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Legal and Ethical Issues in Business

by: Cole Bins

Legal and Ethical Issues in Business BUS 205

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Cole Bins
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Date Created: 09/21/15
BGZOSCC Fundamentals of Business Law Raymond L Hogler Professor of Management Department of Management Module 6 Justice and a Sustainable Economy En ron romtion mental z vNFss Fundamentals nfBusinesx Law South Camden Citizens v Ne WJersey DEP New Jersey 2001 Fans er Theury er ease ivii rrgms viuiatiun under Titie Vi Heid injunctive reiiefis granted in piainti s Nature ufevidence snuvving raerai im Standardfur issuing rmumre Deersrerr ufThird CircuitCuun quppeais Fuiicy issues raised by ease e burdens un puur emzerrs impused by eeurrurme activity 3 m s Fundamentals ufBuxinesx Law Law and Environmental Protections Statutes Clean AirAci emissiun ufpuiiutants mm atmuspnere Clean WazerAcz discharge er puiiutants mm navrgabie Waters Comprehensive Enwonmenza Response Compen anon and maturity Ac CERCLA Nairona EnvironmeniaProieciion Act 1969 encuurage prudu we be t and enieyabie harmuny een man and ms enVirunm 6 m 5 Fundamentals ufBusiness Law Law and Environmental Protections Markets and the Environment Tradeable perrnrt systemtu pendte Has an prdddetrdn reaened its peak capacity Can green eaprtansrn salve tne prdblern7 Biodiversity and Property Eedldgreal etnres7 Endangered speeres aetand its scupe 5 lNFss Fundamenmlx ufBusinesx Law Tunes Reynolds amp Alexander v County of Volusia Florida D C Fla 1995 Faets grease envrrdnrnental erreets er beaenrrdnt hgntrng and autumublle trarne Tnedry grease rnterrerenee Wrtn nabrtat Held injunctwe renerrs granted td plarntrns Amblguuus evrdenee dn hgntrng issue Pulley issues rarsed by ease ednrnets er ngnts and ddtres7 5ndwrndbnes rn Yellowstune Park a srrnnar ease7 6 lNFss Fundamentwls ufBuxinesx Law Environmental Philosophy Property rights as the foundation of government J n eke dn pruperty Locke dntne nature drnberty Locke dntne nature ufmvu hre Deep ecology vvna ddtres dd We owe td nunhuman terms at life7 Free Market Ideologies ndd d muralstrump eeunumles7 l nevermlssedthe eyl The Common Law Approach Boomer v Atlantic Cement Co N Y Ct App 1970 Cummu Flalntlff elalms lruury from uperatlun or plant n law duetrlne ut nms n lssue ur remedle Award or perma mages Cuneumng uplnlun lnlunetlun lS apprupnate Pulley lssue or land use m 5 Fundamentals ofBusiness Law 7 E was Fundamentals ofBusinesx Law Property Regulation Lucas v Scum Caroma Coasla Cou clS El 7992 I Facts purchase Elf beachfm lssue ulmlnutlun ufvalue a nelu mallan nulsance heury m lots and regulatlun tawny under an amendment a would permltbullulng Cuncur a takmg l5 contrary m reasonable lnvestment apenatmns Why shouldn t the government pay for any effect lts regulatlun has on the value at prupeny Dlssent doesn t uepnve owner urall EEDHDml value C a mlssllE m ml a mouse mm 9 Fundamentals ofBuxinesx Law The Global Economy and the Environment Is there any international environmental lawquot Do rich countries owe any duties to poor ones Are international regulations the answer Kyoto Protocol we World Trade Organization and the World Bank College of Business BG205 Law PROFESSOR RAY HOGLER TEACHING ASSISTANT JENNIFER Module No 6 Justice and A Sustainable Economy Environmental Protection SLIDE NO 1 INTRO JUSTICE AND A SUSTAINABLE ECONOMYquot BG205CCI Fundamentals of Business Law Raymond L Hngler Prulessar nr Management Department of Management dule 6 Justice and a Sustainable Economy Environmental Protection PROFESSOR RAY HOGLER Welcome back to module six of Business Law and Ethics This one is going to be a very complicated session because it deals with a lot of issues that are not only timely but very controversial and what we re going to cover in this the title of the chapter is Justice in a Sustainable Economy which allows the authors to bring in a whole range of subjects this is going to include quite a bit of analysis of statutory law common law some constitutional issues It s an area that cuts across a number of legal principles so we re going to have a discussion that might be sort of convoluted at some time but I know that you re also familiar with some of this material and since you re a citizen you read about things that are happening Do you think there s a real issue about global warming for example TEACHING ASSISTANT JENNIFER Yeah I think that I don t think right now that it s a huge issue but if we continue on the same path that we re going I know that we re raising the temperatures far more than has been average which is going to change entire climates PROFESSOR RAY HOGLER And do you think we should do something about that TEACHING ASSISTANT JENNIFER I do PROFESSOR RAY HOGLER And what should we do do you think TEACHING ASSISTANT JENNIFERI think we need to get away from gasoline cars and start looking more at like hybrid things and looking at decreasing the pollutants that we re putting into the air 1BG205M0d6 PROFESSOR RAY HOGLER And would the best way to go about that be to pass a law to do that or place a tax on fossil fuels or what do you think might be a good way to approach it TEACHING ASSISTANT JENNIFERI think that the business economy is going to take care of some of it I know right now hybrid cars are very popular very expensive can t really get a hold ofthem as much because of supply and demand so it s I think creating more ofa reason for businesses to put research into those types of things but I also think that having taxes that I know there s some bene cial tax reasons to buy a hybrid car that the government is going to reward you for doing that and I think that that s good and I think we need to do way more in both ofthose scales PROFESSOR RAY HOGLER Well and you re sort ofa tax expert I mean your background is in accounting and you ve had you have studied taxation You know that our government engages in social policies through taxation We do quite a bit actually to achieve what we believe are bene cial social ends through tax What do you think of the idea of a fty cent a gallon tax on gasoline TEACHING ASSISTANT JENNIFERI think that it de nitely hurts the bottom line fore everybody of getting their car fills up but I think it s necessary cuz I do think that I don t know I d rather pay higher taxes to have gasoline come from a less volatile area like here in the United States to develop our gasoline rather then trying to get it from Iraq and have it have to go through all ofthose different channels and have it be more expensive butPROFESSOR RAY HOGLER Yeah there are some articles in today s news local newspaper a group of authors have undertaken to present four different columns regarding energy policy in the United States They ve made a couple of points that we may touch on here one is that perhaps world oil production has peaked that not that we re about to run out but that we ve probably ful lled our capacity and I ve read that other place The second one is what kind of steps might we take to deal with that issue and we re going to talk about those problems and other ones similar to that when we talk about the material in this class I thought I would just start out with a little conversation about that because after all you re a recent college graduate you ve graduated with honors you re in a very dif cult eld and one which involves a lot ofthose issues about public policy and legal matters so I thought it was interesting to get some general overview here We ll begin with the rst slide and the first case here SLIDE NO 2 CAPTIONED SOUTH CAMDEN CITIZENS 2BG205Mod6 rm Fundamentals ameinexs Law South Camden Citizens v New Jersey DEP us D c New Jersey 2001 Facls of case environmental effeMS of cement planl Theory of case civil rights violation under Title VI Held injunctive relreiis gunned ta plaintiffs Nature oi evidence showing racial impact Standard ior issuan injunctions Decision of Third Circuit coun oi Appeals Policy issues raised by caser burdens on near citizens imposed by economic activity PROFESSOR RAY HOGLER Now this is an interesting case it has to do with a Cement plan What did you think was the basic theory underlying this case and what s the problem here TEACHING ASSISTANT JENNIFER I know that they were looking at how in this particular region it seemed as though the worst quality of air and all these pollutants were found in areas that were predominantly African American and these people were having to have just well below standard air quality with all of these different pollutants in the air and so they re trying to claim that it is a disparate impact case against the shouldn t be allowed to continue because it is against these people PROFESSOR RAY HOGLER Let s take up those questions one at a time I put up on the slide there civil rights violation under Title 6 and you may remember we talked a very long time in an earlier session about Title 7 which deals with employment At this point I would like to clarify for everybody that the Civil Rights Act of 1964 included different titles It prevented discrimination with regard to housing with regard to transportation it covered a whole range of subjects and those subjects are broken down by title Title 7 was employment Did you understand from the case what Title 6 is how that fits into this TEACHING ASSISTANT JENNIFERI didn t I read it PROFESSOR RAY HOGLER Well Title 6 is kind of interesting Title 6 has to do with discrimination by entities which receive federal funding I thought you might have picked up on that because as a woman you may have heard about Title 6 and you may wonder why we now sponsor women s basketball teams women s volleyball teams 7 well we only have a woman s volleyball team we don t have a men s i and the reasons these things came about has to do with the Civil Rights Act and I m not sure whether it s specifically 3BG205M0d6 Title 6 or Title 9 but the recipients of federal funding including educational institutions have an obligation not to discriminate so women it s sort of the same theory I m actually coming to this point Women looked around and they said well you have all these sports programs for men you have football you have baseball you have basketball you have men s swimming you have track and there are very few things that women get to do so we want you to equalize that and that in fact was a valid argument that s why now universities have major competitive women s sports teams and we do our basketball teams and volleyball teams at Colorado State are very good The theory behind this particular case is that a recipient ofa federal fund that is New Jersey had an obligation to insure that there was no discrimination against people which might violate the terms of a title of the Civil rights Act and you re exactly right that s their theory They say that poor people were adversely impacted by this Reading the case were you convinced that in fact was true TEACHING ASSISTANT JENNIFERI was it seemed like the statistics were showing that in these poorer areas there was a lot more ofthese plants that were giving offthese pollutants versus the other areas PROFESSOR RAY HOGLER We re going to talk about two issues here You may have noticed if you read through the notes to this case that it was overruled by the 3rd Circuit Court of Appeals TEACHING ASSISTANT JENNIFER Oh seems to me like it shouldn t have been but PROFESSOR RAY HOGLER Very good so you sympathize with these plaintiffs One ofthe things you learn in legal analysis is that cases can be overruled on a number ofdifferent grounds and I will tell you that the ground that it was overruled on had nothing to do with whether the plaintiffs made out their case about disparate impact The reason I mention that is because I read the 3rd Circuit Court of Appeals case the way this case is edited is not too clear but the 3rd Circuit Court oprpeals in their opinion reported in the Federal Reporter made very clear exactly what the statistics showed so I ll just read those to you They summarized the factual background ofthis case as follows we point out the residents of Waterfront South are predominantly minorities and the neighborhood is disadvantageous environmentally And they put in a footnote and they say the community is comprised of sixtythree African American twentyeight point three Hispanic and nine white residents So it s clear this is predominantly an ethically minority neighborhood so there s no argument about that Then your other point was well are these people being dumped on And the answer is absolutely South contains two super fund sites these are clean ups under a law that we ll talk about later several contaminated and abandoned industrial sites many 4BG205M0d6 currently operating facilities including chemical companies waste facilities food processing companies automotive shops and a petroleum coke transfer station Moreover the New Jersey Department of Environmental Protection which is the party to this case has granted permits for operation of a regional sewage treatment plant a trash to steam incinerator and a cogeneration power plant in the neighborhood As a result Waterfront South the only one of twentythree Camden neighborhoods hosts twenty percent ofthe city s contaminated sites and on average has more than twice the number of facilities with permits to emit air pollution than exist in the area encompassed within a typical New Jersey zip code There is no argument that these people who are predominantly minorities suffer much more environmental damage than other areas of New Jersey but so what TEACHING ASSISTANT JENNIFER Well I don t think that they should be allowed to keep building there and making it worse and worse forthese people Shouldn t they sort of spread it around PROFESSOR RAY HOGLER Sure they should spread it around or we should locate it in an area all concentrated and then people who have the money to live somewhere else should move somewhere else I don t think they live there because they like environmental disasters or living by toxic waste dumps TEACHING ASSISTANT JENNIFER But these people really don t have the resources to move PROFESSOR RAY HOGLER Exactly and so what should we do about that Stop polluting or give them money to move or what TEACHING ASSISTANT JENNIFERI think we should stop polluting PROFESSOR RAY HOGLER Stop polluting and so we have a concrete plant here that s going to make a beneficial and valuable product for all of society and we re going to in ict some injury on these people What if they had just been poor white people Any problem TEACHING ASSISTANT JENNIFER Yeah I don t think that the neighborhood should be allowed to be moved into and made into a commercial district that s going to be full of pollutants if there s already people there that are going to be harmed by it PROFESSOR RAY HOGLER What if they were already there and then this stuff began to develop Do we want to stop economic activity for the bene t of all so people can live there TEACHING ASSISTANT JENNIFER If it s harmful to the people that are there I think that they should have to stay within the standards of safety PROFESSOR RAY HOGLERT hey did There s no dispute about that TEACHING ASSISTANT JENNIFER I thought all the levels were above like twice as many PROFESSOR RAY HOGLERI don t think so I think that New Jersey the Department of Environment actually issued permits for this plant I 5BG205M0d6 think they had been given permission to go ahead and build this plant Now the question is whether or not in combination with that there was so much environmental impact on these people that they made out a case that in fact they were harmed and they were disproportionater harmed in a racial manner That s what this case is about It would be