Social Propositions and Common Law Adjudication

as published in
1990 UNIVERSITY OF ILLINOIS LAW REVIEW 231

Stephen M. Bainbridge

UCLA School of Law bainbrid@law.ucla.edu.

Box 951476 310.206.1599
405 Hilgard Avenue
Los Angeles, California 90095-1476

Abstract: This essay reviews The Nature of the Common Law by Melvin A.
Eisenberg (Harvard University Press, 1988). Professor Eisenberg’s stated goal
therein “is to develop the institutional principles that govern the way in which the
common law is established in our society.” In the course of doing so, Eisenberg
addresses the functions of courts in American society, modes of legal reasoning
and the process of overturning prior precedents. Yet Eisenberg never loses sight
of his central thesis, namely that “all common law cases are decided under a
unified methodology, and under this methodology social propositions always
figure in determining the rules the courts establish and the way in which those
rules are extended, restricted, and applied.”
According to the reviewer (UCLA law professor Stephen M. Bainbridge), The
Nature of the Common Law is one of the most thought-provoking books ever
written on common law adjudication. Eisenberg’s belief in social morality as a
workable guide to decisionmaking surely invites further debate. So too does his
concomitant belief that law is more than merely the personal moral and policy
preferences of the judge. Indeed, one might almost say that The Nature of the
Common Law deserves to be controversial, for Eisenberg has given us a report
that is both normatively appealing and descriptively accurate. The Nature of the
Common Law succeeds because it is both an attractive vision of how courts
should function and a perspicuous account of the real world in which courts
actually function.

Keywords: common law, judges, adjudication

JEL Classification: K41
 Social Propositions and Common Law Adjudication

The Nature of the Common Law by Melvin A. Eisenberg.

Cambridge: Harvard University Press, 1988, pp. 204 (hardcover).

Reviewed by Stephen M. Bainbridge*

In his ambitiously titled book, The Nature of the Common Law, Professor
Melvin Eisenberg’s stated goal “is to develop the institutional principles that
govern the way in which the common law is established in our society.”1 In doing
so, Eisenberg tackles a host of topics. Among other things, he addresses the
functions of courts in American society, modes of legal reasoning and the process
of overturning prior precedents. Yet Eisenberg never loses sight of his central
thesis, namely that “all common law cases are decided under a unified
methodology, and under this methodology social propositions always figure in
determining the rules the courts establish and the way in which those rules are
extended, restricted, and applied.”2 His masterful defense and exposition of this
thesis makes The Nature of the Common Law a significant addition to the body of
common law jurisprudence.

I. SOCIAL PROPOSITIONS IN ADJUDICATION

To say that courts should and do rely on social propositions in deciding (at
least some) common law cases is hardly new. Eisenberg’s contribution comes in
mapping a coherent course between the Scylla and Charybdis of modern

*
Professor, UCLA School of Law.
1
M. Eisenberg, The Nature of the Common Law 1 (1988). For Eisenberg the common law
“consists of the rules that would be generated at the present moment by application of the
institutional principles of adjudication.” Id. at 154. He refers to this as the “generative conception” of
the common law. Id. A necessary corollary of this conception is the notion that the common law is
comprehensive—all legal issues have an answer that can be divined through correct application of
the principles of adjudication. Id. at 159.
2
Id. at 2-3. Eisenberg describes three categories of social propositions: moral norms, policies
and experiential propositions. Moral norms characterize conduct as right or wrong. Id. at 14-26.
Policies characterize states of affairs as good or bad in light of the general welfare of society. Id. at
26-37. Experiential propositions focus on the way the world works. Id. at 37-42. In contrast,
doctrinal propositions are statements of legal rules derived from statutes, judicial precedents and the
academic literature. Id. at 1.
Bainbridge, The Nature of the Common Law 3

jurisprudence. He explicitly rejects theories claiming that some cases can be

decided without reference to social propositions. On the other hand, Eisenberg
also rejects theories claiming that legal reasoning is nothing more than a mask for
the social and political values of the decisionmaker. Common law adjudication, as
Eisenberg sees it, is not merely the ad hoc application of whatever social
propositions a particular judge is taken by; rather, he lays out institutional
principles that constrain and guide the adjudicative use of social propositions.

