Windfalls

I. INTRODUCTION

[W]indfall as a term for an unexpected piece of good fortune goes back to medieval England, when commoners were forbidden to chop down trees for fuel. However, if a strong wind broke off branches or blew down trees, the debris was a lucky and legitimate find.1

In common usage, a windfall is a "casual or unexpected acquisition or advantage," or an "unexpectedly large or unforseen profit." 2 A rare discussion in the legal literature did not stray far from the dictionary, defining a windfall as "value which is received by a person unexpectedly as a result of good fortune rather than as a result of effort, intelligence, or the venturing of capital."3 This definition, however, adds critical economic content to the term: It distinguishes gains due to luck from those due to effort or enterprise. This Article defines windfalls as economic gains independent of work, planning, or other productive activities that society wishes to reward.

The common law has long provided clear protection for the fruits of labor, planning, and risk-taking. Property and tort law protect Farmer Black's wheat crop from theft, negligent destruction, and other harms traceable to wrongful human conduct. Contract law protects Black's right to transfer the wheat in a private bargain for whatever price the market will bear. Modern constitutions, via contract and just compensation clauses, and modern statutes, in myriad ways, have further expanded protections for private property.

Perhaps surprisingly, Farmer Black receives as much legal protection for manna fallen from heaven or, to use a less religious hypothetical, for a golden meteor that falls onto Blackacre. Most commentators simply presume, in passing, that the law treats property obtained by luck no differently than it treats property earned through effort. In upholding the constitutionality of a Washington, D.C., rent control law enacted during World War I, Justice Holmes noted that the measure would deprive landlords "in part at least of the power of profiting by the sudden influx of people to Washington caused by the needs of Government and the war, and thus of a right usually incident to fortunately situated property." 4 A recent scholarly discussion of the famous Coronation Cases5 notes in passing that although " this asset came to [apartment owners] by the purest windfall,...