ELEMENTS D2 & D1 POWER POINT SLIDES Class #13 Friday, September 29, 2016 National Coffee Day

MUSIC (to accompany demsetz): The Beatles MAGICAL MYSTERY TOUR (1967) D1/D2 Lunch Today Meet on Brix @ 12:30 Fernandez * Gonzalez Molasky * Rub Seale * Seals * White Pass-Fail Briefs 12:20 Today: Sign-Up Sheet Posted for URANIUM Meetings 3:00 Today: OXYGEN Written Manning Briefs Due [Teams that Haven’t: Sign-Up for Your Meetings ASAP]

1L YEAR & HARRY POTTER TIME

SCHEDULE ADJUSTMENTS: ELEMENTS et al. To Avoid Rushing & Ensure Basic Skills: We won’t do third substantive unit We’ll do more exam-style problems Specific Adjustments: No Friday Afternoon or Weekend Make-Ups Maybe additional long joint Fridays Week before T-Giving: D1 + D2 Monday Only Week after T-Giving: D1 + D2 Tuesday Only Brief Note on Fall Break (Ignore 2Ls) QUESTIONS?

EXAM ADJUSTMENT: ELEMENTS FINAL Traditional Format: Three Units  Three Equally Weighted Qs Q1 & Q2: Single Fact-Pattern (Not Animals) Q1 = Issue-Spotter Assume Animals Cases (ACs) Govern Covers Two or Three of 1st Possession. Escape, Custom Q2: Analogy Q: Discuss Whether ACs are Good Tool for this Type of Problem

EXAM ADJUSTMENT: ELEMENTS FINAL Traditional Format: Three Units  Three Equally Weighted Qs Q1 & Q2: Issue-Spotter & Analogy This Year Only Two Units Yields One Long Fact Pattern Three-Part Issue-Spotter: (a) 1st Possession & (b) Escape & (c) Custon Each 30 min & 20% Analogy Q: 60 min & 40% I’ll Give You Directions in Advance & Lots of Examples & Opportunities for Qs

THINKING ABOUT & PREPARING FOR ISSUE-SPOTTING EXAM Qs Generally: Exam-Taking Workshops: Nov. 6 & 7 Prof’s Perspective & Sunken Boat Hypo Technical Meaning: Abandonment 1st Possession Problems Escape Problems

DQ1.27: Thinking About Sunken Boat as Exam Q Should the result in Shaw be the same if the fishermen used a sunken boat instead of a net to trap the fish? Assume the boat retains the same percentage of fish that enter it as the net in Shaw. (E.g., <4% of fish that enter escape both nets & boat) Take My Hypothetical as I Give It to You Not helpful to explain why it couldn’t work. Not helpful to ignore because you don’t like it. I get to make up the rules.

DQ1.27: Thinking About Sunken Boat as Exam Q Should the result in Shaw be the same if the fishermen used a sunken boat instead of a net to trap the fish? Assume the boat retains the same percentage of fish that enter it as the net in Shaw. (E.g., <4% of fish that enter escape both nets & boat) Look for Comparisons Relevant to Doctrine Boat could have been stolen (so could net) No way to raise boat (must be or pointless to use it to catch fish)

STATE v. SHAW DQ1.27: Krypton Marking/Notice of Claim to Others is an important recurring policy concern See Shaw test part 2: “so maintain his control as to show that he does not intend to abandon” See Pierson: Mortal wounding + pursuit OK because hunter “thereby manifests an unequivocal intention of appropriating the animal” Could address w sunken boat with clear sign on buoy attached to boat.

STATE v. SHAW DQ1.27: Krypton Marking/Notice of Claim to Others is an important recurring policy concern See Shaw test part 2: “so maintain his control as to show that he does not intend to abandon” See Pierson: Mortal wounding + pursuit OK because hunter “thereby manifests an unequivocal intention of appropriating the animal” NOTE: 1st Possession Cases DO NOT Make Notice to 2d Hunter Pivotal Pierson has notoice of Post’s chase, yet wins Wanie may not have notice of Liesners’ claim, but loses.