my belief and argument that if these were all white people they would never get to court What kind of ifthere s a regulatory agency that grants people permits to do the business here and ifthese businesses have been doing business for a long time what kind of law would take away their right to engage in economic activities because other people don t like it TEACHING ASSISTANT JENNIFER Well I don t think that it s that other people don t like it but I think that they should have to either change the way that they do it in order to stay within the standards that are considered safe and if you re issuing a new permit I think that some ofthe things mentioned in the case is that the department did not look at what their levels would be in conjunction with all these others So I think that ifa company moves in they should have to work together with all 0 the other plants to make sure that together they re not issuing too many pollutants PROFESSOR RAY HOGLER Good and so I go to the other plant I want to open my concrete plant and I go to this rendering plant where they re cutting up carcasses and making sausage or whatever it is and I say golly fellas you were here rst but I want to open my concrete plant and I m concerned that together we re going to be imposing too much impact on these other people here Why don t you agree to shut down a portion ofyour operations so I can open my cement plant What do you think they re going to say TEACHING ASSISTANT JENNIFERI think that they would have I mean it would have to be a business transaction I mean they would have to be worth their while ifthis company was paying them more for shutting down that plant than they re making off of it or part of that plant Obviously they re not going to close the whole plant but I mean I think that ifwe make it standardized that the businesses would then have to have that agreement and they would have to come to an agreement that they will both agree to PROFESSOR RAY HOGLER You have just touched on an extremely important aspect ofthis whole process and that s the question of how are we going to control this Through economic sanctions and ifwe impose economic sanctions who bears the cost It might be more feasible for us for example to say to the cement plant look we ll give you carte blanche to operate here in Camden New Jersey All you gotta do is buy the property ofthese six hundred and twenty people and you provide new homes for them somewhere else and we ll let you pollute all you want to here Do you think 6BG205M0d6 that ought to be the rule TEACHING ASSISTANT JENNIFERI think that they could get those people to agree to sell their land I mean maybe it would be bene cial for them if they were able to be relocated to a better neighborhood PROFESSOR RAY HOGLER Yes and that s exactly the point of an injunction An injunction is to say to somebody we want you to stop doing what you re doing period Now ifwe engaged in an economic analysis of this we might say we don t want you to stop what you re doing we just want you to compensate these plaintiffs for the harm Why do you think the plaintiffs might not like an arrangement like that TEACHING ASSISTANT JENNIFER I m not sure I think that it would be good for them because they could either take the money and stay there accepting the pollution or they could be moved to a new more environmentally friendly place so it would sort of give them that choice whereas if this plant just comes in and they are getting sick from it with no choice about the matter then I think that s unfairto them PROFESSOR RAY HOGLER Yes TEACHING ASSISTANT JENNIFER At least this brings them into the decision and gives them some power over what s going to happen to them PROFESSOR RAY HOGLER It would indeed but part ofthe problem in a legal proceeding is you have to prove what your damages are These people may come in and say look my asthma was caused by your pollution and they might say to these people that s ridiculous you ve been a lifetime smoker you ve got lung problems your problem was caused by tobacco not by our cement plant and it s a very difficult thing to prove That s why they ask for injunction relief and in this case they got it That s what the court said So here we sit Somebody wants to engage in a productive economic activity They bring a case based on this theory that somehow they re in violation oftheir civil rights The trial court grants an injunction against this activity Everything is brought to a halt unless and until we can appeal to the 3rd Circuit We appeal to the 3r Circuit and we win Now I will tell you just because you think this is unfair that the 3rd Circuit Court of Appeals did not dispute the fact that these people suffered from this activity and that they were disproportionater minorities What they said was we don t think that the theory of this case is sustainable in law because we re not sure that under Title 6 you can make out a theory of racial proofor impact under this disparate impact theory They said that s not a theory we re sure will work under Title 6 It works under Title 7 Just to refresh your memory ifl have a qualification for a fire ghter that says you have to run a hundred yards carrying a hose and climb up a ladder into a window carry eighty pounds out ofthat house back down the ladder drag 7BG205M0d6 the dummy back to the starting line within a period of seconds I m convinced that for every nine men that can do it there s only one woman That s disparate impact Then the burden shifts to the employer to show that there s a business necessity That kind of analysis according to the 3rd Circuit will not work under Title 6TEACHNG ASSISTANT JENNIFER What makes it different under Title 6PROFESSOR RAY HOGLER Well partly what makes it different is because different legal doctrine and precedent developed underthose two titles Employment is different than just living in a neighborhood and suffering environmental consequences Think about what might happen if we permitted this kind of theory to go fonNard Don t you think this would occur in every city major industrial city in the United States TEACHING ASSISTANT JENNIFER It would help I think to make it so it wouldn t happen It would help I think provide better housing for people in those poorer areas around these industrial plants PROFESSOR RAY HOGLER Yes and I think what you re suggesting is a wholesale revamping of our housing and social policy in the United States accomplished through a legal theory that is kind of disputable and do you think the citizens of the united States would like to have judges going around telling the city of Camden that they have to prohibit things like cement plants stockyards and all these other obnoxious economic activities because poor people might suffer disadvantageously TEACHING ASSISTANT JENNIFERI think that the market would sort ofthen they would be pushed into areas where there isn t anybody which is probably the best place forthese plants to be anyways PROFESSOR RAY HOGLER Right and think again about what you re suggesting that this plant move out of Camden New Jersey into where Appalachia West Virginia And what about the people living in Camden New Jersey who say look I wanted to work at that concrete plant I live in this neighborhood but I d like to have that twelve dollar an hourjob working in the cement plant TEACHING ASSISTANT JENNIFERI guess that in a perfect world like those people would have a choice and so they could have a vote as to you know so those people could decide do we want to prohibit this or do we want it and sort of have to go to the citizens to allow them to decide what they want in their neighborhood PROFESSOR RAY HOGLER Yes and that s exactly my point What they did was to go to a judge and this one judge made a decision which terminated this concrete plant s right to engage in profitable activity Now I would argue just as you said maybe we should let citizens decide that Well ne and in fact we do let citizens decide that and what we have decided is we re going to impose cost on poor people who happen to disproportionater be ethnic 8BG205M0d6 minorities for the economic bene t ofall of us but we do that in the world don t we TEACHING ASSISTANT JENNIFER I suppose PROFESSOR RAY HOGLER Of course we do We impose economic cost on Costa Rica and Honduras to produce bananas that we like to eat No problem so what s different about Camden ltjust happens to be in this country That s the analysis these courts go through The reason that I like to pursue this a little bit is because if you read this case as we get down to the last three points in this slide here it s the standard for issuing injunctions that really turns this case around What the 3rd Circuit said they didn t disagree with any ofthis They said we agree that the facts are made out as the plaintiffs claim They said the problem with issuing an adjunction is there are very strict legal conditions you have to satisfy they re listed here in this case including irreparable harm which the court nds would exist because once you in ict physical damage on somebody like giving them asthma that s an irreparable condition or could be but the other condition is you have to show a likelihood you will prevail on the merits and that s what the 3rd Circuit says We don t think the conditions here were right to issue an injunction because we don t think that the plaintiffs can prevail here We don t think that this theory that they ve brought fonNard is one that s going to work as the case works its way particularly up to the Supreme Court therefore we re going to deny the injunction It doesn t mean these people can t sue for damages or any other thing all it means is they re not going to get an order from the court stopping this activity We ve already talked about the last point that was mentioned in this slide burdens on poor citizens and I appreciate your discussion I appreciate your arguments but even people who agree that it shouldn t be this way sometimes disagree on the methods to make change and the sad fact of the matter is people who live in neighborhoods which are burdened by pollution live there because people who don t want to live there and can afford to go somewhere else do Now you can say well that sjust the nature of being poor in the United States you suffer a lot ofindignity and injury that other people don t like having bad smells noisy neighborhoods bad roads pollutants all the rest of it and the only way you can get out ofthat is to move somewhere else and if you work hard and improve your lot in life you ll get to move ifyou don t too bad for you So I think that sort of summarizesthis case It s an extremely interesting case for the theory which is novel and for anybody who s interested in looking into legal analysis I highly recommend looking at the 3rd Circuit Court of Appeals This is an extremely complicated case they ve got some very very to my mind 9BG205M0d6 articulate judges on this court of appeals and the way they raise and frame these issues is a very sophisticated legal analysis and while they don t disagree with you about the underlying consequences of what s happening here they are sensitive to the limits of a law in changing this and so we talk about law and ethics and you can say well I have an ethical position on this and l have a legal position and the legal position I think is correctly articulated by the 3rd Circuit Court of Appeals We can t do anything about this through law it may be an ethical wrong but it s beyond our ability to fix it because they said we can t issue an injunction Does that make you a little happier with the outcome of the case TEACHING ASSISTANT JENNIFERA little bit PROFESSOR RAY HOGLER Okay I thinkthey did whatjudges are supposed to do and that s to be sensitive to the nature of legal doctrine TEACHING ASSISTANT JENNIFER Yeah PROFESSOR RAY HOGLER And despite the strong showing of sympathy for these plaintiffs this simply is beyond the reach of an injunctive relief Good SLIDE NO 3 CAPTIONED LAW AND ENVIRONMENTAL PROTECTIONSquot slNr ss Fundamentals 0 Business Law Law and Environmental Protections Slalules Clean Air Act emission or pollutants Into aimaspnere I Clean Water Act discharge of pullulants into a ig ble waters C p ehensl ve Enwronmenral Response Campensation and Dablily Act CERCLA Naflonal Environmental Protection Act 1969 encourage productive and enjoyable harmony between man and his environmenlquot PROFESSOR RAY HOGLER We ll move on to the next slide The next slide has to do with some statutes that were created in order to try to deal with this problem of environmental damage and harm They re mentioned at different times in the books the book I m sorry but in this section they just talk generally about some so I ll talk generally about some too We had the Clean Air Act the Clean Air Act of I think it s 1970 and all of these are mentioned on page 208 just for people following along in the text there s a little discussion of these Right 1970 I looked some of these laws up and I can tell you they have very user friendly web sites If you want to know more about these all you have to do is type in your search engine Clean Air Act or the other ones PART 2 10BG205M0d6 PROFESSOR RAY HOGLER Now the Clean Air Act basically says it triesto limit the emission of pollutants into the atmosphere What do you think you live here in Denver what do you think our biggest problem is in terms of the atmosphere TEACHING ASSISTANT JENNIFERI know since we re close to the mountains we sort of get little bubbles ofair not moving so it can stay over I know especially Denver and Commerce City have problems with air not circulating enough not getting the pollutants out ofthe city so that we can have sort ofa smog cloud Not nearly as bad as other cities but it s still bad for us Coloradoans that like our fresh air PROFESSOR RAY HOGLER Well I think it might be as bad as other cities frankly TEACHING ASSISTANT JENNIFERI know LA is like the worst of the worst PROFESSOR RAY HOGLER Right but Denver has very very bad days It doesn t have days that it used to I mean it used to be so bad that people would be warned to stay indoors We have fewer ofthose part ofthat is a result ofthe Clean Air Act You re quite right the inversion the temperature inversion brings warm air down to the bottom it getstrapped it can t go anywhere and since we live sixty miles north and somewhat to the west of Denver on a good day you can go into the foothills up here and you can look out over Denver and you can see the brown cloud that s smog created by ozone particularly Now if you go on to the EPA s website they will they have a nice discussion ofthese various pollutants that they try to regulate One of the ways they do that is to charge states with reducing emissions into the air This is a federalstate program which is designed to elicit state cooperation Sometimes we re very proud ofthe fact that we have cleaned up our air fairly substantially we don t have the number ofalerts we used to On the other hand you can drive down into Denver and you can spend the day down in Denver and when you come back up here at night your chest feels you do have excuse me Thinking about it made my chest hurt You do have an affect to that So we haven t quite gotten it completely under control The Clean Water Act has to do with discharge of pollutants in the navigable waters We can talkjust a little bit about the theory behind this Why do you think it s only navigable waters TEACHING ASSISTANT JENNIFER I would guess because they would have the biggest problem with ships going through them and though it s in PROFESSOR RAY HOGLER Would it surprise you to know the Poudre River is a navigable body of water TEACHING ASSISTANT JENNIFER No cuz you see people on it PROFESSOR RAY HOGLER In what kind of ships Did you ever see