument is when somebody's tried to confer a benefit upon a stranger the strict liability rule is now unappropriate and a negligence rule is appropriate, because essentially you want to give a break to the fellow who's tried to provide a benefit, in whole or in part, to another individual. So, the way I think that it's best to think about these cases is to first treat every case of an injury as if it's a stranger case. And then, after you do that, ask whether not there's an affirmative defense based upon the plaintiff's conduct, which otherwise alters the outcome in the case. The analysis that was given in Brown and Kendall all assume that the particular injury in question was accidental. Meaning neither the party inflicted the harm wanted to do it, nor the party was injured wished to accept the risk. The situation that arose: how do you think about situations in which there's deliberate harm? I think the correct answer to that is to superimpose it upon the doctrines that have already been applied . So if you go back to Brown and Kendall, and now you just change one fact, and assume that you have a defendant who is wielding the stick has some kind of animus towards the plaintiff and knows that he's falling behind. So at this particular point the intentionality completely changes the nature of the action. The question is how ought that to be incorporated. And the best way is to go back to traditional views associated with pleading. And those do not simply divide the world into a claim on the one hand and a defence on the other. What they do is they rely on the notion of defeasibility. Defeasibility is a notion which says there's always a connection between the prima facie case and the ultimate issue. So it's one thing for me to hit you and it's another thing that I've committed trespass against you. If I hit you it means there are opportunities for defenses, if I say it's a trespass it means that we've already concluded that it's a wrong. So the prima facie case of trespass with respect to the person is in fact that I hit. The affirmative defence that we allow, is that you assumed the risk when you started coming for. Now, once you allow that defence, it too should be defeasible and the way in which it turns out to be beaten or overcome is to show that the defendant knew about the dangerous situation in which the plaintiff was located and decided to inflict the harm in question. And so therefore when you can say is we now have a way of putting a strict liability for accidents into harmony with intentional harms. But it's absolutely critical to keep these particular stages involved because we certainly don't want to require that there be proof of intentional harm in these cases where there was no form of assumption of risk whatsoever. And then, just to finish the story, if you go back to the cases in which you are dealing with accidents which cause surgical wounds, the argument runs as follows: the prima facie case is that you cause a particular wounded distress in question, the obvious point is if there's a surgery, you, the patient, take the risk of accidental harm. Then the question is what's the understanding between the two parties if the harm in question is not purely accidental, but in fact, the subject of some degree of culpability by, um, the defendant physician. Almost everybody agrees that deliberate harm by a surgeon is utterly intolerable and will be held liable, and the question then is what happens when there's some form of culpability which is less than deliberate harm. Either ordinarily negligence or recklessness. The recklessness case is generally regarded as pretty clear and the defendant will be held liable if he's utterly indifferent to the wealth and welfare of his patient. Nobody would ever accept surgery, if they knew that the doctor could be cavalier in the way in which he or she was treated. The ordinary negligence case is much more complicated, because everything depends on what the standard of care is. There are two candidates here. The first candidate is you do this in accordance with the custom of the trade. And that was the traditional standard for a great deal of time. The logic was that the plaintiff can certainly expect that the defendant does what other people in the business does, and the defendant is perfectly willing to undertake an obligation which by virtue of the fact that is constantly imposed means that it's not impossible for him to discharge. And what happens thereafter is, if you have somebody who is sufficiently trained to do the work, knowing that that person has to be held to the responsible level of a customary standard of care, he'll just decline the service and you'll go to somebody else. The second version is to say what we do is a cost-benefit analysis to see whether or not the physician, all things considered, exercised the optimal level of care. On that view, custom is evidence of what should be done, but independent stuff could be taken into account. The shift between these two systems is absolutely critical. Under a customary system you'd have a frame of reference which is pretty easy to resolve and so cases will be expeditiously dissolved--decided. When you decide to say it's just an open ended cost-benefit analysis, the plaintiff can always refer to an additional precaution that could have been taken, that wasn't taken, the defendant will then try to say that it's too costly or creates complicated situations. And what you have to do is to try, at a cost of a trial, after an injury, to reconstruct what was rational conduct before him. My own view, is that this particular approach, though common today, it's extremely costly to