.If a private company distributed thousands of bottles of water with high levels of lead and other contaminants, lawsuits would chase it toward bankruptcy. So why should authorities in Michigan get a pass?
Imagine a class-action suit on behalf of the people of Flint, Michigan. There are plenty of available defendants. The Detroit Water Board, for cutting off the city’s supply of water in a childish snit. Flint’s own water department, for doing a lousy job of testing its only product. The Michigan Department of Environmental Quality, for ignoring claims that there was something wrong with the water and not overseeing the Flint department. Michigan Gov. Rick Snyder for appointing as head of the DEQ a person without significant environmental experience. Oh, and the Environmental Protection Agency, for doing . . well, nothing.
The reason no lawsuit will be filed is sovereign immunity. The state, having created the courts, cannot be sued in them without its consent.
I have argued for years that sovereign immunity makes the most sense when government is providing its core services, particularly services that the market could not easily supply. Elsewhere, sovereign immunity can cause problems, because of its hidden costs. First, because government agencies need not buy insurance, they earn a subsidy that may not be warranted. Second, immunity from suit creates precisely the moral hazard problem that private-sector tort liability is meant to ameliorate.
Many advocates contend that in the specific case of water, there are advantages in having the government provide it directly. Some argue, for instance, that it’s cheaper because government lacks the profit motive. Let’s assume that’s true. Still, along with those advantages come the costs I mentioned above: a lack of tort liability and an increase in moral hazard. With these missing, inattention to detail is more likely. Public Citizen has issued a 10-point fact sheet on why privatizing water service is a bad idea. Ironically, the most troubling issues on the group’s list — low water quality, corruption, unheard local concerns and suffering among the poor — are all present in Flint.
Which is where sovereign immunity comes in. Why continue to allow government agencies that shield? The burden of the doctrine has long fallen heavily on the most helpless. The legal scholar Richard Epstein has argued that sovereign immunity is in part a relic of an era when all rights and privileges were thought to come from the crown. The doctrine is at least somewhat inconsistent, he suggests, with a constitutional system based on natural rights, that is, based on the theory that our rights adhere to us not because government gives them to us but because of our humanity itself.
One’s view of this matter should not turn on whether one is for big or small government. The question is how to get the incentives right. Take the EPA’s reckless pollution of the Animas River in Colorado last summer. A private company would face a substantial fine. Not the EPA. In the words of Thomas Sansonetti, who formerly ran the Justice Department’s environment and natural resources division, “The government doesn’t fine itself.”
Neither does any agency involved in the Flint water crisis. And without a penalty, the incentives to take care are much reduced.
The usual response to arguments of this sort is to point out that claims against government agencies would have to be paid out of tax dollars. Implicit in this contention is the idea that tax dollars are more valuable than dollars that belong to, say, corporate shareholders.
In other words, sovereign immunity is necessary because it’s more important for government agencies than for private entities to hold onto their money.
This seems to me a monstrously wrong proposition, but let’s suppose that it’s right. If tax dollars are truly entitled to such a high degree of care, let’s give them one. Let’s make all ranking government functionaries fiduciaries for the tax dollars that are in their care —with all the personal liability that the fiduciary responsibility entails.
Don’t like that idea either? Then maybe tort liability for the agencies involved is a kinder, gentler solution.
Stephen Carter is a Bloomberg View columnist and a law professor at Yale.
© 2016, Bloomberg View