Outline: Property (Alexander)

Outline: Property (Alexander)

Generally:

Ownership = Bundle of Rights

I. Acquisition of Property and Some Theories of Property

a. Initial Acquisition of Property Rights

i. Rule of Capture

Fundamental Rule:

First person to take possession of something owns it (Prior in Time)

A mortally wounded or trapped animal (ferae naturae) is considered “captured”
Does not apply to animals that have a habit of returning (animus revertendi)

Case: Pierson v. Post (Pages 17-23)

P (Post) hunting fox with dogs. D(Pierson) stumbled upon and killed fox during the hunt.

Issues:

BROADLY:How does one obtain a property interest in a wild animal?

Does pursuit create property interest in wild animals?

NARROW:What constitutes Occupancy?

Pursuit does not create a property interest in an animal
Court assumes that the land is un-owned (vs. uninhabited).

Holding:

Intent is irrelevant
Mere pursuit of an animal does not constitute a right to it. Only possession matters.
D, who stumbled on fox, recovers because he possessed the animal.

Reasoning:

Instrumental reasoning (aim is social goal/benefit): will encourage people to hunt
Heavy weight on Justinian and older thinkers.
Easier to administer than a pursuit rule since “capture” is definite.

Dissent:

Reasonable prospects better rule than rule of capture since it better inspires people to rid the world of “noxious beasts” by rewarding their labor
Courts should leave this up to hunter’s associations and their expertise and customs.

Aside: Locke – once something is mixed with our labor, it becomes ours.

Case: Keeble v. Hickeringill (27-28)

P (K) had decoy pond to attract ducks. D (H) shot off gun to scare ducks away.

Issues:

Did P have possession of the ducks?
Can someone purposefully interfere with your livelihood when there is no visible trespass?

Holding:

Yes, under Constructive possession
Rule: A person who does something so as to impede your livelihood is liable for an action

Reasoning:

A person is free to use their land as they wish, and when it is for trade, something socially valuable, people who interfere are liable for an action.
‘Malicious interference’
Would be alright if D simply set up a competing duck pond since competition is a good thing that drives towards ultimate economic goal and rid the world of animals goal.
Ratione Soli: Landowners possess/own animals on their land till they leave.

More on Rule of Capture:

From Page 31

O T T1

T v. T1

Relativity of title: Trespasser (T) has greater title that T1. O’s title trumps all.

Social Goal: Discourage Trespass
Animus Reverendi: Captured wild animals that have the habit of returning belong to the Captor
Rewards efforts to domesticate and has economic benefit.
Exception: owner loses escaped wild animals unless a second captor has notice that the animal escaped from someone with prior possession
Reasonableness Test: If someone knows an animal is outside its natural habitat, then captor cannot recover.

b. Initial Acquisition of Other Fugitive Resources

i. Oil and Gas

Fugitive resources are treated with the Rule of Capture: Possession establishes ownership.
Underground pools are owned by no one in particular
“Tragedy of the Commons” (see Demsetz): Communal ownership drives people to abuse the resource and causes everyone to use it inefficiently, leading to its depletion
Key illustration of the problem: if A,B,C share an underground pool, one member can go ahead and drill on his property and take it all.
Property rights in fugitive resource, barring trespass/theft, are impermanent, so if you lose possession, you lose the property right.

ii. Water (Common Law)

In terms of underground pools, common law stated that person owned all stuff below and all the stuff above (hell/heaven) in terms of their land (but now generally regulated by statute).
English Rule:Rule of capture

Same as underground pools

American Rule:Reasonable use
Likelihood that it’s going to lead to over-exploitation
That it does not lead to economic/maximum value system for water.
Must be put to reasonable use.
Can extract only at a reasonable rate.
Today governed by regulations
Surface Streams (rivers, etc)

