When It Isn't A Wonderful Day in the Neighborhood: A Jewish Law and Economics Approach to Nuisance

Sturges v. Bridgman

Let's assume

Mr. Bridgman using his mortars only when Dr. Sturges

is not consulting with patients, thereby reducing his (Mr.

Bridgman’s) income from £300 to £150

Dr. Sturges seeing patients in his dining room,

generating income of £120 (whereas he could earn

£200 if Mr. Bridgman were to scale back his use of his

mortars) Which of these is the efficient outcome?

Option 1: A court decision that favors Dr. Sturges by restricting Mr. Bridgman will produce 200 + 150 = 350 combined

Option 2: A court decision that favors Mr. Bridgman will produce 300 + 120 = 420 combined. This is more efficient.

But Wait. If Option 1. Then Mr. Bridgman will pay 80 to Dr. Sturges to reduce his practice. And you end up with Bridgman making 300 - 80 he paid Sturges and Sturges making 120 + 80 from Bridgman. And you get 420 combined.

Rivash

Reuben and SHimon. P and D respectively.

Reuben has wine store. Shimon is a weaver.

Reuben was there before Shimon.

Reuben wins. But Rivash notes Shimon would protest removing his workshop is a transfer cost. Can rebuild a vibrating walll or buy Reuben's home.

Rivash leaves open the possibility that while ruling for reuben, shimon can stilll win out by paying the for the vibrating wall.

Chatam Sofer Case

A father with three children dies having bequeathed his three floor house to his children. Each child gets a floor. Child 1 gets ground floor, child 2 gets Middle floor, Child 3 gets Top Floor. They share a front yard.

Child 3 wants to open a bar (alcohol-serving den of iniquity), Child 1 protests based on the way the opening of a bar will interfere with his use of the yeard that the brothers share common ownership of.

A rabbi is inclined towards child 1's argument, but brings it to chatam sofer just in case. He thinks the Mishnah's distinction is based on different types of harmful effects caused by two types of businesses. The store creates too much noise. But manufacturing doesn't bother people that much.

The Chatam sofer rejects this theory. He comes up with the hot take that this is not the basis of the distinction (in fact, manufacturing creates more noise, from the children, the machines, and everything else). It's really abbout the relative costs to the two parties. Stores in the mishnah is a typological category that means the seitchning costs or the costs of abating the activitity are (relatively) low. Production facility represents business activity that can be enjoined only at relatively high costs. In this case, you are going to selll alcohol in the streets or in the yard. Liquor is a social psychological service that can't be run on the streets because you can't sell alcohol there.

REMA

The threshing floor operator moves his business and the townspeople pay the fee.

SEMA

Make the operator move first, and then the townspeople pay the fee

PROPERTY LAW MEETS TORTS LAW

Coase theorem assumes some transaction costs are endogenous to the legal system: meaning legal rules can facilitate bargaining

• • • Normative coase theorem, Lubricate

      • legal rules should be structured to remove impediments to private agreements Lubricate

    • Normative Hobbes THeorem. Allocate

      • Structure laws to minimize harm caused by failures of private agreement. Allocate Natural cupidity would lead people to quarrel unless third stronger party forced them to agreeI

      • If exchange is not possible, property rights should be allocated to the party that values them most.

    • Strictly following precedent saves court information costs of figuring out who values commodity the most.

• • *Miller v. Jackson, QB 966 (1977)

    • Rule 1

    • Court Issues Inj. against polluter (Polluter can pay victims to sell a right to an easement, i.e. to keep on polluting, but there will probably be a holdout problem if multiple neighbors)

    • Rule 2

    • Court finds a nuisance with injunction, but allows polluter to pay permanent damages to cancel injunction. (The difference here is that the court establishes what the cost of the damages are)

    • Rule 3

      • Polluter’s rights. (the Neighbors can still get together and pay the polluter to move away from the town and pollute somewhere else)

    • Rule 4

      • Court permits polluter to continue unless a resident chooses to pay the cost of an injuction against the polluter, i.e. the cost of moving up shop

Guidelines for Courts Choosing Property and Liability Rules

Rule 2/4: Damages/ Liability Rule

Preferable when the court knows how much of the parties values the right absolutely (even if it does not know which party values the right relatively more)Think Rule 2 (damages as neighbor’s subjective value for being free of pollution) and rule 4 (damages = cost of moving, and value of being free from pollution must exceed that).

