Timothy M. Mulvaney, Legislative Exactions and Progressive Property
, Harv. Envtl. L. Rev.
(forthcoming), available at SSRN
In Legislative Exactions and Progressive Property, Professor Timothy Mulvaney provides a clear and thoughtful discussion of whether legislative exactions should be subjected to the same heightened level of scrutiny that applies to administrative exactions under current Supreme Court doctrine. For those who view exactions as a device that internalizes externalities and forces owners wishing to intensify their use of land to bear the full cost of their development, the conventional wisdom is that Nollan v. California Coastal Commission and Dolan v. Tigard should be read as narrowly as possible.
Both of those cases addressed only administrative exactions and did not need to decide the question of whether similar rules should apply in cases in which the exaction is imposed through more generally applicable legislation. Those who believe that Nollan and Dolan hold government actors to an unreasonably high standard may naturally resist expanding their reasoning to legislative exactions. While acknowledging and largely agreeing with this first-order reasoning, Mulvaney notes second-order effects of confining those two cases to administrative exactions. These second-order effects, he argues, might be more harmful in the long run than those who object to expanding the reach of Nollan and Dolan may have initially recognized.
Mulvaney notes and discusses three straightforward and persuasive reasons why progressive property scholars may object to interpreting Nollan and Dolan as applying to legislative exactions: reliance on “the checks and balances of democratic government, the likelihood of reciprocal advantages stemming from legislation, and an aversion to judicial usurpation of the legislative process.” (P. 8.) But he discourages too much reliance on the initial appeal of these arguments by noting that any approach that applies a higher level of scrutiny to administrative exactions risks marginalizing administrative action more generally, which may lead to closer scrutiny of administrative acts in other contexts.
More broadly, any interpretation that leads regulators to rely more heavily on inflexible legislative processes reduces the ability of regulators to consider the individual facts presented by particular humans who may merit the greater flexibility that only administrative exactions can afford. By raising these second-order concerns, Mulvaney is warning progressive property scholars to be careful what they wish for.
Mulvaney’s warning springs from the progressive property movement, which encourages the consideration of individualized factors when assessing what ownership means and when deciding how a land use law should be applied to a particular owner. Relying on this influential line of scholarship, he suggests that only more flexible administrative exactions can be tailored to these circumstances and—citing the work of several progressive property scholars—that the use of legislative exactions exclusively might disfavor marginalized groups. His creative and thorough review of the literature seeks to caution progressive property scholars that attempts to limit the perceived damage of Nollan and Dolan in this way might backfire, or at least to consider the question with care before assuming otherwise.
But Nollan, Dolan, and the more recent Koontz v. St. Johns River Water Management District give progressive property scholars plenty to worry about already. To the extent the Supreme Court seems attentive to the individualized circumstances of particular property owners, it seems most concerned with the rights of those who wish to intensify existing uses of property, a group that may overlap little with the types of owners of concern to progressive property scholars.
Thus, in Dolan, the Court demanded a high level of correlation between the externalities the owner would create—increased road traffic from an enlarged store and increased water runoff from an expanded and paved parking lot—and the measures the government sought to impose to ameliorate those problems. In Koontz, the Court required the government defendant to make a similar showing before it could impose a monetary fee on a landowner to offset the negative environmental effects the owner’s proposed development was expected to have on local water resources. The Court shows heightened concern for the rights of the owner that wishes to use property more intensively, with a concomitant reduction in concern about the rights of that owner’s neighbors.
These applicants may be the sorts of owners whose stories concern progressive property scholars. Or they may simply be what many takings plaintiffs are: property owners who believe that government efforts to require them to bear costs they would rather not bear infringe unconstitutionally on their private property rights. And scholars are likely to disagree about the extent to which these two groups intersect. But it is not clear that increased consideration of individualized stories will benefit the types of owners (or neighbors) about which progressive property scholars are most concerned.
Justice Alito’s opinion for the five-member Koontz majority is instructive. It portrays regulatory officials as overreaching bureaucrats who must be vigilantly monitored rather than as public servants charged with protecting the common good. If they are not supervised, regulatory officials may engage in “out-and-out…extortion.” (Koontz, 133 S. Ct. 2586, 2595). They might seek “to evade the limitations of Nollan and Dolan.” (Id.) Their activities may be “pressuring someone into forfeiting a constitutional right” and “coercively withholding benefits from those who exercise them.” (Id.) The Koontz Court demonstrates no similar concerns about the behavior of property owners.
In short, exaction cases present a real problem to progressive property scholars, who are concerned with individual human stories. The reason is that these cases, much like nuisance cases, often present facts in which an owner’s gain is a neighbor’s loss. Regulatory takings law, however troubled and confusing it may be, seeks to strike a balance between the applicant’s right to use property and the community’s right not to suffer unreasonably from that use.
Mulvaney insightfully reminds us that progressive property scholars need to be concerned with the individual parties on both sides of that dispute and warns us against reflexively assuming that the wisest course is to limit Nollan and Dolan to administrative exactions. It is entirely possible, though, that after reflecting on the issues Mulvaney raises, those same scholars will conclude that their initial instinct was correct, and that the application of Nollan and Dolan to legislative exactions will cause more harm than good. At least now they will have reached that conclusion after a more sophisticated consideration of the issues his fine article highlights.
