The Answer Is Transaction Costs

Corner Crossing Conundrum: Trespassing, Airspace, and Property Rights

• Michael Munger • Season 2 • Episode 2

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What if crossing a mere corner of private land could land you in legal hot water? This episode tackles the thorny issue of corner crossing, where public and private lands meet at a single point, creating potential trespassing conflicts. We'll dissect Dave Schmitz's insights on the limits of property rights and the Roman law doctrine of ad coelum, which extends property rights from the heavens to the earth's core. Through landmark cases like Hinman v. Pacific Air Transport and Jacques v. Steenberg Homes, you'll gain a deeper understanding of how airspace and land use rights have evolved.

Links:




Book:  Jeffrey Rosen, The Pursuit of Happiness: How Classical Writers on Virtue Inspired the Lives of the Founders and Defined America. Simon Schuster. 

https://www.simonandschuster.com/books/The-Pursuit-of-Happiness/Jeffrey-Rosen/9781668002476

If you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !


You can follow Mike Munger on Twitter at @mungowitz


Speaker 1:

This is Mike Munger, the knower of important things from Duke University Property rights, easements, corner crossing and the ad coelum rule A new this Week's Economics Joke, plus this week's letters and more Straight out of Creedmoor. This is Tidy C. I thought they'd talk about a system where there were no transaction costs. It's an imaginary system. There always are transaction costs. When it is costly to transact, institutions matter and it is costly to transact.

Speaker 1:

I got an interesting letter from CR that I actually thought I would take to make this week's topic because it was about Dave Schmitz's comments about property rights. Cr writes Schmitz's comments on some limits to property rights where a presumption can be overridden to allow passage, as in Hinman v. Pacific Air Transport made me think of the issue of corner crossing. Where two no trespassing signs block the corner. Where two tracts of public land touch Seems crazy to me. Corner crossing should obviously be legal, but courts in Wyoming are still arguing about it. Best, CR. Well, thanks, cr, you're right, that is interesting.

Speaker 1:

The problem with corner crossing is the two adjacent properties that touch at a point catty-cornered, actually make it a trespass to cross from one public space to another. So much of the land in the West is public land and, with some restrictions, public land is available for use by citizens. You can walk on it during hunting season, under some conditions, you can hunt on it, and so on. So imagine a red and black checkerboard. You're on a red square in the middle of the board. Can you cross into any other red square without touching a black square? Well, in terms of geometry, we'll have to consult my math friend, dr Hans Reiss. Here's the problem At the crossing point. Now, think of it as a dot. It's a very small dot at the intersection of the crossing lines that enclose the red and black squares on the checkerboard. Now, are the lines red or black? Well, that question doesn't make any sense. What about the points, the intersection of the line whose color is hard to identify? Well, that's not easy. So on a checkerboard, unlike a football pitch or a basketball court, there are no actual enclosing lines. There's no foul line, there's no out-of-bounds line. The line is the no-color area where there's a transition from red to black, but the line itself has no color. Problem is that the line also has no thickness. The line has zero width. Since it has zero width, a point at the intersection of two property lines has zero area.

Speaker 1:

So, in the context of corner crossing, if you put down a human foot, presumably encased in a human size shoe, on the point of the property line intersections, you will be trespassing. The flat bottom of a male human shoe has a surface area of around 40 inches, probably more. So when you step on the corner point, you're also stepping on the two pieces of private property and the two pieces of public land, all four of the checkerboard squares that meet at the point. So you're stepping on this point that has no area and your foot is bigger than no area. So no one disputes that if you step on the point you would be trespassing. The question, and the question that's raised by CR, is whether you can be standing on one piece of public land and step forward three feet, say, onto the other piece of public land, thereby crossing the corner. Your foot never touches private land if you do that. So you never step on the private land, but your foot, then your body, then your other foot, are going to cross over the private land if you're walking, because the point has zero area and you well, some of us, like me, need to switch to salads for a while. Our bodies have considerable area and so we're going to be crossing over the space that goes up from the private land.

