MUSIC:
THERE WILL BE BLOOD
Movie Soundtrack (2007)
Music by Jonny Greenwood
Trey’s Monday DF
Sessions
Moving to Tuesdays
@ 9:30-10:20 am
Room F200
Fajer’s Exam
Technique Workshops:
Wed. 11/5 & Tue. 11/11
both in
Room F309
@ 12:30-1:50 pm
DEMSETZ FIRST THESIS
We’ll Use on All Unit III Cases
•
•
•
•
•
•
Identify decision/activity at issue
Identify old rule
Identify neg. externalities under old rule
Identify change in circumstances
Does change increase neg. externalities?
If cost of externalities > cost of change 
change in rule
DEMSETZ FIRST THESIS & DQ2.18
Development of Ghen Custom
• Activity = Collecting Whales from Beach
• Old Rule = Finder’s Keepers
• Ext. = Sometimes whaler lost whale he killed
(= investment)  less whaling
• Identify change in circumstances?
• Does change increase neg. externalities?
• If cost of externalities > cost of change  change in rule
DEMSETZ FIRST THESIS & DQ2.18
Development of Ghen Custom
• Activity = Collecting Whales from Beach
• Old Rule + Finder’s Keepers
• Ext. = Sometimes whaler lost whale & investment
• Change: Killing Finbacks w Bomb-Lances
(from causes we’ve discussed)
• Does change increase neg. externalities?
• If cost of externalities > cost of change  change in rule
DEMSETZ FIRST THESIS & DQ2.18
Development of Ghen Custom
•
•
•
•
Activity = Collecting Whales from Beach
Old Rule = Finder’s Keepers
Ext. = Sometimes whaler lost whale he killed
Change: Killing Finbacks w Bomb-Lances
• Ext.  Industry arises/more whales & $$$
• Cost of externalities > cost of change 
change in rule? (Describe)
DEMSETZ FIRST THESIS & DQ2.18
Development of Ghen Custom
•
•
•
•
Activity = Collecting Whales from Beach
Old Rule = Finder’s Keepers
Ext. = Sometimes whaler lost whale he killed
Change: Killing Finbacks w Bomb-Lances
• Ext.  Industry arises/more whales & $$$
• Higher Externalities > Social Inertia 
Custom Develops
DEMSETZ FIRST THESIS & DQ2.18
Development of Ghen Custom
• Ext.  Industry arises/more whales & $$$
• High Externalities > Social Inertia  Custom Develops
• NOTE: If some folks on shore don’t follow custom (as in
Ghen), externalities remain high, so pressure for further
change should lead to litigation or legislation and
(perhaps) adoption of custom as law.
QUESTIONS?
Closing Up Whaling Cases
1.
Whaling Cases on property rights & custom =
“Animals Cases” for purposes of exam
2.
Treat salvage as alternative, not part of ACs
3.
Useful exercise: Apply Whaling cases & Rose to
wolverine problem
4.
Might do charts of these cases mapping, e.g.,
Labor; Marking; Applicability of Custom (fact Q);
Decision to Treat Custom as Law (legal Q)
QUESTIONS?
EXAM Q1 (CUSTOM):
REVIEW PROBS 2B & 2C
XQ1: Dealing w Custom Generally
• Only Address if Q Explicitly Identifies a Custom
• Discuss Separately from 1st Possession/Escape
• Two Sets of Issues
• Does Activity Described in Q Fall Within Custom?
• Sometimes Pretty Clear & Can Addrress Quickly
• Sometimes Room for Lot of Discussion as in Rev. Prob. 2B
• Should Court Treat Custom as Binding Law?
• If I Put in a Custom, Always Room for Lot of Discussion
EXAM Q1 (CUSTOM): REVIEW
PROBLEM 2C (NEXT CLASS)
Should Custom be Treated as Law: Relevant Analysis
• Swift Factors:
• Affect Outsiders
• Used by Whole Industry for Long Time
• Easier to Use than Existing Legal Rules (Certainty)
• Reasonableness
• Ghen: Necessary for Industry to Operate
•
•
Could do as separate factor
Could do as part of Reasonableness analysis
EXAM Q1 (CUSTOM):
REVIEW PROBLEM 2B (i) & (ii)
Custom in Question
There is a custom in the U.S. advertising and
broadcasting industries that advertisements for
ordinary commercial products and services cannot
closely imitate, or use major components of, ads for
charitable organizations.
May be helpful to break it down into parts as you
would a legal standard from a case or statute.
