ELEMENTS B1 & B2 POWER POINT SLIDES Class #28 Monday, November 0 (October 31), 2016 Tuesday, November 1, 2016

Fajer’s Exam Technique Workshop: Dave Brubeck Quintet We’re All Together Again for the First Time (1973) Featuring “Take Five” (1960) Dave Brubeck, Piano * Paul Desmond, Alto Sax* Gerry Mulligan, Baritone Sax Alan Dawson, Drums * Jack Six, Bass Fajer’s Exam Technique Workshop: Wed. 11/2 & Tue. 11/8 Both in Room E352 @ 12:30-1:50 pm Identical Content

Pop Culture Quiz Name the Musical Group: 1st Billboard #1 Hit in 1958 Won 5 Grammys; Nominated for 8 More Featured in Major Studio Motion Picture in 2011 Hint:

Pop Culture Quiz Name the Musical Group: 1st Billboard #1 Hit in 1958 Won 5 Grammys; Nominated for 8 More Featured in Major Studio Motion Picture in 2011

Rose Article & DQ2.21 Cf. RANE (~1981)

Rose Article & DQ 2.21 Characterize Cases in Rose’s Terms Mullett favoring finders by adopting broad definition of NL (v. Limit to Nat’l Habitat): Clear Act: Requiring “nat’l habitat” too generous to OO If animal can provide for itself, F can’t assume prior ownership Relatively few people would know that sea lion out of place Useful Labor: Maybe insufficient labor by OO to … alert other people of claim. contain animal in way that it won’t get mistaken for wild. Note that looking at Mullett this way helps explain why other cases focus on marking & finder’s knowledge: Ways to provide or identify clear act even if animal gets to NL.

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Shaw favoring net-owners by rejecting perfect net rule? Relationship to “Rewarding Useful Labor”?

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Shaw rejecting perfect net rule? Relationship to “Rewarding Useful Labor” Net useful even if imperfect if gets lots of fish Relationship to “Clear Act”?

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Shaw rejecting perfect net rule? Relationship to “Clear Act” Probably most people see fish in net as owned even if imperfect. Net has to be pretty bad to send signal that net-owner doesn’t claim fish (cf. sunken boat) Note: State adopting rule increases “clarity” of act by confirming net doesn’t have to be perfect.

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Albers favoring OOs by rejecting Mullett rule? Relationship to “Rewarding Useful Labor”?

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Albers rejecting Mullett rule? Relationship to “Rewarding Useful Labor” Mullett rule insufficient protection for investment in important industry Tattooing itself is useful labor b/c specifically identifies OO at least to insiders Relationship to “Clear Act”?

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Albers rejecting Mullett rule? Relationship to “Clear Act” Tattoo tells everyone there is OO and specifically identifies OO to insiders (including this D) Court leaves open possibility of different result if truly innocent finder

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Ghen favoring whaling industry by adopting custom? Relationship to “Rewarding Useful Labor”?

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Ghen adopting custom Relationship to “Rewarding Useful Labor” Custom Rewards Labor of Whale Killer. Especially important because: Whaling Industry Useful b/c Whales Valuable Custom Necessary to Industry to Give Enough $$$ Whaler Arguably Did All Possible to Retain Whale Finder Also Gets $$$ for Useful Labor of Reporting Relationship to “Clear Act”?

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Ghen adopting custom Relationship to “Clear Act”: Mark Seems Very Strong What About Interaction with Outsiders?

Rose Article & DQ 2.21 (Radium) Characterize Cases in Rose’s Terms Ghen adopting custom Relationship to “Clear Act”: Q re Outsiders Maybe OK b/c Mark is Very Strong Maybe OK b/c Have to Use Insiders to Process Maybe OK b/c Best You Can Do

Rose Article & DQ 2.21: Characterize Cases in Rose’s Terms Swift adopting Custom (Not Shown in Class) Relationship to “Clear Act”: Accepted by “Relevant Audience” Relationship to “Rewarding Useful Labor” Labor Necessary to Get Resource Incomplete Maybe court assumes that long agreement means industry thinks custom is right balance between labor & notice

Rose Article & DQ 2.21 Characterize Cases in Rose’s Terms I’ll also include in this set of slides a version for Swift (previous slide). Questions on Rose?

LOGISTICS CLASS #28 Unit III Materials on Course Page Plus Updated Syllabus & Assignment Sheet We’ll Start Unit III Next Class Review Problem 2F Next Class 1st Possession of Uninhabited Island Under ACs Uranium/Radium: Names on Slide Before Class Strongest Arguments for Your Client Hardest Qs to Resolve Under ACs Qs on GWA #3?

