Unifying Remedies: Property Rules, Liability Rules, and Startling Rules

Abstract

Imagine that B complains about pollution spewing forth from a factory owned by her neighbor, A. A generation of law students has now learned that ZTs possible remedies traverse the boundaries normally drawn between legal subject areas, much as the previous generation of lawyers learned to lower the divide between law and equity. The educational watershed was surely Calabresi and Melamed's justly celebrated article of twenty-five years ago, suggesting a theory of remedies and concentrating on what it called property rules and tort liability rules.1 By focusing on (and moving between) property rights, damage awards, and private bargains around these rights and awards, Calabresi and Melamed vaporized the inherited barriers between private law rights and remedies. In retrospect, that article is at least as interesting for what it missed as for what it wrought. Readers of law reviews know that a good deal of attention had been paid to the question of when judges should assign property rights or liability awards, and Calabresi and Melamed can be said to have anticipated and initiated that inquiry?which I largely avoid in the present Essay.2 Some readers also know that Calabresi and Melamed might be described as having produced something less than a theory of remedies?if grand implies completeness?because subsequent innovators have shown remedies not anticipated twenty-five years ago. My aim here is, first, to learn about