Joseph Blocher & G. Mitu Gulati, A Market for Sovereign Control
, Duke L.J.
(forthcoming 2016), available at SSRN
International law currently finds itself in a bit of a jam. The time-honored principle of territorial integrity grants nations near-absolute control over their borders. Central governments, for example, routinely reject boundary changes proposed by neighboring states or internal secessionist movements. At the same time, however, the increasingly relevant principle of self-determination demands that all peoples have the opportunity to choose their own national affiliations, govern themselves, and develop free political institutions.
What happens when these two doctrines come into tension? When does the desire for self-determination and the search for better governance trump the inviolability of international borders? And how should the international community respond when a local region seeks to escape an unjust parent country?
In a new article, Joseph Blocher and Mitu Gulati propose an audacious solution to this defining quandry of modern international relations. Blocher and Gulati attempt to solve the problem of international boundary disputes and increase good governance by introducing property theory into the arena of international law. The crux of their idea is that a nation’s control over its borders should become subject to a liability rule rather than a property rule if it discriminates against one of its constituent regions.
Under Blocher and Gulati’s proposal, a nation that denies equal treatment to a local area would lose the ability to prevent a secession. However, the authors also insist that the government receive compensation for its lost land—compensation that would be set by a global “market” for sovereign territory.
For example, imagine that the Sami people of northern Finland believe they would be better off living under a different government. Under the current legal regime, the Sami have few options—the national government of Finland can veto any suggested change, no matter how reasonable.
Blocher and Gulati argue that this shouldn’t always be so. They contend that if Finland has denied the Sami meaningful access to the government, then the Sami desire for self-determination should trump the Finns’ absolute control over the region. Under their proposal, the Sami region could exit Finland with the support of the international community, provided that it compensates the government in Helsinki for the loss of territory.
If all this weren’t radical enough, Blocher and Gulati further argue that regions have a quasi-property right in their own sovereignty that can be sold to the highest bidder. Thus, the Sami could purchase their independence directly from the Finns, or they could solicit offers for their sovereignty from other nation states.
The authors envision that neighboring countries like Sweden, Norway, and Russia might all submit bids to bring the Sami lands under their sovereign control. To protect the principle of self-determination in this scheme, Blocher and Gulati suggest that a super-majority of the people in a transacted area approve any final transfer. Thus, the Sami couldn’t end up as part of a Russian oblast without significant support of voters.
This is bold stuff, and it deserves a wide readership. A Market for Sovereign Control is important because it describes a novel approach to scaling good government. As Blocher and Gulati emphasize, many people around the world would be happier, more productive, and safer if they lived under a different regime. But how do we improve the lives of the unlucky multitudes surrounded by the “wrong” border? Advocating for a dollop of war or colonialism lies beyond the pale. Immigration, the traditional safety valve for peoples seeking better opportunities, also has many serious drawbacks. It’s inefficient, it helps only a small number of individuals, and tends to weaken communities in the poorest countries.
Blocher and Gulati have demonstrated a new way forward. Rather than wait for individuals from poor countries to scrap their way into nations with good governments, they envision a world where property transactions can bring good government to the masses.
Importantly, this idea could improve the lives of peoples well beyond the transacted regions. Borrowing from the ideas of Charles Tiebout, A Market for Sovereign Control shows that the mere threat of border changes and inter-jurisdiction competition for sovereign land should induce some governments to treat disfavored regions with more respect and regard.
Blocher and Gulati are at their spritely best toward the very end of the paper, when they anticipate some of the potential objections to their ideas. The authors argue, quite vigorously, that their market for sovereignty would not lead to the exploitation of poor nations, or an unhealthy commodification of democratic values, or an uptick in aggressive behavior between nations.
Perhaps the most stinging criticism launched at Blocher and Gulati is that their proposal seems rather unworkable and utopian. A Market for Sovereign Control, one could argue, ignores the facts on the ground; boundary disputes currently belong to the irrational world of nationalism and violence, rather than the tidy world of rule-oriented markets. But that is exactly why this idea is so vital.
Since at least the days of the Oresteia, people have used legal structures—like the one proposed here—to domesticate conflicts that once seemed stuck in spirals of vengeance. Property laws in particular have proven successful at draining some of the bloodlust out of disputes between rivals.
The bold strokes of A Market for Sovereign Control leave intriguing questions for further discussion. What counts as a “region”? What happens if the parent country refuses all offers of compensation from an area that wants to succeed? What role, exactly, will international organizations play in the scheme? The article could benefit more discussion of these granular (but important) details, as well as a few more real world examples. Do the authors have any reason to believe their scheme would have better resolved the conflict between Ukraine and Russia over the fate of Crimea? Might it help ease tensions in the South China Sea? These seem like vital questions.