STATE v. SHAW DQ1.27: Krypton Additional Reason to Treat Sunken Boat Differently May not want to reward trap that is dangerous to humans Net in Shaw is easily visible (28-foot square & top 4 feet above water) Sunken boat may not be visible so may be safety hazard to lake traffic if not very well marked I think always reasonable to believe a court will care about significant threats to human health & safety even if you have no case that raises these concerns in the relevant section of the cours

THINKING ABOUT & PREPARING FOR ISSUE-SPOTTING EXAM Qs Generally: Exam-Taking Workshops: Nov. 6 & 7 Prof’s Perspective & Sunken Boat Hypo Technical Meaning: Abandonment 1st Possession Problems Escape Problems

Transition: Shaw to Escape (including GWA#1) “Abandonment” of Property & Technical (Legal) Meanings of Terms

Technical Meaning of Terms When people use a word or phrase in a specialized context, they often intend to employ only the meaning that is most relevant to, or most commonly used in, that context. Might be one of several common meanings. Might be different than meanings used in other contexts. Can call the definition that best fits a specialized context the “technical meaning” of the word or phrase, even when the context is not especially technical or scientific.

Technical Meanings of Terms Three contexts in which people commonly use “technical meanings” of ordinary words/phrases: Sports Reporting Cooking Law. Use of technical meanings so familiar that you probably take it for granted in the contexts of sports reporting and/or cooking. An example …

Technical Meanings of Terms: To “WHIP” Webster’s lists 15+ definitions of this verb including “To strike forcefully with a slender lithe instrument, especially as a punishment” “To move very quickly” (e.g., whip across a highway) “To drive or urge on (as if using a whip) “To stir up or incite” (e.g., whip a crowd into a frenzy) Obviously derived from uses of the object called a “whip” consisting of a handle and a lash.

Terms with Technical Meanings: To “WHIP” Webster’s lists 15+ definitions of this verb BUT When a sports reporter says that “the 49ers whipped the Rams,” we know from the context that no actual whips were used. Here, the relevant definition must be: “To overcome or defeat decisively.”

Terms with Technical Meanings: To “WHIP” Webster’s lists 15+ definitions of this verb BUT When a cookbook instructs us “to whip a cup of cream,” we know from the context that we don’t need to go buy a whip. Here, the relevant definition must be: “To beat into a froth using a utensil like a whisk or fork.”

Terms with Technical (Legal) Meanings For your work in law, look out for situations where common words have technical legal meanings (like “duty” in Torts or “improvements” in Property) and make sure you memorize those meanings and use them where appropriate. E.g., …

Terms with Technical (Legal) Meanings To “Abandon” Property Webster’s definitions of the verb “abandon” include: “to give up to the control or influence of another person” “to withdraw protection, support, or help from” “to give oneself over unrestrainedly” People commonly use the term very loosely: “He’s abandoned me!” can mean things like “forgotten about” or “ignores” or “favors someone else.”

Terms with Technical (Legal) Meanings To “Abandon” Property Definitions of “abandon” include, “to give up with the intent of never again claiming a right or interest.” Use this definition in Elements, emphasizing Intentional decisions (v. careless or negligent acts); Meant to be permanent (v. temporary or of uncertain duration); and (Ideally) Clearly shown by a specific action or statement.

Terms with Technical (Legal) Meanings To “Abandon” Property Definitions of “abandon” include, “to give up with the intent of never again claiming a right or interest.” Use this definition in Elements, emphasizing Intentional decisions (v. careless or negligent acts); Meant to be permanent (v. temporary or of uncertain duration); and (Ideally) Clearly shown by a specific action or statement. Enforcers: Fernand-onment

THINKING ABOUT & PREPARING FOR ISSUE-SPOTTING EXAM Qs Generally: Practicing1st Possession Problems Group Written Assignment #1 2016 Final Exam Q DQ1.28 Escape Problems

GROUP WRITTEN ASSIGNMENT #1 Questions Three Types of Qs Useful for Most Issue-Spotters I’ll Take Qs in Class Today & Tuesday/Wednesday 10/3-10/4 Monday 10/9 (Both Classes Meet Together) I’ll Take Qs By E-Mail until Sunday 10/8 @ 11:59 p.m. In Person until the End of Break on Mon 10/9 QUESTIONS?

