Archive for the ‘Property Law’ Category

Where Have You Gone, Hernando de Soto?

posted by Frank Pasquale

Remember Randy “Duke” Cunningham’s “bribe list” pricing—”$50,000 for every $1 million in appropriated funds he would obtain?” There are now allegations that certain firms offered to “fabricat[e] documents out of whole cloth” to lubricate the foreclosure machine. For a mere $95, one could “recreate entire collateral file,” which is all “the documents the trustee (or the custodian as an agent of the trustee) needs to have pursuant to its obligations under the pooling and servicing agreement on behalf of the mortgage backed security holder [including] the original of the note (the borrower IOU), copies of the mortgage (the lien on the property), the securitization agreement, and title insurance.” Yves Smith draws some interesting implications:

Amar Bhide, in a 1994 Harvard Business Review article, said the US capital markets were the deepest and most liquid in major part because they were recognized around the world as being the fairest and best policed. As remarkable as it may seem now, his statement was seem as an obvious truth back then. In a mere decade, we managed to allow a “free markets” ideology on steroids to gut investor and borrower protection. The result is a train wreck in US residential mortgage securities, the biggest asset class in the world. The problems are too widespread for the authorities to pretend they don’t exist, and there is no obvious way to put this Humpty Dumpty back together.

Smith’s global perspective reminds me of two items. I once heard that, in the wake of Bush v. Gore, a representative of the OAS began a meeting by saying something along the lines of: “We are now to hear from a fragile democracy, one that has suffered severe strains but which looks capable of attaining legitimate procedures for governance. Would the United States representative please come to the dais?” And policymakers who prescribe the titling work of Hernando de Soto for Latin America might want to apply it a bit more carefully at home.

  October 3, 2010 at 5:56 pm   Posted in: Contract Law & Beyond, Property Law, Securities, Securities Regulation, Uncategorized   Print This Post   One Comment

Foreclosure Mills Under Fire; A New Way Forward?

posted by Frank Pasquale

The early days of the financial crisis revealed megabanks indulging in sloppy and self-serving recordkeeping on the macro-scale. Now we see the devastation and disorder that happens when that same profit-at-all-costs mentality is inflicted on individuals. As has recently been reported, foreclosure horror stories include “a man who was foreclosed on when he didn’t have a mortgage and paid cash for the home; a home that had two foreclosure suits against it because both servicers claimed ownership of the title; and a couple foreclosed on over a contested $75 late fee.”

Reform groups like A New Way Forward are gaining strength and members because large financial institutions are increasingly untrustworthy. They no longer appear to be unitary “actors” at all, but rather shadowy and unstable ensembles of desks and divisions whose main goal is slipping by whatever bonus-maximizing scheme won’t set off alarms among risk managers and regulators. As Satyajit Das memorably puts it in his book Traders, Guns, and Money, “no trader making $1 million + a year is going to take questions from an auditor making $50,000 a year” (144).

Given this grim landscape, I wanted to highlight two hopeful items. First, this Monday the Roosevelt Institute will host a conference on the future of financial reform, featuring some of the most credible and compelling voices in the field (including Jennifer Taub, Mike Konczal, Richard Carnell, Sen. Jeff Merkley, and Michael Greenberger). Read the rest of this post »

  October 2, 2010 at 3:31 pm   Posted in: Economic Analysis of Law, Property Law, Sociology of Law, Uncategorized   Print This Post   3 Comments

Money Matters in Ongoing Marriage Law

posted by Alicia Kelly

Married life is characterized by a sharing norm. As I described in an earlier post, spouses commit to and in fact engage deeply in sharing behavior, including a shared family economy. Overwhelmingly, spouses pool economic resources, including labor, and decide together how to allocate them to benefit the family as a whole.

In addition to its affects in the paid labor market (see my last post), sharing money matters inside a functioning marriage.  It shapes the couple relationship as well as each partner individually. Research shows that in an ongoing marriage, money is a relational tool. For example, making money a communal asset is a way to demonstrate intimacy and commitment, and that can nurture a couple’s bond. Yet, in some circumstances, an assignment of resources to just one spouse can also be understood (by both partners) to be appropriate and deserved—a recognition of the individual within a sharing framework. Conversely, it is also possible that spouses’ monetary dealings can undermine individual autonomy and the relationship as well. For example, one person might exercise authority over money in a way that disregards the other. Accordingly, power to influence financial resource allocation within the family is important for individual spouses and for togetherness.

