Property Law Outline SINGER, PROPERTY LAW: RULES, POLICIES, AND PRACTICES

PROPERTY LAW OUTLINE
(R. Schragger, Spring 2005) (SINGER, PROPERTY LAW: RULES, POLICIES, AND PRACTICES (3d ed. 2002)) (Also: SPRANKLING, UNDERSTANDING PROPERTY LAW (2000)) OWNERSHIP OF PROPERTY..................................................................................................................................3 I.................................................................................................................................................................OWNERSHIP ....................................................................................................................................................................................3 A...........................................................................................................................Original acquisition of property ...............................................................................................................................................................................3 B..................................................................Theories of property and how ownership arises (the 6 justifications) ...............................................................................................................................................................................4 C...................................................................................................................................Why grant property rights? ...............................................................................................................................................................................5 D.............................................................................................................Possession as a component of ownership ...............................................................................................................................................................................5 II.................................................................................THE RIGHT TO EXCLUDE: A STICK IN THE OWNERSHIP BUNDLE ....................................................................................................................................................................................6 A........................................................................................................The right to exclude as a non-absolute right ...............................................................................................................................................................................6 B.....................................................................................................The right to exclude and the First Amendment ...............................................................................................................................................................................7 C............................................................................................................The right to exclude and public resources ...............................................................................................................................................................................8 III.................................................................................................................................................................................. ...................................................................................................................................................ADVERSE POSSESSION ....................................................................................................................................................................................9 A............................................................................................................Doctrinal elements of adverse possession ...............................................................................................................................................................................9 B........................................................................................................................................Hohfeldian terminology .............................................................................................................................................................................10 C.........................................................................................................................................Prescriptive easements .............................................................................................................................................................................10 TYPES OF OWNERSHIP.........................................................................................................................................11 I........................................................................................................................................................ESTATES IN LAND ..................................................................................................................................................................................11 A.....................................................................................................................Methods of devising land ownership .............................................................................................................................................................................11 B.................................................................................................................................................The estates system .............................................................................................................................................................................11 C..............................................................................................Interpreting conveyances under the estates system .............................................................................................................................................................................12 Estates System: Freehold Interests.....................................................................................................................13 II...................................................................................................................CONCURRENT OWNERSHIP OF PROPERTY ..................................................................................................................................................................................13 A...............................................................................................................................................Tenants in common .............................................................................................................................................................................13 B.............................................................................................................................................Joints tenants WROS .............................................................................................................................................................................14 C............................................................................Similarities between tenancies in common and joint tenancies .............................................................................................................................................................................14 D.......................................................................................................................................Tenants by the entireties .............................................................................................................................................................................14 E....................................................................................................................................................Marital property .............................................................................................................................................................................15
Property Law Outline
III.............................................................................................................................................LEASEHOLD INTERESTS ..................................................................................................................................................................................16 A.........................................................................................................................................Categories of tenancies .............................................................................................................................................................................16 B...........................................................................Leasehold interests and lease commencement and termination .............................................................................................................................................................................17 C.................................................................Warranty of habitability and the covenant of quiet enjoyment (CQE) .............................................................................................................................................................................18 IV............................................................................................................................AFFORDABLE AND FAIR HOUSING ..................................................................................................................................................................................19 A...............................................................................Three fundamental problems of affordable and fair housing .............................................................................................................................................................................19 B...........................................................................................................................................Fair housing and race .............................................................................................................................................................................20 PRIVATE REGULATION OF LAND USE.............................................................................................................21 I.....................NUISANCE: SUBSTANTIAL AND UNREASONABLE INTERFERENCE WITH USE AND ENJOYMENT OF LAND ..................................................................................................................................................................................21 A.......................................................................................................................................Contours of the doctrine .............................................................................................................................................................................21 B...............................................................................................The Coase theorem and economic analysis of law .............................................................................................................................................................................22 C............................................................................Forms of remedies available in nuisance cases and generally .............................................................................................................................................................................23 II................................................................................................................................................................EASEMENTS ..................................................................................................................................................................................24 A......................................................................................................Classifications and terminology of easements .............................................................................................................................................................................24 B.....................................................................................................Forms of easements and how they are created .............................................................................................................................................................................25 C.................................................................................Interpreting the scope and extent of ambiguous easements .............................................................................................................................................................................26 III.....................................................................................................................................................REAL COVENANTS ..................................................................................................................................................................................26 A..........................................................................................................................................Evolution of covenants .............................................................................................................................................................................26 B...........................................................................................................................................Creation of covenants .............................................................................................................................................................................27 C..............................................................................................................................................Equitable servitudes .............................................................................................................................................................................28 D................................................Posner on injunctions versus damages for breach of anticompetitive covenants .............................................................................................................................................................................28 E..............................................................................................................Racially motivated restrictive covenants .............................................................................................................................................................................28 IV...............................................................................IMPLIED RESTRICTIVE NEGATIVE SERVITUDES SUBDIVISIONS ..................................................................................................................................................................................29 A.................................................................................................................................................................Purpose .............................................................................................................................................................................29 B............................................................................Cases and examples of implied restrictive negative servitudes .............................................................................................................................................................................29 V............................................................................................................................COMMON INTEREST COMMUNITIES ..................................................................................................................................................................................30 A................................................................................................................Types of common interest communities .............................................................................................................................................................................30 B................................................................................................................Critiques of these organizational forms .............................................................................................................................................................................30 C..................................................................................Evaluating the decisions of common interest communities .............................................................................................................................................................................30
