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Property I
University of Pennsylvania School of Law
Balganesh, Shyamkrishna

Fall 2011
I.      What is Property?
A.     Two Conceptions of Property
1.      Trespass to Land
Both Conceptions are normatively vacuous!
a.      Right to Exclude conception
(1)   Trespass: any intentional intrusion that deprives another of possession of land, even temporarily.
(2)   Intentional trespass causes actual harm even if there was no physical harm to the realty. 
(3)   Strict liability tort, with no balancing of interests (Autonomy value – but why? Normatively vacuous).
(4)   Trespass is an on/off button.
Jacques v. Steenberg Homes: Mobile home company delivered a home by crossing neighbor’s property although they had been warned not to.  Court held that although there was no physical harm (nominal damages were $1), right to exclude was absolute and enabled punitive damages of $100k (deterrent).  RULE: Court assumes absolute right to exclude, gives no justification (except that in society we want to deter trespassers).
b.      Bundle of rights conception
(1)   Aggregative, defined by what’s NOT included.
(2)   When more than just the surface the right to exclude gets fuzzy.
(3)   Ad coelum not always upheld (some say legal fiction); you only have right to exclude others from what you can use and enjoy.
(4)   Fun fact: “ad coelum” came from English glossators copying Roman law.
Hinman v. Pacific Air Transport: landowner sues for trespass when planes fly over.  Court holds that ad coelum is a legal fiction and since owner was not using (no dominion/possession) the space the planes flew in, it’s not trespass.  Plus, transaction costs of having to pay all landowners for flyover rights would be prohibitive and rob the public of benefits of flight travel. (efficiency, public use values, cost/benefit analysis)  RULE: you can only exclude others from air above your land that you are using. Right to exclude only protects what you actually use and enjoy.
(5)   Potential justifications for exceptions to ad coelum.
(a)   Must prove owner’s active possession (difficult to enforce).
(b)   Flyovers cause no actual harm (but Jacque showed it’s not necessary.
(c)    Right to trespass is implicitly granted by your own right to air travel (but this couldn’t have been known at the start of air travel).
(d)   Air is public property, like highways (but it could be seen as a taking from private owners, still small compensation could suffice) – US SC took this route in giving federal gov’t control of air.  Like Larry Lessig Googlebooks argument: cost of negotiating w/ all author’s too big and injury to each author too small.
Balganesh question: Does what the plaintiff asks for when suing influence the court’s conception of property (injunction vs. damages)?
2.      Conceptions of Property – Philosophical Perspectives
a.      J.E. Penner, The Idea of Property in Law – right to exclude tempered by use rights/
(1)   Essentialist view: property is an inherent, defined concept, and confers exclusive control over an external thing.
(2)   Rights in rem AND rights in personam can be property rights (as opposed to previous conception that rights in personam were contract rights and property rights were rights in rem) – parking lot example (right to exclude without knowing the owner)
(3)   Right to exclude is only useful as recognized as flipside of right to use
(4)   Justified because it is useful to society to be able to use things and exclude others
(5)   Is saying that bundle of rights conception is problematic.
(6)   Right to use and right to exclude are two sides of the same coin – common property is the objection to this.
b.      Tom Grey, The Disintegration of Property
(1)   Skeptic view: bundle of rights
(2)   We still have property rights laws, even thought the things we own aren’t really things (stocks, etc.)
(3)   The development of an industrialist, capitalist society will necessarily lead to the breakdown of the idea of property.
B.      The Trespass/Nuisance Divide
1.      Doctrine of Nuisance (a tort)
a.      Elements of nuisance
(1)   must interfere with right to use AND enjoy
(2)   Significant physical harm
(3)   either intentional + unreasonable, or unintentional + reckless, negligent or abnormally dangerous.
(a)   Intent is actual or constructive
(b)   Reasonableness determined by balancing interests of both parties (but not autonomy)
(c)    It’s possible that 1st in time often wins whether these factors accord or not
b.      Justifications (mixed bag make nuisance an impenetrable jungle)
(1)   Autonomy
(2)   Balancing/utilitarian/efficiency
(3)   Doctrine of coming to the nuisance (temporal): Bakery/doctor’s office (look up this case name)
(4)   Theory of physical invasion (soundwaves, etc.)
(5)   Neighborliness test
(6)   Normal use theory
c.       Generally now use cost/benefit analysis.  ALTERNATIVES:
(1)   Coming to the Nuisance (1st in time wins)
(2)   Theory of physical inv

respass (right to exclude).
c.       But if it’s a good faith encroachment and causes only slight infringement, $ damages (balancing/efficiency) can be awarded in place of injunction.
(1)   But a bad faith, willful, intentional encroachment won’t get the benefit of balancing; injunction will be ordered.
Golden Press v. Rylands: Neighbor building accidentally encroached underground 3 inches.  P’s did laches (waiting until full building was built before suing) and would only have been materially affected if they wanted to build a basement (so no clean hands).  Court held that small damages ($55 for amount of encroachment) was fine because ordering demolition of building was unconscionable.  Balancing in equity discretion, not actual ruling.
3.      Property Rules and Liability Rules
a.      Calabresi and Melamed
(1)   General
(a)   Original allocation of title matters
(b)   State’s inquiry is 2fold
i.        Where does title lie?
ii.      How do we protect it?
(2)   Property rules
(a)   Owner must voluntarily transfer title
(b)   Favored by low transaction costs
(c)    Subjectively valued by owner/buyer (not state)
(d)   Like injunction
(3)   Liability rules
(a)   You can infringe on owner’s right (no consent – forced sale) and pay $
(b)   Favored by high transaction costs
(c)    Objectively valued by the State (courts)
(d)   Like damages
(4)   Inalienability
(a)   You can’t voluntarily transfer it nor infringe on it and pay damages
(b)   State determines title and compensation (regulates grant – doesn’t protect it)
(5)   To decide, use
(a)   Economic efficiency
(b)   Distributional preferences
(c)    Other justice considerations
(6)   Coase interpretation
(a)   If transaction costs are low, favor property rules because owner can sell entitlement or get an injunction.  Decide who gets the entitlement according to distributional or justice concerns.
(b)   If transaction costs are high, favor liability because solves assembly and holdout problems.