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

2. 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

3. 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
Hint:

4. 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

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

6. 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.

7. 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”?

8. 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”?

9. 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.

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

11. 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”?

12. 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

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

14. 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”?

15. 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?

16. 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

17. 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

18. 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?

19. 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?

20. 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)

21. 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

22. 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.

23. 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)

24. 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?

25. 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

26. 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?

27. 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?

28. 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 …”)

29. 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?

30. 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

31. 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

32. 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)

33. 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.)

34. 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!!

35. 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

36. 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)

37. 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)

38. 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

39. 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?”

40. 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.

41. Hammonds v. C. Ky. Nat’l Gas Co. DQ2.28: Uranium
Long Quote from Willis’s Thornton on Oil & Gas §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?

42. 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.

43. 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.

44. 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?

45. 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.

46. 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?

47. White v. N.Y. Gas Co.
RADIUM DQ2.30
OXYGEN DQ

48. 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?

49. 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.

50. 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).

51. 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

52. 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?

53. 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

54. 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

55. 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?

56. 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

57. 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?

58. 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.