Jean Monnet Center at NYU School of Law


III. Theories of Justice and State Liability

The question to be studied in this part of the paper is whether, in light of the apparent conceptual identity between State liability in the European Union and constitutional tort liability, the theories developed to explain constitutional torts can provide a convincing account of Member State liability in the European Union. Because my goal is to discover the possible justice underlying the legal relationship described in Part II, this part of the paper will be more normative than the preceding parts. Nevertheless, as I have pointed out, this is not an unconstrained normative exercise. The suitability of a particular theory will depend in part on the extent to which it adequately describes the legal phenomenon. A good theory, in other words, will be capable of accounting for the essential features of the positive law of State liability in the EU.
I will examine the two theories most frequently advanced as a basis for constitutional tort liability, one of them an economic theory based on the notion of externalities and the other a non-instrumental theory based on corrective justice.

A. An Economic Theory: Externalities

An externalities theory of EU Member State liability suggests that the purpose of liability is to ensure that public decision-makers in each Member State internalize the costs which their decisions may impose on interests located in other Member States. In this way, the temptation of national authorities to make decisions which benefit their own national economies at the expense of other Member States will be kept in check, and only those measures which are, on balance, beneficial for the Union as a whole will be undertaken.
The externalities theory is an instrumental and, more specifically, an economic theory. It is instrumental because liability serves an ulterior purpose, and it is an economic theory because this purpose is social-welfare maximization. Before examining the theory in more detail, it is useful to explain the sense in which an economic theory can claim to be a theory of justice.

1. Efficiency as Justice

In law, economic analysis has both descriptive and prescriptive aspirations; it aspires to provide both a framework for analyzing the consequences of legal rules and a solution to problems of legal choice. With respect to its descriptive aspect, economic analysis often starts from the assumption that people are motivated by rational self-interest, and proceeds to ask what impact particular rules might have on the activities that are undertaken (allocative impact) and on the welfare of different segments of the population (distributive impact). As for the prescriptive aspect of law and economics, the desirability, or justness, of a rule depends on its efficiency. Here there are a number of possible approaches. One approach is to measure a proposed legal rule against a standard of Pareto-efficiency, which means that a proposed legal rule will be considered superior to an existing rule if it improves the subjective welfare of at least one member of the community without making any other member of the community subjectively worse off. The pure Paretian approach is inapplicable in the real world, since virtually every legal rule makes operates to the disadvantage of at least some people.68 As a result, when legal economists speak of efficiency, they are usually referring to a more lenient standard, such as Kaldor-Hicks efficiency, which considers a measure to be superior to the status quo if those whose welfare is improved by the measure obtain sufficient benefit from it that they could perfectly compensate all those whose welfare is reduced by it.
The first applications of economic theory to legal problems were generally confined to fields where the justification for legislative or judicial intervention could reasonably be expected to be found in economics: Trebilcock cites antitrust, tax policy, and public utility regulation as key examples of these traditional applications.69 Later, groundbreaking work by Coase and Calabresi extended economic analysis to private law fields such as tort and property law, where they faced competition from more traditional, moral theories, such as corrective justice.70 With the writings of Becker, Posner and others,71 law and economics has penetrated even further into areas traditionally thought to be non-economic, such as criminal law, family law, and human rights law. Today, there is scarcely a field of law that has not been examined from the perspective of law and economics.
The broad application of law and economics has not been uncontroversial. Attacking the validity of the factual assumptions underlying legal economic theory, critics argue that people cannot be counted on to act in their rational self-interest, because they do not have sufficient information, are motivated by concerns which go beyond their self-interest, and are in any event not perfectly rational. These objections are well-taken up to a point, but they rest in part on an overstatement of the goals of legal economics. Most economists do not claim that an analysis based on an assumption of rational self-interested behavior can completely account for all human conduct, but simply that it can help to predict, at least with partial success, the impact that legal rules might have on human behavior.72 For example, the fact that possible tortfeasors are not motivated solely by a desire to avoid liability does not change the fact that many of them may take greater care in response to a more unforgiving liability regime.
The critics of law and economics also argue that it is normatively impoverished, and that aggregate welfare maximization is not a substitute for justice. Some fields, such as criminal, family and constitutional law, are thought to be inherently non-economic, and the values reflected in these areas ought not to be reduced to mere factors in a utilitarian calculus. For example, it might be feared that applying a utilitarian analysis to the protection of fundamental constitutional rights could result in the rights of a small minority being traded away to secure benefits to the majority. Certainly under the Kaldor-Hicks model one could imagine a relatively large cost (e.g., violation of fundamental rights) imposed on a small minority being outweighed by the aggregate of small gains (e.g., administrative efficiency) to the majority.
In answer to this objection, one might point out that economic analysis does not inevitably lead to this kind of result. It is open to a legal economist to reason that an individual attaches such great utility to his or her fundamental rights that under no realistic circumstances could the disutility arising from their violation be outweighed by benefits to the majority, except possibly in extremely rare circumstances where the fundamental rights of some individuals must be restricted in order to prevent some catastrophic harm that would jeopardize the fundamental rights of all.73
Clearly, however, one would need some theory to decide what utility to attach to various interests asserted as fundamental. Theories of natural rights, for example, might be invoked at this stage. Some utilitarian absolutists would reject the notion that utility can be assessed objectively, and would argue that the relevant value is each person's subjective assessment of the utility or disutility to him or her of a particular measure. It may be, however, that some objective measurement of utility cannot be avoided. To use a stark illustration, even a utilitarian analysis must recognize that a pedophile's subjective utility from his conduct has a value that is intrinsically different from (i.e., less than) the victim's utility from being left alone. To rank these two utilities, there needs to be an external or objective value system, i.e., a theory of rights.74
In any event, economic efficiency does not pretend to be an exclusive theory of justice. It does not preclude, for example, distributive justice as a criterion for the allocation of wealth,75 although it argues that certain legal rules, such as liability rules, are best understood as furthering the goal of maximizing aggregate welfare rather than assuring an equitable distribution of resources. It would be wrong, therefore, to equate economic analysis with absolutist utilitarianism. In its descriptive aspect, economic analysis claims to provide a partial explanation for human conduct and a means of predicting the behavioral impact of legal rules. On the prescriptive side, legal economics provides one possible structure for assessing the desirability of legal rules by reference to their aggregate impact on the welfare of the members of the community. The fact that other theories of justice also exist, or that the assessment of utility may require reference to an external value system, does not diminish the usefulness of the economic method of analysis.
It is in this spirit that I now turn to an examination of the externalities theory of liability.

