Property: OutlineWHAT IS PROPERTY?

Two Conceptions of Property (property as a right to a thing good against the world vs. bundle of sticks)o Trespass to Land

Jacque v. Steenberg Homes Mobile home/yard case Uphold large punitive damage award for intentional trespass even though damages were nominal Infringement on a legal right + individual/societal interest in deterring intentional trespass

Hinman v. Pacific Air Transport Planes flying over property You don’t own airspace unless you have exercised dominion over it Property must be reclaimed from the earth If use of airspace is an interference trespass Impractical for people to stake out ownership of unused airspace Epstein overflights are a trespass, but there should be no relief because you benefit from

existence of air travelo Conceptions of Property: Philosophical Perspectives

Essentialists (single true definition) (Blackstone) Penner the right to property is the right to exclude all others (grounded by the interest we have

in things) Skeptics (no single canonical description, varies with context)

Grey property is bundle of rights The Trespass/Nuisance Divide

o Nuisance Hendricks v. Stalnaker

Installation of water well created buffer zone that meant neighbor could not install any septic tank In a nuisance case you look to reasonableness (does social value outweigh the harm) balance

competing landowner’s interests Balance of interests is equal or in favor of water well (septic seeps out so it is more invasive)

Water well is not unreasonable no nuisance Nuisance interference with the use and enjoyment of land that causes significant harm and is

unreasonable (harms outweigh the utility of the conduct) Alternative definitions of nuisance

Invasion that causes harm above a threshold lever Enforce general understanding in relevant community of normal use of land First in time, first in right Acting within general norms of neighborliness

Nuisance use/enjoyment of land; trespass possession of lando Exclusion and Governance

Exclusion decisions about resource use are delegated to an owner (trespass) Governance focuses on the uses of resources and prescribes rules (nuisance)

o The Coase Theorem Ignoring the distributional impact, regardless of initial allocation of property rights, assuming no

transaction costs, the final allocation (based on mutual bargaining) will always be the sameo Resolving Property Disputes by Contract

Litigation can be avoided by making “Coasean” bargains (contractual rearrangement of rights) What increases transaction costs: assembly problems (need to get many parties together) + bilateral

monopolies (need something only 1 person can provide) + bad blood Property and Equity (property rights enjoy special protection in courts of equity…specific performance)

o Repeated Trespasses Baker v. Howard County Hunt

Dispute between landowner with chickens and foxhunting dogs that continually damage his property

Equity won’t enjoin a mere trespass, but it will enjoin continuing or repeated trespasses committed in pursuance of a single purpose

Important that fox hunters manifested intent to continue trespassing and that the damage was hard to quantify

Old common law rule said that entry of dogs onto land was not trespass unless you voluntarily caused it or know them to cause damage

o Building Encroachments Pile v. Pedrick

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Property: Outline Subterranean wall encroached 1 3/8” onto neighboring property (underground) Plaintiff given option of money damages or injunction to tear wall down they opted for

injunction Absolutely no right to occupy another’s land must remove the wall (if money damages not

accepted) Doctrinal justification once encroacher is aware of it, it becomes an intentional trespass of a

continuing nature Golden Press v. Rylands

Foundation extends 2-3” onto neighboring land When encroachment is unintentional, slight, and use not affected, and the cost of removal is great,

mandatory removal (injunction) should be denied and money damages awarded (as happened in this case)

Doctrinal justification traditional use of equity; weighing the interests between the parties Most American courts will follow the Golden Press formula of only allowing damages in minor

encroachment situations when it would be unfair to insist on injunctive relief (only if a good faith, non-negligent violation)

o Property rules and Liability rules Calabresi & Melamed

Manner in which entitlements are protected Property rule it cannot be taken away without the holder’s consent (i.e. sale) Liability rule can be taken by what amounts to a forced sale (court award of damages) Inalienable transfers are not permitted between willing buyers and sellers

Calabresi & Melamed box: mode of protection vs. assignment of entitlementProperty Rule Liability Rule

Plaintiff Rule 1 (Pile)Plaintiff can insist on injunctive relief

Rule 2 (Gold Press)Defendant can take entitlement but has to pay court-determined damages

Defendant Rule 3 (Hinman)Defendant is granted the entitlement and plaintiff can only take it away by getting the defendant’s consent (i.e. payment)

Rule 4 (Spur v. Del Webb)Plaintiff can take the entitlement but has to pay court-determined damages

Role of transaction costs (Coase) When they are low, property rules are favored When they are high, liability rules are favored

o The Ex Ante/Ex Post Problem When deciding between property and liability rules, do we analyze the situation ex ante or ex post (before

conflict vs. after conflict)? Courts are naturally drawn to ex post analysis because this is how controversies are presented to them

(tends to focus more on fairness and distributional concerns, whereas ex ante is more likely to consider incentives for future conduct)

Restitutiono Basic elements = enrichment of the defendant + at the expense of the plaintiff + under circumstances that are unjusto The Mistaken Improver

Producers Lumber & Supply v. Olney Building Olney mistakenly built house on property he had sold and the landowner refused all reasonable

offers (buy back property, sell house at discount), so Olney resorted to self-help and tore it down Olney could have gone to court seeking equitable relief for good faith mistake, but he resorted to

self-help (bad faith) and thus they resort to the old common law which says the landowner owns the house and Olney must pay damages (no equitable relief if you act in bad faith)

Dissent this is unjust enrichment, plaintiff suffered no injury except trespasso The origins and Basis of Restitution

Restitution was not originally part of the common law ALI played role in popularizing/formalizing restitution Criticisms

Rests solely on principles of morality rather than law Does not embody a unitary principle, but merely reflects a miscellany of circumstances giving rise

to the right

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Property: OutlineORIGINAL ACQUISITION

First Possessiono Wild Animals

Pierson v. Post Man was hunting down fox when another shot it and took it Mere pursuit does not give a property right to ferae naturae , you must have control (mortal

wound, within reach) in order to have a property right (rule of capture) Policy argument would be lots of litigation and complications if mere pursuit determined

ownership Ghen v. Rich

Whale hunter kills whale that sinks and floats to shore (standard practice), but someone else took it and auctioned it off

The court follows whaling custom and says the killer is the owner, not the finder Policy argument opposite result would remove all incentive to kill whales

Keeble v. Hickeringill Man shots near neighbors decoy duck pond (source of livelihood) If you maliciously interfere with another’s livelihood an action will lie; if you simply engage in

competition (i.e. build your own duck pond) not action will lieo Open Access and the Commons

Eggertson Open access = access is open to all members of particular community, but not to outsiders (can

have free-rider problems) Commons = easily identifiable group of insiders control the use and management of the resource

and holds exclusive user rights that outsiders do not enjoy Hardin tragedy of the commons (overuse of common/open access resources) Anti-commons everyone has the right to exclude everyone else, thus no one can use resource (flipside,

this can make it difficult to develop a resource like a park) Semi-commons a resource is subject to private exclusion rights in some uses but open access for others

(i.e. fish in the ocean)o Other Applications of First Possession

Eads v. Brazelton Brazelton found sunken ship, marked the area, and left; Eads found it 10 months later and salvages

the cargo Brazelton never had possession. You need some actual taking/detention of the property plus an

intent to possess (there is a certain degree of diligence required in first possession claims) Abandoned the owner manifests an intention to relinquish all future claims of possession or ownership Special rules involving salvage of sunken ships Home run baseballs (Popov. Hayashi)

Baseballs in professional baseball games are the property of the home team, but once they leave the playing field they become abandoned property

In this case, both men had equal claim against each other and the world, so they were forced to sell the ball and split the proceeds

Discoveryo Discovery establishes a unique right to possess a thingo Johnson v. M’Intosh

Competing claims to land: someone bought land from Indians before the U.S. existed, and then the government sold that same land

