Music:

MEAT LOAFBAT OUT OF HELL (1977)

Office Hours This Week:Office Hours This Week:–TUE 3:15-4:45pm–WED 10:15am-12:15pm– FRI 11:45am-1:45pm– SUN 1:00-5:00 pm

Class #35 Class #35 • Review Problem 3A(i) (Uranium)• Michelman Continued• Application of Prior Authority to Penn

Central Facts• Penn Central Arbitrariness Claim• 1978• Begin Penn Central Takings Analysis

FINAL EXAM QUESTION 3OPINION/DISSENT FORMAT

•Requires You to Describe and Defend Two Positions•Must Show that You Understand Range of Relevant Arguments Arising from Line of Cases•Must Understand Role of US Supreme Court

– Deciding One Case, BUT Setting Rules for Many – Can Choose to Affirm or Modify Precedent BUT

Must Defend

–Need to Resolve One or More Need to Resolve One or More Difficult Open Qs (Review Difficult Open Qs (Review Problems 3A-3C)Problems 3A-3C)

FINAL EXAM QUESTION 3Review Problem 3A (Uranium)

FROM EXAM QUESTION IIID (1998)

•1979: State Opens Minimum-Security Prison Adjacent to Bart’s Vacant Lot•Findings of Fact– B received vacant lot under terms of his father’s will.– Value reduced by > 2/3 ($2.2M(1970) $600K(1980)).– The prison constituted no threat to the health or safety to

present or future residents of B’s parcel.– No change in allowable uses of B’s parcel.

FINAL EXAM QUESTION 3Review Problem 3A (Uranium)

XQIIID: Big loss in value to B’s parcel when state opened prison on

neighboring lot.

•Part (ii): Unconstitutional “Taking” if Part (ii): Unconstitutional “Taking” if landowners’ property value is reduced landowners’ property value is reduced significantly but Os acquired the property in significantly but Os acquired the property in Q by gift/will/inheritance, so arguably made Q by gift/will/inheritance, so arguably made no investment?no investment?– Assigned to URANIUMS for next Monday –Had been incorrectly listed as 3A(i)

again on Assignment Sheet (I’ve fixed)

FINAL EXAM QUESTION 3Review Problem 3A (Uranium)

XQIIID: Big loss in value to B’s parcel when state opened prison on neighboring lot.

•Part (i): Unconstitutional “Taking”? Part (i): Unconstitutional “Taking”? Landowners’ property value is reduced Landowners’ property value is reduced significantly but significantly but – The state’s use causes no tangible harms to The state’s use causes no tangible harms to

the landowners the landowners • Have to accept findings of factHave to accept findings of fact• Basically means loss of value caused by irrational Basically means loss of value caused by irrational

fearfear

– AND The state places no limits on the AND The state places no limits on the landowners’ use of their lotslandowners’ use of their lots

ELEMENTS B/D

As Black Friday As Black Friday Approaches: Approaches:

Too Much Too Much

Part TwoPart Two

Every kiss begins with Kay®

& Jane Seymour& Jane Seymour• Bond Girl

• Medicine Woman• Queen of TV

Miniseries• Third Wife of Henry

VIII

“Behind Every Open Heart is a Story”

~present~

Jane Seymour’s “Open Heart”

Collection

Unfortunately, it’s usually a story about

cholesterol.

Class #35 Class #35 • Review Problem 3A(i)

• Michelman Continued • Application of Prior Authority to Penn

Central Facts• Penn Central Arbitrariness Claim• 1978• Begin Penn Central Takings Analysis

Takings Theorist #3: Frank Michelman

Introduction to Concepts - DQ3.27-3.28 cont’d (me) - DQ3.29 (radium)

Takings Theorists: Frank Michelmanfrom last time

Compensate losers if Costs of Compensating (= Settlement Costs)

are less than Costs of Not Compensating

(= Demoralization Costs)

Takings Theorists: Frank Michelman DQ3.27-3.28

Role of Efficiency Gains

•Efficiency Gains are the net benefits of implementing the regulation in question.