do and be extremely unreliable when you do it, and see largely disruptive of the contractual arrangements, because owing to the high potential for liability under this so called cost-benefit situation, you will start to see physicians in hospitals declining service. So I think that the third part of the situation, using customary care in professional cases, makes the system complete. What is the complete system? Strict liability in stranger cases, reasonable care standards with respect to the situations in which you're taking on care obligations and third a strong prohibition of deliberate harms in those situations where people have assumed the risk of accidental injury. Thus far, in speaking about the stranger cases I've talked about the relationship between strict liability, negligence and intentional harms. But there's always another element lurking in these particular cases. Is given that you've not met the established standard of care applicable, did your particular actions caused the harm in question? The modern view on this subject is to invoke a two part test. The first is called but-for causation, the second is proximate cause. Under the first part somebody asked the question is - but for the negligence of a particular defendant or but for the action of a particular defendant, with the harm of the plaintiff happen. And if the answer to that question is no, then the defendant turns out to be out. Turns out this test is simply too capacious because there could be all sorts of events. Like I woke up in the morning, two hours earlier than usual, I then went out and drove on the highway, two hours earlier than usual and I hit nobody with no wrong in the way in which I conducted my car. Everybody would say that since the early treatment did not increase the risk of probability or harm, it has to be irrelevant. So if you start with a but-for system, then you always develop a system of proximate cause, a limitation as to what particular injuries that you do cause you're not responsible for and you develop either a foresight or a directness test. A simple way of looking at this is it actually go back to the traditional common law and Roman law solutions. You don't start from any previous condition. What you do is to start with the closest relationship and then slowly go back. And so, if you think about this in a literal fashion, the word proximate cause means the nearest cause, how does this start to operate. The early cases of trespass give the clue to how it is proximate cause is done. If, in fact, you do what was said to be in the Roman system, causation corpore corpore, which is fancy Latin for by the body, to the body, causation begins with a punch to the face. Or a kick in the leg. And the connections here are very tight. And everybody therefore understands what's going on and there's no dispute about it. What then happens is can you go beyond those particular cases, the five other situations in which liability ought to be done. And so what you then try to do is to go backwards from the immediate cause to see if there's something else in the cycle which you want to take into account. So suppose it turns out that what happens is that B happens to run on to A's land. Now there's a C in the background, and what C did was to chase A on to, rather chase be on to A's land. Under those circumstances, C is certainly entitled to say, I did not enter your land, I did not tramp on your crops. But everybody says that to the extent that you imposed coercion upon an intermediate actor, you should be treated as though you're responsible for the harm, as if you did it yourself. And so what you say is actions done under coercion by a third party mean that the actions of the third party are not quote, unquote too remote. Note that, at this particular point in time, the definition of proximate cause it's oddly contradictory. It started with meaning the closest cause and now the question is to figure out how remote causes can be held responsible. and the way in which this is correctly stated into the traditional doctrine is the action of B, when subject to the coercion of C means that, in fact, it did not break the causal connection. The issue is can you go beyond all of this. And here again the early Roman cases picked up by the English cases are very instructive. So to take the Romans' examples at first. Suppose it turns out that I wished to engage acts to poison you. One of the things that I can do is simply jam the poison down your throat by force and everybody will say notwithstanding that there's a chemical reaction at the end of this, that it was by the body and to the body. But suppose I don't want to have to fight, you know, what I do is set poison in front of you and I can seal it into some mint tea, so you can't taste it. And under those circumstances now you drink it in ignorance of what's going on. And the question is can the fellow who put the poison inside the pot say I'm not responsible for the harm, because I didn't make him drink it. And the answer that everybody in every legal system gives to that question is that given the fact that the person who drank the thing, did so under a fundamental mistake as to the danger, meant that his activity was not voluntary with respect to that risk, so the remote actor is responsible. Change the situation just a little bit and assume the middle party actually knew that it was poisonous and was not subject of force of any kind or any sort of threat. At that point if he decides to drink it's his own fault because you have assumption of risk. And so, what you now do is you have a system in which you allow recovery for direct harms and you