Hand, Posner, and the Myth of the "Hand Formula"
The legal literature generally assumes that an aggregate-risk-utility test is employed to determine whether conduct was reasonable or negligent. However, this test is infrequently mentioned by the courts and almost never explains their decisions. Instead, they apply, explicitly or implicitly, various justice-based standards that take into account the rights and relationships among the parties.
This is true even for the two judges most closely identified with the aggregate-risk-utility test: Learned Hand and Richard Posner. During the five decades (1909-1961) that Hand served as a federal judge, he mentioned the test in only eleven opinions, between 1938 and 1949, and in none of those opinions did he actually apply the test to resolve the negligence issue. In his last reference to the test, in 1949, he essentially abandoned it. None of his fellow circuit judges ever mentioned the test.
Posner claims that the Hand formula expresses an economic efficiency interpretation of negligence that has long been implicit in judicial opinions. However, Posner’s arguments are based on speculative and implausible assumptions, overbroad generalizations, selective quotations, and superficial descriptions of cases that misstate or ignore facts, language, rationales, and holdings that are inconsistent with his argument. The same flaws are apparent in Posner’s attempts to apply the Hand formula in his own judicial opinions. Neither he nor his like-minded colleague, Frank Easterbrook, has been able to employ the Hand formula to resolve the negligence issue in any case, and none of their fellow circuit judges has attempted to do so.