Discovery gives title to the government which is consummated by possession (descendant from European practices), AKA title by conquest (Anglo possession vs. Indian occupancy)

o Land grants from the federal public domain Land Ordinance Act of 1875 created system for surveying and disposing of land Preemption Act of 1841 granted prospective preemption right on federal land Squatter-settler problems (they created claims associations to avoid competitive bidding) Homestead Act of 1862 allow you to claim title to land if you inhabit and cultivate it

o Mining camps many were remote and thus they developed their own rules system for property rights/claims Creation (especially prevalent as ‘information’ which is a nonrival, or the use of it by one does not diminish use by another)

o Misappropriation and the Quasi–Property Right in Hot News INS v. AP

INS takes news from AP bulletin boards and distributes it verbatim to their customers

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Property: Outline News itself cannot be copyrighted (is not property), but these actions are an unreasonable

interference with AP’s business precisely at the point profit is to be reaped (equitable issue of unfair competition)

o The Right of Publicity Midler v. Ford Motor Company

Against Midler’s wishes, Ford had an imitator sing one of her songs in a commercial When a distinctive voice of a professional singer is widely known and deliberately imitated in

order to sell a product, the sellers have appropriated what is not theirs The Principle of Accession (ownership of unclaimed resource is assigned to owner of some other resource that has a

prominent relationship to the unclaimed resource)o Increase

In the absence of an agreement to the contrary, the offspring or increase of tame or domestic animals belongs to the owner of the mother

o The Doctrine of Accession Wetherbee v. Green

Wetherbee accidently cut trees on Green’s property and then made valuable barrel hoops out of them

In cases of good faith, when a taken product is changed in identity to a great extent, the original owner is limited in recovery to the value of what was taken (he doesn’t get the improved more valuable product)

Improvement on patents minor = infringement; more significant = infringement + patent (encourage bargaining); radical improvements = new patent

o The Ad Coelum Rule “To whomever the soil belongs, he owns also to the sky and to the depths” Edwards v. Sims

Edwards discovered a cave on his property and developed it; neighbor says a portion is on his property; judge orders survey, Edwards says that invades his privacy

Applies ad coelum and says if portion of cave is Sims’ there is a continuing trespass; can order survey (a trespass) in order to determine if a trespass is occurring

Dissent owner of cave entrance owns cave; Edwards improved the cave and should reap the benefits (took it back from nature)

o Accretion NE v. IA

Dispute between NE and IA following shift in MO river which formed border Shift was sudden avulsion the original border remains

Accretion gradual deposit of solid material (border shifts) Avulsion sudden shift (border remains as original) Reliction land that was underwater but gradually is not Erosion gradual wearing away of land Riparian land bordering any type of water Littoral land bordering ocean or major inland sea

o Fixtures A thing which, although originally a movable chattel, is by reason of its annexation to, or association in use

with land, regarded as part of the land Strain v. Green

D sells house and before moving out removes a number of items, P sues and says they were fixtures so they remain

Hot water tank, venetian blinds, lights, and mirrors mounted to wall are fixtures that go with the house; the easily removed mirror is not and can be taken

Adverse Possessiono When an owner sits on the right to exclude and the statute of limitations for challenging the original unlawful entry

expires, the original owner can no longer exercise the right to exclude and the adverse possessor takes titleo Lessee of Ewing v. Burnett

Adverse possession claim against Ewing who has superior title to land (land sold twice, he was first buyer) Adverse possessor spent 21 years using the land for gravel and presenting it as his own it is now his

o Requirements of adverse possession (in addition to the running of the relevant statute of limitations), the possession must be:

Actual (element of notice) Exclusive Open and notorious (someone, not necessarily owner, has to know)

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Property: Outline Continuous (if there is privity you can tack onto earlier AP use) Adverse under a claim of right (no permission for owner)

There is some dispute about how to interpret this:o AP subjectively, but mistakenly, believes the he is entitled to possessiono AP subjectively believes he is not entitled to possessiono Subjective state of mind is irrelevant, all that matters is that permission has not been

granted [favored]o Purpose of adverse possession

Cost of (dis)proving claims increases over time Reliance interest of adverse possessor Discourage owners from sleeping on their rights Encourage actual use of land Reduces transaction costs for determining title to assets that last for a long time

o At common law you cannot obtain title by adverse possession over the government (some states have modified this)o Carpenter v. Ruperto

Rejects AP claim because the AP acted in bad faith knew someone else had title, knew she had no interest or claim; no confusion or mistake

This is a minority ruleo Howard v. Kunto

Confusion regarding lake house deeds that don’t fit the land occupied Occupancy during summer months of statutory period + continued existence of improvements =

uninterrupted possession When several successive buyers receive title to A under belief they are getting B, and where possession of

B is transferred and occupied in a continuous manner, there is sufficient privity of estate to permit tacking and thus establish adverse possession

o Disability and adverse possession Most state statutes toll the statute of limitations for owners suffering from narrow classes of disabilities

(minors, insane, incompetent, imprisoned) at the time AP enteredo Songbyrd v. Estate of Grossman

Dispute over master recordings The statute of limitations for conversion begins to run at the time of the conversion Can’t bring an action outside the statute of limitations

Sequential Possession Issueso Armory v. Delamirie

Finder of a jewel (chimney sweep) does not acquire absolute property ownership, but acquired property rights over everyone by the rightful owner

o Clark v. Maloney P finds logs floating, the D finds the same logs floating Loss of chattel does not change the right of property, thus Finder 1 has rights over Finder 2, but no one has

rights over rightful ownero Anderson v. Gouldberg

One who acquires property (by finding, bailment, or tort) has a right to retain possession against a mere wrong doer who is a stranger to the property (if I take property that isn’t mine, you can’t take it from me just because I was wrong)

o Relativity of title: not who is the owner, but who has the better claim to the property Competing Original Acquisition Principles

o Fisher v. Steward P trespasses on D’s land and finds swarm of bees and alerts D; D cuts tree down and there is a dispute over

who owns the honey Landowner has constructive possession (like accretion) over things found on his land that is superior to a

trespassero Goddard v. Winchell

P owned property and D leased it for grazing; meteorite fell who owns it? The meteorite was never lost/abandoned, it became part of the earth, and thus belongs to the property

ownero Hannah v. Peel

Peel bought manor, but never lived there because it was used by the military; soldier finds brooch on window that no one knew about who has best claim?

Soldier gets is: general principle is that the first finder has a good title to it against all but the true owner, even though found on someone else’s property

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Property: Outline Exceptions where the landowner gets it:

When the land owner is already in possession of the thing itself If an agent/servant finds it, it belongs to their employer If the finder only finds it through trespass

o Major categories of lost property Abandoned

True owner has voluntarily relinquished all rights to the property Finder gets all rights

Lost When the owner is unaware of losing possession of an item The finder of a lost item could claim the right to possess the item against any person except the

true owner or any previous possessors. Mislaid property

The owner intentionally places it somewhere and then forgets it The finder of a misplaced object has a duty to turn it over to the owner of the premises, on the

theory that the true owner is likely to return to that location to search for his misplaced item. If the true owner does not return within a reasonable time (which varies considerably depending on the circumstances), the property becomes that of the owner of the premises.

o Finders vs. landowners Trespassers lose Invitees generally invitee loses Tenant landlord usually loses to the tenant, but you need additional information. The landlord will

usually win if the property found is a fixture to the land (meteorite)

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Property: OutlineVALUES SUBJECT TO OWNERSHIP

Personhoodo Property and the Human Body

Newman v. Sathyavaglswaran Parents have a property interest in the corneas of their deceased children that must be protect by

due process Next of kin have right to protect the dignity of the human body in its final disposition CA statutes have recognized certain rights that parents have in relation to the bodies of their

deceased children Moore v. Regents of the Univ. of CA

Moore came in for treatment of his leukemia and the Drs. failed to inform him they were going to do research on cells taken from his spleen those cells were then used to make a lot of money