Despite these quibbles, A Market for Sovereign Control remains a real achievement. In a world of dry and overlong law review articles, this is a Harry-Potter-esque page-turner. The ideas presented are grand in scale and the authors don’t back away from upsetting some of the most settled principles of international law. Most importantly, Blocher and Gulati have used their formidable creativity to find ways to improve the lives of people who often get overlooked.
For academics, takings jurisprudence is a continuing source of scholarly fodder and intellectual challenge. However, for the lawyers and judges involved in takings litigation, the procedural barriers created by the 1985 decision in Williamson County Reg. Plan. Agency v. Hamilton Bank and subsequent cases have resulted in a “ripeness” mess, frustrating the access of property owners to federal courts. Michael Berger, a top takings litigator from Manett and Phelps, has called this a “Catch 22” rule because property owners are required to first ripen their claims by filing suit in state court, but are then precluded from filing suit in federal court because the state decision is res judicata.
In response to a long-standing call for reform of this formidable hurdle for litigants, Professor Thomas Merrill has suggested a possible solution encompassed in the title of his new work, Anticipatory Remedies for Takings. The new remedial system proposed by Merrill works alongside the eventual just compensation remedy.
Professor Merrill identifies two lines of Supreme Court decisions that address the appropriate remedies for a Takings Clause violation. He calls these lines of authority the A line and the B line. The A line requires the takings claimant to pursue a just compensation claim in the court that is designated to provide compensation. This line of cases requires that claims against the federal government be brought to the Federal Court of Claims based on the “Tucker Act doctrine” and that claims against state and local governments be brought in state court as required by the “Williamson County doctrine.”
In the B line cases, the Court adjudicates takings claims even when the claims have not been brought first to a court having the authority to award just compensation. Merrill asserts that the trend in the Supreme Court is to follow the B line. He uses the Court’s decisions in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, Horne v. Department of Agriculture, and Koontz v. St. Johns River Water Management District, to illustrate his theory.
The anticipatory remedies proposal is addressed primarily to regulatory takings claims and it encourages courts to principally use the declaratory judgment remedy to “resolve the antecedent question of whether the government action constitutes a taking” while leaving the actual award of just compensation to the appropriate compensatory court. (p. 1650.) Merrill argues that the A line of authority (most distinctly identified in Williamson County) is flawed in finding that the Takings Clause is not violated until just compensation is denied.
Instead, the anticipatory remedies proposal would allow a Takings Clause violation to be litigated “when the property is taken and the government does not offer to pay compensation.” (p. 1647.) This would be similar to the “rule implicitly followed in eminent domain proceedings . . . that a violation of the Takings Clause is complete when the government condemns property without offering to pay just compensation.” (p. 1648.)
Professor John Echeverria responded to Professor Merrill’s solution to the procedural takings litigation mess in Eschewing Anticipatory Remedies for Takings: A Reply to Professor Merrill. Echeverria finds significant disadvantages in adopting Merrill’s anticipatory remedies proposal as adoption would: 1) “risk demeaning the Court of Federal Claims and the state courts;” 2) “alter the established balance between property owners and local governments in takings litigation;” 3) “inject significant new kinds of uncertainty into takings litigation;” and 4) “create new uncertainty about the nature and scope of the substantive protections provided by the Takings Clause.” However, most of Professor Echeverria’s concerns seem to focus on the shift in power from local governments to property owners in regulatory takings litigation.
Without wading into the pros and cons of Professor Merrill’s proposal, it is certainly clear that his essay (together with Professor Echeverria’s response) illuminates how all of the procedural pieces of the current takings litigation morass may fit into one overall structure. The anticipatory remedies proposal provides a framework for understanding the overlapping puzzles of ripeness, jurisdiction, justiciability, mootness, sovereign immunity, and standing as they relate to takings claims.
As an academic, I expect to reread Merrill’s essay every time I teach takings litigation in my Land Use class. I anticipate that it will allow me to speak more intelligibly about the confusion that exists and how that confusion might eventually be overcome when brilliant minds seek solutions. Merrill’s work should also provide guidance to litigators and judges confronting the procedural complexity in takings cases when framing their arguments to resolve constitutional rights under the Fifth Amendment Takings Clause and for finding ways to avoid claims being bounced between (and out of) state and federal courts.
Cite as: Shelley Saxer, Finding a Way Out of the Ripeness Mess
, JOTWELL (April 19, 2016) (reviewing Thomas W. Merrill, Anticipatory Remedies for Takings
, 128 Harv. L. Rev.
1630 (2015) and John D. Echeverria, Eschewing Anticipatory Remedies For Takings: A Reply to Professor Merrill
, 128 Harv. L. Rev. F.
202 (2015)), http://property.jotwell.com/ finding-a-way-ou…he-ripeness-mess/
Andrea J. Boyack, American Dream in Flux: The Endangered Right to Lease a Home
, 49 Real Prop. Tr. & Est. L. J.
203 (2014), available at SSRN.
