Boomer and the American Law of Nuisance: Past, Present, and Future
J.L. Lewin, Albany Law Review (1990), 54:189
neacsu, dana1/28/2018 For Educational Use Only 54 Alb. L. Rev. 189 Albany Law Review 1990 Symposium on Nuisance Law: Twenty Years After Boomer v. Atlantic Cement Co. Jeff L. Lewin Copyright 1990 by Jeff L. Lewin
TABLE OF CONTENTS I. INTRODUCTION
II. AMERICAN NUISANCE LAW PRIOR TO BOOMER A. English Origins: From the Conquest to Blackstone B. Reception in Pre-Industrial America C. Natural Rights Theory and the American Rule of Reasonable Use 1. The Plaintiff-Centered Static Theory of Property 2. The Defendant-Centered Dynamic Theory of Property 3. Competing Natural Rights and the Rule of Reasonable Use 4. The Correlative Theory of Property and the “Relative Rights” Rule of Reasonable Use 5. The Decline of Natural Rights Theory D. Positivist Theory and the Restatement’s Balance of Utilities Test E. American Nuisance Law in 1970
III. BOOMER V. ATLANTIC CEMENT CO. A. The Case B. The Commentary
IV. AMERICAN NUISANCE LAW SUBSEQUENT TO BOOMER A. The Second Restatement and the Compensation Principle B. American Nuisance Law in 1990
V. LAW AND ECONOMICS AND THE LAW OF NUISANCE A. The “New” Law and Economics and the Meaning of Efficiency B. Economic Commentary on Nuisance Law 1. Ronald Coase 2. Guido Calabresi 3. Frank Michelman 4. Calabresi and Melamed 5. Robert Ellickson 6. Edward Rabin 7. Richard Epstein 8. A. Mitchell Polinsky 9. Gregory Travalio 10. Richard Posner C. Critique and Synthesis 1. Assignment of Entitlements in Nuisance Disputes 2. Injunctive Relief Versus Damages 3. Permanent Versus Temporary Damages
VI. THE FUTURE OF AMERICAN NUISANCE LAW: TOWARD THE YEAR 2000 A. John Coons and Court Imposed Compromise B. Comparative Nuisance and Corrective Justice C. The Shape of a Comparative Nuisance System D. Comparative Nuisance and Economic Efficiency E. Coming to the Nuisance, Hypersensitivity, and Other Defenses Based on Plaintiff’s Conduct 1. Temporal Priority and Coming to the Nuisance 2. Hypersensitivity 3. Other Defenses F. Comparative Nuisance and Administrative Costs G. Comparative Nuisance and Dispute Resolution H. Barriers to Adoption of Comparative Nuisance
VII. CONCLUSION APPENDIX
*191 I. INTRODUCTION In March of 1970, on the eve of the first Earth Day celebration and teach-in, the New York Court of Appeals handed down its decision in Boomer v. Atlantic Cement Co.1 Almost immediately, scholarly commentators and textbook writers recognized Boomer as a leading case. With the perspective provided by the passage of time, it is now fitting to reconsider Boomer’s role in the evolution of American nuisance law. This Article represents a synthesis of ideas developed in earlier works.2 The Boomer opinion is central to the discussion because it highlights several of the fundamental questions posed by the law of nuisance as well as providing a temporal demarcation for historical analysis.
Section II recounts the history of American nuisance law prior to Boomer, tracing the development from the English origins of nuisance law through the balance of utilities test in the first Restatement of Torts.3 Section III discusses the Boomer decision and its role in American nuisance law.4 Section IV describes post-Boomer developments, analyzing the reformulation of nuisance doctrine in the Restatement (Second) of Torts and assessing its impact on the American law of nuisance.5 Section V addresses the vast body of post-Boomer commentary on nuisance law that has been influenced by the law and economics movement of the 1970s.6 A summary of the leading works of this movement is followed by a synthesis of the economic issues posed by the Boomer decision. Finally, Section VI proposes a scenario for the future evolution of nuisance law, recapitulating the *192 argument for abandoning the dichotomous all-or-nothing rules of traditional nuisance law in favor of a rule of comparative nuisance.7
II. AMERICAN NUISANCE LAW PRIOR TO BOOMER A. English Origins: From the Conquest to Blackstone The word nuisance derives from the Latin nocumentum, by way of the French nuisance.8 Nocumentum is a medieval Latin word that means loss, damage, or detriment.9 Similarly, the French word nuisance means hurtful, injurious, or prejudicial.10 Having no intrinsic limitations, the term nuisance eventually became a legal grab-bag that the courts seized upon as a substitute for analysis whenever they wished to redress an injury.11 As a consequence, the law of nuisance remains an “impenetrable jungle”12 to many lawyers and judges.
The action for private nuisance can be traced to the twelfth century.13 The word nuisance (nocumentum) first appeared in approximately *193 1187 in Glanvill’s compilation of formal writs within several examples of a writ known as the Assize of Novel Disseisin.14 This variant of the Assize of Novel Disseisin was employed when the defendant’s actions interfered with a plaintiff’s easements or natural rights in land. Eventually, this form of the writ acquired its own distinct identity as the Assize of Nuisance.15 In the thirteenth and fourteenth centuries, the Assize of Nuisance closely resembled the modern cause of action for private nuisance, providing redress for interference with the use and enjoyment of plaintiff’s land resulting from acts committed on the defendant’s land.16
The Assize of Nuisance had certain limitations, however. It was available only to protect a freehold estate against the wrong of another *194 freeholder,17 and the procedures were quite burdensome.18 An alternate remedy for private nuisance was provided by the writ quod permittat prosternere, a writ that could take the form of a Writ of Right or a Writ of Entry.19 This writ was broader than the Assize of Nuisance,20 but the procedures were even more inefficient.21
To avoid the limitations and burdens of the Assize of Nuisance and the writ quod permittat prosternere, litigants sought to redress interferences with land under the newly developing action on the case.22 In the sixteenth century, an action on the case for nuisance could be brought when the assize was not available and no other legal remedy existed.23 By the beginning of the seventeenth century, litigants were permitted to elect between the two writs.24 Thereafter, “trespass on the case became the usual and established remedy for nuisance.”25
The action on the case for nuisance had one significant disadvantage. Whereas abatement was available under the Assize of Nuisance, the sole remedy in an action on the case was money damages.26*195 Abatement was available, however, from the courts of equity, which developed equitable principles different from those employed for nuisance cases in the common law courts. The separate development of nuisance law in the common law and equity courts was “[a] potent cause of confusion,” especially because the equity courts often did not closely observe the technical labels and distinctions employed by the law courts.27
Further complexity was introduced as the action on the case for nuisance was broadened to include actions by plaintiffs suffering “special injury” from interference with a public right, such as obstruction of a public highway.28 Thus, two entirely disparate wrongs--interference with the use and enjoyment of land (private nuisance) and special injury from interference with a public right (public nuisance)--could be redressed in an action on the case for nuisance. The special injury giving rise to an action for public nuisance could involve either damage to land or personal injuries. At first, most suits for personal injuries from a public nuisance were brought as actions on the case for negligence but, by about 1840, they often were brought as nuisance cases.29 Courts sometimes cited their holdings as applicable to nuisance cases generally, without drawing a distinction between personal injuries from public nuisances and injuries to land from public or private nuisances.30
Leaving aside the complications introduced both by private actions for public nuisance and by equitable jurisdiction over private nuisance, the substantive law applicable to actions on the case for private nuisance remained consistent with the absolute protection of property *196 rights under the Assize of Nuisance. The leading pre-Revolutionary nuisance decision was William Aldred’s Case in 1611.31 The plaintiff had brought an action on the case against the defendant for erecting a hog sty near the plaintiff’s house.32 The court established two major principles. First, in holding that an action lay for blocking the light and “infecting and corrupting the air,” the court stated that an injury to the plaintiff’s use and enjoyment of his land was actionable if it pertained to matters of necessity, such as light and wholesome air, but not with respect to “things of delight,” such as a view.33 Second, for interference with essential uses of property, the court articulated the rule of sic utere tuo ut alienum non laedas (“one should use his own property in such a manner as not to injure that of another”),34 expressly rejecting the defendant’s invitation to consider the utility of the hog sty as a defense.35
The leading nuisance cases of the seventeenth century scrupulously followed the rule of sic utere tuo,36 and Blackstone reiterated it in the eighteenth century.37 Thus, on the eve of the American Revolution, the rule of sic utere tuo provided absolute protection against interference with the essential attributes of land ownership.
B. Reception in Pre-Industrial America Blackstone’s Commentaries provided the primary source of legal authority in post-colonial America. In the early nineteenth century, American courts generally adhered to Blackstone’s rule imposing absolute nuisance liability for any injury to an interest in land under the sic utere tuo maxim.38 This absolute rule could have presented a *197 substantial obstacle to industrialization inasmuch as any manufacturing activity that generated vibrations, noise, dust, smoke, or fumes which interfered with adjacent landowners’ use and enjoyment of their property was potentially subject to substantial damage liability or abatement by injunction. It is therefore somewhat surprising that nuisance law did not impede economic development in the years leading up to the Civil War.39
The first third of the nineteenth century witnessed a continuation of colonial economic development.40 Existing industry expanded without substantial qualitative change. Agriculture was still the foundation of the economy.41 The small scale of manufacturing and commerce provided few occasions for land use conflicts.42
Economic conditions changed more rapidly, however, between the mid-1830s and the Civil War.43 The existence of large areas of undeveloped land was a major factor in forestalling the conflict between established landowners and entrepreneurial developers during this period.44 Nevertheless, as the new large-scale manufacturing enterprises increasingly began to inflict damages on their neighboring landowners, the volume of nuisance litigation increased substantially.45
With very few exceptions, the courts adhered to the formal rule of sic utere tuo throughout the antebellum period.46 Nevertheless, it has been suggested that the courts subtly restricted the rule’s application through a variety of subsidiary doctrines that limited the impact of private nuisance law on economic development.47 Perhaps the most important doctrine was the defense of “statutory justification,” which exempted mills, railroads, and other enterprises operating under franchise from the government from the reach of ordinary nuisance law.48 These activities were deemed to be exempt from nuisance injunctions by virtue of their statutory authorization, and the courts further held *198 that they would not be liable for damages in the absence of negligence.49 This defense may have been crucial to the expansion of the railroads. By demonstrating that they took all reasonable precautions, railroad owners could entirely avoid liability for damages to adjacent buildings and crops caused by fires that inevitably resulted from the escape of sparks and cinders.50
It has also been claimed that the courts enlarged the obstacle posed by the rule requiring a plaintiff to show “special injury” to recover for a public nuisance. They did so in two ways: first, by expanding the definition of public nuisance to encompass any dispute involving multiple plaintiffs, and second, by narrowing the definition of special injury through a requirement that the plaintiff’s damages be “different in kind” from those of the general public.51
In addition, without altering the substantive rule of sic utere tuo, courts that were reluctant to enjoin new industrial projects also developed a variety of new equitable principles to restrict its scope. Some courts emphasized their newly rediscovered equitable discretion to deny an injunction against a nuisance.52 Some courts held that “equity would enjoin only actual nuisances and not prospective ones.”53 Other courts demonstrated an increased willingness to view land as fungible and to treat money damages as a complete redress for damage to land, thereby denying injunctive relief on the basis of an adequate remedy at law.54
C. Natural Rights Theory and the American Rule of Reasonable Use Although the United States experienced substantial industrial development in the twenty-five years preceding the Civil War, “[t]he period between 1871 and 1916 witnessed the most remarkable economic growth in American history.”55 The railway system expanded, manufacturing grew, and new industries developed, including mining and oil drilling. By 1889, the United States had become the foremost industrial nation in the world.56
*199 At the same time, American courts began to remove the barriers to private nuisance litigation that had been erected in the antebellum period. Courts frequently rejected the statutory justification defense and were less likely to find that a nuisance was public simply because many landowners were affected.57 The courts increasingly were forced to reach the merits and determine whether a particular activity constituted a private nuisance.58
The pressures of industrialization produced a substantial transformation of American property law and nuisance law in the nineteenth and early twentieth centuries.59 During the nineteenth century, virtually all jurists viewed property as a “natural right.”60 In contrast to the modern positivist conception, that the rights of private property owners were created by law, the natural rights theory posits that property rights existed prior to and independent of the legal and social system.61 Industrialization focused attention on the inherent tension between two aspects of these natural property rights: the right of beneficial use and the right against interference by others. Plaintiffs emphasized the right against interference, urging a broad interpretation of the sic utere tuo maxim; defendants emphasized the right to beneficial use and advocated a narrower interpretation of this maxim.62
Traditional nuisance doctrine accorded priority to the right against interference. In an effort to accommodate economic development, American courts began to restrict the zone of absolute protection against interference and emphasized the property owner’s right of beneficial use.63 The courts sought to resolve the tension between the property rights of plaintiffs and defendants without abandoning the natural law foundation of property rights.64 Their attempts at accomodation were reflected in new theoretical conceptions of the natural rights of property owners. The dominant approaches may be referred *200 to as the “static,” “dynamic,” “competing-rights,” and “correlative” theories of property.65 None of these compromises was successful, and they ultimately undermined the natural rights foundation of property rights, setting the stage for a positivist reformulation of nuisance law in the Restatement of Torts. Within this positivist vision, nuisance law was recast as a utilitarian calculus in which property rights were defined with the aim of achieving the greatest social good.66
1. The Plaintiff-Centered Static Theory of Property The static theory of property was rooted in the Jeffersonian ideal of agrarian republicanism. The property right--individual, absolute, and natural-- protected uses necessary to satisfy basic human needs, especially the rights of habitation and agriculture.67 The static theory resolved potential conflicts by focusing almost exclusively on the plaintiff’s right, giving priority to a limited set of preferences. A residential plaintiff prevailed against interference by agricultural or industrial defendants, and an agricultural plaintiff prevailed against industrial defendants.68
*201 Within the static model, the primary restriction on the rights of a residential plaintiff was the threshold requirement of substantial injury. A plaintiff’s property rights were infringed only if the offending activity substantially interfered with comfort and enjoyment and materially depreciated the property’s value.69 The static model also permitted a limited “locality” rule which, consistent with its agrarian roots, afforded somewhat greater protection to rural than to urban plaintiffs.70 Urban dwellers could be expected to endure the ordinary discomforts and annoyances of city life; thus, the threshold of actionable nuisance was higher in urban areas.
The static theory of property rights, focusing almost exclusively on the rights of the plaintiffs, was generally inhospitable to industrialization. Neither the threshold requirement of substantial injury nor the limited locality rule imposing a higher threshold in urban areas constituted a significant limitation on the traditional rule of sic utere tuo.
2. The Defendant-Centered Dynamic Theory of Property The dynamic theory of property, based on Locke’s theory of social contract, proved more favorable to entrepreneurial interests by focusing on the liberty interests of those wishing to use and develop their property. Individuals were viewed as having natural property rights to the fruits of their labor, rights which existed prior to societal formation.71 These rights were only partially qualified by social evolution and its resulting social compact. Dynamic theory was also influenced by the Hegelian view that property constituted “an essential element in the full realization of individual personality.”72 Dynamic theory viewed the natural individual as a capitalist, and it was congenial to laissez faire social theory, which viewed absolute private control of property as essential to economic growth and social progress.73
For dynamic theorists, sic utere tuo was secondary to the right of property owners to make productive use of their property. These *202 theorists restricted the scope of the sic utere tuo doctrine “by narrowly interpreting the word ‘laedas”’ to mean not “injury” but “legal in jury.”74 Legal injury could only result from a legal wrong, an unlawful act. If the defendant had the legal right to make a particular use of his property, then the damage inflicted on the plaintiff was damnum absque injuria, or damage without legal wrong or legal injury.75
The dynamic model was theoretically incomplete because it could not establish the boundaries of nuisance liability. The legal limits on a defendant’s rights could not be determined from an analysis of property rights, but instead required a socially-based normative theory to determine what constituted a “legal wrong.” This model also was deficient in its inability to provide adequate protection to the property rights of plaintiffs. Pure dynamic theory would have imposed liability solely on unlawful uses within the narrow category of “nuisances per se.” No other particular “use” of property was said to give rise to liability. Consequently, dynamic theory did not provide an acceptable resolution of the conflict between the rights of plaintiffs and defendants.
3. Competing Natural Rights and the Rule of Reasonable Use Jurists sought to expand the protection afforded to plaintiffs under the dynamic model without abandoning the conception of property rights as being natural and absolute.76 The resulting compromise purported to recognize the natural rights of both parties to nuisance disputes within a rule of reasonable use.77 Two different versions of the reasonableness test emerged. One emphasized the rights of defendants while the other focused on the rights of plaintiffs. These plaintiff- and defendant-centered rules of reasonable use were more sophisticated than the pure static and dynamic theories, but ultimately were unable to resolve nuisance disputes without sacrificing the natural rights of one of the parties.
In their attempt to expand the scope of nuisance liability beyond the category of unlawful nuisances per se, dynamic theorists drew upon the developing principles of negligence law to make a distinction between “use” and “manner of use.”78 Although a particular use of *203 property might itself be lawful, the defendant would be liable if the manner of use was negligent or imposed unnecessary harm on adjacent landowners. Negligence-based nuisance doctrine could not provide adequate protection to residential plaintiffs, however, because many manufacturing and industrial uses unavoidably interfered with the comfort and enjoyment of residential property owners, even when conducted with the greatest possible care. As a result, few jurisdictions limited private nuisance liability exclusively to negligent conduct.79
Courts further expanded the scope of liability for both nuisances per se and nuisances based on negligence by considering the nature of the location and other surrounding circumstances in determining whether an otherwise lawful use constituted a prima facie nuisance or whether the defendant had been negligent in selecting a location.80 While the prima facie category of nuisances was too rigid to accommodate the various land use disputes associated with industrialization, it allowed for the consideration of factors beyond the defendant’s use and manner of use, including the nature of the locality and other surrounding circumstances.
Jurists eventually generalized these considerations into a defendant-centered rule of “reasonable use.” Rather than distorting the categories of negligence and nuisance per se, some courts expanded the concept of wrongfulness to impose liability for conduct that was “unreasonable” under the totality of the circumstances. This defendant-centered version of the reasonable use rule represented an elaboration of the principles underlying negligence-based nuisance doctrine, with the wrongfulness of the defendant’s conduct serving as the justification for imposing liability.
The flexibility of the new reasonableness standard provided somewhat greater protection to plaintiffs than a pure negligence rule. Nevertheless, the limitation of nuisance liability to “unreasonable” conduct still would have permitted most well-run industrial enterprises to escape liability for interference with the comfort and enjoyment of neighboring landowners.
*204 An alternative compromise was sought in a plaintiff-centered version of the reasonable use rule. This version was premised on a slightly different conception of the Lockean social contract than that reflected in the dynamic theory of property.81 Whereas dynamic theorists had emphasized the primacy of pre-societal natural property rights, the plaintiff-centered rule of reasonable use posited that holders of natural rights surrendered a portion of their rights when they entered into society so that all could enjoy their property without unreasonable interference. The defendant’s right to beneficial use was limited by the plaintiff’s right to be free of unreasonable interference.82 By focusing on the unreasonableness of the damage to the plaintiff instead of on the reasonableness of the defendant’s conduct, this version of the reasonable use rule would have imposed nuisance liability on even the most well-run industrial enterprises if they inflicted an unacceptably high level of harm on neighboring landowners.
Although both the defendant-centered and plaintiff-centered rules of reasonable use were reflected in judicial opinions, it is questionable whether the distinction between them was apparent to jurists in the late nineteenth and early twentieth centuries. The opinions often fail to reflect any distinction, and their rhetoric vacillates between the defendant-centered and plaintiff-centered approaches in their evaluation of the reasonableness of the defendant’s activity.83 The phrase “reasonable use” suggested that the crucial criterion was the defendant’s conduct rather than the plaintiff’s harm. This may explain why the defendant-centered approach is somewhat more prevalent in the opinions. In the following discussion, the defendant-centered and plaintiff-centered versions of the reasonable use rule will be referred to collectively as the “competing-rights” rule of reasonable use.
*205 Whether the courts focused on the reasonableness of the harm to the plaintiff or the reasonableness of the conduct of the defendant, the competing-rights rule of reasonable use required a meaningful definition of the boundary between reasonable and unreasonable harm or conduct. Starting from the assumption that all parties had equal and absolute rights, courts attempted to deduce a number of more specific doctrines to guide the application of the reasonableness standard.84 Their aim was to define the limits on the rights of all parties in a way that avoided rights conflicts while preserving an equal sphere of rights for each party. In most cases, these doctrines tended to reduce the zone of conflict at the expense of the plaintiff.85
Several doctrines limited the areas of conflict by restricting the scope of the plaintiff’s right to comfortable use and enjoyment. “In keeping with the general trend . . . toward using objective standards, courts . . . applied an ordinary person standard to measure the effect of an interference on the plaintiff.”86 If the defendant’s activities would not have caused “substantial discomfort” to an ordinary person, there would be no recourse for a plaintiff who “happened to be unusually sensitive or peculiarly susceptible.”87
The courts also required some form of physical invasion or damage to the plaintiff as a prerequisite to a defendant’s liability. A plaintiff could not recover for a purely visual “aesthetic injury,” nor could a plaintiff recover if the only damage was a decline in market value. The courts reasoned that so long as the defendant’s activities had no physical impact beyond the boundaries of his property, the defendant could not be deemed to have infringed upon the rights of his neighbors.88
Perhaps the most significant doctrine associated with the competingrights version of the reasonable use rule was the expansion of the “locality rule.” In the static model, the locality rule created a preference for rural over urban plaintiffs.89 Within the reasonable use rule, the locality rule gave rise to more refined distinctions among residential, commercial, and industrial neighborhoods.90 The threshold of actionable injury was measured against the background level of normal interference in each neighborhood or area.91
*206 Among the other factors included in determining the reasonableness of the defendant’s use, a few courts expressly considered the value or utility of the defendant’s conduct.92 These courts did not, however, advocate a balancing of interests or a quantitative weighing of social utility. The value of an activity was merely a factor in the overall qualitative evaluation of its reasonableness. A balancing of interests would have been inconsistent with the absolute conception of property rights underlying the competing-rights rule of reasonable use.
When sitting as courts of equity, however, the judges in a growing number of jurisdictions perceived their equitable discretion as permitting or even requiring the consideration of the impact of an injunction on both the defendant and the public.93 This trend toward “balancing the equities” in suits seeking injunctive relief developed slowly. According to both the static and the dynamic property theories, the plaintiff had an absolute right to injunctive relief against interference with established property rights.94 In the latter part of the nineteenth century, however, courts began to qualify this absolute right through their equitable discretion in actions for an injunction.95 Especially after the turn of the century, a growing number of courts adopted balancing tests for the issuance of injunctive relief, employing such labels as “the balance of conveniences” or “balancing the equities.”96 The balancing of equities was strongly criticized by adherents to the natural rights approach, but it steadily gained ground, becoming the prevailing view by the end of the 1930s.97
*207 4. The Correlative Theory of Property and the “Relative Rights” Rule of Reasonable Use Correlative theory viewed property rights as both natural and relative.98 Property rights were relative in that they were defined by the social context, including existing economic conditions and technology. Property rights were natural in that they were necessarily and intrinsically defined by their social context and were not simply the result of social convention or the sovereign’s command. Within the correlative rights theory, the task of the judge was to discover the property rights that were naturally determined by existing social conditions.
The correlative theory of property rights purported to eliminate the tension between industrialization and the rights of existing property owners by asserting that the parties’ rights were complementary.99 The correlative nature of property rights was reflected in the “relative-rights” version of the reasonable use rule. Within correlative theory, each landowner had two correlative rights: a right to reasonable use and a right to be free from injury caused by another’s unreasonable use. An unreasonable use of land was defined as any use that interfered with another’s reasonable use and enjoyment of land. Conversely, by definition, a reasonable use did not interfere with another’s reasonable use or enjoyment of land. With reasonable use so defined, there could never be a conflict between the natural rights of adjacent landowners.
The relative-rights rule of reasonable use thus differed in an important theoretical respect from the competing-rights rule of reasonable *208 use. The competing-rights version assumed that natural rights were absolute and could conflict, and the rule of reasonable use with its subsidiary doctrines constituted a restriction on the natural rights of the parties. In the relative-rights version, however, the parties’ natural rights were defined by the rule of reasonable use and could not conflict, so no additional doctrines were needed to avoid rights conflicts.100
The relative-rights version of the reasonable use rule was most often associated with the doctrine of riparian rights.101 Riparian rights incident to the ownership of land along a watercourse were treated as natural rights, but they were defined in part by reference to the consequences of their exercise upon other riparian landowners. The riparian rule of reasonable use allowed all riparian owners to make reasonable use of the water in the stream, a use which would not cause unreasonable harm to other riparian owners.
The New Hampshire Supreme Court took the lead in extending the reasonable use rule beyond its riparian rights origins into a general rule applicable to all land use conflicts.102 The New Hampshire cases expressly endorsed a balancing of interests in determining the relative rights of the parties under the rule of reasonable use. The relative rights of the parties depended upon a comparison of individual benefits and harms as well as consideration of social consequences. New Hampshire apparently was alone, however, in applying the relative-rights approach to ordinary nuisance conflicts,103 and even the New Hampshire courts did not consistently adhere to it.104
5. The Decline of Natural Rights Theory The natural rights theories of property failed in their attempts to accommodate the tensions between the rights of plaintiffs and defendants in nuisance disputes, and the various context-dependent *209 rules of reasonable use ultimately undermined the natural rights foundation of nuisance law.105
With regard to the competing-rights version of the reasonable use rule, the limiting doctrines were not intrinsically linked to the nature of property rights and did not eliminate the necessity of referring to extrinsic social norms of reasonableness. One’s property rights could not truly be natural and absolute if they were relative to the locality and other circumstances. Moreover, courts tended to justify both the limiting doctrines and the decisions in particular cases with reference to utilitarian arguments about economic or social benefits.106 This appeal to utilitarian justifications further contributed to the erosion of the natural rights foundation of property theory.
The relative-rights version of the reasonable use rule was even less stable than the competing-rights version. Whereas the competing-rights rule of reasonable use treated the social context as an extrinsic limitation on natural property rights, correlative property theory intrinsically relied upon the social context for the determination of natural property rights. The rejection of late nineteenth-century social determinism destroyed the natural rights foundation of correlative property theory. Cut off from this base, the balancing of interests within the relative-rights rule of reasonable use could easily be viewed as an application of legal positivism. In balancing the interests, the judge would not be discovering the natural rights of the parties but would be explaining the policy justification for judicial law-making.