Dr. seeking a patient’s consent must disclose personal interests (research, economic) that are unrelated to the patients health in order to satisfy his fiduciary duty (breached here)

The use of human cells for research is not a conversion o Balancing of policy considerations (don’t want to prevent research)o Better suited to legislative resolutiono Not necessary to protect patient’s rights

Hecht v. Superior Court Man had sperm frozen, then died, his will left it to his girlfriend for her use, his children objected

and wanted it destroyed At the time of his death, decedent had an interest, in the nature of ownership, to the extent that he

had decision-making authority as to the use of his sperm for reproduction…such an interest is sufficient to constitute property (can’t destroy the sperm)

They don’t decide the issue of the willo Artists’ Moral Rights

Moakley v. Eastwick Artist makes 80 foot mural on wall on church property; the property is sold and the new owner

begins tearing mural down; artist claims that the Mass. Art Preservation Act bars the landowners from tearing it down

The mural was made prior to the enactment of the act, and the act does not apply retrospectively can tear it down

Visual Artists Rights Act federal legislation that prevents destruction of some art that would affect honor/reputation or is of recognized stature

o Cultural Patrimony U.S. v. Corrow

Involves the Native American Graves Protection and Repatriation Act Corrow buys a ceremonial mask from the family of a dead ceremonial singer…he says that he

wants to sell it to another performer, but in reality he was going to resell for profit to a collector; Corrow is arrested for trying to sell ‘cultural patrimony’

Holds that Corrow can be prosecuted and that he should have known that selling the mask was questionable at best

Academic Perspectives on the Domain of Propertyo Demsetz property rights develop to internalize externalities when the gains of internalizations become larger than

the cost of internalizationo Radin distinction between property for personhood and fungible in order to distinguish between the degrees of

protection they should be afforded in different contextso Anti-commodification and inalienability rules ban transfer of property in any context

Radin 3 ways to justify market-inalienability based on personhood: prophylactic; assimilation to prohibition; domino theory

Public Rightso The Navigation Servitude

Things that are inherently too public to be owned privately Navigable Waters

Long history of public access/rights to navigable waters (Rome, U.K.) U.S.: no state government or individual/business operating under state authority can obstruct or

interfere with the public’s right to free use of waterways for transportation (commerce clause power) no decision on whether Congress is bound by the navigation servitude states can decide who owns land under navigable waters

Navigable Airspace

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Property: Outline U.S. v. Causby federal control over navigable waters extends to navigable airspace (can be a

nuisance though)o The Public Trust Doctrine

IL Central R.R. v. IL IL conveyed part land underwater in a Chicago port/harbor to a R.R. then reversed and wanted it

back The state held this land in the public trust and could not abdicate it in the first place (must preserve

such waters for the use of the public) (the trust is governmental and cannot be alienated) Purpestures encroachments on public lands (navigable waters, highways) by private person (permanent

ones that unreasonably interfere with public travel/safety are per se public nuisances) Lake of MI Federation v. U.S. Army Corps of Engineers

Loyola received state, local, and Armey Corps of Engineers approval to purchase land under lake MI to expand campus (would mostly be private, but some public access)

Legislative conveyance of the lake bed violated the public trust doctrine the primary purpose of the land must be to benefit the public (very wary of public private transfers)

State of OR ex rel. Thornton v. Hay Owns beachfront home in OR and wants to fence in portion of sand that is within his property The public had acquired over years an easement for recreational purposes can’t build fence Blackstone’s test of whether a custom exists

o Long use (ancient)o Exercised without interruptiono Peaceable use, free from disputeo Reasonable useo Certaintyo Obligatory recognition of customo Can’t be inconsistent w/ or repugnant to other laws

Rose analysis of the expansion of public trust doctrine to include recreation (recreation is important social glue focuses needs of public and they get what they want)

Watero Watercourse

Riparian owner land abuts watercourse; riparian water rights are appurtenant to the land (can’t be split from the land)

Natural flow theory riparian owner can prevent any diversion of the natural flow by owner upstream

Reasonable use theory for natural uses (necessary to your existence) you can take as much as you need; for artificial uses you can take an amount that leaves enough for the people below (reasonable)

Evans v. Merriweather D builds steam mill along the river Court creates the reasonable use theory:

o Natural uses (necessary to existence) can take as much as you need o Artificial uses can take an amount that leaves enough for the people below

Coffin v. Left Hand Ditch Co. Rejects riparianism (popular in the east, says only land abutting stream can make use of water) in

favor of doctrine of prior appropriation first appropriate gets water Policy rationale support water intensive industries in arid west

o Diffuse surface water (i.e. rain, etc.) Common enemy doctrine each landowner has absolute right to use self=help to repel inflows, even if it

causes damaging flooding to other landowners (subject to reasonableness standards)o Groundwater

Higday v. Nickolaus Higday owns farm outside of Columbia, MO that is successful because of its groundwater; city

buys small tracts of land nearby and begin pumping water out for drinking water Under the rule of reasonable use a landowner cannot withdraw percolating water and transport it

for use away from the land where it was taken if the result is to impair the supply of an adjoining landowner to his injury

Electronic Communicationso Tribune v. Oak Leaves Broadcasting Station

Tribune begins broadcasting at 990 kilocycles, then Oak Leaves starts a 950 there is lots of interference Relies on first in time, first in right equitable analysis

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Property: Outlineo Eventually the federal government took over total regulatory controlo PETA v. Doughney

PETA sues D for setting up peta.org (people for eating tasty animals) To win a trademark infringement/unfair competition dispute you must prove:

You possess the mark That D used the mark That D’s use of the mark occurred in commerce That D used the mark in connection with sale, offering for sale, distribution, or advertising of

goods and services That the defendant used the mark in a manner likely to confuse consumers

To prove cyber squatting you must prove: Bad faith intent to profit from using the address That the address is identical or confusingly similar to, or dilutive of, the distinctive and famous

name D used the mark in a commercial manner, it does not count as a parody, and there was bad faith had to

relinquish it (harsh standard applied to D)

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Property: OutlineOWNER SOVEREIGNTY AND ITS LIMITS

Exceptions to the Right to Excludeo Antidiscrimination Laws

Shelley v. Kraemer Private sale of home to black family in violation of racially restrictive covenant Granting judicial enforcement of a racially restrictive covenant would deny the right to equal

protection in violation of the 14 th amendment Court enforcement of private racially restrictive contract = state action

Fair Housing Act (part of the Civil Rights Act of 1968) Limits discrimination in housing practices with a few exceptions

Attorney General v. Desilets Landlord in MA does not want to lease his apartment to an unmarried couple for religious reasons Sends it back to lower court to weigh interests of the state in preventing housing discrimination

against unmarried couples vs. burden on exercise of religion Reasons for private antidiscrimination laws

Increase housing opportunities for people in protected classes Eliminate personal harm/indignity Eliminate social message of inferiority/subordination

Other Powers of the Sovereign Ownero Licenses

A waiver of the owner’s right to exclude temporary and revocable Marone v. Washington Jockey Club of DC

Man buys ticket to horse race, gets kicked out due to allegations against him The ticket (standing by itself) is just a license, subject to revocation (no right to specific

performance, can sue upon the contract for breach) Hurst v. Picture Theaters

Man buys ticket for movie; they kick him out halfway through Held that the man had a license + grant of interest (right to see film) which is not revocable

allows specific performance ProCD v. Zeidenberg

Man buys non-commercial version of phone number database software, then violates the “shrink-wrap” license terms by reselling the information online

Shrink-wrap license terms became part of the contract and that he was subject to its restrictions More of a contracts case than a property one…

o Bailments When the owner of property (bailor) temporarily transfers custody of the property to another (bailee) Blending of contract (in personam) and property (in rem) elements Allen v. Hyatt Regency

Man parks car in parking garage and it was later stolen (ticket contract terms says no responsibility for the garage) who is responsible?

