Property Outline1. What is property?2. How does property begin?3. What can be property?4. What can be done with property?5. What are the forms of property?6. How can complex collections of property rights be managed?7. How do I know who owns what?8. Where does my property end and my neighbor’s begin?9. How can and should the gov’t take away, give, or change property?

What Is Property?Law of property must work between strangers, so properly relies more heavily on social customs and intuitions than contracts.

I. 2 Conceptions of Property – Trespass to LandA. Trespass: any intentional intrusion that deprives another of possession of

land, even if only temporarily1. Policy: (i) prevents violence and self-help, (ii) owner is in best position nto

know about the property, (iii) incentivizes discoverer to reap rewards2. Compensatory damages obtained by showing harm, punitive and nominal

damages used when difficult to determine compensatory damagesB. Jacque v. Steenberg Homes: P sued Steenberg homes for moving mobile home

across Jacque’s land.1. Rationale: the sovereign right to exclude must be enforced to (i) avoid

potential violence and (ii) protect privacy rights. a. Privacy Rights: if damage is actually done, might not want to disclose

information about your property (i.e. intellectual property of tomatoes). 2. Necessity Defense: travelers have right to deviate from public road when

rendered impassable. But Steenberg cannot show absolute necessity in this case.

3. Other defenses include: public accommodation laws, anti-discrimination laws4. Holding: Yes, there is a trespass . Punitive damages may be awarded at jury’s

discretion. In this case, society has interest in deterring trespassers beyond the interests of the individual landowners. “Make an example” of Steenberg.

C. Hinman v. Pacific Air: P sued air transport companies for operating airplanes over their land (within 5 feet of property line)1. Ad Coelum: right to space below and above land.

a. Policy objections to ad coelom: enforcement difficulties, transaction costs2. Holding: No trespass , because air is incapable of ownership.3. Fact Application : Any use of such air which is injurious would be a trespass,

but any claim of landowner beyond this point is not trespass. No facts alleged to infer any substantial damage accured.

4. How to reconcile Ad coelom (right to airspace) with Hinman (no right to refuse airplanes)?

a. Only possessor can trespass. Bray: but owner can still sue for trespass.b. Airplane trespass actionable only if cause actual harm. Bray: sets up

perverse incentives, does not solve land trespass.c. Airflights are in-kind compensation. Bray: this is regressive solution.d. Airspace is public property to all. Bray: where is limit? Are we not

allowed to have buildings that occupy public airspace?5. Currently, no court has held airplanes liable for trespass because injury is

small and inconsistent. Most courts hold public property explanation.6. If Jacques’ facts appeared in Hinman court? Bray: Hinman court would have

still awarded trespass (just like Jacques court!) BUT STILL DISTINGUISHED Hinman from Jacquesbys saying that Hinman’s air is not Jacques’ land.

7. If Hinman facts appeared in Jacques’ court? Bray: Jacques court would have still held no trespass (just like Hinman court!) by citing policy objections to ad coelom.

II. Trespass vs. NuisanceA. Bray endorses Jacques (yes trespass): give punitive damages for willful trespass.B. Bray also endorses Hinman: must allow airplanes as policy manner! (Use “public

property” reconciliation.)C. Jacques emphasizes ownership. Hinman balances competing interests >

ownership.D. Trespass: indirect path to balancing act, because owner can decide if there is a

trespass possibility and therefore whether to invest. E. Nuisance: a much more direct path to allow courts’ balancing act.F. Tort of Trespass = physical coming over lineG. Tort of Nuisance = significant harm + unreasonable presence (results in

indirect effects)1. Unreasonable: where gravity of harm > utility of activity (Res). Court says

additional considerations might include maliciousness of actions.2. Res: gravity of harm = extent of harm, character, social value, burden, etc.3. Res: utility = social value of conduct, suitability of conduct to character of

locality, suitability of preventing or avoiding invasionBut motives also informs remedies. Mere cost-benefit analysis is insufficient to explain law.

Trespass NuisanceNo harm required Significant harm requiredNo showing of unreasonableness Showing of unreasonableness requiredProtects interests in possession Protects interest in use and enjoyment

III. Nuisance – Hendricks v. Stalnaker: septic tank could not be built within 100 feet of existing water well.A. Both parties come to nuisance so neither can build, aka bad policy. Therefore,

P Hendricks brought suit as nuisance, not as trespass.B. Nuisance: anything which annoys or disturbs the free use of one’s property,

or which renders its ordinary use or physical occupation uncomfortable.

C. Holding: Installation of water well is not unreasonable because balancing of landowner’s interests is at least equal or slightly in favor of water well. Here, septic sytem places more invasive burden on adjacent property.

D. Private Nuisance: determined primarily by harm causedE. Public Nuisance: test of “reasonableness of property use in particular locality”

(see above Tort of Nuisance)F. Exclusion: court’s backstop owner’s authority when trespass occurs and land has

multiple uses.G. Governance: land has only one use and courts decide priority of use.

IV. Coase TheoremEntitlement Value of Farming Value of RanchingFarmer No contract, Farming Deal, RanchingRancher Deal, Farming No contract, RanchingResult: most valuable activity prevails regardless of initial entitlement.A. Takeaways of Coase:

1. Both sides come to the nuisance and cause harm. Which to remove?2. Efficiency exists when transaction costs are zero.3. In real life, transaction costs are not zero.4. Initial allocations matter when transaction costs are high.

B. If costs = 0, then entitlement doesn’t matter. If entitlements matter, then costs are not zero.

C. Additional Coasean assumptions: people are rational maximizers, and all costs are translatable to money (so Coasean theorem works better when ppl’s interests are already economic).

D. Impediments to Contracts: Assembly problems (high transaction costs due to large # of priorities), Bilaterial monopoly (high transaction costs due to limited options; results in holdouts and bad blood.)

E. Coase Thm Application to Jacques: If most valuable activity is transporting home, then deal if entitlement goes to Jacques. If most valuable activity is growing tomatoes, then deal if entitlement goes to Steenberg. In real life, transaction costs are not zero and Jacques cannot convert their interests into monetary value.

V. EquityA. Chancellor gave ad hoc legal relief for problems not addressed by legal system.

Not necessarily motivated by economic efficiency, but rather by moral condem.B. Most stages have merged: courts, procedures (old equity court had no jury)

1. Remedies are not merged! If seek injunction, then addt’l rules of equity apply (ex: equitable defenses, managerial tools like contempt in absence of injunction compliance)

C. Can get equitable injunction of damages are insufficient.D. Maxims of Equity: includes clean hands requirement, and equity applies in

personam, not in rem (to this case only, not as standard practice)E. Bray’s Features of Equity

1. Equity emphasizes exceptional cases2. Equity explicitly incorporates moral reasoning

3. Equity starts with remedy, and works backwardsF. Equity Quotes

1. Chancellor’s imprint is like size of foot—totally arbitray2. Law is too general sometimes, so equity is neede.d3. Fraud is infinite ,so equity is personable to each case.

VI. Repeated TrespassesA. Baker v. Howard County Hunt: hunting dogs bit neighbor’s dress and chickens

1. Args for D and Court responsesa. Dogs trespass. Courts say D likely knew of dog’s trespass; dog’s

trespass is imputed to others.b. Dogs uncontrollable. Courts say D took dogs by control onto land and

had duty to control hound.c. Hunting is good sport. Court says this is not excuse for harms.d. No damage alleged. Court says damage exists to dress and chickens.e. One dog was shot. Court says shot is justified if P felt threatened.f. Adequate remedy of law? Court says damages are insufficient to stop

the “interference with enjoyment of possession of property.” Court also says that cost of suing due to multiplicity of suits > damages remedy. Based on these two reasons, injunction is warranted.

2. Holding: Yes injunction because substantial injury to property.3. Rationale: Jurisdiction of equity to restrain repeated trespasses rests on ground

of avoiding repetition of similar actions.

IV. Equity and Building EncroachmentsA. Pile v. Pedrick: P would not permit D to come onto their land to remove intruding wall. Judge split costs between the two parties. ABSOLUTIST; INJUNCTION.

1. Property Perspective [protect rights]: yes, should take down wall2. Equity Perspective [provide remedies]: hugely expensive and must balance

interests. Remedy must be reasonable and courts cannot go to any means necessary. 3. “Costs are not of course in equity” = costs (aka damages) are not automatically

granted to winner. In America, each side pays their own costs. 4. After judgement, both sides can settle. This is unlikely, however, because if a

deal was going to occur, then it would have already before all the transaction court costs were incurred. B. Golden Press, Inc. v. Rylands: Was encroachment of D’s foundation upon P’s

land intentional? BALANCE EQUITIES. (If no injunction, then damages.)1. Law: If encroachment is deliberate equity may require restoration of

correct position regardless of removal expense. If encroachment is in good faith courts should weigh circumstances. If encroachment is slight and unintntaionl, and cost of removal is so great as to cause hardship, and P’s use is not affected and fairly compensable, may deny injunction and relegate P to mere damages.

2. Holding: encroachment was unintional, so balance and find that expense of removing all is too great.

3. Injunction likelihood diminishes with lack of intent, insignificance of encroachment,s and hardship of removal.

4. Good faith = not having notice. Leads to balancing insig encroachment with great hardship. Bad faith = having notice. Leads to injunction.Jacques: Trespass [mobile home] Hinman: Nuisance [planes]Pile: absolutist trespass, must remove wall.

Golden Press: balance equities

5. Reasons for above evolution from Jacques to Hinman: moral condemnation, despite same impact of trespass. Increasing evolution of fairness leads to equity balance. Fear of overdeterrance and so people won’t build.

6. IP extension and test for patent violation: (i) suffered irreparable injury [like Baker and dogs], (ii) damages are inadequate compensation, (iii) remedy is warranted when balancing hardships [like in Golden Press], (iv) public interst would be served. Likely injunction.

How Does Property Begin?

VII. First PossessionA. Wild Animals

1. Pierson v. Post: Mortal wounding, not mere pursuit, equals possession.a. Ratione Soli: own the land so own the fox on the landb. Majority opinion says mortal wounding while in pursuit is possession.c. Minoriy opinon says closing in is possession. Appeals to custom and

informal jury of community hunters. Pro: hunters would have evolved best system for deciding. Con: custom may be self-interested and disfavor outsiders.

d. Low end of “preparation” does not fulfill signaling need; labor is insufficient.

e. High end of “killing” leads to wasteful races, self-help, and excess conflicts.

2. Ghen v. Rich: Ellis found and sold whale instead of sending word to shooter.a. Under Pierson, initial owner did not continue pursuit, so is not owner.b. Under Ghen’s holding: initial killer is the owner b/c spent effort.

Distingiush from Pierson: property is sensitive to context. Pierson does not apply to Ghen because whale could not be easily obtained after death like fox. Ghen’s court balances incentive creation with social changes.

