ELEMENTS B1 & B2 POWER POINT SLIDES Class #35 Wednesday, November 16, 2016 Thursday, November 17, 2016

Music: Alberta Hunter Amtrak Blues (1980) Next 3 Classes Fri (§s Separate): Michelman & Penn Central Cont’d Mon (§s Together): Rev Prob 3A(i) (Uranium) [Michelman] & Penn Central Cont’d; Course Evaluations Tue (§s Together): Rev Prob 3B (Krypton) Rev Prob 3A(i) (Oxygen) Penn Central Cont’d; Ackerman

Miller v. Schoene & DQ3. 22-3. 25 (with Radium for 3 Miller v. Schoene & DQ3.22-3.25 (with Radium for 3.23) Apples to Apples & Rust to Rust

Miller v. Schoene DQ3.22: Introduction Gov’t Action = Cedar Rust Act: State Entomologist can order diseased cedar trees cut down. State pays for removal but not for loss in value. Purpose? Legitimate (Connected to HSWM)? Action rationally related to purpose?

Miller v. Schoene DQ3.22: Introduction Gov’t Action = Cedar Rust Act: State Entomologist can order diseased cedar trees cut down. Purpose: Save apple trees from spread of cedar rust disease; help big apple industry Legitimate? YES. Helping apple growers and state economy = WELFARE. Action rationally related to purpose? YES. MEETS MINIMAL RATIONAL BASIS SCRUTINY

Miller v. Schoene DQ3.22: Introduction Gov’t Action = Cedar Rust Act: State Entomologist can order diseased cedar trees cut down. State pays for removal. Petitioners’ use of their property: Cedar trees must be cut down; can do anything else with land; can do anything with wood. Some value of tree/wood may be lost Aesthetic loss could mean loss in land value I’ll leave Demsetz Takings Story for You

FINAL EXAM QUESTION 3 Mapping Chart Case Gov’t Act Affected Landowner Intended Beneficiaries Hadacheck LA Bans Brickyards Brickyard Os Neighbors Mahon PA Bans Undermining Coal Companies Surface Os “Airspace Solution” Rights to Empty Gas Pools Gas Companies Miller VA Cedar Rust Act Cedar Tree Os Apple Orchard Os

Miller v. Schoene : Introduction Procedural Posture Order from state official to cut trees Appeal to State Circuit Court, which affirmed order; required payment of cost of removal Virginia SCt aff’d: No violation of U.S. Constitution Writ of Error to US SCt (same as in Hadacheck & Mahon)

Miller under Prior Authorities DQ3.23 (Radium) I Will Use Panels Heavily for “Under Prior Authority” Qs to Practice Applying Tests Miller under Sax?

Miller under Prior Authorities DQ3.23 (Radium) Miller Easy under Sax: No Taking Paradigm Arbiter Case: Arbitration betw: Apple Growers (One Type of Land Use) Cedar Growers (Conflicting Type of Land Use) Controlling Spillover Effects of Growing Cedars Miller under Epstein? Preventing Public Nuisance?: Implicit Compensation?

Miller under Prior Authorities DQ3.23 (Radium) Miller Under Epstein: Preventing Public Nuisance?: Likely. Can View Cedars as “Noxious Use” Harming Others BUT: Maybe Harm Not Widespread or to General Public Implicit Compensation? No. Group Burdened Different from Group Getting Benefits Owners with Both Trees Probably Not Getting Benefits b/c Will Cut Down Cedars Themselves if Apples Valuable

Miller under Prior Authorities DQ3.23 (Radium) Miller under Mahon & Hadacheck: Epstein Analysis Resolves Some Qs Preventing Public Nuisance so OK?: Likely, Not Certain Reciprocity/Implicit Compensation? No. Check Loss in Value: Taking if “Too Far”?

Miller under Prior Authorities DQ3.23 (Radium) Other Qs Under Mahon & Hadacheck: Check Loss in Value: Taking if “Too Far” Loss in Value of Whole Lot? Big loss unlikely unless “10,000 Cedars” Could Compensate Rare Parcel w Big Loss cf. Euclid v. Nectow Loss in Value of Cedar Trees? Os keep wood, so not reduced to nothing, But cedar wood not very valuable, so some loss Denominator Q Again; We’ll Revisit w Penn Central

Miller v. Schoene DQ3.24: Addressing Eubank Local Regulation: Land use decision required if requested by 2/3 of neighbors US SCt in Eubank says Unconstitutional Problem appears to be having some property owners dictate rules for others (w no mediation by state) Pretty clear possibility of unfair/arbitrary result

