Property Law

Lee Anne Fennell

Urbanization has dramatically altered the way in which land generates and forfeits value. The dominant economic significance of patterns of land use and the opportunity costs of foregone complementarities have made the capacity to reconfigure urban property essential. Yet the architecture of our workhorse tenure form—the fee simple—is ill-suited to meet these challenges. The fee simple grants a perpetual monopoly on a piece of physical space—an ideal strategy when temporal spillovers loom large, interdependence among parcels is low, most value is produced within the four corners of the property, and cross-boundary externalities come in forms that governance strategies can readily reach. But times have changed. Categories of externalities that were once properly ignored by the fee simple have become too important to continue neglecting. This paper argues for alternative tenure forms that would move away from the endless duration and physical rootedness of the fee simple.

Stewart E. Sterk and Melanie B. Leslie

Americans currently hold more than $9 trillion in retirement savings accounts. Those accounts, together with the family home, are the principal source of wealth for most working and retired Americans. But when a retirement accountholder dies prior to exhausting retirement savings, what governs the distribution of the account? Most often, not the accountholder’s will or trust, but a one-page fill-in- the-blanks beneficiary designation form that the accountholder filled out, typically without advice of counsel, when she or he opened the account.


When accountholders fill out beneficiary designation forms, they are focused on starting a new job or beginning to save for retirement, not on estate planning. Yet the accountholder’s beneficiary designations often trump express provisions in a will, trust instrument, prenuptial agreement, or divorce decree—documents prepared with inheritance in mind. Moreover, the accountholder may neglect to change the beneficiary designation to take account of changed life circumstances, causing his or her retirement assets to pass to a beneficiary he or she never would have chosen later in life. To make matters worse, although wills doctrine has developed a set of constructional rules to deal with changes of circumstance, those rules do not generally apply to beneficiary designation forms. The current legal framework often frustrates the intent of the accountholder.


This problem, which has already spawned a significant volume of litigation, will become exponentially worse over the coming decade, as more holders of substantial accounts reach the end of their life expectancy. Reform is critical. The financial intermediaries who currently draft beneficiary designation forms have little incentive to improve them because accountholders and employers are unlikely to choose providers based on the quality of their forms. Federal and state legislation is necessary to ensure that these assets are distributed consistently with accountholders’ intentions.

Eleanor Marie Lawrence Brown

The impediments to property acquisition and market success among African Americans are a significant area of inquiry in legal scholarship. The prevailing narrative on the historical relationship between Blacks and property is overwhelmingly focused on loss. However, in the political science, economics, and sociology literatures there is a countervailing narrative of successful property acquisition and retention among what might be termed a “market dominant” subset of migrant Blacks. The most successful subset of Black property owners in the United States today are descendants of Black migrants who were enslaved outside the United States. These free Black migrants, overwhelmingly British subjects originating from the West Indies, are largely invisible in the legal scholarship. Questions have arisen in other disciplines about what differentiated this subset of Black people. Why was their experience of property ownership so different?

Debates in the sociology, political economy, and political science literature have often focused on what Francis Fukuyama has controversially termed “cultural questions,” namely, the view that early West Indian migrants—like Korean or Japanese migrants—possessed a particular set of cultural traits that were distinctly well suited to asset acquisition. This Article focuses on a far more prosaic rationale, contending that the success of West Indian migrants may be rooted in the early grant of what I term “de facto property and contract rights” to West Indian slaves, which allowed their freedmen descendants to become the largest independent Black peasantry in the Americas. Between 1880 and 1924, U.S. immigration officials may have inadvertently selected for propertied migrant “types” when admitting immigrants. Through their own historical exposure to property and contract rights frameworks in the West Indies, as well as internal communal networks which supported informal banking schemes, these Blacks were particularly well placed to take advantage of opportunities for home and business ownership upon arrival in the United States.

The broader point is that there is a glaring omission amidst the “cultural” controversy: What about law? I use the term “law” in this context as it is used by many proponents of new institutional economics, as a proxy for an institutional frame- work that supports property acquisition, regardless of whether this framework is formal (state-supported) or customary. Moreover, the law and economics scholar- ship has focused extensively on institutional frameworks that allow certain religious and ethnic groups to dominate particular sectors, such as Orthodox Jews in the diamond industry or Koreans in the grocery sector. The insights of this literature allow us to interrogate whether Black West Indians had early access to institutions that facilitated contracting and property ownership and if so, whether this institutional history might contribute to their long-term asset acquisition patterns. The question necessarily arises: Why would we think of Black migrants any differently from the way we think of other ethnic and religious minorities who have been successful asset acquirers?

Patricia L. Bellia

In this Article, Professor Patricia Bellia explores how the law should treat legal claims by owners of Internet-connected computer systems to enjoin unwanted uses of their systems. Over the last few years, this question has become increasingly urgent and controversial, as system owners have sought protection from unsolicited commercial e-mail and from"robots" that extract data from Web servers for competitive purposes. In the late 1990s and early 2000s, courts utilizing a wide range of legal doctrines upheld claims by network resource owners to prevent unwanted access to their computer networks. The vast weight of legal scholarship has voiced strong opposition to these "cyberproperty" claims, arguing that such property-rule protection would threaten productive uses of the Internet, inhibit innovation, or even create an anticommons.

This Article challenges the typical criticisms of property-rule protection, demonstrating that they are based on simplifications or false assumptions about the behavior of system owners and the nature of the Internet. Most importantly, scholars have overlooked the use of technical measures to block access, in conjunction with or in place of legal measures. The Article then lays out a wide range of potential legal rules for network resources, from absolute property-rule protection to a "technology displacing" approach that actually limits the technical barriers a system owner can impose, with a number of "loperty" rules--involving property-rule protection triggered by a system owner taking a particular measure--in between. After examining the existing case law, the Article agrees that courts' recent trend toward a closed-access property-rule regime is inappropriate. Professor Bellia, however, demonstrates that attempts to preserve open access by rejecting any sort of property-rule protection are equally misguided. She points out that too-weak legal protection will prompt greater reliance on technical measures that mimic a property-rule approach, similarly limiting access. Yet, because technology lacks the flexibility and common sense exceptions inherent to legal application, the results for the community-at-large could be worse.