Speaker 1:

Now the standard traditional Roman law doctrine of property held that property was ad coelum, that is, it goes to the heavens, also goes below your land, down to a point at the center of the earth, below your land, down to a point at the center of the earth. So you might think of it as a sloped three-dimensional slice that has the shape of your land, that goes upwards to the heavens, expanding outward, and then downwards to a point at the middle of the earth, shrinking, because all the points at the center of the earth also are the point that has zero area. They're at the beginning, in the middle. So there are two court cases and I'm not an attorney, I'm not an expert in this area, but there's two court cases that are interesting. I'm not saying they're the most relevant for this particular case, but two court cases that are interesting, relevant for this particular case, but two court cases that are interesting Hinman v Pacific Air, 1936, and Schock v Steenberg Homes in 1997.

Speaker 1:

The Hinman v Pacific Air case was interesting because it was at the beginning of the time when airplanes were flying cargo mail people across the United States by 1936, there were quite a few planes crossing. They didn't fly very high and they were quite loud. They were propeller planes, they were quite loud, the large ones had multiple engines, and Hinman sued, saying that these airplanes were crossing over his property, thereby violating the doctrine of ad coelum, because, obviously, the plane is above the land but below the heavens, below the top of the atmosphere. That meant that that plane was trespassing in the sense that it was traveling across his land without his permission, even though it wasn't touching the land. Well, the question presented to the judge was whether it was okay to use that land, and the doctrine, according to the judge, was that what was important was that the airplane was not taking any part of the land for permanent use. It was sharing it, and so the finding by the judge basically said it would be impossible, in terms of transaction costs, for the airline to be able to secure the actual permission of every landowner of every piece of land that they would have had to cross to go from, say, st Louis to Los Angeles. That meant that it was much cheaper to assign the easement right, the right of passage, to the airline, even though it seemed like you might be taking something away from the farmer, hinman. Now, to be fair, there were two causes of action here. One was nuisance and one was trespass. The nuisance is more plausible the sound of the airplane, if they're flying too low, is going to disturb the chickens and cows and the nuisance action was they found in favor of Hinman. But the trespass action was the one that's important, that is, you do not have an unlimited right to the air above your land. No one can take it permanently. I couldn't tether a blimp there that blocked the sun and prevented your crops from getting sun or rain. But I can use it briefly.

Speaker 1:

The second case which has what seems like a contradictory holding, but that actually just means that property is complicated, is Jacques versus Steenburg Homes in 1997. The problem was to deliver a mobile home. Steenburg Homes had to go across Jacques' property without permission. Harvey and Jacques were an elderly couple and they had lost some property earlier because someone else had been using it and they had not contested it. So adverse possession, meaning that they put up a fence. The land was being used by someone else and then when they said, no, that's our land, the fact that the other farmer had been using it was enough to say that's not actually your land because for years it has been adverse possession. So Lois and Harvey Jacques were very worried about other people using their land for almost any purpose. Now, whether that's reasonable or not, is it turns out irrelevant because the finding in the case has to do with whether Steenburg Homes could drag a large mobile home, a trailer home, across the Jacques' land in order to deliver it to a third party. Let's call them Smith. So the Smiths have bought a mobile home.

Speaker 1:

The road to the Smiths' property that goes around the Jacques property takes a sharp right turn and it is in a gully. So it's too sharp to be able to get the truck and the mobile home trailer around that 90-degree turn in a gully. They want to drag it across the snow this is in Wisconsin in the winter and Jacques says no, you can't do that. Steenberg asked again. I think they asked three times and the Jacques family said no, no, you cannot do that. And then they said well, this is a quote from the Steenberg assistant manager who had tried to negotiate let us just drag this across your land. The assistant manager for the mobile home company said I don't give a darn what Mr Jacques said, just get the home in there any way you can. The employees followed that order and they delivered the home across Jacques' property.

