THE COASE THEOROM AND JEWISH LAW* BY AARON LEVINE INTRODUCTION

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1





THE COASE THE
O
ROM AND JEWISH LAW
*






BY AARON LEVINE








INTRODUCTION



In
the most widely read article ever written in economics, Ronald Coase set
s
out
an

efficiency approach for dealing with an economic activity that generate
s

harm to
unrelated third
parties
.
Referred to in the economic literature as the negative externality
problem, the typical case entails the emission of smoke pollution by a factory.

The
traditional approach

to the above problem, as ty
pified
in the work of Arthur
Pi
gou, was to cast the problem as a perpetrator
and

victim situation in which one party is
ca
usally

and legally liable.

In
the smoke
pollution case, the
desirability

of making the owner of the factory
liable for the damage caused by the smoke is taken as a
given. The issue is only to
identify the most efficient means of accomplishing this. The alternatives approaches that
suggest themselves include
: a)

making the factory owner
liable for the damage caused to
those injured by the smoke; b) imposing a tax o
n the factory owner varying with the
amount of smoke produced and equivalent in money terms to the damage the smoke
would cause; and, finally, c) to exclude the factory from residential districts.

Coase rejects the above formulation of the negative extern
ality problem. What is
fundamentally missing in the Pigovian approach is the recognition that the negative
externality problem is reciprocal in nature
.


The smoke pollution case
easily
illustrates
this
.
Forcing the industrial polluter to be responsible fo
r the smoke damage his operation
entails, whatever form
this responsibility
takes, raises the cost of doing business for the
factory owner. Forcing the factory owner to
internalize the smoke damage his enterprise
entails
thus results in
some combination of

lower profits, higher prices and or
reduced
e
mployment.

In contradistinction to
the Pigovian approach, Coase casts the negative externality
problem in terms of the goal
of maximixing

social value.

The key
here is to compare the
total product yielded by

alternative social arrangements.
An important aspect of this
comparison is
, of course,
the alternative productions as measured by the market. But, as
C
oase points out,
the comparison should be made in broader terms than this.
Relevant
here
is
F
rank H.
K
n
ight’s insight that the problems of welfare economics must ultimately
dissolve into a study of aesthetics and morals.
Accordingly, the comparison of
alternative outputs should take into account the total effect of these arrangements in all
spheres

of life
.

The Pigovian
approach to the negative
externality problem conceptualizes the
factors of production as merely
p
hysical entit
ies
which the business man acquires and
uses.
In Coase’s conceptualization
, factors

of productions
are, instead
, viewed

as a right
to carry

out a circumscribed list of actions. To be sure, the rights of a resource owner are
never absolute.


2

As a means of showing the difference between Coase and the traditional approach
in respect to the
negative externalit
y

issue,

let’s
briefly
retur
n to
the smoke pollution case.
Assum
e

th
at
smoke pollution causes $100 of damage per annum.
Two methods of
eliminating the damage are available: One method is to tax the polluter $100 for the
damage the smoke causes. A second method is to install a smoke

prevention device in
his factory. The cost of running this device
is $
90 per annum
.

Since the smoke prevention
device is the least cost method of restraining the polluter, the Pigovian approach would
call for the installation of the smoke prevention devic
e.

Instead of figuring out the least
cost method of restraining the industrial polluter, Coase compares what the alternative
productions would be with or without a liability rule against the polluter:
Within this
framework the question to ask is what co
st would those who suffer the damage incur to
avoid the damage
. Suppose the damage can be avoided
by moving

away to a different
district

and this cost amounts to only $40 per annum. Under these conditions, not taxing
the polluter and thus forcing the adju
stment on those who face injury allows society to
achieve a
gain
of $50 higher than
would be the case
had we forced the polluter to install a
smoke prevention device.

The numbers used here are only illustrative.
1


In the various
court cases
Coase examines
, he shows that
judicial

decisions do not
adopt the approach of maximizing society’s total output.
2

Far better therefore would be
for the courts to adopt a
lais
s
e
z

faire
attitude in these matters and let the parties affected
negotiate a deal. Negoti
ation

b
etween the parties will allow the
economic

activity with
the higher economic value to prevail.

Following as a
corollary

is that

regardless
of what

the decision of the court is,

if
transactions cost are
zero or very minimal, the losing party will be driven

to negotiate
with the winning party to modify the
court decision
. Notwithstanding that
t
he court has
re
n
dered a

decision, neg
otiations

between the parties can bring about an optimal
allocation of resources between the conflicting economic activities. One
scholar has
called the later principle the Independence Principle.
3




THE COAS
E

THEOREM AND JEWISH LAW





Our purpose here will be to
extrapolate ho
w

Jewish law deals with the negative
externality problem.
Toward this end we

will compare Jewish law wit
h
the

approach
Coase took in the major cases he
actually
deal
s

with in his paper.

Let’s begin with
straying cattle case
:




THE STRAYING CATTLE CASE



The straying cattle case entails the following elements: A farmer and cattleman
occupy neighb
oring properties. Without any fencing between the properties, an increase
in the size of the cattle raiser’s herd increases the anticipated crop damage in the
following relationship:



3


Assume further that the annual cost of fencing the farmer’s property is $9 and that
the

market
price of the crop is $1 per ton.

Finally, assume that before the arrival of the
cattleman, the farmer incurred an annual
cost
of $
10 to produce and sell his crop and the
total revenue he received for his crop was $12.

Coase
m
ak
es

use of this
data

to demonstrate
that if the price system
works
without cost,
negotiations between the farmer and cattleman will result in society
m
aximizing its output. Let’s show this under alternative arrangements
.

Suppose the legal system makes the cattleman liable for any crop destruction
caused by his cattle. Given this liability rule, the cattleman’s
decision whether

or not
to
expand his herd
will have to include
along with other
additional marginal

costs
,

the
additional
penalty he will incur for crop destruction
.

To illustrate, if the cattleman
expands his herd from two to three
steers, he will have to factor in
as part of his marginal
cost th
e additional three dollar penalty for the
additional three

ton c
rop loss.
To be sure,
means may be available for the cattleman to avoid the crop loss

by incurring an
expenditure of less than three

dollars
,
such as the employment of
additional herdsmen.
W
hatever the minimum marginal
c
ost is,
the cattleman will balance it

against the
anticipated additional revenue he can earn by expanding the herd from two steers to three
steers.
Accordingly
, if meat production yield
s

a higher value compared to crop
product
ion, meat production will supplant crop production.

Suppose the legal system does not hold the cattleman liable for
the

destruction
caused by his steers.
The same result as described above under the liability rule should
obtain.

This is so because if the
law does not protect the farmer, self
-
interest

should drive
the farmer to take action to minimize his loss. Recall that before the arrival of the
cattleman, the farmer was earning a
$2

prof
it on his enterprise
.

According
ly
, the onus
would be on the farmer

to incur the least cost necessary to avoid the loss. If the leas
t

cost
method of avoiding the loss is greater than the mar
g
inal revenue the cattleman can
achieve by expanding his herd from two steers to three steers,
the more profitable
enterprise consist
ing of meat production will displace the less profi
table
enterprise
consisting of crop production.
4


In the real world conducting market transactions is not costless. To make use of
the price mechanism
transactions

costs must be incurred. These costs incl
ude such items
as the cost of negotiating a contract, drawing up the contract and
monitoring

the
agreement

to assure compliance with the terms of the agreement. If the transactions costs
are significant, the price mechanism may not result in negotiation be
tween the parties.
Under transactions costs, there is therefore no guarantee that the economic activity with
the higher economic value will displace the economic activity with the lowe
r

value. The
court system will, therefore, have to deal with the dispute
. To get an economically
efficient result
, the

court should understand
the economic consequence of its decision and
should take these consequences into account when making its decision.
5


Number in herd ( steers)

Annual crop loss ( tons)

Crop loss per addition
al
steer

1

1

1

2

3

2

3

6

3

4

10

4


4



THE

STRAYING

CATTLE

CASE

AND

JEWISH

L
AW



In
extrapolating

Jewish

Law’s approach

to the straying cattle case, the most
fundamental point to ma
ke

is that cattle r
a
iser is obligated to compensate the farmer for
the crop damage his steers cause.

Before addressing Coase’s specific case, let’s note the following points of l
aw
regardin
g

damage inflicted by an animal.


In Jewish Law, the damage an animal inflicts is characterized as either
keren
(lit.
horn
); she’en
(lit. tooth); or
regel
(lit
. foot). Each of these categories manifests damage
proceeding from a different
behavi
o
ral mode.


Keren
is damage
that manifests
an aberration from the animal’s normal behavior,

as for example
, when

the animal
inflicts

the damage by

attacking with its horns or by
biting or kicking.
6



She’en

is damage

rooted in pleasure seeking
by the animal, as for example
when

the animal eats food or inflicts damage in the process of scratching itself against a wall.
7





Finally,
regel

is

damage inflicted
by the animal

by

its natural movement, as for
example, when the animal
steps on and

breaks
an article that is in its path.
8



In the short hand notation of the Talmud, damage inflicted by an animal is referred
to as
shor ha
m
azik
(lit. the ox that inflicts damage
)
.

An important consideration in assessing liability in
shor hamazik

case
s

is the
place
w
here the anima
l
inflicts the damage.
S
he’en
and
regel
incur liability only if the
damage is inflicted in the domain of the victim. If the damage was done in the public
domain (
reshut ha
-
rabim
), no liability is incurred for the damage.
9

Nonetheless, in the
case where the damage consisted of the animal consuming produce, it is recognized that
the owner of the
damaging

animal derived a definite benefit
from the damage his animal
causes. This benefit consists of saving
an expense

to feed h
is animal on that day.
The
assessment here is set at two third’s the price of barley, which is the usual fodder for
animals. Because this sum is a “bargain price,” the owner’s claim that he
did not benefit
from the damage as he would not have fed his anim
al that day has no credibility.
10

Keren,
on the other hand, incurs liability whether the damage was done in the
public domain or on the property of the victim. In both instances, however, the owner
incurs liability the first three times for only half the d
amage his animal causes. Another
leniency for
the first three episodes of
keren
is that the award cannot exceed the value of
the damaging animal.
Provided the owner was properly warned after each incident
, t
he
forth episode of
keren
incurs liability
for th
e

full amount of damage
11

and the
collection
of this payment
is not limited to the value of the animal that inflicted the damage.
12


KEREN IN CONTEMPORARY SOCIETY


Before we draw conclusions
from comparing

Jewish law’s treatment of the
straying cattle case w
ith Coase’s treatment of this case, l
et’s take note of a number of
features of
shor ha
-
mazik
in

the form of
keren.
In respect to
tam,
the one
-
half payment is
in the nature of a fine and
, in addition
, this

type of damage is not at all common.
13


5

Moreover,
sho
r ha
-
mazik
does
not become
mu’ad
unless a court whose judges have
ordination
,
14

that goes back in a link all the way to Moses, make this declaration. This
special credent
ial, called
Semikhah,
became moribund in the latter part
of the

fourth
century.
15

Taken
together, the import of these factors is to make damage proceeding from
keren
out of the jurisdiction of the Jewish court

i
n contemporary society.
16


Because
keren
is very uncommon, we take it as a given that the type of damage
Coase refers to in the strayi
ng cattle case is
sh
e
’en

and

regel
.

