Does Governmental Vicarious Liability Make Any Sense?
A Government Liability Loss Means More Assets Must Be Sequestered from Taxpayers
MARCH 01, 2008 by RIDGWAY K. FOLEY JR.
Ridgway K. (Dick) Foley, Jr. practices law in Oregon and is a former FEE officer and trustee. Copyright Ridgway K. Foley, Jr. 2007.
Fueled by the Instrumentalist Revolution, the American legal system has decayed from a quest for a just resolution of realistic disputes that the parties cannot solve by less formal means into a grab-bag system of income and asset redistribution. Common lore decries lawsuit lotteries, avaricious attorneys, and contingent fees. As customary, common lore contains elements of truth, but in this instance the popular whipping boys obscure more sinister culprits, including illiberal and envious legal theories of enterprise and market-share liability, expanded concepts of nuisance and exemplary damages, and vicarious-liability doctrines in myriad guises.
This essay considers a single aspect of the modern application of the vicarious-liability doctrine of Respondeat Superior. This is the theory that the master must pay for the sins of his servant or, in today’s vernacular, the employer must pay for real or imagined wrongs committed by his employees. More specifically, I’ll analyze the application of this wealth-spreading doctrine when the employer is a governmental entity.
A policeman chasing an armed robber fires and misses his intended target, killing a ten-year-old boy on his way to school. The bereft parents sue the city for their son’s wrongful death. A morally challenged supervisor of the county deed records terminates an attractive young female trainee when she rejects his inappropriate advances. The young lady sues the county, alleging harassment and unlawful termination. A school district fails to meet national measures mandated by the federal government. A lifetime federal judicial appointee fines the district for its misdeed.
In the immortal words of humorist Dave Barry, “I am not making this up.” Actions resembling instances like these occur daily, pervasively, and repeatedly in these litigious United States. In many instances, the lawsuit does not even name the human being who caused the harm; if the peace officer, the supervisor, and the school administrator are named as parties, they customarily play a nominal role and the city, the county, the state, or the district pays the cost of their legal defense and also reimburses or indemnifies them for any personal judgment against them.
Who really pays the costs of defense, the judgments, the fines, and all other system-assessed charges? Uncle Pungle pays and pays and pays. No government creates anything but chaos; no government produces goods, services, or ideas in a marketplace consisting of willing producers and purchasers. In actions against governments and their employees, the entity spends money and incurs expenses and liabilities, but it is the unwilling taxpayer who bears the burden of the ultimate discharge of all costs, claims, and judgments. In most instances, the individual human being causing the resulting putative harm pays nothing at all.
Deviation from the fundamental tenets of the Anglo-American common law ordinarily causes unintended outcomes inconsistent with classical liberty. Application of the current notions of governmental vicarious liability demonstrates the effect of such deviations. No one should consider this paper an unlimited endorsement of the common law as anything resembling a perfect jurisprudential system: creation of a perfect rule of law requires ordination by someone or something greater than frail and fallible human beings. Nonetheless, one can make the case that the elemental English common law, in theory, most nearly approached the grand norm, the finest legal system created by mankind. Certainly in its basic construction and early development, the common law endorsed personal responsibility and nourished individual freedom in an open-textured jurisprudential system until the Instrumentalists denigrated these solemn values.
The common law solved interpersonal disputes, disagreements that the parties could not resolve privately, by employing deterrence and ordering restitution. It recognized and nurtured individual responsibility by wise application of these seminal concepts. Deterrence simply means action prohibiting, constraining, or channeling human conduct. Restitution refers to restoring that which has been lost or taken away. If an individual carelessly injured a neighbor’s person or damaged his property, the law required the errant actor to make the victim whole by restoring him as nearly as possible to his condition before the intrusion. Thus, for example, if a man trespassed on a landowner’s property and took his crop, the law ordered restitution requiring the trespasser to return the property and to pay the money value of the lost crop and the lost use of the land. In similar fashion, if a man promised to sell his crop to his neighbor for a certain amount of money and failed to keep that promise, the law could order the landowner to restore his neighbor to the benefit of their bargain, either by compelling him to keep his contract and deliver the crop or, if that were not possible or feasible, to pay the value of the crop to the neighbor. The juridical actions in these simple examples deterred the trespasser and the promise-breaker by demonstrating that private property and solemn contracts were special and sacred, and that the law common to the community would not tolerate these or future breaches.
Hence, in our initial modern examples, assuming a judge or jury determined culpability, the common law would deter the fleeing felon or careless cop by requiring him to pay the value of the schoolboy’s life to the mourning parents as restitution. Likewise, the common law would compel the lecherous supervisor and the failing teachers to reimburse those who suffered harm at their hands and, by ordering such restitution, deter future similar conduct.
