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Property I
University of California, Hastings School of Law
Depoorter, Ben W.F.

Property

Fall 2016

Professor Ben Depoorter

INTRODUCTION

Property’s main issues

Optimal Allocation of Resources

Given in society that we have scarcity – if there’s plenty of everything, then we wouldn’t need property law and we wouldn’t need to define limits of rights, etc.

Regulation of Personal Resources

Property system has rules of what you can do with a property

Can you sell it? – e.g. Can’t sell your own organs
Are you allowed to destroy it? – e.g. Can you destroy a piece of artwork you bought?
Can’t do anything with it – e.g. Designated conversation areas, designated historical landmarks

Regulation of the legal relationship between the individual and the resource

Interpersonal use of Resources

One person’s use of a resource can affect others and conflict with another person’s use and enjoyment of their resource.

Nuisance law:set limits with what you can do at your property – e.g. your apartment
Servitude law: land use arrangements

Regulation of relationship is needed

State involvement in use/enjoyment of property

For the sake of public interest, states may interfere with one’s use of property – public regulation

Law of takings
Conservation laws
Zoning law
Preservation of free speech: public right conflicts with people who want to exclude people from exercising this right on their property

OWNERSHIP AND FORMS OF ACQUISITION

Forms of Acquisition by First Possession

Possession is an origin of ownership, a way to acquire property rights.

Goals of possession as presumption of ownership:

Want to discourage self-help, i.e. invalidating your rights without recourse through the legal system, taking law into your own hands

Legal systems don’t want people trying to get things back for themselves
Possession is a label of ownership until proven otherwise

Establish possession early

Avoid conflict in the race to own something; gives a clear sign of ownership and saves time and resources
Protect investment – rules establish ownership to those who’ve made certain investments. Don’t want people to put in the resources and investing in gaining a possession and have something else come in and take it away

Ownership by Capture

First capture: to get something that no one owned before

Definition of first capture is context dependent

E.g. even in whaling, definition of first capture depends on what kind of whale it is
Where does ownership of ferae naturae begin? Need to exercise a certain amount of control before you own it.

Pierson v. Post (dead fox): ownership begins when you capture or at least wound an animal, not when you begin to pursue it

Actual/physical possession – more clearly visible
Goes against hunting customs
Public policy: going for clarity, not fairness; less litigation and less squabble
Dissenting opinion: ownership should be drawn at pursuit with reasonable prospect of taking; wants to promote hunting – not mere pursuit, serious pursuit leads to actual possession
What’s best signal – good incentives & less conflicts

Popov v. Hayashi (homerun baseball): ownership begins when you have full control over the ball, but a pre-possessory interest exists when you could have gotten the ball if it weren’t for the illegal actions of others

Fugitive resources

First capture rule for oil (the first person who drills the oil first)

Oil and Gas: keep moving around like wild animals
Constructive possession: not physically own, but own it on (under) your property
Barnard v. Monongahela Natural Gas Co. (drawing gas from one’s adjoining land): First capture rule –the first person who drills the oil can possess it first
Anderson v. Beech Aircraft Corp. (ownership of non-native gas injected into an underground reservoir): the law of capture applies to non-native stored natural gas
Constructive possession doesn’t mean a lot in these cases because of this fugitive nature
First capture is applied: everyone can do whatever they want but it happens to be bad luck for neighbor
We want to encourage drilling and reward efforts
Problem with efficiency: result – inefficient drilling

Tragedy of the commons and diminishing returns – people have the incentive to drill all the oil

People could be drilling in the wrong spots, which creates diminishing returns
For society, optimally, we need to drill in the right spot
Maybe better to coordinate with all owners with the land: pooling contracts, merge (concentration of an industry)

Water rights

Eastern US uses riparian water rights: system for allocating water among those who possess land about its source

People that lived next to water can take water from it, but limitations on what you can do. You can take as much as you need it for natural use, but nothing wasteful and nothing excessive

Western US

Prior-appropriation water rights: the person who first “captures” the water and puts it to reasonable and beneficial use has a right superior to later appropriators
Related to the scarcity or water in Western US – want to protect the person who invested in appropriating the water
More of a full blown first capture rule; collect as much you want, if you believe recourse is underinvested, it can create an incentive for people to invest in the capture.