2. Basic Argument

A particular course of action should be undertaken if and only if it increases aggregate welfare, that is, if the benefits society obtains ("social benefits") as a result of the activity exceed the costs the activity imposes on society ("social costs"). However, when a rational, self-interested actor decides whether to undertake a particular course of action, she is unlikely to base her decision on the benefits and costs of the activity for society as a whole. Rather, her inclination will be to consider only one component of the total social costs and benefits of the activity - namely, those costs and benefits which accrue to her ("private costs and benefits") - and to ignore the costs and benefits which the activity will occasion for the rest of society ("external costs and benefits"). She will undertake a proposed activity when it is privately profitable, that is, when the private benefits exceed the private costs, regardless of whether the activity produces a positive or negative net social benefit. In fact, it is almost certain that some activities which produce a negative net social benefit will be privately profitable, for example, when the benefits of a proposed activity accrue primarily to the private actor while most of the costs are incurred by others.
For an easy illustration of this phenomenon, suppose that a business person is deciding whether to build a new manufacturing plant. From society's standpoint, the plant should be built if the total social benefits from the plant exceed the total costs. The social benefits of the plant would include the business person's private benefits (the present value of her expected operating profits from the plant) plus any external benefits to the broader community, such as job creation. The social costs of the plant would be composed of private costs to the business person (her cost of building the plant), plus any costs which the plant will impose on the rest of the community, such as damage to the environment. However, our business person is unlikely to consider all of these benefits and costs. Her rational, self-interested inclination would be to build the plant if the present value of her expected profits from the plant exceeds the cost of building the plant - in other words, if the private benefits of the plant exceed the private costs. She is not likely to consider either the external cost to the community of the pollution caused by her operations, or the external benefit to the community of the employment the plant will create. As a result, she may decide to build the plant even if the community as a whole might be better off without it.
Tort law claims to solve the problem of externalities by requiring private actors to compensate those injured by their actions under certain circumstances. For example, under Learned Hand's well-known formulation of the negligence standard, an injurer must pay compensation if the cost of avoiding the harm would have been less than the expected value of the potential harm (i.e., the probability of the harm multiplied by the magnitude of the harm).76 Because she may be liable for the external costs of her activities, our business person will no longer simply disregard those costs. In the first place, she will take cost-effective preventive measures, that is, measures which, by diminishing the risk of injury, reduce expected injury costs by an amount greater than the cost of the measure. As well, when deciding whether to build the new plant at all, she will do so if and only if her net private benefit from the plant exceeds the cost of the requisite preventive measures.
Alternatively, under a strict liability standard, a defendant must pay compensation for the actual harm caused by her actions, regardless of whether the harm could have been cheaply avoided. Under this standard, private actors will take the same cost-effective preventive measures as under a negligence regime.77 However, their initial decision whether to engage in the activity at all will be different. Our business person, operating under a rule of strict liability, would build her new plant if and only if her private benefits exceeded the costs of the preventive measures plus the expected value of any compensation that would have to be paid in respect of unprevented injuries.
It can be seen that tort liability, by internalizing all or a portion of the external costs of decisions, produces two sorts of social gains. First, there is the gain from the taking of cost-effective preventive measures - the amount by which the cost of the preventive measures is exceeded by the reduction in expected injury costs. Second, there is a gain from the non-occurrence of some socially detrimental conduct78 which is made privately unprofitable by the fact that the private actor will expect to incur additional costs in connection with preventive measures, compensation for injury, or both.
A number of objections can be raised against the externalities theory. First, since tort law internalizes all or a portion of the external costs and none of the external benefits of activities, it introduces a bias into decision-making, and one cannot know whether the net effect of this bias will be to increase or decrease aggregate welfare. Second, tort law may not maximize social welfare since it leaves the computation of utility at least partly to the subjective assessment of the potential tortfeasor.
To understand the first objection, recall that by internalizing some or all of the external costs of activities, tort law makes activities more costly to the person who proposes to undertake them. This is true of all activities, whether they are socially beneficial or socially detrimental. Thus, tort liability does not eliminate only socially detrimental activities; in fact, it eliminates all activities for which the net private benefit is not sufficient to cover the external costs (or the prevention costs, in a negligence regime) of the activity. Some of these activities would have been socially detrimental, but others would have been socially beneficial.
Imagine, for example, an activity that produces private benefits that slightly exceed the private costs. Suppose that this activity also produces significant external costs, but much higher external benefits. In the absence of a tort liability system, this activity would be undertaken because it is privately profitable. However, under a rule of strict liability, a private actor would be required to pay a portion of the external costs of the activity, namely, the cost of preventive measures plus compensation for any unprevented injury, while not being permitted to reap the external benefits. If these additional costs are sufficiently high,79 the activity will not be undertaken even though it is socially beneficial. Substituting a negligence rule for a rule of strict liability reduces the magnitude of the problem, but does not eliminate it. In a negligence-based tort regime, a private actor would still be required to pay a portion of the external costs of the activity, specifically, the cost of preventive measures, while being unable to appropriate any portion of the external benefits. If the preventive measures are sufficiently costly,80 the activity will not be undertaken even though it is socially beneficial.
This problem would not arise if there were some mechanism for internalizing the external benefits of an activity, so as to offset the bias introduced by tort liability. In the absence of such a mechanism, however, the tort liability system is not unambiguously beneficial. The cost of tort liability is the value of socially beneficial activities which are forgone because the obligation to take preventive measures or pay compensation renders them privately unprofitable. There is no way of knowing, a priori, whether the benefits forgone will be less or greater than the sum of the gains from the taking of cost-effective precautions and the elimination of some socially detrimental conduct. I conclude that an externalities theory is incapable of telling us whether tort liability is welfare-enhancing or welfare-impairing. 81
Now for the second objection. Recall that the normative acceptability of an economic model depends on its incorporation of an objective value system which allows us to compare the injurer's interest in performing the activity to the impact of the activity on other people. Tort litigation subjects the latter part of the utility computation to judicial, and therefore presumably objective, assessment. In deciding whether to act, potential tortfeasors will use this objective measure of the disutility imposed on other people by the activity. However, there is no similar constraint on the potential tortfeasor's assessment of her own utility from pursuing the activity. In practical terms, one could imagine socially detrimental conduct being undertaken by a person who attached an excessive value to the benefit she received from it.
Both of these objections suggest that it is unclear whether tort liability is welfare-enhancing. Since, under an economic analysis, the justness of tort liability rests on the claim that it increases aggregate welfare, the failure of an externalities theory to demonstrate that aggregate welfare is increased by the liability rule is a major weakness of the theory.

