1. MUSIC Billy Joel The Stranger (1977)

2. UNIT III TASKS: SAME AS COURSE AS A WHOLE Figure Out What Cases Mean Think About Best Way to Handle Legal Problem Apply Cases and Theorists to New Problems

3. Figure Out What Cases Mean Hadacheck: Possible Holdings OK if furthering Police Powers OK if furthering Health/Safety OK if preventing Public Nuisance OK if furthering progress OK if some value left

4. Figure Out What Cases Mean Line of ^ Hadacheck after Mahon?

5. Figure Out What Line of Cases Means Hadacheck after Mahon? OK if furthering Police Powers OK if furthering Health/Safety OK if preventing Public Nuisance OK if furthering progress OK if some value left

6. Figure Out What Line of Cases Means Mahon: Narrow Holding: Not OK if: O contracted for specific property right removed AND Value of O’s interest reduced to 0 AND No reciprocity AND No safety issue or public nuisance

7. Figure Out What Line of Cases Means Mahon possible broad holdings (among many others): Not OK if 1.O contracted for specific property right removed OR 2.Value of O’s interest reduced to 0 OR 3.No reciprocity OR 4.No safety issue or public nuisance

8. Figure Out What Line of Cases Means Mahon possible broad holdings (among many others): Not OK if 1.O contracted for specific property right removed OR 2.Value of O’s interest reduced to 0 OR 3.No reciprocity OR (Hadacheck) 4.No safety issue or public nuisance

9. Figure Out What Line of Cases Means Hadacheck after Mahon & Miller? OK if furthering Health/Safety OK if preventing Public Nuisance OK if some value left

10. Figure Out What Line of Cases Means Mahon possible broad holdings (after Miller): Not OK if 1.O contracted for specific property right removed OR 2.Value of O’s interest reduced to 0 OR 3.No safety issue or public nuisance

11. Figure Out What Line of Cases Means Hadacheck + Mahon + Miller: Possible Rules 1.Not OK if O contracted for specific property right removed AND value of O’s interest reduced to 0 2.OK if value of O’s interest reduced to 0 IF choosing between two inconsistent land uses 3.OK if stopping public nuisance 4.OK if reciprocity 5.OK if some value left

12. Figure Out What Line of Cases Means Very Difficult to Identify Precise Line between Hadacheck and Mahon

13. Figure Out What Line of Cases Means Very Difficult to Identify Precise Line between Hadacheck and Mahon; We’ll Return to This After Penn Central

14. Think About Best Way to Handle Legal Problem Keep in mind the “legal problem” we are addressing: NOT “Is the regulation a good idea?” BUT “Has the regulation interfered with claimant’s property rights too much?” As with other Constitutional questions, in effect asking “How should the gov’t operate?”

15. Think About Best Way to Handle Legal Problem Legal Problem: “Has the regulation interfered with claimant’s property rights too much?” Policies at issue: How much leeway do we give the democratically elected gov’t to regulate property? How much protection do we give individuals to use their land as they wish despite disapproval of the majority?

16. Think About Best Way to Handle Legal Problem Terminology Point: If we conclude that the regulation has interfered with property rights more than the Constitution allows (without paying), we call it a “Taking.” Thus, “Has the regulation interfered with claimant’s property rights too much?” = “Has the regulation interfered with claimant’s property rights so much that it constitutes a “Taking”?

17. Think About Best Way to Handle Legal Problem Legal Problem: “Has the regulation interfered with claimant’s property rights so much that it constitutes a “Taking”? Theorists provide us with some ideas about this.

18. Think About Best Way to Decide When a Regulation of Property Rights is a “Taking” Sax: Look at –Arbiter v. Enterpriser –Stopping Spillover Effects Epstein: OK ONLY if –implicit compensation OR –stopping public nuisance Michaelman: Look at –Settlement costs v. demoralization costs –Fairness Principle

19. Think About Best Way to Decide When a Regulation of Property Rights is a “Taking”? “Demsetz Takings Story” Another Way to Think About This Question Who Should Bear Burden for Changing Technology and/or Values? Though Not a Tough Question if Change is: “We’ve just discovered you’ve been poisoning us for years.”