Thus, in the early years of the twentieth century, nuisance disputes in most jurisdictions were governed by reasonable use rules that were becoming increasingly estranged from their natural rights origins. Although only a few courts engaged in an express balancing of interests, most courts determined the reasonableness of an activity by considering the locality and other circumstances, including the nature and extent of the harm to the plaintiff and the social value of the defendant’s activity.107
*210 D. Positivist Theory and the Restatement’s Balance of Utilities Test In the early years of the twentieth century, legal positivism superseded natural rights as the dominant philosophy in American jurisprudence, particularly with respect to property rights. Legal positivism found its clearest expression in the American Law Institute’s Restatement of Torts.108 In the chapter on nuisance law, as elsewhere in the Restatement, the rights of parties were not treated as natural rights but were defined by the applicable legal rules. The Restatement succeeded in clarifying much of the law of private nuisance, but it also severed nuisance law from its natural rights origins, substituting a positivist right determined according to utilitarian criteria of cost and benefit.109
The Restatement eliminated much of the confusion associated with the law of nuisance by defining private nuisance as a tort based on the nature of the interest invaded rather than the nature of the conduct giving rise to liability.110 Previously, courts often had focused on the nature of the defendant’s conduct, unsuccessfully attempting to distinguish nuisance from negligence or from ultrahazardous activity.111 The Restatement broadened the scope of nuisance law to encompass all claims involving “a non-trespassory invasion of another’s interest in the private use and enjoyment of land . . . . ”112 The “invasion” giving rise to nuisance liability could be either “(i) intentional and unreasonable; or (ii) unintentional and otherwise actionable under the rules governing liability for negligent, reckless or ultrahazardous conduct.”113 The Restatement thus succeeded in clarifying the scope and nature of the action for private nuisance.
For unintentional invasions, nuisance liability simply involved application of general principles governing liability for negligent, reckless or ultrahazardous conduct.114 With respect to intentional invasions, however, the drafters had to develop a new set of criteria for determining when an invasion would be deemed “unreasonable.”
*211 It was in the definition of “intentional and unreasonable” that the Restatement worked a fundamental change in nuisance law, adopting what has come to be known as the “balance of utilities” test. The Restatement declared that reasonableness was to be determined according to utilitarian criteria aimed at promoting the public good: “An intentional invasion of another’s interest in the use and enjoyment of land is unreasonable . . . unless the utility of the actor’s conduct outweighs the gravity of the harm.”115
The balance of utilities test represented a radical departure from existing precedent. Although the ALI indicated that many jurisdictions employed a reasonable use rule that took into account the utility of the defendant’s conduct, only one of the three illustrative cases discussed in the explanatory notes had purported to balance the importance of the defendant’s use against the harm to the plaintiff.116 The ALI conceded that “the courts . . . do not expressly analyze the problem of unreasonableness in the terms used in this Chapter . . . . ”117
While the balancing test itself was new, most of its components were derived from existing precedent. Courts employing the competing-rights rule of reasonable use had frequently referred to the factors listed by the Restatement as relevant to determining the gravity of the plaintiff’s harm and the utility of the defendant’s conduct: the nature and extent of the harm to the plaintiff, the motives of the defendant, the social value of the parties’ conduct, the suitability of their conduct to the character of the locality, and the cost of prevention or avoidance.118
What distinguishes the balance of utilities test from most prior judicial formulations is its quantitative nature. In earlier decisions, the foregoing factors were considered qualitatively in a normative evaluation of reasonableness within a natural rights framework, whereas *212 the Restatement strongly implied that costs and benefits were to be weighed quantitatively in order to maximize social value.119 In short, the Restatement represented a shift from the balancing of “interests” to the balancing of “utility.”
E. American Nuisance Law in 1970 Just two years after their adoption by the ALI, the nuisance provisions of the Restatement received a prompt endorsement from William Prosser in the first edition of his influential Handbook of the Law of Torts.120 Only a handful of jurisdictions, however, adopted *213 the Restatement’s balance of utilities test between 1939 and 1969.121 Although courts in a number of other states mentioned the test in dicta,122 the vast majority of American jurisdictions continued to *214 employ a qualitative reasonableness test in which the utility of the actor’s conduct was simply one of many factors in the analysis of surrounding facts and circumstances.123 Nevertheless, Prosser reiterated the utility/gravity balancing test in subsequent editions of his Handbook,124 and commentators cited the Restatement’s balance of utilities test as though it represented the prevailing American view.125
*215 II. BOOMER V. ATLANTIC CEMENT CO. A. The Case Although Boomer v. Atlantic Cement Co.126 is probably this country’s best-known nuisance case, a recitation of the factual and procedural history is necessary to emphasize certain significant details. The Atlantic Cement Company commenced operations at its plant in the Town of Coeymans in Albany County, New York in September 1962, after having “expended more than $40,000,000 in the erection of one of the largest and most modern cement plants in the world.”127 The owners of eight properties in the vicinity of the plant brought suit seeking injunctive relief and damages, and the case was tried in Albany County Supreme Court in June of 1967.128
The trial court found that the operation of the plant created a nuisance because “large quantities of dust” and “excessive vibration from blasting” interfered with the plaintiffs’ use and enjoyment of their property.129 The court held that equitable principles precluded injunctive relief because an injunction would do the plaintiffs “comparatively little good and would produce great public . . . hardship.”130 Having declined to issue an injunction, the court said it was bound by precedent to award temporary damages measured by the loss of rental value or use value in the nearly six years prior to trial.131 In order to effect a final determination, the trial court made additional findings as to the plaintiffs’ permanent damages, measured by the decline in value of each property; it gave the parties thirty days to agree to accept these permanent damages in lieu of the temporary damages as a conclusive determination of their rights.132
*216 The appellate division unanimously affirmed the judgment of the trial court.133 With respect to the denial of injunctive relief, the court reexamined the record and found no reason to disturb the trial court’s balancing of “the respective equities, relative hardship and interests of the parties to this dispute and the public at large.”134 The court affirmed the award of temporary damages based upon the loss of usable value of their properties.135
The New York Court of Appeals affirmed the denial of injunctive relief, but it reversed the judgment for temporary damages and remanded the case for an award of permanent damages.136 The court addressed two issues that had not been discussed in the lower courts. Judge Bergan, writing for the majority, stated that the first question raised by the appeal was “whether the court should resolve the litigation between the parties now before it as equitably as seems possible; or whether, seeking promotion of the general public welfare, it should channel private litigation into broad public objectives.”137 The court modestly declined to use its judicial power “to achieve direct public objectives,” stating: A court performs its essential function when it decides the rights of parties before it. . . .
Effective control of air pollution is a problem presently far from solution even with the full public and financial powers of government. . . .
A court should not try to do this on its own as a by-product of private litigation and it seems manifest that the judicial establishment is neither equipped in the limited nature of any judgment it can pronounce nor prepared to lay down and implement an effective policy for the elimination of air pollution.138
*217 The court then confronted the question whether the denial of injunctive relief could be sustained in the face of established doctrine, which stated that where there is a nuisance and any substantial damage, the plaintiff is entitled to an injunction notwithstanding the economic disparity between the effect of the injunction and the effect of the nuisance.139 The court did not expressly overrule this doctrine, but it declined to follow it because of the “drastic” consequences of closing the plant.140 In a footnote, the court noted the defendant’s investment of over $45,000,000 in the plant and the fact that it employed more than 300 people.141 The court also considered the possibility of granting the injunction, but postponing its effect to give the defendant an opportunity to find means to eliminate the nuisance.142 The court determined, however, that it was unlikely that the defendant could achieve the necessary technical advances in the foreseeable future.143
The court concluded that an award of permanent damages would do justice between the parties because “[a]ll of the attributions of economic loss to the properties on which plaintiffs’ complaints are based will have been redressed.”144 The court recognized that an award of permanent damages essentially would “impos[e] a servitude on [the plaintiffs’] land, [and] . . . would preclude future recovery by plaintiffs or their grantees.”145 To avoid any ambiguity, the court decreed that the judgment entered by the trial court on remand should expressly provide that the damage award was in exchange for a servitude on the land.146 Although the trial court had computed the plaintiffs’ permanent damages to facilitate a final settlement, the court of appeals indicated that the trial court might wish to reexamine the subject before entering a judgment on remand.147
Finally, instead of directly awarding damages, the court directed the trial court to issue an injunction that would be vacated upon the defendant’s payment of permanent damages.148 The court did not *218 explain why it employed a “conditional injunction” instead of simply awarding damages, but subsequent commentators have explained that such an injunction facilitates the plaintiffs’ collection of the judgment by imposing the threat of a shutdown if the defendant were unwilling or unable to pay the damage award.149
Judge Jasen dissented, arguing that the court should have followed existing precedent and awarded an injunction, which he would have postponed for eighteen months to allow the defendant to abate the nuisance.150 Judge Jasen emphasized the seriousness of the problem of air pollution and decried the effective assertion of eminent domain power by a private corporation for private purposes without the property owners’ consent.151
The Boomer saga has an unusual postscript. On remand, the plaintiffs argued that the court should not limit damages to the decrease in the fair market value of their properties, but should instead apply a “contract price” theory (awarding the amount that the defendant would have had to offer to induce the sale of a servitude by the plaintiffs as unwilling sellers) and a “special market value rule” (taking into account the inflated prices the defendant paid for other properties in the locale).152 Although the trial court rejected the plaintiffs’ theories as punitive, it held that fair market value was not the sole criterion for determining damages.153 In fashioning its award, the court took both of the plaintiffs’ theories into account along with the decline in market value.154 The total recovery by the plaintiffs, including interest on the one claim that was not settled prior to judgment, was $710,737.56, nearly four times the amount of the permanent damages set forth in the trial court’s initial opinion.155
*219 B. The Commentary Immediately following the decision, Boomer was widely discussed in law reviews.156 The case has continued to receive substantial attention from legal scholars,157 and the opinion appears in most textbooks on property and tort law.158
The intense interest in the decision cannot be explained by the novelty of its holding nor by the subtlety of its reasoning. First, in employing a balancing test with respect to the issuance of nuisance injunctions, the court was not breaking new ground. A majority of American jurisdictions already were balancing the equities or conveniences159 when the ALI adopted its relative hardship test in the Restatement of Torts.160 Nor was the court’s analysis of this issue especially insightful. The opinion was vague regarding the handling of precedent161 and superficial in assessing the economic consequences *220 of the injunction.162 The grant of permanent rather than temporary damages and the use of a conditional injunction in lieu of a straightforward damage award were both unusual, but neither was unprecedented.163 Moreover, the opinion did not fully explain the rationale for these facets of the decision.
The facts of the case only hint at the most controversial issue in nuisance law: whether the utility of the defendant’s conduct can justify the infliction of nuisance damages without compensation. This issue was never addressed, however, because the defendant did not appeal the trial court’s finding that the cement plant was a nuisance, a finding based solely on the cement plant’s substantial interference with the plaintiffs’ use and enjoyment of their properties, without consideration of its utility.164
*221 Perhaps the prominence of the Boomer decision in textbooks and law reviews reflects its paradigmatic quality as a contemporary illustration of the dilemma faced by courts in modern land use conflicts. The decision provides a medium for discussing the various elements that a court might consider in determining both the entitlements and the appropriate remedy in a nuisance dispute between a major industrial polluter (and employer) and residential plaintiffs. The opacity of the court’s opinion leaves room for provocative questioning and dialogue in the classroom and for more refined analysis in academic journals, especially by the economically-oriented commentators whose works are addressed in Section V.165
IV. AMERICAN NUISANCE LAW SUBSEQUENT TO BOOMER A. The Second Restatement and the Compensation Principle The ALI began work on the Restatement (Second) of Torts in 1954, with William Prosser as Reporter, and it published the first two volumes in 1965.166 A tentative draft of the chapter on nuisance law was first presented for discussion at the ALI’s annual meeting in 1969.167 The most significant change was the proposal to add provisions dealing with public nuisance.168 The Reporter also proposed to add a definition of private nuisance,169 a term that was not employed in the original Restatement,170 and to include a section on substantial harm that gave greater emphasis to the hypersensitivity defense.171 This draft made no fundamental changes, however, in the basic rules governing liability for private nuisance, retaining the balance of utilities test in section 826.172
*222 Because time did not permit an adequate discussion at the 1969 meeting, the chapter on nuisance law was resubmitted for discussion at the ALI’s 1970 meeting.173 This draft also included, as an appendix, a memorandum from Professor Fleming James, Jr., one of the Advisers to the Restatement (Second), questioning the formulation of section 822 in terms of fault-based liability.174 James asserted that many cases had imposed strict liability in situations not involving abnormally dangerous activities, and he disagreed with the characterization of intentional nuisance as liability based on fault.175 James stated that the balance of utilities test failed to explain the large number of cases that imposed liability without fault in “situations where the invasion of plaintiff’s interest is so substantial that he should not be compelled to suffer it without compensation even though defendant’s conduct entails no fault and is not abnormally dangerous.”176 These cases were better explained by the concept of “incomplete privilege.”177
In James’ view, there were two lines of cases better explained by incomplete privilege than by the fault-based scheme of the original Restatement.178 In one, courts awarded damages, even though injunctive relief was denied based on a balancing of the equities, because the utility of the defendant’s activity outweighed the harm to the plaintiff. In the second, the importance of the defendant’s activity was so great that the defendant had the power of eminent domain, and liability for nuisance damages was imposed for unreasonable invasions under the theory of “inverse condemnation.”
At the 1970 meeting, Robert Keeton joined in James’ criticism of the balance of utilities test, and he moved that the Restatement *223 (Second) be amended to impose liability regardless of the social utility of the enterprise when “‘the resulting interference with another’s use and enjoyment of land is greater than it is reasonable to require the other to bear under the circumstances without compensation.”’179 Keeton’s proposal echoed an idea he expressed in an earlier article in which he explained the requirement of compensation in terms of “conditional fault”: an interference may be reasonable if the defendant provides compensation to those it injures, but unreasonable if the defendant is unwilling to pay for the resulting damages.180
Following a heated discussion, Keeton’s motion carried,181 but the 1971 draft revision did not alter the black letter of the balance of utilities test in section 826.182 Instead, language was added to several section comments to indicate that in certain cases the harm may be so serious that compensation is required regardless of the utility of *224 the defendant’s conduct.183 On the other hand, the black letter of section 828 was amended to require that, in determining the utility of the conduct of the defendant, a court must consider “whether it is impracticable to maintain the activity if it is required to bear the cost of compensating for the invasion.”184 Thus, ironically, the animating principle that an activity should pay for the costs of its damages was relegated to the comments, whereas a limitation on that principle, whenever damage liability would have the effect of shutting down the activity, was elevated to the black letter of the Restatement (Second).
While the ALI was clinging to the balance of utilities test, the highest courts of three states upheld damage awards without regard to the utility of the defendant’s enterprise. Jost v. Dairyland Power Cooperative185 involved an action by farmers seeking damages for crop loss and diminution of property values caused by the emission of fumes from the defendant’s coal burning power plant.186 On appeal, the defendant argued that it was prejudiced by the trial court’s refusal to permit testimony that would have demonstrated that the “defendant had used due care in the construction and operation of its plant” and that the plant’s utility “outweighed the gravity of [the] damage to the plaintiffs.”187 In upholding the verdict, the Wisconsin Supreme Court held that balancing the utility of the offending conduct against the gravity of the injury inflicted was not permitted in damage actions, and declined to adopt the Restatement’s balance of utilities test.188
*225Furrer v. Talent Irrigation District189 was an action by an orchard owner seeking damages for the destruction of fruit trees resulting from the leakage of an irrigation canal.190 The action was tried on a negligence theory, and the defendant contended that the trial court erred in refusing an instruction based on the Restatement’s nuisance provisions that would have mandated a balancing of the social utility of the defendant’s activity against the quantum of risk to the plaintiff’s land in determining the reasonableness of the defendant’s conduct.191 The Oregon Supreme Court held that although the social utility of the defendant’s conduct is certainly a factor in determining negligence, the defendant “cannot escape compensating the plaintiff for the harm simply by showing that the defendant’s use had a greater social value than the plaintiff’s.”192
Next, in Boomer,193 an injunction was denied on the basis of a balancing of economic consequences,194 but the court did not question the underlying finding that the defendant’s activity constituted a nuisance warranting an award of damages.195 The utility of the defendant’s conduct apparently was never raised as a defense with respect to the claim for damages.196
At its 1971 meeting, the ALI again debated the merits of the balance of utilities test.197 A motion to amend the black letter of *226 section 826 to incorporate the compensation principle failed by a close vote.198 Following the meeting, however, a compromise acceptable to Professors James and Keeton was achieved.199 The 1972 draft incorporated the compensation principle in the black letter rule of the Restatement (Second) by adding a new section 829A that mandated compensation for “serious” or “substantial” harm.200 As finally adopted by the ALI this provision was weakened slightly, imposing an absolute requirement of compensation only for “severe” harm.201 Comment b to section 829A makes it clear that the compensation principle is to be applied in connection with the test of reasonableness “under the general weighing process stated in [[[section] 826,” but it enables a court to find conduct unreasonable “regardless of the utility of the conduct” if the plaintiff seeks only compensation and not an injunction.202
In addition, the 1972 draft proposed that a requirement of compensation for “substantial” harm be incorporated in a new subsection 826(b), but it was qualified with an awkward double negative providing that such an invasion would be unreasonable only if the cost of compensation “[would] not render infeasible the continuation of the conduct.”203 As finally approved, the requisite level of harm was raised from “substantial” to “serious” and the double negative was rephrased even more awkwardly.204
*227 At first glance, sections 826(b) and 829A seem either redundant or inconsistent, but they can be harmonized by viewing them as the first two steps in a three-step approach to determine the reasonableness of an intentional nuisance. These two provisions differ in that section 826(b) requires compensation for “serious” harm, subject to the qualification excusing compensation that would force the defendant to cease the activity,205 whereas section 829A requires compensation for “severe” harm without any limiting qualification.206
Any inquiry by a court should start with section 829A, for if the harm is sufficiently “severe,” the plaintiff is entitled to compensation in damages regardless of the utility of the defendant’s activity and regardless of whether damage liability would cause the defendant to cease the activity. If the damage is not sufficiently “severe” to trigger section 829A, it may nevertheless be “serious” enough to warrant compensation under section 826(b) without regard to the utility of the defendant’s activity, but only if damage liability would not cause the defendant to cease the activity. Finally, if the plaintiff’s damages were not severe enough to warrant compensation under section 829A and the plaintiff was not entitled to compensation under section 826(b)--either because the damages were not sufficiently serious or because damage liability would cause cessation of the activity--the plaintiff might still be entitled to compensation (as well as an injunction) under the balance of utilities test.207
Although the two tests within section 826 purport to express equal and independent bases of liability, in practice the compensation principle may render the balance of utilities test superfluous. In actions for recovery of damages, plaintiffs can be expected to rely almost entirely upon the compensation principle of sections 826(b) and 829A, for it is difficult to conceive of an activity that would escape liability under these rules and nevertheless be subject to liability under the *228 balance of utilities test of section 826(a).208 In actions seeking injunctive relief, the balance of utilities test would be unnecessary, because it duplicates the equitable principles embodied in the chapter on injunctions in the Restatement (Second).209 Thus, in states that adopt the compensation principle of sections 826(b) and 829A, the courts rarely would be called upon to engage in the balancing of utilities under section 826(a).210
The Restatement (Second) has thus come to embody both the defendant-centered and plaintiff-centered versions of the nineteenth-century reasonableness tests. Section 826(a) imposes liability if the defendant’s conduct is unreasonable because the harms it inflicts are not justified by the utility of the activity.211 Sections 826(b) and 829A impose liability if the harm to the plaintiff is unreasonable in that it is sufficiently serious to warrant compensation.212
Despite the awkwardness of its formulation, the definition of unreasonableness in section 826 of the Restatement (Second) represents a significant advance over both the balance of utilities test and the more general reasonableness standards employed in a majority of American jurisdictions.213 Section 826 clarifies the normative basis for nuisance liability by explicitly according separate recognition to the defendant-centered and plaintiff-centered conceptions of reasonableness. The reasonableness test embodied in the compensation principle of sections 826(b) and 829A, which emphasizes the plaintiff’s right to be free from substantial interference with the use and enjoyment of property, is consistent with principles of corrective justice and with the criterion of economic efficiency.214
*229 B. American Nuisance Law in 1990 The increase in environmental awareness in the late 1960s and early 1970s sparked a revival of interest in nuisance law.215 Most commentators came to recognize, however, that nuisance law could not adequately respond to the problems of air and water pollution. Informational, procedural, and financial barriers would preclude many affected parties from bringing suit against pervasive nuisances with widespread impact on the general public health and welfare. Because major rivers flow through many states, and the prevailing winds blow across state lines, the judiciary in any given state could not meaningfully protect its citizens from air or water pollution. The court in Boomer acknowledged the inherent limitations of the judiciary with respect to assessing pollution control technology and other aspects of environmental policy.216 Private nuisance litigation also proved to be a less-than-ideal method for evaluating the pervasive impact of pollution on public health and on the quality of life, as well as for making important political and economic decisions regarding the level of pollution citizens were willing to tolerate.217
Fortunately, growing environmental concern led to the enactment of important state and federal regulations, most notably the Clean Air Amendments of 1970218 and the Clean Water Act Amendments of 1972.219 Today, virtually all major sources of air and water pollution, as well as toxic waste disposal, surface mining, and coastal development, are regulated by detailed federal statutes.220 Regardless of one’s *230 assessment of their effectiveness, these statutes and their regulatory programs have largely supplanted the law of private nuisance at the forefront of our efforts to protect the environment.221
Due to its inherent limitations, nuisance law generally has been relegated to marginal cases, involving small-scale, localized land use conflicts.222 Private nuisance litigation is most likely to involve disputes that primarily affect only the immediate parties. A frequent source of such disputes is the diversion of surface water in connection with residential and commercial developments.
Disposal of surface water has always posed a problem for those who sought to develop their land.223 In the nineteenth century, American courts took one of two polar approaches to disputes arising from diversion of surface water. According to the civil law rule derived from continental European authority, all land was subject to a natural servitude for the natural flow of surface water, and no landowner was permitted to divert this flow to the detriment of neighboring properties.224 Because the civil law rule proved inhospitable to development, American courts devised a common law rule that recognized surface water as a common enemy, allowing landowners to take whatever steps necessary to protect themselves against surface water, regardless of the consequences for neighboring properties.225 The civil *231 law and common enemy rules thus provided a stark choice between plaintiff-centered and defendant-centered approaches to property rights. American courts were approximately evenly divided between the civil law and common enemy rules, with a slight majority favoring the latter.226 Two states, New Hampshire and Minnesota, took a different approach, applying principles of reasonable use to disputes arising from the obstruction and diversion of surface water.227
In the first Restatement of Torts, the ALI rejected both the common enemy and civil law rules, adopting the rule of reasonable use and incorporating it within the chapter on private nuisance.228 Under the Restatement’s approach, an intentional diversion of surface water would give rise to liability only if it was “unreasonable,” and in the first Restatement unreasonableness was defined by the balance of utilities test.229 With the adoption of sections 826(b) and 829A in the Restatement (Second) of Torts, liability for diversion of surface water can also be imposed if the harm is serious and the cost of compensation would not force the defendant to cease operations, or if the harm is severe and greater than the plaintiff should have to bear without compensation.230
Subsequent to the Restatement’s adoption of the reasonable use rule, a growing number of states have abandoned their common law or civil law rules in favor of a reasonable use approach,231 while others *232 have modified their traditional rules to incorporate the principle of reasonable use.232 Although several of these opinions adopted the rule of reasonable use without reference to the Restatement,233 most have cited at least section 833,234 thereby implicitly linking their rules of *233 reasonable use with the nuisance provisions of the Restatement. And while some of the opinions that cited the Restatement treated conflicts over surface water as sui generis,235 others have recognized that such conflicts represent a form of nuisance dispute.236 As a result, the adoption of the rule of reasonable use in disputes over surface water has occasionally been accompanied by the adoption of the nuisance provisions of the Restatement, including the definition of “intentional and unreasonable” in section 826.237
*234 Apart from disputes involving surface water, only a handful of states adopted section 826 of the Restatement between 1970 and 1990.238 Thus, as of 1990, at most fifteen states have adopted the Restatement’s definition of unreasonableness as set forth in section 826. Of these fifteen states, eight have adopted or endorsed the plaintiff-centered compensation principle expressed in sections 826(b) and 829A as an alternative to the defendant-centered balance of utilities test.239 The other seven states can be said to employ the balance of utilities test as the primary criterion for the determination of nuisance liability.240 In none of these states, however, has a court had an opportunity to consider adoption of the compensation principle.
In virtually all of the remaining thirty-six jurisdictions, the courts continue to employ some form of reasonableness test that reflects an unresolved and often unarticulated tension between the plaintiff- *235 centered and defendant-centered perspectives on nuisance law.241 These courts ask whether the defendant’s conduct and/or the plaintiff’s damages are unreasonable “under all of the circumstances.” In balancing the “rights” or “interests” of the parties, these courts usually consider the utility of the defendant’s conduct as one of many pertinent factors, giving no clear indication as to its relative importance. The uncertain weight accorded to the utility of the defendant’s conduct under these general reasonableness tests represents a middle ground between the balance of utilities test and the compensation principle: under the former, the utility of the defendant’s conduct is a primary and often determinative factor; under the latter, it may be irrelevant.242
It is somewhat ironic that although virtually all jurists would agree with the proposition expressed in Restatement (Second) section 822, that nuisance liability can be imposed for conduct that is “intentional and unreasonable,” only fifteen states have adopted the definition of “unreasonable” as set forth in Restatement (Second) section 826.243
The addition of the compensation principle as a supplement to the balance of utilities test244 can be expected to increase the acceptability of the Restatement’s approach among both courts and commentators,245 many of whom have implicitly or explicitly endorsed this *236 principle as a normative basis for nuisance liability.246 Indeed, given the intrinsic merit of the compensation principle, coupled with the prominence of the Restatement in most discussions of nuisance law, the compensation principle may eventually become the dominant theory of nuisance liability.
V. LAW AND ECONOMICS AND THE LAW OF NUISANCE A. The “New” Law and Economics and the Meaning of Efficiency Although economic principles have been applied for many years to the fields of taxation, corporations, and business regulation, the 1970s witnessed the emergence of a “new” law and economics literature. This “new” law and economics applied economic principles to the law of torts, contracts, and other subjects not previously analyzed in economic terms.247 Law and economics views human beings as rational economic actors and treats legal rules as a pricing mechanism that imposes the cost of a conflict on one of various possible persons. Tort law, for example, either imposes the cost of an injury on a culpable defendant or leaves the injured plaintiff to bear the cost without compensation.
Law and economics analyzes legal institutions and rules in terms of their contribution to economic efficiency. An institution or rule is “efficient” if it maximizes the aggregate dollar value of goods, services, and other sources of utility.248 Legal rules, including various doctrines within the law of torts, contribute to economic efficiency in two respects.249
*237 First, legal rules affect the incentives of the parties to avoid costly conflicts. Economic efficiency requires that the acts of avoidance be undertaken by the party who can avoid the conflict at the lowest cost. A rule of tort law creates efficient incentives if it imposes the cost of the conflict on the least-cost-avoider of that conflict. Conversely, a rule is inefficient if it encourages someone other than the least-cost-avoider to undertake costly precautions, while the least-cost-avoider ignores these costs because they are “externalities” borne by others.