In the straying cattle case, a clear
-
cut difference emerges between Coa
s
e

s and
Jewish law’s treatment of this case. For Coase, the law should not hold the
cattleman

liable

for the crop damage his herd causes to the f
ar
mer.

Economic rationality, however,
tells the farmer that economic survival requires him not to be passive. Instead, the farmer
should implement the least
-
cost method of avoiding the damage to his crops. Depending
upon whether cattle raising or farm produ
ction is the more valuable economic activity,
the economic activity of the greater value will prevail. In sharp contrast, Jewish
law

en
titles

the farmer with the right to be compensated for the crop destruction the herd
cause.

Further clarification is, ho
wever, in order. Consider that
C
oase speaks of the
instance where the farmer’s fields are not fenced

in
. Perhaps
, liability

for

she’en
and
regel

obtains

only when farmer fences in his field and
sustains damages

notwithstanding
the precautions he took to pr
event the damage
s. Relevant here is the following
Talmudic

passage
:


There were these goats owned by the Tarbu family that would cause damage
to
the property of
Rav Yosef
-

So
he said to Abaye
: go tell their owners that they
should keep them
inside their

pr
operty
-
Abaye
said

[
to him;
for

what purpose

shall I
go?
What will I accomplish?
For if I go
and tell them what you, the master have,
they
will tell me that the master should
rather

build a fence around his
own
land
.

But

if
he
[every landowner]
would
be re
quired to
fence
his property
, how would you find
a
case
where the Merciful One
in His Torah
obligates
a person for damages done through
the
shein
of his animal
.

You find it
where [the animal]
burrows under

the fence into
the property.

Or also
, you find it

where the fence fell

down during

the night
and the
animal entered the property before the property owner became aware that his fence was
down.
17




Codifiers
generally
follow
Rav Yosef’s position.

These authorities include R.
Isaac b. Jacob Alfasi (Alge
ria, 1012
-
1103))
,
18

Maimonides (
Egypt,

1135
-
1204
)
,
19

R.
Solomon b. Jehiel Luria (Ostrog, 1510
-
1594)
,
20


R. Joseph Caro (Israel,

1488
-
1575
)
,
21

and
R. Jehiel Michel Epstein

(Belorussia, 1829
-
1908)
.
22


A significant minority of authorities, however, exempt the ca
ttleman from liability
unless the f
ar
mer fenced in his fields
a
nd despite this measure the steers break through and
damage t
h
e crop. These authorities include
R. Hananel b. Hushi'el (North Africa, 11th
cent.)
,
23

R. Asher b. Jehiel

(Germany
, 1250
-
1327)

24

an
d R. Shabbetai b. Meir ha
-
Kohen
(
Siftei

Kohen
,
Poland 1621
-
1662)
.
25

These authorities, however, limit the exemption
to the
circumstance where

the relevant terrain consists of
farm land and grazing land. However,
the exemption does not apply within the conte
xt of an urban setting.
This is so because

6

within population centers it is unreasonable to expect a
householder

to keep his house
(courtyard) under

constant lock.
26


What follows from the
majority view

is that
the farmer is not expected to fence in
his land

as a means of avoiding crop damage from the straying sheep. Quite to the
contrary, the onus is on the cattleman to guard
his

herd against straying into the farmer’s
field and eating or destroying his crops.


Let’s take note that
liability for

the cattlema
n holds only if
he

did not guard his
herd in the prescribed manner. But, if the cattleman did what the law require
d of him, he
bears no liability for the damage his herd causes the farmer.
In figuring out what
preventative measures should
be
prescribed for

the
cattleman
,
the rabbis took their cue
from the language the Torah employs in
describing
what role the owner plays in the
damage his animal causes.
In respect to
keren,
the
language
Torah
employs
in no way
connects the owner with the damage his animal c
auses:


If an ox gores a man or a woman

and the victim dies

(Exodus 22:4). In sharp
contrast
,

the introductory phase the Torah
employs in

the same verse
that describes both

sh’en
and regel indicates that the owner
was guilty of negligent conduct
:”
[H]e

let
s his livestock loose
…(Exodus 22:4).

The difference in the way the Torah describes the
role the owner plays for
different manifestations of
shor ha
-
mazik,

conveys the

notion of a differential standard
of
guarding, depending on the type of damage inflicted
.

In respect to
keren

tam
,

liability is imposed unless the owner guarded his animal
in

a superior manner. In sharp contrast, for
sh’en
and
regel
damage, the owner escapes
liability provided only that he was not guilty of negligence in guarding his animal
.
27



While the
S
ages did not
spell out in specific terms
the preventative measures they
expected the

cattlem
an to take
so that his herd does not harm a neighboring farmer’s
crop, they did
mandate specific prescriptions
in respect
to
what they
expected
of a

householder that is the neighbor of
a

farmer.

The rule is that a householder should keep
his livestock

locked up in a barn
and the door of the barn
should be
strong enough to
withstand an ordinary wind
. If the householder took this precaution, but “an ext
radinary
wind” lodged open the door of the barn and
the animal

inflicted
she
’en

or
regel
damage
to the farmer’s
crop,

the householder bears no responsibility for the damage.
28


Using the preventative measures the law requires
for
the householder as the mode
l
for what the law
would require of the cattleman
,

tells us at once that
leaving the herd
unsupervised in the pasture is negligent behavior
. What seems to be indicated is
a

level of
supervision that under ordinary conditions insure
s

that the
cattle

don’t s
tray
u
nto the
property of the f
a
rmer and destr
o
y his crops.
The number of
Shepards

required to
accomplish this
would,

of course, depend on how large the herd is.

What the preceding
analysis

has demonstrated is that
Jewish law’s treatment of
the s
t
raying c
attle case is incompatible with Coase’s notion that
the externality problem is
reciprocal in nature and the farmer should therefore
have no

inherent right to be protected
against the damage the cattleman causes him.
Rather than
entitling both the cattlem
a
n
and farmer with equal rights to carry out their incompatible enterprises and allow the
price system to determine which enterprise prevail
s
, Jewish law holds the cattleman
responsible for the crop damage his steers cause. The farmer’s protection against t
he
damage
the
steers cause

him is not limited
to the

instance where
he constructs

an

7

adequate fence and
, despite this defensive measure, the steers break through and cause
crop damage.

Instead, the farmer is entitled to compensation for damages even if he

does
not the fence
his fields.

Recall Coase’s notion that if the price system works without cost, the initial
delineation of rights the legal system sets up is not a barrier to allow society to maximize

the social value of its output.

But,
once we take i
nto
account the reality of

positive
transaction cost,
the only hope for an efficient solution is for the legal rule to
be
based on
the goal of maximizing society’s social product. Given that Jewish law’s legal rule for
the straying cattle case is not ai
med
at maximizing
society’s social output,
Jewish law’s
approach to the straying cattle case is incompatible with
C
oase’s approach to this
problem
.
29






THE PROHIBTION TO GRAZE SMALL CATTLE IN THE LAND OF
ISREAL



The gap between Jewish
law and Coase’s ap
proach

to the st
r
aying cattle case
widens
when we consider
the
ordinance the Talmudic sages made against raising
behamah
dakah

(small cattle, i.e. sheep and goats) in the Land of Israel:

Out of fear that small cattle would wander

into neighboring fields an
d destroy
crops there, the sages prohibited the breeding of small cattle

in the Land of Israel except
in the desserts. The importing of small cattle for consumption purposes

was permitted
under controlled conditions. What the ordinance did was not merely

hold the cattleman
responsible for crop damage inflicted by his herd, but outlawed the breeding of small
cattle altogether
.
30

The former approach force
s

internalization of the negative externality

but allow
s

bargaining between the cattlemen and farmers to

determine the land use
pattern. The latter approach, however,
dictates

a land
-
use pattern in the form of farming,
regardless of the implications for economic efficiency.

Why the Sages did not find it sufficient to impose a liability rule against the
ca
ttleman is explained by Maimonides

(Egypt,

1135
-
1204)
) on the basis of the
inevitability of the crop damage that would result from the cattle breeding enterprise.
Dealing with the negative externality by merely imposing a liability rule

would be
tantamoun
t to licensing

the cattleman to destroy the farmer’s crop
, but

calling for
compensation

for damages as they occur.
31

Standing at the basis of the ordinance, according to R. Solomon b. Isaac (
Rashi,

France
, 1040
-
11050,

however, is a desire to
promote

Jewish

settlements and population
growth in the
l
and of Israel.
32

Rashi’s
rationale

explains why the rabbis were not
satisfied to just establish a liability rule against the
cattleman
. A liability rule allows
subsequent bargaining
between the

parties involved to

determine the land
-
use pattern
,
irrespective

of the impact on
p
opulation growth. To insure that the narrow interests of
the parties involved do not produce a bargaining result that would subvert the social goal

8

of population growth, the Sages prohibited
outright the breeding of small cattle in the
land of Israel.






STURGES V. BRIDGMAN



The 187
9
B
ritish

court case
Sturges v. Bridgman involved a successful
suit by a

doctor to restrain a confectioner who operated his business
in adjacent premises
.
The
c
onfectioner’s machinery caused the doctor no harm until, eight years after he had first
occupied the
premises
,
the

doctor
built a

consulting room at the end of his garden right
against the confectioner’s kitchen.
Sturges’
complaint was that
Bridgman’s mort
ars

produced noise and vibrations that made it impossible for him to conduct his medical
practice in
his consulting

room
.

Specifically, the

noise interfered with the use of the
stethoscope and prevented Dr.
Strurges from

carrying on any work requiring cont
inuous
thought. In addition,
D
r.
S
turges
claimed that absent any intention on his part to use the
newly constructed room for professional
purposes
, the noise produced by the
confectioner’s equipment was a nuisance and interfered with his domestic comfort.
To
bolster the later claim Sturges produced affidavits by
n
eighbors who testifie
d

that
the
noise
was such that it interfered with
one’s domestic comfort
.



In Sturges v. Bridgman, the court
formulated the issue in terms of whether
Bridgman’s long standing
use of his mortars without protest from Sturge
s

entitles him to
continue the operation
even after Sturges lodged his protest.
In legal parlance such a right
is called an easement. Noting that
S
turges had no right to prevent Bridgman from
operating his mo
rtar
while the noise it produced was not a nuisance to him, Sturges’
silence during this period can in no way be interpreted as a consent on his part to allow
Bridgman to continue the pounding even after he built the consulting room.
33


By ruling in favor
of Sturges, the court

failed to take account

that the negative
externality problem is reciprocal in nature. Since the economic activities of the doctor
and confectioner interfere with each other
:

mor
e

doctoring is only at the

e
xpense

of less
candy producti
on and more candy production is at the expense
o
f less doctoring.
Taking
into account the reciprocal nature of the externality problem should have similarly led the
court to reject
S
turges’ claim that
Bridgman’s

pounding activity interfered with his
domest
ic comfort.