2016 FIRST POSSESSION EXAM Q Will be Posted Later Today as Part of Info Memo #2 Two Parts: Do One Each of Next Two Weeks in DF Good Sample for You Now b/c Close to Ordinary Animals Case Can Apply Virtually All Ideas except Mortal Wound Good Exercise in Reading Carefully , Using Facts Given & Following Directions

STATE v. SHAW DQ1.28: Krypton Can you frame a single rule that makes sense of the results in Pierson, Liesner, and Shaw? Looking at 2 student submissions from prior classes For substance For clear concise writing I’ll go a little quickly b/c you can review slides in more detail later Note Possible Use on Tests: “It is possible to read the cases together to say …” “Applying this rule here, …”

STATE v. SHAW DQ1.28: Krypton STUDENT #1: Property rights to a wild animal occur when a pursuer, who continues to pursue the animal and has no intent of releasing him back into the wild, has substantially rid the animal of his natural liberty as to render escape highly unlikely under normal circumstances.

STATE v. SHAW DQ1.28: Krypton STUDENT #1: Property rights to a wild animal occur when a pursuer, [ii] who continues to pursue the animal and has no intent of releasing him back into the wild, [i] has substantially rid the animal of his natural liberty as to render escape highly unlikely under normal circumstances. Put in normal chronological sequence.

STATE v. SHAW DQ1.28: Krypton Property rights to a wild animal occur when a pursuer …  A pursuer acquires property rights to a wild animal when the pursuer… Eliminating passive voice.

STATE v. SHAW DQ1.28: Krypton A pursuer acquires property rights to a wild animal when the pursuer… [i] has substantially rid the animal of his natural liberty as to render escape highly unlikely under normal circumstances.

STATE v. SHAW DQ1.28: Krypton A pursuer acquires property rights to a wild animal when the pursuer… [i] has substantially rid the animal of his natural liberty  Need both (a) & (b)??  (b) as to render escape highly unlikely (c) under normal circumstances.

STATE v. SHAW DQ1.28: Krypton A pursuer acquires property rights to a wild animal when the pursuer… [i] has rendered escape highly unlikely (b) under normal circumstances. (Very clever idea)

STATE v. SHAW DQ1.28: Krypton A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] continues to pursue the animal and (b) has no intent of releasing him back into the wild,

STATE v. SHAW DQ1.28: Krypton A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] continues to pursue the animal and (Do you want to require (a) for traps/nets?) (b) has no intent of releasing him back into the wild

STATE v. SHAW DQ1.28: Krypton A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] continues to pursue the animal and (b) has no intent of releasing him [it] back into the wild (Do you want test of pure intent w/o actions?)

STATE v. SHAW DQ1.28: Krypton A pursuer acquires property rights to a wild animal when the pursuer [i] has rendered escape highly unlikely under normal circumstances; and [ii] continues to pursue the animal or otherwise to show he has no intent of releasing it. Takes care of traps & eliminates test based on pure intent.

STATE v. SHAW DQ1.28: Krypton STUDENT #2: A wild animal is deemed property of a person pursuing it if he through his actions made escape of the animal highly unlikely and through his actions has substantially decreased the likelihood of escape since the outset of the pursuit.

STATE v. SHAW DQ1.28: Krypton STUDENT #2: A wild animal is deemed property of a person pursuing it if he [i] through his actions made escape of the animal highly unlikely and [ii] through his actions has substantially decreased the likelihood of escape since the outset of the pursuit. Pronoun ambiguity plus passive voice.

STATE v. SHAW DQ1.28: Krypton A wild animal is deemed property of a person pursuing it if he …  A person acquires property rights in a wild animal if the person … through his actions made escape of the animal highly unlikely and through his actions has substantially decreased the likelihood of escape since the outset of the pursuit. How else would you accomplish these tasks?

STATE v. SHAW DQ1.28: Krypton A person acquires ppty rts in a wild animal if the person … made escape of the animal highly unlikely and has substantially decreased the likelihood of escape since the outset of the pursuit. Interesting idea, BUT Hard to prove Not clear would lead to Pierson result Not clear how would apply to traps/nets

STATE v. SHAW DQ1.28: Krypton I’ll do a more extensive write-up of the submissions from this & prior years and put in a future Information Memo. Qs on DQ1.28?

