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Property Crime in the Information Age
Villanova University School of Law
Aagaard, Todd S.

Aagaard- Property Outline-Spring 2009
Chapter One- What is Property?
I.                   Trespass to Land- physical intrusion that deprives another of possession
A.    Barnhard v. Cohen- created general rule for punitive damages
1.      “Society has little interest in having unlawful, but otherwise harmless, conduct deterred, therefore, punitive damages are inappropriate.”
B.     Jacque v. Steenberg Homes- company moved mobile home against couple’s property against their wishes and no damage was done
                                             1.      Rule: In an action for intentional trespass, a defendant may be liable for punitive damages even though the plaintiff has not shown any loss or injury from the trespass
                                             2.      Nominal Damages: when there is little or no actual harm
a.       The real harm done in this case was the loss of the individual’s right of exclusion
                                             3.      “Society has an interest in punishing and deterring intentional trespassers beyond that of protecting the interests of the individual landowner.”
                                             4.      Steps taken to get around Barnhard:
a.       Here’s the rule
b.      Here’s the rationale for the rule
c.       The rationale doesn’t apply in this case
d.      Therefore, there should be an exception to the rule
C.     Hinman- airline flew flights over plaintiff’s land
1.      Ad Coelum Doctrine- “From the center of the earth to the sky.”
a.       Court rejected the doctrine saying the air is incapable of private ownership
b.      The owner owns are much of the space above his land as he is making use of.
c.       Rule: if airplane deprives owner of use or enjoyment then it’s a trespass
II.                Theories on Property
A.    Exclusion Theory (Penner)- right to exclude others
1.      In Personam- is a right in the behavior or some person, such as the right to the performance of a contract
2.      In Rem- those rights which “bind the world”: everyone must refrain from trespassing on my land
3.      Right to use is the motivation to have property
4.      Right to exclude is how to protect that interest
B.     Bundle of Rights Theory (Grey)- not as much of its own theory as it is a critique of the Exclusion Theory
1.      Fragmentation into discontinuous uses
2.      The term “property” doesn’t mean anything and it’s just a group of rights
C.     Exclusivity Theory (Katz)- agenda setting
1.      Attack on Bundle of Rights because it doesn’t say enough about property law
2.      States that the Exclusion Theory is too focused on the non-owner
3.      Two Ways of Agenda Setting:
a.       Carves out position of authority for owners
b.      Protects owners’ exercises of authority by forcing others to act in accordance with owners’ agenda
4.      Katz states that her theory can explain exceptions to trespass like necessity, while Penner cannot
a.       Example: actual or imputed agenda- imputed means that sometimes we tell owners their agendas
D.    Value Theory (Bell)
1.      Property rights protect stable ownership, stable ownership protects value
2.      Attacks BOR by saying its inadequate
3.      Attacks Exclusion by saying it fails to explain property in its entirety
4.      Right to exclude protects an owner’s idiosyncratic values and bargaining power (subjective value)
III.             Nuisance (see chart)- interferes with owner’s use or enjoyment of property
A.    Private Ordering- idea that people adjust their conduct to anticipate the law
B.     Hendricks v. Stalnaker- defendant drilled a well and it flooded plaintiff’s property
1.      One is subject to liability for a private nuisance if, but only if, his conduct is a legal cause of an invasion of another’s interest in the private use and enjoyment of land, and the invasion is either:
a.       intentional and unreasonable, or
b.      unintentional and otherwise actionable under the rules controlling liability for negligent or reckless conduct, or
c.       for abnormally dangerous conditions or activities
                                                                       i.      Tests Used:
a.       Indecent or malicious conduct (unreasonable)
b.      Balance of harms test (unreasonable)- whether the gravity of the harm outweighs the utility of the actor’s conduct
c.       Knows or should know that the conduct is causing substantial and unreasonable interference (intentional)
C.     Exclusion Rules- decisions about resource use delegated to the owner
1.      Favored in trespass cases
D.    Governance Rules- rules about permitted and prohibited uses of land
1.      Favored in nuisance cases
IV.             Coase Theorem
A.    Reciprocity Observation- one owner is not interfering with another, they are both interfering with each other
B.     In absence of transaction costs, legal rule doesn’t matter because parties will bargain to the optimal result (maximized value)
a.       Transaction Costs: negotiations, identifying other parties, notifying parties, lawyer fees
C.     If transaction costs are present, legal rules matter more
D.    Design legal rules to approximate non-transaction cost ideal world
V.                Resolving Property Disputes By Contract
A.    Assembly Problems- difficulties getting together large groups for bargaining purposes
B.     Bilateral Monopoly- when there’s one buyer and one seller and that which needs

.    Ex Post
1.      Focuses on fairness and distributional concerns after the critical event has taken place
2.      Doesn’t incentivize good faith but whether an act was done in good or faith may play into the result
3.      Courts are drawn to this approach because it’s how cases are presented to them
IX.             Restitution (see chart)- law of “un-bargained for benefits”
A.    Prevents unjust windfalls
B.     Mistaken Improver who destroys improvement is liable for waste
C.     Traditional Rule- anything fixed to land becomes property of landowner
D.    If improvement is in bad faith, landowner gets to keep improvement
E.     Producers Lumber v. Olney- defendant mistakenly put building on someone else’s land and when he found out about it he demolished the building
1.      Rule: Mistaken improver who engages in self-help and waste owes the landowner the value of the wasted improvement
2.      Self-help and waste were the defendant’s fatal flaw
3.      Majority says that the improver didn’t own the improvement, he just had a potential right to restitution
4.      Plaintiff recovered the value of the building demolished by defendant
5.      Dissent says that plaintiff should not be able to recover value of building that defendant built because plaintiff did not invest any more in that building, plaintiff sustained no injury
F.      Courts Have Three Options in Good-Faith Improver Cases:
1.      Let the true owner keep the house and pay the encroacher its value (equitable reward of restitution)
2.      Transfer the lot to the encroacher in return for payment of its fair market value (effected by a common-law award of damages and motivated by considerations of unjust enrichment)
3.      Sell the property to a third party and apportion the proceeds between the true owner and the encroacher in accordance with their respective entitlements (judicial award of partition, reflecting principles of unjust enrichment)
G.    Criticisms
1.      Doctrine rests on principles of morality rather than a more solid foundation in law
2.      Does not embody a unitary principle, but merely reflects a miscellany of circumstances giving rise to the right to restitution