The “American Dream” referred to by Andrea Boyack, an Associate Professor of Law at Washburn University School of Law, is homeownership. As first year Property students are taught, the dream of homeownership has its hallowed roots in Thomas Jefferson’s conviction that widespread ownership of real property was a predicate for a functioning democracy. “The small landowners,” Jefferson wrote, those with “a little portion of land” are “the most precious part of a state.” The idea that the government should encourage more people to own “a little portion of land”—first farms and now single family homes—has inspired public policy since the Revolution.
Boyack does not argue that the American Dream is dead, or that promoting homeownership is an illegitimate policy goal. Instead, she convincingly argues that by myopically focusing on increasing homeownership and owner occupancy, a combination of public land use controls, private land use controls, and federal policies are undermining “important public concerns.” (P. 299.)
An important part of the puzzle, Boyack acknowledges, are widespread private restrictive covenants that prevent homeowners from renting. These covenants effectively bar renter households from many communities, particularly those in growing suburbs.
Much has been written about common interest communities and restrictive covenants in the residential context. The chief contribution that Boyack makes to the literature is her well-reasoned argument that restrictive covenants limiting home rentals do not express a naked “private neighborhood preference[s] for owner occupancy.” (P. 212.)
Instead, Boyack argues, “Government and quasi-government policies actively encourage covenant-based leasing prohibitions, both as a reflection of owner occupancy and homeowner policies and as an underwriting strategy.” (P. 212.) Underwriting standards “crafted and imposed” by the Federal Housing Authority, Fannie Mae, and Freddie Mac “promote[e] owner occupancy as a property value enhancer … [and] punish would-be renters and landlords as well as entire communities that become majority-renter-occupied by denying them access to mortgage capital.” (P. 212.)
This argument is significant for two reasons. First, Boyack contends that this revelation shows why much of the deference granted to these restrictive covenants by courts is undeserved. Second, Boyack argues that a public policy that focuses on “owner occupancy as an end in itself … [rather than] legitimate lender concerns such as property maintenance and community fiscal health” (p. 299) promotes broader social harms. Private covenants and federal underwriting standards that collaborate to segregate renter households from owner households undermine housing affordability and accessibility and further entrench racial segregation.
Boyack provides a thorough overview of the private and public prohibitions on leasing in privately government communities. She also discusses the alleged costs and benefits of such restrictions for both communities and homeowners.
Boyack concludes that “covenant-based prohibitions on leasing” create a variety of costs: “(1) to the property owner who cannot rent out the home, (2) to the community who is adversely impacted by unoccupied and financially distressed properties, (3) to the would-be tenant who cannot reside in the community, and (4) to the public in general that suffers decreased rental housing affordability and persistent, insidious housing segregation.” (P. 291.) At the same time, she acknowledges that “most of the asserted purposes for no-lease covenants appear to be legitimate” (p. 293) and are designed to achieve “better-maintained housing, community harmony, and financeability due to compliance with FHA and GSE underwriting mandates.” (P. 291.)
Boyack proposes to balance these costs and benefits through “more targeted community restrictions and requirements” that focus on “property use rather than property users.” (P. 291.) In particular, Boyack argues that the interests of neighbors and lenders could be protected through community covenants that regulate property maintenance, occupant behavior, and contributions to the upkeep of the community. (P. 297.)
Although Boyack does not expressly make this argument, her article supports the proposition that we have been mis-defining the American Dream as ownership rather than occupancy. The number of renter households in the United States has increased significantly since the 2008 Financial Crisis, and households may choose to rent for a myriad of reasons. As a result, although renters as a group are more likely than homeowners to be young, unmarried, female, and non-white, “[i]n terms of age, income, and transience, a renter of a single-family home is a closer match with single-family homeowners than with apartment dwelling renters.” (P. 208.)
That is certainly true for my family, which is a renter household in a neighborhood of single-family homes. When my husband, two sons and I moved to Winston-Salem six years ago, we had no interest in purchasing a home or living in a multi-family development. We found our options were therefore significantly limited by the legal structures identified by Boyack, particularly in parts of town with newer community amenities and highly-rated public schools. We were fortunate to be able to afford to rent a home in an older neighborhood that served our needs. Many renter households are not so fortunate. The reforms proposed by Boyack will allow millions of households to grab a piece of the American Dream, even if they cannot afford to own their own home.
Maureen Brady, Defining “Navigability”: Balancing State Court Flexibility and Private Rights in Waterways
, 36 Cardozo L. Rev.
1415 (2015), available at SSRN
More than 86,000 square miles of inland waterways traverse and meander throughout the United States. Since ancient times, navigable waterways were not subject to private ownership, but were reserved to the public under the public trust doctrine. In contrast, non-navigable waterways could be privately owned. While riparian and littoral rights are firmly fixed in the common law, what has proven to be more fluid is the definition of “navigability.”
In Defining “Navigability”: Balancing State Court Flexibility and Private Rights in Waterways, 36 Cardozo L. Rev. 1415 (2015), Maureen Brady explains that over the last two centuries, state courts have broadened the concept of navigability, and applied the new definitions to alter existing land titles. As a consequence, many non-navigable waterways have become navigable waterways, increasing public ownership and extinguishing private rights.