It becomes a special concern then, that sharing patterns in marriage are gendered.  As highlighted in my previous post, role specialization remains a part of modern intimate partner relations. Particularly true for married couples, men continue to perform more as breadwinners, and women more as caregivers. As a result, women tend to have reduced earning power in the market. How does this market asymmetry translate into economic power at home? Happily, in a significant departure from the past, a majority of couples report that they share financial decisionmaking power roughly equally. Indeed, most married couples today endorse gender equality as an important value in their relationship. However, in a significant minority of marriages, spouses agree that husbands have more economic power. For some couples then, a husband’s breadwinning role and/or perhaps his gender, confers authority in contentious money matters.

How should law governing an ongoing marriage respond to these sharing dynamics? Consider this hypothetical fact situation. A husband has a stock account from which he plans to make a gift to his sister who he feels really needs the money. The husband suspects that his wife would not approve of the gift. Even though the wife too loves the sister, she believes the sister is irresponsible with money. Let’s assume that the money in that stock account was acquired while the parties were married, and that it came from the market wages of one or both of the spouses earned during marriage. It was a product of the couple’s shared life. Does contemporary law allow the husband to give his sister the gift without her consent? Without even telling her? How should legal power over the money be allocated?

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  October 1, 2010 at 1:04 pm   Posted in: Family Law, Feminism and Gender, Law and Inequality, Law and Psychology, Legal Theory, Property Law, Psychology and Behavior, Uncategorized   Print This Post   2 Comments

Book Review: Peñalver & Katyal’s Property Outlaws

posted by Gordon Hull

Eduardo M. Peñalver & Sonia K. Katyal, Property Outlaws: How Squatters, Pirates, and Protesters Improve the Law of Ownership (Yale University Press 2010).

As they open one of the late chapters in their Property Outlaws, Eduardo Moisés Peñalver and Sonia K. Katyal speak of a “conflicting divergence” in intellectual property law: “is a pirate an outlaw or a freedom fighter? The law asks, unable to offer a comprehensive answer” (212).  Property Outlaws is an ambitious and rigorously argued explanation of why this ambiguity is a good thing.  The book also responds to a pressing problem.  Intellectual property law, as it is currently developing under intense pressure by property owners, is moving rapidly toward the “outlaw” answer, and in this development, Peñalver and Katyal see cause for concern.  It is not, as they emphasize, that all acts of trespass are good things, or that most of the college students on Bit Torrent have any ideal in mind more elevated than seeing movies for free.  It’s that, when one takes a step back and looks at the development of property law more generally, “property outlaws” have served a very important social function in pushing property law, which tends to ossify, in the direction of needed reforms that reflect shifting social norms, pressing issues of social justice, or other normatively important concerns.  To illustrate this larger point, they embed a discussion of the development of intellectual property law in an innovative account of the social dynamics of property law more generally.

Property Outlaws thus makes the descriptive and normative case for what one might call a dialectical understanding of the development of property.  Specifically, “the apparent stability and order provided by property law owes much to the destabilizing role of the lawbreaker in occasionally forcing needed reform and in generating a series of important legal shifts along the way” (11).  The descriptive case is met by showing a series of examples where deliberate disobedience of property regimes has been a significant catalyst in generating legal reform.  Peñalver and Katyal identify two kinds of property outlaw.  The first, the “expressive” outlaw, acts to protest the current legal system, but not to obtain property for herself.  The protestors of the Greensboro lunch counter sit-ins, whose trespassing was a major catalyst to the civil rights movement, were paradigmatic expressive outlaws.  The second, “acquisitive” outlaw violates others’ property rights, and expects to gain personally.  The case for acquisitive outlaws is harder to make because of their “profit motive,” but urban squatters in developing countries seem both to have available a necessity defense and to point to a widespread social justice problem.

The situation with intellectual property law is somewhat different, because IP law is considerably less specific than real property law: not only is the domain of the entitlement more ambiguous (which parts of the work are copyrighted?), but so is its scope (is that fair use?).  Peñalver and Katyal thus propose that intellectual property violators can sometimes be seen as outlaws, but sometimes as “altlaws,” whose “conduct at least arguably falls within the boundaries of legality and, at the same time, who do[] not reject out of hand the concept of intellectual property” (77).  Citing Robert Cover, Peñalver and Katyal propose that the altlaw is engaged in an attempt to “convert legal interpretation into legal meaning,” i.e., to get the law to recognize her interpretation as correct.  Altlaws can also be expressive or acquisitive.  An example of the former is the Swarthmore students who defied cease and desist letters to publicize embarrassing internal documents that cast serious doubt on the integrity of Diebold’s voting machines.  An example of the latter is the revolt in several developing countries against the high prices for AIDS anti-retroviral drugs.  Despite apocalyptic warnings from the pharmaceutical industry, those countries insist they respect patent rights generally, and that they are using existing TRIPS provisions to obtain lifesaving medicines in the face of a public health catastrophe.