Miller v. Schoene DQ3.24: Addressing Eubank Land use decision required if requested by 2/3 of neighbors; US SCt in Eubank says Unconstitutional Pet’r argues Eubank relevant b/c gov’t action (cutting trees) triggered by request of neighbors

Miller v. Schoene DQ3.24: Addressing Eubank Land use decision required if requested by 2/3 of neighbors; US SCt in Eubank says Unconstitutional Pet’r argues Eubank relevant b/c gov’t action (cutting trees) triggered by request of neighbors SCt: In Miller, challenged decision not made by neighbors nor required b/c of their request Gov’t Official Decides Independently Decision Subject to Judicial Review Looks Like Adequate Process; Not Arbitrary

Miller v. Schoene DQ3.24: Addressing Eubank Land use decision required if requested by 2/3 of neighbors; US SCt in Eubank says Unconstitutional Pet’r argues Eubank relevant b/c gov’t action (cutting trees) triggered by request of neighbors SCt: Decision in Miller differs; made by Gov’t official subject to judicial review As in Hadacheck, arbitrariness claim made & rejected. (Reminder: “Arbitrary” not our issue!!) Questions on Eubank Issues?

Miller v. Schoene: Key Language (Compare with Sax) Miller contains important language that seems to describe the government’s role as “Arbiter” (in Sax’s terms) and its Constitutional implications.

Miller v. Schoene: Key Language (Compare with Sax) Top p.128: “… the state was under the necessity of making a choice between the preservation of one class of property and that of the other wherever both existed in dangerous proximity. …

Miller v. Schoene: Key Language (Compare with Sax) Top p.128: … It would have been none the less a choice if, instead of enacting the present statute, the state, by doing nothing, had permitted serious injury to the apple orchards within its borders to go on unchecked….

Miller v. Schoene: Key Language (Compare with Sax) Top p.128: … When forced to such a choice the state does not exceed its constitutional powers by deciding upon the destruction of one class of property in order to save another which, in the judgment of the legislature, is of greater value to the public.”

Miller v. Schoene: Key Language (Compare with Sax) Passage on top of p.128 means: Choice between two conflicting land uses (= Sax arbiter case) is OK even if state has a very strong interest in choosing one over the other. Would make no sense to have a rule that said, The better the state’s reasons, the more likely it has to pay compensation.

Miller v. Schoene: Key Language (Compare with Sax) Top p.128: … When forced to such a choice the state does not exceed its constitutional powers by deciding upon the destruction of one class of property in order to save another which, in the judgment of the legislature, is of greater value to the public.”

Miller v. Schoene: Key Language (Compare with Sax) Passage on top of p.128 means: Court allows state legislature to make this choice. Court does not say it is the job of federal courts to make it.

Miller v. Schoene: Key Language (Compare with Sax) Top p.128: “… the state was under the necessity of making a choice between the preservation of one class of property and that of the other wherever both existed in dangerous proximity. … NOT between any two private interests, but two “classes” of private property (again Sax arbiter) NOT between public and private interests

Miller v. Schoene: Holding & Rules DQ3.25 What rules can you derive from Miller? Can choose between one kind of private property and another in public interest . In making this choice, can prefer the private interest supported by greater public interest even to the extent of destruction of the other (can take value to zero).

Miller v. Schoene: Holding & Rules DQ3.25 What rules can you derive from Miller? Can choose between one kind of private property and another in public interest . In making this choice, can prefer the private interest supported by greater public interest even to the extent of destruction of the other (can take value to zero). Very Important: Case does not address a choice between a purely public interest on one side and a purely private interest on the other

Miller v. Schoene: Holding & Rules DQ3.25 Effect on meaning of Hadacheck? Explicitly reaffirms Hadacheck Shouldn’t be technical in defining “nuisance” (SCt seems to see Miller as “Publ. Nuis.” case) Seems to characterize Hadacheck as a destruction-of-property case Re Kelso: Allowed to take value to zero where choosing one kind of property over another

Miller v. Schoene: Holding & Rules DQ3.25 Effect on meaning of Mahon? Clarifies Mahon didn’t overrule Hadacheck Reciprocity not necessary; none here Public Safety issue not necessary; none here Allowed to take value to zero where choosing one kind of property over another Maybe suggests don’t look at smallest possible unit of property (trees)

Hadacheck + Mahon + Miller Miller citing Hadacheck: “[W]here the public interest is involved, preferment of that interest over the property interest of the individual, to the extent even of its destruction, is one of the distinguishing characteristics of every exercise of the police power which affects property.” Unclear how this fits with Mahon, which Miller ignores entirely.

