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Melamed framework. Although we sometimes move from injunctions to damages in the law of nuisance (Rule 1 to Rule 2) as in Boomer, there is no “right to pollute” that is symmetric to the right to be free of pollution, and hence there is no need to soften the “right to pollute” (Rule 3) with a liability rule that allows such a “right” to be taken in a coerced exchange (Rule 4). Small wonder then that examples of Rule 4 are so hard to come by.

• Modification of Property Rights: Easements

A second, and very different, strategy for handling certain kinds of neighborhood effects or externality problems relies on a modification of property rights known as an easement. Easements carve out particular uses of property and transfer control over those uses to someone other than the owner of the property from which the carve-out occurs. Easements are very commonly used to overcome impediments to access to land that can limit development and use and enjoyment of land. Familiar examples are right-of-way easements and utility easements. But easements are also used to control particular uses of land. For example, conservation easements, which are becoming increasingly popular, prohibit certain kinds of development of land in order to enhance ecological resources, which provide positive externalities for other landowners in the neighborhood and society more generally.

Let us start with some vocabulary. The property from which the easement is carved out is called the servient estate. The property whose owner has the right to engage in or prohibit the use that is singled out is called the dominant estate. If the easement permits the owner of the dominant estate to perform some act on the servient property, it is called an affirmative easement. If the easement requires the servient property owner to desist from engaging in certain activities or uses on the servient property, it is called a negative easement. Most easements are appurtenant to the ownership of land, meaning that the benefit of the easement is attached to a

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particular parcel of land, and runs with the ownership of the benefitted land (the dominant estate). Some easements, at least in the United States, are held in gross, meaning that the benefit of the easement is not linked to ownership of any particular land, but rather is owned by some person or entity without regard to whether they own any particular land or dominant estate.

Some illustrations may help clarify these distinctions. Suppose A and B own adjacent parcels of land. A grants B the right to drive motor vehicles across A’s land to reach a public road. A owns the servient estate, and B owns the dominant estate. B has an affirmative easement in A’s land; the easement is appurtenant to the ownership of B’s land, meaning that whoever owns B’s land in the future will also own the easement allowing access by motor vehicles to the road. Now, suppose C decides to grant a conservation easement to the D foundation, in which C promises not to fill, drain, develop, or otherwise disturb fifty acres of wetlands on C’s land. C’s is the servient estate, and D is the dominant property owner. D has a negative easement in C’s land; the easement is in gross because it is not attached to any particular land owned by the D foundation.

An easement is generally regarded as a property right, and hence it is proper to speak of easements as a strategy for managing externalities through modifications of property rights. It is instructive in this regard to contrast easements with licenses. As discussed in Chapter 4, a license, in its simplest form, is a waiver of the right to exclude. Suppose A says to B: “Go ahead and drive your car across my land to reach the road.” This means A cannot use self-help or legal means to stop B when B, in response to this statement, starts to cross A’s land. But the permission is understood to be revocable, in the sense that A can change A’s mind tomorrow and deny further permission to cross. It is also understood to create no rights good against third parties. Thus, if B starts to cross and finds the way blocked by C, B has no legal claim against C.

A and B could also sign a contract that says A will allow B to cross A’s land for one year, provided B pays A $10 for each crossing. This would be enforceable as a bilateral contract between A and B,

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and B would have an action for breach of contract if A decided after six months to refuse further crossings by B. But it would still be regarded as a contract right. The right is personal to A and B and would not necessarily run to any successor to ownership of B’s land. And the right would not necessarily create any rights against third parties.

An easement is a more robust right than either a license or a contract. An easement is typically irrevocable, either for a designated period of time or in perpetuity. Although one can purchase easements, they are often granted gratuitously or as part of a more general exchange of property rights; periodic payments are rarely required. Easements do not depend on the personal identity of the grantor and grantee. Easements attach to ownership of land and follow the ownership of land into whoever’s hands it may fall. This is always true of the servient estate. It is also true of the dominant estate, at least with respect to appurtenant easements (which are more common). Finally, although authority for this is relatively thin, easements appear to be regarded as rights in rem, in the sense that all the world is subject to a duty not to interfere with an easement. Given the relative permanence, impersonality, and in rem effects of easements, it is not surprising that they have been regarded as property rights.

How does one create an easement? There is the right way, and there are a bunch of legal doctrines that bail out people who have failed to create an easement the right way. The right way to create an easement is by a written grant. This is a writing that includes all the elements required to make a valid transfer of real property by deed from one person to another (see Chapter 7). The writing should include the identity of the servient and dominant lands (or of the benefitted owner in the case of an easement in gross), a description of the easement, and whatever formalities are required by state law for a valid transfer of land, such as attestation of signatures. To assure that the easement is not wiped out by a future good-faith purchaser without notice (see Chapter 7), it should be recorded. To ensure that the easement appears in the chain of title

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of the properties that are benefitted and burdened, it should not be created by reservation in a grant to some other party. In other words, if A wants to convey an easement to B, A should not try to create the easement by reservation in a deed to C, since the attempted grant to B will not appear in B’s chain of title.13

With distressing frequency, parties neglect to create an easement the right way, that is, by written grant. Instead, they behave as if the dominant estate has certain use rights with respect to the servient estate, and then something happens, such as a transfer of one of the properties to a stranger, which causes the owner of the servient estate to deny the existence of any use rights in the dominant estate. Litigation then ensues. The courts could respond to this common situation by saying “tough luck,” and denying dominant claimants any rights absent a written grant. But, perhaps not surprisingly, courts have generally taken an ex post view of the problem. Once there has been a falling out, the parties are in a bilateral monopoly situation, and negotiation of a written grant may be out of the question. Courts have accordingly created a number of doctrines that allow easements to be created as matter of law.