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  September 12, 2010 at 9:37 pm   Posted in: Book Reviews, Intellectual Property, Property Law   Print This Post   No Comments

Intimate Partner Sharing and Commitment Today

posted by Alicia Kelly

My thanks to Angel Maldonado and the rest of the Concurring Opinions team for inviting me to blog this month. During my guest stint I will highlight the law’s involvement in the everyday lives of couples, exploring the intersections of law, sharing and economic behavior and gender relations.

Is longstanding connection and commitment falling out favor? Does solitary individualism rule our times, even in our personal relationships? It is easy to see the disconnects around us. Pick the celebrity divorce of your choice as an example. After forty years of marriage, even Al and Tipper called it quits. So do a lot of ordinary couples. Although declining a bit in recent decades, divorce rates remain high and cohabitants break up rates are even higher. Some even suggest that marriage itself should be on the chopping block—get the state out of intimate relationships, don’t privilege one kind of relationship over another, and leave adults to choose, define and resolve their own relationships.

But failures and worries of relationship failures notwithstanding, the vast majority of American’s today still desire and in fact pursue deep long lasting relations with an intimate partner, and for many, marriage is still seen as the ideal. Although marriage rates have decreased and vary, especially by race and socioeconomics, most people in the U.S. still get married. Lifetime marriage rates from the 2000 census show that overall 86% of men and 88% of women have married at least once by the time they are 49. Interestingly, many unmarried folks are also enthusiastic about marriage. For example, Pew Research Center data from a 2007 survey found that most unmarried adults say they want to marry. Both the never-married parents as well as the cohabiters in the survey were more skeptical than all others that a person can lead a complete and fulfilled life if he or she remains single. No doubt then, committed coupling is still very much in vogue. Something remains powerfully attractive about being part of an intimate partner relationship more generally and for many, about marriage in particular.

What so many people are after is a committed sharing relationship—a protected arena to build and enjoy a web of interdependent connections that bridge the gap between individuals. For many, marriage is the vehicle of choice for this kind of relationship, although surely, cohabiting relationships recurrently serve these goals as well. Because cohabitation is more variable, I will focus on marriage for now, as marriage clearly includes a strong sharing norm. Research demonstrates that extensive sharing is viewed as a centrally important goal for marriage. And behavior reflects this. Although not in every way, and certainly not always perfectly accomplished, spouses regularly engage in an interdependent sharing of their lives, socially and economically.

How should law regard sharing commitments and behavior among couples? Should sharing be supported and nurtured? For any couple who desires it? In what form? Should law funnel intimate partner sharing into a particular relationship structure such as marriage or perhaps civil unions? Or should law seek to reduce interdependence and maximize independence for partners? Alternatively, perhaps law should withdraw altogether and leave it to couples to govern themselves?

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  September 2, 2010 at 4:09 pm   Posted in: Family Law, Feminism and Gender, Property Law, Uncategorized   Print This Post   2 Comments

No For Sale Signs Allowed IV

posted by Sarah Waldeck

With summer at an end, I have a final post about the ban on for sale signs in a Chicago suburb.  (You can read the others here, here and here.)  In this last post, I offer some observations about how community norms and identity play a role in perpetuating the ban.

In prior posts, I’ve written that many in the Village are unaware of how problematic the ordinance is under the First Amendment.  But some residents undoubtedly know, either because of their own familiarity with constitutional law or because the issue is occasionally raised in the opinion section of the local paper or on local blogs.  Political will to change the ordinance, however, seems close to non-existent. 

This lack of will may partly reflect the political reality within the Village.  The same political organization has been in control for more than thirty years and its candidates almost invariably support the Village’s integration policies, which include the ban.  Some residents probably also appreciate the aesthetic effects of the ordinance, because the lack of signage makes the Village prettier than it otherwise would be.  Other residents may feel that the issue doesn’t warrant action, either because they are already inclined to use a realtor to sell their house or because the inability to use a sign does not deter them from entering the for-sale-by-owner market.  I also suspect, however, that some residents who are aware of the constitutional issue would describe themselves as trading freedom of speech for integration. Read the rest of this post »

  August 27, 2010 at 9:25 am   Posted in: First Amendment, Property Law   Print This Post   No Comments

Conference on Property Rights

posted by Gerard Magliocca

My colleague at IU–Indy, Dan Cole, is organizing a terrific conference on the “Evolution of Property Rights Related to Land and Natural Resources” with Elinor Ostrom, who won the Nobel Prize in Economics last year.  A description of the event, which will be held in Cambridge, MA on September 20-21, is here.

  August 23, 2010 at 8:13 am   Posted in: Property Law   Print This Post   One Comment

Resource Allocation in “The Godfather”

posted by Gerard Magliocca

Yesterday I was watching “The Godfather” for  . . . oh . . . about the millionth time and something struck me.  A problem in all three movies is that the Corleone Family wants to treat its resources as property while the other dons want to enforce a sharing norm, which they describe as “wet our beaks.”