Brady’s exhaustive historical analysis reveals that in judicial decisions resolving competing claims to control the use of waterways, the courts have unmoored the meaning of navigability from its early conception—touched by the tides or capable of commercial transport of people or goods—to the present liberal conception, in many states, that includes pleasure boating, floating and similar uses other than navigation. She identifies two significant movements in American history that were the driving forces for these changes: the industrial movement of the mid-nineteenth century that favored expansions of private rights and the environmental movement of the mid-twentieth century that urged greater public access.
What seems to concern Brady is not only that these shifts in the classification of waterways are occurring without notice to private owners, but that they are occurring without constraints and that some of the rationales offered have been strained, if not disingenuous. Her study is rich with cases that present both earnest and opportunistic claims to the waterways, sometimes erupting in violence that cowered even the judges. With perfectly circular logic, one case cited found a waterway to be navigable because purely recreational boating could be turned into commercial use by offering paid paddling tours. Though the trend is concerning, Brady shows that the shift has been neither linear, nor universal, as some courts have viewed the re-routing as a transmogrification that portends a host of negative externalities, including noise from more users, loss of privacy and productivity to the private owners and harm to wildlife from disturbances to habitats. One court noted that in many spots in the waterways deemed navigable under the new rules, there was less water than in a bathtub.
Brady’s main aim is to question the authority of state court judges to reshape the common law definition of navigability, charging them with conducting “judicial takings” without compensation and deprivations of property without due process. Brady does not maintain that the line between navigable and non-navigable waterways can never be redrawn, for that would lead to the ossification of the common law, whose beauty is in its ability to flex and expand as society demands. On the contrary, she insists that state judges, by having leeway to revise and reshape common law definitions, occupy the singular position to mediate between private rights and larger public interests—in water recreation, protecting the environment and in the efficient allocation of water, and to act without the political constraints that compromise legislatures.
Practical wisdom having only limited sway, Brady is doubtful of the capacity of the Due Process and the Takings Clauses to curb judicial decisions that often seem a naked transfer of property from owners to neighbors or competitors, even as modes of commercial transport change. She plumbs the cases to reveal gaps and limitations in the constitutional jurisprudence as meaningful constraints. For example, the Supreme Court has not applied the Fourteenth Amendment to judicial actions to revise common law property rules, and existing takings doctrine is not structured to address novel forms of regulatory incursions.
The most recent case in which the Supreme Court discussed the philosophical plausibility of a “judicial taking,” Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, 560 U.S. 702 (2010), does not help to determine the extent to which adjustments at the margins of navigability would result in the elimination of “established rights.” While she does not predict what the world will be like if the trend continues, Brady’s analysis does conclude that the likelihood of successful takings challenges is fairly low, leaving state courts with almost unchecked power to affect property rights in waterways.
In the end, the vehicle Brady crafts for checking the abusive use of judicial power to recast rights, is both perceptive and evident. It uses the Due Process and Takings Clauses, not as discrete, mutually exclusive tests, but as interrelated parts of a whole analysis. A judicial redefinition would be invalidated if it does not conform to the requirements of the Due Process clause, ensuring that settled expectations are not unduly frustrated and that there is regard for reasonable reliance on prior law.
Even if it overcomes this hurdle, judicial redefinitions of navigability must still undergo a takings analysis, in which the owner might show, for example, that the stream on the property was a significant part of the value of the property. Though denominated as separate stages, Brady perceives that the two clauses overlap in significant respects—reliance on existing state law will simultaneously present a due process question and establish sufficient expectations to trigger the takings clause. But the difference is in the remedy—takings clause scrutiny will not prevent the change in judicial definition of such rights if a public use is present, but instead will only offer some measure of compensation.
Brady concedes that the interests on both sides are too important to offer a normative suggestion on where the line between private/public, majoritarian/individual, industry/environment, should be drawn, but the framework she develops helps to insure that at least both sides factor into the equation. She helps us to see that, in developing that calculus, the imperatives of sustainable land use in a rapidly changing world climate may require owners to cede some measure of control or accept new understandings of what it means to own property.
Daniel B. Kelly, The Right to Include
, 63 Emory L.J.
857 (2014), available at SSRN
Quite often, “private property” brings with it characterizations of individualism, isolation, and exclusion along with images of fences, gates, locks, boundaries, and barriers. In fact, a “keep out” sign has often been identified as a symbol for the essence of private property rights and their function. Professor Daniel B. Kelly reminds us that such images and characterizations miss a huge portion of the utility served by property law that fosters the capacity and motivation to hang a different sign—one that says “come on in.” Professor Kelly’s recent article, The Right to Include, 63 Emory L.J. 857 (2014), catalogs and analyzes the range of legal options available to owners to include others in the use, possession, and enjoyment of real property.
In recent property law literature, the “right to exclude” has gotten most of the ink. In fact, Kelly explains that, “[i]n delineating the bundle of rights that characterizes property, courts have not identified the right to include as a distinct attribute of ownership,” (P. 868) and most scholars have only hinted at the importance of this separate strand of rights within ownership. Professor Kelly’s work is a welcome rectification of this imbalance of affection. If indeed human beings are dependent on each other to survive and flourish, then finding ways to facilitate inclusiveness in relation to property is vital to nourishing our “interaction imperative.” Kelly thoroughly explores the rules and doctrines in property and related fields of law that have emerged to ignite inclusion and spur human sociability.