Second, legal rules affect the efficiency of resource allocation by altering the costs and profitability of engaging in various activities. For example, a rule of law that imposes the cost of defective products on manufacturers, as opposed to a rule of nonliability, raises the unit cost of the products. This results in an increase in the product price and a decrease in the quantity sold. The eventual result will be a shift of resources away from the manufacturing of dangerous products to other activities, which will have become relatively more profitable to undertake. In theoretical models that presume a purely competitive economy, allocative efficiency requires that each activity bear its full costs, without shifting a portion of those costs to others as uncompensated “externalities.” In the actual mixed economy, the analysis is more complex, but the criterion of allocative efficiency still generally favors rules that “internalize” externalities by imposing costs on the activities that generate them.
B. Economic Commentary on Nuisance Law Nuisance law has been a prominent subject of commentary within the literature of law and economics. Ronald Coase’s seminal article discussed the nuisance dispute between the railroad and the farmer whose crops are destroyed by the sparks from passing steam locomotives.250 The prominent role of Coase’s article in subsequent scholarship represents both a tribute to Coase’s insights and a reflection of the intrinsic heuristic value of this paradigmatic conflict.251 Doctrinally, *238 the law of nuisance is inherently amenable to economic analysis because existing rules governing nuisance liability and remedies embody an explicit economic component. In addition, the two most controversial nuisance defenses, “hypersensitivity” and “coming to the nuisance,” have proved especially interesting to scholars with an interest in economics. Moreover, because nuisance law involves conflicts over property rights, as opposed to “personal rights,” application of economic principles to nuisance law engenders less hostility among those who view economics as inherently antithetical to human values and biased in favor of the propertied classes.252
In view of the extensive economic literature on nuisance law, it would be impractical to attempt a comprehensive summary of the entire corpus. Instead, I have attempted to illustrate the evolution of the law and economics perspective on nuisance law by describing the leading works in a roughly chronological presentation, with an emphasis on two issues: the existence of nuisance liability and the selection of an appropriate remedy. Several important works concerning nuisance law were excluded because their focus was broader253 or narrower254 than the scope of this Article. Other works were omitted because their treatment of these issues failed to break new ground255 or seemed too far off the mark to warrant extensive comment.256 My own works on the topic are not discussed here but are cited where applicable.
*239 1. Ronald Coase Ronald Coase’s pathbreaking article257 challenged the traditional economic assumption that if a defendant polluter were not liable for the external costs it imposed on the plaintiff, its output would be higher than the efficient level that would result if it were required to take these externalities into account in its pricing decisions.258 Coase concluded that regardless of the defendant’s liability to the plaintiffs, any efficient precautions would be undertaken by the party who could do so at the least cost, and the same efficient resource allocation would occur in either case, provided that the parties had complete information and could bargain freely.259 This proposition is known as the “Coase Theorem”;260 its validity depends upon the *240 assumed absence of “transaction costs” that would serve as barriers to free negotiations.261
Although Coase drew upon classic nuisance cases in his analysis, his article did not address the modern law of nuisance.262 Indeed, if the parties could be expected to achieve the efficient outcome through negotiations, the law of nuisance would have no impact on efficiency. Coase was concerned with the theoretical solution to the problem of social cost, which he said required a comparison of the total social product instead of the narrower traditional concern with the cost to the victims.263 His principal practical advice was a caveat against governmental regulation of externalities that could preclude efficient private adjustments.264
2. Guido Calabresi In an article published almost simultaneously with Coase’s work, Guido Calabresi examined the various rationales for imposing liability on an enterprise for all injuries and losses associated with its activity regardless of its fault.265 Ignoring the question whether these losses could have been avoided as well as the effect of liability on incentives, Calabresi assumed that certain losses were unavoidably associated with particular activities, and he emphasized the impact of legal rules on the efficiency of resource allocation.266
*241 With respect to resource allocation, Calabresi addressed the theoretical possibility that parties in a bargaining relationship would negotiate to shift the costs of accidents.267 This “pure theory,” as Calabresi called it, was essentially the Coase Theorem. Calabresi said that the “pure theory” was inaccurate because parties frequently are not in a position to bargain, and those who are may inaccurately evaluate the risk of loss, may fail to insure, or may face different insurance costs. Thus, whereas Coase had analyzed the implications of assuming an absence of impediments to negotiation, Calabresi emphasized the existence of these barriers in concluding that the assignment of liability to one party or the other could substantially affect the efficiency of resource allocation. With certain qualifications, Calabresi therefore endorsed what he termed the “allocation of resources” justification for imposing liability upon an enterprise.268
*242 Calabresi applied his theoretical analysis in various legal contexts, beginning with the law of nuisance. Among the various doctrines he analyzed were the rules requiring a balance of social utility against nuisance damages in determining both the issuance of nuisance injunctions and the imposition of liability for nuisance damages.269
With respect to nuisance injunctions, Calabresi said that under the allocation of resources criterion, injunctive relief would be unnecessary as long as each enterprise was charged with the full costs of the damages it caused to others.270 If an enterprise engaged in an offensive activity could pay these damages and continue in business, then the value of the activity was sufficient to justify its existence. If its profitability was not sufficient to allow it to remain in business after paying these damages, then the inefficient activity would cease without the necessity of an injunction. Calabresi recognized, however, that nuisance injunctions might be necessary to achieve an efficient result whenever nuisance damages were widely dispersed, because in such a case an enterprise might not be held liable for all of the damage it caused. Also, even if all of the injured parties were to sue, the cost of a multiplicity of damage suits would be greater than a single suit for an injunction. Insofar as the allocation of resources criterion supported the occasional use of nuisance injunctions, a balancing of costs and benefits would be needed to prevent the issuance of inefficient injunctions.271
With respect to imposition of nuisance damages, however, Calabresi found no justification for the balancing of social utility against the cost of nuisance damages: [U]nder the allocation-of-resources approach, if an activity caused injury the cost of that injury should be made a part of the price of the goods that activity produced. And if the product were sufficiently useful socially, it would be able to make a go of it even though it had to bear the injury costs. If it could not do so there would be a market indication that it was not sufficiently useful to be worth producing.272 *243 By providing an implicit subsidy to activities that inflicted nuisance damages, the balance of utilities test undermines efficient resource allocation. As long as courts balanced social utility when issuing nuisance injunctions, the balancing of utility with respect to damage liability was both unnecessary and counterproductive.
3. Frank Michelman Although Calabresi’s succeeding works focused on the law of accidents,273 Frank Michelman demonstrated the applicability of Calabresi’s analysis to the law of nuisance.274 He also explored particular differences between accidents and nuisance disputes that might necessitate modification of Calabresi’s approach.
Calabresi had advocated internalization of costs by imposing liability on the “cheapest cost-avoider,” a determination which, to have a substantial deterrent effect, probably had to be made categorically.275 Michelman pointed out that because nuisance litigation could have a direct impact on the prospective behavior of the parties, the cheapest cost-avoider in nuisance disputes might be determined on a case-by-case basis as an alternative to categorical rules. Whereas a categorical approach might assume that polluters as a class tended to be the cheapest cost-avoiders and apply a rule of strict liability, a case-by-case approach might apply a reasonableness test resembling the balance of utilities test.276
*244 Pollution also differs from accidents in that negotiations are feasible, so that it would be possible to create a market between polluters and victims, whereas no such market could be created for most accidents.277 The vehicle for such negotiations is the nuisance injunction, which could be waived or dissolved by agreement of the parties.278
Exploring the alternative nuisance rules that might be applied, Michelman employed a hypothetical involving a factory that polluted nearby residences.279 The pollution could be reduced or avoided by installing scrubbers at the factory or air conditioners in the homes. If one were confident that one party was the cheapest cost-avoider, but uncertain whether either technique would produce worthwhile savings, responsibility should be imposed on the cheapest cost-avoider, thereby facilitating a “decentralized” “market test” in which that party would determine whether to undertake abatement or to pay/absorb the damages. If one were uncertain which party was the cheapest cost-avoider, liability should be imposed on the party who could most easily organize and negotiate to shift liability (the “best briber”). Michelman noted that in nuisance disputes, the transaction costs of such negotiations would vary with the remedy.
Michelman then evaluated the various costs associated with the three possible outcomes of a nuisance dispute: (1) the residents bear the costs; (2) the factory is subject to an injunction; and (3) the factory is liable for damages.280 Leaving residents to bear their costs makes sense only if they are the cheapest avoiders or there are no cost-effective avoidance techniques, for the residents are unlikely to be able to organize to bargain with the factory for abatement if the factory is the cheapest cost-avoider. Conversely, subjecting the factory to an injunction may also block cost internalization whenever the residents are the cheapest cost-avoiders, because the factory would have to negotiate collectively with all of the residents, any one of whom could block an agreement by holding out. Imposing damage liability on the factory would reduce the transaction cost barriers in negotiations, but it would also increase the cost of litigation. If the court imposed liability on the factory because it was believed to be the cheapest cost-avoider, an injunctive remedy would be appropriate. If the court were uncertain about the cheapest cost-avoider and sought to impose liability on the best briber, then it should be “wary” of injunctive relief and “should probably confine relief to damages.”281
*245 Michelman next discussed centralization of the internalization of pollution costs through a system of emission fees and considered the role of private nuisance suits in such a system. In this context, he addressed the question of how a court should respond to the likelihood that an injunction would force the polluter out of business and cause severe economic dislocations.282 Michelman pointed out that the problem of secondary costs was separate from the concern that nuisance injunctions could fail to impose liability on the cheapest cost-avoider. Even assuming that the factory was the cheapest cost-avoider, the secondary costs from a shutdown might outweigh the savings in primary costs from pollution abatement.283 Nevertheless, Michelman suggested that the optimal long-run solution might be for the government to alleviate these secondary costs through various programs (such as unemployment compensation, job-retraining, relocation payments, and grants to local governments), which would not undermine the incentives created by the law of nuisance.284
4. Calabresi and Melamed Approximately one year after the publication of Michelman’s commentary on his book, Calabresi returned to the subject of nuisance law in a celebrated article coauthored with A. Douglas Melamed.285 Calabresi and Melamed pointed out that resolving a nuisance dispute ultimately involves two distinct and separable determinations: establishing the “entitlement” and determining the appropriate “remedy.”286 The “entitlement” inquiry asks the law to determine “which of the conflicting parties will be entitled to prevail.”287 In a conflict between a polluting factory and its neighbors, for example, the law must either grant the factory an entitlement to pollute or grant the neighbors an entitlement to clean air.
Once the law has assigned an entitlement to one of the parties, it must then determine the remedy to protect that entitlement.288 One of the chief conceptual contributions of Calabresi and Melamed was their distinction between two forms of remedies, denominated “property *246 rules” and “liability rules.”289 In their terminology, a plaintiff whose entitlement to clean air is protected by a property rule can obtain an injunction against operation of an adjacent factory; a plaintiff whose entitlement to clean air is protected by a liability rule cannot stop the factory from polluting the air but will have a right to compensation in damages.290 A liability rule permits the defendant to take or destroy the plaintiff’s entitlement, provided the defendant is willing to pay the “objectively determined value” of court-awarded damages.291 Thus, when a property rule protects the entitlement, the defendant factory can operate only if it pays the plaintiff a price sufficient to induce a voluntary waiver of the right to injunctive relief, in effect “buying” the entitlement to clean air.292
The novelty of the Calabresi and Melamed approach resulted from the consideration of the possible combinations of entitlements and remedies that might be employed in resolving a nuisance dispute. They noted that nuisance disputes traditionally were viewed as having three possible outcomes: (1) the plaintiff has the entitlement and can enjoin defendant’s nuisance using a property rule; (2) the plaintiff has the entitlement and can obtain damages by means of a liability rule; or (3) no nuisance is found, and the defendant has the entitlement protected by a property rule.293 Calabresi and Melamed posited that symmetry required the existence of a fourth rule under which the defendant has the entitlement but is protected only by a liability rule;294 thus, the plaintiff can enjoin defendant by paying damages to the defendant for destruction of the entitlement.295
*247 Like Michelman, Calabresi and Melamed considered the various situations and criteria that might lead a court to prefer one or another of the available alternatives. They concluded that if efficiency were the sole criterion, rule one (plaintiff protected by property rule, with injunctive relief) would be most appropriate when the polluter was the cheaper cost-avoider, while rule three (no nuisance, defendant protected by property rule) would be most appropriate when the resident was the cheaper avoider.296 If one were uncertain which party was the cheaper cost-avoider, but one party had low transaction costs in negotiations, then the burden should be imposed on that party, who could negotiate to shift the costs if the other party was discovered to be the cheaper cost-avoider.297 If there were uncertainty as to who was the cheaper cost-avoider and transaction costs were high, liability rules (rule two or rule four) could be used to attain the efficient solution without transactions.298 Calabresi and Melamed also considered the differential costs of litigation under rules two and four. Finally, they considered the trade-offs between economic efficiency and possible distributional goals, demonstrating that under various scenarios any of the four rules might be most appropriate.299
At the time Calabresi and Melamed submitted their article for publication, there was no precedent for the rule four compensated injunction in private nuisance adjudication.300 As they recognized, this remedy, “a kind of partial eminent domain coupled with a benefits tax,” is not well suited to judicial imposition.301 If the benefitted plaintiffs were to pay the defendant’s abatement cost, the court would have the difficult task of assessing the cost and apportioning it among the benefitted parties. Because of this difficulty, one might well have doubted whether their rule four would ever be applied in civil litigation.302
*248 Coincidentally, just as the Calabresi and Melamed article was going to press, the Supreme Court of Arizona held, in Spur Industries v. Del E. Webb Development Co.,303 that a compensated injunction was the appropriate solution to a nuisance dispute between a feedlot and a residential developer. Spur and its predecessors had operated a feedlot for over fifteen years in a rural area. Del Webb was a residential developer that had begun to plan a development in the area a few years after Spur commenced operations. With the expansion of the feedlot and the growth of the residential community, residents began to be bothered by odors and flies emanating from the feedlot despite the facility’s admittedly good housekeeping and management. In a suit brought by Del Webb, the trial court found that the feedlot was a nuisance and enjoined its further operation.304
On appeal, the Arizona Supreme Court upheld the trial court’s finding that the feedlot was both a public and private nuisance.305 Yet, it also ruled that the developer who had selected the area for development had “come to the nuisance,” which would have barred relief if the plaintiff had been the only party injured.306 Despite this ruling, the supreme court held that protection of the rights and interests of the public, namely those people who had moved into the development, warranted issuance of a permanent injunction even though the plaintiff was barred from relief on equitable grounds.307 The court further ruled, however, that Webb’s entitlement to the injunction did not necessarily free him from liability to Spur if Webb had been the cause of the damage to Spur.308 Thus, the court held that “Webb must indemnify Spur for a reasonable amount of the cost of moving or shutting down,” remanding the case “to the trial court for a hearing upon the damages sustained by the defendant Spur as a reasonable and direct result of the granting of the permanent injunction.”309
Like Boomer, Spur has become one of the leading nuisance cases in the textbooks and law reviews.310 Nevertheless, nineteen years later, *249Spur retains its distinction as the only reported decision in which a court has held a rule four compensated injunction to be the appropriate remedy in civil litigation.
5. Robert Ellickson In a 1973 article that was heavily influenced by the works of Coase and of Calabresi and Melamed, Robert Ellickson examined alternatives to zoning and suggested that a reformulated nuisance law could be an important element of a comprehensive land use control policy.311 Ellickson proposed to seek both efficiency and equity in resource allocation in his reformulation of nuisance law. Although he began his analysis of nuisance law with a discussion of the Coase Theorem, he concluded that in land use conflicts the initial assignment of rights is a matter that should concern policy makers for two reasons.312 First, the initial assignment of entitlements has an impact on the ultimate resource allocation in the real world of positive transaction cost barriers to negotiation. Second, any alteration of the distribution of entitlements affects the relative wealth of those involved, thus raising an issue of fairness.
Although nuisance law provided the primary source of common law rules for controlling land use and shifting the risk of loss from external harms, Ellickson stated that it is an archaic means and “the confusions and inefficiencies in the law of nuisance are considerably more serious than in most other areas of the law.”313 Ellickson found that many of the doctrinal difficulties in nuisance law arose when courts tried to avoid granting injunctive relief where the defendant’s abatement cost exceeded the damages inflicted on the plaintiff: An injunction often imposes prevention costs that exceed the reduction in nuisance costs it achieves; the closing of a factory may be more costly to the economy than the losses caused to neighbors by its operation. As courts became sensitive to this *250 danger they responded by limiting the circumstances in which they were willing to find a nuisance, rather than denying injunctive relief while still allowing damages . . . .
In many instances courts avoided finding actionable nuisances by applying a type of balancing test; the social utility of the actor’s conduct was compared to the total amount of harm caused. This test is proper for deciding whether to grant injunctive relief. Unfortunately most courts applied the test to the initial question of whether a nuisance existed at all, incorrectly limiting the availability of damage awards that would internalize the harmful externalities.314
In proposing an increased role for nuisance law in land use, Ellickson posited that efficient resource allocation requires “minimization of the sum of the nuisance costs, prevention costs and administrative costs arising from land use conflicts.”315 He proposed to reduce these costs by assigning nuisance liability to the least-cost-avoider of the conflict, whom he concluded would usually be the owner of the land where the pollution source was located.316 Altering the distribution of property rights to place the risk of loss on the landowner carrying out the damaging activity might thus achieve a more efficient resource allocation.317
Ellickson further asserted that an efficient system of incentives for land use would penalize landowners for harmful externalities, reward them for any activities that conferred benefits on their neighbors, and be neutral with regard to normal behavior.318 Nuisance law should play a role in this tripartite system by penalizing landowners via the assignment of liability when parties undertake “subnormal” activity. Normal conduct would be determined by a standard of “neighborliness,” which Ellickson said would be based on community standards, similar to the “reasonableness” standard traditionally applied in negligence cases.319 Under the neighborliness standard, a landowner would *251 only be liable for a change in land use if the new use affronted community standards.320
Ellickson’s most dramatic break with tradition came with his discussion of remedies and his proposal virtually to eliminate the availability of injunctive relief for plaintiffs in nuisance cases.321 Instead, drawing on the work of Calabresi and Melamed, he proposed that the plaintiff be “limited to choosing between the remedies of rule two (damages) and rule four (compensated injunction).”322 Ellickson’s arguments against the general availability of injunctive relief were that it creates a danger of inefficient injunctions when the costs to the defendant exceed the benefits to the plaintiff, and that the balancing process courts use to avoid this danger creates both uncertainty and excessive administrative expense in nuisance litigation. Ellickson also analyzed the usual justifications for injunctions and found them unpersuasive.323
Although he proposed to limit the availability of ordinary injunctive relief in nuisance actions, Ellickson suggested that the compensated injunctions described by Calabresi and Melamed should be made available to all plaintiffs, regardless of whether they would have been entitled to damages.324 Ellickson indicated that plaintiffs might purchase compensated injunctions when they were absolutely precluded from relief by the defenses of hypersensitivity or coming to the nuisance, or if they were not satisfied with the objective measure of *252 damages.325 “This situation is most common when the plaintiff has unusual subjective values, his activities are hypersensitive to injury, or he has come to the nuisance.”326 Unfortunately, Ellickson created a degree of ambiguity by referring to the remedy as a “rule four” injunction,327 whereas his proposal actually represented a hybrid of Calabresi and Melamed’s rules one, two, and four.328
According to Ellickson, the price of a compensated injunction would be the defendant’s abatement costs minus the amount of the defendant’s potential damage liability.329 In a true rule four situation, in which the plaintiff was not entitled to damages, the price of the compensated injunction would equal the defendant’s full cost of abatement. But in a rule two situation, in which the plaintiff was entitled to damages but not an unconditional injunction, the net cost of abatement to the defendant would reflect the reduction in the defendant’s damage liability, and the price of the compensated injunction would be reduced by the amount of those damages. According to Ellickson, the primary role of compensated injunctions would be in facilitating “the termination of a nuisance whose harm a plaintiff subjectively value[d] at an amount greater than the damages he can recover under rule two.”330 Moreover, whenever the plaintiff’s damages exceeded the defendant’s cost of abatement, the price of the compensated injunction would be zero and would be equivalent to a free injunction under rule one.331 In these situations, Ellickson said that compensated injunctions are “useful in assuring the immediate termination of nuisances where collective valuation systems indicate that the activity generates greater external costs than internal benefits, but the defendant’s subjective values lead him to conclude otherwise and thus a judgment for damages would not shut him down.”332 Because these “free” compensated injunctions would be available to many of the plaintiffs who would have received free injunctions under *253 traditional nuisance law, the adoption of Ellickson’s radical-sounding proposal to virtually eliminate unconditional nuisance injunctions actually would deprive few plaintiffs of injunctive relief to which they otherwise would have been entitled.333
6. Edward Rabin The next important commentary on nuisance law came in a 1977 article by Edward Rabin.334 Rabin, like Ellickson, based his analysis on the ideas of Coase and of Calabresi and Melamed. Although his criteria differed from Ellickson’s, Rabin reached a similar conclusion: nuisance disputes should be resolved by granting plaintiffs damages or compensated injunctions rather than unconditional injunctive relief.
Rabin began his analysis by comparing the impact of the four remedies in the Calabresi and Melamed scheme, which he viewed as a continuum rather than as a matrix.335 At one end of the spectrum, an unconditional injunction (rule one) would represent a total victory for the plaintiff: the plaintiff is protected from the nuisance, with the possibility that the defendant may offer a sum of money greater than the plaintiff’s damages in exchange for the plaintiff’s relinquishment of the right to injunctive relief. At the other end of the spectrum, a finding of no nuisance (rule three) would represent a total victory for the defendant: the defendant is permitted to continue the offending activity, with the possibility that the plaintiff may offer a sum of money greater than the defendant’s cost of abatement in exchange for ceasing to inflict damages. Located between these two extremes, a damage award for future injury (rule two) would be a partial victory for the plaintiff, and a compensated injunction (rule four) would be a partial victory for the defendant.
Having analyzed the impact of the four available solutions, Rabin next discussed the criteria to be applied in determining an appropriate resolution of nuisance disputes.336 Drawing heavily on the work of Frank Michelman,337 Rabin compared and contrasted the criteria of utility, fairness, and efficiency and their roles in resolving nuisance disputes. Ultimately, he concluded that because fairness and efficiency *254 each tends to promote utility, “a decision that is both fair and efficient is almost certain to be utilitarian.”338
Rabin proposed to pursue the joint goals of fairness and efficiency by resolving nuisance disputes in a two-step process in which the questions of entitlement (who should pay) and remedy (what should be done) would be considered separately.339 He advocated this twostep procedure because of the confusion generated by the traditional judicial approach of treating the nuisance question as a single issue with only two possible outcomes: either find a nuisance and grant an injunction, which might be inefficient, or avoid issuing an injunction by finding no nuisance, which might be unfair to the plaintiff.
Rabin proposed that the court first resolve the entitlement question on the basis of fairness, emphasizing that liability should depend on the relative fault of the parties.340 He discussed approvingly the ALI’s approach, reflected in the tentative drafts of the Restatement (Second) of Torts, under which a defendant would be liable for conduct that was intentional and unreasonable, negligent, reckless or abnormally dangerous.341 Rabin also endorsed the imposition of strict liability under the proposed section 829A, stating that even in this section “fault plays a dominant role”342 because the harm must be “substantial and greater than the other should be required to bear without compensation.”343 Although he did not directly discuss the defense of hypersensitivity, Rabin indicated that an act should not constitute a nuisance unless it was “substantially more injurious to the normal use and enjoyment of land than the uses usually encountered in the relevant area.”344 With respect to “coming to the nuisance,” Rabin said that “priority of use” should be relevant in assigning entitlements but should not be determinative or provide an absolute defense,. whereas “priority of ownership” should be irrelevant.345
*255 Rabin conceded that the assignment of entitlements on the basis of fairness might conflict with the goal of economic efficiency to the extent that it failed to impose the costs of the conflict on the least-cost-avoider.346 Although he argued for assignment of the entitlement solely on fairness grounds, Rabin asserted that his proposal would facilitate efficient resolution of land-use conflicts by restricting the remedies to liability rules rather than property rules. The exclusive reliance on liability rules would assure that the least costly solution would be likely to occur because the prevailing party “would have a legal duty to agree to the least costly solution . . . . ”347
Absolute entitlements could prevent efficient resolution of nuisance disputes.348 A plaintiff with the right to an unconditional injunction might refuse to negotiate, insisting on abatement even when the cost far exceeded his damages. Rabin recognized that the comparative hardship doctrine could be employed to deny injunctive relief in such cases, but he claimed that the doctrine was insufficient because it would apply too infrequently, only when the defendant’s hardship was disproportionate and far exceeded the plaintiff’s benefit.349
Rabin’s general presumption in favor of the damage remedy would apply in all cases, eliminating both the possibility of inefficient injunctions and the administrative expense of litigating the issue of comparative hardship.350 Under Rabin’s proposal, a prevailing plaintiff could not hold out for an inefficient injunction because his sole remedy would be in damages;351 abatement would occur only at the election of the defendant, when its cost was less than the defendant’s liability *256 for damages.352 If a prevailing plaintiff were limited to a conditional injunction, Rabin believed that abatement would result whenever it was efficient (when the cost of abatement was less than the plaintiff’s damages) and that the defendant would pay damages whenever abatement was inefficient (when the cost of abatement exceeded the plaintiff’s damages).
Although Rabin argued for limiting the remedies available to the prevailing plaintiff, he supported expanding the rights of the nonprevailing plaintiff, who would have the right to purchase a compensated injunction on payment of the defendant’s cost of abatement.353 The primary rationale for making a compensated injunction available to a non-prevailing plaintiff was to foster efficiency by guaranteeing that the plaintiff could obtain abatement whenever its cost was less than the plaintiff’s damages. Without the right to a compensated injunction, the plaintiff would be forced to negotiate with the defendant for abatement, and those negotiations might fail due to strategic behavior or the cost of the negotiating process. In addition to the inherent efficiency of the compensated injunctions themselves, the right of the plaintiff to a compensated injunction would reduce the transaction costs of strategic behavior during negotiations because both sides would be aware that the plaintiff could resort to the judicial remedy whenever the defendant tried to hold out for an unreasonably high price. Also, reducing the bargaining power of the defendant would be fairer to the plaintiff because it would lessen the defendant’s ability to extort a larger payment from the plaintiff. Unlike Ellickson, Rabin limited his consideration of compensated injunctions to nonprevailing plaintiffs and did not consider the possibility of extending this remedy to prevailing plaintiffs who were dissatisfied with the court-awarded damages on account of their substantial subjective losses.
