Music: Alberta HunterAmtrak Blues (1980)

•Candy on Table Available on First in Time Basis

•Mostly Lecture Today• Mercury Rising (as Needed) to

Help w Michaelman: Garcia; Neves; Beal; Solomon; Kirk; Rothenberg; Lacey; Arce

Uranium DQ111

What rules can you derive from Miller?• Can choose between one kind of

property and another in public interest

• In choosing, can prefer public interest even to the extent of destruction of one kind of property

DQ111

Uranium DQ111

Effect on meaning of Hadacheck?• Explicitly reaffirms Hadacheck • Says don’t need to be technical about

“nuisance”• Seems to characterize Hadacheck as a

destruction of property case• Can take value to 0 where choosing one

kind of property over another

DQ111

DQ111Effect of Miller on meaning of Mahon?• Clarifies that Mahon didn’t overrule

Hadacheck• Reciprocity not necessary; none here• Public Safety issue not necessary; none

here• Can take value to 0 where choosing one

kind of property over another• Maybe suggests don’t look at smallest

possible unit of property (trees)• Maybe makes Mahon minor case about

explicit contract

Questions on Miller?

Calcium: OTHER 1920s CASES

Euclid upholds facial validity (under police power) of modern comprehensive

zoning scheme

Other 1920s Cases

Calcium: OTHER 1920s CASES

Euclid upholds facial validity (under police power) of modern comprehensive

zoning scheme

Significant deference to legislative choices & line-drawing (in the

abstract). Similar to Miller.

Other 1920s Cases

Calcium: OTHER 1920s CASES

Euclid (Top p.101): “[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. …

Other 1920s Cases

Calcium: OTHER 1920s CASES

Euclid (Top p.101): … 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. …

Other 1920s Cases

Calcium: OTHER 1920s CASES

Euclid (Top p.101): … 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.”

Other 1920s Cases

Calcium: OTHER 1920s CASES

Nectow finds unconstitutional the application of a zoning scheme to a

particular parcel (answering Q reserved in Euclid)

Other 1920s Cases

Calcium: OTHER 1920s CASES

Nectow finds unconst. the application of a zoning scheme to a particular parcel

No good where • eliminated profitable use of lot *AND*

• no “substantial relation” to furtherance of police power interests

Other 1920s Cases

Calcium: OTHER 1920s CASES

Nectow finds unconst. the application of a similar zoning scheme to a particular parcel

No good where

• eliminated profitable use of lot *AND*

• no “substantial relation” to furtherance of police power interests

PRETTY NARROW LIMIT!

Other 1920s Cases

EVALUATIONS

Dean’s Fellow Cancelled Today

(Complex Parenting Issues)

Transition 1920s 1978: Alberta Hunter

Penn Central• Last & Most Complex Case of Semester

– Culmination of Skills: Read & Reread – Figure out range of arguments it creates

• Order of Proceeding– Today: I’ll Lay Out Dispute (Then

Michaelman)– Friday: NEON DQ117-18: Arguments

From Prior Authority– FRI/MON: Go Through Analysis of Case

(Mix of PHOSPHORUS & ZINC DQs)

DQ116: Intro to Penn Central

• Gov’t action at issue?

• Purpose?

• Limits on the use of property?

• Uses still permissible?

• Harm to the petitioners?

• Demsetz Takings story?

DQ116: Intro to Penn Central

Gov’t action at issue? NYC ordi-nance to preserve historic bldgs.

• Places some obligations on owners (good repair/maintain exterior use)

• Tries to preserve reasonable rate of return. – i) owners can transfer development rights to

other nearby lots they own– ii) tax breaks

DQ116: Intro to Penn Central

Purpose? Tourist $$$; Civic Pride

• NYC Bankruptcy

• I ♥ NY

DQ116: Intro to Penn Central

Limits on the use of property? Uses still permissible?

• Need gov’t approval before structural changes; must maintain properly.

• Can do anything you were doing before designation; can do structural changes if approved.

DQ116: Intro to Penn Central

Grand Central Station designated historic site. Penn Central (RR) owns. Harm to RR?

• RR wants 55-story tower above station.

• Landmark Board disapproves

Grand Central Station (c.1920)

One of the Proposed

Towers with Pan Am Building

(Met Life) in Background

Jacqueline Kennedy Onassis:

"Is it not cruel to let our city die by degrees, stripped of all her proud monuments, until there will be nothing left of all her history and beauty to inspire our children? If they are not inspired by the past of our city, where will they find the strength to fight for her future? …

Jacqueline Kennedy Onassis:

"Americans care about their past, but for short term gain they ignore it and tear down everything that matters. Maybe… this is the time to take a stand, to reverse the tide, so that we won't all end up in a uniform world of steel and glass boxes."

DQ116: Intro to Penn Central

Grand Central Stn designated historic site. Penn Central (RR) owns. Harm to RR?

• RR wants 55-story tower above station. • Landmark Bd disapproves: "aesthetic joke". • Financial Loss: About $2 million/yr in rent

– BUT can sell TDRs to make up some– RR concedes that it can still earn reasonable return

running station as is.

Qs on Facts?

Michaelman: Cost/Benefit Analysis of Decision Whether to Compensate

Once state has decided to regulate, there’ll be winners & losers. Do you compensate the losers?