Court finds that a bailment was created and the garage is responsible for the theft (enclosed, attended parking garage, have to present ticket to leave, guard appeared to miss the theft)

The Bailee’s duty of care Early common law absolute liability Modern reasonable care (take into account all surrounding circumstances) Because the relationship is contractual, can it be modified?

o Abandonment and Destruction Pocono Springs Civic Assoc. v. MacKenzie

People bought property in a development, but after learning they couldn’t install a septic/sewage system they wanted to get rid of it they wanted to abandon it because it was costing them taxes and fees and no on would buy it (a negative asset)

PA law cannot abandon real property/perfect title (D’s remain owners of real property in fee simple with a recorded deed and perfect title)

Eyerman v. Mercantile Trust Lady with nice house in St. Louis dies and her will says she wants it razed (will destroy value);

neighbors object out of concern for surrounding home values Court holds that destruction of the house is against public policy (contravenes an established

interest of society)o Transfer

The right to transfer is considered a fundamental attribute of owner sovereignty

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Property: Outline Exchanges quid pro quo Gifts relinquish title and receive nothing (explicitly)

Rules Designed to Enhance Transferability Common law rule against restraints on alienation owner may not transfer property on condition

that the transferee will not retransfer the property Lauderbaugh v. Williams

o People develop lakefront community and put restrictive covenants in place saying that new purchases have to be members of the community association; developers want to get rid of the covenant

o Courts refuses to enforce the restrictive covenant as a restraint on alienation (would have allowed it if it was limited and reasonable)

Statute of fraudso Any conveyance of a property right in land (except for short term lease) and any contract

for assignment, surrender, or sale of a property right in land must be in writing The Delivery Requirement

In some contexts the law requires that a transfer take place only if the thing be transferred or some evidence of title is delivered to the transferee

Irons v. Smallpiece o Father says he will give son two colts (actually gives him money to buy oats) (father dies)o The court says the son does not get the colts delivery is a requirement for a valid gift

Foster v. Reisso Before woman goes into an operating room and subsequently dies, she pens a note to her

husband saying where she had hidden money and that it was to be his; she had a will in place at the time leaving everything to her kids

o Because the gift was not transferred (possession), it was not the husband’s so it goes to the kids

o Liebman this is a ridiculous result

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Property: OutlineTHE FORMS OF OWNERSHIP

Introductiono The law permits divisions of property across time and multiple personso Focus on freehold interests in land which excludes leases

Divisions by Timeo Estates in land type of property that right that measures a person’s interest in the land in terms of durationo Present possessory interests

Fee simple absolute Largest package of ownership rights; unlimited in duration Owner can designate a successor “To A and his heirs”

Life estate Comes to an end with the death of a named person, usually the holder of the estate Alienable by gift or sale, but not by will (obviously) “To A for life, and then to B”

Defeasible fees (like fee simple absolute, but they may end on the happening of a named contingency) Fee simple determinable

o Ends automatically upon the occurrence of a named event, whereupon the grantor or the grantor’s successor takes the property

o “To CLS as long as it is used for the instruction of law, then to B” Fee simple subject to condition subsequent

o Continues indefinitely, except that upon the happening of the named event (condition) the interest does not automatically end, but can be ended by action (self-help or lawsuit) by the grantor or the grantor’s successor

o “To CLS, but if it is not used for law instruction, then B has the right to reenter and take the premises”

Fee simple subject to executory limitation o Defeasible fee is followed by an interest not reserved by the grantor, but granted to some

3rd partyo “To CLS as long as used for law instruction, then to Morningside Heights Neighborhood

Association” Fee tail

Used to tie land to a family over generations (“to A and the heirs of his body”) Has been abolished in most states

o Future interests (except for fee simple, this is the future interest…what’s left) Interests retained by the grantor

Reversion o Follows the natural end of a life estate and in other contexts in which an owner has not

disposed of the entire feeo “To A for life, then to B” B retains a reversiono B’s fee simple = A’s Life estate + B’s reversion

Possibility of reverter o Interests reserved to the grantor that follows a fee simple determinable (will

automatically get the property back if the limitation built into the fee simple determinable occurs)

o “To CLS as long as it is used for the instruction of law, then to B”o B’s fee simple = CLS’ fee simple determinable + B’s possibility of reverter

Right of entry/power of termination o An interest retained by the grantor that follows a defeasible fee simple subsequent to a

condition precedento “To CLS, but if it is not used for law instruction, then B has the right to reenter and take

the premises”o B’s fee simple = CLS’ defeasible fee simple subject to condition subsequent + right of

entry/power of termination Interests created in a grantee (interest by a third party created by the grantor)

Remainder (follows a life estate, never a fee simple, and the remainder is in a party other than the grantor)

o Indefeasibly vested “To B for life, then to C and his heirs”

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Property: Outline The identity of the takers (C) is known and there is no other contingency that

has to be fulfilled before the interest is ready to become possessory other than the death of B

o Contingent (the remainder is a contingent remainder) “To B for life, then to his children and their heirs “To B for life, then to C if he graduates from CLS” Uncertainty remains as to the identity of the class of takers when the

uncertainty is resolved the remainders are said to vest in interesto Vested subject to complete defeasance

“B for life, then to C, but if condition occurs, then to D” C’s remainder can be completely divested

o Vested subject to partial defeasance (subject to open) “B for life, then to her children (C is the only child at time of grant)” C is part of a class subject to open, thus C has a remainder subject to partial

divestment Executory interest

o An interest in a transferee (not retained by the grantor) that divests or cuts short a previous interest

o “To B, but if he ever gets drunk, then to C”o C has an executory interest

o Vesting Vesting in possession when the interest becomes a present possessory one Vesting in interest means various types of uncertainty about the interest have been resolved A reversionary interest (a reversion, a possibility of reverter, or a right of entry) is considered vested in

interest upon its creation, whether or not it ever becomes possessory Executory interests must normally vest in possession in order to vest in interest

Summary of Estates and Future InterestsPresent Interest Examples Typical Future Interest

Fee Simple Absolute O A (and his heirs) NoneFee Simple Determinable O A as long as X occurs (then to O) Possibility of reverter (in O)

Fee Simple Subject toCondition Subsequent

O A, but if X occurs, then O has right to reenter and take the premises

Right of entry / power of termination in O

Fee Simple Subject to Executory Limitation

O A as long as X occurs, then to B.

O A, but if X occurs, then to B.

Executory interest (in B) *

Life Estate O A for life

O A for life, then to B

O A for life, then to A’s adult children

O A for life, then to B if condition occurs

O A for life, then to B, but if condition occurs, then to C

O A for life, then to her children(B is the only child at time of grant)

Reversion (in O)

Remainder; indefeasibly vested

Remainder; contingent *

Remainder; contingent *

Remainder (in B); vested subject to complete defeasance

Remainder (in B); vested subject to open *

* Subject to rule against perpetuities

Maintaining the Systemo Conservation of Estates

Applies whenever a grantor might convey something less than his full interest the fee simple must be conserved (ensures that all pieces of the estate are accounted for)

Williams v. Estate of Williams Father leaves estate to 3 of his daughters, specifying that if any moved away/got married they

would not have a stake in the property

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Property: Outline Court finds that each daughter held a life estate defeasible upon her marriage Modern presumption is that something is fee simple unless life estate is specified

City of Klamath Falls v. Bell Corporation gives land + building to town for so long as it is used as a library the city stops

using it as a library the grantor corporation is now dissolved who gets it? The company started with a fee simple absolute and then split it: fee simple subject to executory

limitation (donated to the city) + executory interest (conveyed back to the company’s shareholders)

The executory interest was declared void under the rule against perpetuities, leaving something unaccounted for solved by implying a possibility of reverter in the grantor (company) which went to the heirs of the corporation (it had been dissolved)