PUBLIC REGULATION OF LAND USE................................................................................................................31 I........................................................................................................................................................................ZONING ..................................................................................................................................................................................31 A.............................................Biggest regulatory scheme in world b/c all land in country is regulated by zoning .............................................................................................................................................................................31 B.............................................................................................................................Conceptual elements of zoning .............................................................................................................................................................................31 C................................................................................................................Developments in the doctrine of zoning .............................................................................................................................................................................32 D.............................................................................................................................................Exclusionary zoning .............................................................................................................................................................................32 II.....................................................................................................................................................................TAKINGS ..................................................................................................................................................................................33 A..............................................................................................Constitutional underpinnings: The Takings Clause .............................................................................................................................................................................33 B...............................................................................................................................Doctrinal elements of takings .............................................................................................................................................................................34 C.............................................................................................The scope of what constitutes a government taking .............................................................................................................................................................................34 D..............................................................................................................The scope of the public use requirement .............................................................................................................................................................................35 E...........................................................................................................Exactions and unconstitutional conditions .............................................................................................................................................................................36 MISCELLANEOUS TOPICS....................................................................................................................................37 I...........................................................................................................................................INTELLECTUAL PROPERTY ..................................................................................................................................................................................37 A...............................................................................................................................................................Generally .............................................................................................................................................................................37 B........................................................................................................................Cases in intellectual property law .............................................................................................................................................................................38 II....................................................................................................................................................COMMODIFICATION ..................................................................................................................................................................................38 A.................................................................................................................................Commodification and theory .............................................................................................................................................................................38 B.............................................................................................................................Babies, people, and body parts .............................................................................................................................................................................38
OWNERSHIP OF PROPERTY
I. Ownership A. Original acquisition of property 1. Ownership vis--vis Indians in North America i. What colonists understood as transfer of property and sovereignty was often understood by Indians as temporary accommodations of land use ii. Federal government obtained property from Indians and distributed to citizens iii. All land ownership can trace back to federal ownership and grant through conquest, coercion, voluntary concession, or judicial fiat from Indians 2. Johnson v. MIntosh (U.S. 1823) [1.1 CB 4]: Johnson acquired property through his father who got it from Piankeshaw Indians. MIntosh bought same property from fed govt. Johnson sues MIntosh for ejectment. Rule: Indian sovereignty was quashed by conquest. Indians lost sovereignty in property (could not transfer), but Property Law Outline 3
retained an extinguishable right of occupancy in land. Land grant by Indians to Johnson was not within Indians power in light of exercise of fed sovereignty. i. Adopts positivist theory: title to land depends entirely on laws of nation in which land lies; rejected natural law theory (abstract principles) re: Indians ii. Indians retained a right of occupancy (grace of US govt), but US has absolute, ultimate title in all American lands and can quash Indian occupancy iii. As between European powers, rule of discovery (unclaimed lands got go to the first possessor thereof) Marshall had to decide this way in order to justify US property ownership 3. Rule of discovery and the theory of conquest i. Marshall in Johnson: not a moral claim, but rather force is the primary determinant of property rights ii. Property not a thing, but rather ability to get state to enforce your rights iii. Derives from Lockean labor theory of property, but hard for Marshall to justify why discovery = conquest 4. Legal positivism: law as the source of property rights i. Property exists only to extent that the law (sovereign) will protect it ii. Distinguishes between law and morals morals may justify laws, but the two are distinct and laws may act in contrast to moral dictates (Holmes bad man: analyze the law as would someone looking at it w/o giving it moral content) 5. Residual claims of Indians in real property i. Tee-Hit-Ton Indians v. United States (U.S. 1955) [1.3 CB 15]: US authorized timber co. to cut from lands occupied by Indians. Indians claimed title and sought Takings Clause compensation. Rule: Congress has never recognized Indian sovereignty over this land as Indian ownership after white possession has only been right of occupancy. Discovery and conquest gave conquerors complete sovereignty over all lands thus obtained. ii. As a tribe, youd prefer to be property owner rather than sovereign b/c latter than be conquered, while former has enforceable property rights B. Theories of property and how ownership arises (the 6 justifications) 1. Labor & Lockean theory: all property is held in common; property becomes personal only when you but your effort into it and remove it from the common store i. Focus is not on efficiency, but rather on moral desert justification for property labor theory gives laborer normative claim to property ii. Certain forms of labor are favored vis--vis others (colonial settlement is preferred to Indian occupancy w/o settlement) iii. Critique focuses on labor theory as justification for private property why award entire property for labor as opposed to just the value added to property 2. Possession brute social fact: if you have it, you can prevent others from taking it i. Actual possession of contested resources often creates presumption of right to possess unless other party can demonstrate a superior claim 3. Social welfare/utilitarianism award property rights in such way as to maximize social welfare i. Instrumentalist conception of property: how it contributes to social welfare ii. Create incentives for people to do the good by way of conferring property rights iii. Clear property rights enhance social welfare b/c clarifies who owns what and reduces the transaction costs of conveyance Property Law Outline 4
iv. Utilitarianism: involves a cost/benefit comparison with the goal of adopting rules that will promote efficiency and will maximize social utility/welfare 4. Settled expectations: reliance theory to protect property to peoples conformed notions of what property is and that law should vindicate settled expectations/reliance i. Point of property is to determine whether parties actual expectations w/r/t property are justified and thus protected by property law 5. (Natural) Rights: Property as an ends property has human value in and of itself i. Rights as a mean of protecting some important notion of autonomy or privacy, some aspect of personhood or dignity that cant be trumped by considerations of social welfare ii. Professor Radins human flourishing argument: humans beings need to own certain things in order to flourish (wedding rings, sentimental things) iii. Certain property not fungible b/c of the idiosyncratic value attached to it 6. Distributive justice: B/c they are a legal form of wealth, property rights have distributive effects that affect fair allocation i. Compromise btw. principle of protecting possession and promoting distribution ii. Prof. Michelman argues that property must be widely distributed otherwise all held in one person or limited oligarchy would create dictatorship C. Why grant property rights? 1. Allows expectation interests to arise that let people plan and invest 2. Allows bargaining for stuff that we want (economic efficiency) 3. Prevents exploitation of common resources 4. Prevents wasting of things that would otherwise be used up w/o property rights D. Possession as a component of ownership 1. Actual possession normally creates presumption of right to possess unless defeated by a superior claim of possession 2. Rule of capture: possession in animal arises only on deprivation of liberty of animal i. All these rules, at some point, appear to fade into standard (they are announced as bright line rules, but countervailing considerations apply them as standards) ii. Pierson v. Post (N.Y. 1805) [1.5 CB 78]: hunts fox. At end of hunt, comes in and captures fox. Rule: has no property interest b/c property right in animal arises only through capture (point where animals liberty is deprived and brought within hunters control). a. Rationale for majority: need clear rule to avoid litigation re: ownership b. Dissent: This should be resolved via social norms; point of hunting is to encourage elimination of fox and majoritys rule creates disincentives for people to put efforts into hunting foxes c. Dissents social norms arg. makes sense b/c what would hunters decide? They are the institutionally competent party to make this determination iii. Elliff v. Texon Drilling Co. (Tex. 1948) [1.7 CB 82]: and each owned property that shared underground oil deposits. withdrew oil at depth that caused this joint oil to crater and catch fire. sued for negligence. Rule: Owners own shared oil rights. Law of capture permits owner to draw oil from wells on his land even if he dips into others oil. No liability for reasonable legitimate drawing of oil, so long as capture not used to produce waste. a. Rule premised on reciprocity: you can do to others and they can do it to you b. Bright line rule (capture) evolves into standard (only reasonableness allowed) Property Law Outline 5
c. Encourages investment in oil drilling b/c can take others, but limits free-rider overconsumption problem b/c restricted by reasonableness d. Most jurisdictions have adopted reasonableness as standard for determining right to extract from a common pool of sub-soil gas and oil 3. Possession and other natural resources i. Water: Surface water tends to be nuisance; same rule as re: oil and gas a. Groundwater: Doctrine of free use or absolute ownership owner may withdraw from common aquifer even if draws from under others property (some states reject this and adopt test of reasonable use of groundwater) b. Surface water: Streams/lakes most states adopt reasonable use test, while some states adopt prior appropriations doctrine (first use trumps later) 4. Abandonment and finders law i. Finders can acquire title in goods that are properly abandoned (law of finders) a. Abandonment: When owner forms intent to relinquish all rights in property b. Lost: When owner accidentally misplaces property c. Mislaid: When owner intentionally left it somewhere but forgot where d. Finder of lost or mislaid property does not acquire title as to the true owner dispute is often over whether found property is abandoned, lost, or mislaid e. Finder has claim to lost/mislaid property against all 3d parties except owner f. Most states abandon distinctions, require finders to disgorge found property to police for period, with reversion in the finder if true owner not come out ii. Charrier v. Bell (La. 1986) [1.9 CB 92]: removed several tons of Indian burial artifacts. Louisiana, intervening for Indians, sued. Rule: Burial of artifacts of dead is not abandonment, which requires intent to abandon. Burial of these artifacts not tantamount to voluntary relinquishment of property interest. a. Central holding: grave burials not abandoned b/c we dont intend to relinquish any property rights in the things that are buried (dont abandon ancestors) b. Alternative holding: dont want to discourage archeological digs so require true owners to pay finders fee (i.e. treats property as quasi-abandoned) iii. Popov v. Hayashi (Cal. 2002) [1.10 Supp.]: Popov nearly catches fly ball when it leaves his glove precluding absolute dominion and control b/c crowd rushes him. Hayashi ends up with ball and establishes dominion and control. Rule: Rules of possession are defined in context: in baseball, need equivocal dominion and control. Crowd prevented Popov from attempting to establish so Popov has a pre-possessory right to possession, need to balance against Hayashis claim. a. Awards equitable division as the remedy between Popov and Hayashi b. Looks to social norms to determine ownership requirements in baseball c. Applies some rule of capture (Hayashi), but also to Popov b/c he gets a prepossessory right b/c others interfered with his ability to complete possession II. The right to exclude: a stick in the ownership bundle A. The right to exclude as a non-absolute right 1. Non-owners may have right to access under common law, accommodations law, etc. 2. More an owner has opened property to public, less the right to exclude is enforced 3. Trespass = unprivileged intentional intrusion on property possessed by another i. Intent element is intent to do the act (walk on the land), not intent to trespass ii. Trespass is privileged if consensual, necessity, or encouraged by public policy Property Law Outline 6
4. State v. Shack (N.J. 1971) [1.12 CB 106]: Owner employed migrant workers on his farm. Under federal law, sought to access migrant works to counsel them on their rights. Owner sought to have excluded as trespassers. Rule: conduct not trespass b/c complainant not have power to isolate migrant workers and exclude from helping migrant workers under color of federal law. No trespass under NJ law b/c owner had no right to exclude these s. i. However, owner can ask for ID, set limits on visitation, but cant exclude in toto ii. Rights of both parties are limited (owners right to exclude not absolute, workers right to receive visitors cant be excessive, commercial, etc.) iii. Some hints in case of privacy interests, rights needed for human flourishing 5. Desnick v. Am. Broadcasting Co. (7th Cir. 1995) [1.14 CB 111]: ABC got Desnick approval to film and use film in broadcast piece about the eye center. Desnick sues for trespass and defamation. Rule: Look to interest tort (trespass) is supposed to protect. Trespass works to protect the property of another person. No such interests violated here: only professional interviews shown, no intimate details revealed, no eavesdropping, no violation of doctor-patient privilege. i. Unclear that courts rule is workable: some conduct we like, some we dont (why do we say window-shopping okay [false pretenses], but not letting these same reporters in if their goal is to reveal trade secrets) ii. Food Lion, Inc. v. Capital Cities/ABC, Inc. (4th Cir. 1999) [1.15 CB 117 n.5]: Employees hired and then did investigative reporting. Initial entry not trespass, but subsequent videotaping did. Rule: Consent, though given, is not absolute so that even some actions ostensibly w/consent are trespass. 6. Uston v. Resorts Intl Hotel, Inc. (N.J. 1982) [1.15 CB 119]: was professional BJ player excluded from hotel for card counting. sought injunction on grounds hotel had no right to exclude him. Rule: When property owners open property to public invitation, they have no right to exclude unreasonably and have duty not to act in an arbitrary or discriminatory manner. i. Reasonableness of exclusion is decided on a case-by-case basis ii. is not security threat or disruptive, cant be excluded unless violates rules iii. Common law rule was that all except innkeepers and common carriers had an absolute right to exclude (this is rule adopted in most of country); NJ rejects 7. Right to exclude further modified by federal civil rights laws i. Laws dont apply to boarding houses < 5 rooms b/c more likely to be private residence and greater right of association and rights of privacy than public inns ii. CRA of 1964 and 1866 prohibit use of various types of discrimination as means of exclusion from public accommodations, make contracts, hold property B. The right to exclude and the First Amendment 1. Spectrum of property categories: private property quasi-private quasi-public common carriers public property. The more public the property, the more access the public has to the property 2. Marsh v. Alabama (U.S. 1946) [1.18]: Rule: Company owned town was equivalent to a true municipality in all ways except private ownership such that there were rights to public access and free speech in the towns shopping district (functional equivalent of a public business district). 3. Amalgamated Food Employs. Union v. Logan Valley Plaza (U.S. 1968) [1.18]: Extended Marsh to shopping center when speech related to shopper center operations. (Overruled by Court in Hudgens.) Property Law Outline 7