3. Application to State Liability Generally

In addition to the general external objections to economic analysis and the internal weaknesses of externalities theory, there are two additional difficulties which arise when the theory is applied to governmental liability. The first is a theoretical hurdle, namely that the government is not analogous to a self-interested private actor. It turns out that this problem has a solution, and I conclude that an externalities theory is capable of explaining State liability for infringements of fundamental rights and systematically neglected interests. The second, more practical problem is that liability rules may not actually influence the behavior of governments.

(a) Government Is a Social-Welfare-Maximizer

The Objection. The externalities argument is based on the idea of a rational, self-interested, private decision-maker who, in the normal course of events, would not be expected to take into account the effects of her actions on society at large. It is not immediately obvious that the government can be assimilated to such a person. Unlike private actors, government is not expected to disregard the social benefits and costs of its actions.82 On the contrary, enhancing the well-being of the community is an essential duty of government.
There are, of course, imperfections in governmental decision-making. Governmental decision-makers may well be influenced by private motives, such as protecting their departmental budgets, job security, professional prestige, and so on. Cohen summarizes the problem as follows:

While in a perfect world the bureaucracy may take into account all the social costs of its activity, reality may be quite different. This may be because these costs do not come out of the bureaucratic budget, or because the bureaucrat calculates costs not in terms of willingness to pay to avoid the state activity, but in terms of "political costs." In that case the costs may not be related to the preferences of the members of the relevant community. 83

As well, even when they are motivated to maximize social utility, government is forced by practical realities to act upon imperfect information.
Nonetheless, I am not persuaded that we should assume that the generalization which applies to private activity (i.e., that private actors will generally disregard the social costs of their activity) can be applied with equal success to the government. There is a difference between imperfect pursuit of social welfare-maximization, which government engages in, and the pursuit of private interest, which private actors engage in. If we believe that governments routinely adopt policies without regard to the social costs of those policies, it is a serious problem which can only be remedied through structural reforms, such as increased transparency and accountability, and not through such a clumsy device as State liability.
Recall, moreover, that the application of liability rules requires the judiciary to assess the external costs of the alleged tortfeasor's conduct. This task is difficult enough when what is being evaluated is private conduct, affecting a limited set of external interests, but it verges on the impossible when the impugned conduct is a governmental policy. The judiciary is poorly equipped, as an institution, to make assessments of the net social cost or benefit of governmental decisions. Compared to the legislative and executive organs of government, the courts have less flexibility, less access to technical expertise, and less capacity to investigate the social and economic impact of various policies. It is true that the courts have evolved somewhat in North America, and that the traditional bi-polar, fact-based form of adjudication is increasingly giving way to multi-polar litigation and an inquiry into social facts and policy.84 To assist in their new role, U.S. and Canadian courts have developed tools for obtaining social science data and policy advice, such as the appointment of amici curiae and the use of Brandeis briefs. However, this trend remains a peculiarly North American phenomenon, and is regarded skeptically in many other countries.85 In any event, even in the U.S. and Canada, courts are unlikely ever to be able to do the job of legislatures and executives, i.e., maximize social welfare, as well as those two branches, and engaging in this task may detract from their effectiveness as the adjudicative branch of government.
The Response. There may be exceptions to the general rule that government adequately considers the social impact of its policies. If some kinds of social cost are systematically disregarded or undervalued by government, then a liability rule targeted at these overlooked costs might serve a useful purpose.
This argument is related to the utilitarian conception of fundamental rights, developed by Sumner in his book, The Moral Foundation of Rights.86 Sumner describes rights as rules which, although they appear at first glance to constrain legislatures and executive officials' ability to promote some desired goal (such as maximizing aggregate welfare), actually make it more likely that the goal will ultimately be achieved because they prevent certain predictable errors by the decision-maker. Sumner illustrates his point with an example taken from the context of medical experimentation.87 He asks us to consider a hospital ethics committee which sets out to ensure that experiments are only conducted if the costs are outweighed by the benefits, but which suffers from deficiencies in the decision-making structure which create a systemic bias in favor of experimentation. For this reason, the committee pre-commits to a rule of informed consent "to introduce a counterbalancing bias in favour of the subjects" of experimentation and improve the likelihood that the experiments will be authorized if they produce a net benefit, and rejected if they produce a net cost.88 What applies to the hospital ethics committee, says Sumner, applies to government in general. A government interested in the pursuit of a goal (such as welfare-maximization) might pre-commit to rights, which will sometimes prevent it from doing what might appear, at the particular moment, to be welfare-maximizing, in order to counterbalance some bias in the public decision-making system and increase the chance that the ultimate decision will actually be welfare-maximizing.
Sumner does not elaborate on the kinds of interests that may be systematically undervalued, but perhaps they include the interests of disempowered minorities. Every governmental policy has winners and losers, and the fact that a particular group is disadvantaged by a governmental measure does not mean that their interests were not taken into account, or that their disutility from the measure was not factored into the government's social-welfare-maximization determination. However, there may be particular groups whose interests are systematically overlooked because they lack political power. Recall the hint dropped by Justice Stone in a footnote to his opinion in Carolene Products, that the presumption that government acts in the public interest may not be justified where a statute is "directed at particular religious, or national, or racial minorities," since "prejudice against discrete and insular minorities may be a special condition, which tends seriously to curtail the operation of those political processes ordinarily to be relied upon to protect minorities, and which may call for a correspondingly more searching judicial inquiry."89
Another possibility is that government systematically undervalues certain individual rights, such as freedom of expression and freedom of religion. Under this theory, the purpose of constitutional protection may be to lend additional weight to interests which might otherwise be undervalued by government or by a popular majority. Posner believed, for example, that criminal law protections might be undervalued by law enforcement officials, who might systematically grant too much weight to the goals of law enforcement and insufficient weight to the rights of suspects.90
The recognition that government systematically undervalues certain interests leads, in Sumner's analysis, to the conclusion that the entrenchment of these interests in the form of rights increases the likelihood that governmental decisions will turn out to be welfare-maximizing. It also suggests that a liability rule may be appropriate, to ensure that these interests are properly internalized. The rule would be a form of strict liability for a class of systematically overlooked social costs.
Interestingly, governmental liability targeted at these systematically undervalued interests seems to escape the main objections to the basic version of the externalities argument. For example, recall that in the sphere of private activity, tort liability introduced a bias by internalizing the social costs but not the social benefits of action. In the context of governmental activity, this bias would not arise. Our baseline assumption is that governments generally consider the social benefits (as well as the social costs) of their activities, even in the absence of legal rules impacting directly on the public treasury. Governmental liability rule in our model would be targeted at a category of social costs which are believed to be systematically undervalued by government. Internalizing these neglected costs does not introduce a bias into governmental decision-making - it corrects one.
The other objection to the basic externalities theory related to the fact that the decision whether to act was left to the private actor, who was thought to be less objective in her assessment of utility than, for example, a judge. In the context of governmental action, this weakness is transformed into an advantage. For reasons which have already been mentioned, governmental actors are better placed than judges to make assessments of utility. Moreover, as a general rule, we do not question the objectivity of governments in the same way that we doubt the objectivity of private preferences. It is entirely appropriate, therefore, to leave the assessment of social utility generally to the government, while creating a targeted exception for particular costs that would not otherwise be properly internalized by the government.

