Reconceptualizing trespass

Northwestern University Law Review

Volumn 103, Issue 4, 2009, Pages 1823-1862

  Parchomovsky, Gideon ^a   Stein, Alex ^b  

^a BAR ILAN UNIVERSITY   (Israel)

^b UNIVERSITY OF PENNSYLVANIA LAW SCHOOL   (United States)

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EID: 76749138888     PISSN: 00293571     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (200)

1. See 2 WILLIAM BLACKSTONE, COMMENTARIES *2. For an influential discussion of the Blackstonian view's effect on contemporary theories of property rights
2. see Thomas W. Merrill & Henry E. Smith, What Happened to Property in Law and Economics?, 111 YALE L.J. 357, 360-64 (2001) [hereinafter Merrill and Smith, What Happened?]. For discussions of the limits of the right to exclude
3. see THOMAS W. MERRILL & HENRY E. SMITH, PROPERTY: PRINCIPLES AND POLICIES 439-80 (2007)
4. Joseph W. Singer, No Right to Exclude: Public Accommodations and Private Property, 90 NW. U. L. REV. 1283, 1286-1412, 1450-77 (1996) (analyzing antidiscriminatory and other limitations to the right to exclude).
5. See also State V. Shack, 277 A.2d 369 (N.J. 1971) (famously holding on policy grounds that a farm owner cannot deny a worker living on the farm an opportunity to receive aid from volunteers).
6. See Guido Calabresi & A. Douglas Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 HARV. L. REV. 1089, 1092 (1972).
7. See 4 RESTATEMENT (SECOND) OF TORTS § 931 cmt. b (1979) (stating that common law courts predominantly use marketbased rent as a benchmark for determining property owners' compensation for trespass)
8. DAN B. DOBBS, 1 LAW OF REMEDIES: DAMAGES-EQUITY-RESTITUTION, § 5.12(1) at 827-29 (2d ed. 1993) (attesting that, except in special cases, "[g]eneral damages recoveries for harm to interests in land are usually based on the diminished market value or diminished rental value of land" and summarizing relevant caselaw). For a recent court decision applying the marketpriced rent criterion, see Franco v. Piccilo, 853 N.Y.S.2d 789, 790 (N.Y. App. Div. 2008) (instructing the court below to assess plaintiff's compensation for trespassory parking of vehicles on his driveway based on a "reasonable rental value").
9. See infra Part III.
10. See Ian Ayres, Protecting Property with Puts, 32 VAL. U. L. REV. 793 (1998) (importing the taxonomy of "call" and "put" options to explain the protections of liability and property rules).
11. Cf. Yuval Feldman & Doron Teichman, Are All "Legal Dollars" Created Equal?, 102 NW. U. L. REV. 223, 236-50 (2008) (demonstrating experimentally that a person is generally more willing to engage in conduct perceived as transactional, for which she expects to pay the set price, than to commit a "violation" triggering an identical payment in the form of a penalty).
12. See ALEX STEIN, FOUNDATIONS OF EVIDENCE LAW 157-71 (2005).
13. See infra Part II.A.
14. (1722) 93 Eng. Rep. 664 (K.B.).
15. A call option in relation to an asset gives its holder the power to purchase the asset from the owner at a price set in advance (e.g., the market price). Conversely, a put option entitles the owner to force another person into a purchase of the asset at a reserved price. The two options allocate control over assetrelated transactions. The call option obliterates the owner's control over those transactions, while the put option makes this control absolute.
16. See Lee Anne Fennell, Adjusting Alienability, 122 HARV. L. REV. 1403, 1444 (2009).
17. Cf. Ayres, supra note 5, at 798-813 (rationalizing other put options as property rule protections); see also Madeline Morris, The Structure of Entitlements, 78 CORNELL L. REV. 822, 854-56 (1993) (describing put options as reverse liability rules).
18. See infra Part II.B.
19. This problem explains the law's reluctance to recognize disgorgement as a remedy for trespass. See infra notes 76-81 and accompanying text.
20. See infra notes 73-75 and accompanying text.
21. See Calabresi and Melamed, What Happened to Property in Law and Economics?.
22. See Merrill & Smith, What Happened?, For an influential discussion of the Blackstonian view's effect on contemporary theories of property rights, at 360
23. Glen O. Robinson, Explaining Contingent Rights: The Puzzle of "Obsolete" Covenants, 91 COLUM. L. REV. 546, 561-62, 573 (1991)
24. see also Larissa Katz, Exclusion and Exclusivity in Property Law, 58 U. TORONTO L.J. 275, 285 (2008) (rationalizing ownership as entrenching the owner's position as the exclusive agenda setter for the ownedthing); see generally Thomas W. Merrill, Property and the Right to Exclude, 77 NEB. L. REV. 730 (1998) [hereinafter Merrill, Exclude] (attesting that the right to exclude is the key component of property ownership and examining its role in property law generally).
25. See Merrill & Smith, What Happened?, supra note 1, at 389 (defining the right to exclude as allowing the owner "to control, plan, and invest" in the use of her property); see also Merrill, Exclude, supra note 16 at 740-45 (same); Henry E. Smith, Property and Property Rules, 79 N.Y.U. L. REV. 1719, 1759 (2004) [hereinafter Smith, Property Rules] (same).