•Result of cost/benefit analysis legislature should have done in order to decide to adopt the regulation

Takings Theorists: Frank Michelman DQ3.27-3.28

• Efficiency Gains = net benefits of implementing regulation in question. E.g., in Hadacheck:

– Gains (Harm Prevented) b/c no brickyards (health; property values) LESS

– Costs of Regulation (Harm to brick industry from having to shut down and relocate; harm from increase in cost of bricks; costs of implementation and enforcement)

Takings Theorists: Frank Michelman DQ3.27-3.28

• Efficiency Gains = net benefits of implementing regulation in question. E.g., in Miller:

– Gains (Harm Prevented) to apple orchards & state economy b/c cedar rust limited LESS

– Costs of Regulation (Harm to cedar owners & neighbors; costs of implementation and enforcement)

Takings Theorists: Frank Michelman DQ3.27-3.28

Role of Efficiency Gains•Efficiency Gains are the net benefits of implementing the regulation in question.

•If Efficiency “Gains” are negative, If Efficiency “Gains” are negative, legislature shouldn’t pass regulation legislature shouldn’t pass regulation at all. at all.

Takings Theorists: Frank Michelman DQ3.27-3.28Role of Efficiency Gains

•Efficiency Gains are net benefits of implement-ing the regulation in question. If negative, legislature shouldn’t pass regulation at all. •ImportantImportant: Ordinarily, not part of : Ordinarily, not part of Takings analysis.Takings analysis.

•Under Under Euclid & MillerEuclid & Miller, assessing , assessing efficiency gains is job for state efficiency gains is job for state legislature, not fed’l court.legislature, not fed’l court.

Takings Theorists: Frank Michelman DQ3.27-3.28Role of Efficiency Gains

•Even if Efficiency Gains are positive, but less than bothboth Settlement Costs and Demoralization Costs, in theory, shouldn’t proceed with regulation (net loss to society).

Takings Theorists: Frank Michelman DQ3.27-3.28Role of Efficiency Gains

•If Efficiency Gains less than both Settlement Costs and Demoralization Costs, in theory, shouldn’t proceed with regulation.•Could suggest this in a particular Takings case if both SC & DC seem very highif both SC & DC seem very high, but very hard to know with precision.•Really a legislative Q, so shouldn’t be centralcentral to Takings Analysis

Takings Theorists: Frank Michelman DQ3.27-3.28

Role of Efficiency Gains

•Efficiency Gains are the net benefits of implementing the regulation in question.– If negative, legislature shouldn’t pass

regulation at all.

– If less than both Settlement Costs and Demoralization Costs, in theory, shouldn’t proceed with regulation.

– Primarily legislative Qs; not part of judicial Takings analysis.

QUESTIONS?

Takings Theorists: Frank Michelman DQ3.29 (radium)

Fairness Principle

Explain in your own words.

Takings Theorists: Frank Michelman DQ3.29 (radium)

Fairness Principle•OK not to compensate, if affected parties ought to understand how not compensating in similar cases probably is more beneficial in long run.– Like work of John Rawls on “justice”

generally: Look at problem before you know which people in particular will be affected.

– Can’t measure this, so using principle = arguments about fairness and how people are likely to react

Takings Theorist #3: Frank Michelman

Application of Theory

DQ3.30 (radium: apply to earlier cases & “airspace solution”)DQ 3.33 (oxygen: apply to P.C.)

Takings Theorists: Frank Michelmanfrom last time

Compensate losers if Costs of Compensating (= Settlement Costs)

are less than Costs of Not Compensating

(= Demoralization Costs)

Takings Theorists: Frank Michelman DQ3.30 & 3.33: Application

of TheorySettlement Costs•Easy to Identify Losers?

•Administrative Costs of Paying Claims (Valuation/Distribution)

•Value of Settlements (Number x Amount)

Apply to Facts of …

•Hadacheck

•Miller

•Mahon

•Airspace Solution

•Penn Central (OXYGEN)

Takings Theorists: Frank Michelman DQ3.30 & 3.33: Application

of TheoryDemoralization

Costs•Likely Perception of Harm to Losers?

•Likely Perception of Winners/Importance of State Interest?

