Category: Property Law


Stanford Law Review Online: Physical and Regulatory Takings

Stanford Law Review

The Stanford Law Review Online has just published an Essay by Richard A. Epstein entitled Physical and Regulatory Takings: One Distinction Too Many. In light of Harmon v. Kimmel—a case challenging New York’s rent control statute on petition to the Supreme Court—Epstein provides a succinct economic takedown of uncompensated regulatory takings in four distinct areas: rent control, support easements, zoning, and landmark preservation statutes. In suggesting a unified approach to eminent domain whether the taking is physical or regulatory, he writes:

Unfortunately, modern takings law is in vast disarray because the Supreme Court deals incorrectly with divided interests under the Takings Clause of the Fifth Amendment, which reads: “nor shall private property be taken for public use, without just compensation.” The Supreme Court’s regnant distinction in this area is between physical and regulatory takings. In a physical taking, the government, or some private party authorized by the government, occupies private land in whole or in part. In the case of a per se physical taking, the government must pay the landowner full compensation for the value of the land occupied. Regulatory takings, in contrast, leave landowners in possession, but subject them to restrictions on the ability to use, develop, or dispose of the land. Under current law, regulatory takings are only compensable when the government cannot show some social justification, broadly conceived, for its imposition.

Thus, under current takings law, a physical occupation with trivial economic consequences gets full compensation. In contrast, major regulatory initiatives rarely require a penny in compensation for millions of dollars in economic losses. . . .

The judicial application of takings law to these four different partial interests in land thus destroys the social value created by private transactions that create multiple interests in land. The unprincipled line between occupation and regulation is then quickly manipulated to put rent control, mineral rights, and air rights in the wrong category, where the weak level of protection against regulatory takings encourages excessive government activity. The entire package lets complex legal rules generate the high administrative costs needed to run an indefensible and wasteful system. There are no partial measures that can fix this level of disarray. There is no intellectual warrant for making the categorical distinction between physical and regulatory takings, so that distinction should be abolished. A unified framework should be applied to both cases, where in each case the key question is whether the compensation afforded equals or exceeds the value of the property interest taken. The greatest virtue of this distinction lies not in how it resolves individual cases before the courts. Rather, it lies in blocking the adoption of multiple, mischievous initiatives that should not have been enacted into law in the first place. But in the interim, much work remains to be done. A much-needed first step down that road depends on the Supreme Court granting certiorari in Harmon v. Kimmel.

Read the full article, Physical and Regulatory Takings: One Distinction Too Many by Richard A. Epstein, at the Stanford Law Review Online.

On the Servicing Settlement

Today, Jon Walker tweeted that “No one man has done more to protect the power of the financial elites than President Obama.” Is that a fair assessment? Here are some views expressed on the mortgage settlement today:

Adam Levitin, The Servicing Settlement: Banks 1, Public 0:

[The settlement] cover[s] robosigning and overbilling in foreclosures. Given the relatively narrow scope of this settlement, it’s not surprising that the dollars involved are quite small compared to the overall harms created by the housing bubble and aftermath.

The formal price tag for the settlement is $25 billion, although it is projected to accomplish up to $40 billion in relief. Only $5 billion of that is hard cash contributed by the banks. Let me repeat that. The five banks involved in the settlement, which have a combined market capitalization of over $500 billion, are putting in only $5 billion. That’s less than 1% of their net worth. And they are admitting no wrongdoing. To call that accountability is laughable. . . . $32 billion of the settlement is being financed on the dime of MBS investors such as pension funds, 401(k) plans, insurance companies, and the like—-parties that did not themselves engage in any of the wrong-doing covered by the settlement.