In Coase’s view

the court should not have taken sides in this case. A
laissez
-
faire
attitude would have allowed bargaining between the parties to insure that the activity
with the highest social value to prevail.
34



In his pr
esentation of Sturges v. Bridgman, Ronald Coase omitted one of the
details of th
e

case. This detail is that
in his construction project
, Sturges

made use
of
Bridgman’s kitchen

door as one of the walls for his consulting room. In other words,
the
confection
ary’s
kitchen door served as a party wall between
the
Doctors’s

consulting
room and the p
lace w
here he

(the

confectionary
) operated his mortars. Indeed, one of the
d
efenses Bridgman offered was that had plaintiff built his consulting room with
a
separate

w
all, and not against the wall of his kitchen, the Doctor would
not have

suffered
any serious annoyance.
35

In all probability, Co
a
se omitted the
above detail
because

its inclusion
would
make no difference for his analysis. However, for Jewish law, the circu
mstance that one

9

of the side walls of the consulting room was the party wall between the
confectioner’s
kitchen

and the doctor’s garden is a

critical

factor

in deciding the case. Accordingly, our
analysis of
Sturges v.
Bridgman

will be divided into two p
arts
. In the

first part we will
analyze Sturges

v. Bridgman
from the standpoint of Jewish Law based on the actual
circumstances of the case. We will call this
part Sturges

v. Bridgman (1).

The second
part will
consider a variant of the actual case. The s
econd scenario will be dubbed Sturges
v. Bridgman (2).


STURGES V. BRIDGMAN
(1
)
AND JEWISH LAW



In ana
l
yzing Sturges V. Bridgman

(1
) from

the standpoint of Jewish law, the
fundamental factor
to focus on is th
at

Sturges made use of Bridgman’s property to
construct his

consulting room.


The relevant model here, discussed in the Talmud, is the instance where
A’s
courtyard adjoins B’s wall.
The law says here that
A has no right to make use of B’s
wall.
36

To show how strict the application of this rule is, co
nsider the following dispute
between
the decisors
R.
Judah

(
Barcelona
, late 12
th

cent.) and R. Jacob b. Asher

(
Tur
,
Spain
,
12701343). In R.
Judah
’s
view the prohibition does not apply
when
A
seeks only
to
build a

small
projection into
B’s
wall that is les
s than a handbrea
d
th (
a linear
measurement the width of the palm of the hand
)
.

The principle here is that if A

seeks a
benefit from

B
and
B

sustains no harm as a result of
letting
A

have his

benefit
,

the
Jewish court will coerce
B
to allow
A
the benef
it
.

Referred to in short as the
kofin
(coercion)

principle, the dictum says
kofin otah al middat Sedom,
i.e.
we coerce him not
to act like a Sodomite
.
37


In the case at hand, R.

Judah

sees no debit for
B.

Given the limited use
A
can
make of the small
struc
ture he builds into the wall,
B’s
use of the wall
will perforce be an
ad hoc

one,

as opposed to a
use that will be routinely repeated again and again.

Consequently,
B
need not worry that in the event he (
B
) subsequently desires to take
down the wall,
A
wil
l object on the basis that he (
A
) already acquired a
hazakah

(
presumptive

right) to make use of the wall. Moreover, given that the small str
u
cture that
A
wants to build into the
wall

does
n
ot have the capacity to support anything heavy, there
should be no
concern that
A’s
use
will

damage or undermine the wall.
Because R.
Judah

sees no possible debit for
B,
the
J
ewish court will force
B
to allow A the use of the wall
he seeks.
38

Tur

disputes R.
Judah’s

conclusion. In objecting to R.
Judah’s

conclusion,
Tur

ap
parently follows the view that the
kofin
principle applies only when the issue at hand is
denying someone a
benefit

when it
entails no cost to the one who wants to deny it.
However
, the

kofin
principle cannot
coerce
B
to allow
A
to affirmatively make use
of his
property, even though by doing so
B
would suffer no
discernable

loss.
39

Since the essence
of a property right is the
control

the owner ha
s

over his property, forcing the owner to
give up control over his property

is an emasculation of the property ri
ght which is

not
unreasonable to object to.
40


Although
R.

Joel Sirkes (Poland, 1561
-
1650) finds
R.
Judah’s analysis

and
conclusion
compelling,
41

t
he major codifiers,
R. Moses
Issueless

(
Poland, 1525 or 1530
-

1572)
42

and R. Jehiel Mich
a
el Epstein (Belarus,
1
829
-
1908) follow
Tur
.
43



10

Denying
A

the right

to make affirmative use of
B’s

property even when such use
represents

no
discernable

loss
for
B


has direct application for Sturges V. Bridgman.
Most
fundamentally, the rule
equips Bridgman with the right to
ge
t, if necessary, a

restrain
in
g
order from the courts
to insure
that Sturges’

construction project

does not
make use of his
kitchen door

as a party wall for
his
consultation room.
Moreover,
absent any protest during
the construction, Bridgman
does

not lose
his right to continue the operation of his mortar.
This is so because legitimacy would be given to Bridgman’s argument that had he
only
known that
Sturges’ intended use for his construction was incompatible with
the
operation
of a mortar next door, he wou
ld have
gotten a court order to nip the project in the bud
.


The upshot of the above analysis is that in
Sturges

v.

Bridgman

1
, the Jewish court
would
not issue a
restraining

order against Bridgman and order him not to use his mortar
during Dr. Sturges’ of
fice hours.





STURGES V. BRIDGMAN (2)


We will now proceed to analyze
a variant of
the
Sturges
v.

Bridgman
case
.
In
our
variant case, we assume the following facts: (1) In his construction project
, Sturges

did not
make use of Bridgman’s kitchen d
oor as a party wall for his consulting room. Instead,
Sturges built four new walls, with the consequence that the noise and vibrations
emitted

by
Bridgman were muted by the presence of two walls
that separated

Bridgman’s kitchen
from
the consulting room.
(
2) Notwi
thstanding the “double wall” between the pounding mortars
and the consulting room,

the operation of the mortars
made it impossible for

Sturges
to
concentrate
.

From the standpoint of Jewish law
,

Sturges’ complaint
in the above scenario
should be ana
lyzed from two different standpoints. One
aspect is
that the operation of the
mortars prevents Sturges from pursuing his
livelihood

as a medical
practitioner
. Second,
the pounding is a nuisance
that
prevents Sturges

from enjoying the comfort of his home
as

a residence.



NEGATIVE

EXTERNALTIES

AND

LIVELIHOOD

ACTIVITIES


Let’s first take up the
prevention of
livelihood
aspect of the
complaint.
The
model case
here
for
the
treatment of Sturges v. Bridgman
(2)

in Jewish law is the
following Mishnaic and Talmudi
c discussion:


One may not open a bakery or a dye shop u
nder

the storehouse of his fellow;
-
nor
may

he open a
cattle barn



under a storeroom
.
44


A
Tanna taught

the following
Baraita
:


If

the
establishment

of the
cattle barn
preceded

that of the storeroom

it is permitted to maintain the cattle barn.
45



What can be extrapolated from the above Talmudic discussion is a rule regarding
how the economic activities of neighboring property owners (
A
and
B)

are regulated
when one has a
destructive effect

on the oth
er. The rule is that if
A
, for example,
initiated an economic activity on his property,
B
can be restrained from conducting an
economic activity on his own property that would exert a destructive effect o
n

A’s

11

enterprise
. But, once
B
sets up his economic
activity on his own premises,
A
has
no right

to demand that
B
remove his enterprise because it will destroy the enterprise
A
is
planning.

Application of the above rule to Sturges v.
Bridgman
(2)

is very straightforward.
To be sure, Bridgman’s pounding mo
rtars makes it impossible for Sturges to carry on his
medical practice in the adjacent consulting room. But, consider, Bridgman was
conducting his confectionary business at the same place for many years before Sturges
built his consulting room. Accordingl
y, Sturges has no right to put the onus on Bridgman
to make the necessary adjustments so that he can practice medicine in his newly
constructed adjacent consulting room.

Further analysis of the Talmudic model case
referred to earlier
will show that
the
re is even a more fundamental
reason
for rejecting Sturges’ complain
t
. Consider that
the
operation of the
dye shop

and cattle barn
in, say
,

the lower story apartment, is not
only
incompatible

with the storehouse enterprise in the upper story, but,
the joi
nt
operation of these enterprises will result in the
spoilage

of the produce that is in the
storehouse.

This model does not describe Sturges’ complaint. Bridgman’s confectionary
operation does not result in the
destruction or spoilage
of Sturges’ assets
.
Instead, the
pounding renders Sturges’ stethoscope inoperative, making it impossible for him to pick
up the hear
t

beat of his patients by using this instrument.
The distinction we
draw is
between an enterprise that destroys the assets of a neighboring
enterprise and one that
merely makes it
impossible

for a neighbor to conduct
certain

activities on his own
premises. The above distinction finds expression in the work of
a number

of
galactic

authorities.

Let’s begin with
the work of
R.

R. Yehezkel Abrams
ky (London, 1886
-
1971). R.
Abramsky’s

analysis of an aspect
of
Jewish

privacy law, called
hezek re’iyah,
i.e. visual
penetration

of someone’s privacy
, shows that a negative externality is actionable only
when it destroys the assets of the neighboring prop
erty owner, but, not when it merely
makes it impossible for the neighbor to conduct certain activities on his premises.
Preliminarily, let’s take note of the following
examples of
duties the law of
hezek re’iyah
imposes on a property owner.

1.
A
and
B
are

partners in a courtyard. They agree to break up their partnership
and
divide the courtyard between them. With the aim of protecting the privacy rights of
both
A
and
B,
Jewish law demands that
A
and
B

share in the construction of a partition
wall
.
46

2. If
A’s
home faces
B’s
courtyard,
A
has no right to install a window in his home
that faces
B’s
courtyard. The basis of the prohibition is that the installation of the
window invades
B’s
privacy rights.
47

What stands at the

basis of the

hezek re’iyah
duties of

property owners
?


R.
Yehekel Abramsky


proposes two competing approaches.

One possibility is that
absent
the duties described above, privacy invasion between neighbors would be inevitable.
The
purpose of
hezek re’iyah
law
is therefore
to restore privacy

that is
otherwise

lost.

Alternatively, out of fear that his privacy would be invaded
,

a neighbor would
refrain from engaging in privacy activities
. In this understanding the purpose
of
hezek

re’iyah
law

is to impose
prevent
a
tive

rules so as to avoid the
loss of privacy.

R.
Abramsky

rejects the notion that
hezek re

iyah
law is based on
the entitlement
of a property owner not to
be forced to
desist from conducting private activities on his

12

premises out of concern that he will be observed by his neighbor.
W
hat is fascinating
here is that
R.
Meltzer
invokes
the reciprocity principle as

the reason for rejecting this
approach.