3. Keeble v. Hickeringill: Hickeringill shot guns and scared away Keeble’s ducks. Keeble had prepared duck decoys already. Trespass in what?a. Interest in land: H did not go on land; his bullets did. b. Interest in ducks: Ducks not countable. Ducks who were affected by H’s

guns were scared away and under Pierson, not yet K’s property. (Point of possession: when ducks are actually in decoy. Again, point is determined by balancing interests in preserving incentives and deterring wasteful races. Point must also be satisfied by emergence of clarity.)

c. Interest in occupation: fair competition = makes society better off; unfair competition = makes society worse off.

d. Holding: There is property interest in occupation, against unfair competition. This is a limited, quasi-property interest.

B. Open Access and Commons – Elinor Ostrom [Tragedy of Commons]1. Solution 1: Leviathan – central government intervention. Pro: enforce best,

most efficient outcome. Con: informational hurdle.2. Solution 2: Privitaziatio. Con: lose efficiency scales (high transaction costs

and enforcement costs!), distributive critique of non-homogenous plots of land.

3. Solution 3: Institutions: enter collective agreements and happens rather frequently. Con: level of trust required; transaction costs must be sufficiently low; monitoring requirements.

C. Other Applications of First Posession: Oil and gas. Cannot use Jacque-style trespass and ad coleum analysis, because oil and gas move under ground from place to place. As we go further away from land and using trespass, towards air, water, oil and gas, we must use nuisance analysis instead.

VIII. CreationA. Misappropriation and Quasi-Property Right in Hot News: Internat’l News Service

vs. AP:1. Facts: AP alleges that INS is taking their news from published newspapers,

bribing AP employees and bribing newspaper employees for news.2. Issue: Is there a property interst in the idea of news? (The particular form is

not in question, since INS can easily change a few words and still retain substance.)

3. Holding: Yes, there is quasi-property right in news. Majority assumes that there would be no news if INS could just steal AP’s news. Remedy is not damages to property rights, but injunction. Policy for quasi-property: preserve incentives. So, strength of Quasi-Property right depends on # of competitors can exclude.

4. Quasi-Property = (i) valuable creation; (ii) labor and expenses. Bray says this is unsatisfactory in its application to other cases.

5. Hypo: Amazon stealing bookstores’ creation of “public appetite for books”. 6. Holmes dissent: property depends on exlusion by law, I vote for injuction of

subsequent publication for X hours after original publication.7. Brandies dissent: Right against destruction of property, but news is not

property and is instead common use. Legislature should decide if is property.B. Hypo: mountain of meteroites. Allocation strategies:

1. Group Ownership: lowers incentives to find meteroites.2. Individual Ownership, based on meteorite preference: high information cost to

finding preferences.3. Individual Ownership, according to first possession: clear signaling and high

incentives to search, but results in unequal distribution.C. Increasing hurdles to copyrights also increases signaling chances.D. 1st way of property emergence: first possession. 2nd way: creation.E. Socially Useful Competition --------- Socially Destructive CompetitionF. Types of Quasi-Property--------- INS -------------------Keeble: wanton destruction

1. So, cannot use Keeble to explain INS.IX. Accession

A. Sic utere tuo: duty to use property such that other people aren’t hurt. Cannot be socially destructive like in Keeble.

B. Principle of Increase: calf always goes to mother. Increases incentive for farmer who is there at time of birth to take care of baby calf. Also, it’s difficult to determine signaling of paternity.

C. Doctrine of Accession: When mistakenly takes up object that belongs to someone else and transforms it through labor into fundamentally different object, it’s yours.

D. Principle of Accession: includes Increase, Doctrine of Accession, and Ad Coelum. Ownership of unclaimed resource is assigned to owner of some other resource that has prominent relationship to unclaimed resource.

E. Replevin: you get back the goods themselves (not the value, the actual thing. Considerations of Accession: Good/Bad Faith, Relative Value, and TransformationGood Faith Bad Faith Is Accession Present?No No No change in objectYes Yes Untraceable ChangeYes No Substantial Transformation

F. Doctrine of Accession – Wetherbee v. Green: 158K ash trees made into hoops1. Transformation is important because appearance is how we relate to the

outside world (Hume). Here, there was substantial, traceable transformation.

2. When property has been appropriated by another, the original owners can recover it regardless of increased value. If identity has been changed, however, then only compensation of original material’s value is required.

3. Rule: if labor is insig and original object prominent, then title stays with original owner. If labor is prominent and original object is insig, then title passes to improver.

4. Here, since D added so much substantial value, change of title is appropriate. 5. Principle of Restitution: if improver is deemed to be the more prominent

contributer of value, then the improver gets title but must pay damages to the original owner of raw materials.

6. IP extension: minor improvements are likely to be infringement, while sig improvements are still infringements but improver may be entitled to own patent. Truly radical improvements are exempted from liability. Policy: encourages development and gives improvers bargaining leverage that is direct proportion to improvements’ values.

7. Restitution Possibilitesa. Replevin (person making hoops keeps them)b. No replevin (person making hoops gives them up)c. Damages (person making hoops compensates)d. Restitution (P gets wood back and D can sue for value of labor, up to

difference in object value: 800 – 25 = $775 per hoop.)e. In any case, court must decide: who gets physical thing versus monetary

value, and who gets most of the profit? (Who has the burden of proving values will influence these two questions’ answers.)

X. Ad Coelum – Edwards v. Sims

A. Facts: Edwards knows the survey and dangerous and doesn’t want it done, so seeks writ of prohibition to prevent survey from being ordered.

B. Issue: Can court of equity invade ad coleum right to determine truth of cave’s ownership?

C. Holding: yes, court has power to compel mine owner to permit inspection at the suit of a party who can show reasonable ground for suspicion that his lands are being trespassed upon.

D. Dissent: forcing survey would deprive Edwards of his value rights and value of his property. Analgous to Hinman where majority would deprive Hinmans’ rights to use and enjoy their property. Survey would be trespass and deprivation of entire cave.1. But, if apply dissent to other cases, the advantage will fall to people with the

best technology who can then pull out all the oil and gas from everybody’s land. This encourages wasteful racing to get the best equipment first.

E. Ad coelom for Lee: he owns part of the property to the depths. But ad coleum exceptions exist, so ad coleum by itself does not resolve ownership.

F. Issue 2: Does Lee have property right in thing he cannot use, since entrance is on Edwards’ side? Can Lee invoke accession instead of possession? (Court says should conduct survey to find out.)

G. Cannot resolve this case via contracts because transaction costs are too high in this bilateral monopoly. Only having one owner is best.

XI. Adverse PosessionA. Purposes of Adverse Posession:

1. Reliance interests (loss aversion: taking is more painful to adverse possessor)2. Prevent sleepi ng on rights; replacing inefficient gatekeepers3. Minimize transaction costs of title determination

Taxes are clear signal of who is controlling propertyAdverse possession has redistributive effects, but is a crude method of doing so and may not have redistributive effects.Colorable title encourages people to memoralize their claims to land. Decrease transaction costs. Government has high monitoring costs, so prohibition on possessing government land. Government also has high incentive to erect walls and barriers and therefore preclude public use of the government land—bad policy.

B. Law of Adverse Possesion1. Actual possession: not precluded by surface owner’s constructive possession2. Visible/Open and Notorious3. Exclusive: you are acting like owner. But not exclusive in surface use of

Marengo.4. Exceptions: mistaken boundary does not satisfy adverse possession; fraud

does not satisfy adverse possession. C. Marengo Cave Co. v. Ross: does ownership of cave mean ownership of cave’s

surface? No, because owner did not know of occupant (not hostile).1. Court does not sever cave from surface because of ad coleum. Also ,

severance would allow people to take stuff below other people’s grounds (like natural resources).

2. Constructive possession: legal title to land. One who possesses part of the land under an instrument giving color of title to whole parcel. Adverse possession of part of a title may give risk to constructive adverse possession of whole parcel.

3. Color of title: looks legit, but has some defect of which owner is unaware.4. No adverse posesson against government allowed. 5. Seeker of adverse possession must show actual possession, court says (surface

owner’s constructive possession is not required nor relevant). Bray says: this menas there would never be adverse posesion, b/c seeker of adverse possession by definition does not have legal title.

D. Carpenter v. Ruperto: P used extension into corn field as additional yard space. 1. Good faith is essential part of claim of right. Since good faith was absent here,

P cannot take land. (This is minority view).2. Class Law of Adverse Posession: (i) actual, (ii) exclusive, (iii) open and

notorious, (iv) continuous for statutory period, (v) hostile under claim of right for statute of limitations.

3. Rules of Faitha. Subjective Good Faith Required – minority view: works for boundary

disputes; rewards flowerbed creation. Do not pivilegde squatters.b. Subjective Bad Faith Required – minority view: takes away land from

bad gatekeepers.c. Objective Non-Permission Required – majority view: Connecticut Rule

—we’ll not inquire into state of mind. Knocks out many potential cases like adversely possessing law school, because I actually have permission to be here.(1) This is majority view because adverse possesion applies statute of

limitations to legal actions in trespass, ejection, conversion, replevin, things that do not require good faith.

4. Adverse possession is like trespass because swaps out bad gatekeeper Jacques-style owner for good gatekeeper Jacques-style owner. Adverse possession is also like nuisance – to make society better off, give land to more reasonable owner.

5. Garrett: renters are not hostile to broker, who fradulantely created contract against bank. Renters are not hostile to bank.

XII. Howard v. Kunto

XIII. Problem of Sequential PosessionA. Armory v. Delamirie

1. Boy found jewel and took it to jeweler, whose apprentice then took out stones and offered damages. Ruling: Finder wins against all except true owner. D should give full damages.

2. NY statute: there is duty to turn in property of certain value3. Trover: value of item, not item itself. Opposite of replevin.4. Converter: taker, not finder.

5. Court says value of jewel is low to incentive D to give back jewel to finder. That way, D will not be persuaded to give damages.

6. True Owner > Finder > Converter. 7. Hypo: P stole jewel, jewel fell through pocket, D finds. D now owns and acts

as first finder. P was original converter.8. Policy for Sequential Posession Rule:

a. Not having Finder > Converter would mean lots of self-help of First Finder to erect walls and protections against subsequent finders.

b. Keep ownership chain as close to original owner as possible, as opposed to allowing subsequent ownership.

c. Also easier to keep title claims as close to orginal owner as possible.

d. Two questions to answer: Who is finder/converter, and what is sequence of possession?

9. Property right in Armory is in personam, which are cases between people, not abstract controversies. Property rights in general are against whole world (in rem).

10. Japanese alternative: legislative system to educate people to turn in lost property for reward.

B. Clark v. Maloney: P found pine logs floating downstream. Holding: First finder wins over second finder. Avoid excessive self-help and protectionism. Easier for true owner to find. 1. Original loss does not change absolute owner’s right, so subsequent loss does

not divest property from original owner.2. Though Armory doesn’t discuss F1 versus F2, the reasons for Armory (policy

for sequential possession rule) explains why F1 > F2.C. Anderson v. Gouldberg: Where (on whose property ) was timber cut?

1. One who acquires possession of property, even through tort of taking property, has right to retain that posesion against mere wrongdoer who is stranger of property. Otherwise, endless series of unlawful seizures and reprisals. P’s title is good against everyone except true owner.

2. Third party (jus tertii is original owner) cannot set up title as defense to trespass for disturbing possession of first finder.