The Article concludes that entitling a system owner to property-rule protection so long as she provides the user with actual notice of permissible uses of the system or adopts a system configuration making it plain to the user that access is restricted would better balance the interests of consumers and system owners than rejecting property-rule protection outright. Although such an approach might be inappropriate in a limited class of cases--as, for example, when a system owner's predominant motive for limiting access is anticompetitive in nature--Professor Bellia demonstrates that courts and legislatures can apply technology-displacing measures in such cases to achieve an appropriate legal balance.

Katrina Miriam Wyman

One of the most enduring questions about private property is why it develops. Strongly influenced by a short article by economist Harold Demsetz, property scholars recently have analyzed the evolution of private property in economic and social terms, and described it as a response to factors such as changes in relative prices, measurement costs, and the size and heterogeneity of user groups. In this Article, Professor Katrina Wyman argues that Demsetzian-inspired accounts of the evolution of private property tend to neglect the role of the state in property rights formation. Building on the extensive scholarship about the evolution of property rights, she emphasizes the need to take seriously the implications of the political process by which private property often is formed.

To underscore her theoretical argument about the evolution of private property, Wyman also offers a case study of contemporary property rights formation. For over six decades, an international movement has been underway to enclose the oceans, including marine fisheries. Drawing on original research, Wyman examines why individual transferable quotas and similar instruments have been slow to develop in U.S. coastal fisheries in federal waters since national jurisdiction over fisheries was extended to 200 miles from the shore in 1976.

In closing, Wyman underscores the richness of Demsetz's pioneering account of private property and the scholarship that it has spawned. But she also suggests that there remains a large gap between how private property actually evolves and many of the prevailing theoretical understandings of the development of property rights. She argues in turn that filling this gap requires the development of a more robust positive theory of the evolution of private property that takes into account the political process through which private property often is formed, and more systematic empirical research into the development of property rights.

James Graham Lake

The Metropolitan Transit Authority regulates busking—playing music or performing for tips in a public place—differently depending on the subway station. Some stations are reserved for members of a program called Music Under New York (MUNY), while at the others, anyone willing to pay the standard fare to enter the station is allowed to busk. As it happens, the distribution of MUNY and non- MUNY stations within the subway system follows an economic pattern. MUNY covers the stations where we should expect busking to impose the highest externality costs. This economic pattern of coverage provides the substantive basis for this Note: Because MUNY’s distribution is consistent with Harold Demsetz’s foundational theory about the economic development of private property rights, MUNY provides a window into a question left open by Demsetz and contested in subsequent literature—the question of how private property develops. This Note analyzes MUNY to make two contributions to the growing body of literature describing how property rights develop. First, observing the role that changing First Amendment doctrine played in MUNY’s formation, this Note argues that exogenous legal norms act as constraints on the mechanisms through which new property rights develop. Second, it argues that Demsetz’s theory should take account of the inertia built into property systems and the external shocks that help overcome this stasis.

Kevin P. Arlyck

The most intractable questions in takings law involve determinations as to when compensation must be paid for government regulation of private property. Scholars and judges have looked to the history of takings law in the search for guiding principles that can inform, if not resolve, such questions. The 1851 opinion of Chief Justice Lemuel Shaw of the Massachusetts Supreme Judicial Court in Commonwealth v. Alger has figured prominently in these investigations.

This Note argues that such efforts have overlooked other relevant cases Shaw decided, and therefore do not fully appreciate the extent to which Shaw’s jurisprudence was informed by a flexible and instrumental view of how certain principles in takings law should be applied to decide cases. Accordingly, this new perspective on Shaw raises doubts about the extent to which a resort to history can provide effective guidance in resolving the current takings muddle.

 

Christopher Serkin

This Article identifies property law’s special protection for existing uses, explores possible justifications for this protection, and argues that none can support the strong protection that existing uses currently enjoy. Various land use doctrines— from zoning to the vested rights doctrine to amortization rules for prior nonconforming uses—assume that the government cannot eliminate existing uses without paying compensation. The Article asks whether this result is compelled either by constitutional rules or by normative considerations. Neither the Takings Clause nor the Due Process Clause requires this level of protection for existing uses. Normatively, many obvious-seeming justifications dissolve on closer inspection. Objections grounded in underlying principles of fairness and reliance are not conceptually different for regulations prohibiting future uses than for regulations of existing uses. Nor is the extent of economic loss necessarily greater for one than for the other, even though regulations of existing uses create out-of-pocket costs whereas regulations of future uses only implicate forgone profits. In fact, none of the possible explanations for the special treatment of existing uses actually justifies their protection. This Article ultimately concludes that existing uses should not be entitled to any special judicial protection but instead should be subject to the same takings and due process analyses that apply to all regulation and governmental action.

Amanda W. Goodin

This Note examines state legislative responses to Kelo v. City of New London, the recent U.S. Supreme Court case that held that the exercise of eminent domain for private development does not violate the public use requirement of the Takings Clause. In response to Kelo, many states are legislatively prohibiting the use of eminent domain for development generally, but continuing to allow its use for development in blighted areas. This Note discusses the problems with such legislation and concludes that states should avoid crafting rules that allow the use of eminent domain for development solely in blighted areas. Such rules would improperly burden poor and minority communities and imbalance the political process by which rules on eminent domain for development are established.