a. Spur -- developed out of the logic of necessity
b. created by an Arizona court and two scholars -- Calabresi and Melamed
J. Terminology of Calabresi and Malamed?
1. Property rule
a. when an entitlement is protected from being taken away without one's consent --- but all transfers are voluntary -- ie: injunctions are always for sale
2. Liability rule
a. can lose property if one pays you damages for it
b. court can force losses of property / entitlement provided there is payment of damages
3. Who gets protected?
a. Under a property rule: if plaintiff is protected then there is an injunction issued (Estancias/Morgan); if the defendant is protected then no nuisance is found
b. Under a liability rule: if the plaintiff is protected then the defendant must pay plaintiff to continue the activity (Boomer); if the defendant is protected, the defendant may continue the activity so long as the plaintiff does not pay him but once there is payment the activity must stop (Spur)
a) without compensation, the owner of the property is bearing the cost almost entirely whereas the entire society is getting the benefit of government action -- speading the cost of govt action more widely
i. that the term means actual use or right to use of the condemned prperty by the public
2. Hawaii Housing Authority v. Midkiff
i. does the public use clause of the 14th amendment prohibit the state from taking, with just compensation. title in real prperty from lessors and transferring it to lessees in order to reduce the concentration of ownership of fees simple in the state?
ii. property taken from one private person and given to another private person? How is this public?
a) this does not mean that every condemnation proposed by an economic development corporation will meet with similar acceptance simply b/c it may provide jobs or add to the industrial or commercial base --- If the public benefit was not so clear and significant... --- such public benefit cannot be speculative or marginal
b. but alas, the court did not have to do this b/c it failed on the commerce clause anyway
5. What about the state standards for public use?
a. Hawaii v. Midkiff is only the federal standard -- it may be easier to challenge the taking in state court b/c federal law only provides the floor and states are free to raise this as they wish
i. this is why the raiders case was brought in state court instead of federal court?
6. Public use --- means or ends? -- CB 1153
a. What are the ends of an act of condemnation?
i. this is what was done in Midkiff
b. What about means? Prof. Merrill CB 1155
i. public use could be applied in such a way as to endorse condemnation through the power of eminent domain only when transaction costs are sufficiently high to frustrate voluntary transactions in the market b/c sellers have the power to hold out for prices they would not be able to obtain under competitive conditions
ii. self-regulating quality -- govt will have an incentive to avoid eminent domain whenever possible -- will have to take into acct the costs of eminent domain (leg authority, judicial proceedings, professional appraisals)
iii. is this all that Merrill is arguing?
7. Public use test is a variant of the rational basis test used in NASH -- but it is a different test and in fact it is an easier standard to meet