|The Relative Weight of Irreparable Benefits|
|Aaron R. Petty, Sunday, 23 September 2007 [View as PDF]|
In his recent essay in this Journal, Professor Lichtman proposes adding two factors to Leubsdorf’s three-part test for preliminary injunctions. In this Response, I offer a refinement of Lichtman’s analysis of the relative weight that ought to be accorded to each of his five factors. I suggest that because the prospect of irreparable benefits is inherently less troubling than that of irreparable injuries, and because they pose a greater potential for miscalculation, irreparable benefits should weigh less than irreparable injuries in Lichtman’s formula.
The first reason why failing to correct erroneously granted irreparable benefits is less troubling than failing to correct erroneously inflicted irreparable injuries is that we simply do not care as much about gains as we do losses. People are more displeased by a loss—by about a factor of two—than they are pleased by a gain of an equivalent amount. This asymmetry where the disutility of giving something up outweighs the utility of acquiring it is known as loss aversion. One form in which loss aversion manifests itself is the endowment effect.
The endowment effect suggests that people often demand more to give something up than they would pay to acquire it. The classic illustration of the endowment effect involved an experiment distributing Cornell coffee mugs. The mugs, which sold at the bookstore for $6, were distributed randomly to some of the experiment participants. The participants without mugs were instructed to try to buy the mugs from those who had them. Few mugs actually were sold because the median seller would only sell for $5.25, whereas the median buyer would pay no more than $2.25-$2.75. As one commentator has noted, “people are attached to keeping what they already have.” Although the participants in this example displayed a strong endowment effect despite having had the mugs only a short while, additional research has suggested the effect increases over time. As Chief Justice Holmes said, “A thing which you have enjoyed and used as your own for a long time, whether property or an opinion, takes root in your being and cannot be torn away without your resenting the act and trying to defend yourself, however you came by it.”
Professor Lichtman recognizes that “irreparable harms might be of greater moral concern than are irreparable benefits . . . a government decision that wrongly deprives a private party of some right or freedom could reasonably be thought of as being of greater consequence than a similarly errant decision that wrongly recognizes that right.” However, this phenomenon is not simply moral. As Lichtman notes, failing to account for irreparable benefits may have broad distributional and incentive implications for nonparties. However, accounting for them to the same extent as irreparable injuries when the nonparties value them significantly less would only exacerbate the difficulty of acting and reacting “in the shadow of the law.”
Recognition and management of such differences is nothing new; it is generally the impetus behind any standard of proof other than the preponderance of the evidence, including the criminal law’s “beyond a reasonable doubt” standard. A preliminary injunction is, oddly enough, not so different from a criminal verdict. For example, once granted, a preliminary injunction places a private party against the “virtually inexorable power of the state.” Also like a criminal verdict, a preliminary injunction has asymmetrical error costs. With regard to criminal law Justice Harlan stated:
Similarly, the social disutility of irreparable injury is generally greater than the social disutility of irreparable benefits. An erroneous judgment in favor of the party standing to benefit usually will be worse than an erroneous judgment in favor of the party standing to lose something. In criminal law, the thumb on the scale of justice comes in the form of a heightened standard of proof. In the context of preliminary injunctions, an equally simple tool would be to weigh potential irreparable benefits less than potential irreparable injuries of equal magnitude.
II. The Difficulty with the Subjective Value of Benefits
A second reason for weighing irreparable benefits less than irreparable injuries is the difficulty associated with determining the existence of subjective benefits. Professor Lichtman made this point with regard to the reliability of the four irreparability factors generally, but he did not distinguish between harms and benefits in this regard. “The subjective value of harm is . . . difficult to measure, but when one’s resources are harmed we can be fairly confident that the victim has suffered some subjective loss of value.” In the context of a motion for a preliminary injunction, the existence of subjective harm is obvious. It can be easily inferred from the motion itself that the movant will suffer subjective injury in the absence of an injunction.
Determining the existence of subjective benefits is a more difficult task. “[W]hen one’s resources are objectively enhanced, there is no certainty of subjective benefit.” Thus, “[i]t is virtually impossible to administer a test based on the subjective value of [a] benefit.” Because the existence of an irreparable benefit may be difficult to determine, Lichtman’s test should minimize its relative weight to avoid error.
Professor Lichtman is correct—some errors are more troubling than others. In particular, errors in failing to remedy harm are more troubling than errors in failing to remedy ill-gotten benefits. This leaves Lichtman’s five factors to be scrutinized under three levels of analysis. At the top is the court’s prediction of results on the merits, in the middle is the irreparable harm the parties will suffer if the court wrongly decides against them, and at the bottom is the irreparable benefit the parties will enjoy if the court wrongly decides for them. If, as I have argued here, irreparable benefits are given less weight than irreparable injuries, and if, as Professor Lichtman argues, the irreparability factors are disfavored as grounds for decision, what is the practical significance in revising the test to account for factors which we then seek to discount? Perhaps the status quo is not as indefensible as it seems.
Aaron R. Petty is a Staff Law Clerk at the U.S. Court of Appeals for the Seventh Circuit.
Preferred Citation: Aaron R. Petty, The Relative Weight of Irreparable Benefits, 117 Yale L.J. Pocket Part 77 (2007), http://thepocketpart.org/2007/09/24/petty.html