What Hammonds calls “Escape” the industry calls “Reinsertion” Oil & Gas: “Escape” * Starting Point: What Hammonds calls “Escape” the industry calls “Reinsertion” *Featuring “Sybil Green” Font (reinsertions into empty spaces)

Factual Setting of Hammonds & White Oil & Gas: “Escape” Factual Setting of Hammonds & White Gas pool underneath multiple surface lots All usable gas extracted from pool Gas Co. (G) uses empty pool for storage: G has lawful access from some point on surface G wants to extract and reinsert at will G does not want to pay surface Os for right to store gas in the underground parts of their lots

Legal Issue in Hammonds & White Oil & Gas: “Escape” Legal Issue in Hammonds & White White (p.101): [W]hether title to natural gas, once having been reduced to possession, is lost by the injection of such gas into a natural underground reservoir for storage purposes.

Legal Issue in Hammonds & White Oil & Gas: “Escape” Legal Issue in Hammonds & White White (p.101): [W]hether title to natural gas, once having been reduced to possession, is lost by the injection of such gas into a natural underground reservoir for storage purposes. Hammonds (p.96-97): “[W]hether the gas, having once been reduced to possession …, was restored to its original wild and natural status, by being replaced in a similar reservoir of nature….” (???!!!) (We’ll Come Back to This)

Hammonds v. C. Ky. Nat’l Gas Co. FActs & LEGAL CLAIM Dfdt CKNG has gas it extracted from different places. Stores “vast quantities of gas” in depleted underground reservoir, a portion of which is part of Plaintiff Hammonds’s land. H sues for trespass. Means what here? Who (allegedly) is trespassing where?

Factual Settings: Hammonds v. White Oil & Gas: “Escape Factual Settings: Hammonds v. White Gas Co. (G) uses empty pool for storage Hammonds = Dispute betw G & Surface O White = Different Problem Reinserted Gas Leaked into Adjacent Gas Pool Person with Interest in Adjacent Pool Wants to Pump Out Reinserted Gas Through That Pool

Hammonds v. C. Ky. Nat’l Gas Co. DQ2 Hammonds v. C. Ky. Nat’l Gas Co. DQ2.26: Cost/Benefit Analysis (Uranium) Material Harm to H if CKNG stored its gas in the part of the reservoir in her land?

Hammonds v. C. Ky. Nat’l Gas Co. DQ2 Hammonds v. C. Ky. Nat’l Gas Co. DQ2.26: Cost/Benefit Analysis (Uranium) Material Harm to H if CKNG stored its gas in the part of the reservoir in her land? Alternate Uses? Very Unlikely (Shoe Storage??) Danger from Reinsertion: Very unlikely to have leaks or explosions b/c in original reservoir surrounded by non-permeous rock + CKNG knows it’s liable for this kind of harm + H didn’t raise Noise/Fumes: Likely no more than from original extraction; 54-acre lot mostly not affected. Other Kinds of Harm?

Hammonds v. C. Ky. Nat’l Gas Co. DQ2 Hammonds v. C. Ky. Nat’l Gas Co. DQ2.26: Cost/Benefit Analysis (Uranium) Other Harm to H if CKNG stored its gas in the part of the reservoir in her land? Loss of Rental Value (if she’s entitled to) More Psychological/Abstract Harm: Unlikely to be aware of presence of gas (but see “The Princess & the Pea”) Maybe need to protect all property rights (“Just bugs me that …”)

Hammonds v. C. Ky. Nat’l Gas Co. DQ2 Hammonds v. C. Ky. Nat’l Gas Co. DQ2.26: Cost/Benefit Analysis (Uranium) Harm to H = Loss of Property Rights & Rental Value Benefits to society if gas was stored underground rather than on surface?

Harm to H = Loss of Ppty Rts & Rental Value Hammonds v. C. Ky. Nat’l Gas Co. DQ2.26: Cost/Benefit Analysis (Uranium) Harm to H = Loss of Ppty Rts & Rental Value Benefits to society if gas was stored underground rather than aboveground: Safety (See Sylvester Stallone) Aesthetics (Try to Avoid Seeing New Jersey) Cost Savings (No Tanks or Surface Space)  Cheaper Fuel Big Social Benefits Outweigh Harms Unless Great Value Given to Abstract Property Rights

Hammonds v. C. Ky. Nat’l Gas Co. DQ2.27: BARGAINING (Uranium) Why parties were not able to bargain to a satisfactory solution in Hammonds? Ordinary Transaction Costs (see DQ1.29(b)) Unsurprising if big gap between positions: Hammonds has little to lose from holding out CKNG has to worry about similar deals w lots of owners of small surface lots, so unlikely to want to give much

Cf. Trespass & Airline Overflights Oil & Gas: “Escape” Cf. Trespass & Airline Overflights Airlines want to use empty space technically owned by surface Os High value to airline & passengers Little value to surface Os Bargaining very expensive (every lot from NY LA)

Cf. Trespass & Airline Overflights Oil & Gas: “Escape” Cf. Trespass & Airline Overflights Airlines want to use empty space technically owned by surface Os Solution is Federal Statute Removing Surface Rights Above X Feet Could Do Something Similar for Reinsertion We’ll Do As Alternative to Escape ACs in DQ2.36 For Practice: Fact Comparisons: Reinsertion v. Airspace Will Become Part of Our Standard Analysis of Takings Cases (See DQ3.03, 3.09, 3.10, 3.17, etc.)