Riparianism (in the East)
If you are a Riparian land owner, you can take water from the river, but you can’t take so much that it destroys the natural flow of the river
Must leave water for downstream users, so keep the flow intact
Also known as theory of correlative rights (Natural-flow theory)
Makes sense when there is a lot of water
Upshot: No commercial use; but deterred industrialization
Prior appropriation (started in West)

If you have two claimants to water, whoever got there first prevails
The Rule of Capture

Excursus: The Tragedy of the Commons and the Economic

Demsetz Article (35)

Normative Thesis (What we ought to do)
Positive Thesis (What simply is)
Article developing an evolutionary positivist thesis: historically why a regime of private property rights has emerged out of a regime of common ownership.
Also, has a normative message: Private ownership/private property rights is superior to that of common ownership in an economic sense. In that it is more efficient that common ownership
Primary function of property rights is to guide incentives so as to achieve greater internalization of externalities.
Thesis: Property rights emerge in response to desires of the interacting persons for adjustment to new benefit-cost possibilities. (37)
Criterion for optimal state:

Situation in which resources are allocated among people in such a way that you cannot change anyone’s situation without making someone worse off.

Externalities: What is not taken into account when someone makes a decision about how to use a resource (41)
Externalities: for paper, external costs, external benefits, and pecuniary as well as non-pecuniary externalities. Essentially things not taken into account, “external” to the decisions one makes in regards to what actions to take in regards to his property.
Linked to transaction costs – it is external when the cost of bringing it to effect is too high. Simply put, it’s simply not worth it.
“Internalizing” is the process of bringing these externalities so as they have an impact upon all interacting persons. All of this is linked to transaction costs.
Looks to American Indians: Links development of private rights and the commercial fur trade. As hunting and furs gained value, stopped making sense to have it communally owned. Forrest region made sense to cut up piecemeal. Would not have made sense in prairie.
Three types of ownership: Communal (all members of the community), Private (where community recognizes rights of a single owner), and State (state may exclude anyone from use of a right as long as it follows political procedures
Communal ownership always involves externalities. Therefore shift to private.
If a single person assumes it, will take into account future (is this true?)

Will take into account the future, while communal ownership places burden on the present.

Demsetz uses the rationale actor model who is not motivated by altruism or anything else

c. By Creation: Intellectual Property

Generally:
We want to recognize labor
Acquisition by creation = Intellectual Property (Creator is the “first” in time)
Federal Law: US Constitution: Art. 1, § 8, Clause 8
Essentially, creating monopolies for a short period of time to encourage invention
Creating a compromise – encouraging people to create, while at the same time encouraging competition, meaning lower prices, etc.
Federal System (3 Parts):
Patents
20 yrs. following date of application
Application process is expensive and time consuming
Requirements: Utility, Novelty, Non-Obviousness

Copyright
Life of the author +70 years
Tendency of Congress is to extend time
Used to be the case that getting a copyright was very difficult and time consuming
Since 1978, get copyright as soon as reduced to tangible medium
Your copyright is attached to it

Trademark
State AND federal law (Lanham Act)
Words and symbols indicating the source of a product or service
Grew out of common law of unfair competition
Misappropriation and Copyright
Misappropriation: taking someone else’s product and representing as your own
Palming off: claiming that the product that YOU make is the product of someone else

Case: INS v. Associated Press (51)

P (AP)seeks injunction of D from copying it’s bulletin boards and early editions, bribing employees, so as to sell to D’s customers.
D is Misappropriating news, not Palming it off.
P has a quasi-interest in the news with respect to D, but not to the public.
News is common property.
Court bypasses IP and uses Unfair Competition (see Keeble)
AP owns the right to the commercial value of the information that AP acquired through its labor
Dissent (Law Review Article, 57)
Granting people exclusive information conflicts with other rights that tangible property rights does not (wheat vs. information)
Competition depends on imitation

Case: Cheney Brothers v. Doris Silk (55)

D copies one of P’s designs and sells it
P cannot get patent/copyright protection due to seasonal aspect of the product
Issue: Can someone bring an action against a business competitor for imitating
uncopyrighed/uncopyrightable things (chattel)?
To avoid monopoly and encourage competition, the COMMON LAW allows copying andimitation.
Square this with INS?