A. Text-Based Theories of Adjudication

Much of The Nature of the Common Law is directed at debunking what
Eisenberg calls “text-based” theories of adjudication. In this context, his principal
foils are H.L.A. Hart and Joseph Raz.3 Hart and Raz, in Eisenberg’s view, divide
the universe of common cases into two basic categories. In the first, the easy
cases,4 preexisting doctrinal propositions are directly applicable to the case at bar
and provide a clear answer that the court is obligated to reach. Social propositions
simply are not relevant to the decision; indeed, Eisenberg asserts that text-based
theories forbid judges from looking to social propositions in easy cases. The judge
is under a duty to apply the doctrine to all cases falling within its ambit, regardless
of whether it can be justified under current social propositions.5 In the second
category, the hard cases, preexisting doctrinal propositions do not provide a clear
answer. In these cases, the judge simply makes new law based on his own
conceptions of proper morality and policy.
As Eisenberg defines them, text-based theories are largely inconsistent with
the fundamental precepts of our legal system. Litigants have a basic right to
advance good faith arguments for changes in the law.6 The necessary corollary of
3
Eisenberg focuses on the arguments advanced in H.L.A. Hart, The Concept of Law (1961),
and in J. Raz, The Authority of Law (1979).
4
The easy/hard case dichotomy is often attributed to Ronald Dworkin. See Dworkin, Hard
Cases, 88 Harv. L. Rev. 1057 (1975). Hart categorizes cases as clear versus indeterminate, while Raz
refers to them as regulated or unregulated. See H.L.A. Hart, supra note 3, at 123-24; J. Raz, supra
note 3, at 96, 172.
5
M. Eisenberg, supra note 1, at 149. Raz does recognize a limited judicial power to distinguish
or overrule prior precedents (with at least some of the limitations appearing to be driven by the
nature of the English judicial system), see J. Raz, supra note 3, at 183-92, but argues that it is
“possible to identify [binding] rulings without engaging in a justificatory argument.” Id. at 52.
6
See, e.g., Fed. R. Civ. P. 11 (requiring pleadings to be “warranted by existing law or a good
faith argument for the extension, modification, or reversal of existing law”); Model Rules of
Professional Conduct Rule 3.1 (1983) (permitting litigation for the purpose of making “a good faith
4 1990 University of Illinois Law Review 231

that right is the ability of courts to reject blind application of preexisting doctrinal
propositions.7 If a legal rule is not justified by relevant social propositions, the
court may properly refuse to apply it to the case at bar or, indeed, overturn the
rule.8
Nor does the easy case/hard case dichotomy adequately account for the real
world process of common law adjudication. Courts routinely refuse to apply
preexisting doctrinal propositions to cases that appear to fall squarely within the
rule. Courts routinely refuse to extend preexisting doctrinal propositions to cases
that logically could be covered by the rule. And courts routinely overturn
preexisting doctrinal propositions.9 The innumerable examples of such behavior
preclude giving explanatory credence to theories positing a judicial duty to
blindly apply preexisting doctrines without regard to the rules’ justification under
relevant social propositions.
On the other hand, I do not understand Eisenberg to be saying that a judge
must explicitly consider social propositions in every case. For every case
involving novel and difficult questions of law, there are hundreds if not thousands
of cases that fall squarely within the bounds of some well-established legal rule.
Eisenberg admits that judicial decisions in these latter cases often do not explicitly
turn on (or even analyze) social propositions, but insists that social propositions
are tacitly assumed in such cases.10 As no two cases are identical, social
propositions necessarily lurk in the background of every case. The court must
always decide which precedent governs the case at bar. The court must then
decide whether to apply, modify, distinguish or overrule the precedent.11 Both

argument for an extension, modification or reversal of existing law”); Model Code of Professional
Responsibility DR 2-109(A)(2) (same); see also Rotunda, Lawyers and Professionalism: A
Commentary on the Report of the American Bar Association Commission on Professionalism, 18
Loyola U.L.J. 1149, 1165-67 (1987).
7
See M. Eisenberg, supra note 1, at 75 (“courts normally have considerable formal power to
either apply, extend, distinguish (and thereby reformulate), radically reconstruct, or, for that matter,
overrule any announced rule.”).
8
Id. at 152-53.
9
Examples of such decisions can be found throughout The Nature of the Common Law, see,
e.g., id. at 62-74.
10
Id. at 76.
11
See id. at 75.
Bainbridge, The Nature of the Common Law 5

decisions necessarily implicate the question of whether the apparently applicable

rule is consistent with the social propositions underlying the precedent.12 In cases
where the applicable rule is known from long experience to be consistent with
relevant social propositions, however, a court need not waste time reinventing the
wheel whenever the rule is invoked.13