anybody on the Poudre River in a motorboat TEACHING ASSISTANT JENNIFER No I ve only seen them on kayaks 11BG205Mod6 and but still I guess depending on how strict the de nition of navigable isPROFESSOR RAY HOGLER Ah very good and so ifwe have a little trickle ofwater that runs into the Poudre River should we call that a navigable body of water under this law Should you be able to pollute a stream that contributes to the Poudre River TEACHING ASSISTANT JENNIFERI don t think so PROFESSOR RAY HOGLER Well would it be a navigable body of water TEACHING ASSISTANT JENNIFERI would almost I don t know in my mind I would think especially considering that this act is meant to clean up the water supply I d almost think that navigable would be anything that would lead to a navigable water or any part ofwater that could be accessed like by a company Like ifthey can discharge into it then I would think it would be navigable PROFESSOR RAY HOGLER I really like yourthinking That must be why you graduated with honors Now can you think ofany analogy that we ve already talked about in this course that looks like that conceptually How about interstate commerce TEACHING ASSISTANT JENNIFER Yeah PROFESSOR RAY HOGLER It doesn t have to be in interstate commerce it only has to have an affect on an interstate commerce and why is that important that we know how interstate commerce the clause is construed TEACHING ASSISTANT JENNIFER Because ifit can be interstate commerce the federal government can come in and regulate it PROFESSOR RAY HOGLER So now we have the answer to why the Clean Water Act talks about navigable bodies ofwater same principle exactly So for people who might have been a little confused or a little unconvinced about those discussions of interstate commerce here we are back to the same idea The Constitution gives the federal government the right to regulate navigable water no doubt about that the question is what is navigable And if we have a very broad definition which says those bodies of water which are navigable or which contribute to navigable water then we can regulate it and that s what they do Good So what we say is we want to eliminate some ofthe pollutants in those bodies of water so we re going to regulate all kinds ofwater and as a result of that you can read some of the statements on the website and you can nd we have done a fairly good job There are plenty of waters around now which have fish and used to have nothing but dead fish and algae so we made some progress there The Comprehensive Environmental Response Compensation and Liability Act CERCLA is an act designed to allow liability for cleaning up We have a number ofthose sites in Colorado Can you think of one right offthe top of your head TEACHING ASSISTANT JENNIFER Anything 12BG205Mod6 down by Rocky Flats PROFESSOR RAY HOGLER Oh yeah Rocky Flats where they used to make plutonium I mean that thing is a disaster and it s a disaster because we have radioactivity down there and it was designed to produce nuclear weapons so by de nition it s very dangerous material That s a good one we re trying to clean up those sites Also just to my mind ldon t know if it actually is one of these sites but have you been up on a bike path recently Up north oftown I don t know if you read about this but by the Poudre River there used to be a gasoline station ifyou remember that a service station Yeah well it was a long time ago but oil was leaking into the ground and did leak into the ground What they ve done up there now and closed the bike path to do that it s how I know it they ve actually dug up the riverbed you should go look at it it s kind of interesting they dig up the riverbed they lay down a plastic barrier which will prevent any ofthis material from seeping into the river ever again they lay down concrete and then gravel and then they re going to put the river back in its shell lfyou go up there you can see this process and you might say well why are they spending our tax dollars to beautify the Poudre River and the answer is they re not they re doing it to prevent that gasoline and oil which had seeped out oftanks from leaking into the river The question is who pays forthat TEACHING ASSISTANT JENNIFER Well and isn t it anybody that s ever owner that land PROFESSOR RAY HOGLER That may be part of it and we may also impose some tax burdens I believe the city is putting money to that the state of Colorado the federal government it s a big project lfyou look at it they basically rechanneled the river dug up the riverbed corrected that oil leak and they re now putting down a barrier so it s interesting what they ve done and that was basically just to keep the Poudre River clean but on the other hand it had been dirty for fifty years So well that s CERCLA and its related activities The National Environmental Protection Act of1969 to my mind is really the beginning of all of this You may remember well you probably don t remember but there came a time in this country when we celebrated Earth Day and you may remember that because it was it occurred recently and people celebrate the anniversary Earth Day was partly responsible for creating a greater environmental awareness and so back in the late 60 s we passed this act NEPA and ifyou remember in this case there was no environmental impact statement led I don t know if you remember reading that it s kind ofone ofthe details or footnotes or maybe I read that in the 3rd Circuit Court of Appeals but the idea ofan environmental impact statement this comes about because of NEPA and what NEPA basically says is 13BG205M0d6 you do have to take the environment into consideration when you undertake certain kinds of activity including economic activity and I thought it would be useful just to quote a little bit from the purpose ofthe act Just to show the government s commitment here and our commitment to declare a national policy which will encourage productive and enjoyable harmony between man and his environment to promote efforts which will prevent or eliminate damage to the environment and biosphere and to stimulate the health and welfare of man to enrich the understanding of ecological systems and natural resources So then Congress goes on to talk about the policy so we do have a policy in this country of protecting the environment and committing national resources to do that Well looking at all of those do you think we re doing enough or do you think we should do some more TEACHING ASSISTANT JENNIFERI think that we should do more I mean we only have one environment and if we let it get too bad I mean there s no going back I know that under the Bush administration I know he has a new air act that has come out that has decreased the standards that are required and made it so that it s a lot easier on companies to not have to meet the stricter limitations that were set up by the Clean Air Act PROFESSOR RAY HOGLER Yes and part of what we re going to get into in that act and part of what tends to be controversial you say it makes it easier on companies to pollute what the response to that would be was to say it doesn t make it easier to pollute it recognizes that there is pollution and were going to try to create a market which will control pollution through marketing and economic forces rather than this regulatory approach The regulatory approach would be to go to a coal mine and say you re spewing too much sulfur dioxide into the air The permit process would be to go to a mining company and say I know you have an operation in Idaho that shut down temporarily what we re going to let you do is to produce more pollutants in Wyoming or to buy permits from some other mining company that s not in operation right now so you can pollute the air On the other hand although that allows more pollution in a sense in another way it provides market incentives for people to discourage pollution TEACHING ASSISTANT JENNIFER And I de nitely agree with that theory but I also do think that there should be standards that are set up that should not be allowed to be exceeded PROFESSOR RAY HOGLER Fine and we ll come to that and part of the approach that these some ofthese acts take is simply to say like the Clean Air Act you read about this in the New Jersey case that we just talked about part ofthe approach is to say we re not going to let you emit more than a certain amount of pollutants ofa certain size into the air that s the particulate matter standard If 14BG205M0d6 you go onto the website the EPA website and look at their story you will see a lot of discussion of these particulates and thats the problem part of the problem with Denver is that in the winter we put down or at least we used to we put down sand on the roads to make sure we have traction in the winter and then in the summer traffic puts that back into the atmosphere and these little particulates and it creates a situation which is hazardous so that is one way to approach it just say no greater emissions good SLIDE NO 4 CAPTIONED LAW AND ENVIRONMENTAL PROTECTIONSquot 4 F55 Fundamentals afBusinesx Law Law and Environmental Protections Markets and Ins Environment Tradeable permit sys1ern o pollule Has oil production reached ls peak capacily an green capitalism solve the problerr Biodiversity and Property Ecological ethics Endangered species act and its scope PROFESSOR RAY HOGLER We ll move on to the next one and this takes up the question that you asked exactly or the point you raised and that is markets and the environment and this tradable system to pollute There s some discussion in the book one of my favorites on page 210 just looking at the text on this there s a discussion between this command and control which you just described saying you can t emit more than a certain number of pollutants and the permit system which says well we ought to be able to buy and sell the right to pollute and they talk about Stone Container as being an example of this You probably don t know but there s a Stone Container facility down in Denver They make cardboard boxes and evidently in this process there is some emissions and some pollution that takes place but they make containers cardboard containers and there s a case here about how they came to some market solution here which was basically to say we re going to enjoin you from polluting the environment and we re going to impose a certain amount of damages on you but if you can show us that you ve taken steps to reduce pollution we ll minimize the damages that we re going to charge you and maybe that s the way to do it i simply say to polluters look we want you to 15BG205M0d6 engage in this if you don t we ll ne you but ifyou do we ll give you some economic incentives to do that and over on page 211 we already talked about this but what about taxing pollution TEACHING ASSISTANT JENNIFER Well and lthink too not only taxing pollution but maybe make it bene cial like if companies put in place something that will decrease their emissions into the air make that a tax writeoffand make it notjust you know a bad tax but also a good tax cuz I mean tax planning is such a huge part ofa business these days that I think if you gave a good incentive that that would do just as much or if not more than like a penalty PROFESSOR RAY HOGLER Sure and see you a free market capitalist after all so instead ofenjoining this concrete plant in New Jersey we ought to just make them compensate these people by high paying jobs or something so that they can move out We also in the state of Colorado talked about tobacco before but ljust remind you we meaning the voters passed this tax in Colorado on cigarettes Now people who smoke cigarettes don t like paying sixty cents extra for a pack of cigarettes for that tax but we thought it was a good one Now you re the tax expert do you think that s a good tax TEACHING ASSISTANT JENNIFER I do I think that I mean smokers do add a lot of cost to society and they should I think be required to pay some of that back and I also think it helps prevent smokers because I know that some people not a whole lot at sixty cents a pack but it will help some people to quit smoking I actually have a friend who s a smoker that wrote an editorial when the whole debate was going on and he s like it shouldn t just be sixty cents it should be like ten or fifteen dollars and he s like cuz if it was that expensive maybe I d nally quit smoking PROFESSOR RAY HOGLER Then he would quit sure TEACHING ASSISTANT JENNIFER Yeah and so I mean I almost think that we should do more for that because I think it would bene t society to sort of cut down how many people are smoking and the people that still choose to do it I think should have to pay more because ofthe cost that they do impose on society PROFESSOR RAY HOGLER And what about alcohol would you make the same argument that we should impose a tax of say two dollars on a six pack of beer TEACHING ASSISTANT JENNIFERI don t know that I guess with alcohol I mean if you drink in moderation it s not dangerous to your body like I don t think it imposes the exact same cost on society because I don t think you can really smoke and have it not affect your health even if you do only smoke a little bit whereas I think you can drink in moderation and have it not affect your health but at the same time like for alcoholics or people that drink in excess it 16BG205Mod6 does affect society but I think it would be hard to distinguish I mean you d have toPROFESSOR RAY HOGLER Well we could encourage those heavy drinkers not to drink so much by a high tax and those people would probably moderate their drinking TEACHING ASSISTANT JENNIFER Maybe PROFESSOR RAY HOGLER Okay and then the gas tax we could talk about the gas tax In this country that is an anathema the idea that there s going to be a ve cent a gallon tax on gasoline to reduce emissions into the environment I was walking across campus yesterday and I saw some guy sitting in his truck it was one ofthese Dodge Ram chargers it was so big it actually took up two parking places I m sure it was a V8 or V12 or 16 or something like that and he had it running because he was listening to the radio evidently he was just sitting in his truck and there he is pumping noxious gas into the environment and he s got this huge vehicle I don t know maybe he s not just a student but he s a long haul overthe road truck drivertoo and he uses it for that No I m just kidding I know he drives it around because he likes to have a truck so ifwe impose a ten cent per mile gasoline tax on him if we were able to increase the ef ciency I read somewhere in these materials here ifwe could increase the efficiency three miles per gallon per vehicle in this country we wouldn t have to drill in Alaska So we need a tax why don t we have one TEACHING ASSISTANT JENNIFER Well I think part of it is because of the current administration but PROFESSOR RAY HOGLER Well we could blame it all on them but remember back when Jimmy Carter wanted to conserve gasoline and energy and we got rid of that guy cuz we don t want to be told that TEACHING ASSISTANT JENNIFERI think that we should I know I drive a Honda and one ofthe reasons I drive a Honda is cuz I feel lie it is a fuel ef cient car that isn t you know it s not a Dodge Ram truck that is going to be you know going through gas I know my dad drives an SUV but then he complains about the gas prices and I m like well if you traded in your SUV and got a sensible car you wouldn t have to ll up twice a week and pay fty dollars every time you ll up PROFESSOR RAY HOGLER Right and an economist and we have one in this book this guy named Steven Lansberg would say hey that s just perfect If your father wants to pay for his preference for driving an SUV this guy wants to pay for his preference of having a big truck and you want to indulge in your preferences