20. Think About Best Way to Decide When a Regulation of Property Rights is a “Taking”? DQ116: “Demsetz Takings Story” & Penn Central Facts: Decision: Whether to alter historically significant building Old Rule: Os can do as they like. Externalities: Harm to nearby tourist businesses; harm to “history buffs”

21. Think About Best Way to Decide When a Regulation of Property Rights is a “Taking”? DQ116: “Demsetz Takings Story” & Penn Central Facts: Change in Circs: As time passes, buildings become more well-known/more popular; # of history buffs increase Increased Externalities?: Harms increase with popularity/reliance/# of buffs

22. Think About Best Way to Decide When a Regulation of Property Rights is a “Taking”? DQ116: “Demsetz Takings Story” & Penn Central Facts: Change in Rule: Passage of Historic Preservation Laws Response: Os of Historic Buildings claim interference w Property Rights Question: Is it fair to Os of historic buildings to bear burden for society’s recent decision that preservation is important

23. Apply Cases and Theorists to New Problems Basic Skill Required on Test Incorporates Both of the Other Tasks Requires Clear Sense of How Structure of Cases Map onto Problem

24. Apply Cases and Theorists to New Problems: Structure Map CaseGov’t ActAffected Landowner Affected 3d Parties HadacheckLA Bans Brickyards Brickyard OsNeighbors MahonPA Bans Undermining Coal Cos.Surface Os MillerVA Cedar Rust Act Cedar Tree Os Apple Orchard Os Penn Central NYC Historic Preservation Penn CentralTourist Biz; History Buffs

25. Apply Cases and Theorists to New Problems: Structure Map Case/HypoGov’t ActAffected Landowner Affected 3d Parties HadacheckLA Bans Brickyards Brickyard OsNeighbors MahonPA Bans Undermining Coal Cos.Surface Os MillerVA Cedar Rust Act Cedar Tree Os Apple Orchard Os Penn Central NYC Historic Preservation Penn CentralTourist Biz; History Buffs Airspace Solution Hypo KY No Rights to Depleted Gas Pools Surface Os (Hammonds) Gas Cos. Reinserting

26. Apply Cases and Theorists to New Problems DQ117-18: Apply to Facts of Penn Central –To Practice Using the Earlier Cases and Theorists –To Further Understand the Earlier Cases and Theorists –To See What Arguments Lawyers Might Have Made to the SCt When It Decided PC

27. DQ117: Apply Cases to Penn Central Facts Hadacheck after Mahon & Miller OK if furthering Health/Safety? OK if preventing Public Nuisance? OK if some value left?

28. DQ117: Apply Cases to Penn Central Facts Hadacheck after Mahon & Miller OK if furthering Health/Safety? N/A OK if preventing Public Nuisance? N/A OK if some value left? YES

29. DQ117: Apply Cases to Penn Central Facts Considerations from Mahon Right Specifically Contracted For?

30. DQ117: Apply Cases to Penn Central Facts Considerations from Mahon Right Specifically Contracted For? –NO. (Lease after regulation in place) Value Reduced to Zero?

31. DQ117: Apply Cases to Penn Central Facts Considerations from Mahon Right Not Specifically Contracted For Value Reduced to Zero? –If look at whole parcel, NO (Retains value of building + Reas. Rate of Return) –If look at air rights alone, MAYBE (Unclear if city would allow if better) Reciprocity of Advantage?

32. DQ117: Apply Cases to Penn Central Facts Considerations from Mahon Right Not Specifically Contracted For Value Reduced to Zero? –If look at whole parcel, NO –If look at air rights alone, MAYBE Reciprocity of Advantage? NO Loss in Value Too Great?

33. DQ117: Apply Cases to Penn Central Facts Considerations from Mahon Right Not Specifically Contracted For Value Reduced to Zero? –If look at whole parcel, NO –If look at air rights alone, MAYBE No Reciprocity of Advantage Loss in Value Too Great? –$2 Million/Year –BUT retains significant value + reas. return

34. DQ117: Apply Cases to Penn Central Facts Governed by Miller? OK if value of O’s interest reduced to 0 IF choosing between two inconsistent land uses.