Disclaimer you don’t have to accept property (you must express your disclaimer clearly and unequivocally and you cannot accept any benefit from the asset)

o The Numerus Clausus The catalog of estates is finite and closed Merrill & Smith develop a theory of numerous clausus based on optimal standardization of property

rights (key is that allowing 1 person to create a new form of property right increases the information processing costs of everyone else who has existing or potential interest in this type of property…external cost on market participants)

Johnston v. Whiton Man leaves piece of property to daughter with questionable restriction (to her and her heirs on his

side, etc., similar to a fee tail which had been abolished) Using a principle of numerous clausus the court strikes down the qualifications and gives her the

property in fee simple (“a man cannot create a new kind of inheritance” focuses on alienability of property and right of daughter to sell)

Garner v. Gerrish Gerrish leases a house and the terms say he can cancel it at any time, but has no specified end…

landlord wants to evict The lease, which grants no right to the landlord to terminate, creates a life tenancy that can only be

canceled by the tenant or upon his death Mediating Conflicts over Time

o Waste Holders of life estates favor current consumption while holders of remainders are likely to prefer

conservation Brokaw v. Fairchild

Man inherits mansion as life estate and wants to raze it and build apartment building (more valuable), but the siblings with the remainder want to keep the home as is

Any act of a life tenant which does injury to the inheritance is waste the law intends that the life tenant shall enjoy the estate in a reasonable manner and that the land shall pass those holding the remainder as nearly as practicable unimpaired in its nature, character, and improvements

Affirmative waste misfeasance occurs when life tenant takes affirmative action that is unreasonable and causes excess damage to the remainder/reversionary interest

Open mines doctrine any extraction of materials is waste unless the mining was already occurring at the beginning of the life estate

Permissive waste nonfeasance occurs when life tenant fails to take action with regard to property and the failure to act is unreasonable and causes excess damage to the remainder/reversionary interest

Ameliorative waster affirmative act by life tenant that significantly changes the property, but results in an increase in its value (Brokaw says no)

o Restraints on Alienation Courts try to prevent restraints on alienation Mountain Brow Lodge, Independent Order of Odd Fellows v. Toscano

Toscano (dead) gave land to Lodge with restriction that the land is for their use only, and if not, or if sold, it reverts back to him

The court strikes down the restriction on sale as an absolute restrain on alienation, but it upholds the use restriction (as a fee subject to a condition subsequent with title to revert back to grantors)

o The Rule against Perpetuities Background

No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest

Vesting is the elimination of the ‘suspense’ element, e.g. in:

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Property: Outlineo Contingent remainderso Executory interestso Vested remainders subject to partial divestment

Lawyers often insert a “perpetuities savings clause” which is a clause that specifies a back-up plan in case it is invalided under the rule against perpetuities

Some court have started just rewriting instruments to conform with the rule and the grantor’s interest (as close as possible)

Reforms A number of states have abolished common law rule against perpetuities Other reforms

o Wait and see for the common law RAP period (wait and see whether the interest vests remotely)

o Wait and see for the common law RAP period or 90 years (like wait and see, but allows for a 90 year alternative period)

o Interpretation and implication (perpetuities savings clauses, or reform an interest to conform)

The problem of dead hand control Symphony Space v. Pergola Properties

Broadwest conveys building to Symphony Space in fee simple with a leaseback and option to repurchase at various times in the future (including 24 years) (done for tax purposes), and when they try and repurchase Symphony Space says the option is invalid under the RAP

The option violates the rule against perpetuities and is therefore unenforceable Co–Ownership and Mediating Conflicts Between Co–Owners

o Concurrent and marital estates Tenancy in common 2 people sharing, each owns part; no survivorship (goes to the heirs, not the other

individual) Joint tenancy 2 people sharing, each owns part, there is survivorship

Requires for unities at the time of creation: time, title, interest, and possession Tenancy by the entirety each co-owner has separate and undivided interest, and each has the right to

possession of the whole, there is survivorship, no unilateral exit while married Only for married couples and very uncommon

Community property everything acquired during the marriage is shared, stuff from before can become community property if it is comingled with community property

Popular in the south and west More on Marital Interests

o O’Brien v. O’Brien Wife supported husband (and gave up chance of getting certification) while he got his medical degree in

Mexico they divorce quickly after is the medical degree marital property? The court holds that the medical degree is marital property and awards a portion of its present value to the

ex wife (equitable distribution)o Marvin v. Marvin

Non-marital cohabitation relationship, alleged oral agreement to share earnings and girl would render services as companion, homemaker, housekeeper, and cook (gave up her own career)

Will enforce express contracts between non-marital partners (unless only in consideration for sex) In the absence of an express contract, will inquire into the conduct of the parties to determine whether that

conduct demonstrates an implied contract, agreement of partnership or joint venture, or some other tacit understanding between the parties. The courts may also employ the doctrine of quantum meruit when warranted by the facts of the case

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Property: OutlineENTITY PROPERTY

Entity Property: Possessory Rights (permits management of the property to be separated from its use and enjoyment)o Leases (moved from property/exclusion model to a contract/governance model)

Rationale Type of financing device Risk-spreading device Allows complexes of assets to be integrated and managed

Lease Types Term of years has fixed time at which it ends Periodic tenancy automatically rolls over for a stated time (i.e. year or month); must give notice

to terminate Tenancy at will lasts until either party terminates; common law requires no notice, but some

jurisdictions do Tenancy at sufferance tenant was once in rightful possession, stays after his right has ended

The Independent Covenants Model Paradine v. Jane

o Man has 99 year lease, but is displaced when prince invadeso Independent covenants model must pay rent regardless of what happens (all covenants

must be performed regardless of whether others have or have not) Smith v. McEnany

o Landlord built wall that encroached on leased propertyo If the landlord dispossesses you of a portion of the leased property all rent is suspended

(doesn’t apply to de minimis encroachment) Sutton v. Temple

o Farmer leased land for his cows to graze on, but lead on the grass killed his cowso Under the independent covenants model the tenant must pay rent whether the land is

suitable for his purposes or not (caveat lessee)o Distinguishes Smith v. Marrable there is an implied warranty of habitability in a short

term rental of a furnished vacation cottage Extensions of the Independent Covenants Model

Forfeiture clauses lease clauses that said if tenant violated certain covenants (e.g. paying rent) the tenant’s interest in the lease would immediately end

Blackett v. Olanoffo Rents apartment near nightclub the landlord owned which is too noisy, claims he doesn’t

have o pay rento Construes constructive eviction the condition was a natural and probable consequence

of the landlord’s actions and they cannot collect rent because the apartment is not reasonably habitable

In re Kerro Tenants abandoned/surrendered lease (bankrupt) and the landlord released for a longer

term to another party and then sought rent from original tenanto Releasing for a longer period than the original lease is a recognition of the surrender o Generally, in the absence of a lease provision allowing the landlord to release, any new

lease is an acceptance of the surrender The Model of Dependent Covenants

1970s repudiation of property conception of leases in favor of a contract model of leases dependant covenants

Medico-Dental Building v. Horton and Converseo D leased space in the building to a pharmacy and made a covenant in their lease barring

the P from renting space to any other tenant for the purposes of selling drugs; P leased space to a doctor that began supplying drugs

o The court reads the lease like a contract and applies contract principles (reform style landlord-tenant) concludes that the landlord is supposed to do what is necessary to enforce their promise

o Leaves the D with several options: rescind the lease; stay and sue for damages at end of lease term; sue for damages

Javins v. First National Realtyo Housing violations arose during the term of the lease (not there at the start)

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Property: Outlineo warranty of habitatability, measured by DC housing regulations, is implied into leases of

urban dwelling units covered by those regulations and that breach of this warranty gives rise to the usual remedies for breach of contract (implied warranty of habitatability)

o New era obviously the most important thing to the tenants is occupancy…can’t just kick them out if the apartment is subpar (they now can stay and pay reduced, or no rent)

