ELEMENTS B POWER POINT SLIDES Class #25 Wednesday, October 28, 2015 National Chocolate Day!!

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 Happy National Chocolate Day! Help Yourself to One Piece of Chocolate from Boxes on Front Table Fajer’s Exam Technique Workshop: Wed. 11/4 & Tue. 11/10 Both in Room 12:30-1:50 pm Identical Content

Oil & Gas: “Escape”: Recap 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

Oil & Gas: “Escape”: Recap Legal Issue in Hammonds & White [W]hether title to natural gas is lost by the injection of such gas into a natural underground reservoir 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. “[W]hether the gas was restored to its original wild and natural statusby being replaced in a similar reservoir 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….”

Hammonds v. C. Ky. Nat’l Gas Co. KRYPTON: USEFULNESS OF ANALOGY & DQ2.28

Hammonds v. C. Ky. Nat’l Gas Co. Logic of Case 1.Natural Gas = Wild Animal 2.If Animal Escapes Back to Wild, OO Loses Property Rights 3.THUS: If Natural Gas “Escapes” Back to Wild, OO Loses Property Rights 4.OO Loses Property Rights = No Trespass Problems With Use Of Analogy Here? (Volunteers: Kryptons then Others)

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

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.

KRYPTON Hammonds v. C. Ky. Nat’l Gas Co. DQ2.28: KRYPTON Long Quote from W ILLIS ’ S T HORNTON ON O IL & G AS §1264 (pp ): 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?

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

KRYPTON Hammonds v. C. Ky. Nat’l Gas Co. DQ2.28: KRYPTON Why doesn’t Treatise quote conclusively resolve case? Treatisenot binding authority. Treatise not binding authority. Can characterize differently for tax than for property rts. Can characterize differently for tax than for property rts. making an argument should 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.” – Notin fact – 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.

DQ2.29 Upshot of Case (RECAP from monday) Hammonds v. C. Ky. Nat’l Gas Co. DQ2.29 Upshot of Case (RECAP from monday) After the case is over, what new problem does the gas company have? 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? What is likely to happen next? – Gas Company removes gas and stops reinsertion. Is this a good result from society’s perspective? 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) Questions on Hammonds?

White v. N.Y. Gas Co.OXYGEN BRIEF & BASIC INFORMATION DQ

White v. N.Y. Gas Co.: OVERVIEW (Oxygen) [Means?] 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 (Oxygen) 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 (Oxygen) 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 (Oxygen) 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 (Oxygen) 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 (Oxygen) Arguments that G wins even under ACs? Relevant Points Include: 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 (Oxygen) 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” 1.Natural Gas Escapes [into Air!] if Not Confined Well, so Maybe More Like Wild Animal in Cage 2.In White Situation (Unlike Hammonds), G No Longer Fully Controls Gas

White v. N.Y. Gas Co. : Logic of Case (Oxygen) 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 (Oxygen) Plaintiff resident and citizen of PennsylvaniaDefendant is a New York corporation Defendant is a Delaware corporation The amount in controversy exceeds the sum of $3,000 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 public policy – 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.

White v. N.Y. Gas Co. DQ2.32 (Oxygen) Under the reasoning of White, will surface owners (Os) have a trespass action against those who reinsert gas (Gs)?

White v. N.Y. Gas Co. DQ2.32 (Oxygen) Under the reasoning of White, will surface owners (Os) have a trespass action against those who reinsert gas (Gs)? They should; gas remains property of Gs. Penn giving Gs Eminent Domain power to purchase rights from Os suggests state thinks Gs should have to pay Os.

White v. N.Y. Gas Co.: DQ2.32 (OXYGEN) Under the reasoning of White, Os have trespass action against Gs who don’t purchase rights to use pool. White & Hammonds can’t be reconciled on this point. After White, Pennsylvania has different rule than Kentucky. Qs on White?

LOGISTICS CLASS #25: On Course PageNow  Comments & Models for Group Assignment #2  Comments & Models for Bank of Old XQ1s  Comments & Models for: 1997 Q Q1 (1 st Possession) 2012 Q1 (Custom)Soon  Hammonds & White Sample Briefs (Today)  Comments on Group Assignment #1  (1B2) (Today)  (1A1) (by Friday)  (1C1) (by Saturday)

LOGISTICS CLASS #25: The Week Ahead Fri 10/30: No Class; DF Session 9:30-10:20 Fri 10/30: No Class; DF Session 9:30-10:20 Review Problem 2A: Uninhabited Island & Custom Review Problem 2A: Uninhabited Island & Custom Sat-Sun 10/31-11/1: Change Clocks: Fall Back Sat-Sun 10/31-11/1: Change Clocks: Fall Back Mon 11/2: Start Unit III plus Mon 11/2: Start Unit III plus – Review Problem 2I (Q2: Islands & 1 st Possession) (Slide Over from Today) – Print & Fill Out Class Survey (p.109); Bring to Class & Turn In Anonymously (No Name; No Pseudonym) Wed 11/4: Continue Unit III plus Wed 11/4: Continue Unit III plus – Review Problem 2G (Q1: Human Gesture & Escape): Prepare Arguments for Each Escape Factor – 1 st Fajer Exam Workshop: 12:30 Room E352

RECAP: FINAL EXAM QUESTIONS 1 v. 2 XQ1 XQ1: “Assuming Animals Cases Apply, Discuss Who Should Get Property Rights?” Traditional Issue-Spotter, But Need to Be Creative Applying Doctrine Focus of Discussion: Who Should Win Here? – Applying Doctrine from ACs – Looking Only at Specific Parties in Fact Pattern

FINAL EXAM QUESTIONS 1 v. 2 XQ2 XQ2: “Discuss Whether ACs Are Good Tools to Use in This Type of Scenario” Having Tried ACs in the Specific Circumstances of the Fact Pattern, Take a Step Back to Assess How Well They Worked Here and How Well They Might Work in Similar Situations OK to Refer to Facts of Problem as Examples of Situations or Problems that Might Arise, but Application of Specific Doctrine to Specific Facts Belongs in Q1.

