Public Nuisance as Modern Business Tort: A New Unified Framework for Liability for Economic Harms

29 Pages Posted: 10 May 2021 Last revised: 30 Jun 2021

Date Written: May 8, 2021

Abstract

This Article focuses on public nuisance’s innovative use as a means of recovering purely financial losses between non-contracting parties (i.e., “strangers”), in particular where the economic loss rule potentially bars recovery. The Article proposes a new approach to reconciling the torts of negligence and public nuisance, centered on the “channeling” or enforcement rationale: namely, deputizing a class of significantly impacted individuals or entities who can sue to force the tortfeasor to internalize the social costs of its activities. Where the prospect of physical bodily injuries and property damage is attenuated, this cost-internalization function is especially important to deter excessively risky conduct likely to lead to significant financial losses. Moreover, the calculus may be shifting in an age of global financial crises, escalation of digital and informational harms, and growing sense that the societal harms of the 21st century involve risky conduct leading to purely financial harms. Where there are diffuse, widespread harms raising concomitant concerns of under- and over-deterrence, a new “channeling” paradigm is necessary to guide courts in fashioning the metes and bounds of public nuisance as the quintessentially modern business tort of the 21st century.

Keywords: public nuisance; economic loss rule; channeling; enforcement; opioids

JEL Classification: K13

Suggested Citation

Sharkey, Catherine M., Public Nuisance as Modern Business Tort: A New Unified Framework for Liability for Economic Harms (May 8, 2021). DePaul Law Review, Vol. 70, No. 2, 2021, NYU School of Law, Public Law Research Paper No. 21-18, Available at SSRN: https://ssrn.com/abstract=3842081

Catherine M. Sharkey (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
212-998-6729 (Phone)

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