also you have recovery for indirect harms. This can be extended beyond the cases of poison to other areas. So suppose it turns out that generally speaking somebody runs you down with a truck. And what they point out is while they were riding down the highway they managed to come on a board which was weakened by a third party so that they lost control of the vehicle. And that this was a latent defect in the high-, in the highway. It is generally been universally held that the party who created the defect in question so that the other fellow ran off the road would in fact be responsible because that hidden defect that gave it the voluntariness of the particular action in question. It then becomes even more complicated because you assume, suppose that the middle man, if he had paid more attention, could have discovered the defect in the road and have avoided the situation. And here the general answer is that the negligence of the intermediate party does not sever causal connection to the remoteness guy, but in effect now there may be some way in which those two parties, um , the person who ran you off the road and the person who created the dangerous condition have to essentially divide the loss. You take the third case, um, there is something in the road which is dangerous, somebody sees it and says "Aha, this is perfect cover. I really want to hurt this party." and then he deliberately uses that condition to lose control of the vehicle and hammer the third party. Under these circumstances, the general opinion is that the harm is now too remote because the intermediate party had complete control over the situation when it tried to cause a deliberate harm. And then finally there’s an easy case on the other side to show that remoteness of damage is not a simply an unprincipled ad-hoc concept. Suppose it turns out there a whole on the road and then somebody fixes the whole. At that particular point if someone else decides to recreate that whole the first fellow is out from under the situation. It's very important in Torts to understand these cases because the model intellectual approach to the subject is everything about proximate causation cannot be reduced to principles, it's all ad-hoc and it's a matter of social policies to whom would be rather held responsible to whom. And if in fact you have clear conceptions of causation, you don't have that degree of judicial discretion and you cannot sort manufacturing, liability and remote partes like those people who paved roads and so forth for the harms that are caused by others. And it's interesting to see what the division is. Uh the great believer in limited causation was a book by Hart and Honore called “Causation and Law.” And then the great positions on the other side were taken by a number of other people, the most famous perhaps is a man named Wex Malone. And the one guy said "causation is a principle to inquire, we just have to understand it" and the other fellow said "it's just a shield for policy and we’re always thinking about something else". What's that something else? Laws redistribution, deciding ways to milk somebody with a deep pocket and the like. And if you switch to that type of situation, essentially the Tort Law becomes unravelled because people are now held responsible for what they did not do, which means that they will have to invest money to prevent injuries when somebody else in the chain of activities is in a much better position to prevent the losses in question. That is proximate cause in three minutes. It turns out that in virtually every Torts case once the standard of liability has been established you have to ask whether the conduct of the defendant is sufficiently connected up with the loss of the plaintiff, that it's appropriate to charge him with losses. That are two ways to do this. The modern way starts with very remote causes and then tries to narrow the situation down. The traditional way starts with immediate causes and then tries to move the system backwards. So that under the traditional vision you always start with trespass and then you start to move with indirect losses which can occur by setting traps for example or setting poisons in front of other individuals. If you're actually try to trial a case before a jury, using the traditional methods it's much clearer, and if you use the modern methods, what happens is the jury simple does not know what it means to talk about necessary and sufficient causes of harm. So starting tight and going broad it's the way it's done. And once you do that, what you're looking for, it's not whether injuries are quote, unquote "reasonably foreseeable" , you're trying to ask whether this some event which intervenes between what has the defendant has done and what has happened to the plaintiff. And one can explain that in great detail with particular cases. That doesn it, right? One of the things that's commonly done today in the law of Torts is to use a system of negligence law with respect to strangers. And this leads to very profound distortions in the way that the system operates. Take the simplest case possible. Somebody it's playing cricket, it's an exceptionally long ball, out of the field and in effect damages the woman standing on the public road. This was the english case of Bolton and Stone. And the English judges decided under these circumstances that the defendant should not be liable because the probability of an accident at the time of the beginning was so low that it could be safely disregarded. This is a terrible mistake. The probability of the injury being low does not influence the question of who should pay for it, one or the other. It may well