4. Lloyd Corp. v. Tanner (U.S. 1972) [CB 1.16 CB 160]: non-disruptively distributed handbills at mall, private property of . obtained injunction against s further distribution. Rule: Though there are 1st Amend. concerns, those apply only to state action and not private action. Private property does not lose its character simply because public is generally invited to use it for designated purposes. i. Dissent: Marsh held that more private owner opens his property to public use, more that private owner is constrained by statutory/constitutional rights of users ii. Dissent fears that more speech will be proscribed b/c speech parasitic on property and also that malls are where people are at, so need access in order to do speech iii. Distinguishing Marsh: Near-public nature of co. town v. private property iv. Distinguishing Logan Valley: Speech related to venue, near-exclusive means of protesting was to protest at that site 5. N.J. Coalition against War in the Middle East v. J.M.B. Realty Corp. (N.J. 1994) [1.19 CB 167]: non-disruptively distributed handbills against war on mall private property. s prohibited their access to the mall for such purposes. Rule: NJ recognizes broader affirmative speech rights than fed Const. Based on State v. Shmid, three elements to be considered: (1) nature, purposes, and primary normal use of private prop; (2) extent and nature of public invitation to use; and (3) relation of expressional activity to private and public use of property. i. Central fact: shopping centers were all-inclusive and sought to attract nonshopping crowds as well, despite fact that primary use was commercial/for profit ii. Right to exclude vindicated by allowing owner regulation of time, place, manner iii. Dissent: Purpose of malls was for shopping, owner not intend to create downtown C. The right to exclude and public resources 1. Public trust doctrine: certain property owned f/b/o people for common use i. Usually extends to navigable waters and certain related lands to protect publics right to use these areas for navigation, commerce, fishing, swimming, etc. ii. Public trust doctrine not give property right, but rather rights of access and use (cant convey it or exclude others from using it) iii. Other methods states use to achieve same ends: prescription, dedication, custom a. Dedication: gift of realty from private owner to public at large b. Prescription: publics prescriptive easement through long-term use of property c. Custom: long-term public use conferred continuing right to use 2. Matthews v. Bay Head Improvement Assn (N.J. 1984) [1.22 CB 182]: and its members own all the private roads leading to the public beach in Bay Head. Although the beach can be accessed by walking from an adjoining boroughs beach, access on s roads is retained exclusively to its members. sued for access under the public trust doctrine. Rule: Public trust doctrine permits public access to the water and to publicly owned upland beaches. Because the s activities parallel those of a municipality (lifeguards, keep beaches clean), takes on a quasipublic nature and must be open to the public. i. Access to upland beaches not just for passage, but rest/sunbathe and use of water (public trust extended past water to dry sands b/c those necessary for water use) ii. No other public beaches in Bay Head, if all boroughs in NJ did this, no public beaches would be accessible and this would violate public trust doctrine iii. s quasi-public nature important: rule limited to such situations and court takes no position on outcome if this were fully privately owned property Property Law Outline 8
III.
Adverse possession A. Doctrinal elements of adverse possession 1. Consistent elements of adverse possession i. Actual possession: ordinary use to which land is capable, how an owner uses it a. If claim is under color of title, actual possession of part of the parcel will translate into constructive possession of the entire disputed parcel ii. Open and notorious possession: required to put actual owner on notice that there is an actual possession and that the use of the land is in controversy iii. Exclusive possession: not that all are excluded, but excluded as an owner would iv. Continuous possession v. Adverse/hostile possession: Possession had to have been non-permissive, the rebuttable presumption is that possession and use is non-permissive a. Permission to use land ends adverse possession, running of statutory period b. Claim of right: formulation of mental states 1. Some states use objective test (do your acts show objective ownership?) 2. Some states use subjective test, but hard b/c hard to prove good faith/bad faith also choice between which test? (Good faith b/c thought he owned, or bad faith b/c he took affirmative steps to acquire?) vi. All of the foregoing for the statutorily required period a. Can think of AP like stat of limitations requiring true owner to bring suit 2. Adverse possession based on color of title i. Romero v. Garcia (N.M. 1976) [1.26 CB 206]: purchased land from married couple ( and s deceased husband); however, did not join the conveyance in the deed. s occupied during their marriage. sues for adverse possession. Rule: A color of title claim is satisfied despite lack of signature and lack of complete description of parcel so long as a surveyor could determine parcel or adverse possessors had built in such a way to identify bounds of parcel. ii. Color of title adverse possession tends to have lesser statutory waiting period iii. Can fix void/problematic documents of conveyance, avoid formal rules of transfer 3. Nome 2000 v. Fagerstrom (Alaska 1990) [1.27 CB 208]: had been in possession of piece of land and used it seasonally. erected structures during last period of adverse possession, but question remained re: whether his use before erecting structures in first year was adverse possession. Rule: Sufficient continuous, notorious, and exclusive use does not depend on significant improvements, substantial activity, or absolute exclusivity. The standard is what use an average owner would have made of the land. Also, hostility element is not subjective, but by objective test of whether took actions consistent with hostile ownership of land. 4. Doctrine of tacking: allows satisfaction of statutory period by adding up successive owners adverse possession connected via privity of title or claim i. Brown v. Gobble (W. Va. 1996) [1.25 CB 199]: Gobble thought two-foot tract of land was his and used it as such. Browns survey revealed it to be his and sued for ejectment. All elements of adverse possession were unchallenged except the statute of limitations. Gobble tried to prove through tacking. Rule: should have opportunity to show that they adversely possessed not by meeting the ten-year requirement, but by showing that previous owners did and that adverse possession passed to them by tacking. a. Court imposes clear and convincing evidence as standard of proof, idea is to make it hard for the adverse possessor to dispossess the actual owner Property Law Outline 9
b. At heart, case is re: previous owners adverse possession transferring to 5. Adverse possession of personal property: rules more protective of the true owner (i.e. running of period not start until true owner demands return of stolen goods) [CB 252] 6. Policy: adverse possession encourages use and development of land; redistribution of land in this way presumes active use has greater value than just holding the land i. Adverse possession helps to reconcile social norms of property ownership (possession/use) with legal norms of property ownership (title) (labor theory too) ii. AP helps make clear what people own and will help encourage transactions b/c people will be able to convey what they own (but probably wrong in reality b/c bright line rule of title probably would result in less litigation and more sales) iii. May be justified on moral grounds of protecting reliance on relationships (the relationship between land owner and the adverse possessor, the possessor has come to understand that the land owner will not interfere or object to his use) iv. May be justified on personhood grounds: property becomes a part of you v. Psychological claims: hurts more to lose something youve understood to be yours than gain to the owner of something he didnt think was his 7. Alternatives to adverse possession i. Force sales requiring true owner to sell to adverse possessor ii. Restrict adverse possession only to situations of good faith adverse possession iii. Creation of presumption that all use is permissive (minimizes adverse possession) iv. Put burden on adverse possessor to find the true owner v. Sharing regimes as between the true owner and the adverse possessor B. Hohfeldian terminology [1.30 CB 222]: Any time the state confers an advantage on one party, it creates a countervailing vulnerability on the part of others 1. Legal entitlements are not simply entitlements, but jural relations between 2 parties 2. Forerunner of realist jurisprudence re: property as state positivism and idea that property rights are relational (property rights are also property duties on others) 3. Basic elements of Hohfeldian terminology i. Right: claims, enforceable by state power, that others act in a certain manner in relation to the rightholder ii. Privileges: permission to act in a certain manner w/o liability to others and w/o others ability to summon state power to prevent those acts iii. Duties: absence of permission to act in a certain manner 4. Central correlative relationships: right-duty; privilege-no right; power-liability; immunity-disability C. Prescriptive easements 1. Community Feed Stores, Inc. v. Northeastern Culvert Corp. (Vt. 1989) [1.30 CB 232]: used gravel lot land for parking lot and backing out purposes since 1956. 1984 survey showed land to belong to , who erected barrier around its portion to prevent continued use. sought prescriptive easement. Rule: Elements for prescriptive easement are same as adverse possession, except right acquired is right of use rather than title. 2. Why not require party seeking prescriptive easement to acquire property from owner? i. Disconnect in offer price of prescriptive easer and sale price of owner ii. Distributional argument fearing that prescriptive easer will not have $ to do it
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TYPES OF OWNERSHIP
I. Estates in land A. Methods of devising land ownership 1. Land can be divided among owners and across time (temporally) i. Present estate holder has the current possessory right while the interest lasts ii. Future estate holder has right in the future to obtain right of possession iii. Dead hand problem: by letting current owners restrict future alienability of property, allows dead persons to control present use of land 2. Nonfreehold interests are those associated w/landlord-tenant, freehold are all others B. The estates system [CB 579] 1. FEE SIMPLE [ABSOLUTE]: property w/o an associated future interest; w/rights to possess, to sell, and to devise by will/leave to heirs i. O to A; O to A and her heirs; O to A in fee simple ii. Failure to indicate intent to create future interest is presumption of fee simple 2. Defeasible fees: present interests that terminate upon happening of specified event other than the death of the owner i. Automatic future interest in the grantor: FEE SIMPLE DETERMINABLE W/POSS. OF REVERTER a. O to A during residential use; O to A while used for residential purposes; O to A so long as for residential purposes, with reverter in O if otherwise b. Language denoting ownership during limited time period = grantor intent to terminate ownership rights automatically when condition violated or is met c. If condition vitiated, reverts immediately and adverse possession starts now ii. Reversion in grantor upon affirmative act of grantor: current interest is FEE SIMPLE SUBJECT TO A CONDITION SUBSEQUENT and the future interest is a RIGHT OF ENTRY a. O to A, but if used for nonresidential purposes, O shall have a right of entry b. Vests in grantor the right to choose to exercise whether to retake the property c. Rights of entry are devisable (to heirs) and transferable (to third parties) d. Historically, right of entry not possessory until exercised so adverse possession couldnt run, but courts avoid through doctrine of laches iii. Automatic future interest in 3d party: current interest is the FEE SIMPLE SUBJECT TO EXECUTORY LIMITATION and future interest is EXECUTORY INTEREST a. O to A so long as for residential purposes, then to B: shifting interest that automatically vests title in B when condition is broken b. O retains no interest after the shifting grant; future interest is in B or Bs heirs c. O to B when B graduates from law school: springing interest b/c the condition divests the original grantor instead of an intermediate party 3. Life estates: present estates measured by life of some party i. Present estate measured by grantees life: LIFE ESTATE a. O to A for life: after As death, reversion to O or Os heirs b. If A sells interest to B, B has life estate for length of As life, then reverts to O (Bs interest is a LIFE ESTATE PER AUTRE VIE) c. O to A for life, then to B: after As death, reversion to B or Bs heirs. ii. Contingent remainders a. Remainder is contingent if its triggered upon happening of event not certain to happen or if the remainder will go to person unascertainable at conveyance Property Law Outline 11
b. O to A for life, then to B if B has graduated from law school: contingent remainder that reverts to O if B not graduated from law school; if B later graduates from law school, the interest springs to B (SPRINGING INTEREST) c. Unlike common law, contingent remainders are now largely indestructible 4. Presumptions arising from the estates system i. Presumption against forfeitures (preference for current possessor rather than dispossessing in favor of another party): interpret conveyance if possible to avoid loss of property current owner ii. Presumption against restraints on alienation iii. Presumption against creation of new estates other than those already existing C. Interpreting conveyances under the estates system 1. Wood v. Board of County Commrs of Fremont County (Wyo. 1988) [1.35 CB 580]: conveys land to county for purpose of constructing hospital thereupon. County runs hospital, but sells to third party who seeks non-hospital use of land. Wood asserts either possibility of reverter or right of entry. Rule: Language indicating purpose for land grant but not indicating special circumstances to trigger automatic reversion does not create fee simple determinable. Deed not indicate length of time land has to be used for hospital before reverter interest will trigger. i. Central tenet is intent of the grantor in the manifestations of the grant ii. Hard for the court to make out type of conveyance b/c no magic words used iii. Strong presumption for fee simple absolutes unless magic words used; there will be no non-fee simple absolute unless explicit magic words (bright line rule) iv. Most states read purpose language as precatory (no intended legal significance) 2. Cathedral of the Incarnation in the Diocese of Long Island, Inc. v. Garden City Co. (N.Y. 1999) [1.36 CB 582]: Heirs of Stewart convey property to Cathedral so long as for church purposes with no right to re-convey; remainder or reversion rights are in Garden City Co. Cathedral files bankruptcy and court orders sale of land f/b/o Cathedrals creditors. Rule: Absent express intent to create right of reverter, the presumption is right of reentry. However, right of reentry at time of heirs conveyance was non-assignable. Also, NY law allows escape from restrictions if restrictions impede purpose for which property is held. i. NY statute allows removal of restrictions on charitable/educational land ii. No possibility of reverter b/c Co. could identify no evidence showing that intent 3. Edwards v. Bradley (Va. 1984) [1.38 CB 586]: Lilliston devised property to daughter (Edwards) on condition it never be encumbered or would pass to Edwards children. Edwards got all children except one to agree to sell property. On Edwards death, she left $1 to hold-out child (Bradley) and called for property to be sold. Rule: Expressio unius argument (Lillistons will had used fee simple in other places). Conditions on alienation on a fee simple are void, but conditions on a life estate as here are valid. This is a life estate b/c clear intent for land to go to children upon Edwards death or violation of conditions. i. Why not treat as fee simple subject to executory limitations? The conditions permissibly imposed do not include inability to alienate (i.e. cant say O to A so long as A doesnt convey, then to B) ii. Life estate vindicates intent of grantor that this property will pass to grandchildren 4. Interpreting ambiguous conveyances i. Determine grantors intent (from language of the deed if possible) Property Law Outline 12
ii. If language is ambiguous, construe in light of presumption against forfeiture of current possessor preference for the current holder versus future interest holder iii. Must balance grantors intent with public policy re: dead hand control problems Estates System: Freehold Interests [CB 579]
Present Interest Fee simple absolute Fee simple determinable Words Often Used to Create the Interest to A and his heirs to A in fee simple so long as (used for) while (used for) during until unless provided that on condition but ifthan O shall have a right of entry until (or unless), then to but if, then to for life In Grantor Future Interest In Third Person
Possibility of reverter
Fee simple subject to condition subsequent Fee simple subject to executory limitation Life estate
Right of entry if the condition is broken (or power of termination)
Executory interest Reversion Remainder
II. Concurrent ownership of property A. Tenants in common: most common form of concurrent ownership, parties have separate but undivided interest in the property, each interest is devisable and alienable 1. All tenants have right to possess entire parcel, regardless of ownership share 2. Ownership proportion is relevant only in determining division of sale proceeds 3 O to A, B, and C as tenants in common (equal ownership) O to A, B, and C with 1/2 undivided interest in A and 1/4 undivided interest each in B and C (non-equal ownership) 4. Olivas v. Olivas (N.M. 1989) [1.40 CB 646]: Husband and wife owned community property while married and tenants in common after dissolution of marriage. As result of lengthy delay between divorce decree and property division, husband got second home. Husband sued for constructive ouster and rent from wife. Rule: Ouster does not require an affirmative physical act, but can arise w/o fault of either cotenant when the realities of the situation prevent the cotenants from sharing occupancy. i. When co-tenants cant live together on property, constructive ouster and remaining co-tenant has obligation to pay rent ii. Husband bears burden of proving constructive ouster, which he failed to do b/c TC could have construed his leaving as wanting to live with new girlfriend iii. Could have distributional rule: only when the poorer spouse is ousted does rent have to be paid iv. Ruling seems to turn on fault idea that husband pulled out of the house to live w/girlfriend rather than pushed out of the house (actively or constructively) v. Alternate rule: No constructive ouster, only have actual ouster 5. Carr v. Deking (Wash. 1988) [1.41 CB 650]: Father and son own property as tenants in common. Against sons will, father leases his portion of property to Deking for Property Law Outline 13