Miller v. Schoene: Holding & Rules DQ3.25 Effect on meaning of Mahon? Possible Very Broad Reading of Miller: Mahon only prohibits destruction of property rights that are explicitly contracted for. BUT Helpful to Keep in Mind: BOTH Holmes & Brandeis Join Miller without writing separately.

Questions on Miller v. Schoene?

Relevant Considerations in Takings Cases Survey About What Facts Matter Ban on Intended Use (90%) % Reduction in Value (88%): Mahon (Generally); Mahon $$$ Amount Reduction (59%) & Epstein (Impl. Comp.) Purpose of Regulation (63%) = Hadacheck (Police Powers); Sax & Miller (Enterpriser v. Arbiter; Stopping Spillovers); Mahon & Epstein & Miller (Stopping Public Nuisance) $$$ Amount Left (56%) = Kelso (maybe Hadacheck); Mahon (Zero Value) Return on Investment (39%)

Miller v. Schoene: Florida Footnote Citrus Canker is Disease That Spreads Among Different Kinds of Citrus Trees In Florida, Canker Threatens Giant Citrus Industry If State Finds Canker on One Citrus Tree, Takes All Citrus Trees w/in Certain Distance Right in My Own Backyard

Miller v. Schoene: Florida Footnote Citrus Canker is Disease That Spreads Among Different Kinds of Citrus Trees In Florida, Canker Threatens Giant Citrus Industry If State Finds, Take All Citrus Trees w/in Certain Distance State Pays Limited Compensation Coupon for Non-Citrus Trees Political Decision Miller: Compensation Not Required by US Const

Elements Insight: A New View of an Ancient Battle APPLES ORANGES

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES?

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES? YES TYPE OF FRUIT?

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES? YES TYPE OF FRUIT? MAKE JUICE FROM?

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES? YES TYPE OF FRUIT? MAKE JUICE FROM? SEPARATABLE PEEL?

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES? YES TYPE OF FRUIT? MAKE JUICE FROM? SEPARATABLE PEEL? CROSS-SECTION IS ROUND?

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES? YES TYPE OF FRUIT? MAKE JUICE FROM? SEPARATABLE PEEL? CROSS-SECTION IS ROUND? MAJOR U.S. CASH CROP?

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES? YES TYPE OF FRUIT? MAKE JUICE FROM? SEPARATABLE PEEL? CROSS-SECTION IS ROUND? MAJOR U.S. CASH CROP? SOURCE OF VITAMIN C?

Elements Insight: A New View of an Ancient Battle CHARACTERISTICS ORANGES GROW ON TREES? YES TYPE OF FRUIT? MAKE JUICE FROM? SEPARATABLE PEEL? CROSS-SECTION IS ROUND? MAJOR U.S. CASH CROP? SOURCE OF VITAMIN C?

Elements Insight: A New View of an Ancient Battle APPLES ORANGES EXACTLY THE SAME??!!

Elements Insight: A New View of an Ancient Battle APPLES ORANGES BUT: Bruisability & Rules for Transport Liability

Other 1920’s Cases Village of Euclid v. Ambler Realty Co Other 1920’s Cases Village of Euclid v. Ambler Realty Co. (1926) & Nectow v. City of Cambridge (1928) DQ3.26

DQ3.26: 1920s Cases Village of Euclid v. Ambler Realty Co. Thrust of Euclid? Upholds facial validity (under police power) of modern comprehensive zoning scheme. Reserves Q of whether zoning as applied to a particular parcel might be unconstitutional.

DQ3.26: 1920s Cases Village of Euclid v. Ambler Realty Co. Upholds facial validity (under police power) of modern comprehensive zoning scheme. Significance to line of cases we’ve read? Significant deference to legislative choices & line-drawing (in the abstract). Consistent w Miller. Key Language makes clear: That a line is hard to draw doesn’t make it impermissible.