be that the defendant is perfectly rational to take this particular risk, but it hardly follows that if the risk is rational he ought not to pay the plaintiff who is injured in consequence of what had happened. So how should the matter be looked at? Well the first thing is this is a simple case of you hit me, with respect to the individual batsman who hits the woman. And people will then come back and say, "You know this seems rather odd that the batsman should be responsible. Why not put the responsibility either on his team or on the owner of the grounds?" And the answer is the common law had a way to do this and that was a system of vicarious liability. If you were an employee of if you were the owner of premises on which other individuals acted, the basic rule was anybody who acted within the scope of employment or was lawfully on your premises, their actions could be yours to answer. So what would happen is, after you have strict liability for the individual player, you have vicarious liability to both his own team and to the home owners. This is far better than what happened in Bolton and Stone. Saying that you can never sue the batsmen, what they tried to do is to figure out whether not there was negligence in the way in which you designed the park. And this led to a wild goose chase. You ask how do they lay out the cricket field forty years before. Was the boundary line too close to the street, should it have been moved, should they have raised the wall? If you decide they have to raise the wall, how do you know that the wall would have been raised high enough so as to block this particular ball and so on. So what strict liability does, is it keeps the problem of causation into manageable proportions and then the doctrine of vicarious liability is a much better way to get remote actives. And interestingly enough, in the Bolt and Stone situation, the cricket club let poor Miss Stone keep the injury. It was said to be a matter of ethical compensation, not legal compensation. But if you knew what the strict liabilities required, and how the vicarious liability rules worked, it was both legal and ethical, um, compensation, so that you would now be able to adjust a, the legal rules to meet ordinary social expectations, which is something that the negligence system cannot do. Is Tort Law only concerned with physical harm or injury? All right. Thus far in speaking on the law of torts the concentration it' been on three kinds of harms: there is harm to persons, there is harm to chattels or animals, and there is harm to land. But it turns out there's a huge division of responsibility about intangible harms. These could be to either reputation, or to competition or to business affairs of one kind or another. And it's important to understand how these things work. To begin with it's very important to have the same framework for dealing with these kinds of relational interests or intangible harms that you have with respect to physical harms. And that means what the attention you used to do, is to develop the connection between force and fraud and the kinds of intangible injuries that you have. And so were gonna talk about that in the following sequence. We’re gonna deal with defamation, we’re gonna deal with privacy, we’re gonna deal with competition, we’re gonna deal with inducement to breach of contract and interference with advantageous relationships. Dealing with defamation, the basic defamation tort is exceptionally complicated, because it always involves three parties. There is the defendant that makes false statements to mister X. Essentially the misrepresentation induces miss X to believe that it is foolish for her to enter into the transaction with mister Y, when in fact it's false. Now it turns out that under these circumstances it's extremely difficult for mister Y to sue miss X because they haven't entered into any contract at all. But essentially the argument of defamation is that the false statements to the third party created losses to me. These losses are not too remote, because they we're done under the principle of mistake, which as we noted in physical injury cases, do not sever causation. And so the law has from the earliest time, always allowed defamation actions. Can you make this more concrete? The answer is you surely can do so. So , just make the following type situation and you could see how it becomes dramatic. What you do is you tell the King that mister X is in fact engaged in treasonous act. And it's not that the King just refuses to do business with you, as I mentioned before, what he does is he has you executed. Under these circumstances the harm is perfectly physical and very powerful and it would be unconscionable that the person whose fraud induced this particular situation should escape scott free. And the law of defamation is gonna give you an answer. To give another case suppose what you do is you make a public fraud to lots of people, that turns out a candidate for president of the United States has committed a felony and you're announced that two days before the election and people refuse to vote for that candidate. Here again the defamation is even more deadly, because it's not a single third person to whom the misrepresentation made. It turns out to be a whole host of people. And so again the temptation, and it's the correct temptation, is to allow a direct action by the person who lost the advantageous relationship against the party who created the defamatory statement. Defamation therefor is a consistent libertarian tort. The next question about defamation is what to do with respect to defences. And this too, is extremely complicated, so