William K. Black, How Liberals are Getting Spun in the Mortgage Settlement Debate:
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Stanford Law Review Online: Don’t Break the Internet

Stanford Law Review

The Stanford Law Review Online has just published a piece by Mark Lemley, David S. Levine, and David G. Post on the PROTECT IP Act and the Stop Online Piracy Act. In Don’t Break the Internet, they argue that the two bills — intended to counter online copyright and trademark infringement — “share an underlying approach and an enforcement philosophy that pose grave constitutional problems and that could have potentially disastrous consequences for the stability and security of the Internet’s addressing system, for the principle of interconnectivity that has helped drive the Internet’s extraordinary growth, and for free expression.”

They write:

These bills, and the enforcement philosophy that underlies them, represent a dramatic retreat from this country’s tradition of leadership in supporting the free exchange of information and ideas on the Internet. At a time when many foreign governments have dramatically stepped up their efforts to censor Internet communications, these bills would incorporate into U.S. law a principle more closely associated with those repressive regimes: a right to insist on the removal of content from the global Internet, regardless of where it may have originated or be located, in service of the exigencies of domestic law.

Read the full article, Don’t Break the Internet by Mark Lemley, David S. Levine, and David G. Post, at the Stanford Law Review Online.

Note: Corrected typo in first paragraph.

Application of the Public Trust Doctrine to the University of California

Aaron Bady’s blog has been a must-read on the Occupy movement all this fall. Property law professors may be interested in a guest post on it from Gina Patnaik, applying the public trust doctrine to the UC:

In the latter half of the twentieth century, Joseph Sax, Professor Emeritus at UC-Berkeley School of Law, revived public trust doctrine within American case law. Because common law principally derives from court rulings and judicial opinion instead of legislation, it is useful only insofar as it is used: Sax argued that public trust doctrine was a prime example of the ways that historical understandings of a legal concept could be resuscitated to serve the changing demands of the American people. Sax’s seminal work, “The Public Trust Doctrine in Natural Resource Law: Effective Judicial Intervention,” demonstrated that public trust doctrine provided a compelling framework for “lawsuits in which citizens, demanding judicial recognition of their rights as members of the public, sue the very public agencies which are supposed to be protecting public interest.” And Sax was right: the forty years since his article’s publication have seen the public trust doctrine invoked by the courts to shield public lands, natural resources, and even endangered species. Over the course of the past century, the scope of public trust doctrine has moved inexorably towards expanded protections of the public’s interest. Read More


Brooke Shields to Play Suzette Kelo in Lifetime Movie

Really, the headline says it all.  But I am disappointed I didn’t see this one coming.  Anyone who has read Jeff Benedict’s Little Pink House should have seen its made-for-TV-movie potential.

What actually got me thinking about Kelo, however, is the reporting this week in various media outlets that Justice Richard Palmer, one of the four Connecticut justices who found New London’s exercise of eminent domain to be constitutional, apologized to Suzette Kelo after hearing a keynote speech by Benedict.  According to Benedict, Palmer approached Kelo and said, “Had I known all of what [Benedict] just told us I would have voted differently.  I’m sorry.”   

This certainly seems like grist for the Kelo mill, especially since it’s not every day that a judge apologizes to a litigant for having voted against her.  Except that the back story matters a lot here, because that’s not what Justice Palmer says he did.  Rather, as the Justice eventually clarified to Benedict, “Those comments were predicated on certain facts that we did not know (and could not have known) at the time of our decision and of which I was not fully aware until your talk — namely, that the city’s development plan had never materialized and, as a result, years later, the land at issue remains barren and wholly undeveloped.”   The Justice further added the Court could not have known those facts “because they were not yet in existence.”  Moreover, the Justice later responded to a series of written questions from Benedict, one of which was, “Looking back at the Kelo decision (by the Connecticut Supreme Court), how do you see it now? In other words, has it led to good law?”  The Justice responded, “I think that our court ultimately made the right decision insofar as it followed governing U.S. Supreme Court precedent.”  (The fullest account I’ve found of Justice Palmer’s encounter with Kelo and Benedict is here.)

So, not exactly an apology, but perhaps instead a very human expression of regret over what Suzette Kelo went through. 