Other pro-tenant doctrineso Doctrine of retaliatory eviction landlord may not retaliate against a tenant for

reporting code violationso Illegal lease doctrine if a landlord leases property with violations such that the

premises is rendered unsafe or unsanitary, the lease is void There is a debate over what effect the implied warranty of habitability has had on the low-income

housing marketo Craswell it changed the slope of the demand curve

Somer v. Kridelo Man rents apartment, but then his marriage breaks up and he never moves in; the landlord

had an opportunity to mitigate by renting to someone else but didn’to A landlord has an obligation to make a reasonable effort to mitigate damages

Rent Control Most popular in NYC Major types

o Rent freeze freeze rentso Rent stabilization set a fair rent, vacancy decontrol

Opposition creates gap between quantity of housing available and demand leading to less housing and poorer quality than otherwise

In favor rent stabilization will have a less dramatic effect; because apartments are unique landlords have a local monopoly power than rent control combats, Radin argues pro-communitarian grounds

Constitutionalityo Block v. Hirsh rent control satisfies a legitimate public purpose and does not violate

due processo Lingle v. Chevron USA rent control is not a taking if it does not advance a legitimate

consumer protection objective (substantially advances is not a part of takings law) Covenant of quiet enjoyment

Landlord substantially interferes with tenants use and enjoyment so much so that the intended uses/purposes are frustrated.

Elementso Landlord has to wrongly or fail to act where he has a duty too Substantial interference with tenant’s use of the propertyo The tenant must completely vacate the premises (controversial doesn’t solve tenant’s

problem…they end up with nowhere to live + if they move out and sue, and lose, they owe rent!) majority rule

o Cooperatives, Condominiums, and Common–Interest Communities Introduction

Cooperative occupants lease their individual units, but the tenants collectively own the building by holding shares in corporation that has title to the property

Condominium occupants each own the individual units they occupy; collective ownership of common areas

Hansmanno Significant costs in the collective decision-making mechanisms required by condos and

co-opso Over time taxes have increasingly subsidized owner-occupied vs. rental housing

inefficiency in the market Governance Questions

Nahrstedt v. Lakeside Village Condominium Assoc.o Lady wanted to have cats in her condo (part of a large development), but the condo had a

restriction banning pets in the development (it was recorded in the project’s declaration)o Holds that restrictions recorded in the declaration of a common interest development will

be enforced unless unreasonableo The restriction on pets is reasonable

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Property: Outline 40 W. 67th St. v. Pullman

o Man behaves terribly in co-op building and is voted out (upheld)o When reviewing a co-op’s actions, the business judgment standard governs (exercise

restraint and defer to good faith decisions by boards and directors) Entity Property: Nonpossessory Interests

o Principle-agent/agency cost problem the manager is given greater discretion over the use and disposition of the assets than is the case with the management of possessor interests

o Trusts Background

3 persons involvedo Settlor creates the trusto Trustee receives the property and is responsible for its management and control

(fiduciary duty)o Beneficiary person for whose benefit the trustee manages the trust

Spendthrift Trusts (trusts that cannot be reached by creditors of the beneficiaries) Broadway National Bank v. Adams

o Man has trust as well as creditors can they reach it?o Creditors cannot reach a trust that was set up to not be reached (they can take it after it is

dispersed to him)o Counter policy argument makes it more difficult for lenders to know at the outset what

monies a borrow has that can be used as collateral Trust Fiduciary Duties

Rothko v. Reiso 3 trustees designated to sell of the paintings of the late Rothko proceeded to do so in an

inappropriate manner that benefited themselves while depriving the estate of the full value

o Held that they violated their fiduciary duty Changed Circumstances

Cy pres When the original objective of the settlor or the testator became impossible, impracticable, or illegal to perform, the cy pres doctrine allows the court to amend the terms of the charitable trust as closely as possible to the original intention of the testator or settlor, to prevent the trust from failing

Wilber v. Owenso Man dies leaving money to Princeton to pursue his research and Princeton finds that his

notes/research was of no scientific value…can they use the money for other purposes?o The court applies cy pres and allows the money to be used for general academic purposes

Recall the Barnes family and Princeton/Woodrow Wilson School disputeso Corporations and Partnerships

An artificial entity is permitted to own property in its own name and right, as if it were a person Benefit permits the specialization of functions such as subjecting assets to a sophisticated governance

regime defined by the nexus of contracts that make up the legal entity

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Property: OutlineTHE LAW OF NEIGHBORS

Nuisanceo Nuisance a non-trespassory invasion of land of a certain sorto Recall the reasonableness inquiry of Hendricks v. Stalnaker (does social value outweigh the harm balance

competing landowner’s interests)o Adams v. Cleveland-Cliffs Iron Company

People who live near major mining operation sue for trespass, alleging that dust, noise, and vibrations are coming onto their property

The court concludes that MI trespass law does not cover dust, noise, and vibrations, and that these are better dealt with by nuisance law

MI law has a direct invasion requirement for trespass to lando St. Helen’s Smelting Co. v. Tipping

Smelting operation existed for a while, then man bought estate nearby and brought suit because of noxious odors

The court applies a locality rule determine reasonableness in light of locality/context Smelting works had to be closed

o Luensmann v. Zimmer-Zampese & Assoc. Family lived near a drag racing strip and claimed nuisance from noise, lights, and vibrations Per se nuisance can be shown through 2 methods:

Prove that the activity was a nuisance at all times under any circumstances and in any location Prove a violation of law (typically when a municipality categorizes a particular type of activity as

a nuisance) No finding of nuisance

o Boomer v. Atlantic Cement Co. Neighbors to large cement plant seek an injunction due to injury to their property from dirt, smoke, and

vibration Question whether the court should resolve the problem equitably between the parties before it, or whether

they should channel the litigation into broad public objectives (promote the general welfare) The court finds a nuisance, but denies the injunction they order the payment of permanent damages

instead (creating a servitude on their land) (liability rule) Shutting down the cement plant would have been bad for the local economy and far more expensive than

the payment of permanent damageso Spur Industries v. Del E. Webb Development Co.

Man legally develops large feedlot outside of Phoenix, then developments crop up and move closer, and then allege nuisance as a result of the odor

The feedlot was deemed a public nuisance (affects a considerable number of people or an entire community or neighborhood) and should be enjoined

Because the feedlot did nothing wrong and Del Webb “came to the nuisance” they must indemnify Spur for a reasonable amount of the cost of moving or shutting down

Servitudeso Easements

Background Contract in which an owner agrees to waive his or her right to exclude certain kinds of intrusion

by another Always run with the land

Creation of Easements Warsaw v. Chicago Metallic Ceilings

o 2 people purchase property from a common owner; 1 builds a large building for trucks, but doesn’t have enough room for them to turn around, so he uses part of the neighboring property; the neighbor never stops this use until after notice of a lawsuit he goes to build an addition on the sport and other neighbor sues saying he has an easement

o Elements necessary for a prescriptive easement: Use of property that has been open, notorious, continuous, and adverse for an

uninterrupted period of 5 years Existence must also be shown by a definite and certain line of travel for the

statutory periodo The court finds the existence of a prescriptive easement and awards no money damages

(important is their finding of bad faith through the construction of a building on the piece of land after receiving notice of a lawsuit)

Fontainebleau Hotel v. 4525 Inc.