for a little fuel economy car then that s the way it ought to be the market s working But in response to that we could say well look let s make the market a little more sensitive to environmental concerns but we don t have that in this country yet Those are the three points that I ve put up on this slide This whole idea on which we launched this 17BG205M0d6 discussion was to say well can we make markets in uence our decisions about the environment That s the idea behind this tradable permit system and I appreciate your concern about the administration s Clean Air Act but what underlies it rightly or wrongly is this idea that ifwe make it economically feasible then we can achieve more environmental good than othenNise TEACHING ASSISTANT JENNIFER And I agree with the premise I think it does a greatjob in like the business aspect of it to have these companies cuz it s very much they re worth a lot of money these permits so it does give the company incentive ifthey can get their emissions down so they don t need it then they can sell these permits but I also do think that there needs to be stricter standards that they cannot go over PROFESSOR RAY HOGLER Okay and that s a very thoughtful point and what it does is to illustrate exactly the two poles here which is to say economic incentives capitalism versus this what they call command and control regulatory system Both ofthem are out there though I put on this slide has oil production reached its peak capacity and can green capitalism solve the problem Those two things go hand in hand There are a lot of people who would argue that in fact our national foreign relations policy is driven in part by oil I mean there are plenty of arguments about this nobody disputes this there s a recent book out which argues that part ofthe reason we re in Iraq has to do with oil and if you look at the history it s very clearthat our relationship with Saudi Arabia was based not on the fact that we like sand and camels that Aramco and the American interest and the world interest ofall we ve focused on that region of the country Part 3 PROFESSOR RAY HOGLER Now if oil production has reached its peak capacity as some people seem to think then we better start looking for alternatives The question is how do we go about doing that One of the answers is to say well capitalism will solve the problem Now I don t know what you think about that Do you think capitalists are doing enough to try to deal with this issue TEACHING ASSISTANT JENNIFERI think that the government should I thinkthat the government should in uence it more I think that they should really be I mean I think our country is large enough and has enough smart people and enough resources that we should be able to have our energy come from within and not have to look outside our borders for it so I think that the government should be giving more grants to universities and 18BG205M0d6 more grants to businesses that are pursuing these ideas to take the influence off ofoil so that we can stand on our own two feet and not have to have our relations deal with oil demands but should deal with you know other policies PROFESSOR RAY HOGLER So again a ten cent increase in the tax on the price of gasoline and direct that money to the research for other vehicles I was struck by this I just happened to bring in my most recent issue of The Economist and sure enough there s a two page foldout which I ll just hold up here a very nice advertisement I ll show it to you by General Motors and Shell and they say hydrogen cars are here that s what their argument is they say well we are developing these things and they re going to be available in the future so not to worry capitalism is taking care ofit and that may be the case I guess I would sort of agree with you if we have an energy policy we should try to articulate what it is TEACHING ASSISTANT JENNIFER Yeah PROFESSOR RAY HOGLER And maybe provide more incentives TEACHING ASSISTANT JENNIFER Well and I know too there s been so many budget cuts to states and universities that it s I mean RampD is such a huge amount of money to lay down that I think the government should have to put their money where there policies pretend to be PROFESSOR RAY HOGLER Fort Collins wasjust recently announced on somebody s list as in fact the most entrepreneurial area in the United States The people who look at that ranking say that the reason is because of Colorado State University and some ofthe innovations that have come out We have suffered increasing budget cuts over the past ve years here and the brain drain on our university system is showing up So of course I agree it s in my selfinterest to agree but part ofthe problem here is to create the science in the United States before our competitors do and that will only come through our universities I think I can say with some degree of certainty that ifoil production has reached its peak and that we have a limited supply ofthat now the main competitors forthat oil are going to be China India other industrializing countries and China for example I mean its economic growth has been nothing short of stunning over the past few years and they re certainly going to put demands on the oil capabilities ofthe world soTEACHNG ASSISTANT JENNIFER Well I know it s being predicted to be the next center of capitalism I think people are afraid that they re going to beat out the US here in the next decade or so PROFESSOR RAY HOGLER I would be very afraid I talked to a friend of mine who wasjust in Shanghai and my friend said it s like the V ld West Everything is happening in China everything and they re expanding at such a rate whether they can continue that or not it d be interesting to see but their demand for oil is certainly 19BG205Mod6 going to continue to exceed what it has been So it s an interesting problem The next point on the slide and in the book has to do with biodiversity and property and to talk about ecological ethics and I ve also put up there the Endangered Species Act and its scope and then we have a case on that but what would you understand to be the ethics of ecology if you had to articulate any ethical principle that about our environment what might that be about ecology TEACHING ASSISTANT JENNIFER I think that we have to respect the environment that we come in and I know that a lot of people when they re talking about it bring up the idea that the rainforest could have cures for all of the diseases cuz so many cures have been found in the most random of spots I know the book talks about one shrub bush that ended up curing ovarian cancer so I mean we almost it s in out best interest to leave these ecosystems in place because we don t know yet what s in them and what they could provide for humanity PROFESSOR RAY HOGLER I agree and I think that s a good example that is the one mentioned in the book Part of the problem about the Endangered Species Act I don t think it s a problem but part ofthe objective of the act part ofthe problem that it addressed was to simply say that species are becoming extinct and therefore we owe some obligation somewhere to do something about that TEACHING ASSISTANT JENNIFER Well and I think it s not only that they re becoming extinct cuz I mean I think in the history ofthe world animals always go extinct but I think it s the rate at which things are disappearing that is so much higher than anyone has ever seen it before PROFESSOR RAY HOGLER That s what the book says There s some evidence that in prehistoric times species would disappear at the rate of one one thousand every one thousand years and now it s like oneTEACHING ASSISTANT JENNIFER Every day I think they said PROFESSOR RAY HOGLERevery day yeah right and so the idea of ecology says well we should preserve that but could you articulate some further rationale for that other than to say they might be useful for you know nding a cure for cancer I mean in fact what do you care or what do I care I mean I39m not going to get breast cancer why should I care about the yew tree TEACHING ASSISTANT JENNIFER Well I think that I mean the whole the way the world works is so symbiotic and if we get rid of the rainforest like the oxygen Ievel s going to decrease and I just think that we need to respect the environment that we come from and we I mean we re using it and I think we have to do that with very very carefully because I mean you can t ever recreate a rainforest like once it s gone it s going to be gone forever 20BG205M0d6 PROFESSOR RAY HOGLER And ifl said well it s gone forever and so what I won t be around to see it what would you say to me about my ethics TEACHING ASSISTANT JENNIFERI would think that we need to think about the generations that are going to come after us I know I want my kids to know what a park is to know that I can take them up to the mountains and you know like into a hundred percent nature not just city you know notjust concrete from coast to coast PROFESSOR RAY HOGLER And so why should I care about your kids TEACHING ASSISTANT JENNIFERI think you should care about other generations too you re an educator don t you care about those of us you re teaching PROFESSOR RAY HOGLER Sure and I had a discussion in my class yesterday with a student about social security and I said to this student don t you think you owe me some obligation when I retire to continue paying into the social security fund And he said of course not you ought to look out for yourself I don t think I owe you anything and I said well ifthat s the way you feel then I want to get your grandma off social security because I m now paying for your grandma and ifyou don t want me to bene t from your earnings while I m drawing my social security then get your grandma off social security right now just throw her out in the street And he said well I don t know that I would go that far But that requires a certain mindset does it not It requires a mindset that says I m not just in this for myselfand it says that people are not just responsible for their own actions or their own retirement or anything else and I think that is the underlying ethics ofthis There s a fairly interesting little article or an excerpt from an article occurs a little later in the book by Aldo Leopold one ofthe fathers ofthe environmentalism who makes just that argument He says of course you should care about future generations whether you think there will be your children directly effected or not and the point ofthat is to say that we need an ethical system which will respond to that And the Endangered Species Act basically says the same thing I checked that out and looked up a bit of information about that too and it says that the idea is to preserve ecosystems for endangered and threatened species and the approach that they take or the idea underlying that is to say we re going to do this for their own sake So let s look at a case we ll check the next case and we ll come back to this point in the case 21BG205M0d6 SLIDE NO 5 CAPTIONED TURNLES REYNOLDS amp ALEXANDERquot m Fundamentals of Business Law Turtles Reynolds St Alexander v County of Volusia Florida 00 Fla 1995 Facts oi case enwmnmentai ewects oi beachfror lighting and automobile traf c ry oi case intenevonoe with habitat Held injunctwe reiieiis granted to plai tins Ambiguous evidence on lighting issue Automobile lialfic enjoined Policy issues raised by case con icts oi rights and 225 Snowmobiles in Yellowstone Park a similar PROFESSOR RAY HOGLER We re on the case now of the Loggerhead Turtles and two people v The County of Elusa Florida Why do you think the turtles are named plaintiffs in this case do you thinkthere ought to be turtles coming to court Well do you think they call the witnesses as turtles as witnesses TEACHING ASSISTANT JENNIFERI doubt that they call the turtles but I would thinkthat scientists on behalf of the turtles would be allowed PROFESSOR RAY HOGLER Well then why don t they put up Smith and Jones scientists versus instead of turtles TEACHING ASSISTANT JENNIFER I don t know I thought it was funny that they listed the turtles as plaintiffs I didn t know that that was allowed since the turtles aren t necessarily citizens PROFESSOR RAY HOGLER It has to do with the idea of standing Standing is a legal concept that means do you have legal standing or legal status to come into court and plead your case Part of the reason that this comes up is because once EPA was passed back during this period of time a law professor wrote a very famous article and he said do trees have standing and his argument was to say that the natural environment should be represented by personal representatives people who can bring suits but they should also be permitted to bring on behalf of the environment that s why the turtles are plaintiffs in this case TEACHING ASSISTANT JENNIFERI would have thought it would have been brought by like the Environmental Protection Agency or an agency on behalf of them not individuals butPROFESSOR RAY HOGLER You raise a very good case very good problem here If we have laws and rules protecting the environment who is the suitable plaintiff to come into court to protect to enforce those laws and you say the agency Now what if the agency doesn t have the resources to do that TEACHING ASSISTANT JENNIFER That s true PROFESSOR RAY HOGLER 22BG205M0d6 Should we permit the Sierra Club a group ofenvironmentalists to come into court and to sue some logging company for despoiling the environment The logging company might say well who are you and they say we re suing under the Environmental Protection Statutes to stop you from doing this and they say well you don t have any relation to us so why are you bringing this suit against us and you can see that this legal ction is useful So if anybody is reading this case and says why are these turtles represented here that s the answer because there is a legal problem with who s a suitable person to bring this case and they re bringing it on behalf ofthe turtles lfthese two people whoever they are Shirley Reynolds and Reed Alexander these bleeding heart liberals wanted to come into court I might very well say you re not an appropriate person to be bringing this what do you have to do with these turtles And if they said well I like seeing them flocking around the beach I would say that s not good enough So the theory is to say these protected species have an interest oftheir own in being represented in court and we re going to allow people to do that Like that TEACHING ASSISTANT JENNIFER I think it s a creative solution PROFESSOR RAY HOGLER It is a creative solution and this law professor who wrote this article called Do Trees Have Standing became quite famous that s how professors get tenure That s also how they advance their careers but I mean if we didn t have that kind of creative thinking we would still be at a disadvantage in trying to litigate these cases All right so the facts ofthis case are two issues here The environmental effects of beachfront lighting and automobile traf c and the theory is that it interferes with the habitat of an endangered species or a threatened species What s the problem with these lights and vehicles and all that TEACHING ASSISTANT JENNIFER The turtles are confusing them for the moon which has typically been their direction to get out into the ocean and instead now they re crawling into highways and up to restaurants and into homes PROFESSOR RAY HOGLER Sure they look at the lights and they don t know where to go and if they don t manage to get into your bedroom the birds are going to get them because they re going the wrong way it s imperative that they get into the ocean Now what was the problem with the automobile traf c TEACHING ASSISTANT JENNIFER They also had lights that were confusing If they re on the beach they would run over nests they would scare