Speaker 1:

Now, to be fair, it's important that it was winter in Wisconsin. They dragged it across this completely frozen ground over snow. It did zero damage and, in fact, within a day or two it was probably not. Even you couldn't tell that it had been dragged across. Now the question was the Jacques then sued and said you violated, you trespassed. You violated our express desire not to have this dragged across our land. They called the deputy sheriff and he gave a ticket for trespassing that I think was $35.

Speaker 1:

Well, does that mean that this is different? And Dave Schmitz talked about this there's a difference between punishing people for doing wrong and having a liability rule where you're responsible for the damages that you have caused for doing wrong. If I do no damages, does that mean that I owe nothing, or, in this case, $35? So it's more like there's just a small fee in order to do this instead of actually having it be a right. Well, the judge in the Jacques v Steenburg case and this was the Wisconsin Supreme Court that finally wrote the decision that decided things that ended the dispute claimed that there are circumstances under which your property is just your property and that's it. So the finding was that the jury wanted to give substantial punitive damages on the order of tens of thousands of dollars to the Jacques because because the Steenburg Homes had ignored their request and that meant that there wouldn't be any punishment unless there were punitive damages. So the judge allowed punitive damages in this case, even though there's no actual damages.

Speaker 1:

The purpose of the punitive damage is deterrence. So landowners have an interest in protecting your land from trespass and the right to exclude others from your land is essential. So think about what would happen if you could not exclude others from your land, or what amounts to the same thing. I can say you can't go on my land and if you do, you have to pay the government a $35 ticket. That's not really any kind of deterrence and I don't get any part of the fee anyway, it only goes to the government. What's likely to happen is people are going to use violence or guns. So if the law provides no remedy, then it's probably people are going to pull out guns. So the finding in Jacques versus Steenburg-Holmes was that disregard for the Jacques' rights amounted to the kind of egregious conduct that would allow punitive damages even if there were no actual damages.

Speaker 1:

But that brings us to the Corner Crossing case. There's been a number of these, but the one that I'm talking about here is in Wyoming, eventually made it up to the 10th Circuit and the case is Iron Bar Holdings LLC versus Cape. So corner crossing is a civil trespass under Wyoming law. There's an 1885 federal prohibition against blocking passage to public land. Question is whether that federal statute preempts the Wyoming statute, because the Wyoming statute would say that you cannot cross over the corner in order to move into another piece of public land, even if you don't touch the private land that's on both sides of the checkerboard corners. So it's an interesting combination of the two cases the Hinman Air and Steenburg Homes. Because I'm not going to touch the private property of the homeowner, I'm only going to pass over it, and if Hinman is the binding case, it would seem like that's probably okay. We could say that there's an easement I don't get to own the air over the private land, but I get to use it temporarily just at the corner because I have some other purpose. So there was a finding back in January. Judge Scott, back in January Judge Scott Scavdahl found that corner crossing does not constitute trespassing and the Iron Bar Holdings filed a 31-page reply and it is now going to be resolved in a higher court.

Speaker 1:

So what actually happened was that three hunters from Missouri in 2020 and four in 2021 crossed to reach and hunt on thousands of acres of wildlife-rich public land on Elk Mountain, which is enmeshed with Mr Edelman. He's the one who owns Iron Bar Ranch Mr Edelman's big ranch, iron Bar Ranch Mr Edelman's big ranch so he has 22,000 acres and they were crossing over about a three or four inch segment on one corner and the question is whether that constitutes trespass. And it'll be interesting to see what happens, because corner crossing often happens without much contest. In this case, apparently, what the Iron Bar Ranch people want is to prevent others from hunting on the public land. They have the ability to hunt on the public land, but their claim is not well, you don't get to hunt on the public land. You do if you can get there, but you can't get there without trespassing and that's what they're contesting.