FINAL EXAM QUESTIONS 1 v. 2 XQ2 XQ2: “Discuss Whether ACs Are Good Tools to Use in This Type of Scenario” Analogy: No longer “Referee” applying rules to players in game, but “Consultant” presenting report to “Rules Committee” about what rules should be. Cf. Notorious/Unpopular Application of Rule in Sporting Event Once event is finished, can’t “relitigate” the specific result BUT Can have a conversation about whether and how to change the rules.

FINAL EXAM QUESTIONS 1 v. 2 XQ2: “Discuss Whether ACs Are Good Tools to Use in This Type of Scenario” Can Think of Yourself as Addressing Legislature or State Supreme Court : How Should the State Handle Situations Like the Fact Pattern? In What Ways Are the ACs Useful Tools? In What Ways Are They Not Useful? In What Ways Are ACs Better or Worse Than Plausible Alternatives?

FINAL EXAM QUESTION. 2: PREPARATION Three More In-Class Opportunities to Practice – Escaping Oil & Gas (Today  Monday) – Uninhabited Island (Monday) – Human Gestures (Next Friday) DF Sessions 11/6 & 11/9 (Computer Programs) Group Assignment #3: QUESTIONS ON?

REINSERTING GAS & ESCAPING ANIMALS CASES : Argument By Analogy Gas Companies (G) Reinserting Gas Produces Two Kinds of Disputes: 1.Hammonds: G v. Owners of Lots Containing Part of Reinsertion Pool – Who owns gas? – If G owns gas, does G have to pay for right to use pool? – If G doesn’t own, can other Owners extract reinserted gas? 2.White: G v. Owners of Adjoining Pools: If reinserted gas leaks into reservoir not owned/controlled by G, does G lose property rights to gas?

REINSERTING GAS & ESCAPING ANIMALS CASES : Argument By Analogy Gas Companies (G) Reinserting Gas Produces Two Kinds of Disputes: 1.Hammonds: G v. Owners of Lots Containing Part of Reinsertion Pool 2.White: Leaks (G v. Owners of Adjoining Pools) Note :You could address the two kinds of disputes separately where you thought they raised different issues. E.g., might argue ACs better for leaks than for Hammonds.

REINSERTING GAS & ESCAPING ANIMALS CASES : Argument By Analogy 1.DQ2.33: Arguments from Factual Similarities & Differences (RADIUM) 2.DQ2.34: Arguments re Usefulness of Legal Rules/Factors (RADIUM) 3.Arguments re Comparisons to Alternatives – DQ2.35: Oklahoma Statute (KRYPTON) – DQ2.36; Airspace Solution (KRYPTON) – DQ2.37: Overall (ALL)

REINSERTING GAS & ESCAPING ANIMALS CASES : Argument By Analogy DQ2.33 (RADIUM): Factual Comparisons Between Escaping Animals Situations & “Escaping” Gas Situations Arguments from Factual Similarities re Usefulness of Escaping Animals Cases

REINSERTING GAS & ESCAPING ANIMALS CASES : Argument By Analogy DQ2.33 (RADIUM): Factual Comparisons Relevant Factual Similarities Include: – In both, property moving from complete control to place where ownership is less certain. – White leak like escaping animal b/c escaping confinement w/o OO’s intent despite labor to control – Valuable property/industry – Both can hold identifying mark (although marking of gas probably only discernable to expert )

REINSERTING GAS & ESCAPING ANIMALS CASES : Argument By Analogy DQ2.33 (RADIUM): Factual Comparisons Between Escaping Animals Situations & “Escaping” Gas Situations Arguments from Factual Differences re Usefulness of Escaping Animals Cases

REINSERTING GAS & ESCAPING ANIMALS CASES : Argument By Analogy DQ2.33 (RADIUM): Factual Comparisons Relevant Factual Differences Include: – Natural Gas Lasts Much Longer Than Animal or Whale Carcass – Natural Gas Generally More Valuable Than Animal or even Whale Carcass – Reinsertion is Socially Valuable ; Escape is Not – Reinsertion is Deliberate; Escape is Not – Reinsertion Leaves OO with Much More Control than Typical Animal Escape b/c Pool is Limited Area (per Emenike)

(RADIUM) Argument By Analogy Review Problem 2I (RADIUM) Set-Up for Monday: 1.Identify Additional Alternatives 2.Pros & Cons: 1st Possession ACs v. Three Selected Alternatives a.Any Party Gets Ownership of as Much of the Island as They Are First to Use (Possible Split) b.First Party to Take Resources Gets Whole Island c.“Owner” of Nearest Inhabited Land Gets Whole Island