3. Between 2 converteros, the first converter wins. Armory policy: keep the chain of true ownership short; prevents self-help amongst thieves.

XIV. Competing Original Acquisition PrinciplesA. Fisher v. Steward: First Possession vs. Accession: P found bees on D’s land.

1. Rationi soli has less force in U.S. than in England:a. More inequality in land holdings in Englandb. Larger holdings of land in U.S. fewer boundary disputesc. Frontier uncertainty in U.S. precludes use of rationi solid. Exception: Rationi soli applies to bees because bees belong to land, not

the same thing as wild animals that roam. This encourages cultivation of nearby flowers by landowner.

e. Markings (whether bee trees or whales): sufficient for first possession if that was all you could do under the circumstances (like in Ghen).

f. Cannot introduce evidence of local custom; custom must be statewide because too hard otherwise to delineate limits. Also, custom would solve this problem before it got to the courts, so clearly custom is inadequate.

g. Trespassers lose, so P who found bees by trespassing loses.h. Hypo: P owned and cultivated bees, bees fly away to D’s land, P goes and

gets them back. P should get bees because rationali soli applies to bees and bees are stationary.

B. Hannah v. Peel: Highwater mark for Finder’s Rights1. D Peel owned but did not occupy house. P Hannah stationed at house and

found brooch.2. Finder wins because true owner was never found and landowner does not own

it.3. Exceptions to General Rule That Finders Win (regardless of on whose

land)a. Owners take possession of objects already attached to or under the

land.b. Employers/ agents lose. Finder finds it not for himself but for employer.c. Trespassers lose.

4. Mislaid = intentionally places somewhere and forgets it; landowner where object is found wins.

5. Lost = owner is unaware of losing possession; finder wins.6. Hannah requires all 3 exceptions of rule to justify why the landowner would

win with these facts. (Finder actually wins because this is highwater mark.)

First possession: first to possess unclaimed thingCreation: first to possess some new or novel thingAccession: possession of second thing is possession of firstAdverse Posession: rights of original owner are extinguishedSequential Posession: prior possession priviledged in lawCompetion Acquisition Principles: which is more compelling in any context?

Brief summary:

Policy Property: signaling, good faith, context alters possession, custom is always an option (insider advantage, line drawing boundaries, impossible claims), property for some purposes but not others (INS).

Property Remedies: taking, Japanese salvage awards, split fees, small group institution, finders fees. Body parts are further outside the circle.

XV.What Can Be Property?

XVI. Body PartsA. Property and the Human Body

a. Moore v. Regents of the University of California: No conversion right in cells because informed consent is sufficient. Legislature should create new right if they want. Courts punt with uncertainty. Judicial conveyance of right would make every single cell sample out there litigation.

b. Majority: No property because want to preserve innovation benefit.c. Dissent 1: no property because morally people shouldn’t sell body parts.d. Dissent 2: yes property because Ps need recovery rights.e. Dissent 3: yes property because want to be fair to patients.f. Settlement for conversion claim > settlement for informed consent.g. Jacque-style property right insufficient for innovation because of

asymmetric investigatory resources.B. Midler and Right of Publicity: When singer’s voice is distinctive, sellers have

appropriated an identity.1. “Likeness” in statue refers only to actual voice or image. Removed to fed via

diversity.2. Courts have narrowly recognized property rights in publicity via common law.3. Kozinski dissent: right for Vanna White is in what she does for a living; this

decision for Vanna White impoverishes the public domain.4. Midler – yes right b/c voice is personal. Vanna White – yes right b/c body is

personal. Tony Gwynn – no right to baseball hitting methodology. Fantasy Sports – no right b/c likeness restriction applies. Sheldon and Mr. Bray – no right b/c no intent. Info costs?

5. Reasons to have Publicity Rights: profit, artistic value, consumer deception, reputation, labor.a. Strict signaling is not ideal b/c winners would be rich famous people only.

Balance need for clarity with need for certainty.b. Body parts and publicity are at outer edges of property. Property rights

that emerge are limited in some uses.C. Demsetz: as asset value increases so does pressure to create property right

1. What is externalit? Cost that decision-maker does not bera and imposed to third-parties. Bray says include only negative externalities.

2. Property rights develop to internalize externalities, when the gains of internalization are larger than costs of internalization. Property rights emerge when benefits of forming those rights are larger than the costs of forming those rights. Ex: fur trade. Great value eventualy to propertize and not overhunt.

3. Benefits of propertization: creates incentives, collective action avoids wasteful races and depletion of resources, easier to bargain with one person rather than everyone in whole group

4. Costs of propertization: definition costs (surveys and patent costs), monitoring and enforcement costs, deters creativity especially when sanctions are high

5. Predictions: as property values increase, so does propertization created by courts and legislatures.

D. Radin: Personal Property vs. Fungible Property1. Different people have different relationships to property. Jeweler’s

relationship to wedding right is different from wife’s relationship.

2. Self investment in property can be good or bad. If one invests self in property, should do so morally and avoid sin.

3. Penner’s Separation Thesis: things do not become property until separate from self, like hair cuttings.

4. Property vs. Property for Personhood: lack of personal connection DOES NOT IMPLY that there is no property. Notepad is still mere property, though it is not property for personhood.

5. Personal Property --- Fungible Property6. Implications: takings and eminent domain require just compensation that

includes sentimental value because of property for personhood, not just market value. Morality is also majority consensus consideration.

E. Radin v. Demsetz:1. Demsetz offers positive, descriptive theory. Radin offers normative theory of

how to think and disapprove of property.2. Demsetz says we should use property framework; this is a normative

imperative. Radin’s normative theory relies on commonplace positive descriptions. Demsetz can include Radin’s theory in nonpecuinary externalitites.

F. Use both Demzets and Radin on edge of property. Consider moral args, policy args, and punting to institutions.

XVII. WaterA. Evans v. Merriweather: upstream mill owner builds dam to hoard water during

drought. Use English Natrual Flow Doctrine and say that mill’s water must be returned to stream.1. Domain: surface defined chanel of water. 2. English Natrual Flow Doctrine: any material interference with downstream

rights is forbidden unless downstream owner consents. Applied b/c English use is non-consumptive and there were few droughts.

3. American Reasonable Use Doctrine: wide contextual facturs are relevant.a. Expansive social benefit maximization, but uncertain as to reasonableness.b. Ways to overcome uncertainty of “reasonableness”: narrow / domestic

uses versus artificial / nondomestic uses; let jury decide in personam.(1) Non-domestic: must consider reasonableness(2) Domestic uses: do not have to consider reasonableness

c. Usafructory Interest: right to peaches /= right to chop down peach tree. Limited right to use.

d. Water is outside core of property, use nuisance conception. B. Coffin v. Left Hand Ditch Company: portion of dam was torn out; claim for

trespass and injunction to leave dam alone. Trespass affirmed through Prior Appropriation.1. Prior Appropriation: first-in-time approach wins. First person can

unambiguously take all water, as long as use is beneficial. (Flooding gophers is not beneficial.)a. Narrow and extreme form of reasonableness. Natural Flow Theory

disregards reasonableness the most.

b. Incentive to waste: pull out just to create property right2. Under English Flow: Coffin’s dam disrupts natural flow.3. Under American Reasonable Use: preserve incentives to build dam and

reliance interests of original owners.4. Under Prior Appropriation: first possessor has incentive to get water out; Bray

says this might be short-sighted.5. When to use? When water is less valuable, use American Reasonable Use.

When water is very valuable, use Prior Appropriation.6. Natrual Flow > Reasonable Use > Prior Appropriation.7. Carol Rose: different doctrines apply b/c of different historical needs in East

(water not important) to arid West (water very scarce).

I. Navigable WatersA. Roman Law: right to air, water, sea, and shores of sea

1. No reason to have individual property between high tide and low tide; discourage investigating and investing

2. 2. Value of making it public increases because everyone can help with common use of the water.

B. Common Law: 1. Any public can travel by vessel on navigable water Need access from North

Sea to London. Manage assembly problems.2. Right to fish in navigable waters. Prevents self-help and minimize disputes;

morally right to allow small fishermen to fish, but results in overfishing.3. Land beneath navigable waters was owned by crown because there was

sunken treasure.4. Disputes over navigable waters are decided by Royal Admiralty courts

because they have more expertise.C. U.S. Rules

1. Navigable waters include inland waters like Mississippi2. Fed v. States as opposed to King3. Appeal to Constitutions’ limits on public behavior4. Otherwise, same as English Common Law

II. Navigable AirspaceA. Federal gov’t has servitude to allow airplanes over state airspace. Fed servitude

wins over state appeals to ad coelom.

III. Public Trust: though state holds title to navigable waters, U.S. holds public trust for people to enjoy waters free from interference of private parties.A. Illinois Central Railroad: state never had right to alienate railroad. Policy: to

prevent corruptions and sweetheart deals.1. Exception: interest in navigation can include erection of docks and piers, for

which purpose the state can grant parcels of land.2. Professor Joseph Sax on why Public Interest in relevant to environmental law:

a. Can be used to stop environmental destruction and private developmentb. Does not stop government development

c. Democracy problem: applies to all federal land. Cannot be so broad as to prevent federal terrorities’ formation outside the original 13 states, but cannot be too narrow as to preclude gov’t use of White House and Lincoln Memorial.

B. Easements: adverse possession USE of land, not possession of title.C. Oregon: Custom of public use wins over private D’s request to build fences

1. Custom of using dry land for centuries is so prevalent, state should be able to police.

2. Alternatives to custom: (i) prescriptive easement line – requires showing of use; (ii) implied dedication that landowner wanted to grant access – legal fiction because no reason to litigate; (iii) public trust doctrine in dry sand area – unclear managing device. So because of these difficulties, use Custom.

3. All seas and shores treated uniformly under custom.4. Blackstone’s Requirements for Custom:

a. Law must be ancientb. Right exercised without interruptionc. Customary right is peaceable and free from disputed. Reasonable use of lande. Visible boundaries of dry-sand are and character of landf. Custom is obligatory, not optional for each landownerg. Custom must not be inconsistent with other customs

5. Demsetzian increase of beach property value today increase propertization

Bray’s Points on Policy:1) Contexualize policy reccomendations to specific situations.2) Play through multiple iterations to see result of rule.3) Compare policy proposals to alternative legal recimes.4) Use both economic and moral arguments.5) Demsetz is positive, Radin is normative. What is the prediction?6) Use labor arguments. Compensating past work < Future Incentives < Personal

Autonomy.7) Too private to be property (internal organs) ----- Too public to be property

(harbor). Bilateral monopoly args apply to private property; assembly args and monitoring costs apply to public property.

8) Recognize limits and exceptions to doctrines.

Policy for Criminal Protections of Property1) Underenforcement of property rights if merely left to civil enforcement2) Reduce self-help and violence (esp. from people outside legal system)3) Insolvent Ds are caught inside system4) Punish / externalize harm to society5) Criminal law expresses societal values of autonomy, dignity, property

XI. Trespass to Chattels: Olivo and Right to ExcludeA. Shoplifter caught with goods inside store can still be convicted for larceny.

