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Property I
University of Pennsylvania School of Law
Balganesh, Shyamkrishna

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 delivereda 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 invasion (even sound waves count)
(3)   Normal Use Theory (defined by community)
Hendricks v. Stalnaker: P moved next door to D and tried to install a septic system, but D installed a well first too close to P’s property to allow for septic system (only place D COULD have put well).   Court finds for D on reasonableness/balance of interest grounds (but doesn’t really balance, nor mention temporal issue, though it was probably at play). RULE: property rights can be relaxed in favor of balance of neighbor’s interests, in nuisance law (in trespass it would be right to exclude)
2.      Exclusion and Governance
a.      Exclusion = right to exclude = trespass
b.      Governance = bundle of rights (right to use) = bundle of rights
3.      Coase Theorem
a.      In a world with 0 transaction costs, person who needs the resource ends up with it and other party is compensated. In world WITH transaction costs, original allocation of title affects who will end up with it.
b.      Example of farmer neighbor of cattle rancher.
c.       Factors that effect transaction costs (or arguments against Coase)
(1)   Externalities
(2)   Asymmetry of knowledge
(3)   Bilateral monopolies
d.      Gov’t shouldn’t tax and regulate, but lower transaction costs (laissez faire)
4.      Resolving Property Disputes by Contract
a.      Sometimes can work (probably could have worked in Stalnaker)
b.      Some

v. Pedrick
Rule (2) D is liable – P is awarded damages (effectively buys P’s interest w/out P’s consent and compensates with court-determined $ value). – like Golden Press
Defendant (Invader)
Rule (3) D is not liable – and if P tries to prevent, D can get an injunction against P. – like Hinman.
Rule (4) D is not liable – and if P prevents, D only gets $ damages (in effect D sells w/out consent). – like ??
4.      The Ex Ante/Ex Post Problem
a.      Ex Ante
(1)   Analyze the situation before the critical event
(2)   Prefers bright line rules that future parties can follow
b.      Ex Post
(1)   Analyze the situation as it currently stands (at time of dispute)
(2)   Balances interests (to reduce waste) – depends on factual circumstances
D.     Restitution
1.      Generally: compensation for other party’s unjust enrichment
2.      The Mistaken Improver
a.      Good faith improver
(1)   Must make a genuine mistake as to law or fact
(2)   has an interest in the improved property, but not as great as original owner’s interest (not a right to exclude)
b.      But original owner also does not have absolute right to exclude the improvement (unless improver has unclean hands).
c.       Entitled to these remedies
(1)   Remove the improvement and pay damages for harm caused as a result
(2)   Get compensated for the value of the improvement
(3)   Buy the land the improvement sits on
(4)   Court auctions it and divides the proceeds
d.      Clean hands of both parties taken into account (equity remedy)
Producers Lumber v. Olney Building: building company mistakenly built house on lot it had already sold. Land owner did not want to sell the land to builder at builder’s offer, so builder trespassed and tore down the house. Court awarded full value of the house + damage to lot by demolition + exemplary damages to land owner because he had clean hands and builder did not.
II.   Original Acquisition
A.      First Possession
1.      Wild Animals
a.      On land
(1)   Pufendorf’s theory of ownership of wild animals (ferae naturae)
(a)   To own a wild animal, you must possess/occupy it
i.        Corporeally
ii.      Or constructively
·         Mortally wound
·         Ensnare (deprive of natural liberty)
·         Bring within certain control + clear intent to assert dominion
(b)   Possession serves as notice to the world of your ownership (without it, information costs are very high)
(2)   Alternative to Pufendorf: Reasonable Prospect of Possession (notice or intent?)