Nature of news v. Silk/Chattels
Private goods are exclusive – only one person can have it
News is a public good, everyone has a right to it.
KEY: Importance of news v. importance of silk patterns

Case: Smith v. Chanel (56)

Ct. held that a company cold claim in advertisements that its product was the equivalent of the more expensive Chanel No. 5. Argued that competition is driven by imitation and that taking away the ability to advertise or say it’s the equivalent would affect this competition.
By taking this ‘free ride’ the copyist serves an important public interest by offering comparable goods at a lower price.

Intellectual Property Cases (59)

Dispute Over / Protected / Not Protects
Nichols v. Universal Pictures / P had a play he thought was copied.
Not enough similarities for an action. / Creativity / Significant Differences/variations on common theme, human dilemma
Diamond v. Chakrabarty / Patent protection over living organism. He made bacterium that could break down oil.
5-4 Decision / Human Ingenuity (Genetic Innovation) / Living thing (Federal Patent Statue does not cover this)
Danger to health, environment
White v. Samsung Electronics / Robot Vanna put up.
Stifling, but ruled in favor of White.
Used to be name, voice, likeness, and signature protected
Dissent key. It’s parody! / Commercial exploitation of likeness / Creativity/Parody
Metro –Goldwyn-Mayer v. Grokster / Secondary liability for file-sharing programs. One who distributes a device with the object of promoting its use to infringe copyright is liable for the resulting acts of infringement by third parties. / Artistic Expression / Technological Information

d. Property in One’s Person

Case: Moore v. Regents of the University of California (69)

P’s cells used for multi-billion dollar research without his knowing. Wants money.
Sues under conversion (wrongful exercise of ownership over personal property belonging to another) and under breach of fiduciary duty
P can only sue for failure to inform over economic and research interest since he could not prove that their obtaining cells interfered with his own use of them.
Some things such as body parts are not alienable.
Alexander: Court is wrong here. Say that his cells are the same, but his are different – we all have faces and T-Cells, but his were unique. Also, since it’s a bundle of rights, what about exclusion?
Court concerned with policy issues: (1) body parts as property that can be sold. (2) don’t want this to become a black market issue (3) ramifications of having researchers deal with this.
Dissent:
At time of excision, had as much right to do with the tissue as the defendants.
Uniform Anatomical Gift Act actually limits sales for transplantation and therapy. Can argue that it authorizes sales for non-therapeutic uses. Scientists are already doing it anyways.
Law of Accession: When you start out with a raw product and becomes a different produce as a result of someone adding labor, says that the table goes to the person who added the labor if as a result of the addition of the labor, the value of the final product is significantly/substantially greater than the value of the raw product.
Exception: If someone who added the value is a trespasser, final product goes to original owner.
So are Moore’s cells different now?
Court says: Patented cell line is both factually and legally distinct from cells taken from P’s body. Federal law protects products of “human ingenuity” and inventive effort, not discovery of naturally occurring raw materials.

Aside: Bundle of Rights

Right to possess
Right to use
Right to transfer (include)
Right to exclude
Arguably the single most important. Some say that if you take it away, it all falls apart.
Alexander: important, but debatable.

e. The Right to Include, The Right to Exclude

Felix Cohen: Property a relationship among people that allows owners to dictate who to include/exclude in regards to the property.
Civil trespass: person enters land and there’s no request to leave.
Criminal trespass – person who enters without justification and refuses to leave after owner asks him to.

Case: Jacque v. Steenberg Homes (87)

P told D not allowed to drive mobile homes over their property.
Court awarded $1 nominal and $100,000 in punitive damages.
The right to exclude one of most important in bundle of rights.
Want to prevent self-help remedies. Avert conflicts before they take place.