26. See, e.g., Henry E. Smith, Self Help and the Nature of Property, 1 J.L. ECON. & POL'Y 69, 80-86 (2005) [hereinafter Smith, Self Help] (discussing the relationship between selfhelp and the right to exclude).
27. See, e.g., Leo Katz, Choice, Consent and Cycling, 104 MICH. L. REV. 627, 667 (2006) (acknowledging the possibility of relying on the police to fend off trespassers).
28. For a detailed discussion, see infra Part II.A. As Professor Glen Robinson explains: The right to resist forced transfers, regardless of their efficiency, is so fundamental to our conception of property rights as to be almost definitional. If Alice refuses to sell, her reasons for refusal are irrelevant; it does not matter whether she is "irrational" in her valuation of the amenities... or whether she is merely being "strategic" in holding out for a greater share... No one who has even a smattering of legal knowledge would dispute this account as a positive statement of the law, and few who believe in private property would dispute it as a normative statement of what the law ought generally to be. Robinson, supra note 16, at 561-62. This privilege is fundamental to a free economy.
29. See, e.g., RICHARD A. MUSGRAVE & PEGGY B. MUSGRAVE, PUBLIC FINANCE IN THEORY AND PRACTICE 42 (5th ed. 1989) ("The market can function only in a situation where the 'exclusion principle' applies, i.e., where A's consumption is made contingent on A's paying the price, while B, who does not pay, is excluded. Exchange cannot occur without property rights, and property rights require exclusion. Given such exclusion, the market can function as an auction system. The consumer must bid for the product, thereby revealing preferences to the producer, and the producer, under the pressures of competition, is guided by such signals to produce what consumers want.").
30. For a recent account of the right to exclude and its injunctive consequences
31. see Shyamkrishna Balganesh, Demystifying the Right to Exclude: Of Property, Inviolability and Automatic Injunctions, 31 HARV. J.L. & PUB. POL'Y 593, 623-27 (2008) (justifying the right to exclude on grounds of inviolability as a correlative of the obligation inviolability casts on others).
32. See Nicolle Stelle Garnett, The Neglected Political Economy of Eminent Domain, 105 MICH. L. REV. 101, 109 (2006) (observing that the power of eminent domain "deprives an owner of her 'most essential right' to exclude others-including, especially, the government-from her property").
33. See Thomas W. Merrill, Trespass, Nuisance, and the Costs of Determining Property Rights, 14 J. LEGAL STUD. 13, 16 (1985) (defining actionable trespass as "an invasion of the column of space that defines A's possessory interest under the ad coelum rule")
34. see also Desnick v. Am. Broad. Cos., 44 F.3d 1345, 1351 (7th Cir. 1995) ("To enter upon another's land without consent is a trespass.").
35. See supra note 3 and sources cited therein.
36. This discussion draws on George P. Fletcher, Fairness and Utility in Tort Theory, 85 HARV. L. REV. 537 (1972), who advocates a complete exemption from tort liability for damages associated with reciprocal impositions of risk, rationalizes the imposition of punitive damages for intentional torts, andsupports the objective marketbased assessment of accidental damages.
37. We also rely on Gregory C. Keating, Reasonableness and Rationality in Negligence Theory, 48 STAN. L. REV. 311, 313-25 (1996) (updating and refining Fletcher's reciprocity thesis), and on John C.P. Goldberg, TwentiethCentury Tort Theory, 91 GEO. L.J. 513, 567-69 (2003) (conceptualizing tort law as fair terms of cooperation among equals).
38. This criterion for assessing tort damages is dictated by the liability rule regime, rationalized by Calabresi and Melamed, supra note 2, at 1092 ("Whenever someone may destroy the initial entitlement if he is willing to pay an objectively determined value for it, an entitlement is protected by a liability rule. This value may be what it is thought the original holder of the entitlement would have sold it for. But the holder's complaint that he would have demanded more will not avail him once the objectively determined value is set. Obviously, liability rules involve an additional stage of state intervention: not only are entitlements protected, but their transfer or destruction is allowed on the basis of a value determined by some organ of the state rather than by the parties themselves.").
39. This is a restatement of the famous Learned Hand formula. See United States v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir. 1947). For a recent application of the formula, see Mesman v. Crane Pro Servs., 512 F.3d 352, 354-55 (7th Cir. 2008).
40. See Louis Kaplow, The Value of Accuracy in Adjudication, 23 J. LEGAL STUD. 307, 314-17 (1994) (establishing that basing awards on average harm is efficient because it avoids costly ascertainment of individualized damages ex ante and ex post); see also Alex Stein, Of Two Wrongs That Make a Right: Two Paradoxes of the Evidence Law and Their Combined Economic Justification, 79 TEX. L. REV. 1199, 1216-19 (2001) (explaining the efficiency of setting liability for accidents on the expected average damage).
41. Since the strike price is market value, one should expect the option to be exercised whenever a third party values the use of someone else's property at more than market value.
42. See infra Part III.
43. See, e.g., Hammond v. County of Madera, 859 F.2d 797, 804 (9th Cir. 1988) ("Common law principles... indicate that reasonable rental value is the appropriate remedy for trespass. Damage remedies for trespass are essentially compensatory and not punitive." (citing Bourdieu v. Seaboard Oil Corp., 119 P.2d 973 (1941); United States v. Marin Rock & Asphalt Co., 296 F. Supp. 1213 (C.D. Cal. 1969))); Bethlehem Steel Corp. v. Shonk Land Co., 288 S.E.2d 139, 149 (W. Va. 1982) (attesting that "[t]he measure of damages for trespass to realty 'is the rental value of the property wrongfully occupied and withheld, with compensation for injury to the residue thereof'" and that "[i]t is axiomatic, in the absence of statutes providing multiple damages for a tenant's willful failure to surrender leased premises, that a lessor is entitled to the reasonable rental value of property wrongfully withheld by a lessee" (citing Lyons v. Fairmont Real Estate Co., 77 S.E. 525, 528 (1913))).