Imposing restrictions on how
A
may make use of his property with the aim of
affording neighboring property owner
B
free exercise of his

property cannot be defended
if it can just as easily
be
argued that it is
B
who

should be restricted with the aim of
affording
A
free exercise of his property right.
If the negative externality does not
damage
or destroy a neighbor’s property, but instea
d
, makes

the neighbor desist from certain uses
of his property, Jewish law would take a laissez faire approach.
Unless
A
can demonstrate
hazakah,
J
ewish law will not stop neighboring property owner
B
from a use of his
property that will effectively make it

impossible

for
A

to continue his enterprise
.
48


Demonstrating
the limited ability to stop a negative externality when it does not
exert a destructive effect
in the form of either bodily injury or property damage

is the
law
of
davshah

(lit. treading).
This

law says that if
A
has a wall constructed on his own
property

and the neighboring property owner
B
wants to build a wall on his own property,
B
must distance his wall at least four
amot
49

from
A’
s

wall.
50

The rationale
here is that if
the distance bet
w
een

the walls is four
amot
or more, pedestrians will not
hesitate

to walk
bet
w
een the walls and this
pedestrian

traffic
will
harden the earth and thereby strengthen
the
foundations of
wall
s
.

If the gap between the walls is narrower,
however,
pedestrians
will

not walk in between the walls and the foundations of wall
s

will be undermined.
51


Commenting on the law of
d
avshah, Tosafot

(12
-
14 cent. School of French and
German Talmudic commentators)

and R. Solomon b. Adret

(Spain, 1235
-
1319) posit that
this law does

not rest
rict

A
from constructing a wall o
n

the very edge of his own property.

To be sure,

A’s
construction
precludes

his neighbor
B
from constructing
a wall
on his
own property
within
four

amot

of
A’s
wall
.
Nevertheless, there is no legal objection to
A’
s
wall building. This is so because
A’s
wall building merely prevents tr
e
ading from
occurring, but

it itself generates no destructive effect on
B.

Commenting on the above

Tosafot,
R. Aaron Kotler ( New York, 1892
-
19620
derives the general principle that a

negative externality is not actionable when the adverse
effect consists of only of disallowing plaintiff from conducting income
-
producing
activities on his premises.
52



NEGATIVE EXTERNALITIES IN THE FORM OF A NUISSANCE



Let’s now consider the nuisance
aspect of the complaint. The
analogue in Jewish
law is the case where a resident
of a courtyard decides to conduct commercial activity
either in his own residence or in the courtyard
. Suppose this commercial activity
generates
neither bodily harm nor

pro
perty damage to his fellow residents. But, it does
represent a nuisance to one or more of the fellow residents
.

Do fellow residents have a
right
to
object to the commercial activity on the basis of the nuisance element alone? We
shall refer to this right a
s an amenity right.

The analogue here is the issue
of
whether a resident of a courtyard has the right to
prevent a fellow resident from using his premises to conduct a noise generating
enterprise, such as
grinding and hammering.
Given the nuisance the grin
ding and
hammering
entails
, fellow residents
, in the opinion of Maimonides and R. Joseph Caro
,
have

a right to block the enterprise.
53

However, once it can be established that the

13

grinding or hammering took place and none of the residents protested, the
bus
iness

whose
operation

involves
a nuisance

in the form of noise
acquires a prescriptive right (
hazakah
)

to continue the enterprise.
54


Disputing R. Caro, R. Moses Isserles takes the view that
generally fellow
residents of the courtyard have no right to block

the operation on the noise generating
business. Nonethe
le
ss, if the noise is not only

a
nuisance

but would bring on
sickness

to
one of the residents
, that resident
can
stop the operation of the enterprise.
55


In the case at bar,
provided that Bridgman’s gr
inding activity does not cause
actual sickness to any of the neighbors,

all authorities should agree that the enterprise
cannot be stopped. Recall that Sturges


construction made use of Bridgman’s kitchen
door as the fo
u
rth wall for his consulting room. S
ince Sturges has no right to use
Bridgman’s property without his permission
, credence would be given to Bridgman’s
contention that had he known
all along
that Sturges’

use of his kitchen door as a party
wall for the construction project would culminate in
a demand that he shut down his
enterprise, he would have denied Sturges

the right to use his kitchen door as a party wall
for the project.


CONTEMPORARY SOCIETY AND THE NUISANCE EXTERNALITY



In contemporary society local governments legislate zoning code
s. These codes
designate

permitted uses of land based on mapped zones. Basically,
urban

zones
fall into
one of five major categories
: residential, mixed

residential commercial, industrial and
special. Within each
category, most

zoning systems have a proced
ure for granting
variances, usually

because of some perceived hardship caused by the particular nature of
the property in question.


Within the framework of the modern zoning
c
odes, the treatment of the
nuisance

externality would have to take i
nto
account
the applicable secular laws
.

The principal
here is
dina d’malkhuta dina,
i.e
.

the law of the kingdom is law.
56

To be sure, Jewish law
requires disputes between Jews to be adjudicated in a Jewish court,
b
ut
t
his principal
says
that
, generally

speaking
,

in monetary matters the Jewish court should decide the
matter on the basis of
dina d’malkhuta dina.


While authorities
dispute

the ambit of
dina
d’malkhuta dina,
57

contemporary decisors follow
Rema
’s formulation.
58

In his view
,
dina
d'malkhuta

app
lies to civil law generally

and
is recognized only when the law involved
either benefits the government or was enacted for the benefit of the people of the land.
59
.
Conflict between Halakhah and
dina d'malkhuta
, in his view, is generally decided in favor
o
f
dina d'malkhuta
.
60

Exceptions to this rule, however, apply.
Dina d’malkhuta dina

does
not hold in relation to the law of inheritance;
61

nor does it give Jews the option of taking
their dispute to secular courts,
62

or to have the secular court's evidentiar
y procedure imposed
on them.
63



In his analysis of
dina d’malkhta dina,

R. Joseph Eliyahu Henkin (New
York, 1881
-
1973)

argues that the disappearance of the self
-
governing jewish community
makes for a compelling case to follow
Rena’s
view in
contemporary society.

In the
middle Ages, secular governments gave Jews autonomy in matters of civil law. Under
this license
, Jews established

a communal organization, called
kehi
lah
,

and enacted
legislation (
tak
k
anot ha
-
kahal,
lit., ordinanc
es of the c
ommunity), and

penalties for
violators. The legal import of
dina d’malkhuta dina
was no more than to conduct oneself

14

as a good citizen vis
-
à
-
vis civil laws and regulations of the government. In more
-
recent
times, however, in the absence of the
kehi
lah

or
ganization,
dina d’malkhuta
may assume
the legal character of
ta
k
kanot ha
-
kahal
themselves.

Specifically, in democracies where
various governmental entities either legislate or have regulatory authority, Jews, who
have a say in these matters, effectively
cede their
tak
k
anot ha
-
kahal
function to these
government
al

bodies. When civil law assumes
tak
k
anot ha
-
kahal
status, civi
l law
prevails, according to R.

Henkin, even when the statute involved
varies from

Jewish
law’s position on the matter at hand. Accor
dingly, as the venue of initial jurisdiction for
disputes between Jews, the Jewish court (
Bet Din
)

must
consider

the relevant civil law
statute
before

rendering its decision.
64



Adopting
Rema’s

guidepost for the parameters of
dina d’malkhuta di
n
a

equips a

resident of a neighborhood zoned as a residential area to protest the
operation of
a
manufacturing enterprise in the relevant area. The
objection,

absent a successful
application for a variance, should be valid even when the manufacturing enterprise does
not generate noise or additional traffic. Thus, the
halakhic rights of a manufacturer to
conduct noise generating
enterprises on

his premises would give way in contemporary
society to the zoning codes.





THE RAILROAD SPARKS CASE




Another i
nstance, mentioned by
Pigou that

illustrates the divergence
between

private and social cost

is the
r
ailroad sparks case:

Suppose a locomotive emits sparks
from its engine as it passes over adjoining woods and the sparks cause fire damage to
these woods. I
f the law does not hold the
r
ail
road

liable for this
damage, the company


will have no incentive to install spark preventing equipment on its locomotives. Closing
the gap between private and social costs requires the government to make the railroad
liabl
e for the damage the sparks of its engines cause.


In his critique of Pigou
, Coase points out that

the railroad sparks case is by no
means

a hypothetical

matter. Since 18
6
0 the British court system has dealt with this
matter.

In the British court case,
the owner of a wood that adjoined the banks
of a

railroad
sued

the railroad for damage caused by the sparks the railroad emitted from its engines as
it passed over
his

wooded area. While the lower court ruled in favor of plaintiff, the
r
ailroad
c
ompany go
t the decision reversed on appeal.

The basis of the higher court’s ruling was that the legislature authorized the
railroad to operate. In granting this license, the legislature must have anticipated that the
operation of the railroad could cause damage to

nearby woods. The legislature has
therefore the right to expect the railroad to take every practical precaution that the
operation of the company’s locomotives don’t cause damage to the nearby woods. All
evidence
pointed to

the conclusion that the railroa
d did everything practical to make its
locomotive safe. Specially, a cap was put on its chimney; its ash pan had been secured
and the locomotive traveled at the slowest pace consistent with practical utility.


15


The Railway (Fires) Act enacted in 1905 and a
mended in 1923, established a
statutory exception in respect to agricultural
land and

Agricultural crops. In this regard,
as long as the farmer’s claim does not exceed £ 200 (£100 in the 1905 Act) and written
notice of the fire is sent to the company withi
n seven days of the fire, the
r
ailway is
obligated to pay the company for the loss
.
65

For

Coase
the
desirability

of having a liability rule against the railway turns on
the
aggregate
social
outputs

that would obtain under a
lternate legal rules.

Coase illu
strates his point
with the following arithmetic example:
Let’s initially
assume that there is
no

liability rule against the railroad.

Suppose the total revenue the
railroad realizes by runn
ing

one train is $150, while running two trains increase
s

its tot
al
revenue to $250.
The cost of running each train is $50
. In addition, running one train
causes $60 of crop damage and running two trains causes $120 of crop damage.

In
calculating the alternative social values obtainable under alternative legal rules, w
e must
also t
a
ke into account the
losses and gains in
output on

account of the reaction of farmers
to the

no liability rule.
Given th
at the law does not protect the farmer against crop loss
caused by the sparks emitted from a passing railroad
, it

would be
rational for the farmers
to withdraw some land from cultivation.
66

Instead of cultivating the land, the farmer will

t
urn

his
efforts towards his
next best marketplace opportunit
y
. In this regard, C
o
ase
assumes that the loss in output on account of withdrawi
ng some land from cultivation is
$160 and the gain in output of the

farmers in pursuing their next best opportunity
is $
150.


W
e are
now
in position
to calculate the net social value that would be produced
under a no liability rule: Total revenue equals
the combined value of railroad
services
and

the
output the

farmers produce instead of cultivating the abandoned land. Tot
a
l
revenue hence equals $250 +
$
150 equals $400. Tot
a
l cost is the cost of running the two
trains
. Add to
this the

crop
loss

the
farme
rs

sustain on account of th
e

no liability
rule
and
,

finally, the
lost

output on account of the abandonment of
some land from cultivation.
These costs are respectively $
100,

$120 and $160. Since total revenue minus total cost
equals

$400
-
$380
=

$2
0, the rail
road would run both trains under the no liability rule.