B. Distinguishing the Judicial and Legislative Roles

Eisenberg’s claim that social propositions are relevant to all cases opens the
door to one of the most active jurisprudential cottage industries. Like most
commentators, Eisenberg believes that legislators may properly make law based
on their own idiosyncratic moral values and policy preferences.14 Are judges in
making common law equally free to select their personal preferences from the full
universe of social propositions? If not, how does one define the set of social
propositions available to the judge and constrain the judge to select only from
within that set?
In hard cases, text-based theories conflate the roles of judges and legislators.15
Raz, for example, argues that in hard cases a court is essentially free to make new
law based on its own conception of proper morality and policy.16 The major
difference between the judicial and legislative roles is simply that the former’s
law-making efforts are usually piecemeal.17
In contrast, many commentators posit that judges always act in ways
Eisenberg would define as legislative. Social propositions are not only relevant to
all cases, they are determinative. And the determinative social propositions in any

12
See id. at 152-53.
13
See id. at 76. The same may be true where it is not institutionally appropriate to overrule or
distinguish the precedent. Id. For a discussion of the institutional principles Eisenberg believes
govern judicial decisions to overrule existing doctrine, see infra notes—and accompanying text.
14
See M. Eisenberg, supra note 1, at 149-50. But see A. Simmons, Moral Principles and
Political Obligations (1979) (arguing that no lawmaker may properly rely on his or her own moral
and policy preferences).
15
See generally M. Eisenberg, supra note 1, at 146-49.
16
J. Raz, supra note 3, at 197-201.
17
Id. at 200-01.
6 1990 University of Illinois Law Review 231

particular case are those held by the individual judge.18 Adjudication thus is not
what it claims to be—a neutral, objective application of distinctly legal expertise
to a specific problem—but a mask for the personal values and preferences of the
adjudicator.19
Eisenberg rejects both the factual premise that judges routinely act as
legislators and the theoretical proposition that they may properly do so, advancing
several related justifications for his position. The first focuses on the social
function of courts. Any complex society needs an institution before which claims
based on existing societal standards can be heard. In our society, that institution is
the courts.20 “If the courts resolved disputes by reasoning from those moral norms
and policies they think best, there would be no institution to which a member of
the society could go to vindicate a claim of right based on existing standards.”21
Second, since the judicial system is a peculiarly undemocratic institution, the
legitimacy of the adjudicative process requires courts to look to “existing legal
and social standards rather than those standards the court thinks best.”22 Finally,
prohibiting the courts from employing their personal standards makes legal
reasoning fairer and more easily replicable by the profession.23
Having established, at least to his own satisfaction, that limits on the
adjudicative use of social propositions are necessary, Eisenberg proceeds to
provide them. His major contribution comes in defining the set of social
propositions from which the court may select. In addition, Eisenberg adds to our

18
See, e.g., J. Frank, Law and the Modern Mind 100-17 (1930); D. Lyons, Ethics and the Rule
of Law (1984); R. Posner, Economic Analysis of Law 505-06 (3d ed. 1986); Kairys, Legal
Reasoning, in The Politics of the Law 13 (D. Kairys ed. 1982); Greenawalt, Policy, Rights, and
Judicial Decision, 11 Ga. L. Rev. 991, 1050-52 (1977).
19
Some have argued that it is impossible to identify distinctly legal modes of reasoning. See,
e.g., Kairys, supra note 18. Eisenberg clearly believes this is wrong. Indeed, the bulk of The Nature
of the Common Law is devoted to a description of modes of legal reasoning. See M. Eisenberg,
supra note 1, at 50-103. Eisenberg’s model is not value neutral, in that it requires the court to
consider social norms and policies. See id. at 160-61. However, it claims to be objective and
replicable, because the court must refer to an identifiable set of social propositions.
20
Id. at 4.
21
Id. at 150.
22
Id.
23
Id.
Bainbridge, The Nature of the Common Law 7

understanding of stare decisis in the course of requiring courts to give some

weight to the value of doctrinal stability.

