Property I Outline

Property Outline Crawford, Spring 2012
Introduction to Property
2 Conceptions:
1.      Property as right to a thing good against the world.
J.E. Penner, The idea of Property in Law: Property rights can be seen as the right to a right to exclude, and to not interfere with others property. Exclusion thesis: The right to property is a right to exclude others from things which are grounded by the interest we have in the use of things.
a.      In Rem: Creates duties in large and indefinite class of others.
b.      In Personam: creates duty to small and definitely ascertained number of others.
Essentialism (not from article, same theory): Property always involves a right w/ a thing that’s good against the world. (Jaque)
 
2.      Property as a collection or bundle of rights, content varies w/ policy choices and context.
Tom Grey, The Disintegration of Property: Property rights are like a bundle of sticks, different people own certain rights (right to use this property tom and the next day), or to block airplanes from flying overhead.
Skeptical View: “bundle of sticks – property is a word that means nothing until we spell out – w/ different words – what it means (Hinman)
BILATERAL MONOPOLIES:
Trespass
Any intentional intrusion that deprives another possession of land, even temporarily. Strict liability, harm doesn’t matter. Rationale: 1. Avoid self help, violence 2. Protect privacy rights.
            Jacque v. Steenberg homes, Inc.
Facts: D moved RV over p land to deliver despite permission being denied. No harm to property would have occurred.
KP: Punitive damages supported by mere nominal damages are ok ($100,000:1 ratio not excessive here) where tort is intentional trespass to land.
Note: this result hard to square w/ SCOTUS decision in State Farm (ratios > 9:1 presumptively unconstitutional, although its not impossible)
Gives special status to the right to exclude from real property. Does this right deserve it? Are policy concerns re: self help, violence and privacy rights more compelling here in relation to imposing penalties here.
            Hinman v. Pacific Air Transport (AD CEOLEM)-owner entitled to dig to core and build infinitely high.
Facts: Guy sued b/c disturbed when planes “invade” his property and trespass on his land. Flew at altitudes of less than 11 ft. Asked for injunction,
Rule: We own the space above the ground that we can make use of.
KP:      -Ad Ceolum never meant to be taken literally
-Owner of land owns as much of the space above the surfaces as in use, only if used
-No trespass of airspace w/o actual and substantial damage (unlike Jacque)  U.S. v. Causby: U.S. took possession of air rights that did not fly so low over property as to destroy the use and enjoyment of surface and improvements.
NB: ad coelom still has some forces.
1. U.S. v. Causby (328 U.s 256) Actual damage plead. Ad coelom has no place in modern world.
BUT: Airspace low as (83 ft), continuous invasions in same category as invasions of surfaces.
2. Deeds describe surface area but (absent zoning restrictions) can dig as low or build as high as you want or can 3. Ad coelom still default for space below.
Nuisance(v. trespass)
Interferences w/ the use and enjoyment of land caused by some activity on neighboring land (e.g., pollution, excessive noise) which causes “significant harm” and is “unreasonable” (gravity of harm outweighs utility of actor’s conduct)
            Hendricks v. Stalnaker
Facts: D drilled well on corner of land, made it impossible for p to get permit for septic system w/in 100ft. Only place on land he could put it.
Rule: Substantial & unreasonable interference w/ private use or enjoyment of another’s land.
Analysis: Water well not an unreasonable use of land! Only possible spot to put it.
Other Possible Approaches (Factors): regular use of land in community, first use given presumption of validity. Instead of balancing interests, ask whether D committed invasion causing significant harm. In GF?
Restatement Factors (Rst 2nd Torts)
§ 827: (a) Extent of harm involved (b) character of harm (c) social value the law attaches to the type of use or enjoyment invaded.
§ 828: (a) social value law attaches to primary purposes of the conduct (b) suitability of conduct to the character of the locality. (c) Impracticability
Coase “theorem”
If K-ing is costless, parties will keep K-ing to modify the initial assignment of prop rights until they have exhausted all  possible deals that would be mutually advantageous. Final stopping point will be when the use of resources creates the greatest joint wealth for the parties, b/c once this point reached, no deal which puts either in a better position.
1. If there are zero transaction costs, the efficient outcome will occur regardless of the choice of legal rule
2. If there are positive transaction costs, the efficient outcome may not occur under every legal rule.
-Legal Rule à who bears cost/liability for losses/harm
-“outcome” à amount or number of (e.g.) cows or air travel or rays or smoke”
-“Efficacy” à maximizing social value or minimizing social costs
-Social = aggregate of each individual in society
-(not an uncontroversial criterion)
Implicit Assumptions: 1. individuals = rational maximizers (prefer more to less)2. all values can be expressed as $.