7. Richard Epstein In a 1979 article, Richard Epstein sought to refine the law of nuisance in order to reconcile it with general principles of tort law and to interpret it in an internally consistent fashion.354 Epstein started with the premises that nuisance entitlements should be determined *257 solely on the basis of principles of corrective justice and that “utilitarian constraints” should not define the rights of the parties but at most limit the scope of their rights in certain marginal cases.355
Epstein proposed to define nuisance entitlements in accordance with a straightforward causal paradigm: the defendant is strictly liable for any act that causes a physical invasion resulting in an interference with a plaintiff’s rights to the use and enjoyment of property.356 In doing so, he rejected the causal nihilism implicit in Coase’s premise that all nuisance conflicts are jointly caused by the presence of both incompatible parties.357 Epstein rejected this approach because it ignored the question of who had the entitlement, explaining that “for legal purposes the question of causation can be resolved only after there is an acceptance of some initial distribution of rights.”358 In advocating a strict liability standard, Epstein would not recognize a defense based on the defendant having taken all possible care to avoid the harm, nor would he countenance a defense based on the utilitarian weighing of costs and benefits.359 Such defenses would ignore the aspect of corrective justice that protects the individual from judgments based on overall maximization. Nor would Epstein allow any affirmative defenses based on utilitarian constraints, such as contributory negligence and coming to the nuisance, that would undermine the corrective justice approach to nuisance entitlements.360
Epstein did, however, advocate restricting plaintiffs’ rights to recover damages in nuisance cases based on utilitarian constraints relating to the administrative costs of enforcement and the barriers to private negotiations arising from high transaction costs.361 Epstein asserted that the case for individualized damage compensation becomes weaker as the following four factors become dominant: (1) “[h]igh administrative costs for claim resolution”; (2) “[h]igh transaction costs for voluntary reassignment of rights”; (3) low value to the individual rights that would be sacrificed; and (4) implicit in-kind compensation offsetting the loss to the affected parties.362
*258 In light of the above four factors, Epstein interpreted the substantial injury requirement, the locality rule, and the extrasensitivity defense doctrines of nuisance law as reflecting utilitarian constraints on the rights mandated by principles of corrective justice.363
The requirement of substantial injury, sometimes expressed as a rule of “live and let live,” denies liability for low levels of interference.364 This rule is contrary to Epstein’s corrective justice approach, which would find an invasion even if the interference was minor, but the absence of individualized compensation is justified by the high administrative costs of enforcement, the low value of the rights involved, and the likelihood of in-kind compensation through the right to inflict reciprocal harms on others.365
The locality rule measures the actionability of the defendant’s conduct in reference to the surrounding circumstances, relative to the existing pattern of land use, and would allow a level of interference greater than that permitted under the live and let live rule.366 Principles of corrective justice would consider only the two parties involved and would not define their rights based on the environment in which they interact. The utilitarian constraints that justify the locality rule are the high administrative cost of bringing actions against all of the offending activities in the locality and the implicit in-kind compensation resulting from property values that reflect the right to inflict similar harms on others in the vicinity.367
The extrasensitivity defense denies compensation to plaintiffs whose damages result from their unusual susceptibility to low level invasions. This defense is justified by “the obvious fear that the very sensitive condition of the plaintiff will create intolerable limitations upon the freedom of actions of others,”368 coupled with an implicit causal argument that the plaintiffs’ damages resulted from their own sensitivity rather than from the defendant’s invasion.369
*259 8. A. Mitchell Polinsky In a series of related articles. A. Mitchell Polinsky compared the theoretical efficiency of alternative nuisance entitlements and remedies under a variety of assumptions.370 Polinsky noted the tendency of recent commentators to favor damage remedies over injunctions on three grounds.371 First, injunctions put a losing defendant at risk of extortion by a winning plaintiff. Second, under an injunctive remedy, strategic behavior may prevent the parties from negotiating an efficient resolution of the dispute. Finally, damages can promote other distributional goals by enabling a court to award damages in an amount greater or less than the plaintiff’s actual loss. Polinsky argued, however, that a preference for damages is not justified once certain complicating factors are taken into account.372
To analyze the efficiency of alternative rules, Polinsky employed an illustration concerning a factory that could produce up to seven units of output, with a schedule of diminishing marginal profits and a schedule of increasing marginal damages to a neighboring resident.373 Polinsky added a further complication, distributional equity, by which he meant the society’s goals for distributing income and wealth between rich and poor.374
Polinsky followed Calabresi and Melamed in employing symmetrical property and liability rules, but with the additional assumption that the court could grant an entitlement at some intermediate level.375 For example, the defendant could have the entitlement to produce up to a certain amount of pollution, while the plaintiff could have the entitlement to be free of any pollution in excess of that limit, and each of their entitlements could be protected by either a liability rule or a property rule. Polinsky focused on two combinations: (1) *260 the “pure injunctive remedy,” under which the plaintiff could enjoin the defendant from producing in excess of its entitlement level, but the plaintiff would have to “bribe” the defendant to reduce its output below that level; and (2) the “normal damage remedy,” under which the defendant would be liable for damages from output in excess of its entitlement level, but the plaintiff could bribe the defendant to reduce its output below that level.376
Polinsky first analyzed these two remedies in an ideal world of costless and cooperative bargaining, costless income redistribution, and perfect information.377 Under these assumptions, regardless of the remedy chosen, “the cooperative behavior of the parties guarantees economic efficiency, and the availability of costless redistribution assures distributional equity. And this result follows without recourse to the perfect information the court possesses.”378
When the first assumption was relaxed and the parties were assumed to engage in strategic behavior, but redistribution remained costless and the court had perfect information about the factory’s efficient level of output under the injunctive remedy or about the true amount of the resident’s damages under the damage remedy, both remedies still could be used to maximize social welfare.379
In reality, income redistribution is costly both in terms of direct administrative costs and because it tends to encourage individuals to work less diligently or act in other economically inefficient ways.380 Without costless income redistribution, the injunctive remedy may be preferable whenever distributional goals strongly favor the resident, by providing the resident with bargaining leverage to obtain some of the gains from trade, though at the risk of inefficiency if strategic behavior prevents the parties from reaching the efficient solution.381 On the other hand, damages can assure an efficient outcome, but they cannot achieve any redistribution beyond protecting the resident against uncompensated damages.382
Polinsky then considered the consequences of abandoning the assumption of perfect information. First, he assumed that the court may know the resident’s schedule of damages but not the factory’s *261 schedule of profits.383 Under this scenario, the injunctive remedy could not achieve an efficient outcome because the court would be unable to determine the efficient level of output. The damage remedy could reach an efficient outcome despite the court’s imperfect information only if the court assigned the company an entitlement equal to or below the efficient level of output and awarded damages equal to the plaintiff’s actual losses. Because the court does not know the efficient level of output, to guarantee an efficient outcome, the factory’s entitlement must be set at zero. This level, however, might not coincide with society’s distributional goals; promoting these distributional goals might thus entail some sacrifice of economic efficiency.384
Next, Polinsky assumed that the court systematically underestimated the resident’s damages, which is probably the case, given that courts limit awards to objectively measured damages.385 If damages were underestimated, neither the damage remedy nor the injunctive remedy could assure the efficient outcome, and neither remedy was necessarily preferable. If social welfare depended primarily on the resident’s welfare, however, the injunctive remedy might be preferable because (1) it could guarantee that the resident would be compensated for any damages and would obtain some of the gains from trade, and (2) the efficiency loss might be as great or greater under the damage remedy as under the injunctive remedy.386
Finally, Polinsky considered the case in which there were many victims, instead of a single resident, with claims against the factory.387 Beginning with the assumptions of perfect information and cooperative bargaining, the presence of multiple victims did not alter the analysis. Even if the victims employed strategic behavior, either the injunctive or damage remedies based on perfect information could achieve an efficient result, and costless redistribution could achieve distributional goals.388
If distribution were costly, however, the existence of multiple victims would create a preference for the damage remedy, regardless of society’s distributional preferences.389 This was so because under the *262 damage remedy, the entitlement point could be adjusted downward to favor the residents without interfering with the goal of efficiency. Under the injunctive remedy, however, any adjustment of the entitlement point would sacrifice efficiency without promoting distributional equity, because the problem of free riders and holdouts probably would preclude plaintiffs from obtaining any gains from trade.390
When it was assumed that the court had asymmetrically imperfect knowledge-- that is, “complete knowledge of the residents’ damage schedule but no knowledge of the factory’s profit schedule”--the earlier argument in favor of the damage remedy still obtained.391 An injunction would be efficient only in the unlikely event the court were to select an efficient entitlement. It could, however, assure efficiency under the damage remedy by setting the entitlement at a low level of output. “Finally, if the court has imperfect information that leads it to understate the residents’ damages, then, as in the case of a single resident, neither remedy is clearly preferable.”392
Polinsky concluded by reexamining the three main arguments for damage remedies. In response to the argument that injunctive remedies enable the victim to extort from the defendant compensation in excess of actual damages, Polinsky noted that this excess compensation simply represents a sharing of the gains from trade, to which the defendant has no more entitlement than the plaintiff.393 In fact, “[i]f the distributional goal strongly favors the plaintiff . . . then [such] excess compensation may be desirable.”394 Moreover, once one recognizes that the courts tend to understate the plaintiff’s damages, then the damage remedy gives rise to extortion in the opposite direction.
With respect to the argument that injunctive remedies lead to inefficient outcomes when courts set the entitlement too low and the parties engage in strategic behavior, Polinsky pointed out that damage remedies can also lead to inefficient outcomes when the courts underestimate the plaintiff’s damages.395 Finally, Polinsky challenged the argument that damage remedies are distributionally more flexible, noting that their superiority depended upon the unrealistic assumption that the courts possess accurate information about the plaintiff’s damages.396
*263 Ultimately, Polinsky concluded that the arguments favoring damage remedies over injunctive remedies are not logically coherent. Neither remedy is preferable in the abstract, but in particular circumstances one or the other remedy may be preferable, depending on the nature of the available information and the applicable distributional preferences.397
9. Gregory Travalio Like Polinsky, Gregory Travalio questioned the suggestion that prevailing plaintiffs be limited to compensation in damages.398 In Travalio’s analysis of nuisance remedies, he emphasized the problems associated with the assessment of damages and concluded that “contrary to the new conventional wisdom, the superiority of the damage remedy and the conditional injunction in nuisance cases is not established.”399
In support of his argument, Travalio pointed out that the administrative costs of determining damages in nuisance litigation are substantial and could be greater than the transaction costs incurred by parties who engaged in bargaining to avoid nuisance injunctions.400 Moreover, nuisance damages are difficult to ascertain with any accuracy. The traditional measure of damages is the decline in property values, but appraisal of market value is inexact, both before and after a nuisance arises.401
More importantly, damage awards are systematically less than the cost imposed by a nuisance.402 Even an award of the precise decline in a property’s value would fail to measure the owner’s “consumer surplus”--the subjective value in excess of the property’s market *264 price--which reflects sentimental attachment to the property or features that make it particularly well suited to the owner’s needs. Furthermore, because of uncertainty concerning the future health consequences of pollution, the decline in property values cannot possibly reflect total costs. In addition, even if damages were fully compensatory to nuisance plaintiffs, damage awards nonetheless would understate the costs of the nuisance to the extent that some affected parties do not bring suit because they lack information or because the cost of litigation is disproportionate to damages.403
In comparing injunctive relief and damages, Travalio focused on cases with large numbers of parties.404 In these situations, injunctions may be inefficient because transaction costs can bar a “buy-out” by the polluter. On the other hand, courts in such cases are especially likely to underestimate damages because of valuation error, uncompensated subjective value, uncompensated future health effects, and absent plaintiffs. Travalio further argued that the potential of transaction costs to preclude efficient “buy-outs” may have been overstated and that injunctive relief can be flexibly tailored by such means as a grace period for the defendant to abate the pollution. He therefore concluded that “[t]he number of situations wherein damages provide the preferable remedy may be far smaller than commonly assumed.”405 In those cases in which damages were the lesser of two evils, Travalio advocated that the plaintiff receive a premium, such as twice the decline in market value, as an approximation of the owner’s subjective value.406
10. Richard Posner No discussion of law and economics would be complete without some reference to the work of Richard Posner, perhaps the most prolific and certainly the most renowned law and economics scholar. In nuisance law, however, most of his writing is derivative, drawing on the work of Coase, Calabresi and Melamed, and Ellickson.407
*265 With respect to entitlements, Posner said that to promote efficiency the legal right should be assigned to the party who values it the most.408 Posner supported the Restatement’s balance of utilities test as an efficient rule,409 but he criticized the new section 829A because it imposes strict liability.410
To avoid issuance of inefficient injunctions, Posner endorsed a cost-benefit analysis for injunctive relief as exemplified in Boomer.411 Furthermore, he would deny injunctive relief when transaction costs were high, such as in multiple plaintiff situations.412 He would allow injunctive relief only when it would be efficient, when transactions costs were low, or when damages were inadequate.413
Posner also considered the question, at issue in Boomer, of whether courts should award permanent or temporary damages. Periodic damage awards are costly to administer because the plaintiff must bring repeated lawsuits, but they preserve both parties’ incentives to reduce future damages.414 In contrast, permanent damages require a single lawsuit and preserve the plaintiff’s incentives to take future damage-reduction measures, but leave no incentive for the defendant to abate the nuisance.415 To minimize administrative costs and preserve incentives, Posner proposed an intermediate solution, the creation of “time-limited easements” that would confer a right to inflict damages for a limited period, such as ten years.416
*266 C. Critique and Synthesis From the foregoing review, it is obvious that the community of law and economics scholars does not speak with a single voice on the subject of land use conflicts. What follows is my own distillation.
1. Assignment of Entitlements in Nuisance Disputes My analysis proceeds from the premise that entitlements in nuisance disputes should be assigned primarily, if not entirely, according to principles of corrective justice.417 A justice-based nuisance doctrine should not, however, entail any substantial sacrifice of economic efficiency.
This assertion cannot be tested without selecting an appropriate rule of nuisance liability. Unfortunately, there is no universally accepted conception of corrective justice. Commentators disagree about the general principles of corrective justice, and more so about the particular rules that would embody them. There is not even a consensus on whether or not nuisance liability should be based on fault.418 For present purposes, however, it is not necessary to develop and justify an ideal rule of nuisance law. To demonstrate the efficiency of a system of nuisance law based on corrective justice, it should suffice to identify one such rule and compare it with a rule derived from criteria of economic efficiency.
An acceptable justice-based rule of nuisance liability is the compensation principle set forth in sections 826(b) and 829A of the *267 Restatement (Second) of Torts. For the most part, this rule is consistent with Epstein’s proposed strict liability standard for substantial harm.419 It is broader in that it does not require a physical invasion, yet narrower in that some invasions do not warrant compensation: liability is imposed only when the harm is “greater than the other should be required to bear without compensation.”420 The compensation principle permits the factfinder to consider, for example, the plaintiff’s sensitivity, the parties’ temporal priority, the suitability of their activities considering the existing pattern of land use, and perhaps even the utility of the defendant’s conduct, but not in the context of a utilitarian balancing test. Moreover, the compensation principle reflects existing legal authority.421 Absent a clearly superior justice-based rule, it is adequate to illustrate the efficiency of a rule of nuisance law based on criteria of corrective justice.
The leading candidate for the efficiency-based rule is also supplied by the Restatement in its balance of utilities test. This doctrine purports to promote social utility by assigning the right to the party who values it the most, thereby imposing the cost of damages or abatement on the party who should be the least-cost-avoider of the conflict.422 The comparison of efficiency-based and justice-based nuisance law is thus reduced to a comparison of section 826(a) with sections 826(b) and 829A.
*268 In the absence of transaction costs, as Coase demonstrated thirty years ago, efficiency in both resource allocation and incentives to minimize nuisance costs would be achieved through voluntary negotiations regardless of the initial assignment of property rights. In such an ideal world, assignment of property rights based on noneconomic criteria would not adversely affect economic efficiency.
The real world, however, is replete with transaction costs. Two-party nuisance disputes involve bilateral monopoly problems because both parties have committed themselves and their resources to a particular tract of land before the conflict arises. When multiple parties are involved, transaction costs are exacerbated by the difficulty of coordinating negotiations and by the added strategic behavior problems of holdouts and free-riders. Because few nuisance disputes involve low transaction costs, any rule of nuisance liability is likely to affect the efficiency of both resource allocation and incentives for abatement.
The compensation principle is consistent with allocative efficiency because it imposes nuisance costs on the activities that generate those costs. Although, as Coase emphasized, the costs of any nuisance conflict logically could be attributed to either activity,423 Epstein correctly asserts that one cannot meaningfully determine causation until after an initial assignment of property rights has been established.424 Indeed, the assignment of property rights should effectively determine the direction of causation. Once the rights are assigned to one party according to principles of corrective justice, the non-entitled party is appropriately viewed as the cause of the conflict. The imposition of responsibility according to justice-based criteria represents a judgment that those costs ought to be attributed to that party.
In this respect, the criterion of allocative efficiency could be seen as meaningless, for it would be satisfied by any legal rule, regardless of whether the rule was derived from considerations of corrective justice, economic efficiency, or any other criteria. Nevertheless, it can be argued that the concept of causation is more consistent with a justice-based rule of nuisance liability than with an efficiency-based rule of nuisance liability premised on the least-cost-avoider criterion. Under the compensation principle, the standard of normalcy or neighborliness provides a baseline from which one can measure both liability and causation. Imposing liability under a justice-based standard conforms to our common sense evaluation as to which party caused the *269 conflict--the one that invaded the other’s rights. On the other hand, the occasional denial of compensation based on such defenses as hypersensitivity and coming to the nuisance would reflect an implicit judgment that the plaintiffs were responsible for causing the conflicts.
By comparison, an efficiency-based nuisance rule often would fail to impose liability on the party that common sense identifies as the cause of the conflict. For example, if the court had applied the balance of utilities test in Boomer, the cement plant might have escaped liability, leaving the residents to bear the costs of the conflict. If so, the criterion of allocative efficiency would have been satisfied in a formal sense, with the nuisance costs being a cost of residential living instead of a cost of cement making. The ordinary conception of causation is less malleable, however. Regardless of whether it might be logically or theoretically possible to view the residents as the cause of this conflict, a judgment for the defendant would not have changed our perception that these damages were caused by the construction and operation of the cement plant in a residential area.
Whenever the balance of utilities test immunizes an offensive activity from nuisance liability, it fails to impose the costs of the conflict on the activity that we view as their cause.425 Thus, ironically, the justice-based compensation principle is more allocatively efficient than the efficiency-oriented balance of utilities test, because it imposes nuisance costs on the activities that we perceive as responsible for generating those costs.
The justice-based compensation principle also should create appropriate incentives to minimize nuisance costs because it generally imposes liability on the least-cost-avoider of the dispute.426 As Ellickson pointed out, the owner of the property where the offensive activity is located tends to be the least-cost-avoider of the conflict.427 The defendant has more complete knowledge of abatement technologies and their cost, as well as the power to implement abatement unilaterally. If the defendant is liable for the damages he inflicts on his neighbors, he will abate the nuisance if, and only if, the cost of abatement is less than the plaintiffs’ damages.
*270 Inefficiency might still result whenever the plaintiff was the least-cost-avoider but the defendant, due to transaction cost barriers, found it cheaper to abate or pay damages than to bargain for the plaintiff to undertake efficient precautions. Although such cases are theoretically possible, in practice they should be relatively infrequent. Moreover, in those few cases in which the plaintiffs were the least-cost-avoiders, they could be expected to take appropriate precautions themselves because the cost of those precautions probably would be less than the cost of litigation, especially considering the uncertainty, delay, and risk of legal proceedings. If the plaintiffs truly were the least-cost-avoiders, however, they could take the appropriate precautions and then bring suit for reimbursement.428 Conversely, a plaintiff who failed to take appropriate precautions might be limited to recovery of the costs of those precautions under the doctrine of avoidable consequences.429 It should therefore be a relatively rare case in which the plaintiffs were the least-cost-avoiders yet faced abatement costs that were sufficiently great that they were willing to suffer damages and undertake litigation in lieu of taking the precautions themselves.
The balance of utilities test, on the other hand, may fail to impose the cost of the conflict on the least-cost-avoider, because it requires that the gravity of the plaintiff’s harm be balanced against the total social utility of the defendant’s activity, rather than the marginal cost to the defendant of abatement or compensation. Although many commentators suggest that courts should consider the defendant’s marginal costs of abatement rather than the total utility of the defendant’s activity, the test as a whole is at best misleading.430 Moreover, even if the least-cost solution is for the plaintiff to endure the damage, the defendant may be the least-cost-avoider of the conflict if the defendant can insure against the loss at lower cost. Both because of its misleading formulation and its failure to consider the costs of insuring against the loss, the balance of utilities test may fail to impose the costs on the least-cost-avoider whenever it immunizes a socially valuable activity from nuisance liability.
In sum, the compensation principle is just as efficient as the balance of utilities test, and arguably more so. With regard to incentives, it generally imposes nuisance liability on the defendants, who tend to be the least-cost-avoiders of land use conflicts, without substantially *271 undermining the plaintiffs’ incentives to undertake cost-justified precautions whenever they are the least-cost-avoiders. The compensation principle’s advantage in terms of allocative efficiency outweighs any possible efficiency losses with respect to incentives. It assures that the costs of land use conflicts will be imposed on the activities that generate those costs, whereas the balance of utilities test tends to distort resource allocation by providing an implicit subsidy to socially-valued activities at the expense of those they injure. Thus, provided that inefficient injunctions can be avoided, assignment of nuisance liability under the compensation principle, or some equivalent standard based on criteria of corrective justice, is likely to be as efficient as any available alternative rule.
2. Injunctive Relief Versus Damages The debate over the relative efficiency of injunctive relief and damages has come full circle. Theoretically, this controversy is more complex than it first appeared; practically, however, the solution is far more simple.
Proponents of the damage remedy have emphasized the risk of inefficient injunctions.431 They have also pointed to the wasteful transaction costs incurred when a defendant successfully negotiates the relinquishment of a plaintiff’s right to an inefficient injunction.432
*272 On the other hand, as Polinsky and Travalio have noted, nuisance damages are inherently undercompensatory.433 Nuisance damages based on the decline in property values fail to compensate plaintiffs for their subjective personal and psychological losses or for unquantifiable harms to the environment and the quality of life. Often, no compensation is paid by defendants because no actions are brought with respect to damages that are spread among many victims or the public at large. If court-awarded nuisance damages are systematically less than the actual harm imposed by the offensive activities, then exclusive reliance on damage remedies would necessarily lead to inefficiency. Defendants would have insufficient incentives to undertake cost-effective precautions, and the prices of their products would fail to include all of the costs associated with their production. If the choice were between damages in all cases or injunctions in all cases, Polinsky indicates that it is not clear which regime would be more efficient, while Travalio argues in favor of the injunctive remedy.434
Fortunately, the law is flexible and does not mandate an election between exclusive reliance on injunctions or damages. The grant or denial of injunctive relief is subject to equitable discretion, which in most jurisdictions involves some form of balancing test that should prevent the issuance of grossly inefficient injunctions.435 For example, the relative hardship test in the Restatement (Second) of Torts explicitly invites the court to consider the relative costs to the defendant from the grant of an injunction and to the plaintiff from its denial.436
Rabin asserted that the relative hardship test may fail to prevent the issuance of inefficient injunctions because it requires a substantial*273 disproportionality between the plaintiff’s damages and the defendant’s abatement costs.437 A requirement of substantial disproportionality could promote efficiency, however, by compensating for the tendency of damage awards to understate the true extent of damages to the plaintiff and third parties.438 In any event, Rabin failed to provide any examples of inefficient injunctions issued by courts that purported to engage in a balancing of the costs to the parties and the public.439
The availability of injunctive relief subject to a balancing test entails certain litigation costs that would be absent if injunctions were never available. Exclusive reliance on the damage remedy would eliminate the costs of equitable balancing, but any such savings would be largely offset by the added costs of assessing damages. Furthermore, possible administrative savings under an exclusive damage remedy must be balanced against the substantial efficiency losses (as well as unfairness) that would result from the unavailability of injunctive relief whenever an injunction would have been efficient and a damage award would be inefficiently undercompensatory. So long as the equitable balancing tests are generally successful in avoiding the issuance of inefficient injunctions, the efficiency gains from appropriate nuisance injunctions would seem to outweigh the costs of an occasional inefficient injunction and the administrative cost of litigating the issue.440
3. Permanent Versus Temporary Damages Although most often cited for its denial of injunctive relief, Boomer has also focused attention on the issue of whether courts should award retrospective temporary damages, reflecting the injuries through the date of suit, or prospective permanent damages, measured by the total decline in property value.441 Presuming that the defendant might *274 abate the nuisance once liability was established, courts traditionally tended to award retrospective temporary damages.442 The award of temporary damages, however, forces the plaintiff to bring a succession of lawsuits at intervals measured by the applicable statute of limitations.443 It also confronts the defendant with uncertainty as to the extent of future liability, including the possibility of a future injunction.
The court in Boomer sought to put an end to the litigation by awarding permanent damages to the plaintiffs.444 Although this solution eliminates uncertainty and reduces the administrative costs of nuisance litigation, it also eliminates the defendant’s incentive to abate the nuisance in the future. The defendant in effect acquires a permanent easement to inflict nuisance damages on its neighbors.445 In Boomer, the court was aware of this problem but decided there was little prospect that dust abatement technology could be developed in the foreseeable future.446 Although the court may well have been correct in this case, a routine practice of awarding permanent damages could seriously impede the development and implementation of efficient nuisance-reducing technology.
Posner proposed an intermediate solution: awarding prospective damages for a limited time period, five or ten years into the future. The longer interval between lawsuits would reduce administrative costs and uncertainty, leaving the defendant with adequate incentives and ample time to abate the nuisance.447 Posner noted that although *275 it would solve defendants’ incentive problems, this “time-limited easement” proposal would create new incentive problems with respect to the plaintiffs. Plaintiffs would be less likely to undertake efficient precautions during the easement period because any reduction in their current damages would reduce the amount they would receive for their easement during future periods.448 Practically, it is also not clear how a court would determine the length or price of the easement.
A better solution might be to leave plaintiffs with the option to elect permanent or temporary damages. Plaintiffs who wanted to sell their property would prefer to recover permanent damages reflecting the total reduction in their property value. Plaintiffs who wanted to remain but were concerned about the uncertainty, cost, and inconvenience of future litigation could also request permanent damages. Alternatively, plaintiffs who wanted to remain and maintain pressure on the defendant to abate the nuisance could elect to recover temporary damages. Following an award of retrospective temporary damages, either party could initiate negotiations for a prospective time-limited easement, the cost of which could be based on the temporary damage award, thereby reducing the transaction costs.449
Permitting an election between permanent and temporary damages is generally consistent with the applicable provisions of the Restatement (Second) of Torts.450 Although damages for past invasions are deemed the ordinary remedy, the plaintiff may elect to recover in a single action for future invasions and past invasions whenever the maintenance of structures, operations, or other acts on the defendant’s land causes continuing or recurrent invasions on the plaintiff’s land and it appears that the invasions will continue indefinitely.451 The Restatement would allow a court the discretion to override the plaintiff’s election and award permanent damages whenever “future invasions would not be enjoined because the defendant’s enterprise is affected with a public interest.”452
The rationale for this exception is unclear. If the plaintiff believed that his rights were better protected by the in terrorem effect of the *276 prospect of a succession of lawsuits, why should the court mandate a single award of damages? Moreover, what is the relevance of the fact that future invasions would not be enjoined? If the court were correct in its determination that the defendant’s activity was affected with the public interest, then there would be no substantial risk of future injunctions. There might still be some value, however, in leaving the defendant an incentive to reduce the damages inflicted on the plaintiff. And what if the court were incorrect in its assessment of the public interest? Or what if conditions changed? Ten or twenty years later, a court might regret that it forever precluded injunctive relief by imposing an award of permanent damages, against the plaintiff’s wishes, based on a short-sighted assessment of the public interest. A court’s current determination that the enterprise cannot be enjoined simply does not provide sufficient justification for it to override the plaintiff’s election between recovery of temporary or permanent damages.