payment in crops. Father dies. Son sues to eject Deking. Rule: One co-tenant may lease property w/o others consent. Lessee steps into lessors shoes for duration of lease. Son not entitled to eject lessee, but rather to partition. i. Deking gets full use of land under lease b/c co-tenant can lease it all ii. Property rule awarded here allows parties to bargain either for sale of property to Deking (Deking buys out) or for son to buy-out Dekings lease (son buys out) 6. Kresha v. Kresha (Neb. 1985) [1.43 CB 655]: Husband and wife own as tenants in common. Husband goes behind wifes back and leases to son. Husband and wife get divorced. Court awards property to wife, is it encumbered by the leas to the son? Rule: Wife takes the property subject to the lease to the son. Husband had full right to lease, and wife knew about the lease and could have objected at the property dissolution stage. i. Court says unlike situation of sale of property which remains encumbered by lease however in sale, you do title search and would know re: lease, not the same in situation of divorce and property dissolution B. Joints tenants WROS: less common than tenants in common; co-owners are treated as a single owner so one when dies, decedents share passes by operation of law to the surviving tenant 1. Requires the four unities to create: i. Time: interests must be created at the same time ii. Title: all joint tenants must take interest under the same instrument iii. Interest: all joint tenants must have an equal share iv. Possession: all joint tenants must have the right to possess entire parcel 2. Severance if one party conveys his/her interest result is tenants in common (severance does not change relationship between non-selling parties, who remain joint tenants, but who are tenants in common w/r/t selling party) 3. O to A, B, and C as joint tenants 4. Ambiguous conveyances vis--vis intent are interpreted as tenancies in common 5. Tehnet v. Boswell (Cal. 1976) [1.42 CB 652]: Johnson and Tehnet own property as jt. tenants. W/o Tehnets permission, Johnson leases property to Boswell for 10 years. Johnson dies 3 mos. into lease. Tehnet brings suit to void lease. Rule: Leases, unlike sales, are not inconsistent with jt. tenancies so as to require severance. Court will sever only upon acts that indicate both parties intend to end the joint tenancy. However, Tehnet takes property free and clear of all liens, so the lease does not encumber Tehnets ownership. i. Fair to Boswell who had no knowledge of jt. tenancy? Law favors protection of the joint tenant owners right to take in fee simple absolute free and clear ii. May make sense: hard to create jt. tenancies, should be hard to eliminate unless clear evidence of the intent to terminate the joint tenancy C. Similarities between tenancies in common and joint tenancies 1. Either JT or tenants in common can seek partition, judicial remedy of physical division of property, or if not feasible, forced sale and division of proceeds 2. Both have right of possession and can possess w/o paying rent to other, except in cases of ouster; either can lease the entire property w/o the others consent D. Tenants by the entireties: only available in some states and only as between spouses 1. Requires 4 unities of joint tenants and can be dissolved only upon marriage Property Law Outline 14
2. Property cant be partitioned except in divorce and in most states, individual interest of one spouse cant be alienated w/o consent of the other spouse 3. Many states read Married Womens Property Act as abolishing tenancy in entirety 4. Sawada v. Eno (Haw. 1977) [1.43 CB 659]: Husband and wife Endos owned property as tenants in the entirety. Endo caused car accident with Sawada. Before judgment is entered, Endo conveys property to sons. Sawada gets judgment and tries to execute against property on theory of fraudulent conveyance. Rule: No fraudulent conveyance b/c property owned as tenants in the entirety not subject to execution so no fraudulent intent w/r/t conveyance. i. Alternatives court could have adopted that other courts have a. Treat as fraudulent conveyance, reverse and allow to execute on husbands share but problematic b/c infringes on wifes right to inherit it b. Cant partition b/c not permissible by TBTE, so cant attach one or other c. Neither spouse can alienate their share for non-joint debts d. Either spouse can alienate, but subject to other spouses survivorship rights ii. Dissent: Either spouses creditors should be able to levy on spouses share better thing to do is elevate wife to husbands status prior to Married Womens Property Act, rather than bringing the wife down E. Marital property what becomes property of the marital estate for division purposes 1. OBrien v. OBrien (N.Y. 1985) [1.45 CB 671]: Husband goes back to school to get BS and MD. Wife gives up opportunities to follow husband and support him while hes in school. Husband divorces two months after getting MD. Is the MD marital property for division purposes? Rule: NY treats this as property b/c it has value. Awards 1/2 valuation of what general surgeon (husbands field) makes above what a white man with a college degree would make. i. Alternative would be to value this on a services rendered basis by the wife ii. Dissent: Valuation will force husband to work as surgeon, unfair to him iii. Alternative might be to make this fault-based system, but were uncomfortable in marriage situation saying one spouse is bad or at fault iv. Most courts say professional licenses not marital property [CB 678 n.1] 2. Marital property exists differently in community and separate property states 3. Separate property states: spouses own separately except to extent they choose to intermingle their property; equitable distribution occurs upon divorce; spouse can freely devise upon death (although limited by statutory forced share statutes) 4. Community property states (9/50 states): only property acquired during marriage is community property (all other property before marriage and some during marriage remain separate property); some states give half to each upon divorce but most now go route of equitable distribution; spouse may only devise one-half of community property (deceaseds share) since other half vests in other spouse; creditors can reach separate property, and occasionally can reach community property 5. In re Marriage of King (Mont. 1985) [1.46 CB 72]: Husband and wife w/2 kids separated in 1980 and dissolved in 1981. Court awards house to wife on basis of wifes continuing support of children. Rule: Under Montana property settlement statute, TC can apportion property to promote best interests of children and to promote equitable apportionment. i. Forced sale of home as per husband would incur significant realty fees and uproot children from the familial home (psychological justification) Property Law Outline 15
ii. Significant that husband is professional gambler with unpredictable income from which to support children (distributional choice) 6. Watts v. Watts (Wis. 1987) [1.47 CB 688]: Unmarried couple cohabited for twelve years, had 2 children, held themselves out to be married, and owned property. They separated. Woman was homemaker, while man provided financial support. Rule: In making distribution of property, court looks to doctrines in contracts, equity, and property to fashion a remedy. i. Formalist objection: these are incidents of marriage that should be available only to those that accept the burdens of marriage ii. Policy objection: dont create forms approximating marriage b/c this will create disincentives to parties getting married retort: marriage is re: love iii. Why court looks to contracts: settled expectations, social welfare, distributional and labor reasons for wanting to find a contract iv. Why court gives equitable remedy: distributional and fairness concerns b/c the wife was the homemaker while the husband accrued many assets 7. Over time, marriage tends to take on contractual characteristics such as premarital agreements re: property distribution at marital distribution, but courts are hesitant to go full speed ahead b/c of fear of meretricious nature of contracts 8. Goodridge v. Dept of Public Health (Mass. 2003) [1.49 Supp.]: Court says reads its principles from Lawrence v. Texas, but no need to find affirmative duty for state to have to recognize marriage from constitutional prohibition on state right to criminal sodomy based on core of privacy rights Tenants in common JTWROS TBTE Alienable? Y Y, but severs joint tenancy N (except by spouses jointly) Devisable? Y N survivorship N survivorship Leaseable? Y Y in Tehnet; N in other juris.1 N Mortgageable? Y Depends on jurisdiction Maybe jurisdictional
III.Leasehold interests A. Categories of tenancies 1. Term of years: lasts for a specified period of time determined by parties; terminates automatically at lease end; landlord retains future interest of reversion; death of either party does not terminate the tenancy 2. Periodic tenancy: renews automatically at specified period unless either party ends relationship; notice is required prior to termination of lease; death of either party does not end tenancy, but heirs of either may exercise right to terminate 3. Tenancy at will: similar to periodic tenancy but can be ended w/o notice by either party (most states have eliminated this form of tenancy with notice requirements); death of either party typically terminates tenancy
Four ways in which this can be treated: (1) lease severs the joint tenancy and creates a tenancy in common; (2) lease does not sever the joint tenancy but ends on the death of the lessor co-tenant; (3) lease temporarily severs the joint tenancy for the term of the lease; or (4) lease does not sever the joint tenancy but encumbers it after the lessor co-tenants share.
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4. Tenancy at sufferance: tenancy created by tenant who wrongfully holds over after the termination of he lease (as distinguished from a trespasser); landlord who continues to accept rent checks may have agreed to a new tenancy based on check frequency i. Minority states: if lease was term of years, new term of years lease is created ii. Landlord can treat tenant as holdover and sue for possession B. Leasehold interests and lease commencement and termination 1. Self-help eviction: most states deny landlords self-help and require landlords to evict through courts, though oftentimes summary process can be used which limits issues that can be brought in lawsuit and expedites the eviction process 2. Vasquez v. Glassboro Service Assn (N.J. 1980) [1.49 CB 741]: Migrant farmworkers hired by association for labor services and resided on s property. After termination of employment, farmworkers were given summary hearing and then evicted from property. Rule: Farmworker does not qualify as tenant protected under state tenancy statutes. However, unequal bargaining power between parties is particular evident in case of migrant farmworker so that public policy requires reading an implied provision of reasonable time for workers to find alternative housing before eviction. i. NJ allows summary dispossession methods for leases, but no such provisions for farmworkers court fashions appropriate remedy to give workers some protection ii. NJ law prohibits eviction of janitors/superintendents living on premises w/o judicial process, but court finds farmworkers dont fit under this rubric iii. Court eliminates self-help process for farmworkers and gives them at least some rights under law but summary dispossession probably sufficient iv. Can parties negotiate around this rule depends on if waiveable default rule or if its a mandatory default rule still fear of bargaining power, so probably avoid contracts to resolve this kind of situation 3. Landlords duty to mitigate damages i. Sommer v. Kridel (N.J. 1977) [1.51 CB 762]: entered into lease and paid security deposit and months rent, but never took occupancy b/c of changed circumstances. sought to terminate lease, but never responds. never releases for term of lease, even though third party inquired re: leasing. Rule: Court imposes implied duty to mitigate, especially where lessor turned away 3d party ready and willing to lease. ii. Traditional rule does not require landlord to mitigate lease damages, but many states have rejected this position and imposed duty to mitigate iii. Upon breach, landlord can accept termination and release lessee from lease obligations, or he can re-let on the tenants account (where tenant remains responsible for remainder of lease if landlord cant re-let) iv. Duty to mitigate is not a duty per se, but rather an affirmative defense for lessee v. Mitigation may be efficient b/c encourages use of land; but may be inefficient b/c landlord has already paid transaction costs for locating this tenant vi. Acceleration clauses sometimes upheld, but sometimes rejected as penalties 4. Compulsory vs. non-compulsory terms in LL-T relationships i. Pro-compulsory terms: can deal with disparity in bargaining power, dignitary harms (dont want ppl. to contract out of some things), externalities (3d party effects not incumbent on parties), failures in housing market ii. Anti-compulsory terms: rights based arg that owners can do what they want with their property, contractual autonomy of both parties, efficiency/distributional Property Law Outline 17
claim (compulsion to certain terms might harm ppl who were trying to help) 5. Tenants power to sublease and LLs right in opposition i. Sublease vs. assignment: assignment conveys all of the assignors property interests to the assignee w/o reservation of rights in assignor; sublessee is liable only to the sublessor while sublessor is liable directly to the lessor (middle-man) a. Assignors/assignees are in privity of estate; sublease parties are in privity of K b. Even under sublease, LL can sue sublessee for possession (and lessee for rent) ii. Kendall v. Ernest Pestana, Inc. (Cal. 1985) [1.53 CB 785]: Lessee sought to assign his lease interest in commercial hangar to third party that had stronger financial status and agreed to be bound by lease. Sub-lessor refused assignment based on written consent provision. Rule: Case applies only to commercial leases. CA rule = leasehold interests should be freely alienable except as limited by contractual provisions. Landlords can withhold consent only if they have a commercially reasonable objection for withholding consent. a. Many jurisdictions will enforce consent clauses as is, though tend is toward implying a commercial reasonableness standard to lease consent clauses b. Impetus for change in CA: presumption against unreasonable restraints on alienation and increased treatment of leases as contracts (idea that where party as discretionary power in K, duties of good faith and fair dealing) c. Under CA standard, can withhold consent based on lessees finances, suitability of premises for proposed use, legality of use, nature of occupancy d. LL cant withhold in order to obtain higher rents b/c getting higher rents has nothing to do with promoting leasehold alienability (fears of coercion) e. Objections to this rule: LL contracted for this T; LL bargained for unrestricted right to object to sublease; allows T to profit by increase sub-lease rents iii. Slavin v. Rent Control Bd. of Brookline (Mass. 1990) [1.55 CB 792]: T sub-leased apartment to 3d party w/o consent of LL as per lease. LL sought to evict T based on non-compliance w/lease. Rule: Most states still enforce consent clauses in residential context (though changing in commercial); LL in residential retains contractual right to refuse consent arbitrarily. a. Residential leases different than commercial, esp. here, b/c no fear of LL withholding for financial gain (rent control juris.) and no need found in case law for alienability of residential property but unclear whether the residential/commercial distinction does much work [1.55-56] b. Vast majority of states retain rule of absolute discretion in residential leases C. Warranty of habitability and the covenant of quiet enjoyment (CQE) 1. Covenant of quiet enjoyment: LL has duty to provide T with premises that are sufficient so as not to force the tenant out (i.e. no constructive eviction of T) i. Idea that ppl need certain elements to live and not be constructively evicted ii. Minjak Co. v. Randolph (N.Y. 1988) [1.56 CB 805]: T rented loft for use as music studio and home. LL did major construction, causing debris to enter loft and significantly impairing Ts use of the property. T stopped paying rent and LL sought to recover rent, which T defended against on grounds of constructive eviction. Rule: Actual abandonment of property not required in order to show partial constructive eviction, grounds for withholding rent. a. Traditional breach of CQE requires T to abandon premises b/c of breach, but now in case of constructive eviction, need not have actual abandonment b. Doctrine of partial constructive eviction requires T not to have to abandon Property Law Outline 18
c. Punitive damages available where LLs act/inaction was intentional/malicious iii. Blackett v. Olanoff (Mass. 1976) [1.57 CB 808]: T argue constructive eviction b/c LL didnt prevent other commercial T from operating nightclub w/crowds and noises until all hours and engaged in fighting. LL defends on grounds not responsible for actions of other Ts. Rule: While constructive eviction usually requires some intentional act of the LL, LL can constructively evict for consequences of things he did or failed to do. Disturbances to T were natural consequence of LL failing to enforce noise restrictions in leases with commercial tenants. a. Typical rule is that LL not responsible for one Ts annoyance of another exception created here where LL knowingly permitted one to disturb other b. Most important element: LL could by lease quiet commercial T, but didnt do c. Solution in residential context: eviction based on commercial T nuisance 2. Contracting around CQE probably not b/c fear of distributional effects ppl who will contract tend to be poorer and look for any way to cheapen rent 3. Javins v. First Natl Realty Corp. (D.C. Cir. 1970) [1.58 CB 815]: LL seek payment of back rent on property in urban area. withheld rent based on numerous violations of local housing regulation. Rule: Lease in urban area contemplates habitable premises. Court will imply warranty of habitability into such leases based on enforceable provisions of local housing code. i. Traditional rule not require habitability b/c concern was more for the piece of land (agrarian) rather than improvements to the land, but today, T tend to want a full set of goods & services (electricity, heat, plumbing, etc.) ii. Many courts impose warranty of merchantability b/c buyers rely on sellers for good products same idea here standard is housing code, which effectively becomes another term in the lease iii. Why need change in old rule: (1) old rule based on idea that T fully capable of making all repairs, while current T is not jack of all trades and has little incentive to make repairs in short-term lease; (2) recognized broader protections for consumers (esp. since we have this in new residential construction); (3) nature of todays urban housing market2 iv. T duty to pay rent now conditioned upon LL provision of habitable premises v. Counter-argument: imposing warranty increases LL costs and some LL will exit market thereby leaving tighter market and higher rents; alternative might be to have greater governmental enforcement of housing code vi. Warranty of habitability marks movement of LL-T from property to K law vii. Warranty is generally non-disclaimable in almost all jurisdictions IV. Affordable and fair housing A. Three fundamental problems of affordable and fair housing 1. Housing production and the availability of housing i. If you think its supply side problem, could be solved by govt creating more housing or govt subsidizing new construction ii. If you think its demand side problem, create subsidies for people to enter market; however for most ppl, vouchers dont got all the way to home ownership/rental iii. Historically tried all three approaches (govt building superblocks, providing subsidized Section 8 housing, or providing vouchers) but generally all have failed
2
Idea that housing demand > housing supply, so well have race to bottom by LL w/o warranty of habitability.