35. Apply Cases and Theorists to New Problems: See Patterns CaseGov’t ActAffected Landowner Affected 3d Parties HadacheckLA Bans Brickyards Brickyard OsNeighbors MahonPA Bans Undermining Coal Cos.Surface Os MillerVA Cedar Rust Act Cedar Tree Os Apple Orchard Os Penn Central NYC Historic Preservation Penn CentralTourist Biz; History Buffs

36. DQ117: Apply Cases to Penn Central Facts Governed by Miller? OK if value of O’s interest reduced to 0 IF choosing between two inconsistent land uses. Penn Central doesn’t look like the same kind of dispute.

37. DQ117: Apply Cases to Penn Central Facts Another Common Way to Do This: Compare Facts of Old Case to Facts of New Case/Hypo

38. DQ117: Apply Cases to Penn Central Facts Common Way to Do This: Compare Facts of Old Case to Facts of New Case/Hypo E.g., Compare Nectow to Penn Central: –PC: Less Interference w Ppty Rts (Value Left) –PC: Furthers Police Power (Welfare) –Thus, Better Case for Gov’t than Nectow

39. DQ117: Apply Cases to Penn Central Facts Common Way to Do This: Compare Facts of Old Case to Facts of New Case/Hypo E.g., Compare Hadacheck to Penn Central: –Gov’t Purpose?

40. DQ117: Apply Cases to Penn Central Facts Common Way to Do This: Compare Facts of Old Case to Facts of New Case/Hypo E.g., Compare Hadacheck to Penn Central: –Gov’t Purpose? Stronger in Hadacheck –Interference with Property Rights?

41. DQ117: Apply Cases to Penn Central Facts Common Way to Do This: Compare Facts of Old Case to Facts of New Case/Hypo E.g., Compare Hadacheck to Penn Central: –Gov’t Purpose Stronger in Hadacheck –Interference with Property Rights? Hard Call Had: Basically can do anything except existing use; may have substantial loss on investment. PC: Basically can only do existing use; still have reasonable return on investment.

42. DQ117: Apply Cases to Penn Central Facts If compare facts for all cases, should see that PC facts are between the other cases (like an exam Q): –Smaller interference w property rights than Mahon or Nectow; greater interference than Miller (Hard to say re Hadacheck) –Arguably less important purpose than Hadacheck or Miller; more important than Nectow or arguably Mahon (at least as described by Holmes)

43. DQ117: Apply Cases to Penn Central Facts If compare facts for all cases, should see that PC facts are between the other cases (like an exam Q) Thus, Theorists especially helpful to resolve. Note that Court explicitly relies on both Sax and Michaelman. (Epstein not yet written).

44. DQ118: Apply Theorists to Penn Central Facts Sax: Look at –Arbiter v. Enterpriser –Stopping Spillover Effects Epstein: OK ONLY if –implicit compensation OR –stopping public nuisance Michaelman: Look at –Settlement costs v. demoralization costs –Fairness Principle

45. Figure Out What Cases Mean Analysis in Penn Central : Get as far as we can today & continue next week. I’ll update assignment sheet after class

46. Figure Out What Penn Central Means: Arbitrariness (DQ122) pp.112-13: Majority rejects claim that designation of historical buildings arbitrarily singles out some property owners. Why?

47. Figure Out What Penn Central Means: Arbitrariness (DQ122) Majority rejects arbitrariness claim Comprehensive plan here –Rule applies to vast #s of structures –Arbitrariness limited by judicial review of designation or decision

48. Figure Out What Penn Central Means: Arbitrariness (DQ122) Majority rejects arbitrariness claim Comprehensive plan here Hard to say arbitrary gov’t action when PC didn’t exhaust other remedies: –didn’t appeal designation –didn’t appeal decision by Board –only tried 2 options NOTE: SCt not happy to be asked to decide constitutional question that might be unnecessary

49. Figure Out What Penn Central Means: Arbitrariness (DQ122) Majority rejects arbitrariness claim Comprehensive plan here PC Didn’t Exhaust Remedies Regulatory burdens don’t have to be evenly distributed (citing Miller; Hadacheck; Euclid)

50. Figure Out What Penn Central Means: Arbitrariness (DQ122) Majority rejects arbitrariness claim Same result on this claim as Hadacheck & Miller Reminder: Arbitrariness won’t be an issue for you. Leaves us with real Takings Question