take the basic situation and just change it by one fact. Assume that as you make a misrepresentation about a situation to the intermediate party, you do so because you were requested in confidence to give some evaluation of that person. So I'm thinking of hiring somebody and I know somebody who was a former employer. I ask in confidence that that person give me a candid arrangement. And the rule is always been that this creates a privilege given the request so that there's an innocent misrepresentation that causes the candidate to lose the job. They cannot sue the defendant, who answered in response to what was called a quote "qualified privilege". But if it turned down that you knew about the situation, you knew what the truth was, then the strong distinction between accidental and deliberate harms, that applied in the physical injury cases carries over here. So that the qualified privileges, as called would not apply in that particular case where it turns out that there is a deliberate falser. And you can go even one step further. If it turns out that the reason you lie and giving information to somebody else is you know that the third person isn't likely to attack you, and that you're doing this in self-defence, that would be a justification. It's pretty clear that justifications like this are pretty hard to come by, so it's not a very important part of the law of defamation. Second part of the law of defamation has to deal with the complicated distinctions between the various types of defendants in a case. And this is the intersection with First Amendment. And so suppose it turns out you're a newspaper and you publish something, which you believe to be true and it turns out to be false. The Modern Supreme Court, ru-, ruled under a case called New York Times against Sullivans says "unless you have actual malice, here defined to be knowledge of the falsehood or reckless indifference to it's truth, you cannot be held liable". I've always regarded that rule as a mistake. Because it turns out that sometimes it's strict questions of fact that are mistaded and they could be devastating to and individual who loses a job or a promotion in virtue of what is said. The older rule I think was correct, which said that if what you are doing is a false statement or fact the suit can be brought. But if it's a false statement of an opinion, I think that X is a bad person for this job, than that particular situation would be protected so long as the defendant gave the factual basis on which it was made so people who heard the statement could decide for themselves whether it was true or false. But the modern law on this point turn out to be extremely powerful and the actual malus defence has proved so successful in recent years that defamation suits are brought by public, um, official against media defendants have disappeared. Now the second variation on this has to do with public figures, athletes and so forth an they're subject to the same rule as public officials. Moving on, the second area that you have to deal with, with these relational harms, has to do with the torts in the invasion of privacy. And these are divided into multiple parts, of which there are two which essentially turn out to be of great importance. One of these has to do with a situation, where what you do, is you reveal a confidence that you've received from somebody else to a third party. So you go to your doctor and say I've a serious kinds of condition, doctor agrees to treat it and not to tell a third person, and then what the doctor does is, in breach of confidence, tells the third person who then runs away. The key difference between this and the defamation case, is that the information that is conveyed to the third person is true, and the tort of privacy essentially here says if there is a reach of a confidential relationship to a third person, that becomes actionable. And the law of trade secrets is the same thing with respect to recipes and trade lists and lots of other types of situations. Um, the second case where things turn out to be extremely important, are not so much privacy, as the right of publicity. So it turns out you take Michael Jordan's name and you decide to put it on your sneakers, but you don't give him any credit. He can say what you've done has appropriated my name and my likeness for your particular business, this is an asset that I'm entitled to have, you can be enjoying its use, and in effect this tort is widely recognised virtually everywhere as subject of one important carry out. You certainly can, if it's newsworthy, show a picture of Michael Jordan wearing Air Jordans if you're reporting on a sporting event of which he is a participant. So that what you do is, you qualify the tort of right of publicity to cover only those cases where the publicity is used in a commercial context, in order to sell goods one way or another. And this leads to certain kind of heart-rendering cases, the most famous of which is called Sidis against the, a New Yorker, and what happens is our good friend Sitters was a child prodigy who in to his older years lapses into a kind isolated life, selling and collecting streetcar transfers. James Thurber wrote a famous story about him. He actually died in consequence of this shame. And it turned out that the law associated with the revelation of past events unrelated to current affairs is now generally protected under what we call the newsworthiness, um, privilege. So that the areas of action that are most important in this area are breach of private confidences and in effect trhe use of the right of publicity per advertisement purposes. The third type of situation that