1. The Social Support Constraint

According to Eisenberg, adjudicators may only employ those norms or
policies that “can fairly be said to have substantial support in the community, can
be derived from norms [or policies] that have such support, or appear as if they
would have such support.”24 Two critical assumptions underlie this claim: (1) that
social morality is a meaningful concept;25 and (2) that judges are capable of
discerning and effectively applying social morality. Since neither assumption is
free from controversy, a digression into their validity appears appropriate before
examining the operation of this constraint.
The fundamental attack on the notion of social morality argues that it is
impossible to identify moral norms accepted by society at large:
While the belief in a shared political [and, presumably, moral] consensus
might have seemed sensible in the 1950s when the legal process school
was established, that view is “oddly out of touch” with the realities of the
social events following the Vietnam war and Watergate. Law, like the
larger society, is composed of a broad spectrum of conflicting views,
which, as Posner has noted, “runs Marxism, feminism, and left-wing
nihilism and anarchism on the left to economic and political
libertarianism and Christian fundamentalism on the right.” We no longer
live in a world of shared values, where ideology is at an “end.”26

24
Id. at 15, 29. Here he echoes Cardozo, although the latter (as was so often the case) put it
more eloquently: “It is the customary morality of right-minded men and women which [the judge] is
to enforce by his decree.” B. Cardozo, The Nature of the Judicial Process 106 (1921).

Eisenberg adds additional constraints on the set of policies from which a court may select.
Among these are requirements that the policy relate to the welfare of the community as a whole and
not reflect temporary conditions or special interests. M. Eisenberg, supra note 1, at 29-32.
25
In this regard, the debate focuses mainly on the class of social propositions Eisenberg terms
moral norms. Most commentators have at least implicitly assumed that policies can be more easily
identified and utilized in adjudication. The debate as to the proper role of policy prescriptions thus
has focused more on deciding which policies are worthy of judicial consideration. See, e.g., infra
note 45 and accompanying text.
26
Minda, The Law and Economics and Critical Legal Studies Movements in American Law, in
Law and Economics 104-05 (N. Mercuro ed. 1989) (quoting Posner, The Decline of Law as an
Autonomous Discipline, 100 Harv. L. Rev. 761, 766-67 (1987)).
8 1990 University of Illinois Law Review 231

A related criticism posits that social morality is too abstract to be useful as a guide
to decisionmaking.27
In a brief, but telling passage, Eisenberg rejects both attacks.28 Unless one
insists on unanimity, it remains possible to identify many moral norms as to
which majority consensus exists. Certainly most people still believe, for example,
that promises should be kept and that lying is wrong.29 This consensus as to basic
social morality, Eisenberg asserts, often permits judges to “reach a pretty firm
sense of what most people would regard as fair in a given case.”30
Nor does Eisenberg concede that moral norms are indeterminate:
[T]his argument is contradicted by experience. Moral norms such as
“promises should be kept” and “lying is wrong” are neither vacuous nor
susceptible to any interpretation. Furthermore, this argument confuses
the definition of a concept and the instances that fall under it. People
who are not expert at systematization often cannot give a satisfactory
definition of a concept even though they can easily identify cases falling
under it.31

27
See, e.g., J. Ely, Democracy and Distrust 63-69 (1980) (mainly arguing that conventional
morality has no place in constitutional review of statutes by courts); Brest, The Fundamental Rights
Controversy: The Essential Contradictions of Normative Constitutional Scholarship, 90 Yale L.J.
1063, 1083 (1981).

A third criticism of social morality urges that identifiable moral norms reflect the morality of a
dominant group and therefore may not be fairly applied to the rest of society. Eisenberg
acknowledges that some societal groups may hold values different from those of the majority, but
argues that this should not prevent courts from relying on social morality “as long as the community
is not exceptionally pluralistic and the norms claim to be rooted in aspirations for the community at
large.” M. Eisenberg, supra note 1, at 21.
28
See id. at 19-21.
29
While our society admittedly is increasingly pluralistic, Richard Neuhaus aptly reminds us
that “the democratic reality, even, if you will, the raw demographic reality, is that most Americans
derive their values and visions from the biblical tradition.” R. Neuhaus, The Naked Public Square
139 (2d ed. 1986).
30
M. Eisenberg, supra note 1, at 21.
31
Id.
Bainbridge, The Nature of the Common Law 9

