Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 9. Liability without Fault?
economic loss to the properties on which plaintiffs’ complaints are based will have been
redressed.
The nuisance complained of by these plaintiffs may have other public or private
consequences, but these particular parties are the only ones who have sought remedies and the
judgment proposed will fully redress them. The limitation of relief granted is a limitation only
within the four corners of these actions and does not foreclose public health or other public
agencies from seeking proper relief in a proper court.
It seems reasonable to think that the risk of being required to pay permanent damages to
injured property owners by cement plant owners would itself be a reasonable effective spur to
research for improved techniques to minimize nuisance. . . .
The orders should be reversed, without costs, and the cases remitted to Supreme Court,
Albany County to grant an injunction which shall be vacated upon payment by defendant of such
amounts of permanent damage to the respective plaintiffs as shall for this purpose be determined
by the court.
Notes
1. Collective action problems redux. In Boomer, as in Ensign, it is highly likely that the
market will not be able to resolve the problem in a manner that achieves the socially optimal
outcome. An injunction to the plaintiffs would allow any one plaintiff to shut down the plant by
refusing consent. Just as in Ensign, every plaintiff will thus have an incentive to hold out to
extract as much value from the plant as possible. The difference in Boomer, however, is that the
conditional injunction dischargeable by a payment of permanent damages allocates the
entitlement to the plaintiffs—but allows the defendant to reacquire that entitlement, if it chooses,
at a price set by the court. Unlike in Ensign, the court’s initial allocation is not determinative of
the allocation of the entitlement. Why? Because the court’s setting of a price at which the
defendant can force the plaintiffs into parting with their entitlement means that no plaintiff can
hold out. In the event that the value of the cement plant is not sufficient to justify paying for the
right to operate the plant, then the entitlement will stay with the plaintiffs and the plant will shut
down, at least until some better technology comes on board that allows the plant to operate
without causing a nuisance, or that reduces the damages sufficiently so as to make paying for the
right to operate worthwhile. For the general conceptual framework, see Guido Calabresi & A.
Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral,
85 HARV. L. REV. 1089, 1106-07 (1972).
2. The secret logic of tort law? Calabresi and Melamed take the analysis of Boomer a step
further. The injunction in cases like Ensign, they say, allocates the entitlement in question to the
plaintiffs and protects that entitlement with a property rule. The damages remedy in Boomer also
allocates the entitlement in question to the plaintiffs. But it protects that entitlement with a
different remedy, namely a liability rule. The difference is that the liability rule allows others to
separate the entitlement holder from the entitlement at a price set by the court without gaining the
consent of the entitlement holder.
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