ELEMENTS B1 & B2 POWER POINT SLIDES Class #37: Monday, November 21, 2016 National Stuffing Day

Billy Joel, The Stranger (1977)

OPINION/DISSENT FORMAT FINAL EXAM QUESTION 3 OPINION/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 Difficult Open Qs (Review Problems 3A-3C)

FINAL EXAM QUESTION 3 Review Problem 3A (i) (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.

Minimum Security Prison All Adjoining Landowners 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 XQIIID Minimum Security Prison All Adjoining Landowners All State Citizens

FINAL EXAM QUESTION 3 Review Problem 3A(ii) XQIIID: Big loss in value to B’s parcel when state opened prison on neighboring lot. Part (ii): Unconstitutional “Taking” if landowners’ property value is reduced significantly but Os acquired the property in Q by gift/will/inheritance, so arguably made no investment? Discuss In Class Next Monday Assume Today: Analysis same as if B paid fair market value for parcel when he acquired it.

FINAL EXAM QUESTION 3 Review Problem 3A(i) (Uranium) XQIIID: Big loss in value to B’s parcel when state opened prison on neighboring lot. Part (i): Unconstitutional “Taking”? Landowners’ property value is reduced significantly BUT The state’s use causes no tangible harms to the landowners Have to accept findings of fact Basically means loss of value caused by irrational fear AND The state places no limits on the landowners’ use of their lots.

FINAL EXAM QUESTION 3 Review Problem 3A(i) (Uranium) Prison  Big loss in ppty value to B’s parcel BUT No tangible harms to B No limits on B’s use of own lot EASY Qs State Stopping Pubic Nuisance? State Acting as Arbiter? What are Benefits to B? Reciprocity?

FINAL EXAM QUESTION 3 Review Problem 3A(i) (Uranium) Prison  Big loss in ppty value to B’s parcel BUT No tangible harms to B No limits on B’s use of own lot HARDER Qs Arguments from Mahon? State Acting as Enterpriser re B?

FINAL EXAM QUESTION 3 Review Problem 3A(i) (Uranium) Prison  Big loss in ppty value to B’s parcel BUT No tangible harms to B No limits on B’s use of own lot BIG PICTURE HARD Qs Should State Have to Pay If No Explicit Limits on B’s Ability to Use Loss in Value from Irrational Fear (v. Real Harm)

Takings Theorist #3: Frank Michelman Application of Theory OXYGEN DQ3 Takings Theorist #3: Frank Michelman Application of Theory OXYGEN DQ3.30: apply to earlier cases & “airspace solution” DQ 3.33: apply to P.C.

Applying Michelman DQ3.30 & 3.33 (Oxygen) Settlement Costs Easy to Identify Losers? Administrative Costs of Paying Claims (Valuation/Distribution) Value of Settlements (Number x Amount) Apply to Facts of … Miller (MAF) Hadacheck Mahon Airspace Solution Penn Central

Applying Michelman DQ3.30 & 3.33 (Oxygen) Demoralization Costs Likely Perception of Harm to Losers? Likely Perception of Winners/Importance of State Interest? Possible Variations in Spin? Apply to Facts of … Hadacheck (MAF) Miller Mahon Airspace Solution Penn Central

Takings Theorists: Frank Michelman Application of 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. 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. Leave other cases for you

LOGISTICS Midterms Other Feedback During T- Giving Break

Penn Central: Takings Analysis Structure of Penn Central Takings Analysis Overview Relatively Clear Instances of Takings Arguments from Purpose Arguments re Harm to Property Owner Means/End Testing

Penn Central Takings Analysis: Arguments from Purpose [DQ3.39] (n.30): Majority seems to reject distinction between preventing harm & providing benefit. In Hadacheck & Miller, uses lawful at time of regulation [relevance: Os not bad actors meriting punishment?] Cases don’t turn on “noxious use” but that restrictions were “reasonably related” to implementing a policy “expected to produce a widespread public benefit” Plus destruction of historic landmark is public harm. Very 1L Law Prof Kind of Move: “Harm!?” Benefit!?”