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Property: Outlineo One hotel wants to enjoin the construction of an addition (with ‘spite wall’) by a

neighboring hotel that will block sunlight to their pool deck they claimed an easement over 20 years on light and air…

o The court recognizes no legal right to the free flow of air/light from adjoining land Light and air

American law generally recognizes no legal right to free flowing air/light (Fontainebleau), but there are exceptions:

o Prah v. Moretti WI case holding that blocking sunlight can be a nuisanceo Parker & Edgerton v. Foote looks to old English law and find that it protects sunlight

This is an area that will see more litigation given the proliferation of (residential) solar technologyo Covenants

Background Contract in which an owner agrees to abide by certain restrictions on the use of his or her land for

the benefit of one or more others Sometimes run with the land Real covenants (damages) vs. equitable servitudes (injunction)

Equitable Servitudes Tulk v. Moxhay

o Man sells property with covenant that it be open to the public, dispute over covenants application to 2nd buyer

o Court says that the covenant applies, treats it as a contract issue where the 2 nd buyer had notice of the covenant’s existence

o Important because there was no privity between the original seller and 2nd buyer Real Covenants

Neponsit Property Owners v. Emigrant Industrial Savings Banko Bank forecloses on property in development and seeks to dispense with a lien placed on

the property for unpaid owner’s association fees which were specified in a covenanto The court determines that this covenant does run with the land (the court moves away

from conventional law and recognizes the importance of homeowner’s associations)o Requirements of a real covenant

Must appear than the grantor and grantee intended it to run with the land Must appear that the covenant is one “touching” or “concerning” the land with

which it runs It must appear that there is “privity of estate” between the promisee or party

claiming the benefit of the covenant, and the promisor of party who rests under the burden of the covenant

The Requirements for Covenants to Run Real covenant theory

o For the burden of a promise to run: Intent for the burden to run language or inference from context Horizontal privity traditionally a landlord-tenant relationship Vertical privity the person who covenanted for the burden must hold the

entire durational interest held by the covenantor at the time she made the covenant

Touch and concern the lando For the benefit of a promise to run:

Intent for the benefit to run Vertical privity the successor need only succeed to some estate, not

necessarily an estate of the same duration as the covenantor’s Touch and concern the land

Equitable servitude theoryo For the burden of a promise to run:

Intent Notice in the deed, or established by actual or inquiry notice (facts that would

make a reasonable person inquire further and find the covenant) Touch and concern

o For the benefit of a promise to run: Intent Touch and concern

The 3rd restatement

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Property: Outlineo Not adopted by courts, but it relaxes the requirementso Makes enforceability the default subject to limitations based on requirements of writing

or violation of public policyo Examples of covenants that violate public policy

Arbitrary, spiteful, capricious Unreasonably burdens a constitutional right Imposes unreasonable restraint on alienation Imposes unreasonable restraint on trade or competition Unconscionable

Eagle Enterprises v. Grosso Sub-divider/builder sold property with covenant that they must pay a yearly fee to buy

water from a well located on other property; most recent owner builds his own well land refuses to pay

o The court holds that the covenant cannot be enforced against the homeowner because it does not touch and concern the land (water is only for 6 months of the year and therefore does not substantially affect the ownership interest; it also creates a burden in perpetuity regardless of what use to which the land is put)

Notice and the Common Plan Sanborn v. McLean

o People owned a house in a neighborhood and wanted to build a gas station; the lots all came from a common developer, but only some of the deeds contained a restriction

o Court finds a common plan and reciprocal negative easements that mean all the property is subject to the restriction

o Reciprocal negative easement arises out of a benefit accorded to land retained by restrictions upon neighboring land by a common owner

Conservation Easements Fastest growing use of easements Servitudes that restrict the future development of land (the most common type prohibits

subdivision and commercial development, but permits existing agricultural and residential uses) They only exist because of legislation that specifically authorizes them (otherwise they probably

would not run with the land at common law) There can be significant tax benefits

Zoning and Other Land–Use Regulationo Background

Zoning is the regulation of land uses through a general regime permitting and forbidding particular uses of land in certain locations

First became popular in the 1920s They are a matter of state law and the authority to engage in zoning must come from a state zoning

enabling act A local board of zoning appeals will here appeals from denials of building permits, requests for variances,

and requests fro special exceptions Enforcement for zoning violations is typically civil and/or criminal sanctions Zoning issues have dissolved with the rise of planned unit developments which involve specific town-

developer deals Zoning typically grandfathers existing nonconforming uses

o Village of Euclid v. Abler Realty Co. Does the 14th amendment due process clause prohibit a town from creating a zoning scheme that limits a

landowner’s use of their land? (Ambler was not able to sell his property for far more valuable industrial purposes)

Zoning is a valid and constitutional exercise of the police power (health, safety, morals, general welfare) The key is the reasonableness which is determined by examining local circumstances and conditions Euclidian zoning ‘classes’ of property are cumulative (i.e. you can build a residential house on an

industrial lot, but not vice versa)o Southern Burlington County NAACP v. Township of Mt. Laurel

Town had a zoning policy that made it difficult for lower income people to move there (the town promulgates a fiscal concern…doesn’t want people moving in who will have low property tax burdens)

NJ Supreme Court holds that zoning ordinances must make possible the opportunity for a variety of housing types (including low-income) and therefore cannot foreclose the possibility of a certain class form living there a town must bear their ‘fair share’

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Property: Outline Extended in Mount Laurel 2 and 3 allows for injunctive relief as well as a NJ state commission that

decides what exactly is the ‘fair share’ for each municipalityo Sts. Constantine and Helen Greek Orthodox Church v. City of New Berlin

Church sues town for violating the Religious Land Use and Institutionalized Persons Act by imposing a substantial burden on the church by denying its application for rezoning (to build new church they wanted to rezone land as institutional)

The town’s denial of rezoning, and its proposal of various "delaying game" procedural hoops, imposed a substantial burden on the church's religious exercise

22

Property: OutlinePROPERTY AS AN INSTRUMENT OF SOCIAL POLICY

Copyright and Other Term–Limited Intellectual Property Rightso Background

Property rights in intellectual property are generally limited to fixed terms as a result of a compromise give inventors the right to exclude others from copying their innovations, but we put a time limit on that right

o Lessig Length of copyright terms have been extended by Congress many times tolls/delays the passing of

works into the public domain The renewal requirement has generally been abandoned

o Eldred v. Ashcroft In 1988 Congress extends the copyright term by 20 years (also extended for holders of existing copyrights) New terms were life + 70 years or 95 years for corporations Congressional authority comes from Constitution Art. 1, §8 “…securing for limited times…” The court defers to Congress to determine what is meant by ‘limited time’ (rational) The court allows retroactive application

o Landes & Posner Argue for an indefinite renewal system Would only be perpetual for a small number of copyrights More works would end up in the public domain By providing more incentive to inventors, as by product you are likely to increase the size of the public

domaino Dagan

Friends of the public domain should embrace property, rather than fight it Property should be thought of that way it actually is in life and law a set of institutions, each of which

constitute a particular configuration of rights Instead of fighting the propertization of creativity, friends of the public domain should work to redefine the

incidents of property rights in creative products

23

Property: OutlineTAKINGS

Eminent Domaino Background

Constitution, Amendment 5 “Nor shall private property be taken for public use without just compensation”

Problem: each landowner and the government is in a bilateral monopoly situation and you can get holdouts Eminent domain = government can compel a transfer of property rights in return for just compensation Both the state and federal governments have the power Early cases

Berman allowed DC to sell/transfer blighted slums to private developers to promote health/safety

Midkiff allowed state to take land in HI in order to correct a high concentration of land ownership among a few people

Poletown allowed taking of area in Detroit for a GM factoryo The Public Use Requirement

Eminent domain must only be used for “public use” Historically public use meant actual use by the public, but the Supreme Court has construed it as use for the

public advantage or benefit Kelo v. City of New London, CT

Town wants to leverage Pfizer plan to build a research center so they want to build a large development there were a few holdouts

The court holds that economic development/revitalization constitute public use and allow the taking

The potential success of the project is not material (in fact it was never built) Dissent (O’Connor) there are only 3 original uses of eminent domain

o Transfer of private property to public ownership for things like roads, hospitals, or military bases

o Transfer of private property to private party for use of property in the public (e.g. common carriers)

o A few exceptional circumstances where the property is transferred to private parties to serve a public purpose (i.e. to remedy a pre-condemnation harm inflicted on the public)

Following this decision there was a political backlash, and many states enacted laws to prevent these kinds of eminent domain cases (the O’Connor dissent may more closely represent where the court now stands)