VI. THE FUTURE OF AMERICAN NUISANCE LAW: TOWARD THE YEAR 2000 One of the most perplexing anomalies in American nuisance law is its retention of dichotomous winner-take-all outcomes. The determination of whether an activity constitutes an actionable private nuisance depends on the result of either a balancing test or a vague standard of reasonableness. Nuisance law has been described as “a series of adjustments and compromises to limit the rights and privileges of both parties.”453 Nevertheless, the court in each case ultimately must find that the defendant’s conduct either is or is not a nuisance. This false choice454 between “nuisance” and “no nuisance” frequently forces courts to sacrifice one or both of the two goals of nuisance law--corrective justice between the parties and economic efficiency.
The exclusive reliance on dichotomous outcomes in nuisance disputes has produced the following problems: (1) whenever the balance is close, a one-sided result may seem arbitrary and unfair; (2) in such cases, inefficiency results when one party to the dispute bears the entire cost of damages or abatement while the other party pays nothing; and (3) compromise and settlement of disputes may be discouraged due to each party’s perception of the prospect of total victory.
*277 The emerging rules of comparative negligence and comparative fault suggest a possible solution to the problem of dichotomous outcomes. A recent article455 explored the hypothesis that apportionment of costs between parties according to criteria of “comparative responsibility”456 would achieve a just allocation of nuisance costs while promoting economic efficiency and dispute resolution. The application of comparative responsibility to nuisance disputes may be referred to as a rule of “comparative nuisance.”
A. John Coons and Court Imposed Compromise The theoretical foundation for comparative nuisance was provided by John Coons’ important article on court imposed compromise.457 Coons stated that “[a]ny judicial system involves continuing accommodation between the need to preserve a coherent set of ordering principles and the quest for tolerable results in individual disputes.”458 He maintained that our legal system’s almost exclusive reliance on winner-take-all rules exacerbated this tension between formal theory and individual justice.459
*278 As an alternative, Coons proposed the use of court “imposed compromise,” which he defined as “the apportionment of right and duty between opposed litigants by a court according to a quantitative standard that is not limited to the favoring of one party to the exclusion of his adversary.”460 Coons discussed several possible justifications for apportionment, including two which he referred to as “discretion-compromise” and “policy-compromise.” Discretion-compromise seeks to promote corrective justice through rules that enable a court, through judicial apportionment, “to effect a precise expression of the value of the actors’ conduct.”461 Policy-compromise represents an “effort to achieve a specific public advantage by a rule of apportionment,”462 which may include such goals as economic efficiency and informal dispute resolution.
B. Comparative Nuisance and Corrective Justice Tort law is rooted in the fundamental principle of corrective justice that “the [responsible] injurer must compensate the innocent victim.”463 Thus stated, the principle of corrective justice comprises two subsidiary principles: the “compensation principle” that a victim should receive compensation for injuries inflicted by others, and the “apportionment principle” that a wrongdoer should pay for damages caused by his misconduct.464 As an instrument of corrective justice, tort law asks whether the plaintiff deserves compensation and whether this compensation ought to be paid by the defendant.465
In light of the various factors that enter into the resolution of a nuisance dispute, the winner-take-all rules of traditional nuisance law often are incapable of achieving a just resolution of particular disputes. Each of the elements that enter into the determination of nuisance liability--the extent and character of the harm, the costs of avoidance or abatement, the social value of the parties’ activities, the suitability *279 of the activities to the locality, the plaintiff’s hypersensitivity--is itself a matter of degree. The authorities emphasize that each case must be decided on the unique facts and circumstances of the particular dispute, and that there is no readily articulable basis for drawing a bright line between cases in which the balance favors a finding of “nuisance” from those in which the balance favors a finding of “no nuisance.”466
In many reported cases there are equities on both sides, yet a winner-take-all verdict places the entire cost on one of the parties while the other pays nothing. The reports are replete with cases in which diametrically opposite results are reached on seemingly similar facts, and in many of the cases the balance did not clearly favor either party.467 Although each of these decisions may have been correct on its particular facts, the cases provide little guidance as to where *280 to draw the line between “nuisance” and “no nuisance,” nor do they justify the total shifting of responsibility for a slight tipping of the balance. In most of these cases, an apportioned solution would have been more fair than either of the polar outcomes.
It seems absurd to engage in a complex assessment of various factors only to apportion nuisance liability on a winner-take-all basis. Imposing liability on the defendant when the balance only slightly favors a finding of nuisance violates the compensation principle in that the plaintiff recovers the entire cost of nuisance damages for which he is partially responsible. On the other hand, the complete denial of compensation to the plaintiff when the balance tips slightly in favor of the defendant violates the apportionment principle because the defendant who is partially responsible for the conflict escapes any liability for the resulting damages. In many nuisance disputes, the most just outcome, consistent with both the compensation and apportionment principles, would be the allocation of nuisance costs in proportion to the parties’ relative responsibility for the existence of the conflict.468
This is not to say that in all or even in most cases courts should apportion nuisance damages. A plaintiff often would deserve complete and absolute protection against the defendant’s invasion or interference.469 A rule of comparative nuisance should impose a substantial share of the responsibility on the plaintiff only when there was some doubt that the defendant’s conduct was unneighborly, when the plaintiff was somewhat hypersensitive to injury, when the plaintiff had come to the nuisance, or when the plaintiff failed to take reasonable and appropriate precautions.
A rule of comparative nuisance would draw heavily upon existing nuisance law. In determining the entitlements of the parties, comparative nuisance would focus on the responsibility of the parties rather than the utility of their acts, emphasizing the primary role of tort law as an instrument of corrective justice.470
*281 The determination of liability under comparative nuisance would involve consideration of most of the same factors as in traditional nuisance law, yet it would enable the factfinder to apportion liability according to the relative weight on each side of the balance. Compared to the all-or-nothing results under traditional nuisance law, a compromise verdict under comparative nuisance would at least represent an attempt at precise justice. Even if the factfinder’s quantification simply represented a visceral reaction to the entire pattern of facts and circumstances, a 75/25 or 60/40 apportionment often would represent a closer approximation of justice than would a total victory for either party.
C. The Shape of a Comparative Nuisance System In adopting a rule of comparative nuisance, each court (or legislature) must decide whether to employ a “pure” or a “modified” version of comparative responsibility. Under pure comparative nuisance, as under pure comparative negligence, the plaintiff would recover the proportion of damages equal to the defendant’s degree of responsibility. A plaintiff who was 20% responsible would recover 80% of the damages; one who was 50% responsible would recover 50%; one who was 70% responsible would recover 30%. Under alternative forms of modified comparative nuisance, however, the plaintiff would be barred from recovery if his responsibility were greater than “slight” or were “equal to” or “greater than” that of the defendants.
I advocate adoption of pure comparative nuisance.471 The apportionment of nuisance costs according to comparative responsibility is *282 more fair and less arbitrary than traditional all-or-nothing doctrines, and it should apply irrespective of the plaintiff’s share of responsibility. A plaintiff who is substantially responsible for his own damages by virtue of having been negligent or hypersensitive to injury or having come to the nuisance should not necessarily be entirely deprived of any remedy. To the extent that the defendant is also partially responsible, the defendant should bear an appropriate share of the nuisance costs.
In actions seeking money damages, apportionment under a rule of comparative nuisance would not differ greatly from apportionment under comparative negligence in ordinary accident cases. Under comparative nuisance, the jury would determine each party’s share of responsibility for the nuisance, as well as the plaintiff’s damages, and the court would enter judgment for the plaintiff in an amount equal to the defendant’s share of those damages.
But how would apportionment work in actions seeking injunctive relief? Would the plaintiff whose share of responsibility was 20% receive 80% of an injunction? In a sense, the answer is yes. To be more precise, the plaintiff whose share of responsibility was 20% could receive 100% of the injunctive relief sought, but might be required to compensate the defendant for a portion of the defendant’s cost of compliance. The “compensated injunction”--described by Calabresi and Melamed472 and employed in Spur473--would be an essential component of any comparative nuisance rule. The price of a compensated injunction under comparative nuisance ordinarily would be the difference between the defendant’s cost of abatement and the damages to which the plaintiff otherwise would have been entitled after adjusting for the plaintiff’s degree of responsibility.474
*283 The availability of injunctive relief would also depend upon the application of traditional equitable principles. Thus, in many cases the plaintiff should be entitled to injunctive relief without any requirement of compensating the defendant. Conversely, in certain cases an injunction should not be available at any price, either because the plaintiff was undeserving or because an injunction would be contrary to the interest of the public and third parties. When a free injunction seems inappropriate, either because the plaintiff was substantially responsible for the conflict or by virtue of general equitable principles applicable to injunctions, the plaintiff should have the option of purchasing a compensated injunction, provided that an injunction would be consistent with the interests of third parties and the public.
D. Comparative Nuisance and Economic Efficiency Whenever the efficient solution to a land use conflict would involve precautions by both parties, each party should bear an appropriate share of liability in order to generate efficient incentives. Likewise, when society would deem both parties partially responsible for the conflict, the costs of the conflict would be attributable to both activities, and the criterion of allocative efficiency would require that each party take an appropriate share of those costs into account. Traditional winner-take-all nuisance rules necessarily place the entire loss on one of the parties, which tends to induce overinvestment in precautions by that party, underinvestment in precautions by the other party, and a distortion in resource allocation.475
The systematic tendency of most parties to underestimate their potential exposure to nuisance costs, either because they fail to appreciate that they could become embroiled in a nuisance dispute or because they assume that the court would impose the costs of a dispute on the other party, exacerbates the inefficiency of traditional nuisance law. Parties may fail to take cost-justified acts to prevent or avoid land use conflicts because they underestimate their prospective liability.
Comparative nuisance would create better incentives than those presented by traditional nuisance rules by giving all responsible parties an incentive to minimize nuisance costs. It should also partially *284 overcome the tendency to discount unduly the risk of nuisance liability by making it clear that all parties should expect to bear a portion of any nuisance costs whenever there were substantial equities on both sides. To the extent that comparative responsibility is assessed according to the parties’ capacity to avoid or prevent the harm, it should tend to create appropriate incentives by imposing most of the responsibility on the least-cost-avoider. The more that a party should have anticipated or could have avoided the conflict, the more that this party should be deemed responsible for causing the nuisance, hence the greater incentives that party would have to avoid the conflict under a rule of comparative nuisance.
Comparative nuisance would also promote allocative efficiency by imposing an appropriate share of the nuisance costs on each party to the dispute. Traditional nuisance law, with its dichotomous outcomes, places the entire cost on one of the parties. Resource allocation may be distorted to the extent that certain activities systematically tend to escape nuisance liability, while others bear more than their appropriate share of nuisance costs. Comparative nuisance would treat nuisance costs as being associated with an activity to the extent it was deemed responsible for generating such costs in proportion to its departure from standards of normal or reasonable conduct.
E. Coming to the Nuisance, Hypersensitivity, and Other Defenses Based on Plaintiff’s Conduct 1. Temporal Priority and Coming to the Nuisance The question of priority of use is relevant to virtually all nuisance disputes. In very few cases do the plaintiff and the defendant commence their incompatible activities at the same time. Thus, many nuisance conflicts arise between a “first user” and a “second user.”476 Regardless of whether the plaintiff or the defendant is the first user, considerations of both justice and economic efficiency tend to favor the rights of the first user. These considerations do not, however, justify an absolute right based on priority of use.
An important aspect of justice is the protection of the parties’ legitimate expectations. The principle of “first in time, first in right” is not an absolute, but it certainly expresses a broadly shared feeling *285 that claims of right arise from temporal priority.477 A party who commenced an activity without apparent conflict ordinarily should have a reasonable basis for expecting to be able to continue to engage in that activity. A second user who inflicted damages on the first user or demanded that the first user cease engaging in the activity because of potential harm to the second user would disrupt these settled expectations. Alternatively, if the first user should have anticipated the existence of a potential conflict with the uses of neighboring land, it would be unfair to allow a first user to preempt all second users by commencing an activity that was particularly sensitive or obnoxious.
There are sound economic reasons for according some measure of protection to first users and imposing most, but not all, of the responsibility of nuisance conflicts on the second user.478 The second user is usually the “least-cost-avoider” of the conflict. The first user has already incurred the cost of selecting a location and commencing operations, whereas the second user has not yet incurred these costs and in most cases could select another location. The second user is also in a better position to obtain the information necessary to evaluate the possibility of incompatible uses and to take appropriate precautions.479
Although the second user may be the least-cost-avoider of the dispute, it may still be more efficient for the second user to commence operations close to the first user if the value of that location to the second user exceeds the nuisance costs that would be generated by the ensuing conflict. Even in these situations, considerations of efficiency dictate that a greater share of the nuisance costs be borne by the second user. The second user is in a better position to evaluate *286 the relative costs and benefits, and imposing the cost of the conflict on the second user is likely to deter that person from initiating inefficient nuisance conflicts. Affording protection to first users also would give them an incentive to develop their land without having to worry about future nuisance conflicts. The efficiency-oriented commentators therefore generally favor nuisance rules that protect first users, whether they be plaintiffs or defendants.480
But a rule of absolute protection based on priority of use would provide too much protection for first users. First users would have no incentive to anticipate conflicting uses and select locations where future conflicts would be minimized. Once in place, potential victims would have no incentive to take cost-justified precautions. Likewise, those engaged in potentially offending activities would have no incentive to minimize their impact on others. To the contrary, an absolute coming to the nuisance defense would encourage first users to maximize the offensiveness of their activities in order to establish a right of priority against potentially sensitive second users. In order to create efficient incentives, nuisance law should require both the first user and the second user to bear a portion of the nuisance costs, with the second user bearing most but not all of the cost.
Traditional winner-take-all nuisance rules create uncertain and inefficient incentives. In practice, the law often fails to place any of the nuisance cost on the second user, but when it does, the second user bears all of the costs. Because of the various rules that may apply, priority of use is a factor of indeterminate weight. Whether or not it affects the result depends on the totality of the circumstances and the doctrinal label employed by the court.481 If the parties were optimistic and anticipated a favorable outcome in litigation, neither would take an appropriate share of the costs of the conflict into *287 account in determining the location and manner of potentially offensive or sensitive uses.
Under comparative nuisance, if the plaintiff were deemed partially responsible for the conflict because of the decision to locate a potentially sensitive activity near an established nuisance, the factfinder could hold the plaintiff responsible for an appropriate portion of the costs. Likewise, the fact that a defendant should have known that its activity would be offensive to existing property owners should increase the defendant’s share of responsibility for nuisance damages. Such an apportionment of costs would be fairer than traditional rules, which place all of the costs on one party and often provide no protection based on priority of use.
A rule of comparative nuisance that applied principles of comparative fault to all nuisance disputes would create far better incentives than traditional nuisance law with respect to the issue of priority of use. Under a rule of comparative nuisance, an apportionment of damages that reflected priority of use as an important factor would tend to impose a greater share of nuisance costs on second users, but would allow for other offsetting factors to shift some of the cost to the first user. Second users could expect to bear a majority of nuisance costs if they were to commence an activity incompatible with first users, so they would attempt to avoid such locations unless the benefits exceeded their estimated share of the nuisance costs. On the other hand, first users would expect to bear some portion of the cost of future nuisance conflicts, so they would attempt to select locations that would minimize such conflicts and would have an incentive to take cost-justified acts of prevention or avoidance with respect to second users.
2. Hypersensitivity The defense of hypersensitivity is consistent with the notion that the plaintiff’s damages are attributable to the plaintiff’s unusual sensitivity rather than to the defendant’s activity. Because hypersensitivity ordinarily is a matter of degree, apportionment under a rule of comparative nuisance is likely to produce more fair results than the all-or-nothing rules of traditional nuisance law.482
Comparative nuisance would also create better incentives than traditional nuisance law with regard to hypersensitive uses. In general, the party engaged in a use that is hypersensitive to injury is the *288 least-cost-avoider of any conflict with potentially incompatible activities on nearby property. The hypersensitive user is the only person likely to have complete information about the nature and seriousness of potential conflicts. This is especially true when the hypersensitive user is also a second user.483 When the hypersensitive user is a first user, these two factors should tend to offset each other, but either factor may predominate in a particular case. To create efficient incentives, nuisance law should impose a greater share of nuisance costs on hypersensitive users, but it should also leave some incentive for those engaged in potentially offending activities to avoid conflicts with hypersensitive users.
Under traditional nuisance law, however, hypersensitive use is an absolute defense. If the court accepts the defense, no nuisance is found and the plaintiff bears the full cost of the incompatibility. If the defense is rejected, the plaintiff recovers 100% of the damages. The winner-take-all rule fails to reflect that hypersensitivity may be a matter of degree and that the extent to which a hypersensitive user is the least-cost-avoider of a conflict will vary according to the circumstances. If a particular use, such as a drive-in movie theater, is deemed hypersensitive as a matter of law, other parties have no incentives to avoid interference. In most other situations, the rule’s application is sufficiently uncertain so that neither sensitive users nor potentially offending activities can meaningfully estimate their responsibility in the event of a conflict.
A rule of comparative nuisance would create better incentives for all parties, without the need to predict whether an absolute hypersensitivity defense would apply. The more hypersensitive the use, the greater the share of nuisance costs that the party engaged therein would expect to bear, and the greater the party’s incentive for avoiding nuisance conflicts. Those engaged in potentially offending activities would retain an incentive to minimize conflict with any potentially sensitive activities, and their incentives would correspond to the extent to which they could anticipate and avoid the conflict.
3. Other Defenses Generally, whenever the defendant could raise a defense based on the plaintiff’s conduct, comparative nuisance would be superior to *289 traditional nuisance law. The apportionment of nuisance costs in such disputes ordinarily would be more fair and more consistent with economic efficiency than a total victory for either party.
F. Comparative Nuisance and Administrative Costs The number of suits and the costs of discovery and proof would not be substantially altered by comparative nuisance, but it should reduce litigation costs by eliminating much of the difficulty associated with distinguishing among nuisance actions based on negligence, strict liability, and intentional misconduct. Under current law, the jury may receive separate instructions on three separate theories of nuisance liability, and they must further be instructed that the various nuisance defenses only apply to certain of these theories.484 The significance of the distinctions among the various bases of nuisance liability would be diminished, if not eliminated, were the court to apply principles of comparative responsibility in all nuisance disputes.
G. Comparative Nuisance and Dispute Resolution Finally, a rule of comparative nuisance would foster a climate of compromise, encouraging the negotiated resolution of nuisance disputes among neighbors. Winner-take-all nuisance rules create expectations that impede settlement by suggesting that property rights are absolute, rather than relative to circumstances and to the rights of other parties. The notion of absolute rights encourages each party to hold out for vindication in a total victory at trial rather than accept a compromise for some lesser amount. If compromise were embedded in the structure of nuisance law, and the parties expected a court imposed compromise verdict, there would be less psychological incentive to resist compromise in negotiations.
H. Barriers to Adoption of Comparative Nuisance Despite the current prevalence of comparative fault, only rarely has this principle been applied to apportion damages in nuisance litigation. The primary reason is that comparative fault emerged relatively recently, after nuisance law had become encrusted with *290 various doctrines that were created to limit the scope of the contributory negligence defense.485 These doctrines are reflected in the dictum that contributory negligence is not a defense to an “absolute nuisance,” a term that has been loosely applied to any or all of the following: abnormally dangerous activities, nuisances involving statutory violations, and intentional nuisances.486 These doctrines have persisted subsequent to the ascendance of comparative negligence, so that courts apportion damages only when a claim of nuisance is based on negligent conduct of the defendant,487 and not in actions based on strict liability or intentional wrongdoing.488
The rationale for these doctrines was undermined by the apportionment available under principles of comparative fault and responsibility, and the rules have especially little justification when applied to nuisance litigation. Courts should not allow these obsolete doctrines to deter them from applying comparative responsibility in all nuisance disputes, including those involving strict liability or intentional conduct. Although most comparative fault statutes by their terms apply only to negligence actions, and many expressly exclude intentional torts or strict liability actions from their coverage, the law of nuisance is entirely a judicial creation, and courts can fashion a rule of comparative nuisance that is independent of state comparative fault statutes.
The biggest obstacle to the adoption of comparative nuisance may be the legal system’s attachment to dichotomous outcomes. But even here there is reason for optimism. The reasonableness tests of the nineteenth century eroded the bright-line rule of nuisance law as an *291 absolute protection against interference with the use and enjoyment of property, undermining the entire natural law foundation of property rights. Because property rights already have been relativized and subjected to utilitarian balancing, and because comparison of responsibility has become an established part of the tort system, courts may be amenable to a quantitative apportionment of property rights under principles of comparative nuisance.
VII. CONCLUSION A rule of comparative nuisance would incorporate the plaintiffcentered and defendant-centered perspectives on land use conflicts in a synthesis that emphasizes the right against unreasonable interference with the use and enjoyment of interests in real property. Comparative nuisance would be consistent with our notions of corrective justice and with the goal of economic efficiency, as well as facilitating compromise in the informal resolution of nuisance disputes. Although it may not provide the ultimate solution to problems of incompatible land use, comparative nuisance would represent a significant step forward in the evolution of American nuisance law.
Footnotes aa Professor of Law, West Virginia University College of Law. Assistance in compiling the state law nuisance and surface water cases was provided by David Bungard, Michelle O’Shea, and Xueyan Zhang.
The author’s earlier works include: Lewin, The Silent Revolution in West Virginia’s Law of Nuisance, 92 W. VA. L. REV. 235 (1990) [hereinafter Lewin, Silent Revolution]; Lewin, Comparative Nuisance, 50 U. PITT. L. REV. 1009 (1989); Lewin, Compensated Injunctions and the Evolution of Nuisance Law, 71 IOWA L. REV. 775 (1986) [hereinafter Lewin, Compensated Injunctions]. Works of other authors are discussed in §§ II(C) and V(B) of the Article. The footnoting of the discussions of these works represents a compromise. The author would have reserved footnotes for actual quotations from the works under discussion and for explanatory comments. The Albany Law Review’ s regular editorial policy would have mandated a footnote for each proposition and would have required a footnote for virtually every sentence.
See infra notes 8-125 and accompanying text. An earlier version of this historical account appeared in Lewin, Silent Revolution, supra note 2, at 239-67. The author chose to include this section in order to provide a comprehensive treatment for this symposium.
See infra notes 166-246 and accompanying text. The first part of this section elaborates on an earlier discussion in Lewin, Compensated Injunctions, supra note 2, at 783-85. The second part culminates in a survey of American nuisance law, portions of which are set forth in an Appendix.
W. KEETON, D. DOBBS, R. KEETON & D. OWEN, PROSSER AND KEETON ON THE LAW OF TORTS § 86, at 617 n.7 (5th ed. 1984) [hereinafter PROSSER AND KEETON]; W. PROSSER, HANDBOOK OF THE LAW OF TORTS 550 n.7 (1st ed. 1941) [hereinafter PROSSER ON TORTS]; Winfield, Nuisance as a Tort, 4 CAMBRIDGE L.J. 189, 189 (1931).
According to the definitive dictionary of medieval Latin, nocumentum was defined as damnum (loss, damage) or detrimentum (detriment), and it appeared in a gloss on a papal bull of Alexander III in 1172, shortly before its appearance in Glanvill’s treatise in approximately 1187. 4 GLOSSARIUM AD SCRIPTORES MEDIAE ET INFIMAE LATINITATIS 1133 (C. Dufresne ed. 1739). See R. GLANVILL, THE TREATISE ON THE LAWS AND CUSTOMS OF THE REALM OF ENGLAND bk. XIII, ch. 34-36, at 168-69 (G. Hall trans. 1965). No reference could be found to any earlier usage. The word nocumentum apparently did not exist in classical Latin. It does not appear, for example, in CASSELL’S LATIN DICTIONARY (D. Simpson 5th ed. 1968), nor in A LATIN DICTIONARY FOR SCHOOLS (C. Lewis, ed. 1889). It probably derives from the classical Latin word nocuus, meaning hurtful or injurious. See CASSELL’S LATIN DICTIONARY, supra, at 395; A LATIN DICTIONARY FOR SCHOOLS, supra, at 673.
Nuisance presumably derives from nuisant, the present participle of nuire, which means “[t]o be hurtful, injurious, or prejudicial . . . to jeopardize, to harm; to stand in the way, to be an obstacle or hindrance . . . . ” THE NEW CASSELL’S FRENCH DICTIONARY 516 (1962).
PROSSER ON TORTS, supra note 8, at 549-50 (“It has meant all things to all people, and has been applied indiscriminately to everything from an alarming advertisement to a cockroach baked in a pie.” (footnotes omitted)). For a compilation of commentary on the meaninglessness of the term “nuisance,” see Smith, Torts Without Particular Names, 69 U. PA. L. REV. 91, 109-12 (1921).
William Prosser introduced his discussion of nuisance law with the oft-quoted aphorism: “There is perhaps no more impenetrable jungle in the entire law than that which surrounds the word ‘nuisance.”’ PROSSER ON TORTS, supra note 8, at 549.
See RESTATEMENT OF TORTS ch. 40 note at 218 (1939); C. FIFOOT, HISTORY AND SOURCES OF THE COMMON LAW 3-4 (1949); Coquillette, Mosses from an Old Manse: Another Look at Some Historic Property Cases about the Environment, 64 CORNELL L. REV. 761, 765 (1979); Loengard, The Assize of Nuisance: Origins of an Action at Common Law, 37 CAMBRIDGE L.J. 144, 144-45 (1978); McRae, The Development of Nuisance in the Early Common Law, 1 U. FLA. L. REV. 27, 29 (1948); Winfield, supra note 8, at 190; see also Newark, The Boundaries of Nuisance, 65 LAW Q. REV. 480, 481-82 (1949) (stating that “[t] he roots of nuisance go deep into the history of the common law” and noting that both Glanvill and Bracton used the term).
These writs contain allegations of wrongful acts by the defendant ad nocumentum liberi tenementi (“to the nuisance of [the] freehold”) of the plaintiff. See, e.g., R. GLANVILL, supra note 9, bk. XIII, chs. 34-36, reprinted in C. FIFOOT, supra note 13, at 14-15.
