From: wdstarr@athena.mit.edu (William December Starr)
Subject: Re: Law and Economics
Organization: Northeastern Law, Class of '93
Lines: 174
NNTP-Posting-Host: nw12-326-1.mit.edu
In-reply-to: thf2@midway.uchicago.edu


[Procedural note: Ted directed followups to misc.legal only.  While I
respect his right to do so, my own opinions are that (1) "Followup-To"
fields are mere suggestions, not mandatory commands and (2) this issue
is of sufficient (a) general political relevance and (b) civil liberties
interest to warrant keeping it active in t.p.m and a.s.c-l as well, at
least for this round.]

In article <1993Apr11.155955.23346@midway.uchicago.edu>, 
thf2@midway.uchicago.edu said:

> Uh, no.  That's not what happened in _Boomer_.  What happened in
> _Boomer_ was that the judge didn't allow the plaintiffs to blackmail
> the cement plant by demanding a multi-million dollar plant to be shut
> down over $185,000 in damages, and required the plant to pay the
> plaintiffs the $185,000 to make them whole.  The plant would never
> have been shut down-- the plaintiff's lawyers would have just
> negotiated a windfall settlement, because the plaintiffs would prefer
> an amount greater than $185K to having the plant shut down, while the
> plant would prefer any amount less than the value of the plant to have
> the plant continue in operation.  Everyone's property rights were
> protected; the plaintiffs were made whole; unnecessary settlement
> costs were avoided.

Okay, now here's my interpretation of _Boomer_, based on the facts as
presented in the New York Court of Appeals<*> holding (_Boomer v.

<*>Note: The New York Court of Appeals is the highest court in New York
   State.  While the United States and 48 of the fifty states call their
   highest court "Supreme Court," "Supreme Judicial Court" or "Supreme
   Court of Appeals," Maryland and New York call theirs simply the
   "Court of Appeals."  To make matters worse, New York also calls its
   _second-highest_ court the "Supreme Court, Appellate Division"...

Atlantic Cement Co._, 26 N.Y.2d 219, 257 N.E.2d 870 (1970)):

Oscar H. Boomer, et al., owned land near the Atlantic Cement company's
plant near Albany, N.Y.  (The fact pattern gives no information as to
which came first, the plaintiff's acquisition of the land or he
defendant's start of production at their cement plant.)  In the course
of its regular operations, the cement plant did injury to the
plaintiffs' property via dirt, smoke and vibrations emanating from the
plant.  The plaintiffs sought injunctive relief -- that is, they asked
the court to order Atlantic Cement to stop damaging their property.

(Commentary: this seems entirely reasonable to me.  Boomer at al owned
their property and, presumably, a right to quiet enjoyment of it.
Atlantic Cement's actions were depriving Boomer et al of that right.)

Instead of granting the plaintiffs' request for an injunction, the court
ordered them to accept the damage being done to their property, provided
that Atlantic Cement paid them $185,000 in compensatory damages.  In
other words, the court granted Atlantic Cement Co., a private party, the
power and authority to _take_ the plaintiffs rights to quiet enjoyment
of their property by eminent domain.  A taking by eminent domain is
always problematical even when it's done by the state; allowing a
private firm to do it is, in my opinion, totally wrong.

(Yes, I know, the _Boomer_ court didn't call it eminent domain.  But if
it walks like eminent domain and swims like eminent domain and quacks
like eminent domain...)

Let me take issue with the way you've presented the case... you say that
"What happened in _Boomer_ was that the judge didn't allow the
plaintiffs to blackmail the cement plant by demanding a multi-million
dollar plant to be shut down over $185,000 in damages."  Blackmail?

    (Pulls out Black's Law Dictionary, Abridged 5th Edition....
    "Blackmail: Unlawful demand of money or property under threat to
    do bodily harm, to injure property, to accuse of crime, or to expose
    disgraceful defects.  This crime is commonly included under
    extortion statutes.")

How do you define as "blackmail" one party's act of demanding the right
to set its own sale price for a unique piece of property which it owns
and which another party has expressed an interest in buying?  Or of
demanding the right not to sell that property at any price?  As I see
it, Boomer et al, having found themselves in the fortunate position of
owning something which Atlantic Cement had to purchase if it wanted to
stay in business, had every right in the world to set whatever price
they wanted.  There isn't, or at least shouldn't be, any law that says
that you have to be a nice guy in your private business dealings.

