The Other View of The Cathedral

Abstract

In their celebrated article, now simply known as The Cathedral, Guido Calabresi and Douglas Melamed laid out the choice between property rules and liability rules. The rich and sophisticated literature that followed added multiple new ways to view this basic choice and highlighted the advantages of liability rules. The current Article adds a new element to the classic comparison between liability and property rules by introducing the elements of racial inequality and racial bias into the analysis. This move immediately proves fruitful, upending the familiar picture of The Cathedral and showcasing the disadvantage of liability rules.

This Article shows that since liability rules entail an additional layer of open-ended judicial discretion, their application is more susceptible to judicial bias and is more likely to generate discriminatory outcomes. When employing a liability rule, the legal system allows a person’s right to be removed by another, for compensation objectively determined by the judge or jury. This formulation of liability rules should immediately strike us as suspicious: Judges and jurors are never “objective.” The Article shows that implicit biases cause judges and jurors to undervalue the rights of members of racial minorities, thus offering them insufficient legal protection under liability rules. Conversely, property rules do not suffer the same disadvantage, since under property rules right holders are granted authority to evaluate their own rights or hold onto them if they are undervalued by others. The Article discusses the implications of this analysis to the classic debate regarding property and liability rules and studies relevant policy implications.

Keywords: tort, property, discrimination, liability rules, property rules

JEL Classification: K11, K12, K13