Case: State v. Shack (88)

Note: NJ case
Attorney and official who were barred from seeing migrant workers. Owners suing Officials
No trespass. Cannot use property rights to injure rights of others.
Court uses the Economic Opportunity Act (federal statutory law): Farmer can NOT prevent services that are made by federal, State or local services, or from recognized charitable groups seeking to assist him.
Bring up Federal Statute to show general policy, nothing more.
Migrant workers – not aware of their rights.
Primarily bases its decision on STATE common law: As long as this is not within working hours and the behavior is not hurtful, the owner has no right to exclude
P, farmer will look to NARROW reading (MUST be a federal official providing services)

Aside: Sine qua non – a necessary condition

Case: Uston v. Resorts (Blackboard)

Card-counter who is not breaking the rules is stopped from being able to play.
Any common law rights to exclude that the casino may have had was trumped by the state statute
Common Law right: when property owners open their premises to the general public in pursuit of their own property interests, they have no right to exclude people unreasonably.
Must grant “reasonable access” by all citizens to places of public accommodation
Sliding scale: The more PRIVATE you keep your property, the MORE you have a right to exclude. The more PUBLIC you keep your property, the LESS you have a right to exclude.
The Commission alone can decide on these issues regarding rules

Civil Rights Act of 1964

Title II: Injunctive Relief Against Discrimination in Places of Public Accommodation.

To make out a claim, must state the following:

1. D committed discrimination or segregation

2. That the S/D was on the basis of race, color, religion, or national origin

3. That the discrimination took place in place of public accommodation

4. What is a place of public accommodation (must fit in with list of subsection B)

These places in addition must effect commerce (sub C) or must be supported by state action as listed in sub D.

II. Subsequent Acquisitions of Ownership

a. Found Property

“The title of a finder is good against the whole world except the true owner”
Owner does not lose title to property if it’s lost or mislaid
Bailor = transferor, Baillee = transferee
Remember relativity of title – who has the best in regards to the chattel

Case: Armory v. Delamirie (96)

Chimney sweep finds jewel. Takes it to jeweler who refuses to return it.
P sues in replevin (wants the item itself back).
Cause = trover (money damages)
Finder of jewel does not have absolute ownership, but it’s good against all but the true owner.

Thieves cannot take possession of something.

Hypothetical:

Armory finds jewel but has a hole in his pocket. Schwab finds it. Both say they have possession.
But, going to protect Armory as the prior possessor.
Relativity of title
Want to ensure we stop someone from taking from prior possessor.

Winkfield doctrine:

“The wrongdoer, having once paid full damages to the bailee, has an answer to any action by the bailor.”
This ensures that someone is not penalized twice.
This applies to voluntary bailment.
True owner does not always get to be made whole.

Hypothetical:

True owner comes forward. What are his rights against Armory, Delamirie, and Smith?
TO can recover against everyone. If Finder only partially recovers, TO can only recover what Finder has recovered, so is not always made whole.

Hypothetical (Verify):

Example: F1 finds a stone and then F2 finds the stone (F1 is first finder). F2 pays F1 damages. True owner sues F2. What result?
After TO sues F2, F2 can sue F1 to get his money back. Once F2 gives TO recovery, F2 acquires the rights of possession from TO. NO VOLUNTARY BAILMENT.

Voluntary Bailment:

Bailor by virtue of being a voluntary bailor has already assumed the risk of the loss.
This is a voluntary parting with asset to bailee
He has chosen to part with everything and is in best position to evaluate trustworthiness of bailee.

Case: Anderson v. Gouldberg (97)

P trespasses and takes logs to D who tries to take them as mill owner.
Even though P trespassed, has superior title to D. Does not matter how procured.
Prior possessors, even TRESPASSERS acquire right of possession over subsequent possessors.
Stops endless line of litigation.
THIS IS HORNBOOK LAW. It DOES matter how you acquire the good(Confirm)

Case: Hannah v. Peel (99)