ORIGINS OF PROPERTY RIGHTS—ACQUISITION (Johnson v. M’Intosh)
all property cases determine relative ownership of land
Legal Positivism--Property comes from the State—Johnson v. M’Intosh
national property rights are good because states can settle dispute
—holding meets our “settled expectations”—stability of title
“discovery gave exclusive title to those who made it. . . against all other European govts”
Indians not party to this custom.
chain of title must begin with the state
doctrine of conquest “where this incorporation is practicable, humanity demands, and a wise
policy requires:
that the rights of the conquered to property should remain unimpaired”
but Indians have only “rightful occupancy”
Methods of Property Allocation:
First-in-time and Occupancy—First what? answer often comes from social norms
Grotious and Puffendorf.
Market/Auction
Communism—state decides
social welfare
Competition-merit-based/non merit-based differentiation (LSAT scores v. height)
lottery
voting
consensus
might makes right—anarchy?
labor theory—John Locke
property=power to keep other’s out—rooted in state’s power over people—CLS—Cohen & Klein
criteria—maximize choice, efficiency, legitimacy
minimize disputes—set expectations, (maintain “settled expectations”) keep the peace
also, and separately, fairness—culture-dependant (dope)
Rule of Capture and Fair Play —Acquiring Un - owned Resources ( Pierson, Gh en, Keeble, Popov )
Is Pursuit or Capture the standard for establishing ownership of previously un-owned resources.
first-in-time—what amounts to occupancy?
quieting title—which is better, starting the hunt, making the kill, or finding the carcass
customs—matter?
and whose customs? “should have been submitted to the arbitration of sportsmen”
whalers in Gh en v. Rich
structuring incentives to serve public interest
keep in mind capital outlay of hunter
also, do we want more hunting or not?
Capture is the traditional standard (Pierson v. Post)
pursuit, according to Livingston’s dissent, may be more Lockean for foxes
Entitled to frighten away prey? for recreational hunting, maybe so.
for business, no (Keeble v. Hickeringville)
Land-owner or hunter?
land-owner—want to discourage trespassing, allow people to attract game on their land
Geese—govt can win suit against farmer for confiscated corpses of dead geese.
Farmer can’t win damages to her cornfield.
courts sympathetic to pro-competitive uses of property
benefit consumers
less likely to promote social strife
exceptions—police boundaries between fair and unfair competition
**how does Keeble precedent apply to Pierson? if fox-hunting useful trade, supports dissent
supports majority in that tort case—no actual charge of stealing. Birds in pond-trap still not property.
Creation (INS v.AP, Cheney Bros v. Doris Silk)
News—quasi-property—companies own the scoop—otherwise unalienable.
copyrights protect expression of ideas, but not ideas themselves.
constitutional protections
Strahilivitz prefers—Cheney Bros.—better idea not to assign property rights when you have a choice
“our vision is inevitably contracted, and the whole horizon may contain much will compose a very different picture”
Find — Chattels (Armory, Hannah, McAvoy)
Finder has title good against all but good-faith owner of lost or mislaid property (Armory v. Delamirie)
taken to extremes—first-in-time theives win—Anderson v. Goudberg (generally doesn’t
however, if first possessor is wrongful, 2nd finder tends to win
more likely to force return of personal property (replevin) than land—tends to be damages
abandoned property—finders have absolute title
incentives--for finders to find v. for owners to make maximum productive use (risking loss)
or v. finders to trespass and violate privacy (landowner or finder had title?)
for people to buy and losable things
if lost object mislaid, property owners may have title over finders
interest of return to true owner (McAvoy v.Medina)
principal-agent—principal/landowner gets title.
sensible balance like Japanese lost-and-found—turn in to state, get it back if owner doesn’t claim
Native American artifacts—property rights not relinquished w/burial—Charier v. Bell
belong to tribe as a whole when
culturally, religiously, or historically significant
lineal descendants of the dead not identified
Adverse Possession (Van Valkenburg v. Lutz, Manillo v. Gorski, Howard v. Kunto, Warsaw v. Chicago Metallic Ceilings)
Purposes—quiet title (Henry Ballentine), put land to productive use
bad if its your land.
Common law elements:
Open (and notorious)—enclosure or improvement Marengo Cave p.141
Continuous (for statutory period)
Exclusive—Ewing v. Burnet—p.140 Adverse possessor let some people dig gravel and sued others for trespass
Actual entry—using land like the owner would
Non-permissive (hostile, adverse, claim of right, claim-of title)
1. objective—state of mind irrelevant. Point that true owner didn’t stop it—England, Ct.
increasingly followed.
2. good faith—“I thought I owned it”—Prof. Helmholtz
3. aggressive trespass—I thought I didn’t, but intended to make it mine, Maine
not much followed
Patterson v. Reigle—Reigle and Shingledecker think of themselves as finders
would give up title only to true owners. Court says they’re adverse possessors.
once established, relates back to date of event that started statute running.
