“The risk reasonably to be perceived defines the duty to be obeyed, and risk imports relation; it is risk to another or to others within the range of apprehension,” wrote Judge Benjamin Cardozo in his decision in Palsgraf v. Long Island in 1928.
A leading case in the development of common law, as well as tort law, Palsgraf v. Long Island concerned a woman who had been injured in a fireworks accident while waiting at a railroad station and had subsequently sued the railroad.
Palsgraf alleged that the railroad’s guards were negligent in pushing a man who was carrying fireworks, which he then dropped, triggering the explosion that caused her injury.
The railroad appealed verdicts in Palsgraf’s favor to the New York Supreme Court, which submitted that Long Island Rail Road could not be held liable for an injury it could not reasonably foresee.
Cardozo’s majority opinion in Palsgraf v. Long Island established the rule that there is no liability for harm to an unforeseeable plaintiff. This rule was not added to the U.S. Constitution, nor did a legislature scribe it into a statute. Rather, it became part of the common law, a legal system based on court decisions and precedents rather than written laws.
Nearly a century later, Miller & Martin attorney Bob Parsley pauses his active civil litigation practice for an hour to discuss how common law has evolved from the courts of old England to the chambers of American judges and how new common laws could emerge from modern innovations.
Parsley begins with a primer on the various sources of law in the U.S.
To tee up our conversation, where do laws originate in the U.S.?
“There are five big sources of law that shape how we live and behave in the United States. The ultimate sources of law are the U.S. Constitution and the state constitutions. ‘Here’s what our country is about. Here’s what our state is about.’
“And then we have the legislative, judicial and executive branches of the federal government. These have given us the statutes our legislatures pass, the common law our courts make and the administrative rules and regulations our executive branch issues through the various agencies it creates.”
How did common law come to be a source of law?
“Common law comes from England. When our founders formed the judiciary in the U.S. Constitution, it included common law so that the judicial branch would have its own inherent powers to decide disputes.”
How is common law created?
“When Congress passes a statute, that’s the law for everyone in the U.S. But when a court decides a dispute between two parties, they issue an opinion that says, ‘Here’s who wins and why.’ The reasoning applies only to that case.
“However, the next time you have a similar case, they’ll look to this prior decision for guidance, and then the next one that’s similar, but not exactly the same, they’ll look to those two prior cases for guidance, creating a lineage of decisions. That’s common law.”
In his book, “The Common Law,” Oliver Wendell Holmes, Jr., wrote, ‘The life of the law has not been logic: it has been experience.’ What point was he making?
“That the common law is law that judges make gradually over time based on deciding real life disputes. When they announce a decision in a case, it applies only to that case, but the reasoning will guide how other cases in the future are decided.”
Is common law malleable?
“That’s where the doctrine of stare decisis comes in. Stare decisis means ‘Let it stand.’ Holmes’ point was that once a court announces a common law, subsequent courts are supposed to follow it. Circumstances will differ, and how you apply the law to varying circumstances is the malleable part.
“Essentially, stare decisis provides the consistency and reliability the public needs to be able to rely on what the law is. The law can’t be changing day to day.”
How did common law evolve?
“English courts addressed disputes as they arose, and tried to do so in a reasonable and fair way. Rules arose from that. These rules were handed down orally and eventually in writing. Today, the source of common law is the written opinions that generally come from appellate courts.”
Is there a superior source of common law?
“When the highest court issues a ruling, then it’s binding on all lower courts. So, when the Tennessee Supreme Court issues a ruling, it’s binding on every other court in state.”
We want to avoid having too many sources of authority.
“In the federal courts, we have the U.S. Supreme Court and 13 courts of appeals. Each circuit follows only the laws of that circuit. So, an issue will come up, and five circuits previously decided it one way and four previously decided it another. One of the reasons the U.S. Supreme Court will take a case is to resolve such a conflict.”