44. 563 N.W.2d 154 (Wis. 1997).
45. 563 N.W.2d 159 (emphasis added).
46. 563 N.W.2d. (citing McWilliams v. Bragg, 3 Wis. 424, 428 (1854)).
47. 563 N.W.2d. at 163-66.
48. 563 N.W.2d. at 157.
49. 563 N.W.2d. at 157.
50. The court described the defendant's actions as "egregious," "deceitful," and "reprehensible." Id. at 164. Furthermore, the Jacques had previously lost part of their property as a result of adverse possession, id. at 157, and were therefore highly sympathetic plaintiffs.
51. See 563 N.W.2d. at 164.
52. See 563 N.W.2d. at 160-61.
53. See, e.g., Wilen v. Falkenstein, 191 S.W.3d 791, 800 (Tex. App. 2006) (affirming imposition of punitive damages upon trespasser who trimmed neighbor's tree with "specific intent to cause substantial injury to [the neighbor]" and explaining that "the cases prescribing exemplary damages for a 'malicious' or 'willful' trespass are based on the old, common law 'actual malice' definition requiring proof of 'illwill, spite, evil motive, or purposing the injuring of another'" (quoting Clements v. Withers, 437 S.W.2d 818, 822 (Tex. 1969))); Mission Res., Inc. v. Garza Energy Trust, 166 S.W.3d 301, 318-20 (Tex. App. 2005) (affirming punitive damage award in the amount of $10 million against trespasser who conducted hydraulic fracturing through its well to break up rock formation and steal trapped gas underneath owners' property)
54. see also Alexandra B. Klass, Punitive Damages and Valuing Harm, 92 MINN. L. REV. 83, 105-07 (2007) (discussing representative cases that require a showing of malice and reprehensibility as a condition for holding a trespasser liable for punitive damages).
55. MISS. CODE ANN. § 89725 (2009). Typical of doublerent laws, the Mississippi statute provides that "[w]hen a tenant, being lawfully notified by his landlord, shall fail or refuse to quit the demised premises and deliver up the same as required by the notice, or when a tenant shall give notice of his intention to quit the premises at a time specified, and shall not deliver up the premises at the time appointed, he shall, in either case, thenceforward pay to the landlord double the rent which he should otherwise have paid, to be levied, sued for, and recovered as the single rent before the giving of notice could be; and double rent shall continue to be paid during all the time the tenant shall so continue in possession."
56. For additional examples, see N.J. STAT. ANN. 2A:425 (West 2009) (imposing double rent on holdover tenants); see also Miss. State Dep't of Pub. Welfare v. Howie, 449 So. 2d 772, 777-78 (Miss. 1984) (explaining the differences between Mississippi's doublerent statute for holdover tenants, MISS. CODE ANN. § 89725, and the marketrent approach of the common law).
57. We need to acknowledge the possibility of a criminal sanction. This sanction-typically a fine-is virtually never set high enough to deter trespass. See, e.g., Jacque v. Steenberg Homes, 563 N.W.2d 154, 161 (Wis. 1997) (describing the applicable $30 forfeiture as "halfpenny"). In some jurisdictions, a landowner can also collect treble damages from a trespasser who has intentionally cut or removed trees, timber, or vegetation.
58. See, e.g., CAL. CIV. CODE § 3346(a) (West 2009); CONN. GEN. STAT. § 52560 (2009); LA. REV. STAT. ANN. § 4278.1.B (2009); MASS. GEN. LAWS ch. 242, § 7 (2009). Theoretically, of course, a heavy criminal sanction-imprisonment or a skyrocketing fine-would deter trespass, but its social cost would be prohibitively high.
59. See Steven Shavell, Criminal Law and the Optimal Use ofNonmonetary Sanctions as a Deterrent, 85 COLUM. L. REV. 1232, 1236-37 (1985) (explaining that imprisonment and other supracompensatory penalties are costlier than, and therefore inferior to, compensatory remedies).
60. See, e.g., Dolan v. City of Tigard, 512 U.S. 374, 384 (1994) (holding that the landowner's right to exclude others from his or her land is "one of the most essential sticks in the bundle of rights that are commonly characterized as property" (quoting Kaiser Aetna v. United States, 444 U.S. 164, 176 (1979))).
61. See Smith, Property Rules, supra note 17, at 1722-31, 1755-56 (defending a decentralized property system in which owners increase wealth by making individualized choices between utilizations of assets that are numerous and heterogeneous).
62. See Calabresi and Melamed, What Happened to Property in Law and Economics?. For a discussion of the voluminous literature inspired by Calabresi and Melamed's article
63. see Abraham Bell & Gideon Parchomovsky, Pliability Rules, 101 MICH. L. REV. 1, 15-25 (2002).