•Possible Variations in Spin?

Apply to Facts of …

•Hadacheck

•Miller

•Mahon

•Airspace Solution

•Penn Central (OXYGEN)

Takings Theorists: Frank Michelman Application of Fairness

PrincipleOK not to compensate, if affected parties ought to understand how not compensating in similar cases probably is more beneficial in long run.

•Likely similar analysis to Demoralization Costs

•Michelman likely thinks reasonable people OK with cases like Hadacheck w extensive harm

•Principle might operate differently in Mahon because of recognition of possible harms to society from overturning established contract rights.

Class #35 Class #35 • Review Problem 3A(i)• Michelman Continued

• Application of Prior Authority to Penn Central Facts (OXYGEN)

• Penn Central Arbitrariness Claim• 1978• Begin Penn Central Takings Analysis

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Apply Prior Authority to PC Facts

•To Practice Using Earlier Cases/Theorists

•To Further Understand Earlier Cases/Theorists

•To See What Arguments Lawyers Might Have Made to the US SCt When It Decided PC

•Like Treating PC Facts as Exam Question

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Apply Prior Authority to PC Facts

•Sax/Miller

– Pure Arbiter/Miller Case?

– Enterpriser Case?

– Other Arguments from Sax or Miller

Penn Central: DQ3.33Apply Theorists to Facts of PC: Sax

•Arbiter v. Enterpriser: – Not Standard Arbiter Case b/c No Land Use

Conflict– Not Standard Ent. Case b/c Gov’t Doesn’t Want

to Run– Might Argue : More like Ent. b/c Gov’t Wants

Parcel Used Only for Particular Purpose that Serves Gov’t Interest

•Control Spillover Effects– Not Preventing Harm to Other Land Uses– BUT: Externalities to NYC from decision to

change bldg.

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Apply Prior Authority to PC Facts

•Sax/Miller

•Epstein & Related Arguments

– Public Nuisance/Hadacheck Case?

– Implicit Compensation/Reciprocity?

Penn Central: DQ3.33

Apply Theorists to Facts of PC: Epstein

•Stopping Public Nuisance: NO•Implicit Compensation– Reciprocity? Last Time: • Normally not for Hist. Preservation• Penn Central does get some tourism benefits

– Other Compensation?• Tax Breaks: Probably Not Enough to Matter

(Not Raised)• TDRs: Could discuss; might depend on

actual value

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Apply Prior Authority to PC Facts •Sax/Miller

•Epstein & Related Arguments

•Arguments from Mahon (beside reciprocity)?– Too Far?

– Value to Zero?

– Other?

Penn Central: DQ3.32

Arguments about Penn Central from Mahon include:

•Loss in Property Value = “Too Far”? – Losing $2 Million/year– BUT retains value of building + reasonable rate

of return – Gets TDRs + tax breaks– Would need better data plus discussion re “too

far”

•Value to Zero?

Penn Central: DQ3.32

Arguments about Penn Central from Mahon include:

•Value to Zero?– If look at whole parcel, NO– If look at air rights alone, MAYBE • City might allow use of air rights if better

design• TDRs may allow moving value of air rights to

new site

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Arguments about PC from Prior Cases

One Common Way to Do This: Compare Facts of Old Case to

Facts of New Case/Hypo

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Compare Facts of Old Case to Facts of PC

•E.g., Compare Nectow to Penn Central: –PC: Less Interference w Ppty Rts (Value Left)–PC: Furthers Police Power (Welfare) (Nectow

Didn’t)–Thus, Better Case for Gov’t than Nectow

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Compare Facts of Old Case to Facts of PC

•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.

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Compare Facts of Old Case to Facts of PC

•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)

Penn Central: Penn Central: DQ3.32-3.33 (Oxygen)DQ3.32-3.33 (Oxygen)

Compare Facts of Old Case to Facts of PC

•If compare facts for all cases, should see that PC facts are between the other cases (like an exam Q):•Suggests Theorists especially helpful to resolve. Note that US SCt in PC explicitly relies on both Sax and Michaelman. (Epstein not yet written).