Thomas Sowell

OF ALL THE WAYS of making decisions, one of the most ridiculous is putting decisions in the hands of third parties who pay no price for being wrong. Yet that has been one of the most fashionable -- and most disastrous -- methods used in this century in countries that embraced socialism.

Now that communism and other forms of socialism have been discredited by their failures around the world, you might think that the assumptions and methods of such economic systems would also be discredited. But you would be wrong.

Third-party decision-making is alive and well in America today. There was even shock when it suffered a minor setback in California recently.

The Sierra Club and other environmentalist groups asked Judge Quentin Kopp to issue a temporary injunction, pending a trial, to stop a lumber company from using helicopters to lift logs out of a forest. Judge Kopp agreed that the temporary injunction was called for because of irreparable damage that could already be done before a trial on the merits of the environmentalists' contentions.

On the other hand, Judge Kopp ruled, damage could be done to the lumber company if the environmentalists' claims did not stand up in court. So he required those who wanted an injunction to post a bond of $250,000 to cover the damages that the lumber company might sustain from an injunction based on unfounded allegations.

This ruling brought shrill outcries from environmentalists and their lawyers, who are used to imposing huge costs on others at no cost to themselves. One San Francisco environmentalist group calling itself the Earthjustice Legal Defense Fund claimed that requiring bonds in order to get a temporary injunction could have "a chilling effect" on environmental litigation.

It didn't seem to matter to them that an injunction could have a freezing effect on the lumber company, which could lose millions of dollars if it had to suspend operations and lay off workers while a trial dragged on -- workers they might not be able to hire back to resume work if they won in court.

The Earthjustice folks were shocked because, they said, such a large bond requirement had been imposed on them only once before in 20 years of litigation nationwide. Maybe that is what is wrong with our courts -- that they let some people impose huge costs on others at no cost to themselves.


Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

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