64. See Calabresi and Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, at 1105.
65. Calabresi and Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, at 1105-06.
66. Calabresi and Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, at 1122 n.62.
67. Calabresi and Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, at 1106.
68. Calabresi and Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, at, 1111-12.
69. Calabresi & Melamed, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, at 1105-07, 1110 (situating compensation in the domain of liability rules and distributive justice).
70. The owner may prefer to seek marketvalue compensation even when the trespasser's profits are higher than the market rent if the cost of proving those profits far exceeds the cost of establishing the market rent.
71. In some of these cases, trespass is also likely to augment social welfare, but this is not the cases' general characteristic.
72. For an illuminating discussion of costly signaling, as contrasted with "cheap talk," in contract negotiations, see Jason Scott Johnston, Communication and Courtship: Cheap Talk Economics and the Law of Contract Formation, 85 VA. L. REV. 385, 404-39 (1999).
73. See STEIN, FOUNDATIONS OF EVIDENCE LAW, at 143.
74. STEIN, FOUNDATIONS OF EVIDENCE LAW. at 157-71.
75. STEIN, FOUNDATIONS OF EVIDENCE LAW. at 157-71.
76. GEORGE GORDON LORD BYRON, DON JUAN canto XI, st. 37, at 378 (Chiltern Library 1949) (1949).
77. See 2 MCCORMICK ON EVIDENCE § 337, at 473 (Kenneth S. Broun ed., 6th ed. 2006) (stating the general rule of placing the production burden on the plaintiff).
78. Federal Rule of Evidence 803(6) and its many state equivalents render business records admissible as evidence of the truth of their contents. E.g., FED. R. EVID. 803(6); CAL. EVID. CODE § 1271 (West 2009). The hearsay rule consequently does not block their admission into evidence.
79. See 2 MCCORMICK, ON EVIDENCE, § 339, at 483.
80. MCCORMICK, ON EVIDENCE. § 343, at 500-06 (specifying paradigmatic policy grounds for shifting the persuasion burden to defendants).
81. See ARIEL PORAT & ALEX STEIN, TORT LIABILITY UNDER UNCERTAINTY 160-84 (2001).
82. (1722) 93 Eng. Rep. 664 (K.B.).
83. See, e.g., Little Pittsburg Consol. Mining Co. v. Little Chief Consol. Mining Co., 17 P. 760 (Colo. 1888).
84. Little Pittsburg Consol. Mining Co. v. Little Chief Consol. Mining Co. at 763-64.
85. Little Pittsburg Consol. Mining Co. v. Little Chief Consol. Mining Co. at 763 (quoting 1 JOHN WILLIAM SMITH, A SELECTION OF LEADING CASES ON VARIOUS BRANCHES OF THE LAW: WITH NOTES 679 (1888-89)).
86. The last case positively citing Little Pittsburg for this principle is from 1926.
87. See Page v. Savage, 246 P. 304, 309 (Idaho 1926).
88. See CedarsSinai Med. Ctr. v. Superior Court, 954 P.2d 511, 517 (Cal. 1998) (associating adverse inference against spoliator of evidence with Armory); WalMart Stores, Inc. v. Johnson, 106 S.W.3d 718, 721 (Tex. 2003) (same)
89. see also Equitable Trust Co. v. Gallagher, 102 A.2d 538, 541 (Del. 1954) ("It is the duty of a court, in such a case of willful destruction of evidence, to adopt a view of the facts as unfavorable to the wrongdoer as the known circumstances will reasonably admit. The maxim is that everything will be presumed against the despoiler.").
90. See HANOCH DAGAN, UNJUST ENRICHMENT: A STUDY OF PRIVATE LAW AND PUBLIC VALUES 18 (1997) (commending disgorgement of the invader's profits as a remedy that "vindicates the plaintiff's liberty to control the entitlement as part of her private sphere")
91. see also Richard R.W. Brooks, The Efficient Performance Hypothesis, 116 YALE L.J. 568, 583-84 (2006) (identifying conditions in breachofcontract cases under which an efficiencydriven legal system should let the promissee choose between specific performance and disgorgement of the breacher's profits)
92. Steven Thel & Peter Siegelman, The Role of Disgorgement in Contract Law (Fordham Law Legal Studies Research Paper No. 1353402, 2009), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1353402 (identifying disgorgement's advantages as a policy tool in contract law by showing that the defaulter's profit is usually ascertainable and reflects the amount sufficient for deterrence).
93. Whether he actually would desist would depend on the scope and likelihood of the disgorgement remedy.
94. See HANOCH DAGAN, THE LAW AND ETHICS OF RESTITUTION 275 (2004).
95. See HANOCH DAGAN, THE LAW AND ETHICS OF RESTITUTION 275 (2004).
96. See E. Allan Farnsworth, Your Loss or My Gain? The Dilemma of the Disgorgement Principle in Breach of Contract, 94 YALE L.J. 1339, 1350 & n.31 (1985) (attesting that accounting for profits for purposes of disgorgement is an uncertain, complicated, lengthy, and expensive procedure)
97. see also Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 505 (1964) (acknowledging the Patent Act's substitution of injunctive relief for profit accounting and commending it for its simplicity). Cf. Thel & Siegelman, supra note 71, at 43-44 (arguing that accounting for profits is not difficult in contractbased litigation).