Effective enhancement of personal responsibility by deterrence and restitution requires that an erring actor suffer real consequences. If the law shields him from the results of his malevolent or foolish behavior, he will neither learn not to repeat his mistake nor be induced to avoid the same or similar misconduct. To repeat: in almost every instance of governmental-entity liability, the harm-causing individual pays neither defense costs nor restitution and restoration expenses. More to the point, the errant actor incurs no adverse consequences of any significance whatsoever. Even in the most patent instances, government employees are placed on “paid administrative leave” and imbued with a sense of entitlement and victimization far removed from notions of responsibility.
Those who concocted Respondeat Superior theorized that the master controlled his servants, that a businessman who hired employees directed them what to do and how to do it. Hence, the doctrine presumed that a vigilant employer would always hire careful and kind employees; that he would train and oversee their workplace activity to ensure quality and safety; and that he would discipline or terminate any dangerous or incompetent soul in his employ.
Thus even in its inception, vicarious liability deviated from the common-law tradition. After all, the ancient Saxon Witan imposed strict responsibility on the actor, and his family, for intentional and careless behavior harming another; it even enforced strict liability on inanimate objects occasioning human damage. Respondeat Superior made sense in the nineteenth century only when the master or employer in fact controlled and directed the servant or worker, and not when the latter departed from standing orders and made a mess on his own. The doctrine as conceived and expanded amounted to an anti-capitalistic riposte to the real or feigned excesses of the dawning industrial age.
Today the existence of all forms of vicarious liability in all work-related domains makes no sense both as a theory and as applied in the context of the present. Few owners or managers direct and control the daily activities of their workers, even in the smallest aggregate. While labor-union membership wanes in the rust belt, union power thrives in the government sector, where firemen, policemen, teachers, and office workers wield political power and jealously protect their members from employment sanctions. Hence public-employee unions often supplant the owner or manager, effectively controlling workers while avoiding liability. Further, owners and employers both public and private endure increasing legal constraints on their ability to hire and fire, promote, or discipline under rules enforcing “diversity,” “tolerance,” and other egalitarian notions. Chastisement, discipline, and discharge become difficult if not impossible in the modern workplace. In such a cauldron, application of fault-based responsibility and restitution on the erring actor becomes well-nigh impossible.
If Respondeat Superior seems out of place in the private market, it becomes even more unreal in the ever-growing government-employment sector. In addition to union command and lifetime job-security features, government workers receive greater insulation from the consequences of their choices. First, public entities are armed with the power of conceded force, and the government worker exercises that force. Power begets dreams of elitism and favoritism, as well as senses of entitlement and omnipotence. Few government workers recognize, or concede, that they acted carelessly or improperly, and if they do see fault they tend to use the “greater public good” alibi as absolution. The law imposes no personal responsibility on the government actor, and he normally accepts none.
Second, one might argue that deterrence, restitution, and restoration in the government sector control and direct the “public” entity in place of the individual actor. Nonsense. Here the public-“private” dichotomy differentiates the issue. One could contend that imposition of liability on a private business for the misbehavior of its workers induces the business to more carefully hire, train, and oversee the workforce, and that it will lose market share if it does not channel its conduct in such a fashion. A government entity, by definition, is not subject to this market force: it does not operate in a market and it does brook any competition.
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Further, one might urge that requiring a private owner to pay damages to an injured patron will deter future undesirable conduct; an uninsured loss will directly affect the financial success of an enterprise, and an insured loss will cost higher future premiums in addition to any self-retained liability. Again, by definition a government bureaucracy does not live in the marketplace: a liability loss merely means more assets must be sequestered from the supporting taxpayers.
In addition, anecdotal and empirical evidence strongly suggests that judges and jurors will more harshly judge a government employer; if true, this harshness coupled with a perception that any award comes from “free money,” translates into larger compensatory and punitive damage judgments. After all, it seems easier to punish a faceless artificial entity than to assess damages against an individual human being, and the law of human action that one is less careful with another’s property than with one’s personal assets seriously compounds the excess of resulting judgments.
Enormous judgments thereby effectively transfer income and assets in unrealistic and windfall amounts from the productive taxpayer to the recipient, notwithstanding the merits of his case. The size of awards for contract violations and relatively minor personal injuries should never cloud the seminal issue, the survival of the essential character of our legal system. The traditional formal attribute of the Anglo-American system of justice lies in its fair resolution of disputes under a rule of law common for all persons within a clearly defined and strictly limited jurisdiction. The seminal foundational theory of personal legal responsibility undergirding the common law has served us well for more than one thousand years. Erosion of that theory based on bad values and poor insight signals that the end to a worthy system may reside nearby in a future quite different from our legal landscape.