So, the common law is just as binding as a law Congress passes?
“And it’s always subordinate to the U.S. Constitution; the common law can’t contradict the Constitution. Also, it’s always subordinate to a legislative act as long as the statute is constitutional. So, an act of Congress is going to trump a common law rule.
“Courts have the power to decide any dispute that’s before them. And if the Constitution doesn’t say anything about a matter, and a statute is silent on it, the court must decide the dispute. So, there are some rules that exist only in the common law.”
That places a heavy responsibility on judges.
“That’s why judicial appointments are important. The public wants judges who are going to be reasonable and faithful to the Constitution and to the laws legislatures pass and not do their own thing.”
Provide an example of how common law impacted one of your cases.
“Back in the 1920s and 1930s, pensions for workers were a fairly new thing. So, courts started saying, ‘Whenever a statute creates a pension, courts are going to give any benefit of the doubt over whether somebody is entitled to a pension to the employee.’ That was common law; the courts decided it was something that needed to be in place.
“In the 1970s, the state of Tennessee adopted the Uniform Administrative Procedures Act. So, there were pension boards and administrative bodies, and whenever there was a dispute over a decision a pension board had made, it went to the courts.
“In the 1980s, the Tennessee legislature passed an act that defined how judicial review of these administrative decisions worked. One of the principles held that the court give the agency the benefit of the doubt when there are uncertainties. So, you have a common law that says, ‘Give the benefit of the doubt to the employee,’ and the statute that says, ‘Give the benefit of the doubt to the pension board.’
“We’re fighting about that in one of our cases. We’ve asked the Tennessee Supreme Court to clarify the law. Our argument is that the statute trumps the old common law rule.”
You mentioned how a lineage of decisions can craft common law. Is there DNA from Cardozo’s decision in Palsgraf v. Long Island in today’s common law?
“An example would be tort law. If someone steps onto your land and is injured, are you liable or not? In Tennessee, judge-made law generally governs this. Another example would be negligence. Who’s at fault when one car runs into another? Judge-made law also generally governs this.
“As things that are common in society have happened more than once, principles have emerged based on what makes sense. When one person accidentally hurts another person, how do you decide if one person is liable to another? Should someone be compensated? The principles at play have developed over hundreds of years as the courts have gone about their business of deciding cases.”
How does an attorney wrap their head around all of this?
“We read decisions that, for the most part, appellate courts have published. When the Tennessee Supreme Court decides a case, it will write an opinion that says, ‘Here’s what they’re fighting about and here’s who wins and who loses.’ But the important thing for the public generally is the reasoning behind the decision. Trying to decide what’s fair, reasonable and makes sense in a particular situation is the heart of the common law.”
What happens when a case introduces a wrinkle that challenges the common law?
“The law is extended to cover the wrinkle. For example, when railroads appeared, there were all these new things to consider. A big formative period for common law was the 1800s because so many new machines appeared, along with new ways for people to get hurt. Courts did a bunch of new work to take all of the common law principles and apply them to these new circumstances.”
Perhaps the appearance of the internet was the modern version of the railroad.
“It was. People started doing interstate business over the internet. While it took a couple of decades for the law catch up with what was going on, there’s now a robust body of case law that applies to it.”
So, the law lags behind innovation. How will that impact the emergence of AI?
“A dispute could arise and a court might have to make a decision in the matter. But this is where courts make new laws. We have a new circumstance, and people are interacting with each other in a new way, but there’s no statute or regulation. The Constitution doesn’t say anything about AI, so the courts will have to take the existing principles, extend those into this new situation and provide society with guidance on how to go about conducting themselves lawfully.”
Has a case on which you worked led to the creation of common law?
“The issue in a case I have pending in the Tennessee Supreme Court concerns the point at which a property owner should be on reasonable notice that there’s a danger on their property. We need the court to step in and say, ‘This is adequate.’ I hesitate to be more specific since the case is pending.”