98. For a classic statement and analysis of this requirement, see Farnsworth, supra note 75, at 1343-50.
99. For a classic case exemplifying it, see Edwards v. Lee's Adm'r, 96 S.W.2d 1028, 1028-33 (Ky. 1936) (ordering entrepreneur who maintained and charged admission to a scenic cave, one third of which extended under a neighbor's property, to pay the neighbor one third of his net profits). For an illuminating discussion of this case that underscores the intrinsic value of property ownership, see DAGAN, supra note 71, at 76-78.
100. Paula also might be entitled to punitive damages, but, again, not to disgorgement of David's profits.
101. For a recent example of this approach, see Meridien Hotels, Inc. v. LHO Fin. P'ship, 255 S.W.3d 807, 821 (Tex. App. 2008) (exempting from disgorgement management fees earned by trespasser because trespasser paid the landlord holdover rent that equaled 1.5 times the previously agreed amount and the landlord failed to explain to the court "why these damages would not make it whole").
102. RESTATEMENT (FIRST) OF RESTITUTION § 129 (1937).
103. RESTATEMENT (FIRST) OF RESTITUTION § 1.
104. RESTATEMENT (FIRST) OF RESTITUTION § 2 ("A uses a road across B's land without B's knowledge for a period of two years in the transportation of materials, doing so without harm to the land. A saves $2,000 thereby. A reasonable charge for the use of the road would be $200 per year. B is not entitled to recover for the use of the land in an action of assumpsit; in an action of tort he is entitled to recover only $200.").
105. See RESTATEMENT (FIRST) OF RESTITUTION § 3 ("A person is not permitted to profit by his own wrong at the expense of another.")
106. see also RESTATEMENT (SECOND) OF RESTITUTION § 1 at 7 (Tentative Draft No. 1, 1983) (summarizing positive law of restitution by attesting that "[t]he case for relief is especially compelling when the element of gain on one side is matched by loss on the other, and both result from a single wrongful act")
107. see also RESTATEMENT (SECOND) OF RESTITUTION § 1 at 8-9 ("A person who receives a benefit by reason of an infringement of another person's interest, or of loss suffered by the other, owes restitution to him in the manner and amount necessary to prevent unjust enrichment.")
108. Ernest Weinrib, Restitutionary Damages as Corrective Justice, 1 THEORETICAL INQUIRIES IN LAW 1, 37 (2000) (rationalizing the law of unjust enrichment as undoing the proprietary deprivation suffered by the plaintiff).
109. Cf. RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT § 40 (Tentative Draft No. 4, 2005). This draft proposes to substantially expand the scope of disgorgement. Under the proposed rule: (1) A person who obtains a benefit by an act of trespass... is accountable to the victim of the wrong for the benefit so obtained. (2) The measure of recovery depends on the blameworthiness of the defendant's conduct. As a general rule: (a) A conscious wrongdoer, or one who acts despite a known risk that the conduct in question violates the rights of the claimant, will be required to disgorge all gains (including consequential gains) derived from the wrongful transaction. (b) A person whose conduct is innocent or merely negligent will be liable only for the direct benefit derived from the wrongful transaction. Direct benefit may be measured, where such a measurement is available and appropriate, by reasonable rental value or by the reasonable cost of a license.
110. see also RESTATEMENT (SECOND) OF RESTITUTION § 1. The proposed rule would thus establish the facilitation standard for intentional trespasses. In cases of unintentional trespass, the strict causation requirement would continue to apply.
111. See Melvin A. Eisenberg, The Disgorgement Interest in Contract Law, 105 MICH. L. REV. 559, 561 (2006).
112. See Melvin A. Eisenberg, The Disgorgement Interest in Contract Law, 105 MICH. L. REV. 559, 561 (2006)
113. see also ROBERT COOTER & THOMAS ULEN, LAW & ECONOMICS 234 (3d ed. 2000) (coining the concept of "perfect disgorgement" as the mirror image of perfect compensation)
114. Robert Cooter & Bradley J. Freedman, The Fiduciary Relationship: Its Economic Character and Legal Consequences, 66 N.Y.U. L. REV. 1045, 1051 (1991) (explaining that "perfect disgorgement" is "a sanction that restores the wrongdoer to the same position that she would have been in but for the wrong" and thus "strips the agent of her gain from misappropriation and leaves her no better or worse than if she had done no wrong").
115. See CAL. CIV. CODE § 3334 (West 2009). The owner is also entitled to "the reasonable cost of repair or restoration of the property to its original condition, and the costs, if any, of recovering the possession." Id.
116. Starrh & Starrh Cotton Growers v. Aera Energy LLC, 63 Cal. Rptr. 3d 165, 180 (Cal. Ct. App. 2007) (quoting Watson Land Co. v. Shell Oil Co., 29 Cal. Rptr. 3d 343, 351 (Cal. Ct. App. 2005)). California law, however, exempts the trespasser from disgorgement upon a showing that his occupation of another's property originated from "a mistake of fact." CAL. CIV. CODE § 3334(b)(2) (West 2009). The trespasser would then have to pay the owner "the reasonable rental value of the property." Id.
117. Cf. Merrill, supra note 23, at 25-26 (demonstrating how high transaction costs dictate the transition from a "mechanical" to a "judgmental" property right). Both our and Merrill's accounts draw on Ronald H. Coase, The Problem of Social Cost, 3 J.L. & ECON. 1 (1960).