one starts to deal with is essentially inducement in breach of contract. And the famous case on this is a case called Lumbley and Guy and Bettini and Guy, there are two cases together. And it turns out there was a great soprano named Johanna,um, Johanis Wagner, and what happened is that she was under a contract to sing for one of two impresarios. And this was the case in which she was singing for a fellow named Gar, and what mister Lumbley does is he now discovers that his rival has decided to offer her more money to sing for him than he was offering. Now he has a breach of contract action against the singer, because she's violated a long term contract and that action in effect will both for damages on the one hand, and for an injunction against her singing for the rival. It will not allow for her to get specific performance to sing for him. The more controversial action that you started to have was the action that was brought by the innocent impresario against the fellow who induced the breach of contract and what happened in the English cases of um Lumbley and Guy was that the third party who induced the breach of contract knowingly was held responsible in tort. Early on it was a puzzle, as to why it is you needed two actions if you can get damaged from a solvent singer and enjoin her from singing. But later on, the tort of inducement of breach of contract, became essentially irrelevant in dealing with major label disputes. And so the famous case is Hitchman call against Mithcell. What happens there is a large number of workers agree to work for a miner and they say they will not join a union or promise to join a union so long as they're working for you. If they wanna join a union they have to quit first. They're in breach of their promise, they join the union, and the union then wants to call them out on strike, which will disrupt the coal's mine operation. And what the Supreme Court held is you do not have to bring hundreds of actions against individual workers for breaching contracts at will. You could bring an action for injunction against the union that induces the breach of contract and stop the problem that way. This shows you just how powerful public and private law questions intervene with one another because this action was so reviled by the labor movement that essentially, in 1932, under the Norris La Guardia act, the action for inducement in breach of contract in labor disputes was rendered against American public policy. I'm an old line person, and I tend to think that the rules that work for opera singers work for labor unions, I'm very much against the fragmentation of contracts into different classes with different sets of rules. One of the great advantages of the Common Law as against the Modern Regulatory alternatives, is that general principles tend to apply to large numbers of cases. Now the last case in which actionability is allowed involves interference with advantageous relationships by use of force. Rightly understood this class of cases should be paired with the defamation cases, it being understood that defamation is a hell of a lot easier-- sorry. It rightly bein understood that defamation is a lot easier way to disrupt arrangements than using force. But he famous case on this, was essentially a very old case, and it envolved two school masters. And one of them wishes to get the scholars that are attending another school, and what he does, is he shoots at the students as they're going to the school and drives them away. Everybody understands that this is an attack on the students, but many of them will find other ways to go and since they weren't physically injured they don't want to bring suit. But this particular situation completely disrupted the prospects of the other school, who lost all of it's scholars. And at a very early time they said if you use force to disrupt voluntary arrangements , it turns out that you could be sued for interference with prospective advantage. Note that this is a straight libertarian tort. What it says in effect, is that the use of force that disrupts potential voluntary gains, shall be treated as if it were a use of force against the person itself. And what typically happens in these cases is you need the second best remedy. Against the person who's not shot at. Because the first best remedy will not be ceased upon for transactions cost reasons. The harm to the individuals scholars is too low, the cost of litigation is too high, the ability to coordinate activities is too low, so they'll just let the whole thing fall aside. And the early English actions in this particular area created an important area with respect to tort. Now having put all of these things together we come to the last question. Your last example was about competition between two private parties. How does Tort Law handle ordinary competition? One defendant decides to sell goods or services at a price lower than another particular party, and the plaintiff says "Aha, you've now engaged in an unlawful activity which is today called predatory pricing". And there was a famous case in England in 1889, called Mobil and MacGregor which adapted this particular problem. What does this case consist in? What you did is you had a very heavy competition on the China to England tea run. And one company announced at the outset that it would carry pri-, tea at a very, very low price, arguably below its cost, and essentially, the argument therefore was that the competitor was going to be severely disadvantaged at this and so it was going to sue in order to make sure that it could recover it's economical losses caused by this competitor behaviour. The Roman law and