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a. Superblocks of 1960s failed b/c housing could really only be built in segregated way so most housing built in poor neighborhoods w/minorities b. Vouchers tend to increase overall cost of housing market b/c prices go upward as demand for housing services increases 2. Homelessness as a social ill i. Pottinger v. City of Miami [1.62 CB 192]: Rule: Govt has to provide space for the homeless to perform necessary functions. Miami law forbidding homeless from certain public areas denies the homeless a place to perform acts necessary to living (sleeping, urinating, etc.). ii. One solution: give homeless fundamental right to housing enforceable against the government and so can treat them as productive members of society iii. Another: change property rights to give homeless rights in public property 3. Economic discrimination in housing i. Rent control is one way to make housing affordable a. Arguments against rent control: increases demand and encourages overconsumption of housing (own house vs. roommates); decreases supply b/c landlords have less incentive to provide housing; rent control tends to benefit those that need it least; opens way for black market b. Arguments for rent control: housing market is already heavily influenced by taxes and zoning so comparison to unregulated market is unfair; would promote new construction b/c new is exempt from rent control and could get above-market rents; rent control provides reasonable return on investment; though it may lead to decrease in housing, it makes housing accessible to those that have no housing options in an unregulated market ii. Need particular data re: housing market to empirically test these claims B. Fair housing and race 1. Tend to overlap b/c oftentimes race is a proxy for economic status 2. Fair Housing Act prohibits discrimination in sale or rental of housing based on race, color, religion, sex, familial status, or national origin [CB 939], designed to provide housing opportunities to minorities i. Works in conjunction with CRA of 1866 (esp 42 USC 1982) ii. Main provision is 3604 that prohibits discrimination housing sales/rentals iii. FHA may have opened up some access to blacks via elimination of most blatant facial discrimination, but RE agents still tend to steer by racial groups 3. Asbury v. Brougham (10th Cir. 1989) [1.63 CB 945]: Black woman told no housing opportunities and that there were non-waivable rules re: children. White tester sent in and given opposite information. Suit under FHA and 1982. Rule: must make prima facie case of discrimination. then has opportunity to argue why its actions in refusing to rent or negotiate were based on non-race considerations. Burden then shifts to to show pretextual nature of s assertions. i. Punitive awards may be granted on theories of agency and ratification ii. FHA tends to be underenforced b/c most people refused housing need housing immediately rather than pursuing judicial remedies 4. United States v. Starrett City Assocs. (2d Cir. 1988) [1.64 CB 950]: maintained strict racial balancing in its housing complex so as to avoid white flight. US claimed this violated FHA b/c it has a disproportionate effect on minorities. Rule: FHA applies not only to discriminatory intent actions, but actions that have disparate impact Property Law Outline 20
on minorities. While strict quotas enforce FHAs integration standard, it violates FHAs anti-discrimination standard. i. Like public schooling arena, some remedies might be available if theres past history of discrimination and the remedy is limited in time or scope Starrett Citys is neither remedial nor limited in time/scope ii. White flight justification white flight occurs b/c of racism/irrationality or sometimes rational b/c decline in property value/services caused by others flight iii. Dissent: FHA meant to bar perpetuation of segregation, s conduct here is to maintain integration and promote fair housing (not segregated housing) iv. Majority: FHA is meant to be anti-discriminatory effect of intermediate actors that would change that are not relevant to this analysis this program hurts the very minorities it was designed to help 5. City of Memphis v. Green (U.S. 1981) [1.66 CB 960]: City closed streets to prevent access from black neighborhood through white neighborhood. Rule: No 1982 violation b/c streets are closed to both blacks and whites (no special benefits for whites) and no depreciation in black property values or restricted access to black homes. i. Majority: inconvenience is not the basis for a 1982 claim. ii. Dissent: Majority ignores plain and powerful symbolic message of inconvenience in this case tells blacks that they must take detour around white neighborhood; need to consider more than just effects on property values. iii. How would you make a FHA claim? Probably focus on access to neighborhood 6. Attorney General v. Brown (Mass. 1987) [1.67 CB 993]: Brown refused to rent to Section 8 certificate holders even though his housing was in their allowable price range. Rule: TC erred in dismissing Browns defenses based on negative effects of having to take on Section 8 housing and his legitimate business reasons for not doing so. i. Implication: legitimate business reasons may justify denial of rent to Section 8 ppl ii. Browns asserted reasons: administratively expensive, he insisted on first month and last months rent, Section 8 leases materially disadvantageous to him
PRIVATE REGULATION OF LAND USE

I. Nuisance: substantial and unreasonable interference with use and enjoyment of land A. Contours of the doctrine 1. Page County Appliance Center, Inc. v. Honeywell, Inc. (Iowa 1984) [2.1 CB 308]: s travel agency computers caused interference with s television sets in his retail store. sued for nuisance. Rule: Fair test of whether the operation of a business is a nuisance is to consider its reasonableness given the manner, circumstances, and place of its operation and taking into account priority of occupation and location. i. Honeywell is responsible as material participation in causing nuisance b/c it created the computers that emitted this radiation ii. Favoring : interference b/c TV screens dont function any more; was first in time; computer could be fixed so not to leak radiation (unreasonable not to fix it) iii. Favoring : normal use in this case (computers) and is hypersensitive in its use iv. Leads back to intuition: should computers reasonably leak radiation? Which party is the active use? Cost-benefit analysis. Property Law Outline 21
2. Fountainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc. (Fla. 1959) [2.2 CB 319]: sought to build upper levels to hotel that would throw shadow on s hotel and beach. Claim based on interference with s entitlement to light across s property. Rule: No nuisance b/c has no property interest in access to light coming from adjoining property. i. Court rejects English doctrine of ancient lights ii. s most compelling argument: it will be put out of business if s use is not enjoined interference does not get more substantial than this iii. Depending on how property rights assigned, there are costs on both parties (i.e. if theres a nuisance, will have to pay, vice-versa in other hypothetical) iv. Do cost-benefit analysis to see costs each party would bear under each scenario 3. Boomer v. Atlantic Cement Co. (N.Y. 1970) [2.3 CB 315 n.5]: Rule: Cement factory spewing particulate matter is a nuisance, but not enjoined b/c of the employment it brings to area. Court provides a damages rule instead. 4. Prah v. Maretti (Wis. 1982) [2.3 CB 341]: Prah builds house with solar panels. Maretti moves in and builds house that blocks Prahs access to sun. Rule: Rejects traditional rule of no right of access to sunlight based on changed situations and recognition of collecting sunlight in solar panels as a valuable interest. i. Reasons for old rule that are rejected: old rule used to be freedom to do whatever as long as no physical damage to neighboring property; no need for sunlight b/c of artificial lighting; society interest in promoting growth. ii. Case rejects Fountainebleaus central holding of no property interest in sunlight, but that case can be defended on two grounds: if we dont like the right, we can always create a statutory right to light and a per se property rule lowers litigation costs (and parties can more easily negotiate around a clear rule) iii. Dissent: this is something for the legislature to consider, a policy judgment B. The Coase theorem and economic analysis of law [CB 321] 1. Legal realists argue maxims like nuisance dont get us anywhere, need tools to help focus on issues: social welfare analysis of law and economics movement 2. Goal is to promote efficiency: increasing social utility or promoting the greatest amount of general welfare at the lowest possible cost 3. Problem in nuisance is externality: parties that benefit from causing nuisance do not bear the full costs of the nuisance so they tend to overconsume a good that is cheaper than expected to be (i.e. the right to pollute) i. If factory can pay homeowners and still operate profitably, then it is overall an efficient operation b/c it internalizes all costs of its operations ii. General idea is to get parties to properly price their consumption by forcing them to internalize all costs associated with that consumption 4. Coase Theorem: Criticizes idea that parties should internalize their external costs the pollution harms homeowners, but likewise, homeowners demand to stop the pollution harms the factory. Granting a property right in either direction will impose costs on one party or the other. i. Part I: regardless of how the property rule is allocated, in the absence of transaction costs, any legal rule will be efficient b/c parties will be able to bargain around it if necessary ii. Part II: with transaction costs, legal rules creating entitlements can have an effect on efficiency. Courts can maximize efficiency by granting the entitlement to the party that would have purchased it in the absence of transaction costs. Property Law Outline 22
iii. Though no effects on efficiency in absence of transaction costs, can have huge distributional effects depending on how the entitlements allocate resources iv. Transaction costs include the costs of bargaining, of acquiring information, of engaging professionals, cost of litigation. Bargaining costs become even greater as more and more parties are added to the picture. 5. Critique of law & econ: need some moral theory to justify why wealth maximization is the highest value. i. The leading theoretical opponent to utilitarianism is rights theory. Rights says that increasing overall social wealth isnt the only goal. There are natural rights, inalienable rights, etc. ii. Critiques of the efficiency analysis: a. Wealthy have greater power because efficiency is defined by willingness and ability to pay, so efficiency has limitations as an ethical criterion of social decisionmaking as constrained by existing distribution of wealth b. Offer/asking problem people value things differently depending on whether they already own it or if they would have to buy it. Efficient result depends on initial distribution of wealth c. Externalities complicate the offer/asking problem. d. Difficulty of identifying transaction costs e. Commodification certain things, like maybe workplace safety or adoption, should never be on the market but should rather be treated as rights that are inalienable. Also cant commodify justice or fairness concerns f. Law shapes preferences (feedback effects): legal rules shape what we value and may also express values that we hold dear (Bill of Rights) 6. Descriptive law & econ tries to explain why common laws development is/isnt efficient; normative approach tries to formulate particular rules based on social welfare analysis C. Forms of remedies available in nuisance cases and generally 1. Calabresi and Melamad: you can grant various types of remedies property rules; liability rules; inalienability rules 2. Injunction for (Fountainebleau can build): can choose whether or not to bargain away this right. 3. Injunction for (Fountainebleau cant build): can choose whether or not to bargain away this right. 4. Liability rule for (purchased injunction): can pay a price set by the court at which must sell its right to build. If pays, must sell stop. 5. Liability rule for : can build, but if constructs, must pay to 6. Inalienability rule for can build, but it cant bargain it away. Why would we want an inalienability rule? B/c although a deal might be made, the deal continues to impose negative externalities on other third parties (wider externalities). 7. Property rules (injunctions) are good where transaction costs are low so that parties can bargain around them. Liability rules are better where transaction costs high b/c a third party will already have priced it out. Inalienability rule is situation where we dont want parties to be able to get around court-order. 8. Remedies might be structured to favor the low cost avoider i.e. in Prah, allow solar panel guy to prevent building before neighbor starts building, but after neighbor has built, force solar panel guy to reform his solar panel kit (cheaper than making neighbor move his house) Property Law Outline 23
II. Easements A. Classifications and terminology of easements 1. License: temporary invitation to come onto ones property to do something, generally revocable at will, can be expressed or implied, no property interest conferred 2. Easement: Permanent, irrevocable rights to non-owners to use property in certain way i. Affirmative easements: grantee can to enter land and use it (usually right of way) ii. Negative easements: agreement not to do something on ones own land (now typically thought of as restrictive covenants) new ones include conservation easements, preservation easements, historic easements a. Generally disfavored b/c buyers typically not on any kind of notice of negative easements when they purchase property iii. Easements are a form of property rights 3. Running with the land: easement that runs with the land is attached to the parcel so that any future owner is both burdened and benefited by the easement i. Easements by necessity, implication, and estoppel generally run w/the land only if they were intended to do so and are reasonably necessary for enjoyment of the dominant estate ii. Burdens of easements run with the land if they are (1) in writing; (2) original grantor intended to run w/land; and (3) subsequent purchaser have notice at time of purchase a. Notice may be by way of actual notice, inquiry notice (some physical inspection should have indicated signs of easement), or constructive notice (through the chain of title) iii. Benefits of easements run w/the land if they are attached to the particular parcel (appurtenant easement), but if they arent attached to a particular parcel and there is no dominant estate then we have an easement in gross distinction depends on the intent of the original grantor a. Easements in gross can be enforced by their beneficiary (think utility lines) b. Green v. Lupo (Wash. 1982) [2.9 CB 396]: Greens get 30-foot easement at north of property in exchange for release of part of property to Lupo. Green want to use the easement for road to new trailer park and for motorcycle runway. Lupos argue easement is in gross and personal to the Greens. Rule: Presumption against personal easements and in favor of appurtenant easements. Reasonable that easement would be for future rights of way. In gross easement benefits only the Greens and does not run with the land to the subsequent purchaser of the trailer home park Presumption in favor of appurtenant easement helps w/notice b/c when buyers investigate property, theyll now of existence of easement; also limits number of persons w/easements to those w/surrounding land Classic nuisance analysis re: whether motorcycles can be used on land easement can be limited only by reasonable restrictions not absolute ban c. Appurtenant easements not severable from land seller of property w/easement cant sell property and retain easement in gross for himself d. Courts may hold in gross easements not transferable if the grantor did not intend for them to be transferable to other parties 4. Dominant vs. servient estate: dominant estate is the one benefited by the easement, servient estate is the one burdened by the servitude Property Law Outline 24