118. See, e.g., Martin v. Reynolds Metals Co., 342 P.2d 790, 795 (Or. 1959) (attesting that "there is a point where the entry is so lacking in substance that the law will refuse to recognize it, applying the maxim de minimis non curat lex," and that "it would seem clear that ordinarily the casting of a grain of sand upon another's land would not be a trespass")
119. see also PruneYard Shopping Ctr. v. Robins, 447 U.S. 74 (1980) (affirming constitutionality of state power to secure free speech at shopping malls by overriding the right to exclude, provided the owner suffers no material economic disadvantage).
120. Airplane overflights often fall into the de minimis category. See Smith, Self Help, supra note 18, at 99 (noting that "even in the case of real estate, the exclusion strategy does allow some invasions to count as de minimis" and mentioning airplane overflights as an example). An overflight is technically a trespass because "it involves an actual, direct, and visible entry into the column of space belonging to the surface owner." Merrill, supra note 23, at 36. In the most recurrent scenario, however, it causes no significant damage to the owner, who consequently cannot sue the airplane's operator. Id. The owner can sue the operator only when the flight interfered substantially with her use and enjoyment of the property.
121. See 1 RESTATEMENT (SECOND) OF TORTS § 159(2), at 281 (1965). Air transportation is a socially beneficial activity. Air transportation providers are unable to negotiate overflights with landowners at an affordable cost. See Merrill, supra note 23, at 35-36. These two factors mark overflights as an exceptional case in which the owner's compensation should be capped by market prices.
122. 124 N.W. 221 (Minn. 1910).
123. 124 N.W. at 222.
124. 71 A. 188 (Vt. 1908).
125. 71 A. at 189-90.
126. See, e.g., Elder Abuse and Dependent Adult Civil Protection Act, CAL. WELF. & INST. CODE § 15634(b) (West 2009) (exempting from civil liability caregivers of an elder or a dependent adult who allow law enforcement agents investigating a report of the elder's or the dependant's abuse to enter private premises without the owner's consent); Easton v. Sutter Coast Hosp., 95 Cal. Rptr. 2d 316, 322 n.7, 323 (Cal. Ct. App. 2000) (construing § 15634(b) broadly as analogous to the general doctrine of necessity and affirming grant of demurrer in a trespass action against paramedics and sheriffs who forcibly entered residence after receiving report of suspected elder abuse); Rossi v. Del Duca, 181 N.E.2d 591, 593-94 (Mass. 1962) (same)
127. see also Trisuzzi v. Tabatchnik, 666 A.2d 543, 547 (N.J. Super. Ct. App. Div. 1995) (affirming applicability of the necessity defense in trespass cases on the ground that "[t]he cry of distress is the summons to relief'" (quoting Wagner v. Int'l Ry. Co., 133 N.E. 437, 437 (N.Y. 1921) (Cardozo, J.))).
128. These rules are incorporated in RESTATEMENT (SECOND) OF TORTS § 197, at 355 (1965), which provides that: (1) One is privileged to enter or remain on land in the possession of another if it is or reasonably appears to be necessary to prevent serious harm to: (a) the actor, or his land or chattels, or (b) the other or a third person, or the land or chattels of either, unless the actor knows or has reason to know that the one for whose benefit he enters is unwilling that he shall take such action. (2) Where the entry is for the benefit of the actor or a third person, he is subject to liability for any harm done in the exercise of the privilege stated in Subsection (1) to any legally protected interest of the possessor in the land or connected with it, except where the threat of harm to avert which the entry is made is caused by the tortious conduct or contributory negligence of the possessor.
129. But the owner can often resist the transaction's initial imposition. When a person visits her cabin in the woods and finds the proverbial backpacker eating her food to avoid death from starvation, she cannot forcibly remove the food from the backpacker's mouth. Upon a more timely arrival, however, she is permitted by the law to deny the starving backpacker access to the cabin and block his entry by using reasonable force.
130. See cases cited supra notes 91-95.
131. See RESTATEMENT (SECOND) OF TORTS § 197(1), at 355, & illus. 12, at 360.
132. See RESTATEMENT (SECOND) OF TORTS § 197(1), at 355, & illus. 12, at 360.
133. See also John Alan Cohan, Private and Public Necessity and the Violation of Property Rights, 83 N.D. L. REV. 651 (2007) (examining caselaw pertaining to the necessity doctrine and identifying uncertainty as to whether the aggrieved property owner is entitled to recover compensation from a person acting under emergency conditions to protect a societal, rather than private, interest).
134. See Richard A. Epstein, Holdouts, Externalities, and the Single Owner: One More Salute to Ronald Coase, 36 J.L. & ECON. 553, 577 (1993) (attesting that under the circumstances of necessity "the bargaining range is so large that there is some risk that no deal will be struck as each side campaigns for the larger fraction of the contested domain"). Note that if the owner manages to impose on the rescuer a contractual obligation to pay her a downright exploitative amount, she might be unable to recover it.
135. See Shahar Lifshitz, Distress Exploitation Contracts in the Shadow of No Duty to Rescue, 86 N.C. L. REV. 315, 324-37 (2008) (identifying legal exits from distress exploitation agreements).
136. However, this will not be the case when there is significant variance in asking prices.
137. Cf. David Genesove & Christopher Mayer, Loss Aversion and Seller Behavior: Evidence from the Housing Market, 116 QUART. J. ECON. 1233, 1235 (2001) (observing systematic refusal of homeowners to lower their asking prices during market downturns and explaining it by loss aversion).
