Economics as an input in environmental law: Anderson v. Atlas Chemical Industries, Inc

FOR SOME YEARS ECONOMISTS HAVE ADVOCATED A VARIETY OF LEGAL INSTITUTIONAL ARRANGEMENTS WHICH TEND TO INTERNALIZE EXTERNALITIES. THE INPUT OF ECONOMIC THEORY IN THIS RECENT POLLUTION LAWSUIT IS REPORTED AND DISCUSSION IS GIVEN TO THE ECONOMIC IMPLICATIONS OF THE LEGAL RULES INVOLVED IN SELECTED LEGAL REMEDIES. WHILE THE ANDERSON CASE EXPLICITLY INCLUDES ECONOMIC RATIONALE IN THE LANGUAGE INVOLVED IN THE OPINION, IT DOES NOT HELP SOLVE THE PROBLEMS ARISING WHEN TRANSACTION COSTS ARE CONSIDERED. NEW INSTITUTIONAL APPROACHES WHICH MINIMIZE AND/OR MORE EQUITABLY DISTRIBUTE TRANSACTION COSTS OF DAMAGE RECOVERY ARE NEEDED.