Two of these doctrines are based on implied intent. Where there is some sort of preexisting use, such as a driveway or a utility line, and the owner subdivides the property, courts will sometimes declare that an easement by implication exists. The required elements are said to include (1) severance of title to land held by one owner; (2) an existing use, which was visible and continuous at the time of the severance; and (3) reasonable necessity for continuation of the use after severance. The doctrine apparently rests on the assumption that the parties must have intended an easement permitting continuation of the use but neglected to reflect this intent in a written instrument.

13.But see Willard v. First Church of Christ, Scientist, 498 P. 2d 987 (Cal. 1972) (allowing an easement to be created by reservation, without discussing the chain of title problem).

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Even absent a preexisting use, if an owner subdivides property in such a way as to leave it landlocked, courts will sometimes declare an easement by necessity. The required elements are said to be

(1) severance of title to land held by one owner and (2) strict necessity at the time of the severance. Again, the rationale is said to be that the parties would not want to create a subdivision in which one or more parcels were landlocked, because this would severely impair the value of the property. Some states take the idea of an easement by necessity in a different direction, allowing a landowner with insufficient access to petition a court or other official to allow it to condemn an easement and pay damages. This use of what Calabresi and Melamed would call a liability rule promotes access but can be quite threatening to the target of the condemnation. These statutes typically allow the condemnee to object on the grounds that the easement is not necessary for access, for example, because alternative means of access exist.

A third way to create an easement as a matter of law is by prescription. This is the analogue of adverse possession, considered in Chapter 2, with the twist that here the running of the statute of limitations creates an adverse right of use rather than possession. The difference turns on the behavior of the adverse user. If the adverse user acts like an owner, exercising a general right to exclude others and manage and control the property, then adverse possession governs. If the adverse user merely engages in a particular use of the property—such as crossing it or using it as a ditch to drain water—then prescription governs. Otherwise, the same elements that apply in determining whether someone has established title by adverse possession also apply in ascertaining whether an easement by prescription exists: The use must be open, notorious, continuous, exclusive, and under a claim of right for the period of the statute of limitations. With adverse use, as opposed to adverse possession, the continuous and exclusive elements apply somewhat differently. The touchstone in resolving these elements is what a normal holder of an easement would do. This feature is nicely captured in old English cases, which justified prescription on the

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fiction that the servient owner had long ago granted an easement to the dominant owner, but the grant had been lost.

The fourth and final way to create an easement as a mater of law is by the doctrine of equitable estoppel. This doctrine is grounded in general principles of equity. The required elements are (1) the giving of an express license to use property, (2) the reasonable expenditure of significant money or labor by the licensee in reliance on this license, and (3) circumstances indicating that revocation of the license would be unjust. Technically, equitable estoppel does not create a property right. It merely reflects the judgment of a court that it would be inequitable for the owner to revoke the license; hence the court enjoins the servient owner from revoking the license. Given that the theory does not technically create a property right, questions may arise about how long an easement by estoppel lasts, and whether it is transferable and descendable.

The four devices for creating an easement as a matter of law only work for affirmative easements. Some actual use on the servient land is required. This is in significant part a matter of notice. If there is some actual physical activity on A’s land, then A can be expected to be aware of this fact. In contrast, if the claim is that A should be required to desist from engaging in some use, perhaps because this is what A or A’s predecessor did in the past, it is not obvious that A would have ever thought about the possibility of a legal claim for an easement being advanced based on A’s having done nothing. The problem of notice is so severe that English courts refused to recognize any negative easements outside four narrow categories.14 U.S. courts are more tolerant—at least when the negative easement is created by grant. But U.S. courts have refused to allow negative easements to be created by prescription,15 and as a practical matter

14.These were an easement against blocking sunlight from falling on a window, against blocking the flow of air in a defined channel, against blocking the flow of water in a defined channel, and against removing lateral support for a building.

15.See Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc., 114 So. 2d 357 (Fla. Dist. Ct. App. 1959).

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do not allow negative easements to be created by implication, necessity, or estoppel either. A few U.S. courts have created what amounts to a negative easement by prescription in ruling that constructing a building that casts a shadow on a neighbor’s solar collector can be a nuisance.16 But in addition to the problem of notice discussed above, this creates an enormous incentive to be first to capture the sun’s rays, either by putting up a building or a solar collector, and thus could give rise to wasteful racing behavior, analogous to what we see with the rule of first possession (see Chapter 2). In some states, solar access is now governed by statute, usually through a system of permitting or prior appropriation along the lines of water law (see Chapter 3).17

The multiple ways of creating an easement are mirrored by multiple ways of terminating easements. The orthodox method, again, is by grant. The parties can execute a written instrument that terminates the easement, following the formalities of a real estate deed. Easements can also be terminated by abandonment, if the servient owner can show that the dominant owner has failed to use the easement for some time or has made statements indicating an intention no longer to use it, and has taken some affirmative act reflecting the intent to abandon. Distinct, but somewhat similar, is termination by prescription. If the servient owner blocks the easement, for example, by putting up a fence across a right of way, and the dominant owner fails to take action to reopen the easement before the statute of limitations runs, the servient owner may be able to claim termination by prescription. Finally, an easement will be terminated by merger, if the dominant and servient tracts come under ownership by the same person. No one can have an easement over one’s own land.

How can a servient owner ensure that the dominant owner does not overuse or misuse an easement? The law here reflects a mix of

16.See Prah v. Maretti, 321 N.W.2d 182 (Wis. 1982).

17.Sara C. Bronin, Solar Rights, 89 B.U. L. Rev. 1217 (2009).