Nowadays, it is changed and the water rights are some of the most complicated arrangements. Common law is not very relevant anymore. It’s a cluster of administrative law and environmental law. Common law doesn’t really have a say in it. It’s subject to intense negotiations and contracts between states.

Usage and customs

Ghen v. Rich (whaling and usage): whale belongs to the person who killed it, not to anyone who finds the body later

Insight to why the law is flexible
Court sides with customs of whaling
Rule helps whalers maximize the amount of whales they catch
Court did not extend this rule to outside the whaling community; applied this rule because whaling community is small
Court was willing to apply this rule because it was widely used in the whaling community – would not have applied a practice or custom that was not widespread
Reservation (customs are not always offer perfect solution)

Collective action problem e.g. young fish – killing future stock (fishing quota – intervention needed); when a group adheres to a rule that helps them individually, but hurts them as an industry

*Tragedy of the Commons: what’s good for the individual is not good for the group

Negative effects on outsiders
Information costs: Not everyone adheres to customs. Who is affected by this rule? Are there a lot of outsiders? Do a lot of people suffer from accepting the custom?

Customs as a source of law:

Social norms as a substitute for law: determines people’s behavior and does so in disregard of what people are prescribed to do

In small, close-knit communities with repeat players (not in an end-game situation), law doesn’t really matter – e.g. cow-grazing example
But conflict between norm and law could occur if, for example, an outsider becomes involved

Antagonistic: custom in conflict with the law

Internalized norms: people disobey laws sometimes because their beliefs are in conflict with the law
E.g. cyber piracy and copyright law

Interference with capture

Popov v. Hayashi (homerun baseball): When a person completes a significant portion of the steps to achieve possession of an item, but is thwarted due to the unlawful conduct of another, that person is entitled to a pre-possessory interest of the item.

Imp

all the rights of those living in it. This rule extinguished all the title acquired directly from Indians.
First in time in this case is not relevant. What matters is who has the rights and the rights to transfer the title. Doesn’t matter who got it FIRST, but who you got it FROM. The person who has title invalidates the claim from any other.

Colonial principles of land discovery:

Pre-emptive right: Discoverer then has the exclusive right to acquire full title – i.e. negotiate and buy/conquer the land from the tribe (I’ll buy it, or I’ll kill you)
Discovery vs. Possession (leading to ownership)

Native Americans possessed the land, but somehow possession wasn’t enough.

The Native Americans never did anything on the land sufficient to establish property in it.Need clear indication to others around you that it’s yours. (no right to alienate, dispose)
Court talks about incapability to cultivate, alienate so not sufficient to possession

Instead, the Native Americans have the right of occupancy (less than full possession)

Monopsony, one buyer:

The Native Americans can only sell land to the U.S., which creates a very unequal bargaining power. The Native Americans can only either keep the land, or sell for a low price.
Establish clear title system, no competition

This allowed the government to have clear title and also to acquire title very cheaply.
Disaffects the individuals who acquired title directly from Native Americans, but it was necessary for government to claim title

Ownership by Creation

Ownership in One’s Person (PR on yourself) – Right of publicity

Right of publicity is a state right (strongest in CA and NY, where the celebrities are)
It’s more like moral rights; creates another veto right
Distinctive: you can only claim PR with publicity if it is something distinctive
Profit: someone is trying to deliberately obtain profit
Imitation: deliberate imitation with the goal of obtaining profit; with the purpose of endorsement

Celebrity was featured in a way that they are part of the endorsement !!!!

Fame: only for people with fame; specifically, for celebrities
Midler v. Ford (needed song permission)

There is copyright for song: composition (wrote the song), performance (recording company)
The two rights are sold separately
Ford has acquired license in composition
Ford went to Midler instead of paying for performance copyright but P says no.
The court here endorses the ‘right of publicity’

White v. Samsung (Vanna White and the robot that reminds people of her) – private sector

If you think of me, you owe me the money
Not trademark because White’s persona isn’t a reminding people of a source
Public domain – he’s engaging in free speech
E.g. fantasy leagues in St. Louis (NFL, MLB) – public sector

P’s claim: you need to pay them
Court says no! Facts about leagues; free speech, no one owns that

If you want to play a song in an ad, composer, licensing recording and the celebrity