Property Outline-Professor Van Houweling-S2015
General Overview of Property Law
Goals of Property Law
· Clarity and administrative efficiency
o Capture vs. Pursuit (Pierson v. Post)
o Industry Custom (Glen v. Rich)
o Ownership of Forum (Keeble v. Hickeringhill)
o Reasonable Expectations (Popov v. Hayashi)
· Avoiding Conflict/Keeping the Peace
· Satisfying Needs – of individuals and society
· Rewarding Labor
· Encouraging Productivity and Investment
· Best use of resources
· Equity and distributional justice
· Respecting settled expectations and planning
· Internalizing externalities
· Reasonable limitations (e.g., fair use) on existing property
Nature of Property
· As between people – relational, rights limited by the rights of others
· As a bundle of rights (right to exclude, use, alienate, and destroy)
· As a legal conclusion that serves a policy purpose
Purposes of Private Property
· Freedom/individual autonomy
· Productivity, economic development
· Avoiding overuse tragedy (tragedy of the commons)
· Avoiding under-cultivation tragedy
· Promoting honesty
· Administrative ease, good evidence, clarity
· Honoring expectations
· Keeping the peace
· Equitable distribution
Who Had First Possession?
Was the Property Discovered?
1) First-in-Time Rule: Assessment of best title based on temporal primacy
a) Purpose: Allocation of resources
b) Advantages
i) Simplicity
ii) Promotes discovery and inventiveness
iii) Social and economic efficiency
iv) Longstanding social expectations, popular/widely accepted
v) Avoiding social upheaval/keeping the peace
vi) Pragmatism
c) Disadvantages
i) Distributive justice is not always adequately served, doesn’t reflect need
ii) Who defines “time”?
iii) Always retrospective, making it difficult to determine who was actually first
iv) Promotes cheating/manipulation, land-grabbing, excessive use
v) Lack of collective accountability
vi) Nationalistic discrimination by decision-makers
vii) Incentivizes frivolous exhaustion of finite resources
d) Alternatives
i) Collective ownership of important resources
ii) Distribution of property to individuals by the state, auction based on need
iii) Expert calculation of most efficient use
iv) Lottery
v) Use FIT as a tie breaker if a labor-based standard does not resolve it first
2) Johnson v. M’Intosh – Sale of Land Occupied by Native Americans
a) Rule: The first European country to discover and develop American land holds title subject only to the Indian right of occupancy.
i) Conquest begets a title that the courts of the conqueror cannot deny.
b) My Take: Judicial pragmatism in the vulnerable years of a new nation. To permit an exception to this longstanding rule would not only create social upheaval, but it would call into question the legitimacy of a sovereign nation. It is the province of the Congress, not the Court, to confer title. It would be more practical to leave it to the Congress to rectify this clear inequity than have the Court ignore key doctrine.
3) Alternative Theories of Property
a) Locke’s Labor Theory: One owns his/her labor, so when it is mixed with an object, the object becomes his/her property as well. But owns the object before labor?
b) Economic Theories
i) GOAL: Economic efficiency – maximizing economic output of a resource while ensuring compensation of those who are harmed by that beneficial use
ii) Externalities: Occur when one uses a resource in a manner that fails to consider all of the effects of that use (i.e., all potential costs – good and bad)
(1) Problematic in common ownership
(a) Use of common property for personal gain depletes the resource – costs borne by all community members, none of whom exercise regulatory control, so there is no incentive to conserve.
(b) Causes over-investment in capture technology
(2) Potential solution – assign private property rights to individuals
(a) Costs and benefits are concentrated to the owner
(b) Negotiations re: use limited to neighbors rather than entire community
(c) *Perhaps allow community to retain regulatory/distributional power to guard against inequitable distribution, pollution/externalities.
iii) Demsetz on the Tragedy of the Commons: property systems are created when benefits of creating a system exceed the costs of having one.
(1) Problems with Common Ownership: under-cultivation and overuse
(2) Solution: Resolving inefficiencies (minimizing externalities and transaction costs) is more likely through the mechanism of private property, which encourages negotiation and enables involved parties to take concrete action to resolve the problem at issue.
(3) Coase Theorem: In the absence of high transaction costs, the existence of a cause of action is irrelevant to the efficient use of a resource. Instead the question is who will bear the cost of increased efficiency. If there is a COA, the one benefiting from the externality will avoid litigation by absorbing the cost of efficient usage. Without a COA, the one currently bearing the cost of the externality will absorb the cost of the more efficient use.
(a) TRANSACTION COSTS: free riding, negotiation costs, hold-outs, enforcement, bilateral monopoly
(b) TAKEAWAY: In reality, transactions costs make lawsuits necessary
(4) Alternatives Solutions to Tragedy of the Commons: Gov’t regulations, judicial remedies, charging fees, better community property mgmt.
iv) Tragedy of the Anti-Commons
(1) Problem: Over-privatization can stifle innovation and drive up transaction costs by making it difficult to exercise a proprietary right without infringing on the rights of another. (E.g., patents).
(2) Potential Solutions
(a) Limiting the duration of proprietary rights that cause this problem
(b) Collective bargaining power
(c) Government regulation
(d) Compulsory licenses
Was the Property Captured?
1) Pierson v. Post – The Fox Chase and the “Saucy Intruder”
a) Rule: To claim title to a wild
ble distribution of scarce resources, personhood in property, flexibility in law based on nature of individual dispute, community expectations/custom, social order/keeping peace, rule-making
Was the Property Created?
1) Intellectual Property Overview
a) Key Distinction: The threat of overuse that exists with finite resources is not an issue in the marketplace of infinite ideas (competition vs. monopoly incentive)
b) Rationale: Establishing certain exclusive rights to ideas serves to incentivize creativity and cultivation without stifling competition.
i) Avoids consumer confusion
ii) Promotes high quality goods
iii) Prompts disclosure as opposed to secrecy
c) Legal/Philosophical Justification
i) U.S. Constitution, Art. I, § 8, cl. 2: promoting science and the useful arts
ii) Federal Statutes: Copyright Act, Patent Act, Lanham (Trademark) Act
iii) Legal Philosophies
(1) Utilitarian/Economic Incentive Theory
(a) Dominant theory in the US
(b) Exclusive rights give economic incentive for socially beneficial creation/invention by ensuring that creator does not have to compete with copiers who do not make a comparable investment
(2) Labor Theory (Locke)
(a) Focuses on IP as a right attributable to the labor that one invests in the development of creative work
(3) Personhood Theory (Hegel)
(a) Important for human flourishing – emphasis on intellectual work as an extension of the author’s personality
(b) Protects attribution, integrity, and other “moral rights”
iv) Common Law Principles
d) IP Challenges
i) How to facilitate future innovation on “shoulders of giants”?
ii) Allowing commentary on existing cultural works
iii) Overlapping rights + high transaction costs = anti-commons problems
iv) Limiting IP rights (fair use, idea/expression dichotomy, utility requirement)
2) Copyright Law
a) Feist Publications v. Rural Telephone Services – Phonebook Photocopiers
i) Constitutional Rule: Facts are not copyrightable, but compilations of facts generally are so long as there is an element of creativity in the arrangement. “Typical” compilations aren’t enough – a de minimus threshold must be reached.
ii) Infringement Rule: To prove infringement, a claimant must prove 1) that s/he holds a valid copyright and 2) that the respondent copied original elements of his/her work.
iii) Takeaway: Copyright is an extension of FIT, which prevents the copying of the creative work of another.