mothers away from putting eggs down and creating nests and they were also I guess it was showing that ifone ofthese babies got into the rivets that the tires left instead of keep going toward the sea they would follow the rivets and so they d never get to the ocean PROFESSOR RAY HOGLER And sometimes they would climb into 23BG205Mod6 the ruts the tire ruts and they would also fall over on their backs so both of these things tended to interfere with their habitat Now the key to the Endangered Species Act really one of it is to protect habitats as well as simply protecting the animals TEACHING ASSISTANT JENNIFER Obviously I think you would have to protect both because you can t habitats are very distinguished for each animal and if you change it a little bit they might not be able to still be there PROFESSOR RAY HOGLER Absolutely and we re going to talk about takings and I think this is the case where we ll talk about takings What the Endangered Species Act is it de nes takings very broadly We re going to use the word in another case it s in an entirely different context but the Endangered Species Act does use the word taking and what the word taking refers to is interfere with harm harass or pursue So it s not just you re going out and you re actually picking these little turtles up and you know physically removing them it s actually that you re harming their environment and the habitat Good so okay the judge in this case says well we are going to issue an injunction and the injunction is going to require the county to do more than it has done with regard to the automobiles Now the evidence on the lighting issue was kind of ambiguous about whether they may have done enough already It s not as if Florida the state of Florida was attempting to avoid any responsibility I mean they were making the effort here but they also permitted people to drive on the beach at night so what kind of con ict do you think that raises TEACHING ASSISTANT JENNIFER Well it s shown that all these turtles hatch at night so I mean they re young turtles that will be easily confused and very fragile so I don t think that the cars should be PROFESSOR RAY HOGLER Well that s the turtle but what about my rights to drive on the beach TEACHING ASSISTANT JENNIFERI don t think that we necessarily have I mean because the hatching is only like what A week out of the year or possibly a month PROFESSOR RAY HOGLER That s my spring break I want to go down there and drive along the beach at night in my sand dune buggy and drink beer TEACHING ASSISTANT JENNIFER You should go to a bar and not be on the beach PROFESSOR RAY HOGLER I should go to a bar all right we re going to come back to this issue but you understand that I mean people may complain look I like to do this it s an aesthetic thing for me to be able to drive on the beach and therefore I m not going to run over any turtles but I want to be able to drive on the beach and the court basically says look you didn t do enough that to control that factor and so we re going to simply allow no automobiles on the beach What s the difference 24BG205Mod6 between this case do you think and the cement plant case where the court issued an injunction there and the 3rd Circuit decided that an injunction wasn t appropriate We talked a little bit about this TEACHING ASSISTANT JENNIFER Well I think in this case cuz wasn t it only not during the night Like it was an hour before sunset and an hour after sunrise and then cars were allowed in that window So it wasn t completely it wasn t like they were completely setting this beach apart and being like no human contact can ever be part ofthis beach They were still allowing it it was just more ofa compromise whereas in the cement case they completely shut it down and were like this is stopped PROFESSOR RAY HOGLER Right that s a very good answer I think and it has to do with the nature ofthe interest at stake and to say in some cases an injunction might be appropriate in others not We talked in the other case about if you issue an injunction maybe there was a way the concrete plant could compensate those people forthe injury in icted I would say that might even be possible we ll just enjoin automobile traf c unless and until somebody pays this fty dollars for a permit to drive on the beach at night and then we have requirements no lights no driving in a specific area where the turtles might be and then if you leave a rut you have to go out and clean up your ruts we could do that So but in any event the court just enjoins this and the city is going to have to or the county is going to have to go along with it so that might be a good result in this case there s no way to alleviate the harm other than to keep automobiles offthe beach So let s look at the last case that I raised on this slide and this is one that really has a lot of similarities but it s also very controversial People drive snowmobiles in Yellowstone Park in the winter and some people think we ought to prohibit that What do you think TEACHING ASSISTANT JENNIFER Well I think rst of all Yellowstone gets cold in the winter so I m not sure how much traf c it would get PROFESSOR RAY HOGLER Oh there s a lot TEACHING ASSISTANT JENNIFER Really PROFESSOR RAY HOGLER Oh yeah TEACHING ASSISTANT JENNIFER I guess I m a little bit ofa wuss PROFESSOR RAY HOGLER Yeah well I ll just tell you those people who like to do this they go to these little towns in Montana surrounding the park and that is a very substantial part of these town s revenue and there are plenty of people who make a living offwintertourism and the traf c in the park is so bad that some park rangers believe they ought to be issued masks to wear because of pollutants in the park created because these snowmobiles have little twostroke engines which are particularly polluting So the question is do we want to ban them or do we want to permit them TEACHING ASSISTANT JENNIFERI think 25BG205Mod6 that well and Yellowstone is such a fragile area but I know in the summer when I ve gone and it s warm you have trails that you have to stick to They don t just let you go anywhere you want and I would think it would be the same thing in the winter that they should set up snowmobile trails in a spot that s not going to hurt the most sensitive parts of Yellowstone PROFESSOR RAY HOGLER They already do that TEACHING ASSISTANT JENNIFER Then I would agree with it PROFESSOR RAY HOGLER Okay but the argument is they do limit the activity but the argument is that the noise because ofthe nature of the wildlife there the noise is an extremely a very substantial harm on wildlife because of the noise the second is this pollution and the third is the amount oftraf c TEACHING ASSISTANT JENNIFER So maybe they should limit the traf c Only X number of snowmobiles a day or something PROFESSOR RAY HOGLER But then there is a contingent that says any snowmobile traf c in Yellowstone is by virtue of itself harmful we should prevent it all and those are the arguments that have been made This thing is an ongoing case I mean you ll hear about it again this winter and there are very powerful arguments and interests on both sides There are plenty of people in these little towns in Montana who make a living offthis they are adamantly opposed to closing it down There are plenty of people who say I should have just as much right to go into there in winter as you do in the summer riding around in your tour bus or your automobile polluting everything And then there are other people who say this is a different kind of use and it s one that we shouldn t tolerate and these people would say look if you want to ski in there have at it there s no problem with people it s a problem with these particular machines and I believe this is a similar kind of conflict and these con icts arise all of the time in environmental use Rocky Mountain National Park for example now it s my understanding they ve actually closed the roads through the park there are certain times you drive your car in a certain ways and then you must park and ride a bus now does that deprive me of my holy right as an American to drive anywhere I want to in my car The answer is yes but they ve done it and they think it s appropriate Just to mention a couple of others helicopter ights overthe Grand Canyon helicopter ights over Rocky Mountain National Park some people argue you re scaring the elk you re disturbing their mating patterns it really is harmful to the environment And those are all issues that come up So I think this case isjust an illustrative example of con ict over land use and the environment This one arises under the Endangered Species Act we 26BG205M0d6 have made a federal commitment to preserve and protect environment and species and I guess we would agree that s a good thing and this is how it plays out PART 4 SLIDE NO 6 CAPTIONED ENVIRONMENTAL PHILOSOPHYquot a mess Fundamentals of Business Law Environmental Philosophy Property rights as the foundation of governmem 8 r a n a E n a E Locke on the nature a CIVIC lire Deep ecology What dunes do we we 0 nonhuman forms of Me Free Market ideologies Should morals trump economics quotI never missed the monkeyquot PROFESSOR RAY HOGLER We re now going to take a look at some of the philosophy behind here The book includes some selections from John Locke l thinkl would like to spend some time on that you may have some ideas about this from your philosophy class I know that you took a course having to do with what was the title of that course Human and Body TEACHING ASSISTANT JENNIFER Yeah it was like individuality and science literature and art PROFESSOR RAY HOGLER Right and it was taught by a faculty member a pathologist who teaches at the vet school and a liberal arts professor and you took it as an honors course because you wanted a course that what I mean why did you take that one TEACHING ASSISTANT JENNIFER Through the honors course we take four interdisciplinary seminar courses so we sort of bring in were whereas the general education classes are very much just you take your science class you take you literature class and you take your history class and this is sort of looking at the same idea from the three different sides which I loved I thought it was very interesting PROFESSOR RAY HOGLER Sure and we would argue that the difference between a trade school and a university is that you come out of a university and not only do you have some facility in accounting but you also have some ability as a human being to appreciate what human life and nature is like Nowl know that may sound a little highfaluting as 27BG205M0d6 the saying goes but on the other hand we are talking about morals and ethics in this course and you might make the argument that what actually distinguishes people from the environment is our ability to re ect on the nature of life in general So you ve actually had this class and you ve talked about this and you may have talked about John Locke The reason they put this in the book and the reason I like to think about it a little bit is because our governmental system is in large part based on the ideas and philosophies of John Locke That s not to say that John Locke was in uential himself in the founding ofour country but his ideas were well known to Jefferson Madison Adams Hamilton to those people who created this country and they incorporated those ideas I think into our constitution because the words liberty and property are mentioned in the Constitution John Locke on property I don t know if you read that little selection but what do you understand Locke s discussion about property to involve and just I should point out this is on page 220TEACHNG ASSISTANT JENNIFER Well and it seems like he s very much ofthe idea that we have ourselves to look after and that like we above all like have just ourselves as our property PROFESSOR RAY HOGLER That s a very powerful idea I would remove those words just ourselves in fact the essence of human being and civil society is the fact that we own ourselves and if we own ourselves then we own our labor and the idea I think that Locke propounds is that the individual in and of himselfis the master of his body and the master of his labor and that ties into property because what human beings undertake through labor to create then becomes property and property belongs to the person I always envision Locke when he talks about his to think ofa person wandering across the landscape and here I am my own person my own being and I m interacting with the world and not have to interact with other people but the idea is my right should be coequal to but no greater than anybody else s rights and that means that if I own my labor then whatever I accomplished through my labor is mine Does that fit with your understanding of the founders ofthis country and their conceptions of human existence TEACHING ASSISTANT JENNIFERI think so PROFESSOR RAY HOGLER How do you account for the fact that they owned slaves TEACHING ASSISTANT JENNIFERI guess since it s our property or since it was their property and they I guess felt that they had legitimately bought these people which I don t agree with but I mean I guess PROFESSOR RAY HOGLER Well let s unlatch this idea a little bit Locke says every person is his own being and owns the product of his own labor Now what 28BG205M0d6 you just told me was to say that Jefferson who in fact owned slaves let s just use him as an example Jefferson conceived ofthe body and person of Africans blacks to be a form of property ratherthan humanity Would you have would you say that he would have to believe that TEACHING ASSISTANT JENNIFERI would think so othenNise cuz personally ifyou believe like they would almost have to believe that the people that they brought over from Africa weren t people because John Locke had said that you can t hold anyone above anyone else and ifthey thought these people were people then they couldn t have owned them PROFESSOR RAY HOGLER Right so now we get to a point that I made when I came into this guest lecture in your class which sometimes infuriates people it s pretty good evidence that Thomas Jefferson had sexual relations with one of his slaves and in fact had children with her Do you think Thomas Jefferson when he was having sexual relations with Sally Hemming his slave actually thought she was not a person TEACHING ASSISTANT JENNIFERI mean I guess I don t know I would hope not since she bared his children but it seemed like if he owned her though that he would have to believe that she wasn t PROFESSOR RAY HOGLER I ve been to Monticello where Jefferson maintained his households and his slave quarters Do you think he would feel a little odd when he went out to the slave quarters and saw some child who looked just like him and thought this was my property this is not anything human TEACHING ASSISTANT JENNIFERI would think so PROFESSOR RAY HOGLER Yeah I would think so too Now what does that tell you ifanything about the nature of this country TEACHING ASSISTANT JENNIFER That perceptions can change PROFESSOR RAY HOGLER Perceptions can change I think it would tell me that sometimes we as people are able to hold such deeply contradictory ideas in our own mind and function as human beings that we are sometimes inexplicable Despite the fact that I Thomas Jefferson sit down in my wonderful room in Monticello and write the Declaration of Independence and create the foundation ofthis country and I read John Locke here when John Locke says every man has a property in his own person this nobody has any right to but himself he would then have to either conceive that black whatever you want to call them black people were not people or he would have to repudiate the teachings of John Locke This is embodied in the Constitution ofthe United States it is a problem I will submit