B. Larceny = (i) intent to steal; (ii) exercising control inconsistent with owner’s rights, (iii) movement or asportation

C. Evolution in law away from strong property rights towards protection of peace.

D. (iii) is brightline, (i) and (ii) are based on social norms. Brightlines necessary to deal with strangers.(iii) also gives you a chance to stop.

E. Fact-dependant, normative cases depend on jury deliberation. Danger of insider-advantage.

F. Trespass to Chattels = interfere with property in some manner short of conversion while P remained in possession. Ex: hacking.

a. Does not require removal of object.b. Does not need to prevent-self help like in land, because chattels are

movable so burden of moving chattels is small.c. Must show harm, unlike trepass to land.

G. Trover = conversion; wrongful conversion of P’s goods to D’s use.a. Conversion requires dispossession from owner.

H. Trespassery Taking = no permission to have object. If have permission (like in coat check), then no larceny.

I. Hypo: bag with false bottom. No asportation.

X. Intel v. Hamidi: former employee spammed Intel system with angry emailsA. Majority Court: There must be damage to property, and precedent courts have

found that all previous damages from trespass to chattels via email have involved spam. The damage there is from the sheer amount of spam processed. Here, Hamidi’s emails did not cause harm because did not force new computers.

1. Creating new property right would result in increased costs to ease of communications.

B. Dissent: harm exists in lost employee productivity. Analogize new technology to Moore and new body rights. Do not want to discourage IP because cannot protect it.

1. Balance costs of spam with costs of prohibitive, absolute property right.C. MPC: possessor of property can use reasonable force to prevent unlawful

trespass or carrying away of property.D. Right = others owe you duty. Priviledge: right to act without interference from

others.E. Institutional choice to legislatures?F. Nuisance model: is spam reasonable? If so, how much?G. Parcelize cyberspace just like navigable waters?H. False job ads on Craigslist are illegal emails.

I. XI. Limitations on Right to ExcludeA. Necessity: only permissible if you are in snowstorm and about to die. Can only

enter cabin and eat minimal amount. Compensation required; cannot be prosecuted for trespass: Test: if you would rather be sued for trespass than not break in.

B. Custom: weak claim for trespass; subordinate to more formal law.

1. McConico: contemporary law does not require showing of harm. Custom wins because hunting on unenclosed land is very important to people of this time and age.

2. Policy for Custom in 1818: (1) subsistence hunting is necessary for distributive equality. (2) solves assembly problems of bargaining during hunting. (3) Radin: personal investment in occupation. Demsetz: custom is sufficient proxy for law and clear delination of property rights where this land is unoccupied and unsuitable for farming. Also, costs of uninhabited farming is low because the current value of the land is low.

3. This custom disadvantages outsiders who are not white males that can hunt.4. Modern “no trespassing” signs decrease transaction costs of assembly

problems.5. Custom informs law of trespass. Of course, custom changes over time (ex:

beaches).C. Innkeepers and Public Accommodations: usually, cannot exclude.

1. Policy: decreases monopoly power of innkeepers to charge monopoly rents2. Duties: (i) must provide service if available; (ii) can only charge reasonable

rates3. Fed and state public accommodations laws may be different and prohibit

specific types of discrimination.D. Public Policy: Uston v. Resorts Hotel (card-counting)

1. Common Law: if Uston is disruptive, then can exclude. Court punted to federal commission to decide if disruptive; this narrows common carriers’ rights to exclude.

2. Agency Capture is risk of setting up agency with better expertise.3. Uston is like Hinman in nuisance conception. Right to property subordinate to

reasonbale use. No right to arbitrarily exclude; exclusion must be reasonable.4. Application to cyber poker games.

E. Fair Housing Act and Anti-Discrimination1. (a) prohibits refusal to sell to [list of protected characterisitcs]2. (c) prohibits advertising to indicate preference to [second list of protected

characteristics]a. Mrs. Murphy Exception: if owner lives in one of the living quarters with

four or fewer families, then Fair Housing Act does not apply. Mrs. Murphy exception allows you to make your own decisions. This exception does not preclude Subsection C.

3. Using language as proxy for national origin is also violation of statute.4. “Can only speak XYZ language” is allowed because landlord may only speak

that language; better than “cannot speak XYZ language”.5. Application to choosing roomates over online ads. Can be sued if exclude; not

otherwise.6. Bray’s Points on Anti-Discrimination and Fair Housing Act:

a. This is an example of modern evolution of limitation on right to exclude.b. Institutional choice of complex statutes.c. Federal antidiscrimination law is only baseline prohibition on rights to

exclude; states and local govt’s may have additional requirements.

d. Civil enforcement is underenforcement because of high information costs in ascertaining which antidiscrimination laws apply and if they are violated.

II. BailmentsA. Decrease self-help and erection of barriers. Favored over contracts and criminal

theft.B. Bailments = empower bailee to act as owner in several waysC. No Bailment (Rhodes): open lot, no ticketed entranceD. Yes Bailment (Allen): attendant never parksE. Yes Bailment (Scruggs): garage, usually attendant doesn’t arkF. Yes Bailment (Dispecker): covered garage, sufficient delivery of possession and

control by giving car to bellboyG. Payment is compensation for (i) parking space convenience, (ii) insurance against

stolen car. Services offered are reflected in prices charged.H. Will move to extremes if high prices aren’t justified by security. I. If transaction costs = zero, parking lot owner is better suited to bera cost of

protectionJ. Today, courts are stricter when bailees misdeliver goods than when goods are

merely lost or stolen while in custody of baileeK. Allen v. Hyatt Regency: car stolen in parking garage

1. Bailment Transfer = (i) delivery, (ii) relinguishment of possession, (iii) acceptance of transfer

2. Bailment is for sole benefit of bailor = law requires only slight diligence and baillee is only answerable for gross neg

3. Bailment is for sole benefit of bailee = great diligence on part of bailee, who is responsible for slight neglect

4. Bailment is reciprocally beneficial = ordinary diligence and bailee is responsible for ordinary neglect

5. Today: universal standard of reasonable care, including whether there was compensation or whether bailment was for bailee’s beneift

III. Abandonment & DestructionA. Ponoco Springs: P said lot was worthless and wanted to stop paying taxes.

1. Abandonment = voluntarily relinquishing all right with intention of terminating ownership, but without vesting it in any other person

2. Abandonment not allowed. Application: owners still have perfect title.3. Policy: real property cannot be abandoned. Duty to not environmentally

harm. Incentive to investigate and develop.4. Nuisance conception: not allowed to do something that you want with

property. 5. Being property owner bestows both rights and duties like no environmental

hazard.B. Eyerman: property owner wanted to raze home and sell land; people living in

subdivision on home claim public policy.

1. Holding [NEGATIVE EXAMPLE}: conflicts with morals of time and is merely capricious. General rule is can destroy own property, but uncertainty of post-death actions will affect choices during life.

2. In trespass conception, can destroy without giving reason.

IV. Future InterestsA. Fee simple = full ownership foreverB. Life estate = full ownership for life of original owner. “Life measured by original

owner” = pur autrie vieC. Remainder: after life estate, interest goes to another personD. Reversion: after life estate, interest returns to original ownerE. Lease: partial interest in estateF. Historically, exchange protection and land for services and tenures

1. These interests were usafructory (cannot sell or leave to heirs)2. In rem = against whole world

G. Modern analogy of broadcast licences.1. Initially must apply for 3 year inalienable license . Promise of protection in

exchange for services like public programming.2. 1980’s: expectation of renewals. Sale of license is always permitted, and can

be divided. Obligations are diminished and becomes like private property.3. Like feudal estates, deregulation is motivated by political pressure and

political power shifts.H. Rule Against Perpetuities: cannot put qualifications on will that will control

property after he or she has died. Cannot have qualifications that will exist 21 years after the death of lives in being. If so, then those parts are void.1. Not malpractice to misapply Rule Against Perpetuities

I. Lessons of Fedual Tenure:1. Property in law has limited forms (customization, life estate). No

customization allowed, because would otherwise increase costs for everyone else.

2. Constant Quantum of Ownership: can’t abandon real property because William didn’t want barons to abandon property and not give knights

3. In personam = contractual. In rem = against all.4. Political power shifts is alternate explanation to Demsetz’s increase in

property value.5. History gives you ammo to critique historical root of rule and to proeprsize

future rule formation.

V. WasteA. Brokaw: Cannot remove structure because life estate holder must preserve land

for future remainder interest. This is despite the fact that developments will increase the value of the land.

B. Types of Waste1. Affirmative waste: unreasonable and causes excess damage to reversional

interests.

2. Ameliorative waste: increase in market value. Original owner is entitled to get property in original form.

3. Permissive waste: life tenant unreasonably fails to take action and causes excess damage to reversion

C. Can remove structure if surrounding context is extremely modernized (Pabst)D. Policy to Punish Waste: to internalize costs to owner who does not have to suffer

conseuqences of their waste. To deter people looking specifically for waste instances, cabin the possible plaintiffs by justiciability, merit of claim, remedies sought.

E. Takeaways from Waste:1. Waste mediates conflict when interest in land is divided over time.2. More nuisance-style than Jacque style; ability as life estate owner is

constrained.3. Permanent injury to estate is waste. Must protect remainder.4. Exception for completely changed circumstances. Pabst – sufficient change in

environment. Brokaw: insufficient change in environment.5. Asymmetry with adding and subtracting. Adding is more permissible than

subtracting.F. Restraints on Alienation = restriction on ability to alienate by selling, giving

away, or devising.G. Morse: Man cannot restrain wife’s right of alienation because would void policy

of efficiency1. Policy for some restraints on alienation: some restraints like land to minor or

to town for library, are sensible. Power to alienate makes owners more willing to depart with burdensome ownership obligations. Right to transfer is more efficient; free alienation allows society to change assignment. Less friction than adverse possession or contracts.

2. Policy for not having all restraints on alienation: not efficient, destroys owner autonomy

3. Can define class of people to sell to; cannot define class of people to not sell to. Condition is okay unless it substantially takes away whole power of alienation.

H. Body parts require restraints on alienation. Moral discomfort with right to sell body parts.

VI. Co-OwnershipA. Evolving towards trusts and corporationsB. Tenancy in Common: multiple owners. Interests in undivided whole. Interest can

be sold or passed in will. The only required unity is Posession.C. Joint Tenancy: same as tenancy in common, except for Right of Survivorship

where deceased’s rights go poof. Nothing passes. If Unity is destroyed, then joint tenancy is severed and Tenancy in Common is created (partial right of exit through severance without using partition).1. Time: each interest must be acquired at same time2. Title: each must acquire title by same instrument

3. Interest: each must have same legal interest in property, though not same fractional share

4. Possession: each must have right to possess the whole.D. Joint Tenancy is only appropriate for intimate relationships. Avoid probate.E. Straw transactions: sell to X and buy back to sever joint tenancy.F. Tenancy by Entirety: joint tenancy with unity of marriage.G. Community Property: property gained in marriage belongs to both couplesH. Internally appears as commons; externaly as Jacques. Cannot use Levithian b/c

there are multiple owners, and cannot use privatization because interest is in undivided whole.