(b) Liability Does Not Influence Governmental Conduct

Despite its theoretical attractiveness, a more practical objection may be raised against the application of externalities theory to governmental conduct, namely that governments are not actually influenced by liability rules.
As I explained, above, critics of legal economics argue that it is normatively inappropriate to place a finite value on fundamental rights. However, even if one does not object, in principle, to an economic approach to rights, the concern that the State would disregard rights if it were permitted to pay compensation instead is heightened by the fact that the State has very deep pockets. A State which can disregard rights by paying the victim, and which has at the same time the power to print money or raise money by taxation, may not be practically constrained against the infringement of rights.
Cohen highlights two reasons why damages awards are likely to have negligible impact on governmental conduct. His analysis is based on the Canadian experience, but the same phenomenon is likely to be observed elsewhere. First, damages awards are very small in proportion to a department's budget. In Canada, between 1983 and 1985, there was not a single government department where aggregate damages claims exceeded 0.2 per cent (1/500) of the departmental budget.
Second, governmental actors are not subject to the same market forces that constrain private actors. Because of their compensation structures and the discipline imposed by capital markets, corporate managers can be expected to seek to maximize their profits by achieving an optimal balance between internal profits and accident costs. Governmental departments are not subject to anything approaching these constraints. Governmental managers' compensation is all but unaffected by damages awards. As well, damages awards are not normally paid out of the departmental budget, but out of the general Treasury. Even if they were allocated to particular departments, the most likely result would be an increased budget allocation to ensure that existing programs would not have to be sacrificed. Ultimately, the losses would be borne by the taxpayers, whose ability to scrutinize the efficiency of government is even more limited than the ability of shareholders to monitor the performance of corporate managers.91
Moreover, the argument that liability does not affect the conduct of government departments or legislators applies with even greater force to judicial conduct. In light of the principle of judicial independence (including institutional financial independence), common to many countries, it is difficult to see in what way a damages award against a State could be made to influence the conduct of the judiciary.
Despite these practical difficulties, however, there remains at least a plausible theoretical argument that the internalization of overlooked social costs is capable of justifying targeted governmental liability.

4. Application to EU Member State Liability

Here is what an externalities theory of EU Member State liability would look like. The argument would begin with the observation that the interests of people located outside a particular Member State, like the interests of discrete and insular minorities within the State, are likely to be overlooked by national governments. While we assume, for example, that an Agriculture Ministry official in Rome will consider the effect of a proposed measure on farmers and others in all parts of Italy, and will weigh the disadvantages to some against the benefits to others, the official will not find it intuitive to consider the impact of the policy on farmers or consumers in, say, Denmark. Certainly, the political constraints which cause public officials to act in the interest of the domestic electorate do not similarly constrain officials to consider the interests of those who are not part of the national polity. EU Member State liability internalizes the costs of domestic policies for people in other Member States; it forces the Italian official to consider the external costs of a proposed measure as if they were costs incurred internally.
At first glance, this theory appears to be an attractive explanation of EU Member State liability. Indeed, the protection of market freedoms within the EU provides a partial answer to the practical problem posed in Cohen's analysis by the lack of market constraints on government. In the European Union, the free movement of capital and persons may make it easier for European investors and taxpayers to assess the relative performance of their government and, if necessary, to vote with their feet.
We might also think that this theory is normatively attractive as applied to the European Union, since it reflects an ideal of European solidarity. The externalities theory of EU Member State liability treats the European Union as a single unit for the purpose of welfare-maximization. Liability promotes decisions that maximize the aggregate welfare of the entire Union, and prevents decisions that increase the welfare of one country while imposing greater costs on another.
However, there are some important problems with the externalities theory of EU Member State liability. For example, a practical difficulty identified by Harlow is that the prospects of deterrence through liability are reduced by the convoluted and deliberately ambiguous nature of much Community law.92
There is also a more fundamental problem. It may be wishful thinking to assume that Community law creates an obligation on the part of Member States to consider the costs of their policies on interests situated in other Member States. There is in fact no such duty. Community law does not prevent a national governmental official from taking action that may prove detrimental to the interests of people in other parts of the EU, so long as the rules imposed by the Community are respected. For example, a government might find it beneficial, from the perspective of its own citizens, to adopt an indistinctly applicable and non-discriminatory marketing restriction, even if the restriction has a detrimental impact on producers in other EU Member States. Community law presents no obstacle to such measures,93 and imposes no general requirement to consider the interests of people in other Member States.
If such a requirement did exist, then liability would not be conditioned on a breach of a specific provision of Community law. Nor would it be necessary for the injured party to show that the provision was intended to confer rights on individuals. Instead, there would be a right to compensation whenever a national policy had an adverse impact on anyone in another Member State. Since the externalities theory fails to explain one of the essential features of EU Member State liability - the requirement of a breach of individual rights conferred by EU law - the search for a theory of State liability in the European Union must go on.

B. A Non-Instrumental Theory: Corrective Justice

The other main theory of justice encountered in the literature on constitutional tort liability is the non-instrumental theory of corrective justice. To what extent does this theory help us to explain the phenomenon of Member State liability in the European Union?
Corrective justice explains the liability system as the law's articulation of the moral requirement that wrongdoers make good the losses caused by their wrongdoing. The wrongful causation of a loss creates a moral relationship between the victim and the wrongdoer which is mirrored by the legal relationship between plaintiff and defendant and which, without reference to any goals extrinsic to this moral relationship, calls for compensation. In his explanation of negligence law, Weinrib describes the sense in which corrective justice is non-instrumental:

[T]he central elements of negligence law are regarded not as indirectly furthering some independently identifiable combination of goals, but as categories that mark an immediate normative connection between what the defendant has done and what the plaintiff has suffered.94

In this way, tort law exhibits an inherent rationality which accounts simultaneously for the right of a person injured by wrongdoing to compensation by the wrongdoer, and the corresponding obligation of the wrongdoer to make good the losses caused by his wrongdoing, without reference to an external purpose.