Professor Kelly dissects the reality that we do, after all, exercise our right to include every day. And, with each such inclusion, we are faced with potential conflicts. It is useful to think about just how ubiquitous inclusion is in our lives by reflecting for a moment on some archetypal examples. We invite colleagues or friends over for dinner, including them in our home. We grant our gardener access to the back gate and license to roam the grounds, taking advantage of his specialized expertise so that he can beautify our home and surrounding land. The plumber is invited in to make sure all flows well. We may share our homes with strangers in operations like Airbnb and the like. We are willing to lease our property to others, including them in order to receive the benefit of income. We enter into co-tenancies to help reduce the costs of our housing.
With each of these arrangements (and others like them) there are both rewards and risks—the dinner guest who overstays his welcome; the gardener who breaks your lawn gnome because he is just not quite as careful with your property as you would have been or as he might have been with his own property; the overnight guest who unwittingly aids a bedbug migration into your space; the tenant who fails to report the cracks in the roof that could have been repaired to avoid the ceiling collapse; or the college roommate that never wanted to do the dishes but was happy to occupy more than her fair share of the apartment with her junk. One of the greatest benefits of Professor Kelly’s work is that he helps us understand how the law anticipates and navigates these pitfalls while optimizing the potential rewards of inclusivity along the way.
Kelly reveals a roadmap for how the law should support a wide range of inclusion options in order to move owners’ private incentives toward a convergence with the socially optimal level of inclusion. Inclusion can be informal (including by choosing not to exercise or waiving one’s right to exclude), contractual (including licenses), or enabled by strengthening inclusive property forms (such as easements, leases, trusts, concurrent estates, and co-ownership arrangements). Most of the time, inclusion is a matter of choice, but Kelly also takes a valuable moment to discuss those rules that cause “involuntary inclusion” as well, such as public accommodation and antidiscrimination laws.
Key factors to consider when identifying and protecting inclusion rights, according to Kelly, include whether the rights enable sharing and exchange, facilitate financing, spread risks, and promote specialization. Along the way, the law of inclusion rights struggles with coordination difficulties (when multiple parties must negotiate over when they may use or enjoy certain parts of the property), strategic behavior (where a party included tries to expand the scope of their inclusion or when owners acquire assets for the purpose of exploiting inclusion possibilities), and usage conflicts (when, for example, a non-owner might not internalize the long term costs of her actions so she uses the property excessively or does not maintain it well).
Each purposefully-varied legal form comes with differing rights of revocability, varying levels of certainty, different remedies to vindicate rights, and different costs of negotiation, drafting, and enforcement. Kelly taps into some key insights on human nature and owner fears when he explains that, “Owners are more likely to include others if they are able to select from among multiple forms [of inclusion regimes],” (P. 919), so the law has created this diversity of “‘focal points’ around which parties can organize their activities by including others through different combinations of anti-opportunism devices” that control unwanted strategic manipulation of the inclusion and coordinate among multiple users. (P. 920.)
One need only examine one’s own activities to find anecdotal examples of our implicit recognition of the utility of inclusion. We must also remain acutely aware of some of the obstacles and problems with inclusion for which the law already has created varied legal forms to offer tailored solutions that, at the very least, mediate the potential negative effects so that we can maximize the benefits of including others in our property. By examining these issues in depth, Professor Kelly’s work advances our understanding of the contours of the right to include and our appreciation for its unique characteristics.
We must stop imagining that property is the saviour of the legal system, the knight on the white steed, or the guardian of every other right. That was the lesson Andre van der Walt, South African Research Chair in Property Law at Stellenbosch University, taught the assembled audience when he delivered the Keynote Address at the 2014 Annual Conference of the Association of Law, Property and Society. As Professor van der Walt writes in the landmark article based on that memorable address: “I prefer to see property as a gaggle of cleaners who move in after everyone has left, brandishing buckets and mops, cleaning up the property debris once the real work of maintaining the democratic legal system has been completed.” (Pp. 105-106.) In this article, van der Walt reflects on the systemic status of property rights within a wide frame of constitutional, “non-property” rights. Moving from normative theory to doctrinal analyses of the case law of South African courts implementing the Constitution of 1996, as well as examples from the United States, Canada, the United Kingdom, and Germany, the article explores how property rights are, and should be, balanced against non-property rights, including rights to life, human dignity, and equality.
This paper comes at a fascinating moment for property theory, as the politics of property law—particularly in “advanced” democracies like the United States and the United Kingdom—are being tested against a backdrop of rising socio-economic inequality, dramatically accelerated following the global financial crisis of 2008 and the “austerity” politics that followed. As the claims that markets left to their own devices are efficient and stable—or that property is an effective guardian of other rights (Pp. 32-42)—have been challenged, the landscape of unequal opportunity has been exposed, reverberating through property scholarship to spark a renewed interest in property law’s methodologies and discursive traditions across the global property community. Van der Walt explores these debates in the first section of his paper.
