Before proceeding, a word about methodology may be warranted. In line with a venerable tradition of common law torts scholarship, including early scholarship on Palsgraf, this Article makes extensive use of hypothetical cases.60 Such cases can help to elicit the structure of the common moral sensibilities and convictions embedded in tort doctrine, and thereby to illuminate the law’s underlying moral commitments. The history of Palsgraf itself supplies a vivid demonstration of this point. Two days after Palsgraf was argued in the Appellate Division of the New York Supreme Court, a distinguished group of torts scholars and judges, convened by the American Law Institute (ALI), met to discuss a hypothetical case strikingly similar to the facts of Palsgraf.61 The case was offered for discussion (independently, it seems) by Professor Francis Bohlen, the reporter for the First Restatement of Torts.62 Among the luminaries present at this discussion was Cardozo.63 In the meeting’s transcript, we find Cardozo’s skeletal articulation of the moral account of tort liability that he would later defend in Palsgraf.64 We also find the equally distinguished jurist Learned Hand offering a skeletal articulation of something like the competing moral account of tort liability that I defend here.65 It is plausible to surmise that this discussion influenced how Palsgraf was decided, and thereby had a considerable effect on the course of the common law. But in that ALI meeting, it was Hand, not Cardozo, who better understood the moral character and doctrinal structure of tort law. That, at least, is what this Article immodestly attempts to show.
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The impotence of naive idealism in the face of economic incentives.