Let’s now
switch to

a liability rule. Several of the figures given for the previous
model will now change: For one,
since the
law holds

the train company liable for the
spark damage its locomotives
cause
s
, the farmer

is
not strongly motivated to cut
production
:

if

the crop survives
the farmer can sell his crop on the marketplace; if the
crop is damaged by means of the railroad sparks
the farmer ca
n

recover the damage from
the railroad as the law is
on his side. Between these two outcomes, the farmer, according
to Coase, is indifferent.
67


Accordingly, Coase assumes the spark damage under a liability
rule would be double the figure we assume under a no liability rule. Thus, when one train
is run the sp
ark damage is $120 and when two trains are run the spark damage is $240.
This same reasoning leads Coase to assume that under a regime of a liability rule, the
farmers are not motivated to abandon cultivation. Accordingly,
the calculation made
under a rule

of no
li
ability of what the net loss of
farmer production

would be becomes
irrelevant under a liability rule regime.


Let’s now proceed to calculate revenues and loses
under a liability rule regime.
The total revenue the railroad company earns by running
one train is $150. Running the
train incurs

a cost of
$
50.
A
dd to this the

crop loss damage of $120. Since the total cost
of $170 for running the train is
$20
greater than the total revenue earned of $150
,

the
railroad will not run the first train. Running

two trains will
only increase

the company’s

16

losses
to $90
as the $340 loss exceeds the
total

rev
enue

of $250 by
$90.

Because costs are
greater than revenue whether the company operates two t
rains

or one train, the liability
rule results in the railroad sh
utting down.

Working with the above figures of revenues and costs under alternative legal rules
leads Coase to the conclusion that society maximizes it social product by adopting a legal
regime of no liability for the railroad.
Under the no liability rule,

the railroad will find it
to their own advantage to run two trains, which will result in a net social product of $20
for society.

Of course, by altering the figures, it could be shown that under different
assumptions, the

railroad should be held liable. N
onetheless,
Coase‘s

point is that his
illustration, rooted in reasonable assumptions, shows that the proposition that

uncompensated damage done to surrounding woods by sparks from railway engines” is
not necessarily
undesirable
.
68



THE RAILROAD SPARKS CAS
E AND JEWISH LAW



In this section, we will show that in Jewish law, the
r
ailroad sparks case is
analyzed in terms of tort law and the authority of the community to legislate statutes
whe
n

some gain and others lose.

Let’s begin with tort law.
In extrapolat
ing how Jewish law would treat the railroad
sparks case, two issues must be decided. The first is what type of precautionary measures
should be imposed on an individual who wants to conduct a fire
on

his premises to insure
that the fire does not get out of

control and damage a neighbor’s property. Once the
standard of precaution is decided upon, the next step is to decide whether the individual
who conducts the fire should be held responsible for damages his fire inflicts despite
taking the prescribed preca
utions. What follows is two competing models that
address
both

issues:


One model is the
precautions and liability the rabbis imposed on upper and lower
storey occupants who
want to

operate an oven on their premises.

In this regard, the law
requires the l
ower apartment occupant to insure that the height of his oven is
distanced
four
a
m
mo
t

69


from
his

ceiling. Similarly
, t
o

prevent a fire
from
catching on to the floor
pillars, the occupant of the upper story
must install

plaster of
three
tefahim

70

below his

oven.
Nonetheless
, if in spite

of these precautionary measures,
the oven causes damage to
neighbors
,
the operator of the oven bears liability.
71


Another model in the Talmud
that
addresses
precautionary measures and
liability

for fire
is the
rules the rabb
is established
for neighboring field owners
,
A
and
B.
If
A
wants to conduct a fire on h
is
field,

he must
insure that

under ordinary circumstances
72

his

fire is incapable of reaching a neighbor’s field
.

Rather than prescribing a specific
distanc
ing requirem
ent, decisors follow R.
S
himon’s approach, who says that the
distancing requirement depends
on the nature
73

of the fire.
74

Finally, if
A
met the

17

distancing requirement
and despite taking proper precautions the fire broke out and
cause
d

damag
e

to a neighbor,
A
bears no responsibility for the damage.

In
extrapolating the

standard the rabbis would
impose
in the railroad sparks case,
three

options present the
m
se
l
ves:
These are
:

a minimum standard, a stringent standard or
a standard somewhere in

between these two

extremes.
The key to which standard is the
appropriate one for the case at hand is
the
rationale behind t
he differential

treatment of
the totfeasor in the
oven and field cases
.

Speci
fic
ally
, why is
the field owner exempt
from
liability

his fire
c
auses by

spre
a
d
ing

to his
neighbor’s

field
provided he

a
dopted the
proper precautions; whereas the apartment occupant is always responsible for fire
damage
e
ven when he installed
his oven obeying
the prescribed
precautions?


Rif


addresses this issue.
75

Because hi
s presentation contains many
points,

commentators differ as to what
Rif
regards as the critical difference between the cases.
What follows is a number of
interpretations.

We be
g
in with
R. Shabbetai b. Meir ha
Kohen
’s

(
Siftei Kohen,
Poland
,

1621
-
1662) under
standing

of
Rif
:

In
Siftei Kohen’s
understanding of
Rif
, the key
is
the amount of supervision
required in the two cases. In the instance where
A

conducts a fire on his own premises,
the law can require of him no more than to take proper precautions that th
e fire does not
spread beyond the boundaries of his own property. Once
these precautions are taken
and
despite these precautions the fire gets out of control,

A can do nothing to prevent its
further spread.
Consequently, if

the fire spreads further and do
es damage,
A
should bear
no responsibility for the damages. In sharp contrast, the fire of
an oven

burns constantly.
Besides taking proper precautions at the time the fire is ignited, the law expects
A
to

be in
constant
vigilance

for the entire time the fi
re is lit so th
at
if the
fire escapes

the oven
A
will be in position to stop its s
p
read.
76


In his
reading
of
Rif,
R. Jacob Moses Lorberbaum (
Netivot
,

Lisa
, 1760
-
1832
)
understands
Rif

to say
that the

law established different standards of care for the two c
a
ses.
Given the
recurring and routine
use the householder makes of his ove
n
, it would be too
onerous to require him to

install the oven in
such a way that it
will
never cause damage to
neighbors.
I
n
stead, the law established a

standard that if adopted wo
uld ordinarily be safe,
b
u
t only in
conjunction

wi
th

the watchful ey
e

of the
householder

while he is heating up his
oven.
However, in the case of adjacent fields, since the use of fire by the
owner

is only an ad
hoc activity, the law does burden him to
ins
ure

that the fire he makes will not spread to a
neighboring field. Since the standard
of precaution
the law imposes on the field owner is
t
he

most
stringent

necessary to make the surrounding fields safe, any fire damage that
results, despite the adoption

of these precautions
,

is not regarded as the fault of the one who
made the fire, but rather simply as an act of

God.
77



R. Abraham Isaiah Karelitz (
Hazon Ish,
Israel, 1878
-
1953) understands
Rif
to say
that
that the precautionary standards the rabbis set

both for the field and oven owner
s

were
not set with the claim that the fires would as a matter of certainly
not spread if these
standards

were adopted.
Nonetheless
, the oven owner is capable of immediately
ascertaining
that
the standard he implemented wa
s in his
particular

case not sufficient and

make an
immediate adjustment so that the fire will not get out of control. In contrast, the rabbis

18

recognized that the field owner is not capable of picking up immediately that the
rabbis’

standard of precaution

he adopted would not prevent the fire from spreading out of
control
.
Accordingly, as long as the field owner adopted the required standard, the law does not hold
the field owner liable for the damage his fire causes.
78

Finally, let’s take note of
the
insig
ht R.

Aryeh

Loeb b. Joseph ha
-
Kohen

(
K
e
tzot
,
Poland, 1745
-
1813)

offers in explaining the differential
treatment

of the
two cases.

Preliminarily, let’s note that
Ketzot
offers his insight not as his understanding of
Rif,
but
rather as an independent idea.

Ketzot
proposes that
the standard the rabbis set for the oven owner were only
minimum
standards
.
These standards were designed only to insure that in the event
damages occurred, the law would not regard
A
as having set up his oven in a manner that
would
de
liberately

cause
B
damage.
Given that the oven standards are only minimum
standards,
if the operation of
A’s
oven causes
B
damage,
A
bears responsibility. In
contrast, the
standard

the rabbis set up for the
field

owner went beyond minimum
precautions. Inst
ead
,

these distancing
requirements

were de
signed

with the aim that
A’s
fire on his own premises would not get out of control and cause neighbor
B
any damage.
Accordingly, if despite the precautions taken,
A’s
fire gets out of
control and

does
damage to
B’
s
property, the damage is regarded as an act of G
-
d and

A bears

no
responsibility.
79


Analysis of the four opinions just sited points to how
Jewish law

would handle the
railroad sparks case. Preliminarily, let’s note that in the thinking of both
Netivot
and

Ketzo
t

the standard
of care the rabbis set
for
A
when he makes use of his oven in his
apartment is
decidedly a lower standard of care compared to the standard of care the
rabbis set
when
A
conducts

a fire in the adjacent field case. There is nothing in
the other
opinions

that contradicts this.
We take

it that
the lower standard of care
t
he rabbis set
for
the

operation

of an oven
is rooted in the circumstance that the

oven
inherently
entails
recurring use on a day to day
basis and

the rabb
is

therefore
fe
l
t

that it

would be too
onerous to set the highest standard of care
for
A
when
he puts
his oven

to use.


Another point that emerges from
Netivot
is that when the rabbis imposed the
highest standard of care as a prerequisite for the conducting of a fire, the

one who sets up
th
e

fire with this standard of care is exempt

from liability if the fire got out of control
a
nd
damaged a neighbor’s property despite taking the appropriate sta
ndard

of care.
Here too,
t
here is nothing in the other opinions that contradict
s this.

What emerges from the above analysis is that the appropriate standard for the
railroad sparks case is
certainly
not a standard that is
so
stringent that it
would make

it
impossible for the railroad engine to emit sparks

as the locomotive moves alon
g its route.

Given
that the

operation of

a railroad is a r
e
curring day to day routine, imposing the
highest
standard

of care would be too onerous. Instead

a lower standard would be
imposed. Recall the thinking of
Ketzot

that the standard of care the rabbi
s imposed in the
oven case was just a minimum standard. Perhaps, only a minimum standard of care
should be imposed on the railroad too? No. A minimum standard of
p
recaution is
sufficient in the oven case because the operator of the oven is expected to be i
n proximity
of

the oven while it is in
operation

and be in a s
tate

of

readiness

to do what is necessary
to prevent the fire from doing damage if
gets out of control.
In

sharp cont
r
ast, once

t
h
e
engine emits a

spark ther
e

is nothing the motorman can do to i
nsure that the spark does
not cause damage.

Imposing m
ore than a minimum standard of care is therefore

19

indicated.
At the other extreme, imposing a standard of case with the aim of making it
impossible for the railroad’s engine to emit sparks as the locomot
ive moves along its
route would be so onerous as to make the railroad enterprise unprofitable. According the
setting of a standard consistent with allowing the railroad to be a profitable enterprise is
indicated.

We have discussed the three possible standa
rds of care for the railroad sparks
case
in abstract terms. Examination of the details of Vaughan
v.

The Taff Vale Railway case
transforms the abstract notion of various levels of standards of care into concrete terms.