Van der Walt’s contribution is sympathetic to the “progressive property” school, in challenging property theories that place the right to exclude at the “core” of ownership, and ownership at the front and centre of property conversations. Yet, van der Walt goes beyond calls for value pluralism and contextualised reasoning within the sphere of property law, to challenge the proposition that property rights and entitlements take presumptive priority at the front and centre of broader debates about the allocation of resources. A core line of argument in the article is that:
…it is important for progressive property theory to recognise the relatively modest systemic status of property rights in the broader scheme of fundamental rights protection; to acknowledge that the default position is to secure the protection and promotion of non-property rights on the basis of their relatively superior normative and systemic status and not via the protection of property; and to devise conceptual and analytical tools to facilitate a distinction between the two categories of rights. (P. 42.)
While van der Walt recognises that property rights will, and should, generally be protected once the fundamental democratic conditions of our legal system are secured, understanding those rights in a wider constitutional framework has important implications for our theoretical, doctrinal, and methodological approaches to property.
This article focuses on a relatively narrow category of property disputes: access conflicts involving quasi-public land, or land to which a small group of non-owners have been granted restricted access for specific purposes (e.g., shopping centers and airports), and where the owner of the land wants to exclude or evict from land persons who want to use it for a non-property purpose. Within this narrow context, these other preferred uses and interests include the exercise of their right to free movement, assembly, free speech, public demonstration or picketing—although van der Walt also signals potentially broader applicability of this approach to contexts like housing rights and servitudes.
Despite a seemingly narrow focus, there is also far-reaching potential for the work. One of the great strengths of van der Walt’s writing (see also, AJ van der Walt, Property in the Margins, Hart, 2009) is to challenge us to critically re-evaluate our ingrained habits of thinking, the methodological blind-spots that are embedded by the dominant discourse of our discipline. On the one hand, it is (or should be) uncontroversial to argue that, in cases which engage the right to life in conflict with a property right, courts do not (and should not) take the protection of the landowner’s property right as the self-evident starting-point for deciding the case. Yet van der Walt’s analysis of these access-conflict cases highlights the distorting effects of the Blackstonian tradition on our methodologies for resolving conflicts involving property.
Thus, while the particular cases van der Walt refers to as illustrations of this approach are well-known (he discusses, for example, the totemic “progressive property” case of State of New Jersey v. Shack 58 NJ 297 (1971)), his fresh contribution to these debates offers an intellectually radical space for property lawyers to reflect on the place of property rights within the wider legal landscape, and then to show how this is actualised within doctrinal reasoning.
The Systemic Marginality of Property offers a new way to think about the complexities of property contests, the crucial role of context in legal decision-making, and the real human impacts that result from our methodological commitments, particularly when we balance property rights and entitlements against fundamental non-property rights. Joseph Singer has argued that “property law is a constitutional problem because the norms and values of a free and democratic society limit the kinds of property rights that can be created.” This article takes a crucial step forward for this line of analysis, by demonstrating some of the theoretical, doctrinal and methodological steps that follow from accepting that property rights are not absolute but inherently defined by the demands of living in a democratic society, characterised by dignity and equality.
Lee Anne Fennell & Richard H. McAdams, The Distributive Deficit in Law and Economics
, Minn. L. Rev.
(forthcoming 2015), available at SSRN
Lee Anne Fennell and Richard H. McAdams’ The Distributive Deficit in Law and Economics is framed as a law and economics article but makes a significant contribution to property theory. The Distributive Deficit takes on the standard law and economics assertion “that tax is strictly superior to legal doctrine as a means of redistributing income,” (p. 7) and the related assumption “that the distributive pattern in a society will be invariant to the political form of redistribution.” (p. 14) As Fennell and McAdams note, the general acceptance of both tax superiority and the “invariance hypothesis” in law and economics can be credited largely to the work of Louis Kaplow and Steven Shavell (see here, here, and here). Fennell and McAdams’ article is a devastating and wholly convincing critique of this line of reasoning, grounded in the failure of standard law and economics approaches to take into account political action costs. Tax superiority depends on rule and tax changes having zero transaction costs when it comes to establishing the new order. Yet, as Fennell and McAdams’ argue, political action costs can vary depending on preferred mechanism. Put differently, the theoretical possibility of a tax-and-transfer solution does not necessarily mean a redistributive rule change should automatically be discarded: given political action costs, a rule change may still be more efficient than a tax-based approach.