In the first film, Don Vito refuses to provide legal protection for the drug trade.  This leads to a war that is settled at a conference where Don Barzini offers the following critique of having a property rule for corrupt officials:

“Times have changed. It’s not like the Old Days — when we can do anything we want. A refusal is not the act of a friend. If Don Corleone had all the judges, and the politicians in New York, then he must share them, or let us others use them. He must let us draw the water from the well. Certainly he can — present a bill for such services; after all — we are not Communists.”

What Don Barzini is describing is a compulsory license backed by some kind of reasonableness standard. In other words, the Mafia does not set a price schedule for using another Family’s assets.  It just asserts that no right of exclusion exists and, presumably, if the “bill for such services” is too high, then that would violate the norm and could lead to violence.  I also find it interesting that Barzini embraces this compulsory license as an example of capitalism, since there are folks who think of such a mechanism as excessive regulation (at least when imposed by the state).

UPDATE:  Yes, “Take The Cannoli” would have been a better title for the post.

  August 10, 2010 at 5:28 pm   Posted in: Property Law   Print This Post   One Comment

Flynn v. Holder, Markets for Bone Marrow, and Abigal Alliance

posted by Glenn Cohen

Over the summer at the annual health law professors’ conference organized by ASLME, I saw a wonderful presentation on Flynn v. Holder from John Robertson, which I think John will be publishing soon. The case is a challenge to the National Organ Transplant Act (NOTA) of 1984’s ban on selling bone marrow filed in the U.S. District Court, Central District of California, and you can view the complaint here.

My main interest in the case is how it will compare to Abigail Alliance v. Eschenbach, a case I helped litigate at the D.C. Circuit en banc stage when I was at the DOJ. Abigail Alliance involved a challenge by terminally ill patients to have access to drugs that had cleared Phase 1 Clinical Testing but had not gone further in the testing process.  There, the plaintiffs succeeded in getting a panel of the D.C. Circuit to to hold that a fundamental right of theirs was being violated by the FDA policy, with a remand for consideration of whether the government could make its showing on strict scrutiny. On rehearing en banc, however, the full D.C. Circuit reversed gears finding no fundamental right (there was no serious argument in the case that the government would not prevail on rational basis review).

In many ways, Flynn is a beautifully set up test case. The primary plaintiff is very sympathetic — a “single mother of five with three daughters who suffer from a deadly bone marrow disease.” Because bone marrow is renewable, and many other renewable “organs” (think sperm and egg) explicitly fall outside of NOTA’s prohibition, there is an air of arbitrariness here. The plaintiffs do not want to buy bone marrow in crass commercial terms, but instead to “create a pilot program that would encourage more bone marrow donations by offering nominal compensation—such as a scholarship or housing allowance.” While I do not think this fact actually allows us to avoid the the corruption form of the anti-commodificationist argument (I may blog more on that topic soon), on a superficial level it does seem to reduce the strength of at least one talking point. The fact that we already tolerate altruistic bone marrow donation suggests that the risk-prevention rationale that was central in Abigail Alliance faces some problems here. Indeed as I , Lori Andrews, and others have argued in the context of reproductive services, in some ways the “coercion” or “exploitation” concerns that are sometimes raised in anti-commodificationist arguments may be more worrisome in the altruistic and familial setting than in arm’s length market arrangements. The case also seems to compare favorably on crowding-out concerns. Although the Abigail Alliance court did not reach the issue (because whether a fundamental right was present dominated the analysis) the government offered a somewhat attenuated crowding out argument: that the availability of experimental drugs outside of clinical trials would reduce the enrollment in clinical trials, and therefore slow either approval of these drugs (and widespread availability) or a demonstration that they were unsafe or ineffective. Though attenuated, this was a concern that many took quite seriously in the run-up and aftermath of the case.  Here, by contrast, I think the crowding out argument is more straightforward and is similar to one that people associate with Richard Titmuss’ work as to blood sale, that adding commercial elements will drive altruistic donation out of the market. To be sure that is an empirical claim, but one that seems less plausible to me than the parallel claim in Abigail Alliance, and I think here again the charitable/foundation approach may blunt some concerns about the transformation of the social meaning of bone marrow donation.

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  August 9, 2010 at 10:00 am   Posted in: Bioethics, Civil Rights, Consumer Protection Law, Health Law, Law Practice, Property Law   Print This Post   3 Comments

No For Sale Signs Allowed III

posted by Sarah Waldeck

This third post about why a municipality’s ban on for sale signs persists more than 30 years after Linmark focuses on the role of real estate agents and the local realtor’s association. (You can read the prior posts here and here.)  These are the players best-positioned to legally challenge an ordinance that affects the sale of property.  Moreover, the use of signs by one agency would likely create pressure for others to use them, which might make the practice in the Village tip in favor of signs.