What about a case on which you didn’t work?
“In the 1990s, Pepsi published an advertisement for a promotion in which consumers received points for buying its products and could then redeem their points for a T-shirt or a duffle bag. As part of the advertising campaign, they offered a Harrier fighter jet in exchange for 5 million points. Well, a teenager managed to put together 5 million points and said, ‘I want my jet.’
“Pepsi said, ‘Ha, ha, ha. Obviously, that wasn’t a serious offer.’ And the teenager replied, ‘You didn’t say you were kidding; you said anyone who earns 5 million points can have this fighter jet.’
“To have a contract under the common law, you must have an offer and acceptance of the offer, and then provide something in exchange. One way to make an offer is to make it to the public. ‘If you find my lost dog and return it to me, I’ll give you $100.’ If someone brings you your dog, you have to give them $100 or you break your contract. So the question in Leonard v. Pepsico concerned whether or not Pepsi made a genuine offer.”
Did Pepsi and the teenager duke it out in court?
“It went through some litigation, and the court eventually said, ‘This is not an enforceable offer because it was reasonably obvious to the public that it wasn’t a serious offer.’”
And Pepsi breathed a sigh of relief.
“But that was a case in which the court had to decide what made sense. And the law it made in that circumstance says you can publish an advertisement that appears to make an offer for something you don’t intend people to take seriously. If the court hadn’t reached that decision, it would have impacted advertising across the board.”
What brought this topic to your mind at this time?
“It’s always good for the public to understand what judges do and what judge-made law is. People sometimes begin to perceive that judge-made law is undisciplined – that some crazy judge just up and does things. But when judge-made law is done correctly, it’s very disciplined. It’s based on precedent, it’s incremental, it strives to be reasonable and it understands its place.
“It’s not there to override the Constitution or a statute and it understands what its role is. Reminding the public of that is helpful.”
How much responsibility do judges have to explain their decisions to the public?
“When judges issue an opinion, they should remember that they have an obligation to provide the public with sound reasoning. And the more the business of the courts is viewed as reasonable, the more they maintain credibility in the public’s view. You can rely on the courts because they’re reasonable.”
Do you know of judge-made law the public didn’t receive well?
“State v. Odom was a death penalty case before the Tennessee Supreme Court in the 1990s. And the question before the court was whether the defendant had been properly sentenced to death.
“At that time, there were very divided views over the legitimacy of the death penalty in Tennessee. In this particular case, the court held that the death penalty had been improperly imposed. But the public perceived these judges as being anti-death penalty.
“Rather than saying, ‘We’re going to strike down the death penalty because we think it’s unconstitutional,’ they said, ‘We find that the facts of this case do not warrant the imposition of the death penalty because it was not a heinous crime.’ And it involved a defendant who had raped and murdered an elderly woman.
“The public was outraged and said the judges were invalidating the death penalty in a backdoor way. So, people viewed the majority opinion in the case as unreasonable and the court did not win the confidence of the public.”
What was the fallout of that situation?
“Judges don’t run for office in Tennessee but there is a retention election every eight years. And if your eight years are up, then the public votes on whether to keep you in office. The three judges who had voted to not impose the death penalty were all up for retention election a year or two later. And there was a public campaign to vote them out of office.
“Justice A.A. Birch was retained by narrow margin, Justice Lyle Reid retired and Justice Penny White was not retained. That was the first time in Tennessee history that the public did not retain an appellate judge. I believe that’s still the only time that’s happened in Tennessee.”
You were able to see the creation of common law from the inside early in your career.
“I had the great privilege of being a judicial clerk under the Hon. Frank Drowota III my first year out of law school. He was a consummate example of how a judge should conduct themselves. And I came to appreciate how giving the highest decisionmakers in the land the final say is one of the great things about appellate law in the United States. We’ve made it as likely as possible that they’re going to be reasonable, and that society will view their decision as the way we should do things.”