Fennell and McAdams’ contribution is particularly valuable at this point in property law scholarship. The appropriateness and power of law and economics approaches to property, especially the information-cost theories championed by Henry Smith and Thomas Merrill, have taken center stage in debates between progressive and conservative property scholars. Tellingly, in 2015 the AALS Property Section chose to dedicate the section’s panel to “the place and scope of economic analysis.” Those seeking to diminish the importance of law and economics in property law have argued that economic-approaches alone cannot capture all that property law seeks to accomplish and that economic values are only one of many pluralistic values of import. That is to say, recent criticism has been that of the “outsider,” seeking to undermine the conservative tendency of law and economics-based property scholarship not by arguing that law and economics is a bad tool but that it should not be the only approach. Written by two University of Chicago professors, The Distributive Deficit is more of an “insider” attack. It does not question the core tenets of law and economics, it simply shows that on efficiency grounds the oft-repeated conclusion that tax-and-transfer is necessarily a superior means of redistribution compared to rule changes is incorrect. But it is an important intervention for property scholars because without it, the idea that property law should be based upon the notion of tax superiority—advanced by Yale Law professor Robert Ellickson in a recent article—might be uncritically accepted.
The Distributive Deficit begins by showing that the invariance hypothesis is false and then highlights the importance of political action costs. Fennell and McAdams define “political action costs” as “all the impediments parties encounter in achieving desired distributive outcomes through legal coercion, whether through legislation, litigation, or regulation.” (p. 22) They convincingly argue that, because of offset problems (i.e., changes are not inevitably and perfectly offset), behavioral economics (i.e., people are more than rational robots), and preferences for fairness (in terms of political action costs, punishment, and bundling goals), the invariance hypothesis is false. They then explore in greater detail the significance of political action costs. In some respects, this point is akin to that made by Ronald Coase in his introduction to The Firm, the Market, and the Law (1987), namely that we live in a world of transaction costs and therefore academics should focus on the world we live in rather than on the artificially sterile “Coasian” world. In language that arguably is a powerful response to Kaplow, Shavell, and now Ellickson, The Distributive Deficit argues that “the individuals who would give categorical and counterintuitive advice—that, outside of tax, welfarists should ignore the welfare effects of distribution—bear the burden of proving the advice is well-founded.” (p. 48) As I argue elsewhere, discussing the efficiency versus equity claims of Merrill and Smith, questions about the burden of proof and assumptions about whether property law generally works, or does not work, weigh heavily on property debates.
Ultimately, The Distributive Deficit is a great article, first, because it uses the tools of law and economics to question a core assertion—tax superiority—of most law and economics (and conservative property) literature and, second, because it is a grounded article. Though neither author would probably identify today as a critical legal scholar, the article in this way is reminiscent of a similar move by Duncan Kennedy to blunt the cold-hearted law and economics attack on the implied warranty of habitability. Similarly, The Distributive Deficit shows the power of working with economic tools as opposed to against them. Moreover, Fennell and McAdams are careful to not let their largely economic theory project escape the bounds of realism. They write, “tax superiority has traction as a normative prescription only as contrasted with some other actually available means of redistribution.” (p. 29 (emphasis added)) Were Professor Fennell not already known for her extensive scholarly work in property law, there is some risk that this article (focused as it is more on law and economics than explicitly about property law) might not immediately capture the attention of property law scholars. But in the end, The Distributive Deficit not only provides “a reason why distributive goals might at times be better pursued through legal rules than through tax mechanisms,” but, by doing so, it also provides more theoretical space and might for progressive property scholarship.
Property Law Section Editors
The Section Editors choose the Contributing Editors and exercise editorial control over their section. In addition, each Section Editor will write at least one contribution (”jot”) per year. Questions about contributing to a section ought usually to be addressed to the section editors.
Professor Donald J. Kochan
Professor & Associate Dean for Research and Faculty Development
Chapman University Dale E. Fowler School of Law
Professor Tanya Marsh
Professor of Law
Wake Forest University School of Law
Contributing Editors agree to write at least one jot for Jotwell each year.
Professor Kristen Barnes
Associate Professor of Law
The University of Akron School of Law
Professor Avi Bell
Professor of Law
University of San Diego School of Law
Professor Stephen Clowney
Associate Professor of Law
University of Arkansas School of Law
Professor Steven J. Eagle
Professor of Law
George Mason School of Law
Professor Sjef van Erp
Professor of Civil Law and European Private Law
Maastricht European Private Law Institute
Professor Lee Anne Fennell
Max Pam Professor of Law & Ronald H. Coase Research Scholar
The University of Chicago Law School
Professor Matthew J. Festa
Professor of Law
South Texas College of Law
Professor Nicole Stelle Garnett
John P. Murphy Foundation Professor of Law
The Law School, University of Notre Dame
Professor Shelby D. Green
Professor of Law
Pace Law School
Professor Thomas W. Mitchell
Professor of Law
University of Wisconsin Law School
Professor Lorna Fox O’Mahony
Executive Dean of the Faculty of Humanities
Essex Law School
Professor Ezra Rosser
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American University Washington College of Law
Professor Shelley Ross Saxer
Vice Dean and Laure Sudreau-Rippe Endowed Professor of Law
Pepperdine School of Law
Professor Sarah Schindler
Professor & Glassman Faculty Research Scholar
University of Maine School of Law
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Associate Dean for Faculty Development and Woolf, McClane, Bright, Allen & Carpenter Distinguished Professor of Law
University of Tennessee College of Law
Professor Laura Underkuffler
J. DuPratt White Professor of Law
Cornell University Law School
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