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Tort Law and the Economy in Nineteenth-Century America: a Reinterpretation*

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Tort Law and the Economy in Nineteenth-Century America: a Reinterpretation* The Yale Law Journal Volume 90, Number 8, July 1981 Tort Law and the Economy in Nineteenth-Century America: A Reinterpretation* Gary T. Schwartzt The prevailing view of American tort history regards nineteenth-cen- tury tort doctrine as deliberately structured to accommodate the economic interests of emerging industry.' According to this view, the courts jet- tisoned a potent pre-nineteenth-century rule of strict liability in favor of a lax negligence standard, leniently applied that standard to enterprise de- fendants, administered a severe defense of contributory negligence, and placed strong controls on negligence law under the name of "duty." In one scholar's appraisal, "the thrust of the rules, taken as a whole, ap- proached the position that corporate enterprise would be flatly immune * My gratitude runs in several directions: to the UCLA Law School Dean's Fund and to the UCLA Academic Senate for financial support; to research assistants Tom Blasdell, Tim Broderick, and Heather Mahood; and to many faculty, at UCLA and elsewhere, for valuable suggestions and support. t Professor of Law, UCLA School of Law. I. Chief contributors to this overall view include L. FRIEDMAN, A HISTORY OF AMERICAN LAW 409-27 (1973); M. HORWITZ, THE TRANSFORMATION OF AMERICAN LAW, 1780-1860, at 67-108 (1977); Gregory, Trespass to Negligence to Absolute Liability, 37 VA. L. REV. 359 (1951); Malone, The Formative Era of Contributory Negligence, 41 ILL. L. REV. 151 (1946); Malone, Ruminations on the Role of Fault in the Historyof the Common Law of Torts, 31 LA. L. REV. 1 (1970). See generally L. GREEN, TRAFFIC VICTIMS 31 (1958); 2 F. HARPER & F. JAMES, THE LAW OF TORTS 1197-99 (1956); B. SCHWARTZ, THE LAW IN AMERICA 55-59 (1974); S. SPEISER, LAWSUIT 120, 122, 124-26 (1980); Calabresi, Some Thoughts on Risk Distributionand the Law of Torts, 70 YALE L.J. 499, 515-17 (1961); Peck, Negligence and Liability Without Fault in Tort Law, 46 WASH. L. REV. 225, 225-33 (1972); Ursin, Judidal Creativity in Tort Law, 49 GEO. WASH. L. REV. 229, 259-63 (1981); Gordon, Book Review, 94 HARV. L. REV. 903, 907 n.17 (1981). Of course, not all of these contribu- tors would fully concur in all of the text's statements describing the prevailing view, which is a composite. For judicial acceptance of the historians' view, see American Motorcycle Ass'n v. Superior Court, 20 Cal. 3d 578, 587-88, 578 P.2d 899, 904-05, 146 Cal. Rptr. 182, 187-88 (1978) (discussing contrib- utory negligence); Dillon v. Legg, 68 Cal. 2d 728, 734-35, 441 P.2d 912, 916-17, 69 Cal. Rptr. 72, 76-77 (1968) (discussing strict liability and duty). 1717 The Yale Law Journal Vol. 90: 1717, 1981 from actions sounding in tort."2 Frequently, nineteenth-century tort law is described as providing a "subsidy" to economic enterprise. A liability rule presumably amounts to a subsidy if it entails a departure from an otherwise appropriate liability standard designed to relieve a class of injurors from the expense of liabil- ity. Of course, in the nineteenth century, innovative industry may have been perceived as providing social benefits that could have justified a sub- sidy. Recognizing this possibility, scholars like Professors Gregory and Horwitz tend to narrow their arguments. Gregory concludes that by the twentieth century, American industry had simply outgrown whatever sub- sidy needs it possessed at an earlier date.4 For his part, Horwitz considers the subsidy that could have been afforded by the direct expenditure of tax revenues and disapproves of the negligence rule only because it disguised the existence of the subsidy and negatively affected the distribution of American wealth.' But this possibility of regressivity6 is only one aspect of a more general moral problem. Even if a subsidy of enterprise makes economic sense, it seems simply unconscionable to exact that subsidy from the individual vic- tims of serious accidents by depriving them of their right to compensation from the enterprises responsible for their injuries.7 Professor Gregory surely appreciates this in referring to the "ruthless" quality of the nine- teenth-century negligence rule," while Professor Friedman, in characteriz- ing nineteenth-century tort law as having "spared [capital] for its neces- sary work," tends to regard that law as an "engine of oppression."' Evaluation of the negligence rule as a subsidy thus gives rise to a power- ful moral objection. How accurate, then, is the subsidy interpretation? This article tests that interpretation by scrutinizing nineteenth-century tort law as it developed 2. L. FRIEDMAN, supra note 1,at 417. For a similar evaluation, see M. HORWITZ, supra note 1, at 99-101 (nineteenth-century tort law created "immunities from legal liability" and thereby enabled American economic enterprise "to challenge and eventually overwhelm the weak and relatively power- less segments of the American economy"). 