The Palsgraf principle is equally impugned, therefore, by negligence cases in which a defendant is liable to compensate a foreseeable plaintiff whom he has not treated carelessly. Imagine, for example, that a defendant runs a business that engages in a lucrative activity that spews toxic chemicals into the surrounding air — creating a significant risk of killing some nearby residents and damaging a neighboring piece of land, Blackacre.49 It is negligent for the defendant to direct his factory to engage in this activity, for the commercial advantages that he and his business’s shareholders will thereby gain do not justify imposing these risks of personal injury and property damage. Suppose the defendant has excellent reason to believe that the owner of Blackacre (whoever he or she may be) is a large shareholder in his factory — and that he or she has enthusiastically consented to the defendant’s continuation of his chemical-generating activity, notwithstanding the associated risk of damage to Blackacre, because he or she stands to reap a large financial gain (on balance) if this activity continues. It turns out, however, that the defendant’s evidence is misleading; in fact, the owner of Blackacre is not a shareholder in the defendant’s business and has not consented to the defendant’s pollution-generating activity.
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