In the litigation a
ll evidence point
ed to the conclusion that the railroad did
everything practical to make its locomotive safe. Specially, a cap was put on its
chimney; its ash pan had been secured and the locomotive traveled at the slowest pace
consistent with practical utility.
80


Given t
hat once the locomotive’s engine

emits

sparks the motorman can do
nothing
t
o prevent the sparks from causing damage to the
adjoining

woods, the rabbis
would not be satisfied with just setting a minimum standard of care for the railroad
.

Did
the precautions

the railroad adopted in the Taff Vale case constitute more than the
adoption of a minimum
standard?

No. This is so because one
of
the factors Jewish law
takes into account in deciding whether defendant adopted the appropriate distancing
requirement
is th
e presence of combustible material
along the path to the neighboring
property
.
81

Accordingly, suppose combustible material
in the form of long grass
is
present along the railroad
’s

embankment
. Unless the railroad removes the combustible
material by cutting
the long grass
along its embankment
at appropriate intervals,
the
railroad

is not doing
all

it can to prevent fly
ing

sparks from
burning the adjoin
in
g woods.

Apropos
, in th
e

Taff
Vale case
, the railroad did not cut th
e

grass

along its embankment
and it wa
s clearly evident that the sparks emitted from the
engine of the train
initially
burnt

the railroad embankment and from there proceeded to

burn the adjoining woods.
82


The upshot of the above analysis is that for the railroad sparks case the rabbis
would in
sist that the railroad
operate its locomotives with all the precautions against the
emission of sparks
mentioned

in the Taff

Vale case. In
addition
, the rabbis would insist
also
that the railroad cut the grass that grows along its embankment at appropriat
e
intervals.
To be sure all these measures will not assure that sparks will never be emitted
by the a locomotive as it moves along its path. To accomplish this, the speed
rate of the
railroad would also
have

to be regulated. Because insistence of the most
stringent

standards

would put the railway out of business, we take it
as a given
that the rabbis
would not impose
a standard that would insure no sparks, but only a standard that under
ordinary conditions would rarely cause damage.

However,
since exemptio
n from liability
applies only if defendant implemented the most stringent precautions and despite these
precautions the fire defendant conducted caused damage,
the railroad would be liable for
all damage the sparks cause.



THE RAILROAD SPARKS CASE AND COM
MUNAL LEGISLATION


.

Jewish tort law’s treatment of the railroad sparks case is not the end of discussion
of this matter.
This is so because in contrast to the oven case and the adjoining property

20

owner case where the competing rights of neighbors must be
balance
d
, the issue at hand
in the
railroad

sparks case is balancing the rights of an individual against the rights of
society.
Society as a whole comes into play here because the running of the railroad
lowers the cost of shipping freight, which results i
n everyone potentially benefiting from
an expanding marketplace.

In matters

affecting society as a whole, Jewish law assigns the community with
legislative authority to craft policies that maximize societal welfare.
Certain functions are
mandated on the J
ewish community, while other functions, particularly in monetary
matters, require majority approval to pass.
83


In the matter at hand, the task for the Jewish community would be to require the
railroad to get a
government issued
charter
before beginning ope
rations.

This charter
would spell out what precautionary measures the railroad is expected to take to prevent
fire damage to the surrounding woods

as well as what responsibility the railroad must
assume if despite adopting the prescribed precautions damag
e occurs.




In assessing what parameters it should set for the operation of the railway, the
foremost consideration for the community is that the railroad benefits society as a whole
,
including the owners of the nearby woods.
These societal benefit
s

are
,

of course
,

considerably reduced

the higher the costs
the railroad operates under.

The job
for the
legislature

is therefore to
set up rules
that make a railroad a profitable enterprise,
but at
the same time adequately protect the public from the hazards
the running of the railroad
my cause.

These goal
s

translate into requiring the railroad to adopt all the precautions to
prevent sparks emanating from
its engines from
damaging

the
adjoining

woods. In
addition
, the law would require the railroad to cut th
e grass that grows on its
embankments at
appropriate
intervals.
Once the railroad adheres to these standards, it
should not be held responsible for damage it may cause.



PROFESSOR
YEHOSHUA LIEBERMANN

ON COASE


In his paper “The Coase

Theorem in Jewish Law,”
Professor
Yehoshua
Liebermann

disaggregates the Coase theorem into three separate components. These are:
1) the reciprocity principle; 2) the trading principle; and 3) the independence principle.
On a piecemeal basis,
Liebermannn

g
oes on to show that authorities in Jewish law
throughout the centuries adopted these three principles.
84


I am in
agreement

with
Professor
Liebermann

in
r
espect to two of the components
he mentions, but disagree in respect to the third.

Turning first

to
my

area of
agreement; let’s begin with what Professor
Liebermann

calls the
trading principle
. This principle says harmful effects of business
activities can be traded in the market
place

by the concerned parties.


What Professor
Liebermann
calls the
trading
principle

can be restated in
familiar Jewish law terminology
a
s simply saying

that
in monetary matters

an individual
can always waive his rights.
To find authority for this principle there is no need
, as
Professor
Liebermann

does
, to

go far a

field to the
respons
a

literature, as this principle
was first enunciated by the
Tanna
R. Yehudah.
85

Another component of Coase’s theorem, as presented by Professor
Liebermann
, is
what he calls the
independence principle
.

This principle states that if negotiation costs

21

are relativ
ely low, it is possible for the losing party to take the initiative and offer the
winner a payment that would make it worthwhile for the winner to waive his rights and
thereby achieve

an economically efficient result
.

Professor
Liebermannn
n’s
in
dependence principle,
as it
appears

to this
writer
, is
very much
intertwined

with the
trading principle.

That is, once it is recognized that an
indi
vidual

has the right to waive his rights in

a monetary matter, there should be no
objection for one of the
concerned parties to take the initiative an
d

offer his opposite
number a payment to induce him to waive his rights in the matter. This right should apply
to
both before

and after a judicial decision was rendered
in

the matter.

My point of disagreement com
es in relation to what Professor
Liebermann

calls
Coase’s
reciprocity
principle.

This principle
, which is the methodology Coase uses in
all th
e

cases we have dealt with in this paper
, states

that the

most important factor to
focus on in the negative extern
ality case is th
at we should not look at the
circumstances

as a perpetrator
-
victim case. Instead
,

we should recognize that the
negative externality is
reciprocal in nature and the goal should be to maximize social value.

In Professor
Liebermann
’s
assessm
ent

mainstream

Jewish law
e
mbrace
s

the

reciprocity principle

as the way to deal with the

negative externality problem.

In
making this judgment Professor
Liebermann

relies
solely

on
the following Responsum of
R. Mosheh Sofer (Hungary, 1762
-
1839):


The
ele
ments of the case were

as follows: Three brothers inherited a two
-
story
house
. Two of them received the upper level while the thir
d

received the lower level.
A
po
i
nt of contention arose when one of the
upper story
occupants let

it be
known that

he
wanted t
o open a business on the premises consisting of a bar. Because the operation of a
bar
can be expected to

generate
significant new traffic in the courtyard, the
lower

story
occupant

felt
he

had the right to object on the grounds that the
operation of

the ba
r
would
generate

a nuisance in the form of traffic congestion in th
e

courtyard, which was the
j
oint
property of all three brothers.

The rabbi who submitted the question to
R. Sof
e
r
was certain
that Jewish law
would side with the plaintiff, but was relucta
nt to make such a ruling
because the public
would find it strange that on the basis of the anticipated nuisance of increased traffic
congestion
, a neighbor could actually stop someone else’s livelihood. Moreover, for the
circumstances just described
, the

actual practice of neighbors
was

not to complain.
Why
don’t nei
gh
bors exert the
ir

rights here
? In th
e

opinion of R. Sofer’interloc
k
er
, the

practice
of not protesting evolved out of the obstacles Jews had to endure in earning a
livelihood in the long and

protracted Diaspora.
At the time the question was
p
osed one
of the difficulties Jews had to endure was that
very limited outlets to conduct their
livelihood activities was made available to them. If neighbor
s

would protest and exert
their rights
,
a
Jewish

business
that
conducted a

retail outlet on
his

premises would be
driven out of business and would have no where to go. Out of compassion for their
brethren
, neighbors did not exert their rights and
did not
protest the conducting of a retail
trade in one o
f dwellings facing their courtyard.

In
his response to the query put before him, R.
Sofer agrees
with his interlocker
that

the upper story occupant should not be enjoined from conducting a bar on his
premises.
Moreover, R. Sofer claims
that refusing

to iss
ue
an
injunction

against the bar

is
consistent with mainstream thought
in defining
when it is legitimate
to enjoin

the

22

economic activity
a resident

of the courtyard conducts

on his premises. R. Sofer takes
the
mainstream
criteri
on

to be whether the nuisanc
e consists of noise or an increase in traffic
congestion in the courtyard. When the nuisance consists just of noise, as for example
,
hammering noises

coming from the activity of a blacksmith,

neighbors h
a
ve no right to
object. However, when
nuisance
consi
sts of an increase in traffic congestion in the
courtyard, fellow residents may object. Establishing a retail store either in one’s

a
pa
r
t
ment or in the courtyard assuredly increases traffic in the courtyard.
Residents
,
therefore,

have a

right to object.

T
his distinction between noise and traffic, R. Sofer contends, is not the end of the
matter. This is so because as fa
r as noise is concerned, a hammering sound is much more
annoying than the noise generat
ed

by an increase in traffic congestion
.

Addressing t
hi
s

issue,
R. Levi
I
bn Habib (
Ralbah,
Jerusalem
, 1480
-
1545)

propose
d

that the
difference
between a manufacturing activity
and retail

activity is essentially the cost of transferring
the enterprise
away from the residential area
to the public domain, where
marketplace
activities are usually situated. Since transferring a manufacturing activity ordinarily can
only be accomplished with gr
e
at cost,
plaintiff’s

request for a court to order a
manufacturing activity to move from one of the houses
or from

the c
ourtyard to the

marketplace(
shuk
)

is denied as honoring the request ruins the livelihood of the
manufacturer.
When the objectionable commercial
enterprise

is a store, the injunction is,
however, honored,
because the

store can usually move easily to the mar
ketplace

without
ruining the business.
86


The case
at hand

hence hinges on whether moving the
bar from

the upper story of
the house to the marketplace
can only be accomplished at a prohibitive cost.
R. Sofer
answers in the affirmative.
Liquor

is by its ver
y nature not just a beverage but rather a
“social drink.” People do not drink in the street. Instead, they prefer to consume
liquor

within the context of an ambiance consist
ing

most importantly of the opportunity to
socialize.
Because f
orcing the brother
to sell
the liquor in the street ruins his business,

an
injunction

should not be issued against him.

Liebermann

points to the bar case as representative of how Jewish law deals with
the
negative
externality problem and
uses the bar case to demonstrate tha
t Jewish law
adopts the reciprocity principle and its approach to the negative externality case is hence
consistent with Coase’s approach.

Liebermann
’s conclusion is unwarranted.
Recall that R. Sofer’s in
terloker

makes
prominent mention that Jewish busi
ness men at the time found great. difficulty in finding
outlets to operate their businesses. Consequently, they were forced to operate their
businesses in their residences. Against this backdrop, the Jewish court will not issue an
injunction as doing so ru
ins the business of defendant.

Suppose, however, it is common practice not to conduct a business in one’s
residence or in the courtyard of the building

where one lives.