I. Love it or Leave It: partition = automatic right to terminate cotenancy at any time. No reason needed to use this judicial remedy b/c admin costs are too high.1. Ouster is extreme outlier.2. Contracts requires trust.3. Co-owner can claim waste and Life Estate Holder infringing. Wate action is

more permitted for preserving future interest holders b/c they have high monitoring costs as opposed to current owners. Also, incentive for current life estate owner to waste is larger.

J. Delfino: P wants garbage business, but D wants apartment complex development. Garbage business will decrease land value.1. Coast: if transaction costs are zero, then build apartment complex and pay off

trash business owner since pie is bigger. But Radin has other additional transaction costs of entrepreneurial value from garbage business.

2. Partition in kind: carving up land itself. But still doesn’t solve decreased value due to garbage business.

3. Partition by sale: sell whole land and carve up $. Does not include sentimental value.

4. Trend towards partition by sale b/c: increased fungibility, less attached to soil, difficult to divide undivided assets that are useful only when whole (like house).

K. Owelty: make up any slight differences from imprecise partition by using cash payments

L. Harms v. Sprague: Joint tenancy IS NOT severed when less than all of the joint tenants mortgage their interest in the property1. Sprage takes bank loan and gives land as collateral. John Harms cosigns

Sprague’s bank loan and land claim promise. Sprague wants half of Harm’s land, and gets it by being willed party from John Harms. If land is tenancy in common can leave to Sprage. If land is joint tenancy no land to Sprague.

2. Mechanic’s Lein: mechanic gets lein and promised first $30,000 when house is sold until remodeling fees are paid off. Title does not change.

3. Can harm William Harms if joint tenancy is severed; or harm informal mortage lenders if joint tenancy is not severed and William gets everything and mortgage obligation goes poof. a. Future mortgage lends will be more sophisticated to make sure that boht

owners sign.

M. In re Estate of Filfiley1. Daughter vs. Stepfather after mother dies. 2. ½ jursidctions: if take more than moiety tenancy in common. But not

practical when need to withdraw lots of money!3. ½ jurisdiction: if take more than moiety still joint tenancy and other co-

owner has claim b/c mom’s interest poofs4. Moiety = equal share, typically half, of account5. Partition is extreme solution to conflict6. Common law of joint tenancy persists into staturoy world7. Must harm someone8. Money is not as god fit under joint tenancy as land is easily divisilble.9. Money is more nuisance.

N. Co-Owner Conflicts1. O’Brien: med liscense is at boundary of what is property. Can always treat as

property for some purposes but not others. Ex: license is exclusive but not sellable.

2. Concurrence: future realized value of marital property is hard to determine, so damages may be readjusted in time.

3. Policy behind Equitable Distribution Laws: protect poorer spouse, do not divide based on current earning power.

4. License is martial property because there is nothing else. Lisence is therefore subject to equitable division. We can value the license, regardless of martial fault.

5. Statute says must consider career potential in valuation.6. This decision leads to more certainty of valuation and better line drawing.7. Econmic partnership is an easier instrument towards achieving fairness.8. License as martial property is standard, not rule.

O. Marvin1. non-married couple filing for implied contract. Contract was both oral and

implied. 2. Void = from beginning there is no effect. Null.3. Voidable = permitted by someone can step up and say no.4. Contracts for prostition are void as matter of public policy.5. Marriage = community property; Non-Marriage = contract or no contract

depending on customizability6. Options for Marvin

a. All co-habiting couples have community property rejected b/c of uncertainty

b. Contracts are unenforceablec. Contracts are enforceable and there is equitable remedy like convertible

trust7. Google Books

a. Actual negotioans are different bc of different personalitiesb. Fair Use: would be violations except for their use like negative book

reviewsc. Which bucket to put Google Books in?

(1) Copyright owner had limited set of rights that are excludable(2) Things that buyers of copies can do(3) Public Domain: anything anybody can do, such as SNL or parodies

d. Google alleges Fair Use because: only uses snippets, despite the fact that the entire book was scanned

e. Copyright Incentives(1) Information is non-rivalrous(2) Open Access / Commons: best way to distribute already-existing

information and encourage creativity(3) But getting the creation I the first place requires exclusivity and

copyright; strong property rights to incentivize vs. benefits of open acess for takeaways

8. Takeawaysa. Can use property-like systems to settle negotaionsb. Courts are concerned with antitrust

VII. IFQsA. Problems with Command-And-Control Approach:

1. Unintended consequences like concentrated fishing2. Restrictions are indirect proxies like boat size3. Wasteful races to capital at labor’s expense

B. Reasons for Command-And-Control Approach:1. Lower transaction costs than alternatives2. Lack of distribution problems3. Most obvious response

C. Reasons for Failure of Regulatory Approach1. Difficult to centralize knowledge2. Unintended consequences3. Political pressure and lobbying4. Rachet Effect: overuse now as opposed to future intersts

D. ITQs are social institution solution. If not mandated by government, results in ntitrust and lack of enforcement.

E. Strengths of ITQs:1. To conserve for future use2. To innovate and try new techonologies3. To trade4. Quotas require less information and experts

F. Weaknessness of ITQs1. Definition and enforcement costs are high2. Political pressures and lobbying; antitrust concerns3. Distribution inequality among fishers

G. Alliance Against IFQs v. Brown: are reulgations for implementing fishery management plans in Alaska arbitrary or capricious?1. “3 years in past” not capricious because the alternative of using present time

will lead to wasteful races

2. Easier to measure boat’s output rather than individual output, but this is imperfect proxy

3. Holding: admin costs too high; quotas are upheld4. Access Application; prior fishers have invested and so are favored5. Lyman: hard to set up in US because there are so many vetos6. Works bettr with heterogenous fishers

H. Lessons1. Faults and benefits are relative to alterantive schemes2. No single answer: ITQs are not categorically better. Migratory vs. sedentary

fish require different solutions.3. Use history because of personal connections.4. Private vs. Public is not crucial distinction; all are intertwined.

VIII. LeasesLife Estates LeasesGratuitous transfers Periodic rentFew itneractions More interactions

Landowner has more management and control, more interest in land’s useLandlord’s future interests is longer b/c lease term is shorter than life estateSpecialization of maintaining common area and individual units

Lease vs. BuyFarmer in 1600 Lawyer in 2016 Entreprenur in 2016No specialization with leases

Specialization of maintaining premises

Speicalization is valuable

Lease serves as financing device, if lacking capital

Capital is less with new job

Less capital b/c new entrepreneur

Buying loses chances to diversity

Risk-spreading of new move

Risk-spreading of newventures and surrounding business worth

Factors include: lease as financing device; risk-spreading lease; lease offers specialization; lock-in rates if buy. (May want to buy to prevent higher charges in future.)

A. Types of Leases1. Term of years: for fixed time, no notice of termination

a. Ex: L agrees to rent until next year.2. Periodic tenancy: rolls over; notice required.

a. 6 months notice at common law; takes effect after next year’s dateb. Ex: year to year, notifies that lease will terminate

3. Tenancy at will: can terminate at any timea. Ex: L leases to T for duration of war.

4. Tenancy at sufferance: holds right of possession after right had ended; original tenant’s entry was not wrongful

B. Paradine1. L owes covenance of quiet possession to T; T owes covenant of rent to L. 2. Can sue for rent, but cannot take away possession.3. Can sue for house and quiet posesion, but must still pay rent.4. D Farmer claims that invading army prevented him from paying rent.

Holding: must still pay rent regardless of posesion.5. Independent Covenants Mode:

a. If comvenants are connected, then would never overcome disagreement between T and L as to degree of external interference

b. Tenant is in full control; is residual claimant and experiences all highs and lows. Tenant is better equipped to control. Tenant assumes all risk. Minimizes admin costs of reimbursement, if quality of possession changes.

c. Works well for agricultural business of risk-spreading and financing.6. Smith v. McEnamy: the ONE BIG EXCEPTION to Independent Covenants

Modela. Wall evicted tenant by coming over a few inches. 2 covenants owed by

tenant: rent and duty to repair.b. If Landlord prevents possession like through eviction, then tenant does

not have to pay rent. Exception only applies to rent covenant; duty to repair still exists.

c. Evicting a little is evicing the whole. (rule de minmus)d. Degree of interference is important, regardless of minimum interference.

Must consider good faith.

IX. Implied Warranty of HabitabiltyA. Javins: IwH is implied in leases of urban dwelling units.

1. Do not want to claim illegal lease, because Ps want a habitable lease.2. Reasons for Change to Dependent Covenant Model:

a. Factual assumptions have changed (landlord has managerial function today)

b. Consumer protection analogyc. Unequal bargaining power

3. Why Leases are More Like Contracts Than Property: right of possession of interests. Decent living and excludability.

4. IwH is not excludable. Mandatory rule. (as opposed to default rule in background that is subject to customizability.) Otherwise, landlord would disclaim IwH in every written contract.

5. 1 or 2 minor violations are de minimum and do not entitle tenant to reduction in rent.

6. Remedies: jury decides damages and violations b/c fact-specific perofmrance of landlord’s repair.

7. Attending Doctrines that Respond to Each Other:a. IwHb. Illegal Lease Doctrine: if property is unsafe and unsanitary, then lease is

voidc. Doctrine of Retalitory Eviction: landlord cannot retaliate against tenant for

reporting violations B. Consequences of IwH

1. Added IwH is cost that increases demand and decreases supply. Rents rise and supply falls.

2. Added IwH would not change rents b/c sunk investment. Implied rent control b/c supply of housing is inelastic.

3. Craswell: marginal consumer = paying up to WTP; inframarginal consumers = enjoys consumer surplus, willing to pay more; landlord are suppliersa. Landlords are better off when rents increase > inframarginal are better off

b/c apartments are better maintained > marginal consumers are priced outb. Application: broadband internet. Part of IWH would increase

inframarginal surplus and price out marginal consumers. c. Application: parking spaces: decision to have car will decrease, and

increasing parking requirements for housing would increase price.d. Other factors: rent control and enforcement costs.

4. Summary points:a. Shift to Dependent Covenant Modelb. Legislature > courts in leasesc. Distributive effects: moral fairness v. economic arg.d. Resistance to moving property to contracts

5. Remedies of Breach include: vacate lease, specific performance or damages, or % reduction of rent

X. Leases v. Co-OpsA. As compared to leases, co-ops have no risk-spreading or financing. Also, co-ops

lack managmenet and specialization. However, both have excludability.B. Reasons for Increasing Condos and Co-Ops

1. Leases cannot write-off rent. Condos can write off mortgage deducions.2. Condos and co-ops evade rent control by buying.3. Condos and co-ops are picky and some people like that.4. Interior design increases condos over partments.5. Some like condos/co-op’s internal governance.6. Condos are one way for government to abdicate burden of street maintainince

to subdivisions.C. Demsetz: does not explain the rise of co-ops. It was fee simple or lease property

before, simply new property now. Demsetz works better for economic stories than political ones.

D. Raind: lease to condo could increase attachment.E. Co-Ops are not really new form of property. Merely corporation adapted to

building. Legislative action creates condo form of property.F. Nahrstedt: homeowner sued association for preventing pets.