138. See James A. Albert, The Liability of the Press for Trespass and Invasion of Privacy in Gathering the News-A Call for the Recognition of a Newsgathering Tort Privilege, 45 N.Y.L. SCH. L. REV. 331, 333 (2002) (citing Nancy Stancill, Deadly Neglect: Texas and Its Nursing Homes, HOUSTON CHRON., July 22-26, 1990, at A1).
139. See Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 510 (4th Cir. 1999).
140. See Desnick v. Am. Broad. Cos., 44 F.3d 1345, 1347 (7th Cir. 1995).
141. See Albert, supra note 104, at 334 (attesting that investigative reporters broke "several major stories" by resorting to trespass).
142. 44 F.3d 1345, 1351-53 (7th Cir. 1995).
143. 44 F.3d. at 1348.
144. 44 F.3d. at 1348.
145. 44 F.3d. at 1348. at 1351.
146. 44 F.3d. at 1348.
147. 44 F.3d. at 1348.
148. 44 F.3d. at 1348.
149. 44 F.3d. at 1351-52.
150. 44 F.3d. at 1352 (citing State v. Donahue, 762 P.2d 1022, 1025 (Or. Ct. App. 1988); Bouillon v. Laclede Gaslight Co., 129 S.W. 401, 402 (Mo. Ct. App. 1910)).
151. 44 F.3d. (citing Rockwell Graphic Sys., Inc. v. DEV Indus., Inc., 925 F.2d 174, 178 (7th Cir. 1991); E.I. duPont deNemours & Co. v. Christopher, 431 F.2d 1012, 1014 (5th Cir. 1970)).
152. 44 F.3d. at 1351.
153. 44 F.3d. at 1352.
154. 44 F.3d. at 1352.
155. See 44 F.3d. at 1352. ("The lines are not bright... They are the traces of the old forms of action, which have resulted in a multitude of artificial distinctions in modern law. But that is nothing new.").
156. See 44 F.3d. at 1352. ("The lines are not bright... They are the traces of the old forms of action, which have resulted in a multitude of artificial distinctions in modern law. But that is nothing new.")
157. See 44 F.3d. at 1352. ("The lines are not bright... They are the traces of the old forms of action, which have resulted in a multitude of artificial distinctions in modern law. But that is nothing new.")
158. See Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 517-18 (4th Cir. 1999). Allegedly, this fraud included mixing outofdate beef with new beef, bleaching smelly meat to remove its odor, and redating products not sold before their printed expiration dates. See 44 F.3d. at. at 510.
159. See Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 517-18 (4th Cir. 1999). Allegedly, this fraud included mixing outofdate beef with new beef, bleaching smelly meat to remove its odor, and redating products not sold before their printed expiration dates. See 44 F.3d. at. at 510
160. See Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 517-18 (4th Cir. 1999). Allegedly, this fraud included mixing outofdate beef with new beef, bleaching smelly meat to remove its odor, and redating products not sold before their printed expiration dates.
161. See 44 F.3d. at 518.
162. See 44 F.3d. at 518-19. The appropriateness of the jury's $2 damages award for this trespass was not litigated in this appeal and the court consequently did not address the matter, though it did dismiss all punitive damages as they were only awarded for the fraud claim, which the court reversed. See 44 F.3d. at 522.
163. An atheist entering a church open to all prayers does not commit trespass. Yet he would commit trespass if he subsequently whispers blasphemy (even when no one else can hear it). What, if any, remedies would be available to the church in such a case is a separate question. For the possibility of recovering punitive damages, see infra notes 142-152 and accompanying text. Business owners, however, cannot set conditions that create racial discrimination.
164. See, e.g., Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964) (upholding prohibitions against racial discrimination by hotels); see also Singer, supra note 1, at 1286-98, 1303-1412.
165. See Desnick v. Am. Broad. Cos., 44 F.3d 1345, 1351 (7th Cir. 1995).
166. See 194 F.3d at 518.
167. As the Supreme Court has stated: This distinction between potentially remediable displacement and unremediable disparagement is reflected in the rule that there is no protectible derivative market for criticism. The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop. Yet the unlikelihood that creators of imaginative works will license critical reviews or lampoons of their own productions removes such uses from the very notion of a potential licensing market. "People ask... for criticism, but they only want praise."
168. Campbell v. AcuffRose Music, Inc., 510 U.S. 569, 592 (1994) (quoting WILLIAM SOMERSET MAUGHAM, OF HUMAN BONDAGE 241 (Penguin 1992)).
169. Moreover, the business has only itself to blame. Businesses that adopt fraudulent or unsafe practices should bear the consequences of their decisions rather than shelter themselves behind the right to exclude.
170. This recommendation may be at odds with some of our readers' intuitions about the "meter reader" and "corporate spy" cases. Arguably, both the meter reader and the corporate spy should pay their victims more than just a nominal compensation. We tend to agree with this argument: in our opinion, both defendants should pay their victims punitive damages. The reason they should pay those damages, however, has nothing to do with their proprietary infractions and everything to do with their general disrespect for the law. This remedy, as we explain in this Essay, is not the same as propertized compensation. See infra Part III.
171. JOSEPH WILLIAM SINGER, INTRODUCTION TO PROPERTY 40 (2d ed. 2005). An encroachment may also occur when vegetation and tree parts invade the space of neighboring lots. In such cases, however, the rules and remedies are different. Most importantly, in such cases, the encroachedupon owner is entitled to use selfhelp to remove the projecting branches, hedges, and roots. See 194 F.3d.at 42.