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case Hammonds (p.96-97): Statement of “Issue”: “[W]hether the gas, having once been reduced to possession …, was restored to its original wild and natural status, by being replaced in a similar reservoir of nature….” Not Immediately Obvious Why This Q is Relevant to Trespass!!

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case Natural Gas = Wild Animal If Animal Escapes Back to Wild, OO Loses Property Rights THUS: If Natural Gas “Escapes” Back to Wild, OO Loses Property Rights OO Loses Property Rights = No Trespass

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case PROBLEMS WITH THIS USE OF ANALOGY Court extends ACs analogy from 1st possession to escape without any defense. No precedent cited for specific legal Q re ownership of reinserted gas (BUT Animals Analogy treated as well-established binding precedent) No policy discussion at all (E.g., no reference to any part of cost/benefit analysis we did in DQ2.26)

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case PROBLEMS WITH THIS USE OF ANALOGY Court extends ACs analogy from 1st possession to escape without any defense. Deliberate use of reservoir while maintaining control doesn’t look like “escape” (cf. White)

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case PROBLEMS WITH THIS USE OF ANALOGY Court extends ACs analogy from 1st possession to escape without any defense. Deliberate use of reservoir while maintaining control doesn’t look like “escape” (cf. White) Even under Escape ACs, Gas co. could win Short Distance, F’s Knowledge, Protect Industry, AR Continued Control by G might mean no Return to NL

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case Specific Analogy Noted by Court: “If one capture a fox in a forest and turn it loose in another [forest], or if he catch a fish and put it back in the stream at another point, has he not done … just what the appellee has done with the gas in this case?”

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case (URANIUM) Specific Analogy Noted by Court: “If one capture a fox in a forest and turn it loose in another [forest], or if he catch a fish and put it back in the stream at another point, has he not done … just what the appellee has done with the gas in this case?” NO. Reinsertion in Hammonds more like: letting fox out into walled enclosure; or letting fox out having trained it to return when you call.

Hammonds v. C. Ky. Nat’l Gas Co. DQ2.28: Uranium Long Quote from Willis’s Thornton on Oil & Gas §1264 (pp. 97-98): Says reinserted gas resumes its “original character….” Says a neighbor like Hammonds “could take it with impunity through adjacent wells….” Why doesn’t this passage conclusively resolve the case? Some ideas?

Hammonds v. C. Ky. Nat’l Gas Co. DQ2.28: Uranium Why doesn’t Treatise quote conclusively resolve case? Treatise is not binding authority and does not cite to any cases on point (or court would note). Author focused on Tax Q; as we noted re Albers, can characterize differently for tax than for property rts.

Hammonds v. C. Ky. Nat’l Gas Co. DQ2.28: Uranium Why doesn’t Treatise quote conclusively resolve case? Treatise not binding authority. Can characterize differently for tax than for property rts. Also, in quote, Willis making an argument about how reinserted gas should be taxed. “It … should be taxed with and as a part of the land.” Not telling us how Ky (or any other state) in fact taxes. Supports H’s trespass claim if Gas Co. paying taxes on gas in portion of pool on her lot. Supports court’s decision that Gas Co. no longer owns if H paying taxes on the gas.

Hammonds v. C. Ky. Nat’l Gas Co. DQ2.29: Upshot of CaSE RADIUM After the case is over, what new problem does the gas company have? What is likely to happen next? Is this a good result from society’s perspective?

Hammonds v. C. Ky. Nat’l Gas Co. DQ2.29: Upshot of CaSE RADIUM After the case is over, what new problem does the gas company have? Because they lose ownership of reinserted gas, anyone owning surface above pool can drill & take. What is likely to happen next? Gas Company removes gas and stops reinsertion. Is this a good result from society’s perspective? Public loses extensive benefits of reinsertion.

Hammonds v. C. Ky. Nat’l Gas Co. Miscellaneous Points Because of cost-benefit analysis, Ms. Hammonds isn’t very sympathetic plaintiff, so court may be looking for way for her to lose. Note Kentucky SCt in Hail (1854) describing crude oil, then sold as patent medicine, as "a peculiar liquid not necessary nor indeed suitable for the common use of man“ (p.95) (cf. Animals: Blackstone  Albers) Questions on Hammonds?