Here, refusing the
injunction confers defendant with a significant competitive cost a
dvantage.
Here, the
cost of moving the enterprise should not be a factor in deciding the case. Instead, the
criterion should be whether the objectionable activity just causes

an
increase

in noise, or
whether it causes an increase in traffic.

Now, if the

differential cost involved in moving the business enterprise cannot be
invoked in explaining why hammering activity is treated differently than the operation of

a store,
what is the essential difference
between

these two kinds of nuisances?


23

Addressing th
is issue, R. Meir Abulafia (Spain, 1170
-
1244), posi
ts

that what
stands at the basis for a fellow resident
t
o object to the
operation

of

a store in either the
jointly owned courtyard
or on th
e

premises of a house facing the courtyard, is

the right of

a fell
ow resident
t
o object to the
operation of

an enterprise that radically c
hanges
the
character

of the
common property

of the fellow residents.
Accordingly, manufacturing
activity per se even if it

a
nuisance

to the fellow residents in the form
of,

say,
hamme
ring
,
cannot be stopped because the private nature of the courtyard remains intact. In contrast,
when the objectionable activity consists of

a store, an
injunction

will

be issued because
the increase
in
traffic the enterprise attract
s

changes the character

of the courtyard
from a

private place into a

marketplace.
87


Since
Ramah’s
explanation for the differential tr
eatment

of defendant in the two
cases is consistent with
mainstream

thought, it should be invoked for th
e

contemporary
scene

where it is unusual f
or people
to conduct

either
noise

generating or traffic
generating enterprises
on

the premises of their
private
residences
.

In addition, zoning
laws make it illegal to conduct business activities in buildings designated as a residential
zone.


The upshot
of the above analysis is that R. Sofer’s ruling in the bar case is

a
special case and it should not be taken as demonstrating that mainstream Jewish law
embraces the reciprocity principle in dealing with negative externality cases.


SUMMARY AND CONCLUSIO
N


This paper dealt with the treatment of negative externalities in economic theory
and Jewish law.
As the backdrop
for the comparison
we made use of the cases Ronald
Coase
utilized to

illustrate what he felt was the approach economic theory would take to
deal with this phenomenon.

Fo
r

Coase, the key is to recognize that the negative externality problem is
reciprocal in nature.
Illustrating

Coase’s approach is how the emission of smoke pollution
by a factory is treated. Forcing the industrial polluter to b
e responsible for the smoke
damage his operation entails raises the cost of doing business for the factory owner. It
will result in some combination of lower profits, higher prices and or reduced
employment.

Instead of looking upon the industrial pollute
r as a perpetrator and society as
victims of the smoke pollution the factory produces, society
should deal with the
phenomenon with the goal of maximizing social value. An important aspect of this
comparison is, of course, the alternative productions as m
easured by the market
place
.

With the aim of extrapolating Jewish law’s approach toward the negative
externality problem, this paper examined the major cases Coase dealt with in his seminal
paper from the perspective of Jewish law. In each instance, the rec
iprocity principle was
never utilized as an analytic device for
arriving at ruling in
these cases. Instead
,

the ruling
for each case was based on determin
in
g the rights of each party in the matter at hand.

No more illustrating the gap between the two appr
oaches is the cattlemen
-
farmer
case in the context of the land of Israel. Here, with the aim of promoting population
growth the rabbis made it a prohibition to raise small cattle, except in desert areas. This
approach precludes the possibility for the cat
tleman
to offer

a payment to the farmer as an
incentive to allow him to graze his herd on land adjacent to their land.


24

Another instance of a wide gap in the two approaches is the Sturges v. Bridgman
case.
Here Coase leaves out the det
a
il that Stu
r
ges made

use of Bridgman’s kitchen door
as a party wall in the construction of his consulting room. In all probability Coase left out
this detail because it was irrelevant as far as his reciprocity principle was concerned. In
sharp contrast, making use of Bridgman
’s kitchen wall wi
thout

permission forfeits for
S
turges any right to protest the noise Bridgman’s equipment make.

Our paper also investigated Professor Yehoshua
Liebermann
’s contention that
mainstream Jewish law embraces the reciprocity approach.
Lieberma
nn

bases
his

contention on the approach
R.

Moshe
Sofer adopt
ed

in the bar case.
. In consideration
that the backdrop of this case was the
circumstance that at the point in time
w
hen the
litigation
took place
,

it wa
s

not uncommon for Jews to conduct both m
anufacturing

an
d

retail business in
same place
where they took up residence.

Changing socio
-
economic
conditions make the application of R. Sofer’s approach irrelevant for the contemporary
scene.
What has change
d

is that in contemporary
society is

that
tod
ay it is uncommon

and
usually forbidden by the zoning laws to conduct business enterprises in areas designated
as residential. Since
re
fusal
to dislodge the commercial enterprise

confers

an unfair cost
advantage to the defendant

s competitors, the
J
ewish c
ourt would enjoin the commercial
enterprise

fro
m
operating in the residential area.



* This paper was presented at a conference sponsored by DePaul University College of

Law Center for Jewish Law & Judaic Studies, held May 13, 2010. The author
acknowled
ges the financial support of the Jack Miller Center.






1

R. H. Coase, “The Problem of Social Cost,”
The Journal of Law and Economics,
Volume III, October,
1960, pp. 1
-
2, 41
-
43. See also Richard R. Butler and Robert P.

Garnett, “Teaching the Coase Theorem: Are
we getting it Right,?”
Atlantic Economic Journal, June 2003,
31:2,
p. 133.





2

C,F. Coase’s treatment of Sturges v. Bridgman, op. cit. pp. 8
-
10.


3

Yehoshua Liebermannn, “The Coase Theorem in Jewish Law,”

The
Journal of Legal Studies,
vol. 10,
no.2 (June,1981), p.. 294.

.

4

The Problem of Social Cost,
op. cit., 2
-
8.


5

Ibid., 16
-
19.


6

Maimonides (Egypt, 1135
-
1204),
Mishne Torah, Nizkei Mammon
1: 2; R. Jacob b. Asher (Germany,

1270
-
1343)
, Tur,
Hoshen Mishp
at
389, 390; R. Joseph Caro (Israel,
1488
-
1575),
Shulhan Arukh
, Hoshen
Mishpat 389:2.

F
or technical reasons, the Jewish court nowadays does not adjudicate cases where plaintiff’s claim is
keren
(
See Tur, op. cit., 389;



7

Mishne Torah, Nizkei Mamon,
o
p. cit. 1:2, 10; Tur, op. cit., 389,391;
Shulhan Arukh,
op. cit. 389:2; 391:1
-
3.



25






8

Maimonides ,
Mishne Torah, Nizkei Mamon, op. cit. 1:2,
10, Tur, op. cit. 389, 390;
Shulhan Arukh
, op.
cit. 389:2; 390:1
-
9.


9

Maimonides,
Nizkei Mamon,
1:8.; Tur, op. cit
., 389;
Shulhan Arukh
389:11,15.


10

Maimonides,
Nizkei Mamon,
3:1
-
2;
Tur
, op. cit., 391;
Shulhan Arukh
391:8 and R. Moses Isserles
(Poland, 1525 or 1530
-
1572),
Rema,Shulhan Arukh, ,
391:2.


11

Arukh ha
-
Shulha,
op. cit. 389:13.



12

Maimonides,
Nizkei M
amon,
7:3, Tur, op. cit., 389;
Shulhan Arukh
389:5.


13

R .Jehiel Michel Epstein (Belarus,1829
-
1908 ),.
Arukh ha
-
Shulhan, Hoshen Mishpat
1::1
-
4


14

Arukh ha
-
Shulhan,
op. cit. 389:12.


15

Sanhadrin
14a;
Nahmanides
(
S
pain,
1194
-
1270), notes on Maimonides,
S
efer ha
-
Mitzvot,
no. 153; Isaac
Levitates, Aaron Rothkoff and Pamela S. Nadell, “Semikhah,” Michael Berenbaum and Fred Skolnik,
.Editors,
Encyclopedia Judaica, vol. 18, 2
nd

Edition, Detroit: Macmillan Reference, USA, 2007,
pp. 274
-
279.


16

Arukh ha
-
Shulha
n,
op. cit. 1:1
-
4


17

Bava Kamma
23b.


18

R. R. Isaac b. Jacob Alfasi,
Rif, Bava Kamma
23b.


19

Maimonides, Yad,
Nizkei Mamon
5:1 on the understanding of R. Jehiel Michel Epstein,

Arukh ha
-
Shulhan, Hoshen Mishpat
397:2.


20

R. Solomon b. Jehiel Luria,
Mah
arshal Bava Kamma
2:25
.


21

R. Joseph Caro,
Shulhan Arukh, Hoshen Mishpat
397:1.


22

R.

Jehiel Michel Epstein,
Arukh ha
-
Shulhan, Hoshen Mishpa
t
397:1
.



23

R. Hananel, cited in R. Jacob b. Asher,
Tur, Hoshen Mishpat
397.


24

R. Asher b. Jerhiel,
Bava Kamma
2
:10 on the understanding of R.
Shabbetai b. Meir ha
-

Kohen,
Siftei
Kohen, Shulhan Arukh, Hoshen Mishpat
397 note 1.


25

R. Shabbetai b. Meir ha
-
Kohen (Poland 1621
-
1662),
SifteiKohen, Shulhan Arukh,Hoshen Mishpat

397 note
1


26

R. Asher b. Jehiel, explainin
g the opinions that side with Abayyei (
Rosh, Bava Kamma
2:10).




27

Ar. ha
-
Shulhan
op. cit. 396:1
-
3.



28

Maimonides,
Nizkei Mamon,
op. cit. 2:19;
Shulhan Arukh,
op. cit. 396:1;
Arukh ha
-
Shulhan,
op. cit.
396:1
-
3.


29

Final judgment in this matter should

apparently

be reserved in light of Jewish law’s judicial rule called
kim
li (lit I am certain). This rule allows a defendant in a civil judicial proceeding to insist that the judges
consider the merits of his case based on the opinion of a particular subs
tantial minority legal opinion.


26






The

kim li
pleas is recognized only if the authority invoked is a very substantial one. In the
opinion of R. Jonathan Eybeschuetz (Prague, 1690
-
17640,
Urim ve
-
tummim, Hoshen Mishpat
25) validity is
given to the
kim li
pleas
only if the dissenting opinion that rules against
Shulhan Arukh
is either R.
Shabbetai b. Meir ha
-
Kohen (
Poland 1621
-
1662
)

or R. Joshua b. Alexander ha
-
Kohen Falk (Poland
1555
-
1614) ). Recall that
Siftei Kohen
is among the authorities that

exempt the cat
tleman from liability
unless the farmer fenced in his fields and
,

despite the fencing, the steers broke through and damaged the crop.
Accordingly, if the farmer did not fence in his fields, the cattleman
’s
kim li

plea to dismiss the complaint based
on the

legal opinion of R. Shabbetai b.Meir ha
-
Kohen
et al
will prevail.

For the contemporary scene the
kim li
plea is mostly irrelevant. This is so because it is standard
procedure for the organized Jewish courts to require the litigants as a prerequisite for

adjudicating the case to
sign an agreement that they will abide by the rules and decision of the court. Signing this agreement amounts to
forfeiting any right to dictate to the court to decide the case on basis of a substantial authority that holds a
min
ority opinion on the issue at hand.