DQ3.26: 1920s Cases Village of Euclid v. Ambler Realty Co. Key Language re Deference to Legislatures: Long Block Quote (bottom p.130): “[I]t may … happen that not only offensive or dangerous industries will be excluded, but those which are neither offensive nor dangerous will share the same fate. …

DQ3.26: 1920s Cases Village of Euclid v. Ambler Realty Co. Key Language re Deference to Legislatures: Long Block Quote (bottom p.130): “… But this … happens in respect of many practice- forbidding laws which this court has upheld, although drawn in general terms so as to include individual cases that may turn out to be innocuous in themselves. The inclusion of a reasonable margin, to insure effective enforcement, will not put upon a law … the stamp of invalidity. …

DQ3.26: 1920s Cases Village of Euclid v. Ambler Realty Co. Key Language re Deference to Legislatures: Long Block Quote (bottom p.130): “… Such laws may also find their justification in the fact that, in some fields, the bad fades into the good by such insensible degrees that the two are not capable of being readily distinguished and separated in terms of legislation.”

DQ3.26: 1920s Cases Nectow v. City of Cambridge Thrust of Nectow? Finds unconstitutional the application of a zoning scheme to a particular parcel. Answers Q reserved in Euclid.

DQ3.26: 1920s Cases Nectow v. City of Cambridge Finds unconstitutional the application of a zoning scheme to a particular parcel. Why was application unconstitutional? Factual findings in Nectow that application … Eliminated profitable use of lot *AND* Not in furtherance of police power interests

DQ3.26: 1920s Cases Nectow v. City of Cambridge Finds unconstitutional the application of a zoning scheme to a particular parcel where Eliminated profitable use of lot *AND* Not in furtherance of police power interests Significance to line of cases we’ve read? Pretty Trivial Significance: Very Few Cases Where Both (a) and (b) True.

Other 1920’s Cases Village of Euclid v. Ambler Realty Co Other 1920’s Cases Village of Euclid v. Ambler Realty Co. (1926) & Nectow v. City of Cambridge (1928) Questions?

Transition: 1920s Cases  Penn Central (1978) African-American Historian Gerald Early: Three Great American Contributions to World Culture: Baseball, Jazz, & the U.S. Constitution Improvisations on Agreed-Upon Rules

Transition: 1920s  Penn Central = Alberta Hunter (1895-1984) 1910-54: Sang Professionally in US & Europe Lead in Original London Production of Showboat (music last class) Entertained Troops with USO (WWII & Korea)

Transition: 1920s  Penn Central = Alberta Hunter (1895-1984) 1954-77: Career as Nurse Invented High Sch. Diploma to get Nursing Degree Lied About Age to get Jobs in NY Hospitals Hospital Forced Her to Retire at “65” (in fact 81)

Transition: 1920s  Penn Central = Alberta Hunter (1895-1984) 1978-84: Revived Singing Career Singing in NY Jazz Clubs  Media Sensation Recorded Three Albums; Many TV Appearances Toured Europe & South America; Sang at White House Working Until Just Before She Died

Penn Central Transportation Co. v. City of New York (1978) Intro & DQ3 Penn Central Transportation Co. v. City of New York (1978) Intro & DQ3.31 (with Krypton)

Grand Central Station (c.1920)

Penn Central: Introduction DQ3.31 (Krypton) Gov’t action at issue? NYC Historic Preservation Ordinance: Owners of designated historical properties must: keep in good repair preserve exterior use get permission for structural change

Penn Central: Introduction DQ3.31 (Krypton) Gov’t action? NYC Historic Preservation Ordinance Purpose? Legitimate? (Connected to HSWM?) Action Rationally Related to Purpose?

Penn Central: Introduction DQ3.31 (Krypton) Gov’t action? NYC Historic Preservation Ordinance Rational to Believe that Saving Historic Sites Furthers Welfare by Increasing Civic Pride, Attracting Tourist $$$ Use of Affected Lots Need gov’t approval before structural changes; must maintain property properly. Can do anything you were doing before designation; can do structural changes if approved

Penn Central: Introduction DQ3.31 (Krypton) NYC Designates Grand Central Station as Historic site. Penn Central (RR) owns. RR wants 55-story tower built above station. Landmark Board rejects 2 versions of tower on aesthetic grounds.

One of the Proposed Towers with Pan Am Building (Met Life)

Penn Central: Introduction DQ3.31 (Krypton) NYC Designates Grand Central Station as Historic site. Penn Central (RR) owns. RR wants 55-story tower built above station. Landmark Board rejects 2 versions of tower on aesthetic grounds. Claimed Harm to RR?

Penn Central: Introduction DQ3.31 (Krypton) Rejection of Tower Above Grand Central Stn. $$ Loss: Lost Rental Income (Correct) $1 Million/Yr during Construction #3 Million/Yr Thereafter Offset by loss of $700K  $1M rental of displaced space. (Thus, little net loss during construction) Net Loss of at least $2 million/yr in rental income after construction completed (in 1968 $$) Offsetting Financial Considerations?