The latter point, reminiscent of Justice Stewart’s famous remark about

obscenity,32 is perhaps the most interesting aspect of Eisenberg’s defense of social
morality. It may be enough for a judge to know a moral norm when he sees it,
even if the judge cannot state the norm with the precision one expects of moral
philosophers or theologians.
While it may be possible for courts to work with moral norms, it is beyond
dispute that the individual morality of a judge from time to time comes into
conflict with the moral norms recognized by society at large. Ditto as to public
policy concerns. It would be surprising indeed if judges did not occasionally
follow their own views.
It is also beyond dispute that judges, especially elected state court judges who
do not have the shield of life tenure, occasionally succumb to political pressures.
“Obviously, in any elected system there is a strong temptation to decide cases in
favor of the local folks who vote, rather than in favor of the out-of-state folks who
do not.”33 Anyone who has followed certain recent, well-publicized cases
involving home town businesses and celebrities would be hard-pressed to deny
the validity of that claim.
Neither of these facts of life, nor the risk that a court may simply err and seize
upon the wrong proposition, persuade Eisenberg to modify his stance. As he
reminds us, common law cases are usually rather mundane. Great moral issues
that come before U.S. courts—such as abortion, crime and punishment, and the
rights of minorities—usually arise in the context of constitutional or statutory
interpretation. The moral issues of the common law may be as profound, but tend
to be less emotionally charged. It is perhaps less likely that judges will face
significant tensions between personal and social morality in those types of cases.34
Eisenberg’s second claim is that courts have a duty to utilize only those social
propositions that have the requisite degree of social support. “By accepting and
retaining office the judge undertakes an ongoing commitment to carry out the
rules of the office,” one of which is “a moral obligation to faithfully employ the

32
“I shall not today attempt further to define the kinds of material I understand to be embraced
[by the term ‘hard core pornography’]; and perhaps I could never succeed in intelligibly doing so.
But I know it when I see it, and the motion picture involved in this case is not that.” Jacobellis v.
Ohio, 378 U.S. 184, 197 (1964) (concurring opinion).
33
R. Neely, The Product Liability Mess 24 (1988). In fairness, this “home cooking”
phenomenon is not eliminated in federal court, which “can have almost as great a local bias as any
state court.” Id. at 40.
34
See M. Eisenberg, supra note 1, at 21-26.
10 1990 University of Illinois Law Review 231

norms of social morality ... whether or not he privately agrees with those
norms.”35 One may be skeptical about the force of an oath of office in
constraining judicial discretion, but this is not the only arrow in Eisenberg’s
quiver.
A variety of corrective forces come into play when a judge strays from those
social propositions having the requisite degree of support. From the aggrieved
litigant’s perspective, the best outcome will be a reversal on appeal. Even if the
decision stands, however, it may nevertheless soon be consigned to the dust bin of
legal history. Lawyers will make a decent living arguing that the rule should be
overturned or distinguished in future cases. Commentators and other courts may
point out the decision’s flawed reasoning. In extreme cases, the legislature may
step in.36 In sum, common law decisions do not live in a vacuum. The wider arena
of legal discourse acts a significant check on judicial error, whether the “error” is
deliberate or accidental.37

2. The Doctrinal Stability Constraint

Uncertainty about the contours and content of a legal rule plainly imposes
substantial costs.38 So too will uncertainty about the stability of the rule. If
litigation risks cannot be confidently predicted, parties may be deterred from
engaging in socially desirable activities or, at the least, may take costly and
35
Id. at 24. It is important to note, however, that Eisenberg is careful to give courts both
substantial discretion in balancing conflicting social propositions and a leadership role in identifying
and clarifying them. See id. at 19.
36
Perhaps the most notable recent example in a common law field was the
legislative reaction to the Delaware Supreme Court’s decision in Smith v. Van Gorkom, 488
A.2d 858 (Del. 1985). In Van Gorkom, the Delaware Supreme Court imposed personal monetary
liability on corporate directors who, in the court’s view, had been grossly negligent in approving a
proposed merger. At least 36 states responded to Van Gorkom by adopting enabling statutes
designed to eliminate monetary liability for breaches of the duty of care and to make it easier for
directors to obtain indemnification from the corporations they serve. See Steinberg, The Evisceration
of the Duty of Care, 42 Sw. L.J. 919 (1988). It is possible to see this reaction as either a legislative
response to a judicial error in applying the social propositions underlying the business judgment rule
or as an exercise of political power by nervous corporate executives. It is not clear from Eisenberg’s
discussion of the policies underlying the business judgment rule which interpretation he subscribes
to, although I suspect he might say that both are valid. See M. Eisenberg, supra note 1, at 38-39.
37
See M. Eisenberg, supra note 1, at 12-13, 18.
38
See generally Calfee & Craswell, Some Effects of Uncertainty on Compliance with Legal
Standards, 70 Va. L. Rev. 965 (1984).
Bainbridge, The Nature of the Common Law 11