30

Bava Kamma
79b, 80a; R. Issac b. Jacob Alfasi (Algeria,
1012
-
1103)
,
Rif,
,
ad locum;
Maimonides,
Nizkei Mamon,
op. cit. 1
-
2;
Rosh, Bava Kamma
7:13; Tur, op. cit. 409;
Shulhan Arukh,
op. cit. 409:1
-
2;
Arukh ha
-
Shulhan

409:1
-
2.



31

Maimonides, Nizkei Mamon, op. cit.


32

Rashi, Bava Kamma
79b.


33

Law Times Reports, vol. XLI., Sturges v. Bridgman, Supreme Court of Judicature, Court of Appeal,
1879, pp. 219
-
223.



34

The Problem of Social Cost,
op. cit. , pp. 8
-
10.


35


Sturges v. Bridgman, op. cit. p.220.


36

Shulhan Arukh,
op. cit. 153:15.


37

R. Judah of Barcelona quoted by Tur, op. cit. 153
.
For an extensive taxonomy of cases drawn from the
Rishonic and Responsa literature where
Bet Din

applies
kofin
, see Aaron Kirs
chenbaum,
Equity in Jewish Law

(Hoboken: Ktav Publishing House, Inc., Yeshiva University Press, 1991), pp. 185
-
236
,
Shmuel Shilo,
Kofin al
Midot Sedom: Jewish Law's Concept of Abuse of Rights
,
Israel Law Review

15, no. 1 (1980), 49
-
78.


38

R. Judah of Barc
elona, op. cit. See also R. Shalom Moredekhai Segal (Israel, contemporary),
Mishkan
Shalom,
p.322
ot
85.



39

R.
Aaron

ha
-
Levi quoted by R. Joseph Habiba (early 15th cent.),
Nimmukei

Yosef

at
Rif,

Bava

Kamma

8b;
see also R. Abraham Hirsch b. Jacob Eisenst
adt (Bialystok, 1813
-
1868),
Pithei Teshuvah

to R. Joseph Caro
(Safed, 1488
-
1575),
Shulhan Arukh, Hoshen Mishpat

363, note 3.


40


R. Shimon Shkop,
Hiddushei Rabbi Shimon Yehudah ha
-
Kohen, Bava Kamma

19, part 3.


41

R, Yoel Sirkes,
Bah
at Tur, op. cit. 153 n
ote 10.


42

R. Moseh Isserles,
Rema, Hoshen Mishpat
153:4.



43

R. Jehiel Michel Epstein,
Ar ha
-
Shulhan Hoshen Mishpat
153:7.


44

Mishna, Bava Batra
2:2.



27






45

Baraita, Bava Batra
20b;
Rif, ad locum;
Maimonides,
Mishnah Torah, Shekhenim

9:12
;
Rosh, Bava
Bat
ra;
R. Joseph Caro,
Shulhan Arukh Hoshen Mishpat
155:2;
Arukh haShulhan,
op. cit. 155:3
-
4.


46

Shulhan Arukh,
op. cit. ,157:1;
Ar. ha
-
Shulhan,
op. cit. 157:1
-
2
.


47

Bava Batra
59a; Yad, op. cit. ,
Shekhenim
7:5;

Shulhan Arukh,
op. cit. 154:;
Ar. ha
-
Shulh
an,
op. cit.,
154:7.


48

R. Yehezkel Abramsky,
Hazon Yehezkel, Tosefta, Bava Batra
1:5
.


49

Ammot

, the plural of
amma,

is a common measure used in the Torah and the Talmud. It is equivalent to
18 inches according
to
some scholars and to 22.9 inches accor
ding to others.



50

Mishnah Bava Batra
2:4 and Rava’s understanding of
Mishnah

at
Bava Batra

22b
.


51

R. Solomon b. Isaac,
Rashi, Bava Batra
22a. In various ways, the Talmud ad locum limits the practical
application of
davshah. .
More fundamentally,
R. V
idal Yom Tov of Toloso (Fl. 14th cent)

posits that the law
of
davshah
applies only when
A
acquired his parcel of land from the King. Here, we say that implicit in
A’s

purchase was a right to disallow a neighboring property owner
B
from using his propert
y in a manner
that would undermine the foundation of his wall (
Maggid Mishneh
, Yad, op. cit.
Shekhenim
9:9). See also
Arukh haShulhan,
op. cit. 155:14.


52

R. Aaron Kotler,
Mishnat Rabbi Aharon,
vol. 1, p.68.


53

Yad, Shekhenim,

op. cit
.
6:12;
Sh. Ar. ,
o
p. cit. 156: 2.


54

Maimonides and R. Joseph Caro on the interpretation of R. Joshua b. Alexander ha
-
Kohen Falk,
Sefer
Meirat Anayyim
at
Shulhan Arukh,
op. cit. 156 note 11.


55

R. Moses Isserles,
Rema,
at
Shulhan
A
rukh,
op. cit. 156:2.


56

Samuel,
Gittin

88a.


57

Four views on this issue can be identified.


(1) Taking the narrowest view on the scope of
dina d'malkhuta dina

is R. Joseph Caro
.
. In his view,
Halakhah recognizes
dina d'malkhuta

only in respect to matters the government has a financial stake
in, such as
taxes and currency regulation.


(2) Adopting a much wider scope for
dina d'malkhuta.

is R
ema
.
Representing the mainstream opinion,
Rema’s
view is explicated in the text.


(3)

R.
Shabbetai b. Meir ha
-
Kohen

posits that

in litigation between Jew
s, the law of the land finds its
validity only when the non
-
Jewish law does not contradict Halakhah, or in a case where the practical
application of Halakhah is not clear.


(4) Following R. Shabbetai b. Meir ha
-
Kohen's line, R. Abraham Isaiah Karetliz (Isr
ael, 1878
-
1953)
sharply disputes the notion that
lacunae

exist in Halakhah. A halakhic position can be extrapolated for any
issue. If
dina d'malkhuta

contradicts Halakhah, even if the Halakhah was derived by means of extrapolation,
the law of the land mu
st be set aside.




28






58

R. Mosheh Feinstein (New York, 1895
-
1986),
Iggerot Mosheh, Hoshen Mishpat

2:62; R. Yosef Eliyahu
Henkin (New York, 1880
-
1973),
Teshuvot Ivra
, vol. 2, p. 176. See also list of authorities cited by Professor
Shmuel Shilo,
Dina D'malkhu
ta Dina

(Jerusalem, Hebrew University Press, 1974), 157, n. 26.


59

Rema
, op.cit. 369:11.


60

R. Mosheh Isserles,
Rema, Sh.Ar.
, op.cit. 369:11.


61

Ibid.


62

Rema
, op.cit. 26:1.


63

Rema

on the understanding of R. Mordecai b. Abraham Jaffe (Prague, ca. 15
35
-
1612),

Ir Shushan, Hoshen
Mishpat

369.


64

R. Joseph Eliyahu Henkin,
Kitvei ha
-
Grye Henkin
,

vol. 2, pp. 175
-
176;
Teshuvot Ivra
,

no. 96, sec. 1(4).

65

“The Problem of Social Cost,” pp.29
-
31.


66

In the actual British court case (Vaughan v. the Taff Vale
Railway Company, p. 1352)), the fires started
on the railroad bank, which was the property of the railroad and contained long grass that was highly
combustible. Given the possibility that just cutting the grass of the railroad embankment removes the
dang
er of flying sparks to the surrounding woods, the
least cost
reaction of the farmers to the introduction
of a no liability might very well have been, not to abandon their land, but rather simply to cut the grass and
make sure other inflammable material
was not situated in close proximity to the railroad tracks.




67

“The Problem of Social Cost,”’ op. cit. p.32. As it appears to this writer, a farmer would strongly prefer
to sell his crop in the marketplace rather than litigate the railroad for crop l
osses caused by flying sparks. In
the latter instance, recovery is by no means certain and will involve litigation costs and assorted
opportunity costs as well..


67

In the actual British court case (Vaughan v. the Taff Vale Railway Company), the Railroad
company
argued that the farmers by not cutting their grass near the railway bank brought the fire damage on
themselves. Had the farmers done this, the sparks from the locomotives would, perhaps, not have ignited
the grass and the fire would hence not have
traveled further and destroyed the crops.


68

“The Problem of Social Cost,” op. cit. pps.32
-
34.


69

For the definition of
Ammot
,
see endnote 44
.



70

Tefahim
is plural for
tefah. Tefah
-
lit. a handbreadth is a measure of length equal to the width of four
t
humbs.



71

Tanna Kamma, Mishnah, Bava Batra
2:2;
Rif,
ad locum;
Yad, Shekhenim
9:11;
Rosh, Bava Batra
2:5;
Tu
r, op. cit. 155;
Shulhan Arukh,
op. cit. 155:1
-
2;
Ar. ha
-
Shulhan
, op. cit. 155:1
-
2.


72

Ar. ha
-
Shulhan,
op. cit. 418:2.


73

Such factors as the he
ight of the fire, whether the fire is bent by the wind, the amount of fuel and the
combustible materials on site are factors taken into consideration. See sources cited in next note.


29








74

R. Shimon,
Mishnah

Bava Kamma

6:4;
Rif, Bava Kamma
61b;
Yad, Nizkei

Mamon
14:1
-
3;
Rosh, Bava
Kamma
6:13; Tur, op. cit. 418;
Shulhan Arukh,
op. cit. 418: 1
-
5;
Ar. ha
-
Shulhan,
op. cit. 418:22
-
25.


75

R. Issac b. Jacob Alfasi,
Rif, Bava Kamma 60a.


76

R. Shabetai b. Meir ha
-
Kohen ,
Siftei Kohen
at
Shulhan Arukh, Hoshen Mish
pat 154 note 1.
.


77

R. Jacob Moses Lorberbaum,
Nitivot ha Mishpat at Shulhan Arukh, Hoshen Mishpat
154 note 1.


78

R. Abraham Isaiah Karelitz,
Hazon Ish, Bava Batra
14:14.



79

R.
Aryeh Loeb b. Joseph ha
-
Kohen,
Ketzot, Hoshen Mishpat
155 note 1.


80

Vau
ghan v. the Taff Vale Railway Company, op. cit., p1352.


81

Bava Kamma
61a;
Rosh

,
Bava Kamma
6:13;.
Yad, Nizkei Mammon
14:3;
Tur,
op. cit. 418:4;
Shulhan
Arukh
,
,
op. cit. 418:4;
Ar. ha
-
Shulhan ,
op. cit. 418:24.


82

Vaughan v..The Taff Railway company, op.cit
.


83

For a description of the communal legislative process as well as the role Jewish law assigns government,
see Aaron Levine,
Free Enterprise and Jewish Law
.(New York: Ktav Publishing House, Inc. ,Yeshiva
University Press,1980), pp.131
-
160.



84

“The
Coase Theorem in Jewish Law,” op. cit., pp.293
-
303.


85

Kiddushin
19b.


86

R. Levi Ibn Habib, Responsa
Ralbah
96.


87

Ramah, Bava Batra

2:56