1. Basic Argument

It was Aristotle who first described as "corrective justice" the notion that wrongful infliction of injury provided a basis for compensation distinct from relative need or merit ("distributive justice").95 In his Nicomachean Ethics, he wrote:

But the other [form of justice] is corrective, and its province is all transactions, as well voluntary as involuntary. ... [I]f the distribution be of common property, it will be made according to the proportion which the original contributions bear to each other; ... but the just which exists in transactions is something equal ... for it matters not whether a good man has robbed a bad man, or a bad man a good man, nor whether a good or bad man has committed adultery; the law looks to the difference of the hurt alone, and treats the persons, if one commits and the other suffers injury, as equal, and also if one has done and the other suffered hurt. So that the judge endeavours to make this unjust, which is unequal, equal...96

Though Aristotle was the first to articulate the principle of corrective justice, a fuller explanation of the underlying normative principle would draw upon the Kantian concept of the right as the "totality of conditions under which the actions of one can be united with the freedom of others in accordance with a universal law,"97 or, in other words, the conditions under which persons interact on a basis of freedom and equality. When a person fails to observe these conditions in her relations with other people, a disequilibrium is created that should be redressed by her payment of compensation to the injured party or parties. The right of the victim to compensation, and the corresponding obligation of the wrongdoer to make good the loss, are independent of the relative wealth or merit of the wrongdoer and injured party; instead the right and obligation are deduced from the equal status of both parties as free and equal moral agents.
When expressed in a doctrinal relationship, corrective justice presents itself as a liability rule in which both wrongdoing and causation are essential.98 It is wrongdoing which singles out the defendant's conduct from the rest of the chain of events which caused the plaintiff's injury. Thus, the requirement of wrongdoing explains why, when Able is injured by a car driven negligently by Baker, who bought the car from Charlie, it is Baker alone who is liable even though Baker's driving and Charlie's sale of the car to Baker were both "but-for" causes of Able's injury. As for the requirement of causation of harm, it is what singles out Able from all of the other people whom Baker endangered by his careless driving, as one to whom Baker owes a monetary obligation. Thus, the simultaneous existence of wrongdoing and causation explains why the defendant is required to pay damages to the plaintiff, and why the plaintiff is entitled to receive them from the defendant.
The symmetry of the litigation form, and the idea of private law as regulating the interaction of free and equal persons in society, make corrective justice an attractive theory of private law torts. In fact, the principle is reflected in both the common and civil law systems of private law. In English common law, for example, it is trite that the central conditions for liability are wrongdoing (the breach of a duty of care) and the causation of injury. To take a civilian example, Article 1382 of the French Civil Code clearly establishes wrongful causation of injury as the basic principle of civil delictual responsibility when it declares: "Tout fait quelconque de l'homme qui cause E0 autrui un dommage oblige celui par la faute duquel il est arrivE9 E0 le rE9parer."
However, it is not immediately obvious that a theory based on the freedom and equality of the plaintiff and defendant can explain litigation against the State. Indeed, the basis of corrective justice in the interaction between persons is highlighted by the fact that Aristotle titled his essay on corrective justice, "Of Justice in Transactions Between Man and Man."99 In the following paragraphs, I will explore the ways in which corrective justice might nonetheless be thought to inform a rule of State liability.

2. Application to State Liability Generally

One might argue that corrective justice can be applied between citizen and State, despite its origins in the formal equality of individuals, if the State is considered an ordinary legal person. In France, for example, where corrective justice seems to be the basis for the civil law of fault-based responsibility, it was at one time argued that the liability of the Administration could be explained by its legal personality.100 In his PrE9cis de droit administratif, Maurice Hauriou wrote,

... les entrepreneurs lE9gaux de la gestion administrative des affaires du public sont les personnes morales administratives c'est-E0-dire les administrations publiques prises sous leur aspect de personnes morales ; de lE0 vient que la gestion administrative entraEEne E0 la charge de ces personnes morales des responsabilitE9s pE9cuniaires.101

In fact, however, it is doubtful that the theoretical difficulties in applying corrective justice to litigation against the State can be overcome simply by asserting the legal personhood of the State. As Duguit argued in response to Hauriou, the personhood of the State is artificial.102 The State does not have an inherent claim to be part of the community of free and equal persons.
Nevertheless, the belief persists that State liability can be justified on the basis of corrective justice.103 The most complete account in this regard is that of Jeffries. I reproduce his argument here in some length to show how closely it mirrors the basic articulation of corrective justice as applied to the private law of torts:

Persons must be treated as ends in themselves, not merely as objects or instruments of government policy. ... Therefore, relations between the government and individuals are subject to the concept of right. The rights recognized under the Constitution state conditions under which the actions of the government can be united with the freedom of the individual. ...
In this conception, government wrongdoing [that] causes individual injury should be redressed by the award of damages, without regard to the antecedent (or resulting) distribution of wealth.
Both causation and wrongdoing are essential to this conception. ... Defendant's wrongdoing may risk harm to many persons. Not everyone endangered by wrongdoing, however, may demand damages. Causation singles out a particular plaintiff - one who has been injured by the defendant's act - to make a claim on the defendant's resources. ... Wrongdoing is also required. Just as causation identifies why this plaintiff is entitled to recover, fault identifies why this defendant is obligated to pay. Causation itself is inadequate to this task, for there are, in the nature of things, many causes of any injury. ... The showing of fault fills this gap. It identifies the causal antecedent that will be regarded as legally significant. It singles out a particular defendant - one whose wrongful act has caused the plaintiff's injury - to make good the plaintiff's loss.
More simply, fault supplies the moral dimension to the causal relationship. While causation traces a physical connection between doer and sufferer, it provides in itself no moral basis for coercing compensation.104