B. Forms of easements and how they are created 1. Express easements in writing i. All express easements must be in writing in order to be enforced by SoF ii. Buyers are generally put on inquiry notice of express easements b/c they should be revealed by investigation of the chain of title 2. Easements by estoppel (a/k/a irrevocable licenses) i. Holbrook v. Taylor (Ky. 1976) [2.8 CB 363]: seeks to get access via road over woodlands owned by . had previously permitted to use road for access purposes, important after built house with road access. now blocks usage of that road. Rule: A license to use property becomes an easement by estoppel because of investment or reliance interest by the grantee of the license. a. Efficiency argument: needs some way to get to his house and creates incentives for development of land if grantee knows hell be able to get to it b. Counterargument: offered to sell right to use land to prior to home construction, but declined why not force to buy it may previously have given permission to use land or fear that blackmailing once starts buiding ii. Central idea is that no party would invest in property construction relying on existence of right of ingress/egress over a neighbors property if they thought the neighbor could simply dispossess them of these rights of entry and exit 3. Easements by prescription 4. Easements (implied) by necessity i. Finn v. Williams (Ill. 1941) [2.9 CB 384]: conveys property to , leaving no outlet of ingress and egress except over s property (one piece of property surrounds the other). Rule: Where owner conveys land leaving him w/no outlet except over conveyed land, easement by necessity exists over the conveyed land. This implied right runs with the land and may lay dormant before being exercised in the future. ii. Elements of an easement implied by necessity: (1) unity of title; and (2) absolute necessity in sense that grantor can ingress/egress from his property only over the land of the grantee iii. We grant easement by necessity on idea that nobody would sell landlocked property unless he had some way of access to/from the property 5 Easements implied by prior use i. Granite Properties L.P. v. Manns (Ill. 1987) [2.8 CB 377]: owned whole plot of property. Sold some of it to . continued to use driveways over s properties in order to provide rear access to s shopping center and for access to s apartment complex. seeks to stop this access. Rule: must prove necessity as an element of an easement implied by prior use, but need only prove reasonable necessity in order to acquire easement implied by prior use. ii. Elements of easement implied by prior use: (1) prior unitary owner; (2) notice requirement that purchaser bought servient estate subject to easement; and (3) use is necessary and beneficial to enjoyment of the parcel retained by the grantor iii. Most courts hold that absolute necessity is not required iv. Argument for : Granite could and should have expressly reserved an easement when it conveyed the property to v. Argument for : could have performed title search and surveyed property prior to purchase in order to determine any possible encumbrances on the property Property Law Outline 25
C. Interpreting the scope and extent of ambiguous easements 1. Cox v. Glenbrook Co. (Nev. 1962) [2.10 CB 400]: Glenbrook grants Cox easement over one lane dirt road. Cox wants to expand dirt road for access to new housing development hes creating. Rule: Easement is appurtenant rather than limited to access to single family home as asserted by Glenbrook. In gross easement would prohibit Cox development b/c those buyers couldnt use that easement. However, intent of grantor was for easement to be used only as one lane road. i. Preference for appurtenant easement is b/c we prefer development and also easier to price appurtenant easement into land (as opposed to pricing in gross easement) ii. Courts test for what easement owner can do with land: imposes test of reasonableness and undue burden, but ultimately returns to intent of the grantor iii. Court gives w/one hand and takes away w/other could be vindicating intent of the grantor or could be forcing parties to engage in bargaining or vindicating settled expectations of both parties to more limited extent 2. Henley v. Continental Cablevision of St. Louis County, Inc. (Mo. 1985) [2.11 CB 406]: s predecessors had rights to install electric and phone lines on s property. now seeks to install cable lines on s property. Rule: The easement was exclusive to the original grantee (and not shared jointly with the servient estate) so that it is transferable to a new party. Easements extend to cable use b/c thats within scope of original easement grant for telecommunications purposes. i. Utility easements can be construed to evolve to encompass new communications ii. Most courts will agree with Henley and interpret easements broadly 3. Determination of whether use is within scope of easement turns on three part test: i. Whether use is of kind contemplated by grantor; ii. Whether use is so heavy as to constitute an unreasonable burden on servient estate not contemplated by grantor iii. Whether easement can be subdivided a. Most courts agree w/Cox that appurtenant easement benefits entire dominant estate and is apportionable among all future purchasers if dominant estate is divided that this is not by itself an unreasonable burden on the servient estate to have more owners of the easement than in the original grant b. Most in gross estates are also apportionable unless contrary to intent of the grantor or it would place an undue burden on the servient estate III.Real covenants A. Evolution of covenants 1. Courts limited number of negative easements that were available, so parties turn to contract for alternatives. However, contractual rights at that point were not assignable; except was if the contract rights were somehow attached to interest in land of two parties that simultaneously had rights in same land privity of estate. 2. English courts not acknowledge instantaneous privity arising from transfer of property, so many had to turn to equity creation of equitable servitudes. 3. American courts recognize both covenants and equitable servitudes and will treat instantaneous privity as privity of estate for covenant purposes. 4. Restatement (3d) merges covenants and equitable servitudes and provides remedies both at law and in equity so long as they are in writing, intended to run w/the land, owner of the burdened estate was on notice of the restriction, and the covenant is one Property Law Outline 26
that is appropriate to impose on subsequent possessors of the servient estate for benefit of future owners of the dominant estate (touch and concern). B. Creation of covenants 1. Elements of real covenants i. Covenant is in writing usually in deeds or developers will file declaration ii. Owner of burdened land had notice of restriction at time of purchase notice can be actual, notice (only affirmative easements), or constructive iii. Grantor intended restriction to run with land on both sides (servient & dominant): usually through language such as to the grantor/grantees heirs and assigns or if it states intended to run w/the land; if ambiguous courts tend to hold that runs w/land if the covenant touches and concerns the land iv. Restriction touches and concerns both the dominant and servient estates this is the only substantive requirement, all others are procedural a. Idea is to identify kinds of obligations that should run with servient estate b/c they are intended to and will legitimately benefit current and future owners of dominant estates b. Burden side: obligation touches and concerns burdened estate if it relates to use of the land and obligation is intended to benefit current and future owners of the dominant estates c. Benefit side: Obligations touches and concerns if it improves enjoyment of the dominant estate or increase its market value d. Courts traditionally refuse to enforce in gross covenants b/c of lack of touch & concern burden to servient estate not offset by benefit to dominant estate\ e. Sometimes use this element as guise for public policy reasons not to enforce f. R(3d) eliminates this element and says covenants will run w/land if theyre not unconscionable, w/o rational justification, or otherwise violate PP g. Affirmative covenants under R(3d): usually enforceable if they end after a reasonable time and if they can be modified when conditions change v. Privity of estate exists between original covenanting parties (horizontal privity) and between parties succeeding the original parties (vertical privity) a. Mutual horizontal privity: when two parties have simultaneous interest in land such as the LL-T relationship b. Instantaneous horizontal privity: privity attaches at moment of property Xfer c. Horizontal privity excludes agreements between neighbors not part of a conveyance of another property right or when agreement not made as part of conveyance of property interest burdened or benefited by the covenant d. Relaxed vertical privity: position in equitable servitudes and R(3d) burden and benefits fall on any future possessor of the burdened/benefited land e. Strict vertical privity: required by real covenants grantor cant retain any future interests in the land (so LL-T relationships are excluded) 2. Whittinsville Plaza v. Kotseas (Mass. 1979) [2.12 CB 416]: conveyed property to Trust w/restrictions on adjacent property retained by , including promise not to use retained land in competition with discount store envisioned by Trust. Trust conveyed land to . leases his land to CVS for use as discount dept store. Rule: In contrast to earlier cases, reasonable covenants not to compete run with the land when they are consistent with orderly and harmonious development for commercial use. i. TC dismissed on failure to state claim on basis lacked standing to sue Property Law Outline 27
ii. Old rule: covenants not to compete not touch & concern b/c did not confer direct physical benefit to dominant estate and market value increase not sufficient for touch and concern to the dominant estate iii. Trust can clearly sue b/c theres privity of contract between them and courts dont want dead hand to interfere with current owners control of property iv. Trust conveys to ; breaches; Trust cant sue b/c hes conveyed his entire interest in the property; can sue if benefit granted to the Trust runs to v. Slightly more complicated b/c leases to CVS who can be sued or CVS? a. If incorporated covenant in lease, can evict CVS for breach of covenant b. remains ultimately responsible b/c failure to include covenant or failure to exercise such covenant is an independent breach of the convenant vi. In traditional real covenants, Plaza cant enforce real covenant against CVS b/c of lack of strict vertical privity, but can enforce equitable servitude (injunctive relief) against CVS [modern law would make both remedies available to Plaza on basis of relaxed vertical privity] C. Equitable servitudes 1. Same requirements as real covenants except no need for privity 2. Remedy available is injunctive relief at the discretion of the court D. Posner on injunctions versus damages for breach of anticompetitive covenants 1. Benefits of injunctions: parties can bargain around them and are better able to price them than can courts through damages 2. Costs of injunction: require continuing court supervision, may be negative externalities, limitations in bargaining due to bilateral monopoly problem (negotiations break down b/c parties know must deal w/one another) 3. Damages: may be efficient outcome if court can figure out the appropriate amount of damages, but damages may often be inadequate 4. But empirical evidence shows most parties unwilling to negotiate around injunctions b/c winners think they deserve to win and hard feelings = higher transaction costs E. Racially motivated restrictive covenants 1. Shelley v. Kraemer (U.S. 1948) [2.21 CB 493]: 30/39 property owners held deeds restricting conveyance to white owners. Non-restricted owner sold property to black family. State supreme court enforced restriction. Rule: Fourteenth Amendment stops states from interfering with civil right to own, acquire, enjoy, and dispose of property. There was state action triggering 14th Amend. here when state court enforced the racially restrictive covenant. State court enforcement of these provisions is what makes them continue to be enforceable. i. State action doctrine is rule of The Civil Rights Cases ii. Restrictive covenants themselves are not unconstitutional, but state intervention in enforcement makes them unconstitutional: but-for courts intervention, the covenant could not be enforced iii. Counter-argument to claim of state action: (a) this isnt state action b/c otherwise state action will be everywhere b/c regulation is so pervasive; (b) positivism tells us that property is only that which state enforces so that state is everywhere so that to enforce any of your rights is state action iv. If white person refused to sell to Shelley probably no state action/14th Amend. claim, but may have statutory claim under 14th Amend. Property Law Outline 28
2. Spectrum of state action: No state action unless positive law passive enforcement (covenant itself not illegal but state not step in to regulate) declaratory judgment active participant (enforcement of covenant) pervasive state action everywhere 3. We see many fewer constitutional cases like this b/c heavily regulated by statute IV. Implied restrictive negative servitudes subdivisions A. Purpose 1. Help to encourage suburban development b/c was means of enforcing common plan or scheme (usually through a declaration, notice to purchaser, and some fairness considerations as to who are the intended beneficiaries) 2. Doctrine permits neighbors to enforce covenants against parties with home they have no legal relations B. Cases and examples of implied restrictive negative servitudes 1. General idea is that developer sells to first party w/restrictions. The intended beneficiaries of these restrictions are all the future parties next buyer can enforce these restrictions against first party and vice-versa. Effect is that all in community have standing to sue against anybody else. i. Subsequent purchasers get benefit b/c it flowed w/developers sale of property ii. What if some deeds have them and some dont or problems in recording deed some would be able to build in contravention of general plan prevent his by implied reciprocal negative servitudes 2. Evans v. Pollock (Tex. 1990) [2.17 CB 443]: Land in community was parceled out by original owners w/restrictions permitting only residential use of land. Original owners parcels (on the hilltop area of development) did not have such restrictions, and their devisees sold land to third party seeking to build marina. Rule: General scheme or plan may be restricted to only certain well-defined similarly situated lots in a development for doctrine of implied restrictive negative easements to apply. Deed restrictions will not be implied to hilltop parcel. i. Covenants can also be procedural one here also required 3/4 votes of lakefront owners to change the residential restriction ii. Might want to reject this courts rule of applying doctrine only to certain sub-sets of division b/c might want to put prospective buyer on inquiry notice of whether there is an implied restrictive negative servitude via fully uniform neighborhood 3. Sanborn v. McLean (Mich. 1925) [2.18 CB 447]: 53 of 91 lots in neighborhood contain residential restrictions. McLean starts to erect a gas station at the rear of her property. Property had no deed restriction, but some deeds at time of original conveyance had such restrictions. Rule: Implied negative easement had attached to McLeans land at the time of other land sales. McLean was on inquiry notice due to uniform use of parcels neighborhood for residential purposes. i. Significant: McLean is the first party to depart from restrictions in 30 years ii. Strength of inquiry notice argument unclear but moral claim is easy b/c probably clear this is residential neighborhood not for gas stations 4. Riley v. Bear Creek Planning Comm. (Cal. 1976) [2.20 CB 450]: bought property in subdivision with no restrictions and no recorded declaration. Nine months later, developer files declarations requiring Committee approval before building. seeks to build snow tunnel, but Committee denies. Rule: Party is bound by restrictions only if both the grantor and the grantee intended it to be binding. is not Property Law Outline 29
