Coordinating Sanctions in Torts

This Article begins with the standard Law and Economics account of tort law as a regulatory tool or system of deterrence, that is, as a means of giving regulated parties the optimal ex ante incentives to minimize the costs of accidents. Building on this fairly standard (albeit not universally accepted) picture of tort law, the Article asks the question how tort law should adjust, if at all, to coordinate with already existing non-tort systems of regulation. Thus, if a particular activity is already subject to extensive agency-based regulation (whether in the form of command-and-control requirements or in the form of a costinternalizing Pigovian tax), which presumably already addresses any negative externalities associated with the activity, what regulatory role remains for tort law? The answer: Sometimes there is a regulatory role that tort law can play, sometimes not, depending on the situation. For example, if the non-tort regulatory standard is already fully optimizing, in the sense that the regulatory standard (a) sets both an efficient floor and an efficient ceiling of conduct and (b) is fully enforced by the regulatory agency, then tort law should be fully displaced, in the sense that no tort remedy should be available. If, however, the regulatory standard is only partially optimizing (for example, it is only an efficient minimum or efficient floor or it is only partially enforced), then tort law continues to have an important regulatory role. This framework can be used to explain how such tort doctrines as negligence per se and regulatory compliance should be applied. It also helps to explain recent federal preemption cases involving overlapping tort and regulatory standards. In addition, the framework produces insights for how tort law might efficiently be adjusted to coordinate with overlapping social norms, which are also considered within the Law and Economics tradition to be a form of regulation