we have never gotten over and we re not over it yet and the reason we re not over it 29BG205M0d6 yet is because we sometimes subscribe to ideals which we re unable to carry out in practice Now that doesn t detract from the value ofwhat Locke says but it does indicate that when you make these grand statements about people and human nature sometimes you have to qualify them to some extent in order to make them workable Now John Locke says on the nature ofliberty by the way I would like to before we move onto that ifyou look at his discussion of property there s a mention in there that every person has access to the natural world in common with everybody else unless and until this person makes a bene cial use of property and then can enclose it Now that s his theory about how property came into existence so ifl can go out and till an acre ofland effectively and not waste it then I can have that acre of land and I can take the products of it and it becomes mine Now what about common areas What appeals to you or what problems might you see with a common area that people have access to TEACHING ASSISTANT JENNIFER People might like I know with farming you have to leave the land dormant for a time before you can use it so if you re in a period where you re leaving your land dormant and someone comes and tills it and puts seeds in and stuff then they re going to consider that land theirs even though it s not technically so it doesn t really work I guess it only works if you re dealing with the country when it was very sparsely populated and land hadn t yet been owned by people PROFESSOR RAY HOGLER I d like to talkjust briefly about another famous article I wish I would had the capacity to write one of these but this is another famous law review article called The Tragedy of the Commons And here s the theory ifyou accept what Locke has said that everybody has access to common areas and common usage the problem with this is ifl have an area for sheep grazing I will put as many sheep as I possibly can on it to reap the most immediate bene t that I can and ifit destroys that common area so much the worse The key element of property rights is the right to exclude somebody from usage Now we might argue that the reason markets don t work in a lot of environmental areas is because nobody owns it nobody has a right to exclude usage so on the theory of the commons which says that any area accessible to everybody will soon be overused and destroyed that s the tragedy of the common we have to come up with a way of solving that problem Now one of the ways is to say well air s not free so you can t pollute the air as much as you want to although we used to think that maybe John Locke thought it Can t pollute the water as much as you want to can t run a spinning mill where you re putting af uence into the water which ow down the stream and hurt somebody So this idea of being able to limit or exclude use ofthe commons is a 30BG205M0d6 powerful one Now Ithink Locke recognizes that because Locke talks about the idea of liberty What did you conceive Locke s idea of liberty to be or what do you conceive your own idea of liberty to be If you had to summarize it in just a few words what might you say TEACHING ASSISTANT JENNIFER Maybe the freedom to make your own choicesPROFESSOR RAY HOGLER Very good a right to be let alone by government but you re not a let alone by government are you Not at all and in fact you don t want that to be the case do you TEACHING ASSISTANT JENNIFER Not really cuz I want others to be held accountable I want to be able to feel safe and not have someone be able to you know drive their car drunk or PROFESSOR RAY HOGLER Or worse yet you re walking down the street and you re carrying twenty dollars in your purse and somebody comes up and says I want your money or I m going to injure you and I have a gun here you re gonna give them the money and ifyou say well you shouldn t be able to do that he says hey I have liberty I have a second amendment right to carry a gun and I m going to use this gun to rob you so there s a limit What about the limit if you re walking down a street and somebody makes disparaging remarks or yells at you a disparaging comment Do you think they ought to be at liberty to do that TEACHING ASSISTANT JENNIFER No PROFESSOR RAY HOGLER No and neither would Locke Locke says we have an obligation to live in a civil society where liberty is always constrained by obligations to others We re talking about John Locke but there was another very in uential and important eighteenth century English thinker philosopher who was writing at the same time and he s the antiLocke Do you know who this one was TEACHING ASSISTANT JENNIFER No PROFESSOR RAY HOGLER Thomas Hobbes TEACHING ASSISTANT JENNIFER Oh PROFESSOR RAY HOGLER Do you remember ever hearing anything about Hobbes TEACHING ASSISTANT JENNIFERI vaguely remember his name but I don t remember much PROFESSOR RAY HOGLER Thomas Hobbes says John Locke was all wrong When we re walking across that plain when we re the original created human being meandering across the environment in this lush Garden of Eden he says that what happens is not that we come upon other people and enter into consensual agreements that we re going to respect each others rights what happens is that one guy beats another guy up and takes whatever the other person owns So what kind of society do we have We have a society where we all band together and we choose a powerful leader and we equip ourselves so that we can physically confront any threats in our environment and what we 31BG205M0d6 have in a state of nature is a state of constant warfare and the reason that we have civil societies is so that we can have strong defenses and government to protect us from other rapacious beings out there in the world That was Hobbes TEACHING ASSISTANT JENNIFER Not quite as happyPROFESSOR RAY HOGLER Not happy at all unless and until you happen to be living under a king a very powerful king in Europe or England who would go over and whip the French for example and we d plunder France and take their goods and make them chattels or we go to Hobbes is a good example of slavery I don t think you can explain slavery with John Locke and Thomas Jefferson but you can certainly explain slavery with Thomas Hobbes He would say that s a natural outgrowth of the interaction of people on this planet one group enslaves another and that s the way it works and ifthe Africans don t like it then they ought to ban together build warships build armaments build guns and when we come over to enslave them they kill us maybe they enslave us That s Thomas Hobbes All right so I don t want you to just walk out thinking hey John Locke was the person but Locke had a lot of in uence on our system but there are plenty of people who look at Hobbes as well All right now you re quite right ifyou look at on page 221 there s a quotation John Locke saysthe end oflaw is to preserve and enlarge freedom for in all the states of created beings capable of laws where there are no laws there s no freedom Liberty is to be free from restraint but then he goes on to say that s the way it works both ways I have to respect your rights Now we re actually moving onto the idea ofthat we get to here which is to say well ifthat s true about Locke then why do we ever have government What s the basis of our government And the basis of our government is consent and that s where our ideas of liberty and freedom I think are embedded in The Constitution and is in our civil discourse The theoretical ideas that we consented to this system therefore we have an obligation to preserve protect and uphold it Now the next section ofthe materials here deals with this thing about deep ecology I think it just takes off on what Locke has said by saying well if humans owe obligations to each other in this way to create a government what kind of obligations might they owe to nonhuman beings and to their environment In this idea of deep ecology is to say well we owe some duty to the environment and nonhuman forms of life but how would you articulate why that life is important TEACHING ASSISTANT JENNIFER Well I think that diversity of life is fundamentally important because it adds I mean we need trees to give oxygen we need you know and we give carbon dioxide to plants and like the whole biology is very symbiotic to the point that diversity is a must 32BG205M0d6 PROFESSOR RAY HOGLER Yes and that might be true but does it explain how we would deal with let us say cattle I mean we eat cattle in this country we don t eat horses In France they may eat horses In India they don t eat cattle at all so is there some choice we want to make about life forms and how we treat respective life forms Should we say as you just said well diversity is important does that mean I shouldn t swat the fly on my wall or where do you draw the line there TEACHING ASSISTANT JENNIFER I guess I would draw the line at if something is endangered we should do everything as possible to protect it If it s and like with cows in this country I mean they re bred and there s millions ofthem so I guess I don t feel bad about eating a hamburger but I mean I know in India it is held up as a higher life form it is very religious so they don t eat it so I guess it s sort of a cultural thing on which animals you sort of deem eatable PROFESSOR RAY HOGLER But that s not a very good response to say it s all cultural is it Because in India they may have a culture of cutting down vast forests to feed the populace and if we say look we don t think you ought to be cutting down all ofthose trees they may say well that s our culture Or In Africa where they exploit the land to such a degree that it becomes desert we say well you shouldn t do that and they say well our culture is to stay alive by subsisting on this forest who are you to tell us not to how do you respond to that TEACHING ASSISTANT JENNIFER We all become vegetarians PROFESSOR RAY HOGLER We all become vegetarian this is pretty good the examples I were thinking of were a couple One has to do with dogs There was a case up here you may remember in Aspen this guy had a bunch of huskies that he used in the winter to transport people around on sleds you know Aspen I mean people come there and it s like Disneyland they want to be thrilled and they want to have the legitimate experience so this guy has teams of huskies Some ofthese huskies they get old they can t pull the sled anymore and he shoots them Remember reading about this TEACHING ASSISTANT JENNIFER I haven t heard about this PROFESSOR RAY HOGLER Well I can guarantee you it was a very large newsworthy item you would cry They had TV crews up there they had publicity he would shoot his dogs Sometimes he would shoot his dogs because they were unwilling to pull the sled sometimes he would shoot his dogs because they were too old to pull the sled they were too old to pull it effectively anymore 33BG205M0d6 and there s a great ethical outcry against that What s wrong with it TEACHING ASSISTANT JENNIFER I mean it s really cruel PROFESSOR RAY HOGLER Cruel TEACHING ASSISTANT JENNIFER Yeah PROFESSOR RAY HOGLER Why is it cruel What will you have him do with his dogs To what extent does he owe some duty to those dogs TEACHING ASSISTANT JENNIFERI mean I guess he could I mean he doesn t have to kill them ifthey re not suiting his purposes anymore He could take them to a humane society and someone else could take care ofthem PROFESSOR RAY HOGLER Sure I m on the Board of Directors at the Humane Society here for what s called an open shelter People bring us dogs all ofthe time Ifthey bring us a dog and say I don t want this dog and this dog is too old and we don t think we can adopt it we euthanize it Now people criticize us they say well you should never euthanize animals I used to be ofthat opinion myself and then I became more involved in this and I ve had to work with executive directors and I once had a conversation we were interviewing an executive director and I said we want too be a nokill shelter and she said no you don t She said if there are animals to be disposed of somebody s going to have to do it TEACHING ASSISTANT JENNIFER Well and at least if you re doing it with euthanasia like they re not in pain PROFESSOR RAY HOGLER They re not in pain He shot them in the back of the head with a twentytwo TEACHING ASSISTANT JENNIFER I think that would be more pain than ifyou had a vet technician petting the animal and then injecting something PROFESSOR RAY HOGLER You re right It s a very hard thing to do but he said and the vets con rmed this there s no law against this in Colorado and the vet said ifl come out here and euthanize one ofhis dogs it costs forty dollars if he shoots it it costs forty cents to buy the bullet either way the dog is gone So now tell me your ethical position about these animals TEACHING ASSISTANT JENNIFER Well I mean I guess if it was an old or sick animal then I can sort of at least see it because it would be like I mean ifit s at the end of its life then I guess it wouldn t matter as much but if it was a younger dog that could go on and live you know another with another family then I think that would be inline but it s hard I m PROFESSOR RAY HOGLER Let s talk about two cases all right Let s talk about elephants for a little bit It s true I think there s plenty of evidence that elephants grieve over lost elephants and they have tremendous ability to communicate with one another They live in families They re sensitive to other elephants I mean they re in a very social grouping Do you think it would be more ethically heinous for somebody to kill that elephant for its ivory tusk which were valued at say fty thousand dollars or for the husband of Terri 34BG205Mod6 Schiavo to pull the plug on Terri Schiavo TEACHING ASSISTANT JENNIFERI think it s a very hard question PROFESSOR RAY HOGLER Of course it s a hard question but aren t these the questions we ask everyday about ethical decisions and the environment and business TEACHING ASSISTANT JENNIFER And I guess in the Terri Schiavo case I felt I mean she d been so sick for fteen yearsjust in the hospital and I mean I know personally I wouldn t want to live that long like that Ifthere was nothing else that could be done for me Iwouldn t want to be attached to machines but I mean and I do think it s horrible to kill an elephant I mean to me ifa tribesman in Africa killed the elephant and not only forthe husks but for a you know the meat that provided you know food for his village for the next six months that s not a heinous to me as these poachers that just kill it just forthe tusks and leave the whole body to decompose so I just think that its all sort of all different I think it s very much individual when you re making up the question PROFESSOR RAY HOGLER That s a very contextualized answer and you know those people who were demonstrating outside of Terri Schiavo s hospital They don t want context They don t want thought or reflection They have an idea about this and their idea is she s a human living person don t touch her John Locke s idea is much different than that I think John Locke s idea is that we re dealing with sentient thinking sensitive responsive and morally functioning entities That s what people are the ability to make moral choices Terri Schiavo couldn t make any moral choices I would argue that elephants make moral choices so when we talk about the animals I think we need to have a little better understanding of how all this ts in because to me John Locke would say hey an elephant is an elephant As a matter of fact the last thing that I have on this slide here should morals trump economics And I quoted from this little article by Steven Landisburg who reduces everything to economic preferences and his idea is