The notion of wrongdoing or fault bears close examination in Jeffries' argument. In Weinrib's account of corrective justice in private law, wrongdoing had a sense that could be derived from the form of private law litigation, which presupposed the equal rights of both litigants. Wrongdoing was simply a failure by one of the parties to respect this equality. It is not clear that the meaning of wrongdoing in public law can similarly be deduced from the form of litigation and, as a result, the transposition of corrective justice from private law to public law leaves us searching for an alternate theory of wrongdoing.
Unfortunately, a theory of State wrongdoing is not a matter on which there is likely to be unanimity. For instance, Jeffries argues that wrongdoing requires fault beyond mere unconstitutionality, but in a response to Jeffries, Nahmod points out that a mere violation of a constitutional provision could equally be considered wrongdoing by the State.105 The indeterminacy of the notion of wrongdoing is highlighted by Nahmod, who states that "wrongdoing is a social construct."106 From this observation it is but one small step to Prosser's assertion that "there is no such thing as a theory of negligence, because negligence, like the Constitution, is what we make it."107
To make sense of the concept of State wrongdoing, it is necessary to begin with a theory of the State. Suppose, for example, that we take the State to be, as it was described by Rousseau and Locke in the contractarian tradition, a collective body formed by the union of free and equal individuals. What distinguishes the State from other such unions is that, through law, it can compel obedience from its individual members. Or, perhaps more precisely, a subset of the members within the State wields governmental power and can compel obedience from each of its members in the name of the community as a whole. The Lockean view is that the members of a community agree to be bound because only in this way can they secure the conditions for the enjoyment of their natural rights. Without the protection of law, people's rights would be fragile. However, another reason individuals agree to be united under government is that other shared objectives, such as the pursuit of distributive justice108 and the enhancement of aggregate welfare, can be achieved through collective action. The restrictions imposed by government on absolute liberty are the solution to the "tragedy of the commons"109 and other dilemmas of unconstrained voluntary action.110
An important feature of this theory of the State is that it does not portray the State as an end in itself, but as a means by which individuals pursue their greater security and happiness. As Chevallier notes in his essay on the rule of law, this fact provides a normative basis for the legal duty of the State to respect the rights of the individual:

L'C9tat de droit implique en effet une certaine conception des rapports entre l'individu et l'C9tat, qui sous-tend tout l'E9difice juridique : non seulement la puissance de l'C9tat trouve ses limites dans les droits fondamentaux reconnus aux individus, ce qui crE9e ainsi la possibilitE9 d'une ABopposition au pouvoir fondE9e sur le droitBB, mais encore elle a pour finalitE9 mEAme, pour justification ultime la garantie de ces droits; l'C9tat de droit repose en fin de compte sur l'affirmation de la primautE9 de l'individu dans l'organisation sociale et politique, ce qui entraEEne E0 la fois l'instrumentalisation de l'C9tat, dont le but est de servir les libertE9s, et la subjectivisation du droit ...111

To be precise, these rights are inherent to the relationship between the individual and the State because they represent the limits of what a free individual can be required to give up in exchange for the security and material benefits of collective action. Although it is not necessary for the purposes of my argument to describe the content of these rights, one place we might look for them is in the Kantian concept which underlay the basic version of corrective justice, namely an idea of fundamental rights as the set of conditions under which persons interact on a basis of freedom and equality.
Two principles of liability emerge from this conception of the State and of rights. First, when a public official (or legislator, or judge) exercises her power in a manner that denies the freedom and equality of another person, Kantian corrective justice requires the payment of damages by the official to the affected individual. This principle reflects Duguit's characterization of the State as

... une sociE9tE9 oF9 existe la diffE9renciation entre gouvernants et gouvernE9s, les premiers disposant de la plus grande force, les seconds devant obE9ir, mais les deux devant se soumettre E0 une rE8gle supE9rieure, la rE8gle de droit.112

The fact that some individuals wield governmental power, while others do not, does not grant the former a licence to disregard the equal rights of the latter.
The second principle, which is more pertinent to the issue of State liability, is that where the community, through the acts of its officials (or legislators, or judges) has violated the fundamental rights of some of its members, the community as a whole should be liable for the harm caused by the infringement. State action, even if it is undertaken in the interests of aggregate welfare maximization or distributive justice, crosses the limits of acceptable collective action when it violates one of the individual's fundamental rights. Since the wrong is by the State, in the sense of the entire community, it is consonant with corrective justice that the obligation to repair the resulting injury should be borne by the community, through the State.
These principles are not mutually exclusive. On the contrary, it may easily be imagined that governmental wrongdoing could trigger both personal and State liability. This could happen, for example, if an official caused damage through a violation of rights while acting in the course of her duties. In such a case, corrective justice as between the official and the victims would require that the official bear personal responsibility for what would have been, in fact, her decision to violate the fundamental rights of another person.113 But the State would also properly be held liable because the official's act would have been on behalf of the State and, through it, the entire community. It is possible, in this way, to find in corrective justice a rationale for State liability for harm caused by infringements of fundamental rights.

3. Application to EU Member State Liability

The difficulty with applying corrective justice to the liability of Member States is that the rights protected under EU law cannot easily be seen as being limits inherent to the relationship between the individual and the State.
One might perhaps retreat to an argument based on the legal personhood of Member States within the EU. It is true that the practice of some domestic legal systems to ascribe legal personhood to the State is accentuated within the EU legal system. For example, the EC Treaty itself was adopted by the Member States in their capacity as international legal persons. Even more interestingly, from the standpoint of corrective justice, the ECJ has occasionally shown signs of treating the Member States as being legally equivalent to ordinary persons. For example, in its case law on the anti-trust provisions of the Treaty, the Court of Justice has been willing to treat State enterprises as economic actors no different from a private undertaking.114 Another example is the Court of Justice's declaration in Van Gend that both individuals and States are the subjects of the European legal order. Both of these examples are indicative of a decreased specialness of the State in the eyes of the Court of Justice. However, as I have already explained, the fact remains that there is no inherent equality between the State and the individual, even for Member States of the European Union. The argument for corrective justice as a theory of EU Member State liability cannot rest solely on the legal personality of the Member States.
It might be argued, in the alternative, that EU Member State liability reflects a public law theory of corrective justice analogous to that advanced by Jeffries in relation to constitutional torts. Corrective justice recognizes that government wrongdoing that causes individual injury should be redressed by the award of damages. One might argue that a government that violates the individual rights conferred by EU law has committed a wrong and that, if any injury results, corrective justice requires that compensation be paid. However, this argument is normatively empty: the violation of EU law is a wrong against an individual only because EU law says so. As we saw, above, corrective justice in relations between the State and an individual concerns rights which are inherent to that relationship. The violation of rights protected under EU law, even a "sufficiently serious breach" within the meaning of Brasserie du PEAcheur, cannot be seen as a transgression of the limits inherent to the relationship between an individual and a State.

