Last week I taught Justice Traynor’s opinion in Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging Co.. The opinion is a classic example – perhaps caricature would be a better word – of neoclassical contract law. The issue in the case was the admissibility of parole evidence to construe the terms of a written contract. The traditional rule is that such evidence is not admissible if the terms of the contract are clear on their face. Traynor ruled, however, that parole evidence was admissible so long as the language of the contract is “reasonably susceptible” to the interpretation offered by the party seeking to introduce the evidence. The holding in Pacific Gas is a major relaxation of the parole evidence rule, to be sure, but that is not why Traynor’s opinion makes it into virtually every published contracts case book. Rather, the case is there for the dicta.
Traynor begins his analysis of the question with an anthropological and philosophical aria attacking the very notion of plain meaning. Those who believe in it, we are informed, are the victims of a primitive faith in the totem power of words. (He drops a footnote at this point discussing Egyptian mythology.) Words, he tells us, do not have absolute referents, a fact that he takes to be fatal to the notion of plain meaning. You can have a lot of fun in class with this language. If one is inclined, I suppose that you can follow Traynor down the wooded path to the Golden Bough, or, if you are less anthropologically ambitious, talk about the meaning of meaning. You can also have a great deal of fun comparing the soaring linguistic theorizing of Traynor’s dicta with the much more modest holding in the case. If we really believe that the absence of absolute referents drives a stake through the primitive totem of plain meaning, how exactly do we engage in the inquiry about whether written terms are “reasonably susceptible” of a particular interpretation? I have a sneaking suspicion that it involves judges – perhaps even Justice Traynor – reading the words of the contract and deciding what they mean.
Pacific Gas is a godsend to contract professors, and I can’t help but think that Traynor really wrote the opinion for us. I am grateful. Still, at the risk of looking the gift horse in the mouth, I do wonder if it is good judging. My understanding is that contrary to the doomsayers (including Alex Kozinski) who insist that Pacific Gas is the end of the parole evidence rule in California, Golden State judges continue to exclude extrinsic evidence in the face of clear written terms. Pacific Gas didn’t result in revolution, simply confusion. Given the wild whipsawing between dicta, rule, and holding in the opinion, this is not really all that surprising. My judge always insisted, “We’re not writing for the ages here; we’re writing for the parties.” The craft-oriented modesty of this approach appeals to me. I also suspect that it generally makes for much better law. And yet, I can’t help but note that Traynor’s opinion has been intellectually influential precisely because it is so poorly written. Getting into the case books is another way of influencing the law, and I suspect that the results of Traynor’s thoughts on totem and absolute referents wouldn’t have had nearly the currency that they do had he written a law review article instead.