EXAM Q1 (CUSTOM):
REVIEW PROBLEM 2B (i) & (ii)
Custom in Question (Sample Breakdown)
1. In the U.S. advertising and broadcasting industries
2. ads for ordinary commercial products and services
3. can’t
a. closely imitate; or
b. use major components of
4. ads for charitable organizations.
Then apply to problem like a legal standard.
LOGISTICS CLASS #26
Now On Course Page
• Group Assignment #3 (I’ll Take Qs Next Class)
• Comments & Models for Assignment #2 Later This Week
• Complete Set of Old Exam Qs I & II
– Comments & Models for XQIs Later This Week
• First Part of Unit III Materials (Starts Fri)
– Updated Syllabus & Assignment Sheet
• Hammonds Quiz
– White Quiz Later Today
LOGISTICS CLASS #26
Semi-Make-Up Class
• Friday, November 7
– Both Classes 7:55-9:55 (with Break)
– Three Panels Divide Up Responsibility
– On New Assignment Sheet
• Least Interference I Could Think of w Rest of
Schedule
• Most of You Have No LComm Meeting &
Grammar Test at 2
§D Attendance Sheet Left Side
Rose Article (Uranium)
Cf. RANE (~1981)
Rose Article (1985)
Possession as the Origin of Property
Recall idea of theory as a way to
determine what kinds of facts are
relevant to addressing particular
problems.
Rose Article (1985)
• 2 principles tying “Possession” to ownership
1.
2.
Reward useful labor
Provide “Clear Act” giving notice of ownership.
• Substantial overlap between the two
– Right kind of labor can constitute the “Clear Act”
– Sending clear signals itself is useful labor we might
wish to reward
Rose Article & DQ 2.20 (Uranium):
Rewarding Useful Labor
• Benefits of Rewarding Labor Clear:
– We want people to do useful labor so we reward them
– Labor-“Desert” Theory = Deserving
– Cf. Labor-“Dessert” Theory: “If you clean your room,
you can have some cake.”
• What (two) problems does Rose see with
labor theory?
Rose Article & DQ 2.20 (Uranium):
Rewarding Useful Labor
Problems with Labor Theory?
• Not clear why you own your own labor
– e.g., cd be duty to community
• How much labor must you add to a thing to make
the thing yours?
– Pouring tomato soup into ocean
– Broader Version: What is scope of right that labor
creates?
Rose Article & DQ 2.20 (Uranium): “Clear Act”
Benefits flowing from “Clear Act”
• Gives notice to people who want to use or
purchase property. (Similar idea in
Demsetz)
– Facilitates trade  highest (most valued) uses
– Minimizes conflicts
Rose Article & DQ2.20 (Radium): “Clear Act”
Benefits flowing from “Clear Act”
• Gives notice to people who want to use or purchase
property. (similar idea in Demsetz).
• Note relationship to language in Pierson & Shaw:
– Intent to retain animal insufficient
– Need act demonstrating that intent
Rose Article & DQ 2.20 (Uranium):
“Clear Act”
Possible problems arising from attempt to
provide the “Clear Act”?
Rose Article & DQ 2.20 (Uranium):
“Clear Act”
Possible problems arising from attempt to
provide the “clear act”?
1. Making clear to people who actually use or
might want to use the thing in Q.
2. Making clear at relevant time.
3. Expensive to establish/maintain symbols.
•
Difficulty Marking Some Types of Property (per
P.Comparato §B)
Rose Article & DQ 2.20 (Uranium):
“Clear Act”
• Expensive to establish/maintain symbols
– Registration system is often useful alternative to
consider for XQ2, but often expensive
– By contrast, first possession systems often relatively
cheap to administer
Rose Article & DQ 2.20 (Uranium):
“Clear Act”
“Relevant Audience”
• Clear act never clear to everybody; needs to be
clear to people who need to know (= rel. aud.)
• Clarity of act can be dependent on culture (aliens
buying sunshine)
Rose Article & DQ 2.20 (Uranium):
“Clear Act”
“Relevant Audience”
• Rose: In our system, acts showing property in
land often depend on not conforming to nature
– See adverse possession.
– Relevant audience of Americans working with land
recognizes as signs of possession, e.g., cultivation,
improvements, enclosure
QUESTIONS?
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
• Shaw rejecting perfect net rule?
– Relationship to “Rewarding Useful Labor”?
– Relationship to “Clear Act”
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
Shaw rejecting perfect net rule?
• Relationship to “Rewarding Useful Labor”
– Net useful even if imperfect if gets lots of fish
• Relationship to “Clear Act”?
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
Shaw rejecting perfect net rule?