Critique (so far)
1. Can every value be expressed in monetary terms? (or are all values commensurate?
2. “endowment effect”
For Coase, to hold, our valuations must be stable
If I value a marker @ $100 sell for > $100 Buy for < $100 o   Example: Endowment Effect: If Crawford values pen at 100, and mike values it at 101, mike will have it by the end of the day. But what if no valuation varies based on whether initial entitlement lies w/ me? Sell for > $150 buy for < 100   Empirical question à if it holds, variance might not: (most likely does hold, if it all for unique goods) TIP OF THE DAY: not uncontroversial so its controversial EXAMPLE: Cattle   # in herd Total Annual Crop loss Crop loss per additional steer 1 $1 $1 2 $3 $2 3 $6 $3 4 $10 $4 1st Legal Rule: Could say rancher is liable to farmer for any damages. (Rancher’s Duty to Fence in) o   Is it worth it to get 1 more cow if I’m gonna have to pay for it. o   If each steer costs 3.50 you’ll add up to 3 because you’ll lose 50 cents past 3 2nd Legal Rule: Could say rancher not liable for damage. (Farmer’s Duty to fence out) o   No transaction costs: Farmer could pay the rancher to not add an extra head of cattle. o   Will have to pay at least $3.50 to the rancher, but I’ll only lose $1 Eventually works out the same. Last thoughts on Coase: 1. In nuisance dispute, where: Literal right to exclude is infeasible (e.g. sound waves) Exit is hard (bilateral monopoly) Disagreement about where entitlement lies + annoyance/anger may impede private resolution Courts often weigh interests and effectively determine higher value” use à assign right accordingly.       Restatement factors on -. 26  largely (but not perfectly fitting w/ coase 2. Be alert to possibility of cosean bargains (i.e. mutually beneficially reassignment of rights). Look for where they don’t occur and what prevents them. Repeated Trespasses At common law, only remedy for trespass to land is for damages, only repeated trespass goes to court of equity, seeking injunction against trespasser.             Baker v. Howard County Hunt             Facts: Dogs attacked wife/rabbits. Rule: Equity will not enjoin mere trespass. Will enjoin when: If the injury is irreparable, or cannot be fully compensated by awards of damages, or if a series of trespasses have been repeated by the same person, or threatened by persons. -Injunction Preferable When: injuries are intangible/immeasurable, and damages wouldn’t create enough incentive to prevent future trespass. 1. He who seeks equity must do equity (clean hands) 2. Equity will intercede only when remedy at law is inadequate. Building Encroachments Considered continuous trespasses. When is a party entitled to equitable relief? Damages? Property Rule: X has right; Y CANNOT take it w/o consent! (Pile) Liability Rule: X has right; Y can take it if Y compensates X for the amount determined by the court. (Golden Press) PROMOTES TRANSACTIONS THAT INCREASE VALUE OR AVOID WASTE.             USUALLY REQUIRES GOOD FAITH. Pile v. Pedrick Facts: D had District surveyor assessed property line, over by 1.5 in. Offered that it be a party wall, both parties can use it, p said no + couldn’t enter property to remedy by chipping away encroachment. Issue: Are there any circumstances where trespass is allowed? Can the judge distribute the costs (for litigation), b/c one side is being unreasonable Rule: STRICT. No circumstances allow for a permanent trespass. Analysis: It could be treated as permanent trespass and the p could be compensated, or the D could be ordered to remove ends of the stone that are trespassing (but requires permission of plaintiff to go on property to do so). Threat of repeated (continuous trespass) (where remedy at law is inadequate). Ad Ceolem sort of viewpoint, even though it doesn’t matter, underground, never going to cause a problem, but do have the right to dig to hell. Conclusion: Forced defendant to remove wall, but made plaintiff pay costs. TAKE AWAY: INCENTIVE TO BE CAREFUL WHEN SURVEYING   Golden Press, Inc. v. Rylands: Facts: Golden press builds which encroaches 2-3 inches underground. Ryland’s never objected, waited until this stuff was completely completed. Rule: Injunction may be denied and plaintiff relegated to monetary damages if 1. D’s encroachment is unintentional & slight 2. P’s use not affected 3. P’s damage is small and fairly compensable and 4. Cost of removal so great as to cause grave hardship or otherwise make removal unconscionable. Analysis: The expense and hardship of such removal would be so great in comparison with any advantage the plaintiffs could gain. Unconscionable to require it. Such a slight over step, they offered to mitigate, (go chip the ends off). There is no damage to the plaintiff. Must be gross disproportion to require injunction, and it must be in good faith (honest mistake). If not, doesn’t matter the burden or disproportionate. BALANCING Conclusion: Opposite of Pile. (Modern view: probably liability under these facts, GF important) Calabresi and Melamed (on property/liability rules):             State has to choose who gets entitlement, enjoyment of music v. silence. Property Rule: protects to extent someone wishes to remove entitlement form its holder must buy it in voluntary transaction in which value agreed upon by seller. Liability Rule: When someone can destroy entitlement and p