the Common law on this point was extremely clear. If there is no fraud, that is no defamation, if there is no force and there's just simply competition then it was called a case of damnum absque injuria. That is double talk. What it means in effect is you've got a real palpable injury, that's the damnum, but there's no legal injury. And then the question is why. And the answer is unless you allow the interplay of competitive forces a system essentially will be brought to stagnation because incumbents can keep out new supplies of goods and services. So the basic rule is if somebody wants to lower their rates, then you can lower your rates to meat them or forfeit the business. The question often arises: can predation work? And the answer, generally speaking, is no. And it's important to understand why. If you lower the price of your goods below your costs, you will attract all sorts of customers in the short run and you will end up carrying huge quantities of goods, at a substantial loss, because as your needs for capacity expand, you're going to have to bring less and less efficient units into production, so your costs skyrocketed as your revenues drop. The other fellow, what he's going to do, is simply sit aside for a while, and indeed when predation was attempted on the railroads, in the nineteenth century, in America, what people did, is they started to ship their own goods as railroads, on somebody else's line in order to increase their losses. The scheme that existed in Mogul and McGregor in fact collapsed for exactly these reasons. So what the modern economic analysis says is that if you're dealing with predation cases you cannot find any resource misallocation, because the problem it's going to be self corrected. It's important to contrast the predation cases with the cartel cases. In the cartel situations, what a bunch of sellers do is agree to essentially restrict output and to raise prices and to increase their profits in the short run. So they’re willing to do this so long as they can enforce the agreement. Um, there's no short term losses which are gonna be offset by long term gains which never come, so this arrangements are stable. And hence, if you look at the modern law, it turns out that allowing proving actions for the cartels it's still allowed under the Sherman Act, but often what happens is the government brings criminal prosecutions against these things and after it wins the prosecution, private parties use the information gleaned from the criminal case in order to bring their own action. So what happens, if you want to summarize the entire body of Tort Law in a single sentence, this is the sentence that you would ask. If there's the unuse of force and fraud by all means consider some kind of remedy. If it turns out you're dealing with monopolization and cartelization, by all means, consider some remedy, but if it turns out it's pure competition, where somebody tries to undersell somebody else, the best thing that the law can do is to ignore the harms in question. Is this Modern Policy? The answer today is no, There is industry after industry where what you do, is you place minimum price constraints on sale, restraints on entries in order to prop up the prices that could be received by encumbers. And in the great case of Nebby against New York, what the Supreme Court held was that it was consistent with the public interest to prop up a cartel by preventing the sale of goods, in this case milk, below a fixed price. And one of the great dangers of going beyond the tort law is what you do, is license cartels, which create huge economic losses, the common law rules which essentially said that pure competition is to be preferred or vastly superior and the worst thing that you could possibly do, is to prop up cartels, because now you're spending positive dollars in order to create a very elaborate, administrative system that hurts social welfare. It turns out that when you look at new deal innovations that deviate from the Tort Law, all of them, whether they're in agriculture or in labor, or in airline pricing and so forth, have the same model. What we do is we strict the output and raise the prices, hurt consumers far more than we benefit producers. And that is something which the Tort Law would never do. And it shows, I think, in the most vivid form why there is an incredible conflict that takes place between Common Law conceptions of wrong and the Public Law conceptions, which starting with the new deal displacement. The Tort Law is not just about ordinary private disputes, it has a huge message to say about how the largest systems of social organization should be constructed. Thank you for listening to this episode in the Common Law unit of the No. 86 lecture series, where Professor Richard Epstein looks at long-established common law and regulatory patterns, and lays out six core principles as building blocks. His approach has roots in Roman Law, Anglo-American Common Law, and early Constitutional practice. These rules regulate human interactions in ordinary social life, and deal with individual autonomy, property and first possession, freedom of contract, and tort. The spirit of debate of our Founding Fathers animates all of the No. 86 content, encouraging discussion and critical reflection relative to how each subject is widely understood and taught in law schools and among law students. Subscribe to the No. 86 Lecture series on your favorite podcast platform to have each episode delivered the moment it’s released. You can also go to fedsoc.org/no86 for more lectures and videos on Property, Contracts, and the Common Law. Thanks for listening. See you in class!