When I first began examining the Village’s ordinance, I hypothesized that real estate agents have a financial incentive to comply with the ordinance because the perceived inability to use a for sale sign makes selling by owner extraordinarily difficult.  I’ll begin with the economics of the ban, even though my research hasn’t been terribly revealing.  Then I’ll turn to the norms of the local real estate industry, to which my initial hypothesis did not attribute enough significance. Read the rest of this post »

  July 16, 2010 at 1:23 pm   Posted in: First Amendment, Property Law   Print This Post   No Comments

No For Sale Signs Allowed II

posted by Sarah Waldeck

In a recent post I marveled that a particular Chicago suburb has no for sale signs, even though we are in the midst of the worst housing market in recent history.  The suburb has an ordinance banning for sale signs (you can read its text in the earlier post) and I wondered why the ban continued to have force even though the Supreme Court ruled that such ordinances were unconstitutional in the 1977 case Linmark Associates v. Willingboro.  Here’s what I speculated: 

Most residents assume that ordinances in the local statutory code are good law; that is, they perceive themselves as being legally prohibited from using a For Sale sign.  Those residents who are familiar with First Amendment law are nonetheless deterred from using a sign because (1) there is a residual risk that the Village will try to enforce the ordinance; and (2) there is reason to worry about sending a market signal of “desperation” if you are the sole seller using a sign.  As for real estate agents, most know that the ordinance is unconstitutional but they have incentives to comply with it nonetheless. The perceived inability to put a For Sale sign in one’s yard makes it extraordinarily difficult to sell by owner . . . . Furthermore, as repeat players in the Village, real estate agents may be reluctant to do anything that the Village will view with displeasure. 

I’ve spent the last month researching whether this hypothesis is correct.  In this post, I want to focus on the effect of the ordinance remaining on the books and on the actions of the Village, both with respect to its own citizens and with real agents.  The bottom line is that if a municipality carries on as though it is acting constitutionally, a lot of people will believe that it is. 

Read the rest of this post »

  June 24, 2010 at 12:32 pm   Posted in: First Amendment, Property Law   Print This Post   5 Comments

No For Sale Signs Allowed

posted by Sarah Waldeck

In the midst of the worst housing market in modern memory and more than thirty years after the Supreme Court’s ruling in Linmark, there is suburb of Chicago in which For Sale signs are nowhere to be found.  This is the first of several posts exploring why.  The story, which I am still unpacking, reveals much about what happens when government fails to formally repeal unconstitutional laws and about how community norms can trump Supreme Court precedent. 

The single most important (although not the most interesting) element in the story is the following ordinance, which bans most for sale and for rent signs and was adopted in an effort to prevent white flight:

REAL ESTATE FOR RENT AND FOR SALE SIGNS PROHIBITED:

The President and Board of Trustees find as follows:

A. That a prohibition of “For Sale” and “Sold” signs has been recommended by the Commission on Community Relations on the basis that said signs tend to encourage unfair housing practices and tend to defeat the purposes of the Village’s Human Rights Program.

B. That a prohibition of “For Rent” signs has been recommended by the Commission on Community Relations for the following reasons:

1. “For Rent” signs presently are used more frequently in areas that have a greater percentage of occupancy of minority residents. “For Rent” signs are seldom used in connection with buildings that have no minority occupants. The use of these signs therefore tends to “signal” that minorities may be more welcome in some areas of the Village than others and this tends to segregate areas contrary to the policy of the Village to maintain an integrated community.

2. A proliferation of “For Rent” signs encourages panic peddling and block busting.

3. “For Rent” signs may give an appearance of community instability when concentrated in a limited geographic area.

4. A proliferation of “For Rent” signs may infer that an area is less desirable than other areas.

5. A system of apartment management that refers tenants to the source of rentals will encourage greater professionalism in apartment management.

It shall, therefore, be unlawful for any person to construct, place, maintain or install a “For Sale”, “Sold” or “For Rent” sign on any property developed for residential use in the Village. The term “For Sale” sign shall include signs carrying the following or similar words: “Open House” or “Open for Inspection” and shall include any other devices placed on the property to indicate that the property is for sale.

In the case of new construction of residential property or conversion of an existing structure to condominium use where a condominium declaration is recorded, a “For Sale” sign shall be permitted on the property until the property or condominium units are sold, but not to exceed one and a half (1 1/2) years after issuance of a certificate of occupancy for a new building or from the date the “For Sale” sign is posted in the case of a conversion.

In part of the ordinance not reproduced here, the Village allows Open House signs to be displayed for a period of time on Sundays.