1. Statute: enforce CC&Rs (covenants, conditions and restrictions) when reasonable.

2. Rules set in Declaration Prior to Purcahse, OR a. Either Presumptively valid (condos almost always win) – equilibrium 1 orb. Invalid b/c (i) arbitrary, or (ii) imposes excessive burdens, or (iii) violates

public policy3. OR Subsequent Ex-Post Board Decisions

a. Always Reasonable is categorical b/c:(1) Preserves expectations(2) Minimizes litigation expenses; tenants can always threaten lawsuits

and get their way – equilibrium 24. Dissent: presumptively valid means that almost all CC&Rs are valid

G. 40 West 67th Street v. Pullman: Pullman was extremely objectionable neighbor.1. “Objectionable Conduct” decided by:

a. Business Judgement Rule – deferential standard to let board make any substantive decisions as long as proper procedures are followed.

b. Statute of RPAPL where co-op must prove that tenant is objectionable. Usually governs relations between L&T.

c. Real Property Rule is standard, but Business Judgement Rule is way to satisfy that standard.

d. Court more likely to be deferential to co-op since factors are so extreme. Further scrutiny justified by tenant’s action if board acted (i) outside scope of authority, (ii) in a way that did not legitimately further corporate purpose, or (iii) in bad faith. Here, all 3 are satisfied.

e. Burden of proof of good faith = shown by absence of bad faith.H. Takeaways

1. When standard of review is Business Judgement Rule (more deferential to co-ops), all 3 factors for furher scruity are almost automatically fulfilled.

2. Emphasize procedure to make winning more likely. To court, procedures’ import > substantce’s import.

I. Shareholders in corporation can sell if they dislike board’s decisions, but tenants in co-ops cannot easily sell if they wish to exit. This is reason to limit applicability of Business Judgmenet Rule to co-ops.

J. New forms of property with condos and co-ops; co-ops are almost exclusviley found in NYC.

K. Most cases involve ex-post disputes about governance, not upfront CC&Rs.L. How those ex-post cases are resolved affect ex-ante choices about entering

condos or co-ops. M. Ex-post abuses by either Board or Individual mean that court must choose which

standard of review and thus which party to show deference to. But, tradeoff is that it’s harder to police that party if give them lots of deference.

XI. TrustsA. Management v. Ownership Interests that are Non-Posessory

1. Beneficiay /= trustee manager

2. Ex: Trustee managing apartment building gives earnings to beneficiary. Beneficiary cannot live in building.

3. Ex: Stockholder is beneficiary but cannot manager or possess company building.

B. Settler = person who creates interest. Owns some property to be conveyed.C. Trustee: manager with good judgement. Fee simple against world + fidicuary

duties. Requires freedom for discretion.D. Beneficiary: younger with fewer assets. Unable to manage resource. Recives

periodic distributions of income. E. The only limitation is for sole trustee to serve as sole beneficiary. Trustee can act

as full owner and buy, sell, etc. F. Trusts can be created by will or inter vivos transfer of assets.G. Functions of trusts: to give assets across generations, or to form charities.H. Statute of Frauds: trusts must be in wrting.I. Without trusts, there would be fewer gifts. J. Legal Title = owned by trustee. Alienable powers.K. Equitable Title = beneficiary interest owned by beneficiary. Trustee cannot abuse

power.L. Trustee’s compensation could be filial duty or payment. M. Trusts are generally in rem. Trustee genereally has fee simple, do not need to

know identity of beneficiary.N. Rothko: 3 trustees mismanaged settlor’s paintings. Beneficiary sought to keep

everything in estate.1. Paintings sold one time with high commissions of 50%.2. Identifies first big problem of trusts: principal-agent problem, here setllor-

trustee problem. O. Wilbur:

1. Identifies second big problem of trusts: changed circumstances.2. Trend: cy pres becoming less suspicious. Must find general intent of charity

before cy pres can be applied; existence of charitable donation /= intentP. Summary of Trusts

1. Trust developed in equity b/c difficult to pass land to children2. Legal vs. equitable title (beneficial interest)3. Fiduciary duties4. Separate management from non-possessory interests5. Principal-agent problem. How does settler control? (Rothko)6. Changed circumtsances (Wilbur and cy pres)

XII. Notice and PosessionA. Irons: intent to relinquish + possession + delivery. There exists an oral gift, but no

delivery. Delivery is required to signal ownership to world and guard against false claims or disclaims.1. Trover for 2 colts. There must be delivery for gift.

B. Limits on Jacque-style exclusions: adverse possession, public necessity, custom, innkeepers and common carriers, anti-discrimination stattues, canot create new

estate sin land, cannot impose restraints on alienation, cannot destroy in some circumtsances, delivery requirement of gifts

C. Valid Gift = intent to relinquish possession + deed or deliveryD. Wills Act:

1. Will must be in writing2. At least one distinerested witness3. Sometimes, signature must be notarized4. Exception 1: holographic wills, written by hand5. Exception 2: gift causa mortis (in comtemplation of death)

a. Made with view to donor’s present straitsb. Must die for gift to be bestowedc. Must be delivery

6. Policy for Wills Act: prevent coercion and fraud, reduces disputes and maintains common record, solemnity encourages seriousness of transaction

E. Foster: There must be delivery, not just a letter.1. Informal writing of desire does not constitute formal delivery. If husband had

handed items to wife and she had handed back, would have counted as delivery. Assets must be delivered, not the will. Assets can be symbolically delivered (like keys to house).

2. Formal ritual of delivery solves ambiguities in holographic wills. 3. Like larceny’s requirement of a movement, prosession is signaled by delivery

and is proxy of actual ownership.F. Reasons for Delivery

1. Need owners in any case, regardless of outcome2. Reduce fraud (Irons)3. Reduce scope of disputes over gift (Foster)4. Avoid conflicting gifts5. Encourage careful decision-making

G. Proving Ownership1. Posesion is easier for small, fungible, low-value objects (i.e. pencils and

papers)2. Items that cannot be destroyed require Marking (i.e. chairs)3. Items that are immovable require Recording, not Posession (i.e. desks)4. Conditions for registry to work: object must be sufficiently valuable; there

must be an enforcement mechanism5. Factors Toward Recordation: too big to move, registration is required for tax

purposes6. Facts Against Recordation: easily moved, low-value, fungible

H. The Art of the Steal Notes1. Principal-agent problem between The Barnes (his will) and subsequent

trustees of Lincoln University, the eventual control by the Philadelphia Art Establishment

2. Changed Circumstances: building was depreciating and president of Lincoln Board wanted to sell paintings to restore in public trust

3. Cy pres: specific intent of staying in country cannot be fulfilled b/c of water damage. So cy pres says to move downtown.

4. High transaction costs of lawyer fees and moving the paintings on tour. If cannot be moved, then commercial value = 0. Coase.

5. Selection problem of subsequent trustees after The Last Apostle died.6. Presented one side of story as exploitation of The Barnes. Better storytelling

tactics? I. Statute of Frauds: any contract for sale of land must be in writing

1. Formalities avoid fraud and disputes, even in good faith2. Formalities increase solemnity. Land is important.3. Signed by whomever the contract is being enforced against.4. When title is uncertain, quick claim deed: no warranty that I own, but any

interest I have is given to you.J. Nemo Dat

1. Cannot give what one does not have2. Ex: life estate au trie vie (“measured by giver’s life”)3. Ex: Finder’s Rights. Rights against everyone except true owner. Given away,

new owner has right against everyone except true owner. 4. Vimar: thief cannot transfer title in painting to anyone else.5. Exception to Nemo Dat: Good Faith Purchase – can transfer more than you

have. Requirements include:a. Seller must be able to sell; seller cannot be theifb. Buyer is acting in good faith; did not have notice that title was bad. Must

have “inquiry notice” and make inquiry if suspected bad title.c. Good faith purchaser must actually purchase and give something in

exchange.

XIII. Recording ActsA. Recordation = leaves disputes over title to be resovled ex post once they arise.

Only makes copies public. Such ex-post litigation in form of quiet title can be in rem

B. Registration = resovles disputes about title x ante, confers rights in remC. Reasons for Recording Acts: uncertainty about good faith exists, and good faith

purchase can actually take away your property. So nemo dat is insufficient.D. Types of notice: actual notice, constructive notice (“deemed to know”)

(presumption of notice), inquiry noticeE. Race Statute: first to write down in central office wins. Problem of people selling

property twice. F. Having title is separate issue from suing for damages / legal claims.G. Notice Statute: recording first is irrelevant if you had any type of notice. Operates

like Good Faith Purchaser Exception, except with a centralized office. Decreases incentive to race, but increases Unceratinty about having notice again.

H. Combination statutes: subsequent buyer wins if write first and did not have noticeI. Nemo Dat and Good Faith Purchaser Requirement still operates in backgroundJ. Statutes fit in one bucket: race statute, notice statute, or combination statute.K. Uniform Real Property Electronic Recording Act makes title searches

obsolete. L. Numerus Clauses: cannot invent new forms of property

M. As search costs on electronic systems decrease, easier to create new forms of property and deviate from numerous clauses.

N. Muggaas: Adverse Posessor (AP) always wins1. Good Faith Purchaser vs. Adverse Posessor. Who wins depends on faith:

a. Good Faith: did not have notice. Decreases incentive to record. Doesn’t think she’s AP.

b. Bad Faith: did have notice, AP increases race to record.c. Objective Non-Permission: not invited. Again, only ppl in Bad Faith will

record, thosein Good Faith ill not record. 2. Quiet Title: I have been adversely possessing it and have quiet title to it.3. Title Insurance: title company investgates and gives warranty that title search

is secure.4. Winner: AP > Recroding Act.5. After statute of limitations passes, no need to keep flag flying forever for

APer.6. Land records convey certainty, unless there’s AP in the past.7. Title searches are insufficient b/c they do not catch APers.8. AP creates new interest, outside of scope of nemo dat. This new interst is

equal to the interest givne in nemo dat; can’t get what was not givne.9. Recordation Summary

a. Uncertainty about who owns property motivates recordationb. Certainty is difficult, even with recordation, marking and posesionc. Institutional choice of acts passed by legislatrues, b/c need centralized

decision-making and fundingd. Functional questions like “how do we know who owns?” last forever, vs.

form questions like grantee index which can be solved easily by teche. Marketable Title Acts: only have to go back 30 years for certainty >

accuracy. Applies b/c of untraceable goods in the doctrine of accession.f. Privately vs. publicy-administered systemsg. Title searches handled by the companies

XIV. NuisanceA. As a tort, manages spillover between property ownersB. Does not address claims, but rather uses that are inconsistent with one anotherC. Adams:

1. Complaints: a. vibrations, noise and dust reduced home values, perhaps to zero.b. Cracks in homes and loss of home valuec. Sleeplessness damagesd. Accumulating dust

2. Win on trespass claim, but not on nuisance claim. Easier to recover damages for trespass b/c do not have to show sig harm. In this case, hard to show sig harm of dust when compared to the livelihood of mine workers.

3. Mine can afford to apply damages as compensation for externalities. INjuction would not afford compensation to home owners.