ifyou can t put a value on it in terms of dollars there s no value at all and he says when I read about the discovery ofa new monkey in South America I never missed the monkey I said dude but you missed the point and the point is that there are some things that cannot be reduced to your preferences and as moral people we should take an approach to the world that recognizes that Now I m not taking a position one way or another on the elephant versus Terri Schiavo but I would argue that when we start talking about John Locke and property and all that stuff you have to come to terms one way or the other with the idea that the founders of the country engaged in slavery However you want to account for theories of civil 35BG205M0d6 society and I guess when we have this discussion we start to talk about moral choices within a context and if we talk about the environment we should at least consider the idea that maybe there are some forms of human existence which should not necessarily take precedence over other forms of nonhuman existence and where we draw that line is a subject of debate and maybe we say like Peter Singer the father of the environmental movement that if a species or a being can feel pain then they are entitled to our moral solicitude and I think he can say Terri Schiavo never felt pain she had no cortex When they pulled the plug again I don t want to speculate too much about this but when they pulled the plug there were medical experts who said she didn t feel a thing Now if that s the case then why shouldn t we have more regard for the elephant who would have pain and experiences psychic injury Well when you start to talk about environmental philosophy it takes a little more than one slide but I think we ought to appreciate that PART 5 SLIDE NO 7 CAPTIONED THE COMMON LAW APPROACHquot 7 F55 Fundamentals afBusinesx Law The Common Law Approach Boomer v Atlantic Cement Co NY Ct App 1970 Plaintiff claims injury from operation nr pianr Common law doctrine ui nuisance Issue of remedies Award or pennananr damages Concurring opinian injunction is appropriate Policy issue raw and economics appmach to problem PROFESSOR RAY HOGLER So we ll move onto the next slide Now we re going to talk about the common law One of the things that I like about this book itjust jumps around back and forth from place to place and in a sense we ve been talking about statutes now we re going to talk about the common law One of these was the early approach to what common law should do about activities which affected other people and this doctrine developed I mean its historical it goes clear back to medieval England There are plenty of cases where land owners would pump water out of a well and the adjoining property would subside and the argument that the well owner would make is to say hey I never physically trespassed on his property I didn t cause 36BG205M0d6 any harm it was just that effect of natural forces and the law never accepted that argument They said the key to this whole doctrine is you have to use your land and your property in such a way that it doesn t interfere with legitimate rights of others Okay so this is a case where a guy is making a complaint about the impact ofa cement plant another cement factory yeah and I guess you gured out what the problem is with these cement factories TEACHING ASSISTANT JENNIFER Yeah they re noisy PROFESSOR RAY HOGLER Do you know where our former cement factory was around here TEACHING ASSISTANT JENNIFER I would guess north Fort Collins PROFESSOR RAY HOGLER Sure and did you ever see it TEACHING ASSISTANT JENNIFERI don t think so PROFESSOR RAY HOGLER Oh you can go up there it sjust north of La Porte Holnam Cement Company and for years and years and years and years they made cement around here They were situated in a place which had absolutely no dwellings residences anything else around it so they made cement to their heart s content and they shipped a lot of it out ofthese big trucks but nobody cared because the big trucks were not interfering with anybody and neither was their cement plant This one however the theory here he comes in and he shows that the plant has injured him total damage plaintiffs property is relatively small but nonetheless they re putting out particulates and pollutants and the question is really in this case once you find that a nuisance exists is you have to do something about it so the issue is the remedy Now why do you think that s kind of problematic here I mean what were the alternatives that you saw TEACHING ASSISTANT JENNIFERI mean I guess they could offerto buy his property from him but most likely since now there s a cement factory the value of his property is not what it was before the cement factory moved in and the resell value for people now to move close to him plus health reasons and health costs and who knows if he s going to get sick later and he doesn t know yet PROFESSOR RAY HOGLER Right so there s an issue ofjust how much he has suffered but ifyou rememberthe court talks about the typical remedy here is an injunction and the typical remedy is simply to say to the concrete plant we shut you down and that used to be sort ofthe way the law would approach it is to say if you ve created a nuisance then a person can ask for you to cease that nuisance Now in this case they ve taken an approach which is a little different and what they did was to award permanent damages The way you get around this is to simply show that the impact on your property let s say the loss of resell value perhaps some damage to your health and we let juries calculate this all of 37BG205M0d6 the time If you injure me in an automobile accident I may include pain and suffering Now how does anybody know what kind of pain and suffering I ve had They don t They just put it to a jury l testify that I ve lost the use of my limb I ll never be able to run again whatever it is and they make an award That s what they re doing in this case simply to say let him prove up his damages and we ll impose that burden on the cement plant You think that s a good way to do it rather than shutting down the plant TEACHING ASSISTANT JENNIFERI think as we sort of get more commercial it might be easier n the courts to have a sort of more freedom in what types of damages they re going to award cuz I think it would be hard if the only thing the court could do is shut down the cement factory because I think at some point they re not going to be able to just shut down these factories PROFESSOR RAY HOGLER Right and I would agree with that entirely We talked a little earlier and the bottom line on this slide has to do with law and economics We talked about how the law might try incorporating economic principles into decisionmaking This is one of the classic cases a man named Ronald Coase who was an economist won a Nobel prize he actually won the prize I think in the 70 s although he did most of his work in the 1930 s and 40 s what Coase said is look one ofthe ways you can analyze law is just to say what are the economic interests at stake and what kind of legal rule do we want to impose Not to oversimplify it too much but what Coase said is the legal rule doesn t matter ifyou allow economic forces to work and his theory is to say look let this concrete plant come in next to this guy and build a concrete plant If the law says that you have to compensate him they will negotiate Now if the law says to the homeowner you have no remedy against this concrete plant then he suffers some economic loss and he may go to the concrete plant and say look I ll give you Xamount of money ifyou will take abatement procedures or something like that Now Coase s point is simply to say this is what we want we want the parties to negotiate or the law to try to arrive at an economic conclusion which will adequately compensate each person for the loss of his or her interest The concurring opinion to my mind states the correct law and it says we ve always awarded injunctions and I believe this case is a nice illustration ofthe fact that law and economics nally moved into the common law analysis enough to say we used to award injunctions now we re going to try to take an approach which recognizes the economic realities because after all people work at this I think this may be the case where they said three hundred people work at this plant We don t want to take the right of people away to a livelihood we don t 38BG205M0d6 want to take away the right of people entrepreneurs to make concrete we use it all the time so we come to this kind of adjustment which reflects economic realities instead of simply saying you re out of business TEACHING ASSISTANT JENNIFER I think we ve also reached a point where there isn t really that many places left in America where they can go and make cement where it s not affecting anybody PROFESSOR RAY HOGLER Right TEACHING ASSISTANT JENNIFER The population is such that you can no Iongerjust you know go outside of town to a place because it s farther and farther until you can find a place where it s not going to affect anybody PROFESSOR RAY HOGLER Right and in concrete case one that is the Camden case they did not sue on a common law nuisance theory I believe because they might not have prevailed There was plenty of other economic activity there so they came up with this creative solution and they used this Title 7 racial disparate impact theory Had I been the 3rd Circuit Court of Appeals applying law and economic principles I might very well have said okay we will grant the injunction but we will also give you the opportunity to negotiate for an economically suitable resolution to this So if the concrete plant went and said look or the concrete plant got together with other economic activities in that area and said look we ought to compensate these plaintiffs you know maybe enough for them to move a little higher up on the hill then that would be a good solution So I think this court takes an approach which is a little more reasonable than saying okay shut it down SLIDE NO 8 CAPTIONED PROPERTY REGULATION AND THE CONSTITUTION 3 F55 F undamentals 0f Business Law Property Regula on and the Constitution Lucas V Scum Carolina Coastal Council 5 CL 1992 Held39 lulzl lakingquot requires campensalinn ll common law nuisance luau woulu permit building Cnncur a lakmg ls wulrary lp reasonable luyeslmaul expemallnns Dissent aoesn l deprive nwner ur all ecurlnmic value quota rmss e In klll a mouse Why srrpulurn lira poyurumanl pay lprany allacl us regu aliun has on me value 0 property PROFESSOR RAY HOGLER Now we ll move onto the next one which is a variation on this only this is a constitutional problem Why is it a constitutional problem 39BG205M0d6 TEACHING ASSISTANT JENNIFER Because this man has property and now he s not going to be able to use it in the way that he wants to PROFESSOR RAY HOGLER Yes and where does the constitutional problem arise TEACHING ASSISTANT JENNIFER Is it eminent domain PROFESSOR RAY HOGLER It s akin to eminent domain when the government takes your property and they physically take it the Fifth Amendment to the Constitution requires just compensation for any taking That s usually construed to actually physically intrude on the land though Now is there any physical intrusion on this guy s land by the government TEACHING ASSISTANT JENNIFER No PROFESSOR RAY HOGLER No what s he complaining about TEACHING ASSISTANT JENNIFER He s no longer going to he want to build I think houses on this land just like his neighbors were able to do but now because ofthe new environmental regulations he s not going to be allowed to do that so it s sort ofa different type of but he s not longer able to use it exactly how he wanted to PROFESSOR RAY HOGLER Exactly and are we going to permit people to use their land exactly how they wanted to at all So I own a piece of property next to the interstate and I m going to put up a sign which has blinking lights and somebody s offered to pay me a very substantial sum of money ifl advertise Harris Casino in Reno Nevada and so I m driving up interstate 25 and I see a sign that s twenty ve feet tall and has blinking lights and dancing girls and a little animated stuff down at the bottom Now I want to do that because I m going to be able to get a hundred thousand dollars a year for my sign Should I be permitted to do that TEACHING ASSISTANT JENNIFERI think that you re probably going to have to meet the codes of I would think that there would be standards for highway signs and whether or not it s going to distract driversPROFESSOR RAY HOGLER And the answer is no I m not going to be permitted to do that So did they take my property TEACHING ASSISTANT JENNIFER Not physically PROFESSOR RAY HOGLER No it s still sitting there and one of the important attributes ofthat property is I can still keep the people off of it it s still sitting there So what the court talks about here and it s a decision by Antonin Scalia Antonin Scalia and Clarence Thomas as I said before are advocates ofa certain kind of constitutional interpretation They re also advocates of this economic analysis of the law They re relying on an analysis advanced by a law professor named Richard Epstein Richard Epstein wrote a book called Takings in which he put fonNard this theory that says ifyou diminish the value by regulation that is a taking just as much as actually setting 40BG205Mod6 foot on your land and removing a parcel of it forthe government s use like putting a bike path through my backyard Ifthey do that they have to compensate me No doubt about that Scalia talks in this case about the idea oftakings and he starts out by saying we ve always recognized physical intrusion amounts to a taking and will require compensation the second part of this is a taking under the Fifth Amendment which is a diminution of value Epstein would say any form of that diminution is a taking any form of regulation That s pretty extreme to my mind because it means ifwe have zoning that says you can t have chickens and goats in your apartment over here on Laurel street because you have a little yard and there are people next to you that s a taking of your property That s kind of absurd isn t it TEACHING ASSISTANT JENNIFER Yeah PROFESSOR RAY HOGLER I think so Epstein doesn t and to my mind neither does Antonin Scalia but he hasn t quite had his way yet I might add I ll just editorialize part of the very real concern that s taking place now about judicial appointments and libusters and all of this stuff has to do with the nature ofthe Supreme Court and you can say well it s all about abortion or it s all about whatever but to me it s not I mean this is much more farreaching and subtle and what Scalia says is I would conclude this was a taking just cuz this guy can t build his houses Now do you understand the limits to the taking concepts that Scalia announces in this case TEACHING ASSISTANT JENNIFER I didn t really understand where he drew the line PROFESSOR RAY HOGLER He draws the line to say if it s a total taking you must be compensated By that he means any beneficial use which had been permitted at common law if it diminishes that value then it s a taking If you re going to regulate something which interferes with common law rights it s a taking Now the way he and I might add he doesn t he doesn t make it all that clear what the limitation is TEACHING ASSISTANT JENNIFER Cuz I think he just says like ifthe government s gone too far which is very subjective PROFESSOR RAY HOGLER Right and he uses the word total taking and going too far and all the rest of that but he imports an idea into this that is kind of if you will it s kind of dangerous in the sense that he reverts back to this idea of common law nuisance doctrine Now where that becomes clear is I think in the concurring opinion with Justice