bound b/c he was on no notice of the declaration and not intend to be bound thereby. i. Dissent: buyer purchasing with actual knowledge of general plan of mutual restrictions may not in future seek to be absolved by restrictions of general plan were giving the buyer something for nothing b/c he knew of the restrictions ii. Why majority ignores actual notice: wants bright-line rule that if we have recording system, were going to bind parties to it makes it less expensive to make factual determination of notice during litigation iii. If no restrictions now, it will never burden this buyers successor and Riley cant put it into a conveyance deed b/c itd be an in gross servitude and cant get implied restrictive negative servitude on successor b/c no longer have common owner V. Common interest communities A. Types of common interest communities 1. Homeowners and condominium owners associations set up by developer and empowered to enforce restrictions and covenants, usually by brinigng lawsuits i. Set up in declaration creating subdivision, homeowners have voting rights ii. May collect dues to maintain common areas such as roads, hallways, etc. iii. Each condominium owner owns his own unit and all owners own the common areas as tenants in common 2. Cooperatives Entire building owned by a single nonprofit coop corporation, individual owners buy shares in the corporation, other owners are responsible for a delinquent owners failure to pay rent b/c corporation is the mortgagee on the entire proprety; b/c of owners financial interdependence, usually have veto power re: who can live in the cooperative building B. Critiques of these organizational forms 1. Distributional fears that people w/money will be attracted to these quasigovernmental entities leaving poorer people w/worse municipal services 2. Fear of producing socioeconomic and racial discrimination b/c these organizations undermine democracy and civic engagement C. Evaluating the decisions of common interest communities 1. OBuck v. Cottonwood Village Condominium Assn (Alaska 1988) [2.24 CB 546]: Cottonwood took down and prohibited use of antennae on building rooftop by rule of the Board of Directors. OBuck complained that they would now have to use cable system that would cost them more b/c they had multiple TVs. Rule: Reasonableness test Legitimate considerations underlie the antennae ban such as roof repair, aesthetic value to the community from uniform buildings. Condo owners sacrifice some freedom of choice to live in this kind of unit. i. Condo owners dont rely on courts in these situations, but rather on internal political processes within the condominium association ii. Court imposes reasonableness test and determined that safety and aesthetic concerns were sufficiently reasonable to ban use of the antennae the association need not list all of its restrictive uses, but can enforce unlisted ones so long as they are reasonable and some other ground for connecting the use Property Law Outline 30
2. Court could have adopted unconscionability test only overrule Board decision if its unconscionable 3. Many states adopt business judgment rule (standard applied to board of directors of corporations) if youre doing youre job and doing it for good of community, court will defer and will not assess your choices 4. The more governmental the function the association is asserting, the more likely the court will intervene to review the action of the association
PUBLIC REGULATION OF LAND USE

I. Zoning A. Biggest regulatory scheme in world b/c all land in country is regulated by zoning 1. Prior to zoning, nuisance was only substantive restriction on how you could use land 2. Zoning arose in tandem w/suburban subdivisions several ideas underlying it include pastoralism (escape of the city), race (white flight), and ethnicity 3. Zoning enabling acts states delegate their police power to municipalities to regulate land use. The acts usually require the municipal government to establish a comprehensive plan for land use throughout the municipality. i. Use zoning accomplished by dividing the municipality into districts and regulating the kinds of uses allowed within each district, like commercial uses in one district and industrial uses in another. ii. Area zoning regulates uses within a district, like establishing rules for the size of lots within a district, the height of buildings, the requirements to set back structures a certain distance from the property borders, etc. 4. Legal backdrop: i. Police power state power to protect the safety, welfare, health, and morals ii. Takings (Amend. V) a property cannot be taken with just compensation but Mugler v. Kansas [CB 1048] says zoning in good faith and to protect public from harm of any kind is not a taking 5. Average reciprocity of advantage the idea that we dont worry about distributional problems if a set of zoning decisions has a predominantly average affect on most property owners and doesnt create windfalls for any one group. 6. There are also special exceptions and spot zoning B. Conceptual elements of zoning 1. Debate between Holmes and Brandeis in Pa. Coal Co. v. Mahon (U.S. 1922) [2.25 CB 1049], where Court strikes down land use regulation as a taking for first time i. Holmes: Regulation goes too far b/c it prohibits mining of coal under streets, a vital component of property rights that makes the regulation = taking; property can be regulated, but if regulation goes too far, it will be understood as a taking ii. Brandeis: Regulation not go too far b/c co. still owns the coal (no divestiture), rule is just that it cant be removed until can be done safely, not takings b/c they are intended to benefit general welfare; this alleged taking impinges on only fraction of entire property; dont have to worry about average reciprocity of advantage (what owner gets in return) when state is exercising its police power for general welfare and what owner gets in return is to live in a civilized society Property Law Outline 31
C. Developments in the doctrine of zoning 1. Village of Euclid v. Ambler Realty Co. (U.S. 1926) [2.26 CB 1051]: Developer purchased tract of land for industrial purposes. Subsequent zoning prohibited industrial uses and reduced value by 75%. Rule: Zoning ordinance serves a legitimate public interest and does not unconstitutionally deprive of property rights under Amend. XIV notwithstanding substantial decrease in market value. i. If validity of legislative judgment is debatable, legislative judgment must stand ii. Zoning by districts is upheld w/such benefits: making areas more fire safe, increase safety and security of home life, prevent accidents and traffic, decrease noise, create a better environment in which to raise children iii. Adopts Brandeis conception of average reciprocity of advantage 2. Prior nonconforming uses uses of land that are nonconforming now but were conforming to prior zoning laws before the zoning laws were changed i. Grandfathering is not constitutionally required ii. Town of Belleville v. Parillos, Inc. (N.J. 180) [2.26 CB 1055]: District with restaurant was re-zoned for residential use where restaurant not permitted. Restaurant grandfathered in via prior nonconforming use. Restaurant changes largely to a disco dance club. Rule: Municipalities can put limitations on nonconforming uses, generally by preventing increase or change in nonconforming use. Existing nonconforming use will be permitted to continue only if its a continuance of substantially the same kind of use as that to which the premises were devoted at time of passage of zoning ordinance. 3. Variances have to show hardship to be get one; usual test for hardship is strict: i. The hardship cannot be self-imposed. ii. Hardship is not usually found unless there is NO economically viable use of the property if the zoning is enforced. iii. Many states also require that the property be different in some unique way from surrounding property, such as having a unduly narrow frontage or an odd shape or elevation, and that the hardship result from this unique condition. iv. Many zoning boards will ignore strict requirements, grant the variances anyway. v. Commons v. Westwood Zoning Bd. of Adjustment (N.J. 1980) [2.26 CB 1058]: sought variance from zoning board to build house on undersized lot. The variance application was opposed by many neighbors. Board denied on basis of no showing of hardship and that variance would substantially impair purpose and intent of zoning scheme. Rule: Undue hardship means no effective use can be made of property w/o variance. However, even in light of undue hardship, zoning board must find that variance does not substantially impinge upon public good and intent and purpose of zone plan. D. Exclusionary zoning 1. Huntington Branch, NAACP v. Town of Huntington (2d Cir. 1988) [2.27 CB 997]: Town zoning restricted multi-family housing to largely minority area. Developer sought rezoning to build apartment complex in largely white neighborhood, which Town denied. Developer brings Title VIII disparate impact claim. Rule: In a disparate impact claim, need not allege discriminatory intent in its prima facie case. bears the burden of rebutting with evidence of a bona fide and legitimate justification for its action and demonstrate that no less discriminatory alternative can serve those ends. i. Easier to press disparate impact claim that disparate treatment claim Property Law Outline 32
ii. prima face case: statistical evidence of how multi-family zoning falls disproportionately upon the minorities who are in need of public housing (court found disparate impact b/c zoning perpetuated segregation and shortage of lowincome housing falls upon blacks who have a greater need for it) 2. Village of Belle Terre v. Boraas (U.S. 1974) [2.27 CB 1011]: City has zoning ordinance prohibiting more than two unrelated people from living together, though any number of related persons may cohabit. Students bring suit against ordinance. Rule: The drawing of the lines of families belong to the legislature. No fundamental rights impinged here; rational basis review. Legitimate guidelines for zoning met by city here: quiet place, wide yards, few people, restricted motor vehicles. i. Dissent: Ordinance violates petitioners First Amendment associational and privacy rights b/c ordinance was overinclusive and underinclusive; other means were available ii. Legitimacy of zoning increased to include these types of goals: protection of children and families, clean air, low traffic, low noise 3. Moore v. City of East Cleveland (U.S. 1977) [2.28 CB 1017 n.1]: Only certain familial relations were permitted to live together. Rule: Ordinance is unconstitutional b/c cuts deep into fundamental right to construct ones own family. i. Different from Belle Terre b/c deals w/construction of families w/related persons 4. Southern Burlington County, NAACP v. Township of Mt. Laurel (N.J. 1975) [2.28 CB 1030]: claims Mt. Laurel zoned its land in such way to require certain housing and lot sizes that low and middle income families were excluded. Clear demarcation between the town and neighboring Camden, NJ where white flight occurred. Rule: Every municipality must by its land use regulations make realistically possible an appropriate variety and choice of housing. i. Implicitly a race case b/c correlation in Mt. Laurel between race and income ii. State constitutional law rationale municipality is an arm of the state and the municipality must exercise police power to benefit the general welfare and not just the welfare of the municipality; also rationales based on spillover effects and externalities and disparate impact on poor and minority iii. Reasons underlying Mt. Laurels scheme: want to avoid low income housing, want to avoid bringing in kids that would burden educational system w/o reciprocal tax base iv. Mt. Laurel was imposing externalities on rest of state by excluding the poorest v. Mt. Laurel is minority rule few states interpret constitution to prohibit exclusionary zoning vi. Decision is deregulatory to extent that it permits landowners to do more w/land vii. Not go that far b/c although requires affordable housing, the affordable housing can still be marginalized and kept distinct from higher income housing II. Takings A. Constitutional underpinnings: The Takings Clause 1. Amend V: nor shall private property be taken for public use w/o just compensation 2. Property always subject to government taking, so long as for public use and govt provides just compensation (power of eminent domain) liability rule for govt 3. Takings Clause not care much for idiosyncratic value criteria is market value 4. Taxation does not constitute a taking, nor does every diminution in value of land constitute a taking requiring compensation (regulation typically not a taking) Property Law Outline 33
B. Doctrinal elements of takings 1. Two basic classifications of takings i. Per se takings: Govt action is facially a taking, i.e. physical occupation of land a. Forced invasions can only be conducted through eminent domain power b. Even a forced invasion increasing property value qualifies as a per se taking c. Other per se takings: diminution of property value to zero; where the government takes a core incident of ownership (but no case has dealt w/this) ii. Ad hoc takings: All other takings are ad hoc takings w/three part test involving (a) character of governmental action; (b) economic impact of the government action; and (c) reasonable investment back expectations of the parties (settled expects) iii. These tests are to figure out whether what government is doing is a taking at all iv. Owners prefer per se to ad hoc b/c former has no balancing tests to apply 2. The denominator problem defining the scope of whats being taken (is it a 100% taking of small part of larger property or a smaller percentage of the whole property) C. The scope of what constitutes a government taking 1. Cases dealing with per se takings i. Loretto v. Teleprompter Manhattan CATV Corp. (U.S. 1982) [CB 1095 n.1]: Law required landlord to permit cable companies to place certain cables and equipment on their building. Rule: A permanent, forced invasion of property is taking of property per se, no matter minimal the invasion and no matter how small its effect on the market value of the property. ii. Yee v. City of Escondido (U.S. 1992) [2.33 CB 1091]: CA established law to protect mobile home owners by limiting actual/constructive eviction, establishing rent control, and including right of occupancy as part of sale of mobile home unit in park. Park owners argue physical invasion and taking. Rule: Not a physical taking b/c Court has always held to require owner to submit to physical occupation of land. Here, owners continue to voluntarily rent land even after the regulation. a. OConnor argues not a taking b/c settled expectations of owners is that theyll have mobile homes on their pads so they dont lose anything by the statute and also b/c owners invited lessees and retain the right to end leasing of pads iii. Lucas v. S.C. Coastal Council (U.S. 1992) [2.36 CB 1110]: Owner bought beachfront property at time when it was not regulated. SC then institutes regulations prohibiting occupable improvements on certain beachfront lots. Owner asserts diminution to zero as per se taking. Rule: Amend V violated when owner denied all viable economic use of his land unless its justified by background state property or nuisance law. Diminution to zero is a per se taking. a. Scalia found that statute eliminate all economically useful/viable use of land b. Court treats as per se b/c similar to total appropriation of the property under physical invasion and unlikely well ever see this kind of case again c. Blackmun dissent: Not a 100% taking, but rather a small taking of a larger set of property rights; state is empowered to take property to protect from harm d. Kennedy concurrence: Fear that were making static law re: when state can do a non-compensable taking (w/in bounds of nuisance) and also diminution should be in light of reasonably-backed expectations e. Stevens dissent: Arbitrary to distinguish between 95% taking and 100% taking argument is that this shouldnt be a per se taking, but rather an ad hoc taking Property Law Outline 34