4. Cannot recover for nuisance by coming-to-the-nuisance.5. Usually, trespass requires physical intrusion. Here, dust does not occupy land.

Trespass Nuisance-Style Trespass

Nuisance

-tangible invasion -no tangible invasion required (+)

-no invasion required (+)

-strict liability / no harm need to be shown b/c it’s presumed (+)

-no harm needed (+) -significant harm must be shown

-reasonableness is not required (+)

-reasonable or unreasonable (+)

-acitivty must be unreasonable

6. Evolution of Nuisance-Style Trepass: most begin to require harm; some begin to require unreasonable activity. So this category goes away.

7. Jury instructions: dust can affect, damage, or invade the property. NO harm required, only tangible, appreciable invasion.

8. Putting together all the plusses of Nuisance and Trepass into Nuisance-Style Trepass creates tensions of geographic restriction. Combining into nuisance-style does not make sense b/c tensions will pull to either end. Yet, nuisance and trespass are insufficient themselves, so regulations like zoning enters.

9. Nuisance-style trespass is concept in some jurisdictions. In those jurisdictions, the requirement of tangible, appreciable invasion is relaxed.

10. Some conflicts are not solvable by property. What happens if mine goes away, but the harm of dust does not?

XV. Coming to the NuisanceA. Campbell: Brick-maker kills trees on neighbor’s land.

1. Coming-to-the-nuisance can lead to wasteful races. Courts consider timing, good faith and absence of spite. Later overlaid with cost-benefit analysis and sig harm requirement.

2. Brick-maker wins b/c : high cost in injunction; brick-making is valuable and should be encouraged; minor damages.

3. Trees win b/c: nuisance is high cost; brick-making can be moved elsewhere as opposed to mining; and trees did not come to nuisance b/c were unaware of brick-making.

4. Assuming good faith, harm of moving breaks is high. 5. Coming to nuisance decreases injunction, increases damages.6. Remedies

a. Injunction: not automatically grantedb. Prescription: continuous for long period of timec. Damages: not appropriate here b/c harm is repeated to treesd. Equitable Defense

(1) Latches: waited too long to complain(2) Estoppel

e. Undue Hardship: assuming good faith, is harm to D extreme? Every case seeking injunction must consider balance of hardship.

f. Personal tree nejoyments are not replaceable, but bricks are.7. Lessons:

a. There is exclusive dominion, limited by sic utere tuo. Some jostling is okay, but extreme damage is not.

b. Locality, referee determines if nuisance here.c. Lawful trade: n/a b/c nuisance doctrine applies.d. The Restatement balances harms in coming-to-the-nuisance.

B. Spur Industries: Spur must move or shut down, but Webb must indemnify with damages b/c Webb came to the nuisance.1. Injunction is satisified but is an extreme remdy.2. Injunctions are flexible, and can be more or less with reporting requirements,

offset with payments, etc.XVI. Easements

A. AP is owner with right to exclude.B. Easement: only owner of property right of easement = property right to use, not to

exclude. There is still the original owner of the underlying property, so courts are unwilling to give easements.

C. Baseball Publishing Co.1. License = waiver of right to exclude. Reovocable at will, limited by anti-

discrimination. Ex: move theater granting guest license to come into movie theater. Could then revoke and kick him out.

2. If sign is a lease, then can keep up. Unsure which part of wall is leased and excludable.

3. If sign is a license, then revocable. Not a property right but rather a forbearance. Timeframe is uncertain; license can be oral.

4. If sign is a easement, then is easement for an year with option to renew.5. Court says sign is easement. Usualy requires deed, except when:

a. Prescription: using property against owner, adverse useb. Specific performance: equitable remedy. Injunction to fulfill contract. P

doesn’t want damages. Courts are concerned with fairness so issue equitable remedy without deed.

D. Types of Easements1. Easement appurtenant = belongs to another parcel of land2. Easement in gross = belongs to grantee, not to land. INheritablea nd

transferable provided that grant was for commercial and not recreational purpose.

3. Profit a prendre: right to enter on land of another to extract something of value.

4. Affirmative Easement = permits easement holder to perform some affirmative act.

5. Negative Easement = permits easement holder to demand that owner of servient track desist fromcertain actions like blocking sunlight.

6. Private Easements = authorize specific parties to use land for designated purposes

7. Public Easements = authorize general public to use land for designated purposes

E. Limitations and Requirements of Easemnets1. Hostile to easements in gross b/c hard to keep track2. Cannot subdivide easements b/c use would be come more intensitve3. Easements wrt land require deed as per statute of limitations

F. Warsaw v. Chicago Metallic Ceilings:1. Prescriptive Easement = (i) open/notoroious, (ii) continuous, (iii) adverse, (iv)

uninterrupted for five years, (v) fixed and definite line. Does not require actual use, does not require exclusivity, and length of time is shorter than AP.a. Fixed and Definite Line: path used in easement is determined and cannot

infringe on underlying owner’s rights of land.2. Holding: D wins and P cannot load trucks. D does not have to compensate P,

who must tear the building down. There is a prescriptive easement, so no compensation required and building must e torn down.

3. Buildings were erected with full knowledge of P’s clalim.4. Self help options of putting up signs and making easements permissible.

G. Fontainbleu: [Negative Easements] 1. Eden Roc hotel cast shadow on Fontainblue’s pool.2. Ancient Lights Doctrine: no interference with light that existed for 20 years.

Negative Prescription Easement. Light had not hit Eden Roc for 20 years, only 1.

3. English Approach: 4 kinds of negative easements, one of which is light on window. Can get by prescription.

4. American Approach: not limited to 4 kinds of easements, can get other types. But none can be obtained by prescription, must be obtained by deed!

5. Eden Roc’s claims of injury:a. Irreparable injury. But cannot stand alone.b. Spite wall. Not recognized b/c there are other benefits.c. Violate of statute requiring 100 ft setback. No damages for Eden Roc

b/c violation does not hurt Eden Roc. Housing Authority, on the other hand, can levy fines. Also no injunction b/c Fontainbleu had permit.

d. Violation of Eden Roc’s negative easements. Fontainbleu did not give easement deed to Edecn Roc, and in US there is no easement by prescription, so no such easement exists in the U.S.

6. Sic Utereo tuo: need to show (1) some other additional hook like nuisance, or need to show (2) extreme harm like spite fence.

7. Holding: Blocking sunlight is not a nuisance. If it was, then would encourage wasteful races and preclude development.

8. Coase: if transaction costs are zero, then Fontainbleu would build elsewhere or still build and compensate Eden Roc. But because there is bilateral monopoly here, transaction costs are high.

9. Institutional Choice: Legislature cannot adjuciate in personam, but want to minimize ligigattion costs.

H. Penn Bowling [Misuse of Easement]: 1. Dominant tract has easement, which Servient tract must allow. 2. A has easement, B brings claim of overuse. Proper use means only use on

dominant tract of land, as per brightline rule.3. Brightline rule: method of determining overuse: use for other properties not

allowed! Holding: standard of reasonabless for overuse of easement. a. Easements appurtenant for other parcels are not allowed.

b. When there is misuse, no forfeiture or abandonment of easement occurs. Does not lose easement altogether. No injunction needed, only a mere order to use easement properly. This order enjoins all use while A figures out how to use easement properly, like remodeling.

I. Easements only work well when the world does nto change.

XVII. ZoningA. Zoning vs.

1. Decision-maker is legislature.2. Environmental law can also regulate.

B. Nuisance vs.1. Decision-maker is courts.2. Standards can be high; must show unreasonable harm and sig activity.3. Not good for planning, so is an incomplete solution.

C. Easements.1. Decision-maker is parties who give deeds to each other.2. Prescriptve easement is treated as if there exists deal.3. No reservations to third parties, so insufficient as a solution.

D. Euclid1. U1 – single family homes; all the way to U-7. Cumulative zoning.2. Euclid is suited for industrial uses. Amber Realty wants to sell land to factory

owners. Without zoning restriction, can sell at high price. With zoning system, can only sell U6 parcel and value of U3 and U2 drops.

3. Existing non-conforming uses can still say in isolated pieces within U1 and U2; owners of such pieces will win monopoly windfall.

4. Ambler claims violation of due process (as a substantive, facial issue). Whoever wins, wins against the entire statute.

5. Court says zoning system is reasonable b/c prevents apt buildings from imposing externalities. Consequence: in future, more zoning will occur. Future challenges should either emphasize discrimination effect, or bring suit as an “as-applied” (non-facial) challenge.

E. Like custom, those who design zoning system may unduly benefit.F. Illinois and Pennsylvania restrict zoning .Fed courts say zoning is okay and is

never a violation of due process.G. Alternative exists to negotiate with zoning boards directly.H. Zonging blocks transactions by limiting uses. But zoning also solves collective

action problem of many constituents and stakeholders.I. Cumulative Zoning is more flexible than Non-Cumulative Zoning, but may result

in one mansion in factory zone.J. Pros of Zoning: more and better development to align uses and minimize death

from pollution; reduces uncertainty.K. Cons of Zoning: unfair to outsiders; unfair to exist users who do not conform; can

result in fines or required chnges.L. Harbison [Eliminating Non-Conforming Uses]

1. City ordinace told Harbison to stop junkyard use of cooperages.2. Extreme solutions: use must cease, or use can continue.

3. Nuisance claim fails b/c cooperate has existed for long time.4. Options:

a. Eminent domain = compensation for taking. But expensive and relatively friendly to owner.

b. Chosen Solution: Amoritization = grace period, after which use is prohibited. No compsnation. Less costly, and so will result in higher use. Can solve more problems, but outsiders are excluded from system-creation.

c. Holding: court weighs loss to owner with reasonabless of amoritizatio nperiod. Each decision is case-sepcific.

5. Economic cost of externalities from zoning: height restrictions in Washington DC decreases supply of housing, increases price of housing, and prices out poor people

6. Lessons of zoning: fairness /= economic args; motivation /= economic results, abstract states /= concrete consequences

M. Mount Laurel:1. Outlier case2. IwH application: requiring air-conditioning prices out marginal consumers3. Tiebout Hypothesis :ppl can sort themselves into different areas with different

packages of taxes and public goods; voting with feet4. Facts: Mount Laurel only wanted to have U1region5. PUDs: private urban devleopers .If developers let in children, they must by

statute pay child’s school fees. Effect is to decrease children from coming in, or pitch to rich families. Aim is to discriminate on income and amount of social services provided.

6. Holding: cannot prohibit low-incoming housing b/c housing is basic right. Must offer low-income housing and variety of housing and benefits that are for welfare of people and not for benefit of local tax rate.a. Limitation: can limit such providing of low-income houses if there is a

heavy enough burden, like unable to build tower where earthquake exists.b. Adhereence to rule is based on measured effects, not on legislative intent

of Mount Laurel board.