You go on to say: "The plant would never have been shut down -- the
plaintiff's lawyers would have just negotiated a windfall settlement,
because the plaintiffs would prefer an amount greater than $185K to
having the plant shut down, while the plant would prefer any amount less
than the value of the plant to have the plant continue in operation."

If so, so what?  Since when are the courts supposed to be in the
business of preventing parties from reaping windfall settlements from
other parties when those settlements arise from wrongful acts by those
other parties?  If Atlantic Cement didn't want to have to face a choice
between paying a windfall settlement or going out of business, well,
shouldn't Atlantic Cement have thought of that before going _into_
business?  (I note that as far as the facts show Boomer et al were _not_
the parties responsible for bringing about this situation -- that was
Atlantic Cement's own fault for choosing to build and operate the type
of plant they did where and when they did.)

And then you say: "Everyone's property rights were protected; the
plaintiffs were made whole; unnecessary settlement costs were avoided."
As above, I dispute your claim that the plaintiffs were "made whole."
They were, in fact, by court action deprived of their rights as owners
of property to choose to sell or not sell that property at a price
acceptable to them.  And for that deprivation they were _not_ made
whole.  And again I ask: Since when are the courts supposed to be in the
business of ensuring that "unnecessary" settlement costs are avoided?
(If so, I've been miseducated -- I always thought that the courts were
supposed to be in the business of ensuring that justice is done.)

> Is _Boomer_ really being taught as "infamous?"  That's really sad if
> it is, because I fail to see how it's less than completely sensible.
> You should read the law and economics stuff first-hand instead of
> filtered through teachers who clearly don't like it, for whatever
> inexplicable reasons.

(1) _Boomer_ is not being taught as "infamous," at least not at my
school.

(Aside: Northeastern Law usually does a very good job of hiring for
their first-year, mandatory classes (such as Torts, where I first
encountered _Boomer_) instructors who, regardless of their personal
opinions, can and do teach the law neutrally.  When the students get
into their second and third years, in which the students (a) can pick
and choose which courses to take (except for the mandatory Professional
Responsibility, of course) and (b) are presumed to be a bit more worldly
and self-confident, less likely to be consciously or sub-consciously
intimidated by Law School Professors and able to learn from openly
biased instructors rather than be indoctrinated by them, the instructors
tend to be more open in expressing their own opinions.  This is
especially true of part-time instructors who, in real life, are
practicing attorneys or sitting judges... this can be _very_
educational, sometimes far more so than being taught by a somewhat
cloistered scholar.  End of aside.)

I called it infamous because that's my opinion of it.  For the reasons
I've stated above, I believe it to be a triumph of something that I can
only call "economic correctness" over justice.

(2) It is "completely sensible" only if you believe that the alleged
right of the owners of Atlantic Cement to stay in business and avoid
losing a lot of their own money due to their own wrongful act, and
the alleged right of several hundred Atlantic Cement employees to
not have their jobs disappear, should trump the rights of people who
own property which was damaged by Atlantic Cement's wrongful acts.
(And if you believe that it is correct for the courts (or any other
branch of government) to grant to private parties the right to take
other people's property by eminent domain.)

> You'd like Posner, Bill.  He's a libertarian.

Really?  I didn't know that... what, if anything, has he had to say
about cases like _Boomer_?

> Of course, he has too much of a paper trail to ever be nominated by a
> president, Democrat (won't like his antitrust stance) or Republican
> (won't like his support of gay marriage), and if bright law students
> "shiver" at what they don't understand, it's easy to imagine how the
> press will play it up as baby-selling.  (I've seen Mike Godwin claim
> that Posner asserts that law and economics is applicable to everything
> and is the end-all and be-all, when Posner says precisely the
> opposite.)  So it goes.

I've admitted that my understanding of the field generally referred to
as "law and economics" is weak.  If it advocates the use of economical
analysis as one of many "tie-breaker" factors which courts may use to
help them reach decisions in cases in which the dispute, as measured by
the scale of "justice", is evenly balanced, fine.  But as illustrated by
_Boomer_, it is _not_ fine when the courts start viewing the economics
of a case as being more important than the justice of a case.

-- William December Starr <wdstarr@athena.mit.edu>