Whereas Glanvill listed these nuisance writs as examples of Novel Disseisin, Bracton, in the next century, referred to the same writs as examples of a separate Assize of Nuisance. Compare R. GLANVILL, supra note 9, bk. XIII, ch. 35, reprinted in C. FIFOOT, supra note 13, at 14 with H. BRACTON, DE LEGIBUS ET CONSUETUDINIBUS ANGLIAE fol. 233b, reprinted in C. FIFOOT, supra note 13, at 20. Bracton purported to distinguish the two writs according to the location of the wrongful act; Novel Disseisin was appropriate when the wrongful act was done on the plaintiff’s land, whereas Nuisance lay for interferences arising from conduct on the defendant’s land. BRACTON, fol. 234b, reprinted in C. FIFOOT, supra note 13, at 21. See C. Fifoot, supra note 13, at 9. Following Bracton’s distinction, some scholars have assumed that the two writs developed in parallel from the outset. See, e.g., RESTATEMENT OF TORTS ch. 40 note at 218-19 (1939); Newark, supra note 13, at 481-82. Others have suggested that the Assize of Nuisance was created to fill a gap resulting from the Assize of Novel Disseisin’s limitation to acts occurring on the plaintiff’s own land. See, e.g., Winfield, supra note 8, at 190-91. It seems more likely, however, that the thirteenth-century Assize of Nuisance simply represented a new name for a variant of the twelfth-century Assize of Novel Disseisin. See Coquillette, supra note 13, at 766-67. Loengard correctly points out that Glanvill’s nuisance writs were examples of the Assize of Novel Disseisin, and she asserts that the Assize of Nuisance was “a name which the twelfth century certainly did not know.” Loengard, supra note 13, at 158 & n.44. Loengard asserts that actions against nuisances under the Assize of Novel Disseisin were “founded in and mandated by” the “constitution” of Henry II that had “set out the rules and procedure” for the Assize of Novel Disseisin. Id. at 158-59. She believes that this “constitution” had appeared in written form; possibilities include a lost Assize of Novel Disseisin or a missing article within the text of the Assize of Clarendon. Id. at 153-54. She rejects the suggestion made by others that the extension of the Assize of Novel Disseisin to actions sounding in nuisance was the result of a judicial gloss. Id. at 163-65.
Examples of fourteenth-century actions under the Assize of Nuisance appear in McRae, supra note 13, at 37. The Assize of Nuisance was broader than the modern private nuisance action in that it also protected persons with franchise rights in a fair, mill, or ferry against local competitors. Id.; C. FIFOOT, supra note 13, at 5-7.
Coquillette, supra note 13, at 767. The Assize could not be used by plaintiffs who were “leaseholders, copyholders, guardians, and holders of rights of commons.” Id. at 773. Similarly, it was not available if the defendant was a stranger or did not own the servient estate. C. FIFOOT, supra note 13, at 94. The Assize lay only for positive acts of misfeasance, and not for nonfeasance. 7 W. HOLDSWORTH, A HISTORY OF ENGLISH LAW 334 n.2 (1926).
3 W. HOLDSWORTH, supra note 17, at 20 (1927). The authorities differ concerning the origins of this writ. See 3 W. BLACKSTONE, COMMENTARIES *221-22 (quod permittat “in the nature of a writ of right”); 1 E. COKE, INSTITUTES OF THE LAWS OF ENGLAND pt. 2, at 406 n.8 (1809) (no quod permittat before statute of novel disseisin); C. FIFOOT, supra note 13, at 4-5 (indicating quod permittat came from the Writ of Right); 7 W. HOLDSWORTH, supra note 17, at 330 (indicating that quod permittat came from the statute of Westminister II); Winfield, supra note 8, at 191 (indicating quod permittat did not exist before the statute of Westminster II).
Winfield, supra note 8, at 191. Winfield describes the writ quod permittat prosternere as more “clumsy” than the Assize of Nuisance and says: “It was in the nature of a writ of right and was therefore open to the infinite delays appropriate to that form of procedure.” Id.
McRae, supra note 13, at 43. Blackstone stated that the remedy for private nuisance was an action on the case for damages. 3 W. BLACKSTONE, supra note 19, at *220. He noted that abatement was available under the Assize of Nuisance and the writ of quod permittat prosternere, but he indicated that these two writs “are now out of use, and have given way to the action on the case . . . . ” Id. at 221-22. The two older writs were abolished by the Real Property Limitation Act of 1833. Winfield, supra note 8, at 191 (citing Real Property Limitation Act, 1833, 3 & 4 Will. 4, ch. 27, § 36).
Originally, a common or public nuisance was a crime, abatable by local authorities and punishable in the local courts. In a sixteenth-century case, however, it was stated in dictum that a plaintiff injured by a public nuisance could bring an action on the case for damages, but only if the defendant’s conduct had inflicted on the plaintiff a special damage or inconvenience, different from that endured by the public at large. See Anon, Y.B. 27 Hen. 8, fol. 27, pl. 10 (1535), reprinted in C. FIFOOT, supra note 13, at 98; 8 W. HOLDSWORTH, supra note 17, at 424; Newark, supra note 13, at 483-84. This dictum eventually became law. See Iveson v. Moore, 1 Ld. Raym. 486, 91 Eng. Rep. 1224 (1700); Fowler v. Sanders, Cro. Jac. 446, 79 Eng. Rep. 382 (1618); Williams’s Case, 5 Coke Rep. 72b, 77 Eng. Rep. 163 (1595). Blackstone stated that an action would lie for a public or common nuisance only “where a private person suffers some extraordinary damage, beyond the rest of the king’s subjects . . . . ” 3 W. BLACKSTONE, supra note 19, at *220.
See id. at 484-89. Newark notes: [J]ust as the [negligence-based public nuisance] cases were, by reason of their transference to the realm of nuisance, infected by notions of strict liability, so there was a tendency for “cross-infection” to take place, and notions of negligence began to make an appearance in the realm of nuisance proper. Id. at 487.
9 Coke Rep. at 59a, 77 Eng. Rep. at 821. The defendant had argued “that the building of the house for hogs was necessary for the sustenance of man . . . . ” Id. at 58a, 77 Eng. Rep. at 817. The court replied: [T]he building of a lime-kiln is good and profitable; but if it be built so near a house, that when it burns the smoke thereof enters into the house, so that none can dwell there, an action lies for it. . . . [T]his stands with the rule of law and reason . . . sic utere tuo ut alienum non laedas. Id. at 58b-59a, 77 Eng. Rep. at 821.
Blackstone defined a private nuisance as “any thing done to the hurt or annoyance of the lands, tenements, or hereditaments of another.” 3 W. BLACKSTONE, supra note 19, at *216. He cited William Aldred’s Case and the rule of sic utere tuo, indicating that even a lawful trade would be strictly liable for depriving a householder of light and air. Id. at *217.
Id. at 628. In 1839, agriculture accounted for 70% of the value of commodities in the economy, while mining, manufacturing, and construction accounted for only 30%; by 1870, agriculture represented only 50% of the total, while mining, manufacturing and construction had increased to 50%. Id.
See id. at 74-80; Kurtz, supra note 40, at 629-51. But see Comment, Critical Legal History and Private Actions Against Public Nuisances, 1800-1865, 22 COLUM. J.L. & SOC. PROBS. 307, 309-12 & nn.21-27 (1989) (taking issue with many of Horwitz’s contentions).
See id. at 76-78; Kurtz, supra note 40, at 640-42. But see Comment, supra note 47, at 316-18 (stating that “courts did not fashion the special injury requirement into a significant obstacle . . . . ”).
Horwitz emphasized developments in the early years of the nineteenth century, but he conceded that formal nuisance doctrine remained unchanged up to the time of the Civil War. M. HORWITZ, supra note 38, at 31, 74. Kurtz discussed substantive and procedural limitations on the injunctive remedy in two periods, 1837-1870 and 1871-1916. See Kurtz, supra note 40, at 628-65. According to Robert Bone, the significant developments in natural law theory occurred between 1850 and 1920. Bone, Normative Theory and Legal Doctrine in American Nuisance Law: 1850 to 1920, 59 S. CAL. L. REV. 1101, 1104-08 (1986).
In his analysis of normative theories of property rights between 1850 and 1920, Bone identified three “models” that embodied the conception of property as a natural right. See id. at 1135-36. Bone referred to these three natural rights models as the “static absolute dominion model,” the “competing rights model,” and the “relative property rights model.” Id. According to Bone, the competing rights model was associated with what he termed the “dynamic absolute dominion” theory of property rights, id. at 1135, whereas I view the competing-rights model as conceptually distinct from the dynamic absolute dominion theory. I therefore discuss four separate approaches instead of Bone’s three.
This analysis is to some extent consistent with what has been called the subsidy thesis: that nineteenth-century tort law witnessed the development of numerous liability-limiting doctrines which had the effect, if not the purpose, of subsidizing emerging industry by sacrificing the welfare of ordinary victims. The subsidy thesis is associated with L. FRIEDMAN, A HISTORY OF AMERICAN LAW (2d ed. 1985); M. HORWITZ, supra note 38; and Gregory, Trespass to Negligence to Absolute Liability, 37 VA. L. REV. 359 (1951). The thesis is criticized in Schwartz, The Character of Early American Tort Law, 36 UCLA L. REV. 641 (1989); Schwartz, Tort Law and the Economy in Nineteenth-Century America: A Reinterpretation, 90 YALE L.J. 1717 (1981); and Williams, Book Review, 25 UCLA L. REV. 1187 (1978) (reviewing M. HORWITZ, supra note 38). See also Rabin, The Historical Development of the Fault Principle: A Reinterpretation, 15 GA. L. REV. 925, 947-48 (1981) (the courts’ treatment of tort law was divided between a desire to help business and a desire to compensate victims). I agree with Bone that the subsidy thesis is at best incomplete in that it fails to take into account the theories and values of the judges, according too much weight to the outcomes of the cases and too little weight to the language of the opinions. See Bone, supra note 59, at 1107-08 & n.6. Also, the proponents of the subsidy thesis emphasized changes in the antebellum period, whereas Bone’s analysis suggests that the substantive transformation of nuisance law primarily took place after the Civil War and remained incomplete until the publication of the fourth volume of the Restatement of Torts in 1939. Id. at 1224-26.
Id. at 1124-25. Bone contends that although laissez faire theorists invoked utilitarian arguments linking economic freedom with economic and social progress, their approach was “consistent with a natural property right on the assumption, quite common in the late nineteenth century, that the progress or evolution of society itself was a natural phenomenon.” Id. at 1125.
Id. at 1140-44 & n.99. Although many courts employed the language of negligence in discussing the law of nuisance, the exclusive reliance on negligence-based nuisance liability generally was limited to the category of legislatively-authorized uses, such as mills, railroads, and public utilities, which could not be deemed unlawful because of their express statutory authorization. See id. at 1139 n.95.
See id. at 1141 & n.99. For example, the manufacture and storage of explosives was not unlawful or malum in se, but some courts created a special category of prima facie nuisances or nuisances as a matter of law for dangerous activities conducted in proximity to residences or other sensitive uses. Other courts ruled that such defendants were negligent in selecting an inappropriate location. See id. at 1152 & n.113.
For a classic statement explaining the natural rights origins of the rule of reasonable use, see H. WOOD, A PRACTICAL TREATISE ON THE LAW OF NUISANCES IN THEIR VARIOUS FORMS; INCLUDING REMEDIES THEREFOR AT LAW AND IN EQUITY 2 (1st ed. 1875): While it is true that every person has and may exercise exclusive dominion over his own property of every description, and has a right to enjoy it in all the ways and for all the purposes in which such property is usually enjoyed, yet, this is subject to the qualification that his use and enjoyment of it must be reasonable, and such as will not prejudicially affect the rights of others. It is a part of the great social compact to which every person is a party, a fundamental and essential principle in every civilized community, that every person yields a portion of his right of absolute dominion and use of his own property, in recognition of, and obedience to the rights of others, so that others may also enjoy their property without unreasonable hurt or hindrance. Id. (footnote omitted).
See Bone, supra note 59, at 1152-56. See also M. HOROWITZ, supra note 38, at 37 (dating the transition to this view from 1818). For additional cases and authorities, see supra note 92, infra notes 107, 116, 120.
Id. § 822. The drafters of the first Restatement stated the rule without employing the term “nuisance” because they thought it “desirable to avoid the use of a term attended with so much confusion and uncertainty of meaning.” Id. ch. 40 note at 215. A definition of private nuisance was added, however, in the RESTATEMENT (SECOND) OF TORTS § 821D (1977). See infra notes 166-72 and accompanying text.
CompareRESTATEMENT OF TORTS §§ 827-831 (1939) (enumerating the factors to be considered in evaluating the gravity of harm and utility of conduct) with Smith, Reasonable Use of Property, supra note 107, at 385 (listing typical factors which should be considered in determining reasonable use).
The Restatement is somewhat ambiguous in this regard: “Determining unreasonableness is essentially a weighing process, involving a comparative evaluation of conflicting interests in various situations according to objective legal standards.” RESTATEMENT OF TORTS § 826 comment b (1939). Whether the comparison is qualitative or quantitative, it is at least clear that “social value” is not necessarily equivalent to economic value. See id. § 827 comment e; id. § 828 comments d & e. In particular, comment e to § 828 refers to considerations of social value that reflect the natural rights origins of nuisance law, including the preference for residential and agricultural uses associated with the static theory. See id. § 828 comment e.
PROSSER ON TORTS, supra note 8, at 580. Prosser’s discussion reflects a curious mixture of the natural rights and positivist approaches to nuisance law. He refers to the rights of the parties as “correlative and interdependent,” and indicates that nuisance law “is very largely a series of adjustments to limit the reciprocal rights and privileges of both,” but he concludes that “the court must make a comparative evaluation of the conflicting interests according to objective legal standards, and the gravity of the harm to the plaintiff must be weighed against the utility of the defendant’s conduct.” Id. As authority for the balance of utilities test, Prosser cited only six cases. Three of these were the Cogswell, McCarty and Oakes cases cited by the ALI and discussed supra note 116. The other three were Holman v. Athens Empire Laundry Co., 149 Ga. 345, 100 S.E. 207 (1919); Ebur v. Alloy Metal Wire Co., 304 Pa. 177, 155 A. 280 (1931); and Johnson v. Drysdale, 66 S.D. 436, 285 N.W. 301 (1939). Prosser had a penchant for interest balancing, and this was not the only topic for which Prosser discerned a “trend” in the law on the basis of a handful of cases. See G. WHITE, TORT LAW IN AMERICA: AN INTELLECTUAL HISTORY 157-58, 169 (1980). According to White, Prosser’s influence over the development of tort law derived from “his capacity to synthesize; his persistence in maintaining and refining his classifications so that they hardened into doctrine; his skill in preserving doctrine he had helped create.” Id. at 176. In this instance, however, even the cases relied upon by Prosser provide scant evidence of any trend toward weighing the utility of the defendant’s conduct against the gravity of the harm to the plaintiff. Only in Oakes did the court engage in a balancing of utility. See supra note 116. Cogswell and McCarty both represented typical expressions of the reasonable use rule. Id. Likewise, Holman, Ebur and Johnson articulated general, multi-factor reasonableness standards without in any way suggesting that the courts should engage in a balancing of utility. See Holman, 149 Ga. at 350-51, 100 S.E. at 210;Ebur, 304 Pa. at 182-84, 155 A. at 282;Johnson, 66 S.D. at 440, 285 N.W. at 304. Although each of these cases emphasized that the benefits from the defendant’s activity were an important factor in the evaluation of its reasonableness, of the six cases cited in Prosser’s treatise only Oakes actually supports his assertion that nuisance liability is determined by balancing the utility of the defendant’s conduct against the harm to the plaintiff.
As of 1969, the balance of utilities test had been adopted in at most eight states, and perhaps in as few as five. See supra note 121. The “utility of the defendant’s conduct” was expressly a factor in at most another eight states, and probably in no more than five: Connecticut, Missouri, North Carolina, Ohio, and Tennessee. See supra note 122. Most of the remaining jurisdictions employed a general balancing test without citing § 826 of the Restatement and without mentioning the “utility of the defendant’s conduct,” although many of them did consider the value of the defendant’s conduct as a factor in the determination of reasonableness. For representative decisions, see supra notes 107, 116, 120 & Appendix.
See PROSSER ON TORTS, supra note 8, § 89 at 526 (4th ed. 1971); id. § 90, at 616-17 (3d ed. 1964); id. § 72, at 410-11 (2d ed. 1955). Prosser continued to cite the same six cases in support of the balance of utilities test.
Id. at 1025, 287 N.Y.S.2d at 114. The trial court relied upon the following factors: “The defendant’s immense investment in the Hudson River Valley, its contribution to the Capital District’s economy and its immediate help to the education of children in the Town of Coeymans through the payment of substantial sums in school and property taxes.” Id. The court also noted that “[t]he company installed at great expense the most efficient devices available to prevent the discharge of dust and polluted air into the atmosphere.” Id. at 1024, 287 N.Y.S.2d at 113.
Id. at 481,294 N.Y.S.2d at 453. The appellate division noted the following relevant factors: [T]he zoning of the area, the large number of persons employed by the defendant, its extensive business operations and substantial investment in plant and equipment, its use of the most modern and efficient devices to prevent offensive emissions and discharges, and its payment of substantial sums of real property and school taxes. Id.
See, e.g., Roberts, The Right to a Decent Environment; E =MC2 : Environment Equals Man Times Courts Redoubling Their Efforts, 55 CORNELL L. REV. 674 (1970); Note, No Injunctive Relief in New York Against a Private Nuisance when Defendant’s Comparative Financial Hardship Outweighs the Injury to Complainant, 21 SYRACUSE L. REV. 1243 (1970); Comment, Environmental Law-- Nuisance--Injunctive Relief Denied in Private Action for Nuisance Caused by Industrial Polluter--Boomer v. Atlantic Cement Co., 45 N.Y.U. L. REV. 919 (1970); Comment, Air Pollution, Nuisance Law & Private Litigation, 1971 UTAH L. REV. 142; Recent Decisions, 35 ALB. L. REV. 148 (1970); Recent Cases, 20 BUFFALO L. REV. 312 (1970).
E.g., R. CHUSED, CASES, MATERIALS AND PROBLEMS IN PROPERTY 1103 (1988); J. CRIBBET, C. JOHNSON, R. FINDLEY & E. SMITH, CASES AND MATERIALS ON PROPERTY 721 (6th ed. 1990); C. DONAHUE, T. KAUPER & P. MARTIN, CASES AND MATERIALS ON PROPERTY 1040, 1042 (2d ed. 1983); J. DUKEMINIER & J. KRIER, PROPERTY 804 (2d ed. 1988); P. KEETON, R. KEETON, L. SARGENTICH & H. STEINER, CASES AND MATERIALS ON TORT AND ACCIDENT LAW 625 (1983); R. POSNER, TORT LAW: CASES AND ECONOMIC ANALYSIS 779 (1982); W. PROSSER, J. WADE & V. SCHWARTZ, CASES AND MATERIALS ON TORTS 867 (6th ed. 1976).
Given the court’s emphasis on the disparity between the impact of the injunction and the effect of the nuisance, it is surprising that the court paid little attention to these consequences. The court mentioned in a footnote the $45,000,000 investment and the company’s 300 employees, but did not analyze the probable consequences of granting the injunction. Boomer v. Atlantic Cement Co., 26 N.Y.2d 219, 225, 257 N.E.2d 870, 873, 309 N.Y.S.2d 312, 316 (1970). Had the court enjoined the nuisance, would the entire $45,000,000 investment and all of the jobs have been lost? Presumably, much of the plant and equipment would have been relocated to a nonresidential neighborhood, with the remaining building and fixtures converted to some other less noxious use, but no attempt was made to estimate the cost of relocation or the alternative uses of the plant. Likewise, the court simply assumed that all 300 jobs would be lost, instead of considering the possibility that many would be shifted to a new location, while other employees could work at the plant after conversion to its best alternative use. The court’s consideration of the impact of the nuisance was also somewhat perfunctory. The court said that the award of damages would redress all of the plaintiffs’ economic losses, but it ignored the impact on their health and quality of life. Id., 309 N.Y.S.2d at 316-17. More importantly, the court ignored the impact of the plant on the remainder of the community. There is no discussion of Coeymans’ population, nor the number of persons living in the vicinity, nor the impact of the plant on their property values, health, and quality of life. It is ironic that the court asserted that it was not competent to promulgate public policy regarding air pollution, while simultaneously overriding established precedent based on an implicit public policy favoring economic development. Id. at 223, 257 N.E.2d at 871-72, 309 N.Y.S.2d at 314-15. Likewise, the court apparently was unaware of the inconsistency between asserting that it considered only the parties before the court while emphasizing the 300 nonparty employees of the defendant. Id. at 225, 257 N.E.2d at 873, 309 N.Y.S.2d at 316. This is not to say that the court reached the wrong decision. Even if the cost of relocation and conversion totaled only $5,000,000, it might well have outweighed all the economic and intangible effects of the dust and vibrations on the small community around the plant. The efficient solution might well have been for the neighbors to move rather than for the plant to relocate. Nevertheless, the court’s decision is not a model of clarity in legal reasoning nor of precision in economic analysis.
See id. § 821D. Private nuisance was defined as “a non-trespassory invasion of another’s interest in the private use and enjoyment of land. . . . not inconsistent with an accompanying trespass to the land.” Id.
See RESTATEMENT OF TORTS ch. 40 note at 215 (1939). In the Restatement (Second), the ALI recanted, stating: “[T]he name of nuisance cannot be cast aside without departing entirely from the legal terminology that is universally accepted . . . . ” RESTATEMENT (SECOND) OF TORTS ch. 40 note at 84 (1977).
SeeRESTATEMENT (SECOND) OF TORTS § 821F & comment d (Tent. Draft No. 15, 1969) (invasion not substantial if “normal” person or property would not be offended or annoyed, notwithstanding subjective idiosyncracies making invasion unendurable to plaintiff).
See id. § 826. This draft did propose to restructure § 822 by retaining the category of “intentional and unreasonable” and bifurcating the category of “unintentional and otherwise actionable.” Id. § 822. This change accentuated the distinction between liability based on “negligent or reckless” conduct and liability for “abnormally dangerous conditions or activities.” Id.
Id. at 132. According to James: A substantial body of authority regards this as an application of strict liability; if the harm to the plaintiff is unreasonable (i.e., a nuisance) then liability will be imposed upon the author of it if he knew or had reason to know that the harm was being caused, even if he has been without fault. Id. (footnote omitted).
Presentation of Restatement of Law, Second, Torts, Tentative Draft No. 16, 47 A.L.I. PROC. 287, 312 (1970) [hereinafter A.L.I. Presentation]. Keeton’s proposal was consistent with a comment in the scope and introductory note preceding § 822 of the Restatement with respect to the distinction between actions for damages and suits for injunction: Even when there is present harm, it is one thing to say that a defendant should pay damages for the harm his factory is causing, but it is a different thing to say that he must close his factory if the harm cannot be stopped. For the purpose of determining liability for damages for private nuisance, conduct may be regarded as unreasonable even though its utility is great and the amount of harm is relatively small. . . . It may be reasonable to continue an important activity if payment is made for the harm it is causing, but unreasonable to continue it without paying. RESTATEMENT OF TORTS ch. 40 note at 224 (1939).
Keeton, Conditional Fault in the Law of Torts, 72 HARV. L. REV. 401, 432 (1959). Keeton provided the following example: [S]ome nuisance cases involve only conditional fault. This appears to be true, for example, of mining activity in the hills of Tennessee which the court would not enjoin unconditionally because it was extremely valuable both to the defendants and to the community; instead, the court decreed that an injunction would issue unless the defendants paid damages or gave security for such payment to the complaining landowners. A decree denying an injunction on such a condition may be viewed as a determination that the interference is not unreasonable if compensation is provided, but is unreasonable otherwise. Id. (footnote omitted). The concept of conditional fault was also discussed by Page Keeton. See Keeton, Trespass, Nuisance, and Strict Liability, 59 COLUM. L. REV. 457, 461-62, 471 (1959); Keeton & Morris, supra note 97, at 417-18.
A.L.I. Presentation, supra note 179, at 313-25. Keeton’s proposal was adopted over the objection of the Reporter, Dean William Prosser, who continued to insist that the balance of utilities test adequately addressed situations in which the harm was greater than the plaintiff should bear without compensation. Id. at 326-28. Following the 1970 meeting, Prosser retired as Reporter and was replaced by Dean John Wade. Wechsler, Foreword to RESTATEMENT (SECOND) OF TORTSSSSSSSSSSS at vii (Tent. Draft No. 17, 1971).
See, e.g.,RESTATEMENT (SECOND) OF TORTS § 826 comment b (Tent. Draft No. 17, 1971) (“Other invasions may impose harm so substantial and so serious that the recipient cannot be expected to bear it without compensation, regardless of the utility of the activity in the abstract.”); id. § 827 comment a (“The gravity of the harm . . . may be found so significant that in and of itself it requires compensation, regardless of the weight of the utility of the conduct.”); id. § 828 comment h: The utility of an activity in which the actor engages may sometimes be determined in the abstract. . . . In case [sic] of a cement factory polluting the air with dust, the utility may be society’s need for building materials. This is appropriate if the suit is for an injunction totally prohibiting the activity. . . . In a damage action, the conduct for which the utility is being weighed is really the carrying on of the activity without paying for the harm it causes. The cost of compensating for the harm is thus a factor in evaluating the utility of this conduct. . . . In the damage action, therefore, the cost of compensating for the harm is usually more significant than the general social value of the activity, with the result that the utility is less likely to outweigh the gravity of the harm. Id.
Id. at 174, 176-77, 172 N.W.2d at 652-54. The Jost court concluded: Whether its economic or social importance dwarfed the claim of a small farmer is of no consequence in this lawsuit. It will not be said that, because a great and socially useful enterprise will be liable in damages, an injury small by comparison should go unredressed. We know of no acceptable rule of jurisprudence that permits those who are engaged in important and desirable enterprises to injure with impunity those who are engaged in enterprises of lesser economic significance. Id. at 176, 172 N.W.2d at 653.
Id. at 509, 466 P.2d at 613. The court continued: Thus, in the present case it is immaterial that defendant’s conduct in the operation of the canals was of great social value in that it would substantially benefit the other farmers in the area and the public generally, far outweighing the harm done to plaintiff alone. . . . The requested instruction, in effect, would have told the jury that it could deny plaintiff recovery if it decided that the social value of operating the canal was sufficiently great. This would clearly have constituted reversible error. Id. at 509-10, 466 P.2d at 613 (footnote omitted).
See Continuation of Discussion of Restatement of the Law, Second, Torts, Tentative Draft No. 17, 48 A.L.I. PROC. 72, 72-100 (1971). During the discussion, Boomer was cited as a case in which damages were awarded despite the utility of the enterprise. Id. at 77-80. The denial of injunctive relief in Boomer was also debated, and Judge Breitel of New York’s Court of Appeals, who had not participated in the Boomer decision, indicated his agreement with Judge Jasen’s dissent. Id. at 79-80.
