PROPERTY CRAWFORD SPRING 2018
What is Property?
Two Conceptions of Property:
Essentialists: Seeks to find a single true definition of property as a legal concept; right that a thing is good against the World
Skeptics: Bundle of Sticks/Rights; most important sticks include: right to exclude, transfer, possess, use, and destroy
Rights in Rem v. In Personam:
In Rem: Bind “all the World”
In Personam: Only Binds Specific Individuals
Exclusion v. Governance: Managing Property
EXCLUSION: Delegate resource use decisions to a gatekeeper then support them. It’s your Property & Can Exclude the way you want it. Owners discretion. (Trespass law; Jacque Case)
Used where part, Resources like land have multiple potential uses, and when we think it’s desirable to give owners discretion to choose which is most valuable
GOVERNANCE: Prescribes particular rules about permitted and prohibited uses of resources without regard to other attributes of the resource (Nuissance Law: Stalnacker)
Sources: Can derive from any Source: Social Norms, K, Gov Regulations & CL Judgments
Governance tends to be used in situations where the particular uses of property are of heightened significant, either because strongly favored or disfavored. Court may determines directly how the property will be used.
Ad Coelom Rule: Own Land from the core to the heavens; own everything subject to zoning restrictions. “From the Center of the Earth to the Sky.”
2. TRESPASS v. NUISANCE:
TRESPASS: Any intrusion that deprives another of possession of land, even if only temporary; a strict liability tort; No actual harm or intent required
Dog Trespassers: Not Liable if you don’t expect it; liable when owner knows dog is bad but allows to roam anyway. Assume that a pack of dogs will cause damage. (Baker)
CASE: JACQUE v. STEENBERG HOMES: (Trespass)
FACTS: P forbids D to go across their land to deliver a mobile home. D does it anyways. There was no damage to the property.
HOLDING: Nominal damages can support punitive damages where the tort is intentional trespass to land. Private landowners should feel confident wrongdoers who trespass on land should be appropriately punished.
Note: Ratios of punitive to compensatory damages exceeding 9x are suspicious
CASE: HINMAN v. PACIFIC AIR TRANSPORT: (Ad Coelom Rule)
FACTS: D flies his plane less than 100 feet above P’s land.
HOLDING: Right of possession goes all the way to Infinity or 150 feet. Owner of land owns as much of the space above him as he can use but so long as he uses it.
Ad Coelum Rule: Owner of the surface is also entitled to dig below the surface and to build above the surface; subject to zoning restrictions
Epstein’s View: Planes are trespass, but owners have an implied compensation because they get to use airplanes too; you fly over my property & I fly over yours.
Note: Administrative/Transaction Costs (Bargaining, Inspections, Monitoring, Drafting K’s)
NUSIANCE: An unreasonable interference with the use and enjoyment of land that causes significant harm
Unreasonableness: The gravity of the harm outweighs the social value of the activity alleged to cause the harm (Balancing the parties interests)
Private Nuisance: A substantial and unreasonable interference with the private use and enjoyment of another’s land
CASE: HENDRICKS v. STALNAKER (Nuisance)
FACTS: D has two wells. P sues D for nuisance because can’t build a septic system.
HOLDING: Building the second well was not unreasonable. Also considered temporal priority. Also well is not a nuisance.
Note: Gen Norms of “Neighborliness” if violated. (Ex: Spite Fence) can be actionable nuisance. Here, similar competing interests, balancing of landowner interest is at least equal.
Temporal Priority: First use to be est. is given presumption of validity relative to a later, incompatible use
Protect possession of land
Protect use & enjoyment of land
Clear and strict
Not clear and strict
No harm requirement
Need to show considerable harm
Invasion of something big and solid
Invasion of microscopic materials (light, gas, sound)
Court of Equity
Court of Law
Awards monetary damages
Uses a standard (drive in a safe manner)
Uses a rule (65 mph)
Considers more factors, judges have more discretion
Requires clean hands
CASE: BAKER v. HOWARD COUNTY
Invariance: With no transaction costs, the efficient outcome will occur regardless of the choice of legal rule (Doesn’t matter who starts off with entitlement)
Endowment Effect: If you own it, value it more
Efficiency means maximizing value and minimizing costs
If there are positive transaction costs, the efficient outcome may not occur under every legal assignment of right (preferred rule is one that minimizes the transaction costs); realistic approach; it matters who starts with a legal right
Assumes that: 1) Humans are rational maximizers 2) All values are capable of being expressed in monetary terms
Airspace Case Example:
Shouldn’t matter if the airlines or homeowners have the rights to the air space first. If it’s important enough to the airlines, they should be able to buy from the land owners
With transaction costs; should apply rights first to the party with a strong interest
Here airlines have a stronger interest in airspace at 30K feet.
2 Factors that create high transaction costs:
Assembly Problems: When someone wants to assemble property rights from a large number of owners in order to undertake a project
Ex: Airlines would have to contract with all property owners to use their airspace
If no transaction costs: If the airlines made more by paying for the airspace then it doesn’t matter whether the landowner gives the right or not. But if there are costs, then it would destroy airlines.
Bilateral Monopoly: Refers to localized monopolies in which a property owner needs something that can be provided by only 1 other person; only 1 buyer, 1 seller.
Ex: Steenberg had only 1 reasonable route but it was over the Jacques land
Lessons for Lawyers: Important to look ahead to identify assembly problems and bilateral monopolies before its too late for Coasean bargaining