3. See, e.g., M. HORWITZ, supra note 1,at 63-108; Gregory, supra note 1, at 368. 4. Gregory, supra note 1, at 368, 396. 5. M. HORWITZ, supra note 1, at 99-101. 6. Horwitz' lack of empirical proof is discussed in McClain, Legal Changeand Class Interests: A Review Essay on Morton Horwitz' The Transformation of American Law, 68 CALIF. L. REV. 382, 394-95 (1980). 7. This sense of unconscionability would not be appropriate, however, if the original compensa- tion "right" had itself been exclusively derived from economic or utilitarian premises, without any regard to considerations of fairness. 8. See Gregory, supra note 1, at 368. 9. L. FRIEDMAN, supra note 1, at 410, 417. Friedman indicates that countervailing tendencies like judicial "heart" and the emerging political "voice" of labor prevented this "engine" from becoming "perfect." Id. at 417. His treatment of doctrinal compromises appears in id. at 417-27. See Tushnet, Perspectives on the Development of American Law: A CriticalReview of Friedman's "A History of American Law," 1977 WIS. L. REV. 81, 89-90. 1718 Nineteenth-Century Tort Law in two quite different American jurisdictions-California in the new West and New Hampshire in the old Northeast. 10 I chose California because it is my state, because it has long been an important state politically and economically, and because its judiciary has been so influential in the eluci- dation of tort doctrine in the twentieth century.' I selected New Hamp- shire because it was one of the original thirteen states, because its textile mills placed it in the forefront of nineteenth-century industrialization, and because subsidy scholars have not given the state any extended consideration. 2 My methodology was straightforward: I read every tort case 3 I could 1 4 find in the nineteenth-century New Hampshire and California Reports, which collect the opinions of those states' Supreme Courts. 5 Also, in order 10. In recent years, American social history has been enriched by close studies of individual com- munities. E.g., S. THERNSTROM, POVERTY AND PROGRESS: SOCIAL MOBILITY IN A NINETEENTH CEN- TURY CITY (1964). These studies gain the advantage of depth while running some risk of narrowness. See id. at 6. 11. Most subsidy scholarship has focused unduly on a few states, particularly Massachusetts, New York, and Pennsylvania. See Scheiber, Regulation, Property Rights, and Definition of "The Markct':"Law and the American Economy, 41 J. ECON. HIST. 103, 107-08 (1981). Horwitz, for example, neglects western jurisdictions. See Presser, Book Review, 52 N.Y.U. L. REV. 700, 721-22 (1977). 12. I advance no claims about the general representativeness of my two jurisdictions. California is in many ways atypical, see C. MCWILLIAMS, CALIFORNIA: THE GREAT EXCEPTION (1976), and New Hampshire is known for a certain Yankee stubbornness. Moreover, New Hampshire's late nine- teenth-century Chief Justice, Charles Doe, may well have been idiosyncratic by contemporary judicial standards. G. WHITE, THE AMERICAN JUDICIAL TRADITION 126 (1976). Even so, however, the law of nineteenth-century New Hampshire remains quite appropriate for study. First of all, Doe was not appointed to the Court until 1859 (serving, then, for 35 years). See J. REID, CHIEF JUSTICE: THE JUDICIAL WORLD OF CHARLES DOE 77-78, 201-06, 432-33 (1967). Moreover, Doe's opinion in Brown v. Collins, 53 N.H. 442 (1873), is commonly regarded as the most important expression and defense of the nineteenth-century negligence standard. See L. FRIEDMAN, supra note 1, at 426; J. REID, supra, at 134-39; G. WHITE, TORT LAW IN AMERICA 16-17 (1980) [hereinafter cited as G. WHITE-TORT LAW]. The Doe Court's conception of the nineteenth-century negligence system thus seems highly relevant. And since Brown and Buch v. Amory Mfg. Co., 69 N.H. 257, 44 A. 809 (1897)-the two nineteenth-century New Hampshire tort opinions that remain read today-tend to be known for their anti-liability tenor, it seemed likely that New Hampshire would prove hospitable to the subsidy thesis. 13. As defined here, "tort" includes most cases dealing with physical harm to body or property, and most cases whose judicial opinions espouse what is now recognized as basic tort doctrine. Cases of defamation, malicious prosecution, and nuisance, especially nuisance involving continuing interference rather than traumatic injury, have been excluded. For the most part, cases dealing with riparian law have also been excluded. See pp. 1737-39 infra. 14. There were about 430 cases in California and about 340 in New Hampshire. 15. During the nineteenth century, the New Hampshire and California Supreme Courts were the only appellate courts in their respective states. For details on the California Court, see Kagan, Cart- wright, Friedman, & Wheeler, The Evolution of State Supreme Courts, 76 MICH. L. REV. 961, 974- 75 (1978).
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