Speaker 1:

Landowners should have the right this is what Eshelman claims should have the right to prevent the public from trespassing on their property, and that's the only right that Iron Bar has ever asserted. They're not saying that people can't hunt, they just can't get to the land and hunt if, in order to get to the land, they have to trespass uh be able to obtain it. And so, whichever way the court decides, it should be possible. If the hunters value it more, they should be able to pay a fee. The problem is that there is a law that has said that corner crossing is just simply illegal and that would mean that it's not open for bargaining, because I cannot contract around that, or at least that's the interpretation that has been given to that law is that you can't cross without permission and it's hard to find the owners of some of these very large tracts of land. So, eshelman says the hunters argue that they're not really asking for the right to intrude on private property. They claim that iron bar does not have the right to prevent such inted right to trespass across private property in order to recreate on any otherwise inaccessible public land that lies beyond it. The Hunter's case rests on the fallacy that if the government gives the public an implied license to use public land, then the public must automatically have the right to conveniently access that land, even over private property. So that's the Eshelman's claim is they don't contest that there is a license to use the land to hunt, but there is no easement that allows hunters to violate private property on the way to exercise that license to hunt. Well, it'll be interesting to see. Apparently, the appeal was just heard in the 10th Circuit and there may be a decision relatively soon. So stay tuned. But it certainly is an interesting transaction cost problem because it does seem like bargaining might be able to solve it, and yet we're spending a lot of money and time trying to decide this question once and for all in terms of the rights assignment in court. Whoa, that sound means it's time for the twedge.

Speaker 1:

This week's economics joke, as I often have lately, there are two, one of which comes from ChatGPT. The economics joke is that the economist's partner couldn't sleep, so they elbowed the economist awake. Please, dear, explain to me again the definition of elasticity, the point being that that could put anyone to sleep. Second, the ChatGPT joke. I asked ChatGPT to tell a joke about corner crossing easements. Here's what ChatGPT said Corner crossing easements are funny because they're like trying to navigate a game of Monopoly with the added challenge of community chest cards that say congratulations, you now have a permanent pathway for your neighbor's dog to stroll through your backyard at any time. Well, that GPT can come up with some pretty strange jokes. So that was an interesting insight.

Speaker 1:

Suppose that the game of Monopoly had community chest cards that created easements and it meant that you could walk through my yard that had hotels on it. Because that's the point If you land on my hotels, you have to pay. But there's community chest cards that say no, no, you can pass through this. You can land on this space, you don't have to pay anything. Pass through this, you can land on this space, you don't have to pay anything. That would certainly change things.

Speaker 1:

Well, I got a letter from RA. Ra asks can you please identify what the host means when he says the opening lines? This is Mike Munger of Duke University, the knower of important things. Who is the knower of important things? Is it Mike Munger or is it Duke University? Thanks, ra. Well, that's a fair question, and you may notice that at the beginning of today's episode I changed it so that that ambiguity is removed. One of the problems with pronouns is transaction costs. It is not clear what the pronoun refers to. As R. As RA points out, the conventional rule is that pronouns refer to their immediate noun antecedent, which, in the case of the old introduction, was Duke University. So I'm tempted to say that I don't really know the answer, because that's an unimportant thing and I'm the knower of important things. But fair enough, ra, I have changed, you have effected change in the introduction. From now on, it will be Mike Munger, the knower of important things, from Duke University. So what RA said was I had responded in an email. So I have to say RA says since this ambiguity became apparent to me, I think about it every time the podcast starts.

Speaker 1:

I was hoping the question might lead to some insight regarding the structure of academic institutions and how knowledge is gained and imparted to others. I would try to rephrase my question, but I'm not sure what my specific question is. I suspect, however, that the answer will be transaction costs. Well, ra, that is a deep insight. The answer is transactions costs, because this is a question and it doesn't matter what the question is. The answer is transaction costs. However, you're right. There is a deeper interpretation. Suppose I have an idea, or I say something or I publish something, do I own it or does Duke University own it? And the answer is going to be that it depends on existing contracts, which, of course, is a question of transaction costs, just as you had said.

Speaker 1:

Well, it's time for Book in a Week. This week's book is by Jeffrey Rosen the Pursuit of Happiness. How Classical Writers on Virtue Inspired the Lives of the Founders and Defined America. It's from Simon Schuster. Well, the next episode will be released on Tuesday, june 18th. Until then, thank you for being a listener. We'll have another hilarious twedge, and more, next week on Tidy C.