THINKING ABOUT & PREPARING FOR ISSUE-SPOTTING EXAM Qs Generally: 1st Possession Problems Escape Problems Techniques are Same Practice Midterm = Escape Problem So I can use existing materials. You will use Manning, Mullett, Albers Schedule revisions posted over the weekend (We’ll slide Kesler to after Midterm) Facilitating Coverage of Escape Cases

Facilitating Coverage of Escape Cases Recheck & Follow Suggested Briefing Form Use Glossary for Manning & Mullett Do Self-Quizzes: I’ll Explicitly Ask Assigned Panels Related Self-Quiz Qs Do Not Talk in Class…

Facilitating Coverage of Escape Cases Recheck & Follow Suggested Briefing Form Use Glossary for Manning & Mullett Do Self-Quizzes: Do Not Talk in Class, Even in Parseltongue

September Fog Calisthenics A Thousand Words Script for an Ordinary School Year One Month Into Law School: Three Things to Think About September Fog Calisthenics A Thousand Words

The Rhythm of the First Year Same at Every School Where I’ve Taught Same Every Year But One Since 1988

The Rhythm of the First Year Three Typical Fall Semester Low Points: Mid-September Mid-October Mid-November

The Rhythm of the First Year: The Mid-September Crisis You Have Never in Your Life Worked So Hard for a Whole Month Without Feeling on Top of Things!!! Common to Start to Worry That …

The Rhythm of the First Year: The Mid-September Crisis I’m the Stupidest Person Here & They Let Me In By Mistake

The Rhythm of the First Year: The Mid-September Crisis KEEP IN MIND: We’ve Already Discussed: You’re Learning New Language by Immersion

The Rhythm of the First Year: The Mid-September Crisis KEEP IN MIND: We’ve Already Discussed: You’re Learning New Language by Immersion Perception of “Hard” v. “Easy” Questions

The Rhythm of the First Year: The Mid-September Crisis KEEP IN MIND: Learning New Language by Immersion Perception of “Hard” v. “Easy” Questions Nature of Socratic Method: Profs Control Discussion & Decide What’s “Relevant”

The Rhythm of the First Year: The Mid-September Crisis KEEP IN MIND: Second Year Students (No Secret 1L Graveyard)

The Rhythm of the First Year: The Mid-September Crisis So Let Yourself Believe the September Fog is Normal and Nearly Universal

The Rhythm of the First Year: The Mid-September Crisis Almost All of You Will be Worried About Something Else Four Weeks from Now!

The Rhythm of the First Year The Mid-September Crisis Uranium Radium Oxygen Krypton

One Month In: Three Things to Think About September Fog Calisthenics A Thousand Words

The Rhythm of the First Year & Elements Common Mid-September Concern: This class is fun and all, but does any of this really matter?

The Rhythm of the First Year Same at Every School Where I’ve Taught Same Every Year But One

FALL 2001

Pierson v. Al-Qaeda???? FALL 2001

The Rhythm of the First Year & Elements Analogy to Calisthenics

The Rhythm of the First Year & Elements Analogy to Calisthenics Apply Language of Case to New Facts Compare Facts of Case to New Facts Apply Policy Concerns to New Facts Identify Key Similarities & Differences

The Rhythm of the First Year: The Mid-September Crisis KEEP IN MIND: Analogy to Calisthenics: You Are Starting to Use New Muscles, So You’ll Be a Little Sore

One Month In: Three Things to Think About September Fog Calisthenics A Thousand Words

The Rhythm of the First Year Staying Motivated

The Rhythm of the First Year Staying Motivated Fall 2014: Ray Rice, the Elevator Videotape & the Failure of Words

The Rhythm of the First Year Staying Motivated Storytelling Will Be Your Responsibility

The Rhythm of the First Year Staying Motivated Storytelling Will Be Your Responsibility Development Project

The Rhythm of the First Year Staying Motivated Storytelling Will Be Your Responsibility Development Project Parental Rights

The Rhythm of the First Year Staying Motivated Storytelling Will Be Your Responsibility Development Project Parental Rights Environmental Partnership

The Rhythm of the First Year Staying Motivated Storytelling Will Be Your Responsibility Development Project Parental Rights Environmental Partnership Less Visible Assault

The Rhythm of the First Year Staying Motivated Storytelling Will Be Your Responsibility Development Project Parental Rights Environmental Partnership Less Visible Assault Remember the Client Who is Waiting for You!!

