I will get back, as promised, to what I see as troubling signs out of the Roberts court, but I’m quite pleased that the Court yesterday decided a case, Anza v. Ideal Steel, involving an issue I write about — on my first day of blogging no less! — the influence and operation of tort-law principles outside the common law of torts. In Anza, the Court ruled that a business that claimed harm by a competitor’s refusal to pay sales taxes, and therefore ability to charge lower prices, did not meet the “proximate cause” requirement for civil RICO standing, a requirement drawn from tort law. Other posts about Anza can be found at SCOTUSblog here and here, and at White Collar Crime Prof Blog here.
This “proximate cause” requirement was imported into the civil RICO statute in a 1992 case called Holmes v. SIPC, because the civil RICO statute was based on the antitrust laws, which had in turn been read to have incorporated the common-law tort principle of proximate cause. But as Justice Scalia’s concurrence in Holmes pointed out, even if you think that some type of policy-based limitation should be part of RICO standing, it’s not at all clear that tort law or antitrust law is the source of that requirement.
Scalia seems to think that the requirement comes from some general background principles of the common law, but how exactly do we read that into a federal statute? I’m not sure, but see Caleb Nelson’s recent, interesting piece called “The Persistence of General Law” on the topic.
Another oddity of this line of cases is that the proximate cause requirement is primarily a feature of negligence law, but in civil RICO, you’re generally talking intentionally caused injuries, not carelessly caused harm. And the equivalent limitation in common law fraud — the underlying intentional-tort claim on which the RICO claim was based — is actually the reliance requirement, the issue which the Court had actually granted cert. on in Anza, but declined to address. This “statutory standing” issue addressed in Anza may be better thought of as an issue of “substantive standing” in tort law, to use Ben Zipursky’s term — a rule that the defendant’s act not just be a wrong, but a wrong to the plaintiff herself.
So far, I’ve written about this Anza-related theme of the influence of tort-law principles outside tort law in the context of (1) harmless-error determinations in criminal appeals, which I reframe as a but-for causation problem in constitutional torts, and (2) workers’ compensation cases, where common-law defenses like contributory negligence and assumption of risk — that the injury was the worker’s fault in some sense — continue to preclude claims even though these defenses were explicitly dealt out of the workers’ compensation “bargain” that replaced tort law for workplace injuries.
Besides these specific examples, I think it’s interesting that tort-law principles continue to be influential in a variety of domains, at a time when the tort system itself is under attack from all sides. Not sure yet what accounts for this apparent paradox, and would welcome thoughts.
Posted by Jason Solomon on June 6, 2006 at 10:12 AM
Comments
Tort law principles seem to be deployed in the illustrations given – civil RICO, harmless error, even ‘strict’ worker’s compensation – such that they operate so as to limit liability. As Holmes put it in his famous lectures, “The general principle of our law is that loss from accident must lie where it falls”, although we know that there is much to dispute his claim.
Of course, the objection in the post is that in the main illustration (civil RICO), “you’re generally talking intentionally caused injuries, not carelessly caused harm.” We’re not, then, in the realm of accidents, are we?
Or are we, really? Accidents are at some (however uncertain) risk of taking place, this moment or any other. The principles of tort law we apply in a given case determine the radiation of responsibility (and thus liability) for an accident. When courts demand that the accident ‘proximately cause’ the harm complained of, they are distributing responsibility and risk, mostly onto one party – that harmed – as in, say, Mrs. Palsgraf’s case.
Yet it’s said that civil RICO cases don’t much involve accidents. Here, there is another motive, namely that of limiting the reach of civil RICO, which has been the subject of complaint for many years. The tort principle of proximate cause is used to limit liability even for intentional acts (like not paying sales tax), on the reasoning that the tax evader’s competitor’s losses, if any, thereby caused are too attenuated – the radiation of responsibility is too diffuse to say that a legally compensable wrong has been done. Civil RICO is effectively otherwise displacing the business torts with promises of treble damages, if we were to allow tax evader’s competitor’s claim to proceed.
Harmless error seems a bit like that too, in that an error has concededly been committed, but the question there seems more like whether or not the extraordinary remedy of a new trial should be ordered – what’s the fit between the magnitude of the error such that defendant should be afforded another trial? Especially when it’s figured out that defendant is probably – or ‘beyond reasonable doubt’ – guilty, we mightn’t afford her ‘a second bite at the apple’.
The way that the Fourth Amendment works – fruits of an unlawful search are inadmissible as evidence – seems to lead to a similar calculus; a judge doesn’t want ‘the criminal to go free because the constable has blundered.’ Judge Calabresi has argued that the exclusivity of the remedy for a Fourth Amendment violation (pretending the evidence doesn’t exist) leads judges to twist into contortions in order that criminals might not go free, inflicting collateral damage on privacy law in the process. (On the civil side, he says that a jury is going to be hard-pressed to award a convicted felon damages, and I think that’s quite right).
Your last illustration – ‘strict’ liability irrespective of fault – is the most unusual context into which one might import tort law principles designed to limit liability of those mentioned; the whole point of the system is to proceed without regard to a worker’s fault. Holmes’ claim of the general principle of our law has penetrated quite far indeed.
Posted by: CJS | Jun 10, 2006 1:50:35 PM
Interesting post, JS. What do you think about the Posnerian claim that common-law reasoning tends to evolve efficiently? If tort-law doctrine is, in fact, fairly efficient in the average case, that might explain its pull in statutory cases that leave room for common-law-type reasoning.
Plus, of course, tort principles are highly salient for most lawyers. We were trained to think in those terms, so we frame other ideas with them.
Posted by: BDG | Jun 6, 2006 10:49:54 AM