Should good or bad faith of adverse possessor matter? Hard to determine—gives AP incentive to lie
Could balance benefits to would-be adverse possessors with interests of true owners by ruling for forced compensation
Warsaw v. Chicago Metallic--overturned
Tacking allowed for good-faith adverse possessors (Howard v. Kunto)
**true owner lives in house in off season and adverse possessor sneaks up in summer
would be fun to give adverse possessor easement for a few months, but
provides incentive for people to use others’ property
harder to manage a house that two people have rights to
e.g., who pays satellite TV bills after we get out of court?
Adverse Possession of Chattels (O’Keefe v. Snyder, Newman v. Bost)
“open and notorious” less cut and dry—O’Keefe argues for public display
sometimes more of a burden on original owner of chattels, where we have concerns about security of title
discovery rule—statute starts running when true owner discovers that art is gone, unless due diligence is exercised
courts moving towards discovery rule rather than strict AP.
O’Keeffe—applies in Indiana
range in definition of due diligence, from “if I knew where it was I’d try to get it back” (passive) on up
why no “due diligence” for land? --costs lower than for art, supposedly
Guggenheim rule—statute starts running when owner demands art back and good faith purchaser refuses
more protection for people who’s art gets stolen.
applies in NYC
Tacking—if you buy from legitimate dealer, your title can be better than true owner’s
Burden of proof on owners for due diligence rather than possessors for elements of AP
Doctrine of market overt—if its sold on the open market, you can keep it even if it was stolen.
Voidable title—U.C.C. § 2-403(2)—you can get good title from “a merchant who deals in goods of that kind”
even if they’re stolen.
Gift (Gruen v. Gruen , Newman v. Bost )
why allow them at all in the face of distribution objections?
people take better care of/create more wealth if they determine its recipient
Elements: intent, delivery, acceptance
Gifts Causa Mortis—increased risk of fraud and coercion (Newman v. Bost)
higher standards for delivery—not clear how manual delivery prevents more against fraud
Symbolic delivery increasingly accepted by courts (Gruen v. Gruen)
increased focus on intent element. Strahilivitz is down.
b. COMMON AND DISPUTED RESOURCES
The Commons and Externalities ( Missouri v. Illinois , Lobstermen)
Tragedy of the Commons: individuals have incentives to overuse socially valuable resources (Hardin)
Negative externalities—actor doesn’t bare social costs of behavior (Missouri v. Illinois)
Solutions: take into account transition costs, principal-agent costs, incentives, social capital
Options: private property (not always the best)
regulation/coercion
communal property
building of social capitol and social conscience (lobster-men)
social norms—not effective for corporations and cities
Social Capital contributes to wealth creation, vibrant democracy, health (Putnam)
interconnectedness of isolated groups not as useful as between groups
PTA, military-->bridging groups
loss of social capitol—TV, women in workplace, fewer children
Public Trust Doctrine (Matthews v. Bay Head, Sax)
so important--inalienability—why? what if city’s offered $100 billion?
principal-agent problem—legislators susceptible to special interests
people value entitlements they have (bounded rationality)
network effects of breaking up contiguous beach that people expect and rely on
social capitol created on the beach (Mathews v. Bay Head)
constitutional law cases protecting fundamental right to travel?
is this like free speech and the news, like the right to vote?
Sax says inalienability too much—should have supermajority, constitutional amendment
some rights to important they distinguish citizens from serfs.
Coase Theorem: Behavioral Law and Economics (Cubs v. Rooftops)
an argument against making factories liable, taxing them, or barring them from residential districts
no more factory’s fault for polluting than people’s fault for living in pollution—can pay polluter to stop or move
Problems: transaction costs—when high?
assessment costs—when high, then what?
distribution
free-riders
holdouts—acrimony,
bounded self-interest—weighing what you own over what you might gain
coffee-mug experiment—Jolls, Sunstein and Thaler p.221
people allocated mug want more for them than rational—entitlement
reference transaction of 50/50 when one partner gets given money
if partner offers under 20, 30%, don’t accept it.
high transaction costs mean people can’t contract around bad legal rules
externalities come from transaction costs
Social Norms & Social Institutions ( Shasta County , Schild v. Rubin, Ternant v. Boudreau, Firms)
Close-knit groups (Shasta County--Elliskon) where information pertinent to social control circulates--don’t seek legal remedies
can be good for relationships among insiders, reducing costs of legal system
can involve feuding and racism
law=backstop—when all else fails or when working with strangers
how should law operate in relation to social norms? (Ternant)
enforce them because efficient?
maintain disparities because doing so maintains incentives not to go to court
Social Institution—the firm.