XVIII. Eminent Domain and TakingsA. Requirements for Takings, as per 5th Amendment:

1. Taking of2. Property for3. Public use4. With just compensation

B. Regulatory Takings Doctrine: government imposes restrictions such that you cannot use your property1. Ex: making your land U7 for green space is not per se “taking”

C. Pros of ED: solves holdout problems and assembly problemsD. Cons of ED: potential for discrimination and corruption / patronage; payment /=

sentimental value b/c courts are difficult institution to measure market value

E. Standard for “Taking”: if you take nearly all the value, then taking. Otherwise no taking.

F. Standard for “Just Compensation”: market value . But this has the flaw of not having actual value held by owner. This value also depends on actions by the government, that could potentially decrease market value.

G. Public Use: Kelo1. (Holding) Public use = some benefit to the public, not merely available to

public.2. Deference to local government and their meetings and reports.3. Like the Business Judgement Rule, as long as local governments follow

procedures, then okay.4. Kelo loses, ED and Pzifer wins. Yes ,there is public use.

Professor Writings:This distinction between harm rules and power rules is by no meansabsolute.10 Which category a rule falls into depends on societal perceptionsof harm, and thus can vary between societies and within a singlesociety over time. A prohibition on sexual relations between a more powerfulperson and less powerful one (an adult and a teenager, a guard anda prisoner, a teacher and a student, an officer and a subordinate) mightbe characterized as a prohibition on per se harmful conduct or as a prohibitionon the powerful obtaining a new sphere of power over the vulnerable.Is trespass a per se harmful act or rather an act that is not intrinsicallyharmful but that often leads to harms, such as damage toproperty?11 Either interpretation is plausible. In certain cases, then, thetwo categories contend with one another.12

12. To be clear: The distinction is not in effect, because both kinds of rules can

prevent harm and can alter power and vulnerability; nor is the distinction in publicjustification, because both are supported, at least in contemporary liberal democracies,with appeals to the ultimate prevention of harm. Rather, the distinction lies in whetherthe act (or condition) being regulated is perceived to be per se harmful (examples of harmrules include prohibitions on assault, rape, securities fraud, race discrimination,intentional infliction of emotional distress). One reason the distinction is not absolute isthe nebulousness of what constitutes harm. See 1 Joel Feinberg, Harm to Others: TheMoral Limits of Criminal Law 31–36 (1987) (“The word ‘harm’ is both vague andambiguous . . . .”); see also Bernard E. Harcourt, The Collapse of the Harm Principle, 90 J.Crim. L. & Criminology 109, 113 (1999) (“Claims of harm have become so pervasive thatthe harm principle has become meaningless . . . .”). This Essay relies on ordinary usage ofthe term in lieu of technical definition.11. Cf. Thomas W. Merrill & Henry E. Smith, Property: Principles and Policies 7–8(2007) (considering why intentional trespass is a strict liability tort). Another example is arule that an elected judge must be recused in a case involving a major contributor. SeeCaperton v. A.T. Massey Coal Co., 129 S. Ct. 2252, 2256–57 (2009). Such a rule might be aharm rule, if the harm is perceived to be the appearance of impropriety, or a power rule, ifthe harm is perceived to be actual bias.12. In addition to instances where the power/harm rule distinction turns on thecharacterization of the harm, there are four kinds of cases that might be

Trespass can be per se harmful, or lead to other harms like property damage.

Intentional trespass can be strict liability tort.

consideredintermediate: (1) The law regulates conduct that is not per se harmful and yet theprobability of subsequent harm approaches 100% (e.g., a person purchases largequantities of a date rape drug); (2) the law regulates conduct that is not per se harmfuland yet no further steps must be taken by the actor to inflict harm (e.g., a person writes aslanderous post on a blog that no one reads); (3) the law regulates conduct that issometimes per se harmful and sometimes not and yet we cannot be sure which one is thecase (e.g., a judge votes in a major contributor’s case, if the harm is perceived as actualbias); and (4) the law regulates conduct that is per se harmful but does not do so primarilyto prevent the coincident harm but rather to prevent a subsequent harm (e.g., a person’suse of fighting words).

Discounting is also inadequatefor uncertainty about property rights because of how uncertainty undermines the rationalesfor having property rules in the first place (such as encouraging efficient investmentand information gathering by property owners).

In being effectively dichotomous, areas of status resemble property law, and its closedlist of standard forms, rather than contract law, with its almost unlimited customizability

One important reason to allow preventive adjudication is to avoid giving litigants anincentive to inflict harm in order to secure adjudication of their disputes. See Thomas W. Merrilland Henry E. Smith, Property: Principles and Policies 8 (Foundation 2007) (explaining the lack ofa harm requirement for an action for trespass to land).

Adjudicating chunky cases has a rough parallel in property law, where many questions are answeredex ante for the entire system rather than through a fine-grained ex post balancing ofinterests.

One advantage of resolvingchunky cases (either in preventive adjudication or through property law rules) is that there arefewer borderline cases that a party can manipulate by altering its underlying behavior.

As TomMerrill and Henry Smith have shown, property law is marked by the numerus clausus (“thenumber is closed”) principle: it offers a closed list of standardized forms instead of free customization.

Ownership is“clouded” when one person has possession of private property (land, art,trademarks, and so on) and has been thought to have a right in one of thestandard forms of property specified by the legal system,134 but someoneelse now disputes that person’s claim to the property right.Clouded-ownership cases resist discounting because of how uncertaintyaffects the policy rationales for having property rules ratherthan liability rules.135 Among the reasons for property rules are (1) encouragingefficient investment136 and (2) encouraging property ownersto develop and disseminate information about their property.137 The investment

Rationale for property rules: encouraging efficient investment and information gathering by property owners.

Property law is dichotomous: closed list of standard forms. Contrast to contract law, with its almost unlimited customizability.

Lack of harm requirement for “trespass” exists because must avoid giving litigants incentive to inflict harm in order to secure adjudication of disputes.

Many property law questions are answered ex ante for entire system, rather than fine-grained ex post balancing of intersts. The advangate is fewer borderline cases to manipulate through altering behavior.

Numerus clausus (closed number principle).

Clouded ownership = dispute over right to standard form of property.

Information-development reason is advantage

reason is familiar. The information-development reasonhas also become important in property scholarship; Henry Smith identifiedit as a key advantage that helps explain the frequent use ofproperty rules to protect entitlements.138These policy reasons are undermined, however, when there is uncertaintyabout property rights.139 Stewart Sterk has recently describedhow uncertainty about property rights can create inefficiently highsearch costs.140 I have in mind not the way uncertainty increases searchcosts (an increase that might offset the ordinary justifications forproperty rules), but rather the way uncertainty undermines the rationalesthat justify property rules in the first place. Uncertainty underminesinvestment and information development; and for these problems,discounting is an inadequate response.Consider a concrete example in which, for simplicity, I will treatKnightian uncertainty about property rights as if it were risk.141 A personpossesses and appears to hold in fee simple a parcel of land. (Thisperson is “the probable owner.”) Another person produces a deedthat indicates a heretofore unknown conveyance in the past. The deedis probably fraudulent; nevertheless it puts a cloud on the probableowner’s title.142 (The person producing the deed is “the low-probabilityowner.”) By stipulation, there is a 90 percent chance that a courtwould find the deed fraudulent. If, however, the court were to find thedeed legitimate, the low-probability owner would have superior title. Therefore, in order to sell the land, the probable owner will have tolower the price, because buyers will discount for the possibility of notreceiving good title.Here discounting seems to work: everyone discounts the probableowner’s claim to title because of the risk of a probably fraudulentdeed. And yet relying on discounting is problematic, because of howthe risk affects the incentives of the possible owners. Without certainty,their incentives to invest in the property are reduced. Any significantinvestment would be unlikely because the expected return mustbe discounted for the possibility of non-ownership.143 This disincentiveto invest would thus prevent the property from being put to its mostefficient use. And without certainty, the benefit from developing anddisseminating information about the property is also reduced.Crucially, we should not assume that the reduction in the advantagesof ownership (both individual and societal) is continuous withthe reduction in the probability of ownership. In other words, a cloudon title does not merely redistribute individual shares of the pie—itmakes the pie smaller. This is so for three reasons, the first two ofwhich have not been recognized in the existing literature.First, a small reduction in the probability of ownership is likely toreduce the probable owner’s incentives to understand and improvethe property without a corresponding increase in incentives for thelow-probability claimant. A person with a 90 percent chance of ownershipis likely to reduce her investment in the property by at least10 percent, but the low-probability owner is unlikely to make smallinvestments that make up the difference between the probable owner’sinvestment under the certainty and uncertainty conditions. We candescribe this as a “certainty bonus” from having undisputed title: anadditional increment in the likelihood of gaining title, especially onethat is relatively close to zero (for example, the move from a 4 percentchance to a 5 percent chance), is not as valuable as the last increment(for example, the move from 99 percent to 100 percent).Second, even if the low-probability owner did make investmentsin the disputed property that corresponded to the probable owner’sreduction in investment, there would be a coordination problem. Thisis an understatement, given the animosity that often accompanies title disputes.144 One example is the case of the neighbor with intemperate signs. See note 142. The animositythat can exist in title disputes is a major reason why Coasean bargaining is not an adequatesubstitute for preventive adjudication. Consider Ward Farnsworth, Do Parties to NuisanceCases Bargain after Judgment? A Glimpse Inside the Cathedral, 66 U Chi L Rev 373,

of using property rules to protect entitlements. Uncertainty undermines these rationales.

Uncertainty decreases the probable value of any title, so owners are disincentived to invest.

Whole pie is made smaller by lack of incentive to invest. Certainty bonus from having undisputed title makes everything bigger than the case with uncertainity.

421 (1999)(finding animosity between parties and an absence of bargaining after nuisance judgments).Farnsworth includes this illuminating quotation from the defense attorney in a nuisance case:“[M]ost property line disputes that I have ever been involved in [were] a result of animositybetween the parties involved. It doesn’t seem to matter whether those parties are family membersor strangers but the property line dispute solidified their feelings of dislike and/or hatred ofthe other party.” Id at 429–30. An investment of $100 by one owner is likely to be moreeffective than an investment of $90 by a probable owner and $10 by alow-probability owner, since the expenditure by the low-probabilityowner is likely to be duplicative. Clouded ownership thus reduces thereturn on the possible owners’ uncoordinated investments. (And legalrules can exacerbate the problem if they penalize high-probabilityowners for cooperating with low-probability ones.)Third, uncertainty over ownership may cause the claimants to increasetheir expenditures on inefficient self-help. As a general matter,self-help is often not the most efficient way to protect an owner’s investments.145 Self-help is even more costly in a clouded-ownership scenario,because of how it interacts with the coordination problem justdescribed. If one claimant engages in extralegal self-help, her efforts candrive down even further the return on the uncoordinated investmentsin the property. To vary an example given by Henry Smith,146 imagine alocked gate on an access road. Rival claimants can even make the propertypractically unusable for each other—imagine two locked gates onan access road, each installed by a different claimant.147By causing these three problems, uncertainty about ownershipthwarts the ordinary function of property rules—encouraging ownersto make efficient investments and to develop and disseminate information.148 And all three problems are impervious to discounting. But

Also, alternate investment by low-property owner is likely to be duplicative and not additive.

Self help = expenditures to prevent others from using, not from using the property efficiently and to develop and disseminate information.