Penn Central: Introduction DQ3.31 (Krypton) Rejection of Tower Above Grand Central Stn. Loss: At least $2 million/yr in net rental income after construction completed (in 1968 $$) Offsetting Financial Considerations: Tax Breaks Transferable Development Rights (TDRs) Conceded that RR makes “Reasonable Rate of Return” on Grand Central Station parcel. QUESTIONS ON FACTS?

FINAL EXAM QUESTION 3 Case Gov’t Act Affected Landowner Intended Beneficiaries Hadacheck LA Bans Brickyards Brickyard Os Neighbors Mahon PA Bans Undermining Coal Cos. Surface Os Miller VA Cedar Rust Act Cedar Tree Os Apple Orchard Os Penn Central NYC Historic Preservation Os of Historic Buildings Tourist Biz; History Buffs

Takings Theorist #3: Frank Michelman Today  Fri: Intro to Theory DQ3 Takings Theorist #3: Frank Michelman Today  Fri: Intro to Theory DQ3.27-3.29 (me) Mon: Applying Theory DQ3.30 & 3.33 (Oxygen)

Takings Theorists: Frank Michelman DQ3.27-3.28 Cost/Benefit Analysis But not analysis of whether underlying gov’t regulation is a good idea.

Takings Theorists: Frank Michelman DQ3.27-3.28 Michelman = Cost/Benefit Analysis of Decision Whether to Compensate Once state has decided to regulate, there’ll be winners & losers. Should you compensate the losers?

Takings Theorists: Frank Michelman DQ3.27-3.28 Michelman (MMN) = Cost/Benefit Analysis of Decision Whether to Compensate Once state has decided to regulate, there’ll be winners & losers. Compensate losers if … Costs of Compensating less than Costs of Not Compensating A Major Insight of MMN’s Work is: These Costs Exist

Takings Theorists: Frank Michelman DQ3.27-3.28 MMN = Cost/Benefit Analysis of Decision Whether to Compensate Once state has decided to regulate, there’ll be winners & losers. Compensate losers if … Costs of Compensating (= Settlement Costs) less than Costs of Not Compensating (= Demoralization Costs)

Takings Theorists: Frank Michelman DQ3.27-3.28 Cost of Compensating = Settlement Costs: Includes Cost of paying claimant & everyone like claimant Remember decision to pay affects more than just the case in front of court (you)

Takings Theorists: Frank Michelman DQ3.27-3.28 Cost of Compensating = Settlement Costs: Includes Cost of paying claimant & everyone like claimant Costs of administering payment scheme Focus on costs of identifying; valuing; processing E.g., Paying Off All Airspace Owners E.g., Damages (Price-Fixing) = 8% per pair of blue jeans purchased in Calif. For 10 Years Can dwarf actual payments.

Takings Theorists: Frank Michelman DQ3.27-3.28 Cost of Compensating = Settlement Costs: Likely Highest When Lots of claimants Claims not same for each claimant and intangible or otherwise hard to value E.g., Again, Paying Airspace Owners

Takings Theorists: Frank Michelman DQ3.27-3.28 Cost of Not Compensating = Demoralization Costs: Includes Upset to losing party & everyone similar Upset to sympathizers We Care b/c “Upset” Can Manifest As … Disincentives to future investment Lack of faith in gov’t & resulting behavior (refusal to pay taxes or to obey other laws)

Takings Theorists: Frank Michelman DQ3.27-3.28 Demoralization Costs: Focus on Likely Public Reaction

Takings Theorists: Frank Michelman DQ3.27-3.28 Cost of Not Compensating = Demoralization Costs: Likely Highest When Many people view gov’t act as unfair/arbitrary Relatively few people bear very high burdens not seen as relating to their own behavior Typical of Very Repressive Regimes Elsewhere to Deliberately Demoralize People This Way

Takings Theorists: Frank Michelman DQ3.27-3.28 MMN = Cost/Benefit Analysis of Decision Whether to Compensate Once state has decided to regulate, there’ll be winners & losers. Compensate losers if … Costs of Compensating (= Settlement Costs) less than Costs of Not Compensating (= Demoralization Costs)

Takings Theorists: Frank Michelman DQ3.27-3.28 MMN = Cost/Benefit Analysis of Decision Whether to Compensate Do Rough Comparison of Settlement Costs (SC) & Demoralization Costs (DC) If SC>DC, no compensation (often widely dispersed small losses) If DC>SC, pay compensation (often small group of losers viewed as unfairly burdened)