commons—lawyer productivity
balance between rewarding teamwork and rewarding individual effort
goal of organizational governance to economize transaction costs
Cravath system—self-selects for collectivist workaholics who won’t slack when the reach the $2mill/yr
open in recruiting about system and overwork
lock-step compensation based on seniority
promotion from within—incentives for those already in
new attorneys get chunks of important cases to do perfectly under supervision
Problems—damage to psychological well-being—no new blood, isolated like lobster-men
possibility of principal-agent problem
Finley-Kumble—individual rewards for productivity in brining in clients
selects for stars—opportunistic, charming, charismatic, big-ego, good social network
nobody back at the library doing grunt work, no firm loyalty
Encroachments &Tresspass, Property & Liability (Pyle v. Pedrick, Raab v. Casper , Morgan v. High Penn Oil,)
lowest-cost damage avoider should have to avoid the damage (Pyle-lowest cost-avoider)
if we know who that is, property rule is better.
if we don’t, and transaction costs are high, liability rule may be better (Estancias)
avoids hold-out and free-rider problems
if we pick wrong one, she’ll pay liability and keep going
high assessment costs--> property rule
Coase Theorem leaves out question of ability to pay
distribution problems mess everything up
unjoined plaintiffs in pollution cases.
Good faith improver rule:
improver can remove improvement or recieve compensation equal to market increase (Casper v. Raab)
owner must compensate or sell land to improver.
Nuisance Law (Estancias Dallas v. Shulz, Circuit Club/Dakota Residents, Boomer v. At l antic Cement, Spur Industries v. Del E Webb Develpmnt, tradable permits )
Property-right—fairness, anti-Coasian.
buffer zones—good idea to require nuisance-creating industries to buy them,
so neighbors aren’t tempted to opportunism (Spur Industries)
Permanent Damages—can under-compensate (Boomer v. Atlantic)
over-compensate—if regulation gets rid of nuisance
Coming to the Nuisance—recovery can be barred—LOOK AT SPRANKLING
Nuisance and Environment: Market-based system for pollution control
tradable emissions or taxes rather than required new technology and mandated % reductions
should be more efficient than command and control
should kick-in when difference in efficiency greater than start-up costs
businesses prefer tradable emissions to taxes b/c imperfect info on costs
interest groups hold back the process—want grand-fathering
Strahilivitz blames divided government, unions and environmentalists
thinks Bush might push it through
anti-market based
Sindel--when you transfer from fine to fee you remove moral stigma
does stigma improve enforcement?
make it more likely for people to get caught?
sulfur dioxide—matters a lot WHERE its polluted
would need permits for damages rather than pollution
comparison to carpool lanes—paying to switch lanes better than fines for using it
people who pay report you (carpoolers don’t under either regime).
less legitimate to trespass in empty carpool lane when there’s option to pay for it
not a perfect analog since, for one thing, right to switch lanes can’t be traded
also, may be harder for companies/eco non-profits to monitor
(Merril said market-mechanism only allowed through when environmentalists satisfied with standards
command-and-control only worked when industry could grand-father)
c. OWNERSHIP INTERESTS
Land—Fee Simple, Fee Tail
can’t have a fee-tail in personal property (Jee v. Audley)
Life Estates ( White v. Brown, Baker v. Wheedon )
when there’s confusion, courts choose fee simple over life estate (White v. Brown)
can sell your life estate, though not the land itself without consent of remaindermen.
remaindermen have cause of action if you lower value of land
property contrasts with contract law—pre-made cobb v. salad bar b/c of 3rd party interests
restraints on alienability (fee-tail) not ok in property law because:
property unmarketable (market brings highest valued use)
perpetuates concentration of wealth
discourages improvement
unfair to creditors—need to keep sticks in predictable bundles
disabling restraint—can’t transfer
forfeiture restraint—if you try to transfer you forfeit
promissory restraint—if valid, enforceable with contract remedies of damages or injunction
uncommon outside landlord-tenant context
Defeasible Estates ( Marenholz v. County Brd. of School Trustees, Ink v. City of Canton )
defeasible—can last forever or end depending on future events
fee simple absolute—not defeasible
fee simple determinable—will end automatically at event
“so long as, while, during the continuance, until”
fee simple subject to condition subsequent—defeasance not automatic
“upon the condition that, provided that”
transferor retains “right of entry” or “power of termination”
covenant—promises grantee makes enforceable by injunction & damages
no defeasance
Holdings resting on one word or two good if all lawyers know the codes
more efficient, lower errors—problem is when they don’t and its not clear
courts prefer fee simple subject to condition subsequent--Marenholz
Future Interests and Trusts (Swanson v. Swanson)
Rules of Intestacy: issue first, then parents.
at death of spouse surviving spouse has elective share of fee simple ownership of estate