In Linmark Associates, Inc. v. Willingboro, 431 U.S. 85 (1977), the Court struck down a similar ordinance.  Like the ordinance reproduced above, Willingboro’s law was aimed at maintaining stable, integrated neighborhoods by prohibiting homeowners from placing For Sale or Sold signs on the lawns.  While the Court acknowledged the importance of Willingboro’s goal, it nonetheless held that the ordinance unconstitutionally interfered with freedom of speech.  Nothing distinguishes the Village’s ordinance from the one in Linmark and all academic and legal commentary I’ve found on the Village’s ordinance agree that it is plainly unconstitutional.

This is what I had always assumed was the explanation why, despite Linmark, the Village has no For Sale signs:  Most residents assume that ordinances in the local statutory code are good law; that is, they perceive themselves as being legally prohibited from using a For Sale sign.  Those residents who are familiar with First Amendment law are nonetheless deterred from using a sign because (1) there is a residual risk that the Village will try to enforce the ordinance; and (2) there is reason to worry about sending a market signal of “desperation” if you are the sole seller using a sign.  As for real estate agents, most know that the ordinance is unconstitutional but they have incentives to comply with it nonetheless. The perceived inability to put a For Sale sign in one’s yard makes it extraordinarily difficult to sell by owner; without the ability to put up a sign, sellers need access to the multiple listing service to make large number of buyers aware that a house is available.  Furthermore, as repeat players in the Village, real estate agents may be reluctant to do anything that the Village will view with displeasure.  All of these factors worked together, I thought, to chill For Sale commercial speech within the Village.

As I have begun to ask more questions, I am learning that while my initial assumptions were not exactly wrong, they are far less nuanced than what is necessary to fully describe why a de facto ban on for sale signs persists.  More on this in later posts.

  May 13, 2010 at 1:44 pm   Posted in: First Amendment, Property Law   Print This Post   One Comment

Land Transactions Meet the Kentucky Derby

posted by Sarah Waldeck

If you don’t know him already, meet Conveyance, with odds of 18/1 according to online sports book SBGGLOBAL.

I can’t be the only Property professor who is finding the urge to place a wager almost irresistible.

p.s. The picture is from horsephotos.com.

  April 29, 2010 at 11:21 am   Posted in: Property Law   Print This Post   3 Comments

Property Outlaws

posted by Gerard Magliocca

I want to flag a terrific new book by Eduardo Penalver and Sonia Kaytal called Property Outlaws: How Squatters, Pirates, and Protestors Improve the Law of Ownership.  In the midst of record foreclosures, their work is a must-read.  Here is the publisher’s description.

Property Outlaws puts forth the intriguingly counterintuitive proposition that, in the case of both tangible and intellectual property law, disobedience can often lead to an improvement in legal regulation. The authors argue that in property law there is a tension between the competing demands of stability and dynamism, but its tendency is to become static and fall out of step with the needs of society.

The authors employ wide-ranging examples of the behaviors of “property outlaws”—the trespasser, squatter, pirate, or file-sharer—to show how specific behaviors have induced legal innovation. They also delineate the similarities between the actions of property outlaws in the spheres of tangible and intellectual property. An important conclusion of the book is that a dynamic between the activities of “property outlaws” and legal innovation should be cultivated in order to maintain this avenue of legal reform.

  January 13, 2010 at 1:51 pm   Posted in: Property Law   Print This Post   No Comments

The Yale Law Journal, Vol. 119, Issue 3 (December 2009)

posted by Yale Law Journal

  January 12, 2010 at 9:48 pm   Posted in: Constitutional Law, Immigration, International & Comparative Law, Law Rev (Yale), Law Rev Contents, Property Law, Tax   Print This Post   No Comments

Do Initial Allocations of Property Rights Matter?

posted by Mark Edwards

If the last two years of American economic life have demonstrated anything, it is that property rights are not static.  Sometimes things that were once private property become public property (see, e.g., Motors, General).  Sometimes things that were once public property become private property, then become public property again, before they presumably become private property again (see, e.g., Mae, Fannie).  And sometimes things that were once considered inherently communal and thus inamenable to private property rights at all, become divided and privatized (see,e.g., the air).

Tradeable carbon emissions allowances are an example of the latter.  There’s a lot to like in the cap-and-trade programs proposed under the Waxman-Markey and Kerry-Boxer bills.  I hope some robust version of them passes and becomes law.  But one sticky issue that needs to be resolved is how initial allowances to fill airspace with carbon gases should be allocated.  Options include auctioning off all of the allowances, giving the allowances to existing carbon producers, and, most politically palatable, something  in between – some mixed proportion of free allocations and auctions.