C. A Note on Distributive Justice

Both corrective justice and economic efficiency are identified as alternatives to distributive justice,115 and, for this reason, I wish to make it clear that our rejection of the corrective justice and externalities theories should not be taken as an indication that distributive justice may be at the base of EU Member State liability.
The concern of distributive justice is the equitable allocation of societal wealth according to criteria such as merit or need.116 Distributive justice is an important concern of government, but it does not appear to be the theory underlying either private law tort liability or constitutional tort liability. In both cases, there is no reason to think that the kind of transfers contemplated by those forms of liability improve the overall fairness of the societal distribution of wealth. To use an example given by Coleman, even a person whose wealth exceeds what she would be allocated under any possible principle of distributive justice would be entitled to claim damages under tort law from an indigent person who negligently injured her.117 Similarly, as Jeffries points out in the context of injuries caused by government, constitutional tort liability cannot be rationalized as an expression of distributive justice:

Lawful government action may cause devastating harm, while even flagrant unconstitutionality may injure only slightly. If money is collected from all members of society to compensate those injured by unconstitutional government acts, some persons gravely harmed by (lawful) government action will be made to join in compensating minor (unlawful) injuries to economically advantaged individuals. As a scheme for redistributing wealth, or merely for relieving hardship, this makes little sense.118

If payments such as these are rationally connected with a principle of justice, the relevant principle must be one of efficiency or corrective justice, and not distributive fairness.
The fact that constitutional tort liability does not appear to be based on distributive justice does not mean that other forms of State liability might not be. For example, the no-fault doctrine of E9galitE9 devant les charges publiques might be seen as a mechanism for improving distributive fairness. However, it is difficult to see a basis in distributive justice for any system in which the reason for liability is the causation of damage through a violation of rights. In particular, distributive justice is not a theory that is capable of accounting for the phenomenon of EU Member State liability. There is simply no basis for assuming that people whose rights under EU law were infringed are, on any measure of need or merit, deserving of a greater share of society's resources than they would enjoy in the absence of the liability rule.
Therefore, we cannot conclude, from the inability of corrective justice and externalities theory to explain the liability of States within the EU, that the theory underlying Member State liability is distributive justice.

D. Overall Assessment of the Theories

In the preceding sections, the two main theories of justice used to explain the phenomenon of constitutional tort liability were explored and found wanting in their application to Member State liability in the European Union. We also saw that the inability of these theories to account for Member State liability did not mean that distributive justice was the appropriate model. Why then did the main theories advanced in support of constitutional tort liability fail to explain EU Member State liability?
In each case, the failure of the main theories to explain EU Member State liability was attributable to the underlying substantive law and, more particularly, to the character of the rights conferred by EU law. Externalities theory, for example, could explain liability for violations of minority rights or fundamental human rights, but it was not capable of explaining liability for damage caused in violation of the substantive rules set out in Community law. Corrective justice, on the other hand, could not account for liability based on violation of norms which are not derived from principles inherent to the relationship between individuals and the collectivity. Since the substantive rules of EU law are anything but inherent to the relationship between individuals and their Member States, corrective justice was incapable of accounting for State liability for damage arising from violations of those rules.
In Part II of the paper, when we identified a breach of rights as one of the defining features of EU Member State liability, we did not closely examine the nature of the rights involved, but in light of the inability of either externalities theory or corrective justice to account for EU Member State liability, it is worth taking another look.

68 See R. Posner, Economic Analysis of Law, at p. 14-15 (5th ed., 1998).

69 M.J. Trebilcock, "Economic Analysis of Law," Canadian Perspectives on Legal Theory, R.F. Devlin, ed., at p. 103 (1991). See also Posner, Economic Analysis of Law, at p. 25.

70 R. Coase, "The Problem of Social Cost," 3 J. L. and Econ. 1 (1960); G. Calabresi and D. Melamed, "Property Rules, Liability Rules and Inalienability: One View of the Cathedral," 85 Harv. L.Rev. 1089 (1972).

71 See, e.g., G.S. Becker, The Economic Approach to Human Behavior (Chicago: U. Chi. P., 1978); "An Economic Analysis of Marital Instability," 85 J. Pol. Econ. 1141 (1977); "Crime and Punishment: An Economic Approach," 76 J. Pol. Econ. 169 (1968); Posner, op. cit..

72 See R. Posner, Economic Analysis of Law, at p. 18 (5th ed., 1998); D. Baird, "The Future of Law and Economics: Looking Forward," 64 U. Chi. L. Rev. 1129, at pp. 1131-32 (1997).

73 This approach was taken, for example, in a number of American constitutional cases: a famous and now discredited example is Korematsu v. U.S., 323 U.S. 214 (1944) (internment of persons of Japanese ancestry during World War II). Another well-known example is U.S. v. The Progressive, Inc., 467 F.Supp. 990 (W.D. Wisc., 1979), recons. den., 486 F.Supp. 5 (W.D. Wisc., 1979), app. dism., 610 F.Supp. 819 (7th Cir., 1979). Here, a federal district court granted an injunction against the publication of instructions for building a hydrogen bomb, saying that while a prior restraint on publication represented a "drastic and substantial" infringement of the freedom of speech, "[a] mistake in ruling against the United States could pave the way for thermonuclear annihilation for us all. In that event, our right to life is extinguished and the right to publish becomes moot" (p. 996).

74 Several authors have noticed the need for an antecedent theory of rights in a framework of social welfare maximization. See, e.g., C.G. Veljanovski, "Wealth Maximization, Law and Ethics - On the Limits of Economic Efficiency," 1 Int. Rev. L. and Econ. 5, at p. 20 (1981); W.J. Samuels, "Book Review - Maximization of Wealth as Justice: An Essay on Posnerian Law and Economics as Policy Analysis," 9 Tex. L. Rev., at p. 155 (1981); N. Mercuro and T.P. Ryan, Law, Economics and Public Policy (Greenwich, Conn.: JAI, 1984), at p. 132. Even Posner seems now to agree that social welfare maximization rests on tacit assumptions about the relative value of various components of social welfare: see R. Posner, Overcoming Law (Cambridge: Harvard U.P., 1995).

75 See Posner, Economic Analysis of Law, at p. 30.

76 U.S. v. Carroll Towing Co., 159 F.2d 169, at p. 173 (2d Cir. 1947).

77 It can be demonstrated that, as a first approximation, strict liability and negligence lead to the same conduct on the part of potential injurers. This is because, in determining what measurers to take to avoid incurring liability in a regime of strict liability, a potential injurer will compare the costs of avoiding the harm with the likelihood that she will in fact cause harm and have to pay damages. This calculus is identical to Learned Hand's negligence formula and, as a result, we would expect potential injurers to act in the same way regardless of whether negligence or strict liability is the rule. See R. Posner, Tort Law: Cases and Economic Analysis, at p. 4 (1982).