By the way, readers will note that I chose not to refresh anyone’s recollection about the substance of Suzette Kelo’s case or the eventual ruling from the U.S. Supreme Court.  Instead, you can all just catch the movie. 


Hat Tip to my former student Eric Abes.


Armenian genocide and the Third Amendment

As Tom Bell has noted, the Third Amendment gets no respect. It is as likely to be mentioned by comedians as by courts, and holds a position of honor among the odd clauses of the Constitution, where it is so infrequently used that even non-uses draw attention. But this neglected amendment has one potential application today, where it could play an important role in a somewhat high-profile case.

Etchmiadzin CathedralI’m talking, of course, about the Armenian genocide litigation.

Here’s a snippet from a recent story in the Armenian Weekly (with emphasis added):

In July, Armenian American attorneys sued the Republic of Turkey and its two major banks, seeking compensation for confiscated properties and loss of income. A new federal lawsuit was filed last week by attorneys Vartkes Yeghiayan, Kathryn Lee Boyd, and David Schwarcz, along with international law expert Michael Bazyler, against the Republic of Turkey, the Central Bank, and the Ziraat Bank for “unlawful expropriation and unjust enrichment.” The plaintiffs are Los Angeles-area residents Rita Mahdessian and Anais Haroutunian, and Alex Bakalian of Washington, D.C. The three Armenian Americans, who have deeds proving ownership of properties stolen from their families during the genocide, are seeking compensation for 122 acres of land in the Adana region. The strategic Incirlik U.S. Air Base is partly located on their property.

That’s right. Armenian-Americans are seeking to recover property seized by Turkey during the Armenian genocide. And significant portions of that land are currently used to quarter American troops. Read More


Adverse possession amid the foreclosure crisis

Apparently I can’t stop blogging about morality, which is kind of weird because it certainly doesn’t play much of a role in my personal life or even my writing.  Anyway, a student from a past property class recently passed along this really interesting article about Kenneth Robinson, a man who occupied a vacant house in a tony suburb of Dallas, apparently in an attempt to adversely possess it.  The contemporary twist is that the house—valued at about $300,000—was vacant because its owners had abandoned it, apparently when they found themselves upside down on their mortgage.  (They appear to still be the house’s title holders, since foreclosure has not yet taken place.)

I like this story for lots of reasons, including that it provides another modern data point about the continuing relevance of adverse possession.  Another reason is that it stresses that adverse possession “is not just a loophole, it’s the law.”  The article says that adverse possession is “as old as Texas” but even that understates the case—it’s actually one of the oldest property doctrines around, dating to Hammurabi’s Code.

But I like this story especially because it raises a new twist on the rationale for and merits of adverse possession doctrine.  News stories about adverse possession are almost invariably accompanied by cries of outrage by people who regard the doctrine as offensive to property rights.  In class, students also tend to regard the doctrine skeptically, though (to their credit) in a more measured and thoughtful way.

As this article (or at least the comments to it) illustrate, though, the ongoing housing crisis and related foreclosure epidemic have caused public reaction to adverse possession cases to become less angry and in some cases even positive.  I explore this phenomenon in more detail below the fold.

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Farewell, Barnes and Zoning Matters, Really

In the last week I’ve come across two teaching resources that are worth sharing.  As the headline suggests, the first is about the Barnes Foundation, which closed the doors to its original home in Merion, Pennsylvania at the end of June.  For years I’ve been urging my Estates and Trusts students to visit the Barnes before it is “too late,” by which I meant “before it moves to downtown Philadelphia.”  I did this partly because I thought one needed to see the Barnes to fully understand the ongoing battle over its future, and partly because the Barnes was really, really cool.  Now that it is officially “too late,” I will point them to this 360 degree interactive tour of the Barnes that was put together by the New York Times.  Their effort really gives a flavor of the place, although many of us undoubtedly mourn that we’re left with only a computer program.    