• Relationship to “Rewarding Useful Labor”
– Net useful even if imperfect if gets lots of fish
• Relationship to “Clear Act”
– Probably most people see fish in net as owned
– Net has to be pretty bad to send signal that net-owner
doesn’t claim fish (cf. sunken boat)
– State adopting rule increases “clarity” of act by
confirming net doesn’t have to be perfect. (per Gomez
Sec. D)
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
• Mullett adopting broad definition of
NL (v. Limit to Nat’l Habitat):
(Fajer)
– Relationship to “Clear Act”?
– Relationship to “Rewarding Useful Labor”
Rose Article & DQ 2.21:
Characterize Cases in Rose’s Terms
Albers rejecting Mullett rule?
• Relationship to “Rewarding Useful Labor”?
• Relationship to “Clear Act”
Rose Article & DQ 2.21:
Characterize Cases in Rose’s Terms
Albers rejecting Mullett rule?
• Relationship to “Rewarding Useful Labor”
– Mullett rule insufficient protection for investment in
important industry
– Tattooing itself is useful labor b/c specifically
identifies OO at least to insiders
• Relationship to “Clear Act”?
Rose Article & DQ 2.21:
Characterize Cases in Rose’s Terms
Albers rejecting Mullett rule?
• Relationship to “Rewarding Useful Labor”
– Mullett rule insufficient protection for important industry
– Tattooing itself is useful labor
• Relationship to “Clear Act”
– Tattoo tells everyone there is OO and specifically
identifies OO to insiders (including this D)
– Court leaves open possibility of different result if
truly innocent finder
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
• Ghen adopting custom?
– Relationship to “Rewarding Useful Labor”?
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
Ghen adopting custom
• Relationship to “Rewarding Useful Labor”
– Custom Rewards Labor of Whale Killer. Especially
important because:
• Whaling Industry Useful b/c Whales Valuable
• Custom Necessary to Industry to Give Enough $$$
• Whaler Arguably Did All Possible to Retain Whale (per
Bautz §B)
– Finder Also Gets $$$ for Useful Labor of Reporting
• Relationship to “Clear Act”:
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
Ghen adopting custom
• Relationship to “Clear Act”:
– Mark Seems Very Strong
– What About Interaction with Outsiders?
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
Ghen adopting custom
• Relationship to “Clear Act”: Q re Outsiders
– Maybe OK b/c Mark is Very Strong
– Maybe OK b/c Have to Use Insiders to Process
– Maybe OK b/c Best You Can Do
Rose Article & DQ 2.21 (Uranium):
Characterize Cases in Rose’s Terms
I’ll also include in this set of slides
version for Swift
Rose Article & DQ 2.21:
Characterize Cases in Rose’s Terms
Swift adopting Custom
• Relationship to “Clear Act”:
– Accepted by “Relevant Audience”
• Relationship to “Rewarding Useful Labor”
– Labor Necessary to Get Resource Incomplete
– Maybe court assumes that long agreement means
industry thinks custom is right balance between labor
& notice
Oil & Gas:
st
1
Possession
DQ2.22: Someone Remind Us:
• Under Westmoreland, if a pool of gas lies under
two adjacent parcels of land and the owner of
one parcel drills a well, how much of the joint
pool is he entitled to take through his well?
• How is this result related to the court’s
description of gas as a mineral ferae naturae?
Oil & Gas:
st
1
Possession
DQ2.22: Cf. Hammonds p.92
“[O]il and gas are not the property of any
one until reduced to actual possession by
extraction, although by virtue of his
proprietorship, the owner of the surface, or his
grantee …, has the exclusive right of seeking to
acquire and of appropriating the oil and gas
directly beneath. This theory of ownership or,
perhaps more accurately speaking, lack of
ownership
is
practically
universally
recognized. ...”
Argument By Analogy
Oil & Gas: 1st Possession
Are Pierson/Liesner/Shaw Good Tools for
Determining 1st Possession of Oil & Gas?
Three Common Approaches
1. Significance of Factual Similarities &
Differences (DQ2.23 = OXYGEN)
2. Usefulness of Doctrine (DQ2.24 = KRYPTON)
3. Usefulness of Alternatives (DQ2.25 = URANIUM)
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ2.23. Arguments from Factual
Similarities re Usefulness of
Pierson/Liesner/Shaw
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ2.23. Arguments from Factual
Similarities re Usefulness of
Pierson/Liesner/Shaw
Could try:
Mobility Across Property Lines
Labor Necessary to Capture
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ2.23. Arguments from Factual
Differences re [Lack of]
Usefulness of
Pierson/Liesner/Shaw
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ2.23. Arguments from Factual
Differences re [Lack of] Usefulness of
Pierson/Liesner/Shaw
Could Try
Mineral Movement More Predictable
Value of Oil/Gas Generally Higher