Regulatory Takings: The Basic Contourso If the government regulates property in an especially severe way, the regulation will be deemed a taking and just

compensation owed o PA Coal v. Mahon

Coal company has agreement with homeowner to take coal from under his house; new PA statute bans mining coal in a way that could cause subsidence of a house

The court holds that the PA law is a taking (can’t be sustained under the police power) if a regulation goes to far, it’s a taking (Holmes)

Dissent (Brandeis) says this is not a taking, that is clearly for the public purpose and an acceptable use of the police power (it is irrelevant that the same goal could have been achieved through eminent domain at public expense)

Disagreement on the denominator Holmes taking all the column of coal under the house Brandeis taking just a portion of the whole property

o Penn Central Transportation v. City of New York P wants to build addition on top of Grand Central which is protected by the NYC Landmark Act the

landmark commission denies permission The court holds that this is not a taking Penn Central Balancing test (ad hoc) importance of government aims/benefits vs. harm to the owner Landmark preservation is within the police power The government has not gone too far current use as a train station is not impaired + TDR (transfer

development rights what is not allowed can be transferred to neighboring property) Controversy about whether to weigh value of TDRs

o Loretto v. Teleprompter Manhattan CATV NY law says that landlords cannot interfere with or demand payment for installation of cable equipment on

their buildings is this a taking?

24

Property: Outline Per se rule created permanent physical occupations authorized by the government are takings without

regard to the public interests served Dissent (Blackmun) points out that landlords are required to have many things already (e.g. postal

boxes)o Other cases

Kaiser Aetna v. U.S. directive to open a privately constructed marina to the public (navigation servitudes) was a taking

PruneYard Shopping Center v. Robins state directive allowing person to distribute leaflets in a privately-owned shopping center was not a taking

o Lucas v. South Carolina Coastal Council Lucas buys 2 empty lots on the beachfront SC passes law that restricts development in order to protect

the beach and he cannot build houses on either property When a regulation deprives land of “all economically beneficial use” then it is a taking The court makes an analogy to nuisance the state is limited to what neighbors would have been able to

accomplish through nuisance litigation Similar to a current case before the Supreme Court: Stop the Beach Renourishment, Inc. v. Florida

Department of Environmental Protection Whether the state’s legislation to restore storm-eroded beaches along the ocean or lakeshores,

modifying the private property boundary line, constitutes a judicial taking or violates the due process clause

o What is property for regulatory takings purposes Board of Regents v. Roth look to independent sources such as state law

Regulatory Takings: Extensions and Applicationso The Scope of the Police Power

Miller v. Schoene Cedar trees on VA property are ordered torn down because of possibility they could spread cedar

rust to nearby apple trees (which could kill them) Apple trees are a major industry and have many attendant industries as well The court allows the Cedars to be taken down the state was under the necessity of making a

decision between preservation of one class of property vs. another (two incompatible uses) in such a situation the court may decide to preserve that which of greater value to the public

o The Denominator Problem Conceptual severance practice of disaggregating an asset into separate rights of property and treating

each separate entitlement as in itself a property right (would allow the denominator to be shrunk to the point where a takings claim is plausible)

Phillips v. Washington Legal Foundation When lawyers hold client funds they put them in IOLTA accounts and the interest is used to pay

for low-income legal services The court holds that the interest on this money (exceptionally small) is the property of the client

(interest follows principal) The court does not suggest what amount would be just compensation Followed by Brown v. Legal Found. Of Washington interest in IOLTA accounts is a taking,

however because it would not have existed in the absence of the program no compensation is due Palazzolo v. RI

Decision by RI to prohibit filling in 18 acres of coastal wetland is not a taking because it did not deprive the land of all economically beneficial use (could still develop the upland wetlands)

The state cannot simply leave a token interest in order to get around declaration of a taking The case uses the premise the that petitioner’s entire parcel serves as the basis for this takings

claim (denominator) Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency

Local planning agency placed a 32 month moratorium on development while they created a comprehensive land use plan is this a taking?

The court says that this is not a taking mere fluctuations in value during the process of governmental decision-making, absent extraordinary delay, are incidents of ownership and cannot be considered a taking

The denominator is the entire partial and the entire time cannot make temporal ‘slices’ for a takings claim

o The Problem of Exactions Exaction agreement by the developer to donate certain property or money to the local community as a

condition of obtaining approval from authorities to proceed with the development

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Property: Outline Nollan v. CA Coastal Comm’n there must be a nexus between the regulatory purpose and the condition

the government is seeking to exact Dolan v. City of Tigard

Woman owned store and wanted to increase its size the that of the parking lot (her property is near a creek with a flood problem) the city wants a portion of her land for flood control and a bike path in exchange for approval

The court applies a 2-prong test (expanding Nollan ): o Is there an essential nexus o Does the degree of the exaction bear the required relationship to the projected impact of

the proposed development The court finds that there is not a “rough proportionality ” (between the degree of the exaction and

the impact of the proposed development) and therefore this is a takingo Temporary Takings

First English Evangelical Lutheran Church v. County of Los Angeles The complete destruction of the value of property constituted a taking even if that taking was

temporary and the property was later restored (years later…vague rule limited to the facts presented…)

Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency Local planning agency placed a 32 month moratorium on development while they created a

comprehensive land use plan is this a taking? Cannot sustain a rule that classifies as a taking all temporary takings

o Litigating Takings Cases Background

Complicated because the constitutional right is a right to compensation, not a right to a certain degree of protection from the government 5th amendment not violated until the government has taken + failed to pay just compensation

This requirement has led the Supreme Court to require the property owners exhaust available remedies under state law before turning to the federal courts

o Length of time issueo Preclusion issueo Many thin that federal courts would be more sympathetic to takings claims that state

courts Williamson County Regional Planning Comm. v. Hamilton Bank of Johnson City

Takings claim is not ripe because respondent has not yet obtained a final decision regarding the application of zoning regulations to his property and has not utilized the procedures TN provides for obtaining just compensation

San Remo Hotel v. City and County of San Francisco Issues validly decided in state court judgments can be used to preclude that issue from federal

court even if the party did not want to litigate in state court but were forced to due to rules Petitioners were not required to ripen their complaint below, but chose to do so, thereby allowing

for preclusion No de novo review of state court takings decisions in federal court

Current state of takings lawo Liability for temporary takings under First English was reduced by Tahoeo Lucas’ per se rule for total takings was limited by Tahoeo Nexus + rough proportionality test of Dolan are limited to exactionso San Remo promises to keep nearly all regulatory takings questions out of federal courto These changes represent a large reversal of the increase in takings liability that occurred under Rehnquist

Flemming v. Nestoro Nestor was immigrant from Bulgaria and paid into the Social Security program for 18 years; he was a member of the

Communist Party from 1933-1939 (which was not illegal at the time)o After he started collecting Social Security he was deported for having been a member of the communist party (Red

Scare/McCarthyism) and then had his benefits terminatedo The court holds that social security benefits are not an accrued property right o Reich: The New Property

Argues that Flemming v. Nestor resembles the philosophy of feudal tenure wealth is not owned or vested in the holders, but rather it is held conditionally by the state to ensure you fulfill obligations imposed by the state

A major function of property is to draw a line between public and private power Reforms in society have made much private wealth subject to the public interest

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Property: Outline Argues for the creation of a ‘new property…’ Explores the relationship of government largess, the public interest, subservience, individual rights, and

property rights

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Property: OutlineCRYSTALS AND MUD IN PROPERTY LAW (CAROL M. ROSE)

Property law is filled with hard-edged doctrines that tell everyone where they stand (crystals) Sometimes we seem to substitute fuzzy, ambiguous rules of decision (mud) Looks at the ‘crystals and mud’ nature of mortgages sees a back-and-forth pattern: crisp entitlements made fuzzy by

accretions of judicial decisions, crisped up again by the parties contractual arrangements, and once again made fuzzy by the courts

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