Next up is something for Property professors: an episode of This American Life entitled “Game Changer.” You can access the episode, which is about drilling for natural gas in Pennsylvania, here.  Fast forward to minute 33:30 and soon a reporter will say, “The standoff between [the gas company] and [the town] started with one of the least gripping topics in all of government: zoning.”  While the reporter’s explanation of the difference between conditional and permitted uses isn’t any more interesting than what I say in class, the story she tells is much more engaging than anything I’ve previously used to teach zoning.  Moreover, the story of the small town that tried to write a zoning ordinance after Big Gas arrived does a better job of driving home the economic consequences of zoning than anything I’ve encountered to date.


Tsunami and “natural rights” in property

תַּחַת כָּל-הַשָּׁמַיִם לִי-הוּא
— Iyov 41:3 (Tanakh)

Whatsoever is under the whole heaven is Mine.
— Job 41:11 (Authorized Version)

It’s said that the Lisbon earthquake and tsunami of 1755 had a profound effect on the thought of Voltaire, Rousseau, Kant, and others. Having occurred so far from Western intellectual centers, the 2004 Southeast Asian tsunami and the 2011 Japan tsunami are unlikely to be so influential. The first fits easily into the discourse of “underdevelopment,” and evokes our pity. The second occurred in a country more “like us” in many ways, but was soon overshadowed by just one of its effects, a so-called nuclear “catastrophe” that fits easily into the discourse of energy politics and money, and that resonates with our bi-polar attitude toward technology.

While I can’t speak to the 2004 tsunami, I did spend time earlier this month investigating the impact of the Japanese tragedy first-hand. Obviously, the effects of seeing one erased town or neighborhood after another, in three dimensions and 360 degrees, and of smelling them, and of sneezing or choking on their dust, were more than intellectual. But an unavoidable by-product of the experience is that it’s hard not to think some of our cherished intellectual positions are vain, self-serving and simply wrong. And among them, our notions of property.
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Attention All Flatlanders, Fudgies, and Other-State Equivalents II

Now for some seasonally-appropriate scholarship:

A while back, I asked readers who were involved with family cottages (or summer homes or cabins or whatever you want to call them) to tell me their stories. I was curious about how many generations the property had been in your family; how you handled carrying costs, improvements, scheduling and use; whether your property was governed by a tenancy in common or other legal arrangement; and whether that arrangement was rocky or smooth.   Some first-rate sociology had already been done in this area, but I was curious enough to want to supplement with some casual empiricism.

I recently posted the article that grew out of these inquiries on SSRN.  Forthcoming in the Notre Dame Law Review, the article discusses how “identity property” is passed along from one generation to the next.  Identity property is that which is valued for what it represents about self and family—a sort of ratcheted-down version of Margaret Radin’s “personhood property.”  In the absence of more sophisticated estate planning, identity property is often inherited by the decedent’s children, who take as tenants in common.   Standard doctrine relies on familial bonds and the unilateral right of partition to mitigate bilateral monopoly problems and to foster cooperation in the management of the children’s common resource.  I argue that with identity property, this standard account is often wrong.  Because courts favor partition by sale, the exit of one tenant often means that the remaining co-tenants will be forced to sell the identity property.  Because the remaining tenants perceive the property as non-fungible, the threat of exit can be powerful enough to exacerbate bilateral monopoly problems and decrease the likelihood of cooperation. 

The article makes use of some of the stories that readers of Concurring Opinions told about their family cottages to elucidate how devisees modify the default rules of a tenancy in common, particularly the right of partition.  What I found most interesting about these stories was how willing some individuals were to radically restrict their right of exit from the co-tenancy and the corresponding belief that a strong right of exit would ultimately work against their collective interest.  The Article ultimately argues that when it comes to identity property, the right of exit through partition should not be as absolute as current law allows. 

For those who are interested in learning more, the abstract and article are available here.

 p.s.  And for those of you who are gearing up for another season in property that is jointly owned with other relatives, rest assured that not one single person who responded to my request reported an entirely smooth arrangement!