Comment on Donohue

Abstract

Professor Donohue's article on the effects of fee shifting on settlement,' which is perhaps the most abstruse article in this symposium, certainly bears out Dean Calabresi's statement that some hold the attitude that something may work fine in practice, but we have to show that it will work in theory.2 I suppose I have been chosen to try to deal with it because of my sin of pretending to understand what George Priest was trying to teach some federal judges about economics at a conference last year.3 The topic Professor Donohue addresses is a good example of Harry Kalven's doctrine that the law is analytically dense. Kalven meant this in the sense that the term mathematically when applied to a set of numbers, means that you can place another number between any two numbers in the set.4 Thus, for example, the set of integers is not dense, because you cannot put another integer between 2 and 3. The set of all real numbers, however, is dense because you can find another number between any two real numbers, no matter how small their difference. In the legal context, there usually exists a complication or an additional fact between any two concepts or rules that seem to cover a situation that creates a new situation requiring additional thought. Professor Donohue's article is a good attack on an extremely dense subject. My remarks will be a true comment on Professor Donohue's article. I do not intend to debate him, but rather to raise additional questions and discuss the implications of what he has written. Too often the Theorem5 is invoked to mean that the legal rule simply makes no difference. Professor Donohue does not make this mistake, but does not explicitly countermand it either. The Coase Theorem says that, with the ability to contract (and no transaction costs!), independent parties should reach the same decisions on productive processes under any rule of law. Thus the number of railroads and the amount and nature of wheat farming should not be affected by who bears the cost of fires started by railroad sparks. This does