Michaelman: Cost/Benefit Analysis of Decision Whether to Compensate

Compensate the losers if:Costs of Compensating

less than

Costs of Not Compensating

Costs of Compensating = “Settlement Costs”

INCLUDES:

• Cost of paying claimant

• Cost of paying everyone like claimant

• Costs of administering payment scheme – E.g., 8% per pair of blue jeans– Focus on costs of processing; valuing

Costs of Compensating = “Settlement Costs”

LIKELY TO BE HIGHEST WHEN …

• Lots of claimants

• Claims intangible or otherwise hard to value

Costs of Not Compensating = “Demoralization Costs”

INCLUDES:

• Upset to losing party

• Upset to similarly situated parties

• Upset to sympathizers

• Can manifest as– Disincentives to future investment– Lack of faith in gov’t & resulting behavior

Costs of Not Compensating = “Demoralization Costs”

Focus on likely public reaction.

Costs of Not Compensating = “Demoralization Costs”

LIKELY TO BE HIGHEST WHEN …

• People see as unfair or arbitrary

• Relatively few people bearing very high burdens not seen as relating to their own behavior

Compare Settlement Costs to Demoralization Costs

• If SC>DC, no compensation (often widely dispersed small losses)

• If DC>SC, pay compensation (often small group of losers viewed as unfairly burdened)

Michaelman Recap: Cost/Benefit Analysis of

Decision Whether to Compensate

Once state has decided to regulate, there’ll be winners & losers. Do you compensate the losers? YES if

Costs of Compensating (Settlement Costs)

less than

Costs of Not Compensating (Demoralization Costs)

QUESTIONS?

Role of Efficiency Gains

• Efficiency Gains are net benefits of implementing regulation in question.

Role of Efficiency Gains

Efficiency Gains are net benefits of implementing regulation in question.

E.g., in Hadacheck: • Harm prevented b/c no brickyards (health;

property values)LESS

. Costs of regulation (Harm to brick industry from having to shut down and relocate; harm from increase in cost of bricks; costs of implementation and enforcement)

Role of Efficiency Gains

Efficiency Gains are net benefits of implementing regulations in question. E.g., in Miller:

• Benefits of Regulation (to apple industry & to state economy)

LESS

. Costs of regulation (Harm to cedar owners & neighbors; costs of implementation and enforcement)

Role of Efficiency Gains

If Efficiency Gains are negative, regulation shouldn’t be passed in first place.

Role of Efficiency Gains

If Efficiency Gains negative, regulation shouldn’t be passed in first place.

• Important: Not part of analysis in Takings case.

• Under Euclid & Miller, assessing efficiency gains is job for state legislature, not fed’l court.

Role of Efficiency Gains

If Efficiency Gains positive, but less than both Settlement Costs and Demoralization Costs, in theory, shouldn’t proceed with regulation (net loss to society).

Michaelman: Application

If Efficiency Gains less than both Settlement Costs and Demoralization Costs, in theory, shouldn’t proceed with regulation.

• Might suggest this in a particular case, but very hard to know with precision.

• Maybe if both SC & DC seem very high, suggest shouldn’t go forward.

Role of Efficiency Gains

If Efficiency Gains less than both Settlement Costs and Demoralization Costs, in theory, shouldn’t proceed with regulation.

• Might suggest this in a particular case, but very hard to know with precision.

• Maybe if both SC & DC seem very high, suggest shouldn’t go forward.

• Shouldn’t be central to a Takings analysis.

Role of Efficiency Gains

If Efficiency Gains less than both Settlement Costs and Demoralization Costs, in theory, shouldn’t proceed with regulation.

• Might suggest this in a particular case, but very hard to know with precision.

• Maybe if both SC & DC seem very high, suggest shouldn’t go forward.

• Shouldn’t be central to a Takings analysis.

• QUESTIONS?

Michaelman Sample Application: Miller (Mercury)

• Settlement Costs? – Identifying “losers”– Valuing loss– Total Cost?

• Demoralization Costs?– Upset of “losers”?– Upset of sympathizers?

• Balance?

Michaelman Fairness Principle

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.

• Application to Miller?

Michaelman Fairness Principle

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.

• Miller? Reasonable to think most people would see saving important industry as more beneficial in the long run than protecting minor property interest (in landscaping).

Mid-September Crisis

Mid-October Crisis

Mid-November Crisis

YOU HAVE MORE TIME THAN YOU THINK YOU DO

• End of LRW

• 3 Days Clear Before Each Test

• Thanksgiving

• Wed Nov 25 + Fri Nov 27-Tue Dec 1

• Schedule Your Time (Roughly)

USE OLD EXAMS• Do Under Exam Conditions

• You’ll Never “Feel Ready”; Build in Time to Do Anyway

• Look at Old Model Answers if Available– Imperfect

– Evidence of Kind of Exam Professor Likes

• If Questions Remain Afterward, Ask!

OTHER EXAM PREP TIPS

• Checklists for Open Book Exams

• Make Time for Group Work– Consult on Qs from Cases/Classnotes

– Discuss Hypos & Old Exam Qs

– Identify Likely Issues for Exam

• Go to Office Hours/Review Sessions– My times posted soon on course page

Peace of Mind Tips• Now to Dec. 17: You Need to Sleep

• Ignore Rumor Mill

• The First Year “Grade Curve”

• September 2012

YOU CAN DO THIS !