excessive precautions. On the other hand, uncertainty may also result in

undercompliance with the governing standard. If parties do not believe the rule
applies or will be extended to them, the standard will fail to optimally deter the
targeted form of undesirable behavior.
At first glance, Eisenberg’s thesis appears to create substantial problems of
doctrinal stability. He is unwilling, however, to make doctrinal propositions
entirely defeasible in the face of changing social propositions. Accordingly, he
constrains the use of social propositions by giving some counter-balancing weight
to the value of doctrinal stability.
Eisenberg believes common law rules should satisfy two distinct, albeit
related, standards. The social congruence standard requires “that the body of rules
that make up the law should correspond to the body of legal rules that one would
arrive at by giving appropriate weight to all applicable social propositions and
making the best choices where such propositions collide.”39 The systemic
consistency standard requires “that all rules that make up the body of the law
should be consistent with one another.”40
Eisenberg recognizes that parties may justifiably rely on a legal rule to
provide the governing standard even if the rule is out of whack with applicable
social propositions or inconsistent with other legal rules.41 Accordingly, he
permits courts to overturn existing doctrine only if the rule “substantially fails to
satisfy the standards of social congruence and systemic consistency.”42 In
addition, the court must engage in a form of cost/benefit analysis. The costs
imposed by the rule’s incongruity and inconsistency must be greater than the
benefits provided by doctrinal stability.43 In areas where parties are unlikely to
plan their behavior based on existing doctrines, doctrinal stability may be
relatively unimportant and a court should be fairly liberal in bringing out of
whack doctrines back into line. But in areas such as property and estates, where

39
M. Eisenberg, supra note 1, at 44.
40
Id.
41
Id. at 47-49.
42
Id. at 105. The Nature of the Common Law includes an interesting discussion of the various
techniques a court may use to overturn existing doctrines. All of those techniques, however, require
that the basic standards described in the text be satisfied before a doctrine can be overturned. See id.
at 104-145.
43
Id. at 105.
12 1990 University of Illinois Law Review 231

planning is common and reliance on doctrinal stability is likely, courts should be

more reticent. In these latter areas, techniques such as signalling (in which the
court suggests that it will revisit the issue later) or prospective overturning may be
more appropriate than an immediate reversal of existing doctrine.44

II. THE COMMON LAW IN THE AGE OF STATUTES

For readers persuaded by Eisenberg, or at least interested in seeing his ideas
play out, the major flaw of The Nature of the Common Law is likely to be its
length. It is too short. For example, I would have been interested in Eisenberg’s
view of the claim that efficiency is the sole acceptable and/or the prevailing norm
in common law adjudication.45 Perhaps the most glaring omission, however, is
Eisenberg’s failure to discuss in more detail the relationship of statutory
interpretation to common law adjudication.46
The story of U.S. private law in the twentieth century is one of ever increasing
legislative encroachment upon matters traditionally within the common law’s
domain.47 This development has not ousted the courts from their role in
generating common law rules. It has, however, introduced new questions about
the nature of common law adjudication in the “age of statutes.”48
Consider, for example, the thorny issue of obsolete legislation. While the
common law is increasingly affected (and effected) by statutory enactments, it is
usually much easier to get a statute passed in the first instance than to amend or
repeal the statute in light of changed conditions. As a result, courts must often
wrestle with statutes designed for a different time and different problems.

44
Id. at 123-29.
45
For useful, albeit somewhat dated, introductions to the efficiency debate, see Symposium on
Efficiency as a Legal Concern, 8 Hofstra L. Rev. 485 (1980); A Response to the Efficiency
Symposium, 8 Hofstra L. Rev. 811 (1980); see also Cooter & Ulen, An Economic Case for
Comparative Negligence, 61 N.Y.U. L. Rev. 1067, 1094-1100 (1986).
46
Eisenberg’s treatment of this issue is largely relegated to the final footnote of The Nature of
the Common Law. See M. Eisenberg, supra note 1, at 161 n.35.
47
See G. Gilmore, The Ages of American Law 68-86 (1977); L. Friedman, A History of
American Law 580-82 (1973).
48
For a superb treatment of these issues, see G. Calabresi, A Common Law for the Age of
Statutes (1982); see also W. Eskridge & P. Frickey, Cases and Materials on Legislation: Statutes and
the Creation of Public Policy 290-92, 613-35, 869-91 (1988).
Bainbridge, The Nature of the Common Law 13

