Deterrence: The Legitimate Functionof the Public Tort

L Introduction In 1900, workers' compensation in America was a controversial hotly debated, allegedly unconstitutional scheme.1 Today, it is commonplace.2 Likewise, in 1900, imposing liability upon a product manufacturer absent privity of contract with the injured victim was a radical suggestion.3 Today, it is the rule.4 In 2001, despite the incredibly large settlements reached in the states' suits against the tobacco industry, the idea of holding a person or entity liable to a governmental entity for costs incurred by the government, arising out of personal injuries its citizens suffered or arising out of attempts to prevent injury, is not yet generally accepted. Will such liability be commonplace in fifty or one hundred years, or will such suits fall by the liability wayside? Is liability theoretically justified, or is it such a deviation from generally accepted notions of tort law that courts should refuse to impose liability? What are the primary theoretical justifications for these governmental tort claims? This Article will consider the legitimacy of the so-called public tort and will examine some objections as well as justifications. In sum, while there are bona fide philosophical and practical problems with public tort suits, there are also good reasons for allowing such suits to go forward. In particular, the public tort suit has a key role to play in providing efficient deterrence, as the legal economist uses that term. Public torts provide a mechanism that will encourage persons to take account of all the costs posed by their activities and, therefore, to invest efficiently in safety. Initially, public torts provide a vehicle that forces a defendant to take account of the costs it has imposed on society, even though the defendant's victims will not recover those costs as damages in individual tort suits either because those individuals do not sue, or because recovery is not allowed for reasons other than the defendant's conduct, i.e., administrative convenience. Public tort liability may be particularly appropriate in cases in which traditional tort concepts would not lead to liability in individual tort suits, but in which conglomerating claims in the public suit would overcome these traditional hurdles. Notable hurdles include the requirement of proving cause-in-fact or legal cause in an individual tort suit. Classic conceptions of liability and societal norms may cause a decisionmaker to balk at imposing liability in an individual's case, whereas liability in a conglomerated claim may be more palatable. Moreover, there may well be normative concerns that properly deny an individual recovery, such as the fault of the individual victims However, denying all recovery results in underdeterrence. Put differently, denying recovery in all individual suits may create an externality for the defendant. Because the defendant escapes liability in individual suits, it will not face all of the costs of its activity and, therefore, it will not take those costs into account when making critical decisions about engaging in the relevant activity. Merely because the defendant should not be held liable to the individual does not preclude some other liability-imposing device. Such a device forces the defendant to take account of all the costs that its activity imposes upon society. The public tort suit might be that device. II. Defining Public Torts To oversimplify, a tort is a wrong other than a breach of contract.6 The word private in that definition initially seems to indicate that torts involve actions (and potentially some inactions) by one person that cause injury to another person. Torts is the body of law in which society decides if the person sued must make redress to the person suing, or if the person suing is entitled to some equitable relief against the person sued in order to prevent or stop some injury. Does a governmental entity acting and suing as a governmental entity have any place in the tort mix? …