Econ 4040 1st Edition Lecture 9 Outline of Last Lecture No Class Outline of Current Lecture I Review for the Exam Current Lecture ECON LAW REVIEW SESSION I Matthews v Massell 356 F Supp 291 N D Ga 1973 Facts mayor of Atlanta plans to use federal Revenue Sharing Act funds to pay firemen s salaries and use resulting savings in the general fund for politically motivated tax refund Claim of Plaintiffs proposed use of federal funds violates requirement that funds be used only for priority purposes misuse will render city liable for repayment of funds and penalty Defense restrictions on use of funds are illusory and unenforceable as recognized by Congress Matthews v Massell 356 F Supp 291 N D Ga 1973 Holding proposed use of funds a violation enjoined Reasoning no restrictions on the use of freed up funds on the fact of the Act but shifting funds from one account to another constitutes a misuse of funds as it would violate the spirit of the restrictions Economic theory budget curve of the city and new year spending problem result is illogical from a single budget perspective allocation of budget contingent on the new funding is indistinguishable from These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute next year s budget presupposing the funding intent is only relevant here because the budget was preannounced Tilton v Richardson 403 U S 672 1971 Facts Higher Education Facilities Act of 1963 allocates funding for new buildings to universities Claim of Plaintiffs taxpayers grant funds to religiously affiliated colleges as a violation of the First Amendment Holding no violation problem of entanglement between the federal government and religious institutions is mitigated because 1 collegiate institutions prioritize education and college students are cynical 2 non ideological character of the aid provided 3 no continuing financial relationship Douglas Dissent one budget money saved for the construction of secular buildings can be spent for religious purposes restricting use of budget would require surveillance which will create further entanglement Tilton v Richardson 403 U S 672 1971 Economic Theory designing funding conditions toincentivize a particular use Matching grant effectively reduces the price of building by assume two budget items religious buildings and non religious buildings Equilibrium depends on elasticity of demand Without knowing elasticity of demand we cannot know the effect of a matching grant Edwards v Sims 24 S W 2d 619 K Y 1929 Facts entrance to a cave located on Edwards s land where he operated an exhibition of the cave Lee neighbor sues to compel a survey to determine if any part of the cave falls under his property Chancellor Sims ordered the survey Edwards sues for a writ of prohibition to prevent the survey Rule of Law Cuius est solum eius est usque ad coelom et ad inferos Whoever owns the soil owns all the way to heaven and down to hell old rule Holding writ of prohibition denied right to exclude others from your property sometimes yields to public policy or the property rights of others Edwards v Sims 24 S W 2d 619 K Y 1929 Dissent cave has no use to Lee would adopt instead a rule that limits dominion over space below real property to resources that can be utilized cave mouth owner should own whole cave because he has the means to enjoy and profit from it The true principle should be announced to the effect that a man who owns the surface without reservation owns not only the land itself but everything upon above or under it which he may use for his profit or pleasure and which he may subject to his dominion and control It should not be held that he owns that which he cannot use and which is of no benefit to him and which may be of benefit to others Economic Theory who derives the most benefit from use of the resource Or should we focus on conservation Externalities from subterranean use Alternative approach clarity of a bright line rule like the old rule allows the market to allocate resource to user who can derive greatest value but depends on transaction costs U S v Causby 328 U S 256 1946 Facts army and nave planes fly 60 ft above plaintiff s house and chicken farm chickens are scared to death Claim of Plaintiff taking by the government tort claims not available Defense Air Commerce Act of 1926 declares navigable airways a public right of way under the sovereignty of the US determined by Civil Aeronautics Authority Holding damages are more than incidental an intrusion so immediate and direct as to subtract from the owner s full enjoyment of the property and to limit his exploitation of it Flights over private land are not a taking unless they are so low and so frequent as to be a direct and immediate U S v Causby 328 U S 256 1946 Policy protecting full enjoyment of real property promotes investment Black s dissent majority s rule erects a barrier to regulatory adjustments to new technology Courts can contribute by awarding damages or granting injunctions but to establish rigid property rules in airspace is obstructive Economic Theory commercial easement property becomes common when commonly used a controversial balancing of private and public rights Moore v Regents 249 Cal Rep 494 1988 Facts Moore s unique cells were patented by doctors at the hospital at which he was treated Claim of Plaintiff conversion 1 owned or had a right to possession 2 wrongful act or disposition of s property rights by 3 damages Defense property interest for Moore would obstruct research and diminish social utility Issue before the Court were Moore s cells and cell line derived from those cells his property Holding Moore has a property interest in the cells note not the law this aspect of the holding was reversed on appeal Dissent this is an issue for the legislature not appropriate for the court to create a property right in this area Economic Theory Coase theorem and market for body parts assign clear property rights and alienability and the market will allocate to the most valuable use Flynn v Holder 684 F 3d 852 9th Cir 2012 Claim of Plaintiffs challenge constitutionality of National Organ Transplant Act s ban on compensation for bone marrow donations especially as applied to new minimally invasive procedure as a violation of Equal Protection because identical to blood donation Defense rational basis for distinguishing between organs defined for purposes of the Act as body