Kennedy He said it is a taking inconsistent with any reasonable nancial investment Now do you think this guy who had been down on the Isle of Palms for twenty years and just bought these lots do you think he had any conception when he invested in those lots that at some point in fact he might not be able to build his property on them TEACHING ASSISTANT JENNIFER No PROFESSOR RAY HOGLERI sort ofdisagree Ithink he realized 41BG205Mod6 that at some point the ocean might come and wipe out his lots I think he appreciated that at some point they might develop that property by providing barriers against it there might be coastal improvements all the rest ofthat stuff I think he appreciate that the government might regulate that property at some time because he was a developer that s what he did for a living and I think they re aware that sometimes zoning and regulation can change I mean any developer knows that TEACHING ASSISTANT JENNIFER I m not a developer PROFESSOR RAY HOGLER No but he was and I think that s what Kennedy is referring to Now the dissent in this opinion he simply disagrees on the fact I think this is Justice Blackmun Justice Blackmun said what happened is the majority here has used a missile to kill a mouse and I would agree with that They ve articulated a doctrine that really was a revolutionary one in this area of constitutional adjudication TEACHING ASSISTANT JENNIFER Seems to be very farreaching PROFESSOR RAY HOGLER It is farreaching because it suddenly recognizes there s a constitutional limit on regulation whatever that is If it deprives you of some value whatever that is and Scalia uses the word total and Blackmun says don t be ridiculous No if you read his opinion the facts appear to be much different Do you think this guy was deprived of any and all value of that land TEACHING ASSISTANT JENNIFERI think that it very much changed the value of the land that he could no longer develop it PROFESSOR RAY HOGLER Sure TEACHING ASSISTANT JENNIFER I mean I think property with a home on it versus property that s just waiting for something to be built is worth far less PROFESSOR RAY HOGLER But as Blackmun makes clear this guy could go out there he could swim he could picnic he could keep everybody else off his beach he could put a mobile home out there he could do a lot of things with it and still enjoy that property This happens a lot doesn t it I mean there may be adjacent home owners when this guy said well I can t put two condos on there and therefore I m going to lose my nine hundred thousand dollars there might be adjacent homeowners down in this very wealthy area who say look I ll give you nine hundred thousand dollars forthose two lots I m not going to do anything with them but now I ll have a beachfront property that runs for a mile on this beach and I can keep people off it I ll have a very secluded area Soto me I think that s ridiculous to say that it totally deprived him of value that s just to my mind that s just kind of stupid Now there s another case that s referred to in here this Pallazo case in New Jersey where I think the court returned to a modicum of sanity and they took the approach that I m taking about 42BG205M0d6 and basically they said Iook we realize there may be a diminution in value according to the changed use but to say you lost all the value of this property which is very desirable that s ridiculous you know people will still pay to have that and then this final question why shouldn t the government pay for any effect its regulation has on the value of property Do you think our world could function if that were the TEACHING ASSISTANT JENNIFER No PROFESSOR RAY HOGLER No I don t think so either That would just go so far as to say that if out in the county I zoned this land to say you couldn t bring your pigs chickens and turkey ranch out there and put it next to my propertyTEACHNG ASSISTANT JENNIFER Yeah and well even like when Denver International Airport was built all those homes I mean for miles and miles that are now going to have you know plane traffic they can t compensate every single person out there that you know had their property value affected by that PROFESSOR RAY HOGLER No and I m glad you raised that Two days ago I read in the paper there s a developer Crown Point Development who wants to bring in a billion dollar development out there by DIA and build all these homes and what they re arguing is that the zoning regulation should be changed and people are saying well look you know that s why we bought this and put this airport out here They re saying no we II triple glaze the glass really that s what they re saying Well air condition these homes we will agree that if there s going to be noise there we just want you to change the zoning but you re quite right they build those houses the next thing you know a homeowner s complaining and they claim that there s a diminished value or Crown Point might say it s diminished because of the zoning so you re quite right I mean that makes it unworkable SLIDE NO 9 CAPTIONED GLOBAL ECONOMY AND THE ENVIRONMENTquot r ss Fundamentals of Business Law The Global Economy and the Environment Is there any international environmental law Do rich countries owe any duties to poor ones Are international regulations the answer Kyoto Protocol Are International organizations the answer the World Trade Organization and the World Bank 43BG205M0d6 PROFESSOR RAY HOGLER We have one last slide and I m sure you re glad we nally got here It s been along session but these cases raise interesting questions The last one I d like to touch on is the global economy One ofthe questions I ask up there is there any international environmental law and do you think there is TEACHING ASSISTANT JENNIFER I think that I know like in the accounting field if there is an international law that it s very hard to enforce because it usually countries have their own enforcement and they follow that before they follow the international PROFESSOR RAY HOGLER lwould say that the answer to that is simply no and when I say international environmental law I mean some duly promulgated rule which imposes rights and duties which can be enforced as you point out it can t be enforced the other point is what institution what body would create that TEACHING ASSISTANT JENNIFER Yeah PROFESSOR RAY HOGLER It s not the United Nations TEACHING ASSISTANT JENNIFER You d almost I know in the accounting world we created our own We created the International Accounting Standards Board so I mean the environmental agencies would have to create an international agency PROFESSOR RAY HOGLER I ll just pursue that a minute We have generally accounted Generally Accepted Accounting Principles GAPP we have other accounting rules and then you mentioned the International what do they call theTEACHNG ASSISTANT JENNIFER International Accounting Standards Board PROFESSOR RAY HOGLER Accounting Standards now those are rules developed by an accounting by a group of accountants but you have a very strong incentive to do that right because economic transactions demand some transparency some uniformity it s in everybody s interest to have those standards TEACHING ASSISTANT JENNIFER You would think so PROFESSOR RAY HOGLER It is because we do have accounting standards and I know there s another in addition to the Generally Accepted Accounting Principles there are standards that everybody subscribes to are there not TEACHING ASSISTANT JENNIFER Correct PROFESSOR RAY HOGLER And they re called what TEACHING ASSISTANT JENNIFER They re promulgated by FASB or I mean that s a governmental but it s the FASB statements the Financial Accounting Standards Board PROFESSOR RAY HOGLER Financial Accounting Standards all these rules adopted by the world of accounting to regulate their activities and when I 44BG205M0d6 say they have incentives to do this it s because if everybody participates then you ll have a level playing eld where everybody can go out and engage in commercial transactions and know what the rules are for accounting TEACHING ASSISTANT JENNIFER Unfortunately the US has a very egocentric view about accounting rules and we feel that everyone should step up to what we consider the best accounting standards in the world which are of course ours so we require so I guess we haven t the US hasn t done a very good job oftrying to accept Basically the US standard feels that ifwe re going to follow the international accounting standards then they set out the international board has to accept all ofour standards PROFESSOR RAY HOGLER Yes despite those little differences though there is common incentive to work toward common goals We can t say that about the environment because developing countries may have a need to pollute the environment in orderto industrialize if we try to hold them to standards in the United States for the release ofemissions into the atmosphere they might say we can never comply with that why should we bear the burden of your standards of environmental protection when in fact it does nothing but hold us back So there it s not the same case at all and so when I say is there any international environmental law I would argue no and there s not likely to be because there s no desire to have that kind of uniformity as there is in accounting standards The next two questions go together We do have a similar process to that in this Kyoto Protocol but that was where nations got together and said we will agree on procedures but we didn t accept the protocol did we No we don t like the fact that somebody else might impose standards on us by virtue ofour agreement to abide by some international rules We could go on about that at length but I think that the concept basically underlying that is to say well what duties do rich countries owe to poor ones Now you might say well we don t owe anything to them at all TEACHING ASSISTANT JENNIFER I think that we do I think especially as America we owe a duty to go into countries I mean we went into Iraq because ofyou know supposedly the atrocities that were happening there and I think we do have a duty to go into countries where there s genocide where there is horrible things that are happening and I think that we have the resources to help those countries that desperately need us PROFESSOR RAY HOGLER This is a very interesting point One of the most famous economists or nancial or business experts is a man from Harvard named Jeffrey Sachs 45BG205M0d6 Jeffrey Sachs argues we could eliminate world poverty and he very speci cally points out exactly how much every country would have to contribute to that effort but he said ifwe devoted let us say twenty percent ofour gross domestic product to eliminating world poverty we could do it fairly easily and it wouldn t harm us unnecessarily I mean there would be some burden That s highly unlikely isn t it Yeah and so we go into Iraq do you recall what the justification was and now is for going into Iraq TEACHING ASSISTANT JENNIFER At the time it was because they had weapons of mass destruction PROFESSOR RAY HOGLER Right but that proved to be purely phony TEACHING ASSISTANT JENNIFER Now Bush tries to say it was to help you know that the nation was in such chaos and that we had to go there to help the people and make the world a better place PROFESSOR RAY HOGLER Okay and if we make the world a better place ifthat s a moral obligation do you think we ought to be able to sort of quantify exactly how that might transpire We now spend a hundred and sixty seven billion dollars in Iraq Now if we were wanting to improve to make the world a better place should we use metrics like improved healthcare improved sanitation improved electrical facilities improved infrastructure improved economics TEACHING ASSISTANT JENNIFERI think so I mean I think ifwe devoted some money to Africa it would be very easy to gure out you know how many people are we helping with the aid you know just by distributing condoms to stop the spread ofthe disease you know we could very much make a huge impact on the world PROFESSOR RAY HOGLER Right and therefore you come to the question if we owe a moral obligation to these people to try to help them out we may run into countervailing moral obligations on the part of some to say we don t believe in contraception we don t believe in condoms and therefore we re not going to countenance any efforts which involve that TEACHING ASSISTANT JENNIFER And I think it is de nitely and I mean a lot of people don t think the US should be the police of the world but and I think that it would have if that was our policy it would have to be I think very specific as to what we are going to do and how we are going to help people and when it s appropriate to go into their countries PROFESSOR RAY HOGLER My last point up here and we ll try to wrap it up with this international organizations like the World Trade Organisation and the World Bank The World Bank has come under some criticism because the argument is that the world bank actually goes into a country and attempts to change the political system rather than anything else it s a political machination and thus for example we go to a country and say we will 46BG205M0d6 give you aid but we would like you to promote free trade and we would like you to undertake these very specific activities and we re going to condition the aid on that Now sometimes countries say well we don t have the infrastructure or the ability to engage in economic activities the same way you do that is capitalism we need a little state control and regulation and we need to create the conditions and the World Bank would say no ifyou accept our money you accept the changes that we re going to ask you to make That s the criticism So as we work through all ofthis I mean I think we ve come to well the contradiction is actually encapsulated in the title of this The Global Economy and the Environment When we talk about the economy maybe we re talking about one thing when we talk about the environment maybe we re talking about ethical and moral choices that we make of course we ve been doing this all semester but now here we are back to this same point to say well that an economic obligation that we owe to other countries is a moral one How should we accommodate our environmental concerns with our economic needs How does that translate into our relationship with other countries around the globe I think it s a little ironic that we can go in and devote a hundred and sixtyseven billion dollars of our resources to a country where now the rationale is we re providing liberty for citizens Well what is liberty worth If we put a price on everything else that we re doing and we engage in this costbenefit analysis why didn t we put a price on liberty I would be willing to bet that for a hundred an sixtyseven billion dollars Saddam Hussein would have been more than happy to go to Argentina or someplace so why didn t we just offer him say ten billion dollars to leave Then we could have used twenty billion dollars to convert the country to a democracy I m just sort of you know speculating now but my point I think is a valid one sometimes we apply economic analysis to some issues sometimes we imply ethical values and ifyou look at our foreign policy and you say well we ve done the same thing there which was it in Iraq TEACHING ASSISTANT JENNIFER Yeah PROFESSOR RAY HOGLER Economic Was it self defense No Was it economic Well maybe if we get cheap sources ofoil I don t know In any event we came to the end ofthis discussion this is an ongoing discussion two hours is hardly enough time to settle anything having to do with these questions but at least we ve tried so next time we ll move onto another subject Thank you TEACHING ASSISTANT JENNIFER Thanks 47BG205M0d6


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