Economist Robert Stavins, in the Coasean tradtion, has insightfully argued that  (with some caveats, including that transaction costs in this cap-and-trade program are similar to the transaction costs in others) the initial allocation of allowances doesn’t matter in most significant ways:  it will have no effect on the distribution of allowances after trading, and will have no effect on the total magnitude of emissions and their attendant social costs.

But there is another factor economists have not addressed, that could effect the total magnitude of emissions and their attendant social costs, and that may well depend in part on the method of initial allocations: compliance.

Law Professor Christine Parker and political scientist Peter May, among others, have demonstrated that compliance with business regulation is highest when the regulated businesses believe that the regulatory regime is fair.  Lower levels of compliance reduce the effectiveness of the regulation in producing the desired outcome, and increase the costs of achieving it.  In the world of carbon emissions, this would mean a higher total magnitude of emissions and a reduced benefit to the public through the higher costs required to achieve them.

My research into Icelandic fisheries suggests that in moving natural resources from communal to private property through cap and trade programs, initial allocations of rights do have an important effect on the perceived fairness of the regulatory regime, and thus on the willingness of the regulated to comply with it.

In Iceland, the government decided to protect fish stocks by freely allocating tradeable fishing rights and implementing catch quotas.  Permits were issued to fishing vessel owners based on their average catches during a three-year test period.  New entrants to the industry must now buy their way in by purchasing or leasing rights from others through the Icelandic Quota Exchange.  Although the system has been successful in reducing the overall catch, the perception that it is unfair has led to open defiance.  In an extraordinary case before the Icelandic Supreme Court, one fishing company did openly what many apparently do quietly — defied the system on the grounds that it was unfair.  

Transactions costs, of course, are inevitable, but it is not transaction costs that have produced resistance to the Icelandic system.  Rather, resistance is itself is a type of transaction cost, broadly construed, produced by the perceived unfairness of the initial allocation of rights.  In other words, the initial allocation of rights does indeed effect the overall effectiveness of a private property system. 

There has been considerable uproar over the potential free allocation rights to current carbon emissions producers.  Whether or not, as a matter of classical economic theory, the initial allocation of rights should effect the overall effectiveness of the program, the perception of fairness or unfairness will probably effect compliance with the system, and that in turn will effect its overall effectiveness.  It is important, therefore, for policy makers to bear in mind that the perceived fairness of initial allocations of property rights does indeed matter.

  December 5, 2009 at 9:53 am  Tags: Environmental Law, property  Posted in: Economic Analysis of Law, Empirical Analysis of Law, Environmental Law, Property Law, Uncategorized   Print This Post   One Comment

WWJP (Where Would Jesus Park)?

posted by Adam Benforado

With all of the talk over the last few months about “death panels,” nationalizing banks, and the dangers of trying al Qaeda terrorists on U.S. soil, it is easy to believe that attacks on our freedoms are easy to spot, but often they are not.

They can hide on quiet Sunday streets. They can lurk in the shadows of a perfect fall day.

A couple of Sundays ago, I was walking in downtown Philadelphia at around 3PM when I came upon a traffic attendant writing a ticket for a car parked on the north side of Spruce Street just south of Rittenhouse Square. As I often saw vehicles parked up and down the street on Sundays despite the clear “No Stopping Any Time” signs, I decided to ask what the rule was.

I was told by the attendant that the City tickets cars “after church let’s out.” WhenI pressed the attendant on whether that was the official policy, she told me it was.

Doing a little more research (plucky young academic that I am), I found some interesting details at the website of the Tenth Presbyterian Church. According to the site, “The City of Philadelphia generously permits parking by the congregation in designated areas near the church for Sunday services and for certain types of congregational special events.” To enjoy these “[s]pecial relaxed street parking privileges,” a member of the congregation must pick up a church-issued parking placard from one of the church lobbies and display it in the front windshield. The church goes on to offer to “help resolve” any tickets that are received despite displaying the placard.

Yes, perhaps, I’m just frustrated to not be among the chosen—I do covet a good parking spot—but this doesn’t seem, well, “kosher.”

If the city of Philadelphia does not believe that there are enough parking places in Center City on Sundays, there is any easy answer: remove the parking prohibition on Sundays for all Philadelphians—Christians, Muslims, Jews, agnostics, and atheists alike. There is no reason that a tax-paying secular humanist who wants to take her children to the park ought to get a ticket and a tax-paying Christian who wants to attend services ought not.

As this has piqued my interest, I have vague (and unlikely-to-be-realized) plans to fill out a request for information from the City, but before I do that I think it is best to make outrageous claims and reach unfounded conclusions based solely on the above details. What do you think? Is this totally harmless or . . . an affront to the history of Pennsylvania, a violation of the United States Constitution, and a sure sign that the Rapture is already upon us?