Penn Central Takings Analysis: Arguments from Purpose DQ3.39: Does Footnote 30 alter earlier cases? If “noxious use” category gone, would seem to mean that readings of Hadacheck & Miller that rest on public nuisance idea are incorrect. I’m skeptical that category is completely gone. You’d think preventing greater harms ought to give state more leeway to regulate land use.

Penn Central: Takings Analysis Big Qs Left Open by Penn Central NOXIOUS USE Meaning of Distinct Invest-Backed Expectations (DIBE) DIBE & Hadacheck Denominator Q Heightened Scrutiny for Takings?

Penn Central: Takings Analysis Big Qs Left Open by Penn Central Noxious Use Should we read Footnote 30 literally to mean that harm/ benefit distinction is irrelevant to Takings analysis and there’s no special treatment for “noxious uses”? —OR— Can we still argue that gov’t gets more leeway to limit property rights when stopping significant harm to others or when purpose is otherwise very important?

Penn Central: Takings Analysis Structure of Penn Central Takings Analysis Overview Relatively Clear Instances of Takings Arguments from Purpose Arguments re Harm to Property O Distinct Investment-Backed Expectations Denominator Q Means/End Testing

Penn Central Takings Analysis: Arguments re Harm to Property Owner Majority rejected claimant’s argument that any significant loss in value is a Taking. However, says (p.141) that a significant factor in Takings analysis is the “extent to which the regulation has interfered with distinct investment-backed expectations” (DIBE) Opinion is not explicit about what DIBE means or its relationship to the facts or to prior cases

Penn Central Takings Analysis: Arguments re Harm to Property Owner [DQ3.34] Not significant interference with DIBE in Penn Central (pp.146-47) No interference w primary expectations re parcel. Can still use in way intended (RR Stn) Can still make reasonable rate of return (RRR) on investment Claimant exaggerates impact on “air rights” No indication that can't build anything above. Can transfer air rights in any event (suggests can consider TDRs in doing valuation)

Penn Central Takings Analysis: Arguments re Harm to Property Owner [DQ3.34]: DIBE: My Read from Majority Expectations = Refers to owner’s expectations at time of purchase (or relevant subsequent investment) Expectations presumably must be plausible/lawful at time = implicit requirement of reasonableness

Penn Central Takings Analysis: Arguments re Harm to Property Owner [DQ3.34]: DIBE: My Read from Majority Distinct: expectations re property right affected must be Specific: Not vague like “someday I might develop more” or “I want as much profit as I can get” Separate from Whole (where relevant): Look for evidence showing O considered right in Q separately at time purchased

Penn Central Takings Analysis: Arguments re Harm to Property Owner [DQ3.34]: DIBE: My Read from Majority Investment-Backed? Evidence that distinct property right specifically paid for (e.g., separate price or negotiation) Rewards good lawyering in drafting transaction documents (e.g., separately pricing “air rights” “mineral rights” “support rights” etc.)

Penn Central Takings Analysis: Arguments re Harm to Property Owner [DQ3.34]: My Read of DIBE Expectations = O’s at time of investment (& reasonable) Distinct: Specific v. Vague; Separate from Whole Investment-Backed? Specifically paid for Penn Central Air Rights not focus of deal: not distinct or investment-backed Of Course DIBE in RR Station, BUT No significant interference b/c RRR

Penn Central Takings Analysis: Arguments re Harm to Property Owner [DQ3.34]: My Read of DIBE Expectations = O’s at time of investment (reasonable) Distinct: Specific v. Vague; Separate from Whole Investment-Backed? Specifically paid for Exam Note: Owner generally had some DIBE at purchase (intended uses) Check if right affected is specific part of DIBE Check if interference w DIBE is significant (e.g., no RRR)

Penn Central Takings Analysis: Arguments re Harm to Property Owner If My Read of DIBE Correct Significance: Protects ag. specific out-of-pocket losses If O explicitly paid for specific use and state denied that use, may be Taking If RRR on intended investment, not Taking Suggests different result in Penn Central IF: O bought parcel last year at higher price b/c of intent re tower OR O purchased air rights alone