Today, it is one of the most ubiquitous taxes we pay. The tax is levied on virtually everything we buy, sell, and use. It represents 30 percent of the price of a stepladder and over 95 percent of the price of childhood vaccines. Because of the tax, you cannot use a sled in Denver city parks or a diving board in New York City schools. You can no longer buy American-made brands of sporting goods, especially equipment for amateur contact sports such as hockey and lacrosse. In Missouri, for a time, you could not use public transportation in the city of St. Joseph, nor could criminals be sent to jail in Lafayette County.
The tax directly costs American individuals, businesses, municipalities, and other government bodies at least $80 billion a year, a figure that equals the total profits of the country's top two hundred corporations. But many of its costs are indirect and unmeasurable, reflected only in the tremendous effort, inconvenience, and sacrifice Americans now go through to avoid its collection.
The tax is better known as tort liability, conceived in the 1950s and set in place in the 1960s and '70s by a new generation of lawyers and judges. Oddly, the liability tax is widely and passionately believed to protect the ordinary consumer and worker, the hapless accident victim, the little guy. But it is in fact a recent invention that operates overwhelmingly for the benefit of lawyers.
Who enacted this tax? No one in particular. In the 1950s and after, a new group of legal theorists rose to prominence in the law schools and in the courts. Their leaders were thoughtful, well-intentioned legal academics at some of the most prestigious law schools and judges on the most respected state benches. Most consumers, the new school reasoned, pay little attention to accident risks before the fact. Consumers fail to demand, and producers fail to supply, as much safety as would be best. Furthermore, consumers buy less accident insurance than they really need. In a remarkably short time, on the strength of this reasoning, these legal reformers completely recast a centuries-old body of law in an entirely new mold of their own design.
The Death of Contract
Sweeping changes in the common law can rarely be traced to any single decision. But the story of modern tort law can be said to have begun in 1958, when one Chester Vandermark brought a new car from the Maywood Bell Ford dealership near Los Angeles. Six weeks and 1,500 miles later, Chester was driving his sister Mary to Joshua Tree in the California desert. The car's brakes failed. Both Chester and Mary were seriously hurt. They sued Maywood Bell, among others. The dealership indignantly disavowed all responsibility. Its contract with Vandermark, after all, was quite explicit. "Dealer's obligation under this warranty is limited to replacement, without charge. . . of such parts. . .acknowledged by Dealer to be defective. . . .This warranty is expressly in lieu of all other warranties, express or implied, and of all other obligations on the part of Dealer."
The case reached the California Supreme Court in 1964. Maywood Bell was in for a rude shock. "[T]he fact that [the dealer] restricted its contractual liability to Vandermark is immaterial," the court pronounced. "Regardless of the obligations it assumed by contract, it is subject to strict liability." The
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