2. Kaiser Aetna v. United States (U.S. 1979) [CB 1097 n.1]: Private owners dredged waterway to create marina and connect it to Pacific Ocean making it a navigable waterway. Fed govt tried to get it to open to public b/c it was a component of navigable waterway. Rule: This is taking requiring compensation b/c owners invested in property on expectation that they would be able to control it and became part of navigable waterways only through owners investment. i. Holding that right exclude is one of the fundamental sticks in the property bundle ii. Distinguish from PruneYard: private club instead of general public business 3. PruneYard Shopping Center v. Robins (U.S. 1980) [2.31 CB 1087]: Protestors sought to peacefully distribute handbills in corner of shopping mall. CA court upheld right to protest on private property when done reasonably. Rule: Not every governmental destruction or injury to property is a taking. Examination focuses on whether the restriction burdens some people alone which should be borne by the public at large. i. Restricting right to exclude for free speech purposes not unreasonably restrict use of property or impair its value nor is so essential to economic use as to be a taking (distinguish from Loretto b/c this is just a temporary taking) ii. Potential adverse impact mitigated by time, place, and manner regulations iii. Why case arises: CA court changes conception of property right to exclude iv. Court says not a per se taking, but an ad hoc taking subject to ad hoc test says not a physical invasion b/c mall is open to public so right to exclude not crucial to use or economic value of property v. Best argument for taking: state is requiring public forum for free speech purposes 4. Miller v. Schoene (U.S. 1928) [2.35 CB 1108]: State entomologist ordered destruction of all red cedar trees within two miles of apple orchards due to cedar rust. Owners of nominal value red cedar trees argued impermissible state action. Rule: Statute had to choose between red cedars and apple trees, and when faced with such decision, states does not exceed constitutional powers when it destroys one class of property in favor of another that state determines is of great public value. i. Cedar trees were ornamental and nominal values; apples were big cash crop ii. Theory is that you own subject to limit that you cant cause nuisance red cedars here were nuisance on apple trees so state not do taking in ordering destruction iii. Coase: Apple trees impinge on existence of red cedars relationship has 2 faces 5. Battle over background principles of state property law: Government takings law often changes the shape of background principles of state property law D. The scope of the public use requirement 1. Traditional view is very deferential to states assertion of public use b/c state pays 2. Hawaii Housing Auth. v. Midkiff (U.S. 1984) [2.41 CB 1174]: Legislature made finding of oligopoly in land ownership that skewed fee simple market; passed law that upon tenant petition permitting housing authority to condemn land from owner and sell to tenant. Rule: Where state seeks to exercise eminent domain, public interest is also conclusive for public use requirement is coterminous with state sovereign power. Public use requirement not proscribe taking where eminent domain power is related to conceivable public purpose (rational basis analysis). i. Fact that property is transferred immediately to private use is not relevant b/c Court has rejected literal requirement that condemned property be put into use for the general public 3. Development of the doctrine in Michigan Property Law Outline 35
i. Poletown Neighborhood Council v. City of Detroit (Mich. 1981) [2.42 CB 1179]: GM needed 400-500 acres of land to construct plant facility. State condemned property for conveyance to GM in order to facilitate economic growth and adding jobs and taxes to economic base. Rule: Once legislature has made determination that government action of the type contemplated here serves a public need and is essential to the public purpose, courts rule is extremely limited to rational basis review. a. Dissent: Only private party stands to gain from this public use. Unlike Slum Clearance cases where the public benefited from the slum clearance itself while private ownership and building was just an incidental benefit. ii. County of Wayne v. Hathcock (Mich. 2004) [2.43 Supp.]: County needed to acquire several hundred more continuous acres to build business park that would bring thousands of jobs to area. After negotiation, County condemned remaining property. Rule: Overrules Poletown. Public use arises only when (1) condemnation required for public necessity; (2) when private party getting land remains accountable to public in use of that property; or (3) when selection of land for condemnation is based on public concern. a. Office parks do not require condemnation in order to be built b. Adopts Poletown dissents reasoning that there is no public benefit to the condemnation, only to the private use that will come from the condemnation c. Incidental economic benefits cannot justify such a condemnation 4. Arguments on the two sides of Kelo v. City of New London [Supp.] i. Raises same issue as in County of Wayne: do incidental economic benefits justify the power of eminent domain ii. Arguments in support of the exercise of power of eminent domain (pro-City): a. Public use is addressed to the legislature not judiciary, and legislature deserves deference in its findings of public use (Midkiff argument) b. Consistent w/Midkiff b/c state sovereign power, rational basis review c. Efficiency argument: benefit of taking for many > burden on the few; Constitution presumes govt will take property so long as it pays d. No slippery slope fears b/c takings are expensive and costs lot to do, also protected by democratic political process, and b/c creates possible disincentives for businesses to invest in land b/c of fear of condemnation e. Legislatures make distributional arguments all the time iii. Arguments in support of not extending public use (homeowners): a. Constitution contains public use limitation, thereby limiting takings authority, and its the judiciarys role to enforce this limitation b. Taking from one private entity to another is not a public use (Midkiff doesnt permit use of police power to benefit single party) c. Fairness argument burden falls disproportionately on homeowners d. Slippery slope argument: what is the limit of governmental takings? Take from EconoLodge to give to the Ritz? E. Exactions and unconstitutional conditions 1. Occurs when party seeks adjudicative body permission to do something and body attaches conditions to grant of request (exactions, impact fees, linkage requirements) all raise question of whether latter constitute a taking 2. Exaction: Requirement that requester provide benefit to public to get some action Property Law Outline 36
3. Nollan v. Cal. Coastal Commn (U.S. 1987) [HB 674]: Nollan sought permit to build home on beach property. State conditioned permit on grant of easement over dry sand to permit public access. Rule: A regulation substantially advances a state interest when there is an essential nexus between the exaction and the state interest the exaction is intended to serve. i. Scalia analysis focuses on whether w/o the permit request state could require Nollan to dedicate land no b/c would be per se taking under Loretto ii. Court holds state interest in providing public visual access unrelated to exaction an exaction relating to a height limit might related, but not an easement 4. Dolan v. City of Tigard (U.S. 1994) [2.38 CB 1148]: Dolan sought to expand store and gravel parking lot. City conditioned building permit on land grant to floodplain (b/c lot would be more impervious surface) and bike path (for extra congestion). Rule: Although theres an essential nexus, state must show rough proportionality between exaction and the nature and extent to the impact of the proposed development. Govt has burden of proof w/r/t exaction. i. Court holds floodplain dedication satisfies essential nexus but not rough proportionality b/c no need for full dedication to effect citys purposes ii. Less deferential to findings that bike path could offset traffic, as opposed to finding that it would offset traffic no proportionality b/c of this state finding iii. Stevens dissent: Why distinguish public/private? Owner probably prefers public b/c no taxes, no liability and she wants tramplers theyre potential customers iv. Stevens proposed proportionality test: an exaction is proportional unless developer can show that its so grossly disproportional to developments adverse effects that it manifests motives other than land regulation on party of city v. Test applies only to adjudicative bodies, not to legislative bodies (zoning) 5. Court has limited reach of Nollan/Dolan to exaction in form of dedication
MISCELLANEOUS TOPICS
I. Intellectual property A. Generally 1. IP is catch-all term for patents, copyrights, and trademarks, but aloso rights of publicity and trade secrets things that are intangible 2. Federal and state trademark laws gives perpetual property rights to holders of distinct marks and prevents future use of similar marks by other to create confusion i. Idea to protect consumers from buying goods palmed off as somebody elses ii. Issues of dilution: tarnishment (good marks associated w/lousy products) and dilution (when mark becomes less closely tied to the product) 3. Copyright and patent have roots in Copyright Clause of Art. I, sec. 8 4. Patents are scientific inventions that have to be novel, non-obvious, and useful i. Have to get patent from USPTO ii. Lasts for twenty years (monopoly) in exchange for information forcing of the elements of the patent 5. Copyrights applies to artistic works, lists for lifetime of creator plus seventy years i. Eldred v. Ashcroft (U.S. 2003) [2.47]: Sonny Bono Act extending terms of current copyright holders constitutional on basis Congress can extend, but indicated there may be some limits. Property Law Outline 37
ii. Fear is that copyrights supposed to promote progress, but at some point, too long periods will actually inhibit progress in artistic works 6. Might prefer liability rules (you can violate any of these freely as long as you pay) or property rules (cant violate, but will possibly induce bargaining to efficient outcome) B. Cases in intellectual property law 1. Intl News Service v. Associated Press (U.S. 1918) [2.45 CB 35]: INS took AP press articles wholesale and re-released it to its members for publication in their newspapers. AP claims copyright in their news articles, but INS says news is factual and not protected. Rule: News of current events is common property and general public may acquire it for consumption from AP. As between AP and INS, however, INS may not use AP news for commercial purposes. i. Value of news is first-to-report and to allow INS actions would be to permit it to free-ride on APs investment in producing the news (recognizes APs quasiproperty right in the news information so long as it retained commercial value) ii. Holmes dissent: INS may do this, but it must credit AP (value in first-to-report) iii. Brandeis dissent: Courts should stay out of realm of attributing new property rights, that whole point of copyright is to stimulate progress we should leave to legislature to determine whether we should have property or liability rules here 2. Feist Publications, Inc. v. Rural Tele. Co. (U.S. 1991) [2.46 CB 1239]: Feist takes Rurals phone book and resells it as its own. Rural asserts copyright interest in the compilation of the phone numbers. Rule: No one may claim originality as to facts, but compilations thereof are copyrightable. Copyright protection extends only to those works that are original to the author. No matter how original the format, facts do not become original through association. i. Name, phone numbers, and ordering are not original to Rural and theres no originality as to Rural in the ordering of these facts, no creativity at all (originality requires some minimal amount of creativity on part of claimant) ii. We dont copyright facts b/c that limits peoples use and stifles creativity II. Commodification A. Commodification and theory 1. Commodification Creation of property rights in things other than real property 2. Whats okay to commodify? Usually a matter of degree b/c impossible to prevent exchange in pretty much anything of value (drugs/sex) b/c black markets will arise 3. Margaret Radin argues that certain types of property interests, e.g. freedom, are so crucial to individual dignity that they should be treated as personal rights that cant be exchanged on the market 4. Posner argues we should create a market for children because there arent enough it would increase social welfare by having more children 5. Property rights permit us to value work and reward investment, encourage socially beneficial behavior 6. But property rights can also can devalue the most important things the things we value most, some things that money just shouldnt be able to buy 7. Alternative: we like property rights, but only in certain spheres market vs. family (we trade in the market, but not the family; money in the market, love in the family) B. Babies, people, and body parts Property Law Outline 38
1. Moore v. Regents of the Univ. of Cal. (U.S. 1990) [2.48 CB 51]: Moore had several operations for cancer in which doctors took his discarded genetic material and created very valuable and profitable cell lines. Moore sought to enforce property interest in this genetic material. Rule: Moore has no property interest as court does not want to commodify body parts (no recovery in conversion). However, he may be entitled to recovery on theory of informed consent. i. Dissent: Essence is that patients can still bargain for the giving of their consent to take body parts away same effective outcome that majority is trying to avoid ii. Distributive concerns that most likely to sell are the poor iii. Moral and dignitary concerns: this is stuff we hold sacred, not to be sold 2. In re Baby M (N.J. 1988) [2.48 CB 1279]: Surrogate mother refused to perform contract and give up baby. Father and to-be-adoptive mother seek to enforce. Rule: Court will not enforce surrogacy contract on fears that it is baby-selling and raises considerable distributional problems and bargaining/coercion problems. i. Rich can use poor to get babies need to take 3d party babies into account (court treats surrogacy as akin to adoption and the paramount interests of the child) ii. NJ particularly fearful re: bargaining power implying that if the process is sufficiently safe, there may be possibility of enforcement of surrogacy contracts iii. However, case focuses lot on protecting rights of mother and ensuring the voluntariness and knowingness of her decision to give up child 3. Dred Scott v. Sandford (U.S. 1857) [2.49 CB 1264]: Rule: Scott refused access to diversity jurisdiction in fed courts b/c he was not person under law and not a citizen, but rather was property of his owner. i. Property can be used to monopolize and oppress and dehumanize ii. Property rights fundamental to human flourishing, but theyre also a product of cultural and political decisions need to reconcile the two
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