Id. The proposed version read as follows: § 829A. Gravity vs. Utility--Serious Harm. Under the rules stated in §§ 826-828, an intentional invasion of another’s interest in the use and enjoyment of land is unreasonable and the actor is subject to liability if the harm resulting from the invasion is substantial and greater than the other should be required to bear without compensation. Id. at 4.
RESTATEMENT (SECOND) OF TORTS § 829A (1977). The section reads: § 829A. Gravity vs. Utility--Severe Harm. An intentional invasion of another’s interest in the use and enjoyment of land is unreasonable if the harm resulting from the invasion is severe and greater than the other should be required to bear without compensation. Id.
RESTATEMENT (SECOND) OF TORTS § 826 (1977). The complete text of § 826 now reads as follows: § 826. Unreasonableness of Intentional Invasion. An intentional invasion of another’s interest in the use and enjoyment of land is unreasonable if (a) the gravity of the harm outweighs the utility of the actor’s conduct, or (b) the harm caused by the conduct is serious and the financial burden of compensating for this and similar harm to others would not make the continuation of the conduct not feasible. Id.
For an historical account of the adoption of these provisions and an excellent explanation of their interrelationship as set forth in Tentative Drafts Nos. 17 and 18, see Comment, Internalizing Externalities: Nuisance Law and Economic Efficiency, 53 N.Y.U. L. REV. 219, 231-37 (1978). Dean Wade’s account appears in Wade, Environmental Protection, the Common Law of Nuisance, and the Restatement of Torts, 8 FORUM 165 (1973).
A plaintiff would be forced to rely on the balance of utilities test of § 826(a) only in the following situation: the plaintiff sought only damages, the damages were “substantial” or “serious” but not “severe,” and the cost of compensation would “make the continuation of the conduct not feasible.” SeeRESTATEMENT (SECOND) OF TORTS §826(a)(1977). In such a case, if one ever arose, the plaintiff ought to prevail under the balance of utilities test because, except for enterprises crucial to national defense or public health, the inability of an activity to generate profits sufficient to cover the costs of damage compensation constitutes prima facie evidence that its social utility is outweighed by the gravity of the harm it inflicts.
Id. §§ 933-951. Particular attention should be paid to § 936: “Factors in Determining Appropriateness of Injunction.” Id. § 936. These equitable principles include consideration of “the relative hardship” to the parties and the “interests of third persons and of the public.” Id. § 936(e)-(f). See also id. §§ 941-942 (elaborating on these equitable principles).
The rule of nuisance liability could be stated more simply by eliminating the balance of utilities test entirely. The possibility that damage liability might force the defendant to cease operations could be addressed by a rule mandating that the availability of damages in such situations would depend upon application of the rules governing the availability of injunctions.
See, e.g., Juergensmeyer, Control of Air Pollution Through the Assertion of Private Rights, 1967 DUKE L.J. 1126; Oakes, Environmental Litigation: Current Developments and Suggestions for the Future, 5 CONN. L. REV. 531 (1973); Roberts, supra note 156; Schmitz, Pollution, Law, Science, and Damage Awards, 18 CLEV. ST. L. REV. 456 (1969); Schuck, Air Pollution as a Private Nuisance, 3 NAT. RESOURCES LAW. 475 (1970); Note, Water Quality Standards in Private Nuisance Actions, 79 YALE L.J. 102 (1969); Comment, The Role of Private Nuisance Law in the Control of Air Pollution, 10 ARIZ. L. REV. 107 (1968); Comment, Equity and the Eco-System: Can Injunctions Clear the Air?, 68 MICH. L. REV. 1254 (1970); Comment, Air Pollution, Nuisance Law, and Private Litigation, 1971 UTAH L. REV. 142; Comment, Air Pollution as a Private Nuisance, 24 WASH. & LEE L. REV. 314 (1967).
Kinyon & McClure, supra note 223, at 898-99; Annotation, supra note 223, at 1199. This harsh doctrine was often qualified by a rule imposing liability when surface water was diverted in a body through artificial channels, and a diversion of surface water could also result in liability under principles of negligence. See id. at 1203-07. Similarly, civil law states often allowed qualifications and exceptions. See id. at 1211-16.
The seven “balance of utilities” states are California, Illinois, New Hampshire, New Jersey, Utah, West Virginia, and Wyoming. See supra notes 121, 237. Even in these states, there is reason to doubt whether the courts would apply this test to a claim for money damages. Wyoming appears to have limited the test to actions for an injunction, while California has not uniformly applied the test even in actions seeking injunctions. See supra note 121.
These 36 jurisdictions can be roughly divided into four categories: I. Twenty-three jurisdictions impose liability for interferences that are substantial and unreasonable, without explicit reference to the utility of the defendant’s conduct: Alabama, Arkansas, Colorado, District of Columbia, Florida, Georgia, Indiana, Kansas, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nevada, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, Vermont, and Virginia. II. In nine states, the courts employ a reasonableness standard in which the utility of the defendant’s conduct is an explicit factor: Arizona, Connecticut, Delaware, Idaho, Kentucky, Minnesota, Missouri, Tennessee, and Washington. III. In three states, the test for nuisance liability has not been clearly articulated, but probably would involve a reasonableness standard; there is no indication that the balance of utilities test would be applied in any of these states: Alaska, Hawaii, and Maine. IV. Finally, Louisiana’s unique law of nuisance is based on its Civil Code. Cases and applicable statutes from each of these jurisdictions can be found in the Appendix to this Article.
From the seeds sown in the early 1960s by Ronald Coase and Guido Calabresi, see infra notes 257-72 and accompanying text, the law and economics movement flourished in the 1970s with the establishment of the Journal of Legal Studies at the University of Chicago in 1972 and the publication of Richard Posner’s treatise in 1972. See R. POSNER, ECONOMIC ANALYSIS OF LAW (1st ed. 1972).
The following summary places the cart before the horse to some extent, in that most of the principles were derived from the individual works discussed in § V(B). See infra notes 250-416 and accompanying text. Nevertheless, this brief exposition will be helpful in understanding these works and their role in the development of economic thought. A more comprehensive synthesis is attempted in § V(C). See infra notes 417-52 and accompanying text.
See Coase, The Problem of Social Cost, 3 J.L. & ECON. 1 (1960) [[[hereinafter Coase, Social Cost]. Coase was responding to the earlier treatment of the problem of railroad sparks in A. PIGOU, THE ECONOMICS OF WELFARE 183 (4th ed. 1932). Coase, supra, at 29 n.35.
See, e.g., W. LANDES & R. POSNER, THE ECONOMIC STRUCTURE OF TORT LAW 31-41 (1987); R. POSNER, ECONOMIC ANALYSIS OF LAW 7, 42-48 (3d ed. 1986) [[[hereinafter R. POSNER, ECONOMIC ANALYSIS]; Cooter, The Cost of Coase, 11 J. LEGAL STUD. 1 (1982); Grady, Common Law Control of Strategic Behavior: Railroad Sparks and the Farmer, 17 J. LEGAL STUD. 15 (1988); Lewin, Comparative Nuisance, supra note 2, at 785-88; Schap, The Nonequivalence of Property Rules and Liability Rules, 6 INT’L REV. L. & ECON. 125 (1986).
E.g., Farber, supra note 157; Merrill, Trespass, Nuisance, and the Costs of Determining Property Rights, 14 J. LEGAL STUD. 13 (1985). Farber’s emphasis was on justice, but his comments on efficiency were quite perceptive. His conclusions are similar to my own, and I have inserted frequent references to his work in the footnotes.
E.g., Berger, An Analysis of the Doctrine that “First in Time is First in Right,” 64 NEB. L. REV. 349, 378-84 (1985); Bryson & Macbeth, Public Nuisance, the Restatement (Second) of Torts, and Environmental Law, 2 ECOLOGY L.Q. 241 (1972); Grady, supra note 251; Rose-Ackerman, Dikes, Dams, and Vicious Hogs: Entitlement and Efficiency in Tort Law, 18 J. LEGAL STUD. 25 (1989); Wittman, First Come, First Served: An Economic Analysis of “Coming to the Nuisance,” 9 J. LEGAL STUD. 557 (1980).
E.g., Hawkins, ‘In and of Itself’: Some Thoughts on the Assignment of Property Rights in Nuisance Cases, 36 U. TORONTO FAC. L. REV. 209 (1978) (considers the Boomer paradigm with respect to criteria of efficiency and fairness); Ogus & Richardson, Economics and the Environment: A Study of Private Nuisance, 36 CAMBRIDGE L.J. 284 (1977) (summarizes the literature and analyzes its application to British nuisance law); Comment, Internalizing Externalities: Nuisance Law and Economic Efficiency, 53 N.Y.U. L. REV. 219 (1978) (discussing fairness and efficiency of RESTATEMENT (SECOND) OF TORTS §§ 826(b), 829A (1977) in relation to Copart Industries v. Consolidated Edison Co.).
With respect to the incentives to take precautions, Coase asserted that if the law failed to impose the costs of the conflict on the party who could prevent them or suffer them at the least cost, the parties would negotiate to shift the costs to the least-cost-avoider. Coase, Social Cost, supra note 250, at 2-8. For example, suppose that the defendant’s cost of abatement were less than the damages suffered by the plaintiff. If the defendant were held liable, he would abate because it would be cheaper to abate than to pay damages. If he were not liable, however, it would be in the plaintiff’s interest to pay the defendant a sum less than the amount of his own damages but greater than the defendant’s cost of abatement in order to induce the defendant to abate. See id. Conversely, if the cost of abatement were greater than the plaintiff’s cost of absorbing the damages, the defendant would not abate the pollution, regardless of the legal rule. If the defendant were held liable, paying the damages would be cheaper than abating the nuisance. Even if the plaintiff were entitled to an injunction, the defendant would offer the plaintiff an amount greater than the plaintiff’s anticipated pollution damages but less than the cost of abatement to induce the plaintiff to waive his right to injunctive relief. If the defendant were not liable, then enduring the damages would be less costly for the plaintiff than paying an amount sufficient to induce the defendant to abate the pollution. Thus, there would be no bargain for abatement. See id. With respect to allocative efficiency, Coase assumed that the direct cost of damage or damage liability was equivalent to the opportunity cost of a foregone payment from an adversary. See id. For example, a defendant would not distinguish between the direct cost of $1000 in damage liability (if liable) and the opportunity cost of an offer by the plaintiff to pay $1000 for the defendant to abate the pollution (if not liable). Both are real costs to the defendant, and both would, at least in theory, have the same impact on production decisions.
See, e.g., Aivazian & Callen, The Coase Theorem and the Empty Core, 24 J.L. & ECON. 175 (1981); Calabresi, Transaction Costs, Resource Allocation and Liability Rules--A Comment, 11 J.L. & ECON. 67 (1968); Coase, The Coase Theorem and the Empty Core: A Comment, 24 J.L. & ECON. 183 (1981) [hereinafter Coase, The Empty Core]; Cooter, supra note 251; De Alessi, The Economics of Property Rights: A Review of the Evidence, 2 RES. L. & ECON. 1 (1980); Demsetz, When Does the Rule of Liability Matter?, 1 J. LEGAL STUD. 13 (1972); Ellickson, Of Coase and Cattle: Dispute Resolution Among Neighbors in Shasta County, 38 STAN. L. REV. 623 (1986); Hoffman & Spitzer, Experimental Tests of the Coase Theorem with Large Bargaining Groups, 15 J. LEGAL STUD. 149 (1986); Kelman, Consumption Theory, Production Theory, and Ideology in the Coase Theorem, 52 S. CAL. L. REV. 669 (1979); Kelman, Spitzer and Hoffman on Coase: A Brief Rejoinder, 53 S. CAL. L. REV. 1215 (1980); Nutter, The Coase Theorem on Social Cost: A Footnote, 11 J.L. & ECON. 503 (1968); Regan, The Problem of Social Cost Revisited, 15 J.L. & ECON. 427 (1972); Spitzer & Hoffman, A Reply to Consumption Theory, Production Theory and Ideology in the Coase Theorem, 53 S. CAL. L. REV. 1187 (1980); Wellisz, On External Diseconomies and the Government-Assisted Invisible Hand, 31 ECONOMICA 345 (1964); White, Coase and the Courts: Economics for the Common Man, 72 IOWA L. REV. 577 (1987).
Coase himself questioned the relevance of the Coase Theorem: [W]hile consideration of what would happen in a world of zero transaction costs can give us valuable insights, these insights are, in my view, without value except as steps on the way to the analysis of the real world of positive transaction costs. We do not do well to devote ourselves to a detailed study of the world of zero transaction costs, like augurs divining the future by the minute inspection of the entrails of a goose. Coase, The Empty Core, supra, note 260 at 187.
For example, among the cases cited by Coase were Sturges v. Bridgman, 11 Ch. D. 852 (1879), and Cooke v. Forbes, 5 L.R.-Eq. 166 (1867). Although these cases potentially involved the defenses of coming to the nuisance and hypersensitivity, Coase did not directly discuss these doctrines; he simply noted that the judges had ignored certain aspects of the economic implications of these disputes. Coase, Social Cost, supra note 250, at 8-13.
Id. Calabresi considered three further economic arguments for enterprise liability. First, he noted the importance of insurance in many legal disputes. See id. at 506-07. Assuming that parties would attempt to purchase insurance against foreseeable risks, Calabresi pointed out that in certain situations one of the parties might be able to purchase insurance at a lower cost. He concluded that economic efficiency would be promoted by imposing the costs of the conflict on the least-cost-insurer. See id. Second, Calabresi analyzed the “spreading of losses” justification for enterprise liability, which posits that many small losses are preferable to one large one. See id. at 517-27. The argument for loss spreading has two independent bases: avoidance of the secondary dislocations (bankruptcy, unemployment, etc.) that can result from concentrated losses, and the assumption of declining marginal utility. Id. at 517. The assumption of declining marginal utility presumes that the more one has of anything, including money, the less one values having a bit more of it, and the less one has, the more one values the last unit lost or gained. Under this assumption, if a $10,000 loss were concentrated on a particular individual, she would become poorer, and would lose higher utility dollars than if the same $10,000 loss were spread over 10,000 identical people, whose $1 losses were of low utility dollars. See id. If we abandon the assumption that all persons are identical, then the loss-spreading justification depends upon the controversial alternative assumption that one can make interpersonal comparisons of utility. That is, even if we accept the premise that the loss of $10,000 at once would hurt X more than 10,000 times as much as the loss of $1 would hurt her, it does not follow that it would hurt X more than 10,000 times as much as the loss of $1 to ten thousand other individuals. See id. at 518. An individual can spread her loss by obtaining insurance, either first-party accident, medical and life insurance for the victims, or third-party liability insurance for the injurers. Imposing the cost on an enterprise will also spread a loss to consumers via higher prices, to workers via lower wages, and to suppliers via reduced purchases. See id. at 519-24. Although Calabresi saw some merit to the loss-spreading justification for enterprise liability, he asserted that loss spreading could be more effectively accomplished through direct schemes of social insurance than through rules of enterprise liability. See id. at 529-30. Finally, Calabresi considered the “deep pocket” justification for enterprise liability. See id. at 527-28. Because this argument depends entirely on the assumption of declining marginal utility coupled with the controversial assumption that one can make meaningful interpersonal comparisons of utility, Calabresi was less enthusiastic about the deep pocket justification. See id. Moreover, to the extent that the assumptions underlying the deep pocket argument had merit, they would be better served by a scheme of taxation and redistribution than by a rule of enterprise liability. Id. at 528.
Id. at 534-36. Calabresi noted that the criterion of loss spreading did not support the issuance of nuisance injunctions. Id. If nuisance damages were dispersed, then they were already being spread. If they were concentrated, then imposition of damage liability would spread the loss to consumers through higher prices without inflicting secondary dislocations on enterprises and their employees and suppliers.
Id. at 537. According to Calabresi, the only economic justification for balancing utility might come from loss-spreading theory, which would caution against imposing heavy damages on an important enterprise that might disrupt the industry or cause other disastrous secondary consequences. See id. at 538-39. Nevertheless, he concluded: [T]here are still many cases in which no really good reason exists for not charging an enterprise with “nuisance” injuries even though the enterprise is highly useful socially--cases in which the effect of charging such costs would not be disaster to the industry, but only higher prices in the long run. Id. at 539.
Michelman, Pollution as a Tort: A Non-Accidental Perspective on Calabresi’s Costs, 80 YALE L.J. 647 (1971) [hereinafter Michelman, Pollution as a Tort] (reviewing G. CALABRESI, supra note 273). Much of the work explicates Calabresi’s conceptual framework, including the terminology of “primary,” “secondary” and “tertiary” costs and the goals of “general deterrence” and “specific deterrence.” Id. at 649-66. The three categories of costs would now be referred to, respectively, as nuisance costs, secondary dislocations, and administrative costs. Michelman associated Calabresi’s concepts of general and specific deterrence with incentives created by decentralized markets and centralized collective decisions, but he suggested that these categories were not especially helpful; they have since passed out of circulation, so I will try to describe Michelman’s ideas without using this terminology.
Id. at 656-57. That is, to create appropriate incentives, liability must be assigned categorically (to drivers or pedestrians, to manufacturers or consumers), because individuals would be unable to estimate their potential exposure if liability were assigned on a case-by-case basis according to which party was the cheapest cost-avoider of the particular accident or conflict.
See id. The authors also noted a third category of “inalienability rules,” which limit or forbid the transfer of an entitlement. See id. at 1092-93. The authors viewed property and liability rules as closely related and linked in their application, but discussed inalienability rules separately. Id. at 1106.
Id. “An entitlement is protected by a property rule to the extent that someone who wishes to remove the entitlement from its holder must buy it from him in a voluntary transaction in which the value of the entitlement is agreed upon by the seller.” Id.
Id. at 1115-16 (citing Michelman, Pollution as a Tort, supra note 274, as an example of the traditional three-rule perspective). Under the third rule, the defendant has the right to continue the offending activity and cannot be compelled to relinquish that right except in a voluntary transaction at an agreed upon price.
Id. In their words: The very statement of these rules in the context of our framework suggests that something is missing. Missing is a fourth rule representing an entitlement in [defendant] to pollute, but an entitlement which is protected only by a liability rule. The fourth rule, really a kind of partial eminent domain coupled with a benefits tax, can be stated as follows: [Plaintiff] may stop [defendant] from polluting, but if he does he must compensate [ [ [defendant]. Id. A similar compensated injunction remedy had been proposed three years earlier in a student note. See Note, An Economic Analysis of Land Use Conflicts, 21 STAN. L. REV. 293, 315 (1969) (“In many nuisance cases the proper solution is to have an injunction imposed on one party and to have that party win damages.”).
Id. at 1119-20. Under rule two, the defendant would abate the pollution if its damage liability exceeded the value of continuing to pollute (i.e., the cost of abatement). Under rule four, the plaintiff would pay the defendant to abate the pollution if the damages exceeded the defendant’s benefit from polluting.
Id. at 184-85, 494 P.2d at 706-07. This holding itself was significant. Most states do not recognize “coming to the nuisance” as a defense. See Annotation, “Coming to Nuisance” as a Defense or Estoppel,42 A.L.R.3D 344 (1972). See also infra notes 476-81 and accompanying text (discussing temporal priority and coming to the nuisance).
See, e.g., O. BROWDER, R. CUNNINGHAM, G. NELSON, W. STOEBUCK & D. WHITMAN, BASIC PROPERTY LAW 127 (5th ed. 1989); R. CHUSED, supra note 158, at 1123; J. CRIBBET, C. JOHNSON, R. FINDLEY & E. SMITH, supra note 158, at 727; J. DUKEMINIER & J. KRIER, supra note 158, at 811; Coquillette, supra note 13, at 761; Cribbet, Concepts in Transition: The Search for a New Definition of Property, 1986 U. ILL. L. REV. 1; Currie, State Pollution Statutes, 48 U. CHI. L. REV. 27 (1981); Ellickson, Alternatives to Zoning: Covenants, Nuisance Rules, and Fines as Land Use Controls, 40 U. CHI. L. REV. 681 (1973) (discussed infra notes 311-33 and accompanying text); Polinsky, Resolving Nuisance Disputes, supra note 157; Rabin, Nuisance Law, supra note 149 (discussed infra notes 334-53 and accompanying text); Zacharias, The Politics of Torts, 95 YALE L.J. 698 (1986).
He reached this conclusion through application of four guidelines: Knowledge (assign the risk to the party with lower information costs); Organization (assign the risk to party with lower organization costs, usually the party with fewest members); Control (assign the risk to party in control of properties, who can prevent harms most efficiently); and Simplicity of Rules (minimizing cost of determining rights distribution). See id. at 724-28.
Id. at 728-33. The difference between the negligence standard and Ellickson’s proposed nuisance standard is that in negligence the act is judged by the surrounding circumstances, whereas in neighborliness, an alleged nuisance for which damage is the sole relief should not be judged with reference to the local environment. Id. at 732. Such a “block by block assessment of neighborliness” would prove administratively difficult and expensive, and thus a broader “metropolitan” or community standard should be employed. Id.
Id. at 731-32. Ellickson suggested that four affirmative defenses be recognized. Two defenses would protect the defendant’s liberty interests in “freedom of expression” and “equality of opportunity.” Id. at 748-51. The other two defenses--“hypersensitivity” and “failure to mitigate damages” (which would include “coming to the nuisance”)--were justified primarily on grounds of efficiency and secondarily on the basis of fairness. Id. at 751-61.
See id. at 739-48. First, a justification for injunctions based on the idea that market values do not reflect the subjective losses of plaintiffs did not persuade Ellickson because he proposed bonus payments, based on legislated schedules, to compensate for these subjective values. See id. at 739-40. Second, Ellickson rejected “the moral assertion that a landowner should not be able . . . to force others to exchange basic property rights for damages.” Id. at 740. He noted that such exchanges have always been allowed, and he allowed for exceptions to his “no injunction rule” when plaintiff’s personal safety or fundamental liberties were at issue. See id. at 740-41. Third, Ellickson found unconvincing the rationale that injunctions are necessary because of judgment-proof defendants. Id. at 741. He proposed a new priority rule in which judgment creditors would take priority over all mortgages, and further noted that “[b]y definition [defendant] landowners have assets on which a plaintiff could levy to receive cash, or at least the termination of defendant’s ownership.” Id. Finally, Ellickson analyzed the premise that injunctions are more efficient because of the administrative costs of damage calculation, assessment, and dispersal. Id. at 742-48. While he acknowledged that administrative costs are dependent on the nature of the situation, Ellickson concluded that injunctions also create administrative problems that prevent them from necessarily being superior. See id.
Id. at 739 n.203 (“If the external costs of an activity exceed its internal benefits to the defendant, the balancing test currently entitles the plaintiff to an injunction. Rule four would continue to entitle him to a ‘free’ injunction in this situation.”). See id. at 741 n.212, 745 n.222, 746.
Id. at 746. Ellickson continued: “In that situation the defendant is not entitled to compensation under rule four; an appropriate restriction on his activities would, if anything, increase the value of his land by reducing his nuisance liabilities.” Id.
Rabin, Nuisance Law, supra note 149, at 1309. Rabin reasoned that although “considerations of utility, fairness and efficiency sometimes may support conflicting results,” both efficiency and fairness tend to correlate directly, though not perfectly, with utility. Id. at 1308.
See id. at 1321-29. Rabin criticized the Restatement (Second) of Torts for not distingishing “between one who merely acquired property after the establishment of a nearby nuisance and one who institutes a new use of his property at such a time.” Id. at 1326. The new owner should have the same priority as the old owner, or else the free alienability of land would be impinged. Id. at 1326-27.
See id. at 1314-16. Rabin stated that “[a]ny ‘solution’ that merely places the burden on the least-cost-avoider makes efficiency the only criterion and ignores considerations of fairness.” Id. at 1315.
See id. at 1330-31. Rabin provided no authority for his assertion that the comparative hardship doctrine requires that the defendant’s cost be entirely disproportionate to the plaintiff’s damages in order to warrant denial of injunctive relief. The Restatement (Second) of Torts’ relative hardship doctrine does not require any particular degree of disparity, and Rabin did not cite any cases in which a court issued an inefficient injunction because the defendant’s costs were only slightly greater than the plaintiff’s benefits from the injunction. SeeRESTATEMENT (SECOND) OF TORTS § 941 (Tent. Draft No. 19, 1973).
See Rabin, Nuisance Law, supra note 149, at 1330-31, 1335-36. Rabin would, however, allow injunctive relief in exceptional cases involving either egregious conduct by the defendant or a class of injured parties so diffused that damages would be impractical. Id. at 1335.
Epstein, Nuisance Law: Corrective Justice and its Utilitarian Constraints, 8 J. LEGAL STUD. 49 (1979). The article focused entirely on nuisance entitlements and did not address the question of remedies.
See id. at 69-73. He stated that these defenses were not justified under principles of corrective justice because generally they did not involve any violation by the plaintiff of the defendant’s rights but merely reflected the “calculus of [societal] costs and benefits.” Id. at 69. When the plaintiff’s conduct was dominant over the defendant’s, however, such affirmative defenses should be recognized to acknowledge the true source of the nuisance. Id. at 70.
See id. at 82-94. These rules are inconsistent with Epstein’s theory of nuisance liability, so that Epstein was forced to explain them in terms of utilitarian constraints on his ethical theory. Other commentators have argued that these doctrines are justified by principles of corrective justice, and Epstein’s own arguments could be viewed as deriving from considerations of fairness rather than from utilitarian constraints. Cf. Michelman, Just Compensation, supra note 337 (describing relationships among considerations of efficiency, utility and fairness with respect to just compensation for regulatory takings).
See Polinsky, Controlling Externalities and Protecting Entitlements: Property Right, Liability Rule, and Tax-Subsidy Approaches, 8 J. LEGAL STUD. 1 (1979); Polinsky, On the Choice Between Property Rules and Liability Rules, 18 ECON. INQUIRY 233 (1980); Polinsky, Resolving Nuisance Disputes, supra note 157. The following discussion is based on Resolving Nuisance Disputes, which is the most accessible of the three. See also A. POLINSKY, AN INTRODUCTION TO LAW AND ECONOMICS 17-25 (2d ed. 1989).
See id. at 1083-85. Polinsky considered the goals of efficiency and distributional equity to be subsumed within the broader concept of “social welfare.” Id. at 1086. It is curious that Polinsky considered the goal of distributional equity but did not directly address the question of fairness with respect to principles of corrective justice between injurer and victim. See id. at 1080 n.11.
Id. at 1088-92. By cooperative bargaining, Polinsky meant that the parties, each acting entirely out of self-interest, would maximize their joint benefits by exploiting all potential gains from trade. See id. at 1088-89.
See id. at 1106-09. Polinsky pointed out that the analysis of many victims “may be of limited relevance,” because if the interests of the victims could be aggregated in a class action, the single-victim analysis would apply. Id. at 1109. On the other hand, if their interests could not be aggregated, the appropriate solution might involve public regulation. Id.