Rule 1/3: Injuction / Property Rule

When trx costs are low, injunction preferable Viewed as simpler and clearer than damages. Still unclear cost of complying with injunction, Still problem of private info about costs inhibits bargaining leads to asymmetric info and tendency not to successfully bargain.

When trx costs are high enough t prevent bargaining. Injunction perferable if icourt knows which party values rights relatively more, though not absolutely.

WEAVING IN THE CONTRACTS

• • • easier before rather than after. Less likelihood of holdout problem because less likely to stand collectively.

    • Call Options and Put Options

      • A call option gives holder right to buy asset st exercise/strike price on specified future date

      • A put option gives the holder a right to sell asset at the strike/exercise price at a future specified date.

      • Rule 6,

        • Resident has injunction subject to put option to force polluter to buy easement.

      • Rule 5

        • Polluter has right to pollute, subject to put option to forcibly sell an injunction against polluting at court ordered strike price.

      • If Rule 6 implemented at $5M, then efficient. If residents value less, then they sell and get the surplus. If they value it more, then no selling.

RASHBAZ

Slaughterhouse next to residential home. Resident claimed 6 problems requiring damages

1. Loss of privacy (slaughterhouse higher)

2. Less daylight

3. Vibrations

4. Odors

5. Noise (he can't study torah)

6. Butchers not only cut up little animals, they are animals among men and I can't stand them

Razbash Responsa pt 4 col 1 at 57.

Communtiry cannot locate slaughterhouse there. Razbash says the issue was settled Slaughterers begged, and scholar relented. Community pressured the scholar.

Oh, the farmer and the cowman should be friends,
Oh, the farmer and the cowman should be friends.
One man likes to push a plough,
The other likes to chase a cow,
But that's no reason why they cain't be friends.

Territory folks should stick together,
Territory folks should all be pals.
Cowboys dance with farmer's daughters,
Farmers dance with the ranchers' gals.

All:
Territory folks should stick together,
Territory folks should all be pals.
Cowboys dance with farmer's daughters,
Farmers dance with the ranchers' gals.

Farmer:
I'd like to say a word fer the farmer

Eller:
Well, say it!

Farmer:
He come out west and made a lot of changes

Man:
That's right!

Will:
He come out west and built a lot of fences,

Curly:
And built 'em right across our cattle ranges.

Cowboy:
Why don't you dirt strangers go back to Missouri where you belong?

Will:
We got just as much right here!

Farmer:
Shut up!
The farmer is a good and thrifty citizen
No matter what the cowman says or thinks
You seldom see 'im drinkin' in a bar room

Curly:
Unless someboy else's buyin' drinks

Andrew:
Oh, the farmer and the cowman should be friends,
Oh, the farmer and the cowman should be friends.
The cowman ropes a cow with ease,
The farmer steals her butter and cheese,
That's no reason why they cain't be friends

All:
Territory folks should stick together,
Territory folks should all be pals.
Cowboys dance with farmer's daughters,
Farmers dance with the ranchers' gals.

Eller:
I'd to say a word for the cowboy--

Curly:
You would!

Eller:
The road he treads is difficult and stoney
He rides fer days on end
With just a poney fer a friend

Annie:
I sure feelin' sorry fer the poney!

Eller:
The farmer should be sociable with the cowboy
If he rides by an' ask fer food an' water
Don't treat 'im like a louse
Make 'im welcome in your house

Ike:
But be sure that you locked up yo' wife an' daughters

Girls:
Oh, the farmer and the cowman should be friends.
Oh, the farmer and the cowman should be friends.
One man likes to push a plough,
The other likes to chase a cow,
But that's no reason why they cain't be friends.

Eller:
Ain't nobody gonna slug out anythin'. This here is a party!
Break it up ya' two ol' fools. Alright Andrew sing it!
Dum-dah-dee-um-dum-dum!

Andrew:
Oh, the farmer and the cowman should be friends,

All:
Oh, the farmer and the cowman should be friends.
One man likes to push a plough,
The other likes to chase a cow,
But that's no reason why they cain't be friends.

Curly:
And when this territory is a state
An' joins the Union jus' like all the others
The farmer, and cowman and the merchant
Mus' all behave theirselves and act like brothers

Eller:
I'd like to teach you all a little sayin'
And learn the words by heart the way you should
I don't say I'm no better than anybody else,
But I'll be damned if I ain't jist as good!

All:
I don't say I'm no better than anybody else,
But I'll be damned if I ain't jist as good!

Territory folks should stick together,
Territory folks should all be pals.
Cowboys dance with farmer's daughters,
Farmers dance with the ranchers' gals!