Li v. Yellow Cab Co.49 is a well-known and rather dramatic example of one

response to statutory obsolescence. The basic issue in Li was whether the “all or
nothing” rule of contributory negligence should be replaced by a rule of
comparative negligence. In many states, this was a fairly simple question of
common law reform. In California, however, the situation was complicated by the
fact that the legislature in 1872 had codified the contributory negligence rule.50
One might have therefore expected that only the legislature could authorize
adoption of a comparative negligence rule. The California Supreme Court
nevertheless concluded that it had the power to adopt comparative fault as the
governing standard.51
The problem is perhaps best brought into focus by slightly modifying the
context in which Li was decided. Assume for the moment that there was no
relevant statute. In that context, the contributory negligence rule was a prime
candidate for overturning under Eisenberg’s theory of adjudication.
The California Supreme Court acknowledged two basic social propositions
that appeared relevant to its determination:
The first is that one whose negligence has caused damage to another
should be liable therefor. The second is that one whose negligence has
contributed to his own injury should not be permitted to cast the burden
of liability upon another.52
The contributory negligence rule was out of whack with the first of these
propositions, because it failed to distribute liability in proportion to fault. It
insisted on exonerating negligent defendants in cases of slight fault by the
plaintiff. As such, given the relevant social propositions, the rule no longer
satisfied the standard of social congruence. The rule of comparative negligence, in
contrast, satisfied both propositions. A negligent defendant could be held liable
even where the plaintiff’s negligence contributed to the injury, but the negligent
plaintiff could not throw his or her entire loss on to the defendant.53

49
532 P.2d 1226 (Cal. 1975).
50
See id. at 1233-35. For an overview of the evolution of the contributory and comparative
negligence rules, see Cooter & Ulen, supra note 45, at 1071-79.
51
See Li, 532 P.2d at 1232-39.
52
Id. at 1239.
53
It is perhaps noteworthy in this regard that the Court adopted the “pure” form of comparative
negligence, under which plaintiff may always recover at least some portion of her loss regardless of
the extent of her negligence, rather than one of the forms of the rule (such as the “50 percent” rule)
14 1990 University of Illinois Law Review 231

Equally important, the contributory negligence rule could not be justified by

the values underlying stare decisis. In terms remarkably similar to Eisenberg’s
standards, Professor Keeton argued that the values of “stability, predictability, and
evenhandedness are better served by the change to comparative negligence than
by adhering in theory to a law that contributory fault bars when this rule has
ceased to be the law in practice.”54 At the trivial level, it is difficult to imagine a
situation in which a tort defendant could claim to have justifiably relied on the
contributory negligence rule in planning his or her conduct. More significantly,
the myriad exceptions and qualifications attached to the rule, coupled with blatant
jury failures to adhere to the rule, created uncertainty and unequal treatment.55
In sum, Eisenberg’s model readily explains and justifies Li—assuming the
contributory negligence rule had been laid down by the courts in the first instance.
The rule was substantially incongruent, sufficiently so that the costs of retaining it
outweighed any benefits provided by doctrinal stability. But does the rule’s
statutory adoption change the analysis? Justice Clark, at least, thought that it did,
describing the majority’s opinion as “a gross departure from established judicial
rules and role.”56 On the other hand, “[c]ourts in several other states have
commented on the holding in the Li case without betraying any visible signs of
shock or outrage.”57 Surprisingly, while Eisenberg briefly discusses Li in

which may deny any recovery by the plaintiff under certain circumstances. See id. at 1242-43. For a
discussion of the various forms of the comparative negligence rule, see Cooter & Ulen, supra note
45, at 1075-78.

The contributory negligence rule also was unsupported by the systemic consistency standard.
When the rule was first adopted, the common law had not yet evolved techniques for apportioning
liability on the basis of fault. Li, 532 P.2d at 1239. By the time Li was decided, however, such
techniques were well-established. Comparative negligence for many years had been the governing
standard in a variety of federal statutes and had been adopted by 26 states. Id. at 1232.
54
Keeton, Comments on Maki v. Frelk—Comparative v. Contributory Negligence: Should the
Court or Legislature Decide?, 21 Vand. L. Rev. 906, 916 (1968). The values Eisenberg sees as
justifying stare decisis include “evenhandedness, protecting justified reliance, preventing unfair
surprise, replicability, and support.” M. Eisenberg, supra note 1, at 105.
55
See Keeton, supra note 54, at 916; see also Cooter & Ulen, supra note 45, at 1079-1100
(arguing that comparative negligence is both more efficient and more equitable than contributory
negligence).
56
Li v. Yellow Cab Co., 532 P.2d 1226, 1246 (Cal. 1975) (Clark, J., dissenting).
57
G. Gilmore, supra note 47, at 97 n.58.
Bainbridge, The Nature of the Common Law 15