See id. at 1111-12. For example, if efficiency were of paramount concern and the court had relatively accurate information about the victim’s damages, then the damage remedy would be superior. A different situation would present itself, however, if the court lacked information about both the injurer’s costs and profits and the victim’s damages, but had reason to believe that the injurer’s efficiency loss from too little activity was small relative to the efficiency loss from excessive activity. In such a case, the injunctive remedy may be more efficient. Also, if there were a distributional preference for the victim, the injunctive remedy would be better.
Id. at 212. Although the article was not primarily concerned with the determination of nuisance entitlements, Travalio employed two illustrative paradigms in which he asserted that the right should be assigned to the first user. He also endorsed a coming to the nuisance defense whenever the defendant could not reasonably have foreseen that the plaintiff might locate a conflicting use nearby. Id. at 213-14.
See R. POSNER, ECONOMIC ANALYSIS, supra note 251, § 1, at 7, §§ 3.5-3.8, at 42-62; R. POSNER, ECONOMIC ANALYSIS OF LAW §§ 3.4-3.7, at 34-52, § 3.12, at 58-62 (2d ed. 1977); R. POSNER, ECONOMIC ANALYSIS OF LAW, supra note 247, §§ 2.4-2.7, at 16-30, § 3.12, at 36-39. See also W. LANDES & R. POSNER, supra note 251, at 29-53; R. POSNER, TORT LAW, supra note 158.
W. LANDES & R. POSNER, supra note 251, at 49 & n.29; see also R. POSNER, ECONOMIC ANALYSIS, supra note 251, § 3.7, at 56-57 (approving of balance of utilities test in context of easements for airplane noise).
W. LANDES & R. POSNER, supra note 251, at 45-46; R. POSNER, ECONOMIC ANALYSIS, supra note 251, § 3.8, at 62 & n.5. He suggested, however, that transaction costs are never low in land use conflicts. See id. at 54. Multiple party disputes engender problems of communication, organization, holdouts and free riders, while strategic behavior under bilateral monopoly impedes resolution of two-party disputes. See id. § 3.7, at 54-55, § 4.11, at 119.
Id. Even if more effective or less costly abatement methods were to become available, the defendant essentially would possess a perpetual easement to inflict nuisance damages. See R. POSNER, ECONOMIC ANALYSIS, supra note 251, § 3.7, at 57.
R. POSNER, ECONOMIC ANALYSIS, supra note 251, § 3.7, at 57 (citing Baxter & Altree, Legal Aspects of Airport Noise, 15 J.L. & ECON. 1 (1972)). Posner said that this solution would create a disincentive for plaintiffs to take precautionary measures, however, because any measure that would reduce their damages would also reduce the price they could expect to receive for the next time-limited easement. Id.
Defense of this position is beyond the scope of this Article. Other authors share this view, however. See Epstein, supra note 354, at 49-50; Rabin, Nuisance Law, supra note 149, at 1309; Travalio, supra note 398, at 216-17. See also Farber, supra note 157, at 19-20 (“[t]his argument is largely based on fairness rather than economics . . . . the ethical norms of community and reciprocity that underlie nuisance law”); Hawkins, supra note 255 (arguing that courts should resolve disputes according to the ethical considerations of the dispute, rather than economic principles). For a general assertion of the primacy of corrective justice over economic efficiency in tort law, see Lewin, Is Justice Implicitly Efficient?, 38 J. LEGAL EDUC. 423 (1988) (reviewing W. LANDES & R. POSNER, supra note 251).
Epstein advocated a rule of strict liability based upon a simple causal paradigm: A is liable for causing an invasion of B’s property that interferes with B’s use and enjoyment thereof. See Epstein, supra note 354, at 65-69. Ellickson would require fault in the sense of a departure from a standard of normalcy or neighborliness. See Ellickson, supra note 310, at 728-33. Rabin also would require fault, but he would extend the term beyond its ordinary meaning of intentional wrongdoing, recklessness, or negligence, to include abnormally dangerous conduct or the knowing infliction of serious harm without compensation. See Rabin, Nuisance Law, supra note 149, at 1317-18. If fault is extended to encompass “conditional fault”--failure to pay for damage inflicted pursuant to a qualified privilege--then the distinction between fault and no-fault liability becomes one of semantics rather than substance.
RESTATEMENT (SECOND) OF TORTS § 829A (1977) (emphasis added). As indicated in § IV, compensation principle proponents disagree as to the essence of the underlying normative theory. James spoke of “incomplete privilege,” while Keeton referred to “conditional fault.” See supra notes 174-80 and accompanying text. Although the inclusion of “should” begs the question somewhat, the flexibility of the compensation principle makes it preferable to Epstein’s more determinate physical invasion test. See Epstein, supra note 354, at 53-54. A strict physical invasion test would be both too narrow, exempting from liability a visual nuisance or interference with light, air, or view, and too broad, precluding a defense based on the plaintiff’s hypersensitivity or the defendant’s temporal priority. Epstein himself qualified his simple paradigm with certain “utilitarian constraints.” See supra text accompanying notes 361-69.
See supra note 239 and accompanying text. Although the nuisance provisions of the Restatement (Second) have been adopted in only a minority of jurisdictions, the compensation principle is implicit in the reasonableness test employed by most courts.
Economic proponents of the balance of utilities test include Richard Posner. See supra text accompanying notes 408-10. In order to assure that nuisance law imposed the costs of land use conflicts on the least-cost-avoider, however, the law would have to be phrased in economic terms, requiring courts to evaluate the least-cost solution on a case-by-case basis. For a proposal in this vein, see Woj, Property Rights Disputes: Current Fallacies and a New Approach, 14 J. LEGAL STUD. 411 (1985) (advocating that both parties state the value they attach to the right, with the person stating the higher value obtaining the right but paying the stated cost to the other party; in effect, the entitlement would be assigned to the party who valued it less, but, protected only by a liability rule and thus subject to a forced sale to the party who valued it more). Such a legal standard is so foreign to our legal system that it does not warrant serious consideration.
The following discussion of incentives presumes that one or both parties could take cost-justified precautions to reduce the level of nuisance damages; the “least-cost-avoider” is the party who can do so at lower cost. The present discussion does not address situations in which the least-cost solution would be for the plaintiff to absorb the nuisance damages without either party taking additional precautions; the possibility of inefficient precautions in these situations is relevant to the choice between injunctive relief and damages. See infra text accompanying notes 431-40.
Ellickson, supra note 310, at 742; Rabin, Nuisance Law, supra note 149, at 1331-36. But see Farber, supra note 157, at 15 (discussing empirical research which suggests that risks of strategic behavior have been overestimated; “[Hoffman and Spitzer] found that groups of up to forty ‘victims’ had little difficulty in organizing and negotiating mutually advantageous bargains with ‘polluters.”’ (citing Hoffman & Spitzer, Experimental Tests of the Coase Theorem with Large Bargaining Groups, 15 J. LEGAL STUD. 149 (1986) and Hoffman & Spitzer, Experimental Law and Economics: An Introduction, 85 COLUM. L. REV. 991 (1985))).
Ellickson, supra note 310, at 742; Rabin, Nuisance Law, supra note 149, at 1336. But see Farber, supra note 157, at 16 n.65 (“I believe that these frictional costs are worth incurring in order to achieve a more just result. (It is also unclear that the transaction costs of litigating or settling a damage suit will be any lower.)”). Proponents of the damage remedy have also complained that a plaintiff could employ an injunction to “extort” an undeserved “windfall” through negotiations. This argument was summarily refuted by Polinsky. If the plaintiff has received an injunction but the cost of abating defendant’s injury exceeds the amount of plaintiff’s injury, then there are possible gains from negotiating a payment in exchange for the relinquishment of plaintiff’s injunction right. Polinsky, Resolving Nuisance Disputes, supra note 157, at 1077-78. The plaintiff in such a transaction is not engaged in extortion, but is selling a legal right. Id. By receiving a windfall, the plaintiff has simply succeeded in obtaining a portion of the gains from trade. Id. at 1110. Furthermore, as between the two parties, the plaintiff would seem to be more deserving of these gains, because the defendant is violating the plaintiff’s property rights.
See Polinsky, Resolving Nuisance Disputes, supra note 157 at 1110-11 (discussed supra notes 395-96 and accompanying text); Travalio, supra note 398, at 230-48 (discussed supra notes 402-03 and accompanying text). See also Farber, supra note 157, at 14-16 (damage awards fail to compensate for “injury to the victim’s dignity as a member of the community” and do not measure psychological harms, health hazards, or loss of “consumer surplus”).
Polinsky, Resolving Nuisance Dipsutes, supra note 157, at 1111; see Travalio, supra note 398, at 248-51; cf. Farber, supra note 157, at 16-17 (arguing on fairness grounds that “a general rule of injunctive relief is warranted” because damages are not fully compensatory and the risk of inefficient injunctions is overestimated).
In addition to discretion with respect to issuance of injunctions, a court has the power to issue an injunction but postpone its effect, thereby giving the defendant adequate time to abate the nuisance without substantial disruption; the defendant might or might not be held liable for damages during the grace period. See Ogus & Richardson, supra note 255, at 311-14 (discussing cases); Travalio, supra note 398, at 247-48. This option was considered by the New York Court of Appeals in Boomer, but it was not employed because of the court’s pessimism concerning the prospect of substantial advances in future dust control technology. See Boomer v. Atlantic Cement Co., 26 N.Y.2d 219, 225-26, 257 N.E.2d 870, 873, 309 N.Y.S.2d 312, 316-17 (1970).
Cf. Farber, supra note 157, at 16-17 & n.76 (because of the insufficiency of damages, “a general rule of injunctive relief is warranted”; plaintiffs should be denied an injunction based on the economic value of the defendant’s activity “only where the balance tilts very strongly against the plaintiffs”).
Even if the efficiency losses from nuisance injunctions outweighed the efficiency gains, a general presumption in favor of nuisance injunctions would be warranted by considerations of justice. See Farber, supra note 157, at 16-17.
The court in Boomer proposed to avoid any ambiguity in this regard by instructing the trial court on remand to include an explicit provision in its judgment that the award constituted compensation for a servitude on the plaintiffs’ land. Id.
447 R. POSNER, ECONOMIC ANALYSIS, supra note 251, § 3.7, at 57 (citing Baxter & Altree, supra note 416).
448 Id. 449 The trial court in Boomer employed a similar approach. It computed both the plaintiffs’ temporary damages and their permanent damages, awarding only temporary damages but giving the parties thirty days in which to agree to accept the permanent damages instead. Boomer v. Atlantic Cement Co., 55 Misc. 2d 1023, 1025-27, 287 N.Y.S.2d 112, 114-16 (Sup. Ct. 1967), aff’d,30 A.D.2d 480, 294 N.Y.S.2d 452 (1968), rev’d,26 N.Y.2d 219, 257 N.E.2d 870, 309 N.Y.S.2d 312 (1970). 450 SeeRESTATEMENT (SECOND) OF TORTS § 930 (1977). 451 Id. § 930(1). 452 Id. § 930(2). 453 Prosser, Nuisance Without Fault, 20 TEX. L. REV. 399, 418 (1942). 454 Rabin, Nuisance Law, supra note 149, at 1299, 1311 n.32. 455 Lewin, Comparative Nuisance, supra note 2. 456 Although derived from concepts of comparative fault, comparative responsibility is broader. It encompasses acts and omissions by both parties that would not constitute “fault” as that word is generally used in American tort law. Two problems arise when the term “fault” is used to analyze nuisance disputes. First, there is some question as to whether the term should be applied to the defendant’s conduct insofar as nuisance law may impose liability without fault. Second, to the extent that apportionment is premised on the plaintiff’s being hypersensitive or coming to the nuisance, the plaintiff would not be at fault within the ordinary meaning of the word. In lieu of “comparative fault,” I have employed the term “comparative responsibility,” following the usage of William McNichols and Richard Wright. See McNichols, Should Comparative Responsibility Ever Apply to Intentional Torts?, 37 OKLA. L. REV. 641, 642 n.4 (1984); Wright, Allocating Liability Among Multiple Responsible Causes: A Principled Defense of Joint and Several Liability for Actual Harm and Risk Exposure, 21 U.C. DAVIS L. REV. 1141, 1145 (1988). “Responsibility” has a moral as well as a legal connotation, which preserves the emphasis on principles of corrective justice and extends the consideration beyond traditional notions of “fault.” 457 Coons, Approaches to Court Imposed Compromise--The Uses of Doubt and Reason, 58 NW. U.L. REV. 750 (1964) [hereinafter Coons, Approaches to Court Imposed Compromise]. See also Coons, Compromise as Precise Justice, 68 CALIF. L. REV. 250 (1980) (elaborating on issues raised in the earlier article). 458 Coons, Approaches to Court Imposed Compromise, supra note 457, at 750. 459 Id. at 751. Coons stated: So long as the judge is required to choose winner and loser on an all-or-nothing basis, “sound” doctrine does not provide him the variety of alternatives logically, if rarely, necessary to achieve perfect adjustment in hard cases. . . . The law appears eternally bound to an unsavory choice between a formless and unpredictable qadi justice on the one hand and, on the other, universal rules which falsify the realities of particular existential situations. Under a system of winner-take-all the one-sided result reached upon principle in the close case must continue to trouble the conscience of the law. Only the power to adjust quantitatively the rights and responsibilities of the parties could provide the court with sufficient alternatives to face this problem directly. Id. (emphasis supplied). 460 Id. at 753. 461 Id. at 774. 462 Id. at 775. 463 Englard, The System Builders: A Critical Appraisal of Modern American Tort Theory, 9 J. LEGAL STUD. 27, 27 (1980). 464 Note, Comparative Negligence, 81 COLUM. L. REV. 1668, 1668 (1981); see PROSSER & KEETON, supra note 8, § 1. 465 See generally Englard, supra note 463 (critical analysis of traditional corrective justice framework). 466 The various formulations of this concept are redundantly recited in the legal encyclopedias. See58 AM. JUR. 2D Nuisances § 23, at 685-86 (1989); 66 C.J.S. Nuisances § 8, at 741-42 (1950). 467 Compare Nair v. Thaw, 156 Conn. 445, 242 A.2d 757 (1968) (operation of commercial air conditioner in private home held to be a nuisance; nighttime operation was enjoined, and plaintiffs received $3500 in damages) with Davis v. Levin, 138 So. 2d 351 (Fla. Dist. Ct. App. 1962) (defendant’s residential air conditioner was not a nuisance). With regard to coming to the nuisance, compare Pendoley v. Ferreira, 345 Mass. 309, 187 N.E.2d 142 (1963) (defense not applied to plaintiffs who purchased land near existing pig farm, though defendant’s conduct only became unreasonable with the change to a residential district) with Spur Industries v. Del E. Webb Development Co., 108 Ariz. 178, 494 P.2d 700 (1972) (en banc) (defense applied to developer who purchased land near existing feedlot in agricultural area; plaintiff obtained an injunction based on the interests of third parties, but its issuance was conditioned on plaintiff’s indemnifying defendant for its cost of relocation). With regard to sensitivity to light, compare The Shelburne, Inc. v. Crossan Corp., 95 N.J. Eq. 188, 122 A. 749 (Ch. 1923) (injunction granted against illumination after midnight of defendant’s large electric sign which disturbed guests in plaintiff’s hotel) with Belmar Drive-In Theatre Co. v. Illinois State Toll Highway Commission, 34 Ill. 2d 544, 216 N.E.2d 788 (1966) (drive-in theater’s special vulnerability to light constituted a hypersensitive use as a matter of law, so plaintiff had no cause of action against operators of new highway service area). With regard to the need for light, compare Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc., 114 So. 2d 357 (Fla. Dist. Ct. App. 1959) (per curiam) (construction of addition that would cast shadow on plaintiff’s pool not enjoined because no legal right to light and air), cert. denied,117 So. 2d 842 (1960) with Prah v. Maretti, 108 Wis. 2d 223, 321 N.W.2d 182 (1982) (plaintiff’s special need for sunlight for solar heating panels was not hypersensitive use as a matter of law). With regard to contributory negligence, compare Copart Industries v. Consolidated Edison Co., 41 N.Y.2d 564, 362 N.E.2d 968, 394 N.Y.S.2d 169 (1977) (no error found in jury instructions that dealt with both intentional and negligent nuisance and stated that contributory negligence was a defense to the latter without making clear that it was not a defense to the former; plaintiff, whose car storage and preparation business was ruined by paint discoloration and pitting of customer’s cars caused by sulfur oxides emitted by defendant’s nearby power plant, received no compensation for the $1.3 million in losses) with LeRoy Fibre Co. v. Chicago, Milwaukee & St. Paul Railway, 232 U.S. 340 (1914) (contributory negligence held not a defense to a nuisance arising from negligence, so plaintiff who stored flax near railroad tracks recovered entire loss from fire damage caused by railroad’s negligent emission of live cinders). 468 As indicated, “responsibility” is somewhat broader than “fault” in that it does not necessarily involve moral blameworthiness in a traditional sense. See supra note 456. The term itself begs the question of the criteria to be used in apportioning responsibility; the factors involved in the determination of comparative responsibility are discussed infra note 470. 469 There would be no reason for any apportionment of nuisance damages in a case such as Boomer, for example. 470 Among the factors to be considered in determining comparative responsibility would be the following: the intent and motives of each party; the level of risk created to the plaintiff and to third parties; the character, duration, and severity of the actual damages to the plaintiff and to third parties; the costs to the litigants and to third parties of avoiding or preventing the damages or relocating or discontinuing either activity; the foreseeability of the conflict, including whether either party had knowledge, notice, or an opportunity to discover the potential conflict prior to its existence; the remoteness of the causal relationship; priority in time; the suitability of each activity to the particular location; whether the activity being interfered with was hypersensitive to injury; whether the offending activity was customary or usual; community standards reflecting the relative social value of the activities; and whether the benefit of each activity was public or private. This list is not meant to be exclusive, nor would there necessarily be universal agreement as to the appropriateness of each of these factors. Most of them appear in some form in the Restatement (Second) of Torts. 471 Lewin, Comparative Nuisance, supra note 2, at 1043-46. In an earlier article, I argued that a rule of pure comparative fault is both more fair and more efficient than any rule of modified comparative fault. Lewin, Comparative Negligence in West Virginia: Beyond Bradley to Pure Comparative Fault, 89 W. VA. L. REV. 1039, 1062-77 (1987). To summarize, modified comparative fault results in a complete denial of compensation to plaintiffs whose losses were caused in part by the fault of the defendants. The modified rule is unfair insofar as it immunizes culpable defendants from all liability, while leaving partially culpable plaintiffs to bear a disproportionate share of the losses. The modified rule is inefficient in that certain defendants do not pay for the damages they cause, in effect receiving a subsidy from non-recovering plaintiffs. The modified rule also generates added administrative costs in determining whether the plaintiff had exceeded the applicable fault threshold, thereby increasing the cost of litigation, as well as impeding negotiated settlements due to uncertainty as to the outcome. In short, modified comparative fault suffers, to a lesser degree, from all of the defects of the contributory negligence rule. A rule of pure comparative fault, by contrast, is both fair and efficient. The losses are divided fairly in proportion to the fault of each party. Each actor must take its share of these costs into account with regard to incentives and allocative efficiency. The rule also simplifies litigation and promotes settlement of disputes. Although a majority of comparative negligence statutes embody the modified form, most jurists and scholars favor pure comparative fault. 472 See supra notes 293-302 and accompanying text. 473 See supra notes 303-09 and accompanying text. 474 In certain cases the price of a compensated injunction should be refined further. For fairness and efficiency, any measurable costs that the nuisance inflicted on third parties should be offset against the price of a compensated injunction. If the interests of the public or third parties strongly favored the issuance of an injunction, the price might appropriately be determined by multiplying the plaintiff’s share of responsibility by the amount of his own damages, which could be far less than the price if measured by the defendant’s net cost of abatement minus damage liability. For a more complete explanation of how to determine the price of a compensated injunction, see Lewin, Comparative Nuisance, supra note 2, at 1052-53. 475 Although the Coase Theorem suggests that the cost would be considered by both parties as a result of negotiations between them, in practice the existence of substantial transaction costs makes it unlikely that the loser would be able to bargain with the winner. Furthermore, the uncertainty of nuisance law makes it unlikely that either party would perceive an appropriate ex ante share of expected liability for these costs. 476 See, e.g., Berger, supra note 254, at 378-81; Hawkins, supra note 255, at 216-17; Rabin, Nuisance Law, supra note 149, at 1321-29. 477 See, e.g., Hawkins, supra note 255, at 216-17; Rabin, Nuisance Law, supra note 149, at 1321-29; Travalio, supra note 398, at 214. Cf. Michelman, Just Compensation, supra note 337 (just compensation for regulatory “takings”). But see Epstein, supra note 354, at 72-73 (arguing that corrective justice does not warrant a coming to the nuisance defense). 478 See Berger, supra note 254, at 378-84; Wittman, supra note 254, at 557. 479 Second users already know their own intended use and can easily ascertain the identity of all property owners in the area and inquire about their actual or intended uses. They can then either avoid potential conflicts by locating elsewhere or else negotiate an amicable resolution of the potential conflict through the purchase or sale of an appropriate servitude. First users, on the other hand, cannot learn the identities of potential second users who have not yet purchased property in the vicinity, and they would have no feasible means of anticipating all of the potential conflicting uses of adjacent property. It would not be economical for a potential first user to purchase servitudes from all neighboring landowners, especially if he believed that the location was more suitable for his intended use than for most of the anticipated conflicting uses. In the absence of protection based on temporal priority, first users would be subject to the risk of extortion by neighbors or others who threatened to commence potentially sensitive or offensive activities on adjacent land. 480 See, e.g., Berger, supra note 254, at 378-84, 388; Ellickson, supra note 310, at 758-61; Rabin, Nuisance Law, supra note 149, at 1321-29; Wittman, supra note 254, at 558; Note, An Economic Analysis of Land Use Conflicts, 21 STAN. L. REV. 293, 303-09 (1969). Cf. Michelman, Just Compensation, supra note 337 (concerning just compensation for regulatory “takings”). 481 According to the Restatement (Second) of Torts § 840D, coming to the nuisance is merely “a factor to be considered in determining whether the nuisance is actionable.” RESTATEMENT (SECOND) OF TORTS § 840D (1977). Although courts generally are unreceptive to the coming to the nuisance label, the assumption of risk defense is available in nuisance actions based on negligence or strict liability. Id. §§ 496A-496G (1964) (negligence); id. § 523 (1976) (abnormally hazardous activity). Although assumption of risk is not a defense to an intentional nuisance, the defense of “consent” may apply. Id. §§ 892, 892A (1977). If the nuisance arises from negligence, the defendant’s temporal priority might result in an apportionment of nuisance costs under principles of comparative negligence. Contributory or comparative negligence does not apply, however, in actions based on intentional nuisance or strict liability for abnormally dangerous activities, although apportionment may obtain in such cases under the doctrine of avoidable consequences. Id. § 918. 482 See supra note 467-68 and accompanying text. 483 As a second user, the hypersensitive user can minimize potential conflicts by electing not to locate in proximity to incompatible activities. Those engaged in potentially offensive activities, on the other hand, have a limited capacity to anticipate the subsequent arrival of hypersensitive users. 484 See supra note 481 and accompanying text; see, e.g., Copart Indus. v. Consol. Edison Co., 41 N.Y.2d 564, 362 N.E.2d 968, 394 N.Y.S.2d 169 (1977) (judgment for defendant affirmed despite confusing instructions that set forth both intentional nuisance and negligent nuisance theories but informed jury that contributory negligence only applied to the latter). 485 See Lewin, Comparative Nuisance, supra note 2, at 1076, 1079-88. 486 Id. at 1076. See, e.g., Hylton v. Shaffer’s Market, Inc., 343 A.2d 627 (Del. Super. Ct. 1975); Taylor v. City of Cincinnati, 143 Ohio St. 426, 55 N.E.2d 724 (1944); PROSSER & KEETON, supra note 8, § 78, at 552; Note, Nuisance: Contributory Negligence or Assumption of Risk as Defense, 28 TENN. L. REV. 561, 565-68 (1961). 487 Lewin, Comparative Nuisance, supra note 2, at 1077. See, e.g., Floyd v. City of Albany, 105 Ga. App. 31, 123 S.E.2d 446 (Ct. App. 1961) (public nuisance); Sandifer Motors, Inc. v. City of Roeland Park, 6 Kan. App. 2d 308, 628 P.2d 239 (Ct. App. 1981); Hall v. Michigan Dep’t of Highways & Transp., 109 Mich. App. 592, 311 N.W.2d 813 (1981) (public nuisance). Cf. Wilhelm v. City of Great Falls, 225 Mont. 251, 732 P.2d 1315 (1987) (contributory negligence defense to nuisance arising from negligence); Schiro v. Oriental Realty Co., 272 Wis. 537, 76 N.W.2d 355 (1956) (same). 488 Lewin, Comparative Nuisance, supra note 2, at 1079-84. See, e.g., Honeywell, Inc. v. Trend Coin Co., 449 So. 2d 876 (Fla. Dist. Ct. App. 1984) (comparative negligence no defense to intentional nuisance), aff’d in part and rev’d in part on other grounds,487 So. 2d 1029 (Fla. 1986) (per curiam); Fitzgerald v. Young, 105 Idaho 539, 670 P.2d 1324 (Ct. App. 1983) (same); Melendres v. Soales, 105 Mich. App. 73, 306 N.W.2d 399 (1981) (same; public nuisance); Branch v. Western Petroleum, Inc., 657 P.2d 267 (Utah 1982) (comparative negligence inapplicable because the defendant’s nuisance was subject to strict liability as an abnormally dangerous activity and as a statutory violation).
Kentucky: Louisville Ref. Co. v. Mudd, 339 S.W.2d 181, 186-87 (Ky. 1960) (“the existence of a nuisance must be ascertained on the basis of two broad factors, neither of which may in any case be the sole test to the exclusion of the other: (1) the reasonableness of the defendant’s use of his property, and (2) the gravity of harm to the complainant. Both are to be considered, in the light of all the circumstances of the case, including the lawful nature and location of the defendant’s business, the manner of its operation, and such importance to the community as it may have; the kind, volume, time and duration of the particular annoyance; the respective situations of the parties; and the character (including applicable zoning) of the locality.”). See also Louisville & Jefferson County Air Bd. v. Porter, 397 S.W.2d 146, 150-51 (Ky. 1965) (directed verdict should have been granted because defendant’s conduct was reasonable and plaintiff’s damages were not unreasonable); Radcliff Homes, Inc. v. Jackson, 766 S.W.2d 63, 66 (Ky. Ct. App. 1989) (defendant’s use may be unreasonable if it unreasonably injures the plaintiff).
IV. Louisiana Louisiana’s unique law of nuisance is based on its Civil Code. SeeLA. CIV. CODE ANN. arts. 667-669 (West 1980); id. art. 2315 (West Supp. 1990). See also Yiannopoulos, Civil Responsibility in the Framework of Vicinage: Articles 667-69 and 2315 of the Civil Code, 48 TUL. L. REV. 195 (1974) (analyzing Louisiana’s law of civil responsibility).