White v. N.Y. Gas Co. RADIUM DQ2.30 OXYGEN DQ2.31-2.32

White v. N.Y. Gas Co.: OVERVIEW P has rights to part of proceeds [Means?] from gas well (O’Donnell Well = OD) operated by Ds OD had not produced much gas for a long time. Ds & others using nearby well for storage of reinsertion gas. Reinsertion gas leaking underground into OD. OD starts producing again Ds discover that gas now coming from OD is reinsertion gas from other well & curtail production of OD Factual Dispute: Was the gas coming out of OD stored gas or local gas?

White v. N.Y. Gas Co.: OVERVIEW Factual Dispute: Was the gas coming out of the OD well stored gas or local gas? Findings: By the time of trial all the local gas was gone. Thus, only stored gas was coming out of the OD well.

White v. N.Y. Gas Co.: OVERVIEW Claim by P’tiff: (relying on Hammonds & ACs) Once reinserted underground, gas has “escaped”, so belongs to nobody. Hammonds. Thus, what comes out of OD well belongs to “captors” (owners/beneficiaries of OD including P). Ds have contractual duty to continue pumping OD well for benefit of owners of proceeds of OD (as though it was one of several wells doing initial capture in a multi-well field).

White v. N.Y. Gas Co.: DQ2.30 (Radium) USE OF ANIMALS ANALOGY IN WHITE: Court says gas has not “escaped” (p.99) The two pools are one “well-defined storage field” Ds control both BUT I think more like escape than Hammonds. Ds didn’t intend that gas flow into 2d pool Ds lucky they controlled 2d pool as well Different rights to “Proceeds” of the two pools

White v. N.Y. Gas Co.: DQ2.30 (Radium) USE OF ANIMALS ANALOGY IN WHITE: Court says gas has not “escaped” (p.99) BUT more like escape case than Hammonds. DQ2.30: If court had treated this as “escape”, arguments that G wins under Escaping ACs?

White v. N.Y. Gas Co.: DQ2.30 (Radium) Arguments that G wins even under ACs? Relevant Points Include Labor by OO, No Abandonment, Plus: Return to NL: Not “Natural Habitat” (but see Mullett ) Like Kesler: relatively short time & distance; quick “pursuit” Marking/F’s Knowledge: Nature of gas shows industry expert that not local Highly unlikely OD well starts producing again w/o leak Court’s zoo elephant in Pittsburgh (p.103) a little Q’able Need to be expert to tell NE from SW gas Maybe more like: Fished-out lake suddenly has fish again

White v. N.Y. Gas Co.: DQ2.30 (Radium) Arguments that G wins even under ACs? Domestication Could Easily Have Rule That Once “Captured”, No Longer Wild Animal, so Stronger Rights Two Concerns re Analogy to “Domestication” Natural Gas Escapes [into Air!] if Not Confined Well, so Maybe More Like Wild Animal in Cage In White Situation (Unlike Hammonds), G No Longer Fully Controls Gas

White v. N.Y. Gas Co. : Logic of Case Finding #1: Plaintiff is a resident and citizen of Crawford County, Pennsylvania. Defendant New York State Natural Gas Corporation … is a New York corporation and doing business in Pennsylvania. Defendant Tennessee Gas Transmission Company … is a Delaware corporation and doing business in Pennsylvania. The amount in controversy exceeds the sum of $3,000 exclusive of interest and costs. Relevance?

White v. N.Y. Gas Co. : Logic of Case Finding #1: Plaintiff is a resident and citizen of Crawford County, Pennsylvania. Defendant New York State Natural Gas Corporation … is a New York corporation and doing business in Pennsylvania. Defendant Tennessee Gas Transmission Company … is a Delaware corporation and doing business in Pennsylvania. The amount in controversy exceeds the sum of $3,000 exclusive of interest and costs. Diversity Jurisdiction in Fed’l Court

White v. N.Y. Gas Co. : Logic of case & DQ2.31 (Oxygen) Diversity Case in Federal Court Court must apply Pennsylvania Law (Erie) Penn. Trial Court case followed Hammonds Court: Penn. SCt would not follow Hammonds Penn doesn’t always use animals analogy for oil & gas Hammonds rule discourages reinsertion Strong public policy favoring reinsertion (note finding re necessary for winter heating in Northeastern US) DQ2.31: What is Significance of Statutes cited on top of p.104?

White v. N.Y. Gas Co. : Logic of case & DQ2.31 (Oxygen) Court: Penn. SCt would not follow Hammonds Penn doesn’t always use animals analogy for oil & gas Hammonds rule discourages reinsertion Strong public policy favoring reinsertion DQ2.31: Penn. Statutes = Evidence of public policy Eminent Domain power available to get storage space. Like Oklahoma Statute cited in n.2 p.101 What does use of EmDom mean in this context? Allowed to store even near coal mines. See Mahon & Friedman article in Unit III State leases out land for storage.