  December 1, 2009 at 6:30 am   Posted in: Property Law, Religion, Uncategorized   Print This Post   6 Comments

Of Domes and Homes

posted by Mark Edwards

I’m very happy to be back adding my two cents to Concurring Opinions.  Thanks very much, Dan, for the invite, and Sarah, for the introduction. 

I was watching the NFL Vikings carve up the Bears yesterday, trying to decide what to post about first, and my eyes were drawn not to quarterback Brett Favre, running back Adrian Petersen . . . or even the freak who dresses like a viking and leads cheers inside the Metrodome, the Vikings’ domed stadium.  I kept looking at the shots of the stadium itself, and thinking about two recent court orders. 

One was issued last Monday, lifting an injunction on the previous week’s sale by auction of the 94,000 square foot, 80,300 seat Pontiac Silverdome, along with an adjacent fieldhouse and 127 acres of land.  There were four bids.  The winning bid? $583,000.  Total.  After auction fees, the current owner — the City of Pontiac, Michigan — will net about $430,000.  When professional sports tenants such as the Detroit Lions left, a property that cost $56 million to build was rendered practically worthless.  In fact, Pontiac was prepared to accept any bid for the property, since maintaining it was costing the City $1.5 million per year. 

The other order was issued in September by Judge Berrigan of the U.S. District Court for the District of Eastern Louisiana, ordering St. Bernard Parish not to interfere with the construction of a mixed market-rate and low income housing project.  The Parish, faced with an influx of low income tenants, had refused to issue building permits for the project, imposed a moratorium on building apartment complexes, and passed an ordinance making it illegal to rent to anyone other than a blood relative without special permission.  The New Orleans area faces an extreme shortage of low income housing, despite the population diaspora from the area generally.  Most of the housing destroyed by Katrina was low income. 

Read the rest of this post »

  November 30, 2009 at 8:07 am  Tags: property  Posted in: Current Events, Property Law, Teaching, Uncategorized   Print This Post   4 Comments

Celebrity Legal Claim of the Week

posted by Jon Siegel

Those celebrities just can’t stay away from strange legal theories.  After Roman Polanski claimed last week that his sex crime should be excused because he’s a great artist, Jon Gosselin, former star of “Jon & Kate Plus 8,” is now claiming the right to exclude television crews from the home he owns jointly with his wife.

Jon Gosselin and his wife had a “reality” TV show about their life with their eight children.  But now they are estranged, and Jon recently got fired from the show, which is to be renamed “Kate plus 8.”  Not taking this lying down, Jon has demanded that TLC, the network filming the show, stay out of his house.  If they enter to film, he claims he’ll have them arrested as trespassers.

Sheesh, if I were TLC’s general counsel, I would tell Jon, “ooh, we’re scared.”  How about some basic property law?  Every law student knows that joint owners of property (known in property law as “joint tenants” or “tenants in common”) each own an “undivided interest” in the whole property and each has a right to occupy the property without the consent of the other.  Heck, each of them has a right to lease the property without the consent of the other. 

In 1861, the California Supreme Court considered the case of a lessee who had leased property from a joint owner and was then asked to leave by the other joint owner.  The Court said, “We have no doubt that one tenant in common may occupy the common premises, and as little that he may permit another person to occupy a part of them; and it is impossible for us to see how that tenant in common could sue such person, so lawfully entering or occupying, as a trespasser, or how his cotenant could maintain such suit.”  Ord v. Chester, 18 Cal. 77 (1861).

More recently, a California court considered a case quite like the Gosselins’:  an estranged husband and wife jointly owned a home, which the husband leased to a third party.  The wife showed up and tried to oust the lessee.  The court said:  “A cotenant has no right to oust a person who holds possession with the consent of another tenant in common.  . . . When a joint tenant leases to a third party he confers upon the latter the same right of possession that he himself has.”  Verdier v. Verdier, 152 Cal.App.2d 348, 313 P.2d 123 (1957).

If one of the estranged spouses can lease the property without the consent, and indeed over the objection, of the other, then either can certainly invite guests onto the property without the consent and over the objection of the other.

So if I were TLC, I would tell Jon to get lost.  Kate’s permission is all they need.

  October 1, 2009 at 12:07 pm   Posted in: Property Law   Print This Post   One Comment

Residential Integration

posted by Gerard Magliocca

I want to draw your attention to this new book on The Integration Debate:  Competing Futures for American Cities, which explores racial segregation in housing and discusses various options for addressing the issue. One of the chapters was written by my colleague Florence Roisman, who is a towering figure in Affordable Housing Law (though in person, she’s rather short).  Part of the proceeds go to the National Fair Housing Alliance and the John Marshall Law School Fair Housing Legal Support Center in Chicago.

  September 22, 2009 at 6:13 am   Posted in: Property Law   Print This Post   No Comments

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