172. See James L. Kainen, The Historical Framework for Reviving Constitutional Protection for Property and Contract Rights, 79 CORNELL L. REV. 87, 134 (1993) ("Under the common law of the early nineteenth century, a nonowner who, in good faith or otherwise, entered, possessed, and improved real property was generally not entitled to the value of those improvements if they were 'permanently affixed to real estate.'" (quoting Kelvin H. Dickinson, Mistaken Improvers of Real Estate, 64 N.C. L. REV. 37, 38 (1985))).
173. A. 646 (Pa. 1895).
174. See 194 F.3d. at 647.
175. See 194 F.3d. The court gave Pedrick one year to comply with its order. See 194 F.3d.
176. See, e.g., CAL. CIV. PROC. CODE § 871.1-.7 (West 2009).
177. See Ayres, supra note 5, at 814-16.
178. 124 Cal. Rptr. 590 (Cal. Ct. App. 1975).
179. See Ayres, supra note 5, at 594-95.
180. See Stewart E. Sterk, Property Rules, Liability Rules, and Uncertainty About Property Rights, 106 MICH. L. REV. 1285, 1313-14 (2008). As Professor Sterk explains, applications of the negligence standard are bound to be factintensive and vary from case to case.
181. See Ayres, supra note 5. at 1314.
182. See also id. at 1322 ("[W]hen the stakes increase, failure to search becomes less reasonable and more negligent."). The prospect of recovering marketprice compensation for innocent encroachments will also set the right "marking off" incentive for property owners. An owner will mark off her property (e.g., by surveying its boundaries and fencing them off) only when the difference between her and the market's valuation of the property exceeds the cost of marking off. Id. at 1314-15. For another rationalization of the rule that imposes marketprice compensation on bona fide encroachers, see Lee Anne Fennell, Efficient Trespass: The Case for "Bad Faith" Adverse Possession, 100 NW. U. L. REV. 1037, 1066 (2006) ("Once the structure is in place, a bilateral monopoly exists that may prevent the efficient result from obtaining through consensual market transactions.")
183. See supra note 41 and cases cited therein; Gallegos v. Lloyd, 178 P.3d 922, 925 (Utah Ct. App. 2008) ("[B]efore punitive damages may be awarded [in a trespass case], the plaintiff must prove conduct that is willful and malicious, or that manifests a knowing and reckless indifference and disregard toward the rights of others.'" (quoting Hatanaka v. Struhs, 738 P.2d 1052, 1054 (Utah Ct. App. 1987)))
184. Meighan v. U.S. Sprint Commc'ns Co., 924 S.W.2d 632, 642 (Tenn. 1996) (opining that punitive damages are available in "the rare, appropriate trespass case" and that "[c]oncomitant with the... right to sue for trespass is the corresponding remedy which may in unusual, unique cases include punitive damages")
185. Walter E. Wilhite Revocable Living Trust v. Nw. Yearly Meeting Pension Fund, 916 P.2d 1264, 1274 (Idaho 1996) (approving trial court's refusal to impose punitive damages for trespass because "punitive damages are not favored by the law and should be awarded... only in the most unusual and compelling circumstances," such as "in a trespass action when the defendant acted in a manner which was outrageous, unfounded, unreasonable, and in conscious disregard of the plaintiff's property rights").
186. See Smith, Property Rules, supra note 17, at 1723, 1732-33 (rationalizing the imposition of punitive damages for trespass as part of the preferred property rule protection of ownership).
187. See, e.g., BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 563-65 (1996) (documenting an Alabama court's award of punitive damages in the amount of $4 million to a local doctor who purchased a new BMW sports sedan without being told that it was repainted after damage presumed to be caused by acid rain).
188. See e.g., BMW of N. Am., Inc. v. Gore, 517 U.S. 559. at 574-86 (voiding a punitive damage award for being excessive and determining guideposts for assessing punitive damages under the Due Process Clause).
189. See e.g., BMW of N. Am., Inc. v. Gore, 517 U.S. 559
190. see also State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416-18 (2003).
191. See Gore, 517 U.S. at 575-86.
192. See Gore, 517 U.S. at 575.
193. See Gore, 517 U.S. at 575-86.
194. See Gore, 517 U.S. at 581-83 (noting that few awards exceeding a singledigit ratio between punitive and compensatory damages satisfy due process); see also State Farm, 538 U.S. at 425.
195. State Farm, 538 U.S. at 425.
196. 563 N.W.2d 154 (Wis. 1997).
197. We are aware that the Jacques had actually refused to accept money in exchange for allowing the defendant to move its mobile home through their territory. See id. at 157. We still believe that there must have been a sum high enough to persuade them to give the requested permission.
198. Cf. Keith N. Hylton, Punitive Damages and the Economic Theory of Penalties, 87 GEO. L.J. 421, 446 (1998) (arguing that the punitive award in Jacque "is quite defensible on economic grounds").
199. See supra note 145 and cases cited therein
200. see also Patterson v. Holleman, 917 So. 2d 125, 135 (Miss. Ct. App. 2005) (approving a trial court's refusal to award punitive damages because."'[i]n the case of a trespass, punitive damages may be awarded if the proof shows that the trespass was willful, grossly negligent or wanton'" (quoting Teasley v. Buford, 876 So. 2d 1070, 1078 (Miss. Ct. App. 2004))).