78 By "socially detrimental," I mean conduct which produces a negative net social benefit. Conversely, "socially beneficial" refers to conduct which produces a positive net social benefit.

79 That is, if they exceed the net private benefit from the activity.

80 Again, if their cost exceeds the net private benefit from the activity.

81 Few legal economists seem to acknowledge this difficulty with the externalities theory of tort law. Some authors have made a similar argument against the personal liability of government officials, but the problem arises with equal force in the general law of torts. In the context of bureaucratic liability, see J.L. Mashaw, "Civil Liability of Government Officers: Property Rights and Official Accountability," 42 L. and Contemp. Prob. 8, at pp. 26-27 (1978); R. Posner, "Excessive Sanctions for Governmental Misconduct in Criminal Cases," 57 Wash. L.Rev. 635, at p. 640 (1982); D. Cohen, "Regulating Regulators: The Legal Environment of the State," 40 U. Toronto. L.J. 213, at p. 225 (1990).

82 Cohen, at p. 646.

83 Ibid.

84 See A. Chayes, "The Role of the Judge in Public Law Adjudication," 89 Harv. L. Rev. 1281 (1976).

85 But see A. Stone, The Birth of Judicial Politics in France (Princeton: Princeton U.P., 1992).

86 Oxford: Clarendon Press, 1987.

87 See pp. 182-196.

88 Page 193.

89 United States v. Carolene Products (1938), 304 U.S. 144, at fn. 4.

90 Posner, "Excessive Sanctions," supra.

91 In their classic work, The Modern Corporation and Private Property, at p. 124 (1932), A. Berle and G. Means argue that corporate managers are effectively unconstrained because shareholders have insufficient incentive and opportunity to monitor them. See, for an explanation of the same phenomenon in relation to government, Cohen, supra, at pp. 252ff.

92 Harlow, at p 209.

93 Cases C-297 and 268/91, Keck and Mithouard, [1995] 1 C.M.L.R. 101.

94 E.J. Weinrib, "Causation and Wrongdoing," 63 Chi.-Kent L. Rev. 407, at p. 409 (1987).

95 Aristotle, Nicomachean Ethics, Book V., ch. IV, R.W. Browne trans. 1914. See also Weinrib, "Causation," supra, at p. 449; E.J. Weinrib, The Idea of Private Law (Cambridge: Harvard U.P., 1995), at pp. 56ff. On the distinction between distributive and corrective justice, see also J.L. Coleman, Risks and Wrongs (Cambridge, U.K.: Cambridge U.P., 1992), at pp. 304-305.

96 Aristotle, ch. IV.

97 Weinrib, "Causation," at p. 449, citing I. Kant, The Metaphysical Elements of Justice (J. Ladd trans. 1975), at p. 34. See also Weinrib, Private Law, at pp. 81-82.

98 Weinrib, "Causation." See also Coleman, supra, at p. 324.

99 Aristotle, chap. IV.

100 M. Deguergue, Jurisprudence et doctrine dans l'E9laboration du droit de la responsabilitE9 administrative (Paris: LGDJ, 1994), at p. 72.

101 PrE9cis de droit administratif, 9e E9d., 1919, p. 521.

102 L. Duguit, L'C9tat, le droit objectif et la loi positive, 1901, p. 5.

103 See J.J. Jeffries, Jr., "Compensation for Constitutional Torts: Reflections on the Significance of Fault," 88 Mich. L. Rev. 82; S. Nahmod, "Constitutional Damages and Corrective Justice: A Different View," 76 Va. L. Rev. 997 (1990); R.H. Fallon, Jr., and D.J. Meltzer, "New Law, Non-Retroactivity and Constitutional Remedies," 104 Harv. L. Rev. 1731, at p. 1793 (1991); K. Cooper-Stephenson, Charter Damages Claims (Toronto: Carswell, 1990), at p. 58.

104 Jeffries, at pp. 94-96, footnotes omitted.

105 Nahmod, supra, at p. 1011.

106 Nahmod, supra, at p. 1009.

107 Prosser, "Palsgraf Revisited", 52 Mich. L. Rev. 1, at pp. 15, 17.

108 See Coleman, supra, at p. 312.

109 This phenomenon was first named by G. Harden in "The Tragedy of the Commons," 162 Science 1243 (1968), who observed that shared pastures tended to be overgrazed. The theory developed to explain this phenomenon also explains more generally why, in the absence of regulation, rational, self-interested individual behavior with respect to common resources leads to their overuse and depletion.

110 Another commonly invoked example is the public good problem. In the absence of coercive governmental action, such as the raising of taxes, certain socially beneficial goods would be underproduced because it is not feasible to exclude "free riders", that is, to limit the enjoyment of the goods to the people who pay for them. Thus, although everyone benefits from the existence of traffic lights, a rational, self-interested person would decline to contribute to a fund for their installation, because, once they have been installed, she benefits fully from them regardless of whether or not she contributed. See J. Rawls, A Theory of Justice (Cambridge: Harvard U.P., 1971), at pp. 267-68; Coleman, supra, at p. 312.

111 J. Chevallier, L'C9tat de droit (Montchrestien, E.J.A. 1992), at p. 59-60.

112 Duguit, loc. cit.

113 I do not deny that there may be reasons unrelated to corrective justice for granting immunity to such an official.

114 Case 1155/73, Saachi, [1974] E.C.R. 409. Article 90(2), however, creates an exception for undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly, where the antitrust rules would obstruct the performance of the tasks assigned to them. See J. Maitland-Walker, Competition Laws of Europe (London: Butterworths, 1995), at p. 4.

115 See, e.g., Posner, Economic Analysis of Law, supra, at p. 30; Weinrib, Private Law, supra, at pp. 56ff; Coleman, supra, at pp. 304-305.

116 A theory of distributive justice is at the base of Rawls' "second principle", namely that "[s]ocial and economic inequalities are to be arranged so that they are both (a) to the greatest benefit of the least advantaged, consistent with the just savings principle, and (b) attached to offices and positions open to all under conditions of fair equality of opportunity." See Rawls, supra, at p. 302.

117 Coleman, supra, at p. 304.

118 Jeffries, supra, at p. 91.

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