connection with his treatment of cases in which existing doctrines are overruled
prospectively, he fails to deal with the complications created by the fact that the
doctrine being overruled was a creature of statute rather than of the case law.58
A similar problem arises when a court is called upon to make law
interstitially. Legislative enactments rarely deal with all of the possible
permutations of legal disputes that arguably fall within the scope of the statute.
Consider, for example, the evolution of the federal insider trading prohibition.
The Securities Exchange Act of 1934 did not expressly prohibit insider trading.
Instead, Congress regulated insider trading through the reporting and short-swing
profit provisions of Section 16.59 Beginning in 1961, however, the courts and the
SEC essentially created a federal common law of insider trading under Section
10(b) and Rule 10b-5.60 It has been vigorously argued that there was no statutory
basis or authority for this development.61
One may assume Eisenberg approves of the federal insider trading
prohibition.62 But can his model be used to justify its creation? Eisenberg hints
that his model could be applied to this (and other) forms of statutory interpretation
with relatively few modifications:
The term interpretation suggests a process that focuses on the text, its
content, its authorship, and its objectives, but in reality establishing the
full meaning of a canonical text may also involve application of the
standard of systemic consistency, the standard of doctrinal stability, and
58
See M. Eisenberg, supra note 1, at 128. One may assume, however, that Eisenberg believes
that the California Supreme Court erred in Li. He observes in passing that statutory and
constitutional cases “differ from the common law in that they are rooted in canonical texts, which the
courts cannot properly reformulate.” Id. at 161 n.35.
59
15 U.S.C. 78p (1982).
60
The initial movement in this direction was In re Cady, Roberts & Co., 40 S.E.C. 907 (1961).
The truly seminal case, however, was SEC v. Texas Gulf Sulphur Co., 401 F.2d 833 (2d Cir. 1968),
cert. denied, 394 U.S. 976 (1969).
61
See Dooley, Enforcement of Insider Trading Restrictions, 66 Va. L. Rev. 1, 55-69 (1980);
see also Bainbridge, The Insider Trading Prohibition: A Legal and Economic Enigma, 38 U. Fla. L.
Rev. 35, 37-42 (1986); Note, A Critique of the Insider Trading Sanctions Act of 1984, 71 Va. L.
Rev. 455, 456-62 (1985). For an overview of the current scope of the insider trading prohibition, and
a description of certain recent statutory developments that provide a more authoritative basis for the
prohibition, see Rosenbaum & Bainbridge, The Corporate Takeover Game and Recent Legislative
Attempts to Define Insider Trading, 26 Am. Crim. L. Rev. 229 (1988).
62
See M. Eisenberg, supra note 1, at 73.
16 1990 University of Illinois Law Review 231

a standard of congruence with relative social propositions (which in the

case of canonical texts may include moral norms and policies embraced
or subsumed in the text, even though they lack social support). ... Under
this analysis, the content of all law in our society, not merely the
common law, would ... consist of the rules that would be generated at the
present moment by application of the institutional principles that
determine how courts establish the common law and the full meaning of
canonical texts.63
Given the rapidly diminishing distinction between common law (in the sense
of case law) and statutory law in many private law fields, however, one might
reasonably have expected Eisenberg to do more than hint at how his model would
resolve what Calabresi called “the dilemma of ‘statutorification.’“64 Given the
overall success of The Nature of the Common Law in creating a framework for
common law adjudication, one might also hope that Eisenberg will revisit this
area to expand on the few, albeit lucid, thoughts he offers on the nature of the
common law in the age of statutes.
III. CONCLUSION
The Nature of the Common Law is one of the most thought-provoking books
on the common law in recent years. It almost certainly will be controversial.
Eisenberg’s belief in social morality as a workable guide to decisionmaking
surely invites further debate. So too does his concomitant belief that law is more
than merely the personal moral and policy preferences of the judge. Indeed, one
might almost say that The Nature of the Common Law deserves to be
controversial, for Eisenberg has given us a report that is both normatively
appealing and descriptively accurate. The Nature of the Common Law succeeds
because it is both an attractive vision of how courts should function and a
perspicuous account of the real world in which courts actually function.

63
Id. at 161 n.35. One may infer that Eisenberg believes his model justifies the development of
the federal insider trading prohibition. See id. at 73.
64
G. Calabresi, supra note 48, at 7.