Back to Work!!

Shaw  Demsetz: Intro to Externalities KRYPTON DQ 1.29 & URANIUM DQ1.31

STATE v. SHAW DQ1.29(a): Krypton Assume net-owners have no enforceable rights in fish caught in their nets until they physically remove the fish from the nets. Thomas chooses to take fish from the owners’ nets. Who might be affected by this decision? Which of these effects is Thomas likely to take into account when deciding whether to take the fish?

EXTERNALITIES Costs or benefits external to a decision-making process Must be with reference to particular decision or activity. Helpful to start by identifying decision-maker

EXTERNALITIES Costs or benefits external to a decision-making process Must be with reference to particular decision/activity Helpful to start by identifying decision-maker If decision-maker considers a cost, but chooses to absorb it, not an externality E.g., Thomas considers own exertion necessary to take from nets, but may decide to take anyway

STATE v. SHAW DQ1.29(a): Krypton T Likely to Consider Some Likely Externalities Own Exertions/Cost of Equipment, etc. Benefits to Dependents Benefits to Likely Purchasers Threats of Self-Help by Net-Owners (if any) Costs to Net-Owners, Their Dependents, Their Purchasers Costs to Net Manufacturers Effect on Ecosystem (note might be benefits if “theft” discourages use of big nets) Benefits to Suppliers of Substitutes

EXTERNALITIES Examples from outside this problem? Costs or benefits external to a decision-making process With reference to particular decision or activity Helpful to start by identifying decision-maker Examples from outside this problem? Me not trimming my tree Other examples? URANIUMs Volunteers

Questions on DQ1.29(a) or Externalities? STATE v. SHAW DQ1.29(a) & 1.31 Questions on DQ1.29(a) or Externalities?

STATE v. SHAW DQ1.29(b) Assume Net-Owners have no enforceable property rights in fish caught in their nets: If the fish are worth more to the net-owners than to Thomas, presumably there is some amount of money they could contract to pay him to leave the fish alone that would leave all parties better off than before the contract.

STATE v. SHAW DQ1.29(b) Krypton What obstacles stand in the way of the parties entering contract where T promises not to take fish from nets? Assume cost to net-owner is $500/wk & benefit to Thomas is $300/wk. Assume One-on-One Negotiation.

STATE v. SHAW DQ1.29(b) Krypton Costs of One-on-One Negotiation Include: Investigation Costs (e.g., find relevant parties; determine relevant costs/values; legal research) Bargaining Costs (e.g., time, representation) Strategic Behavior (negotiating postures) Enforcement Costs

STATE v. SHAW DQ1.29(b) What obstacles stand in the way of the parties entering contract where T promises not to take fish from nets? Assume cost to net-owner is $500/wk & benefit to Thomas is $300/wk. Additional Obstacles if Multi-Party Negotiation (multiple net-owners; multiple fish-takers)?

Additional Costs of Multi-Party Negotiation: STATE v. SHAW DQ1.29(b) Additional Costs of Multi-Party Negotiation: Free-Riding Holdouts Organization/Management Costs Compare Agreement on Restaurant & Movie: Two People? Four People? Your Parents, Your Siblings, Everyone’s Spouses & Kids??

Collectively: “Transaction Costs” STATE v. SHAW DQ1.29(b) Collectively: “Transaction Costs” Investigation Costs Bargaining Costs Strategic Behavior Enforcement Costs Free-Riding Holdouts Organization/Management Costs

Transaction Costs Costs of Reaching Agreements Can Prevent Parties from Reaching Bargains that are “Efficient” (i.e., Would Make Everyone Better Off)

Questions on DQ1.29(b) or Transaction Costs? STATE v. SHAW DQ1.29(b) Questions on DQ1.29(b) or Transaction Costs?

INTERNALIZING EXTERNALITIES Changing Rules, Laws or Circumstances to Force Decision-Maker to Take External Costs or Benefits Into Account Generally Imposed from Outside; Not Done by Decision-Maker (Contrast “Internalizing” in Psychology)

INTERNALIZING EXTERNALITIES Changing Rules, Laws or Circumstances to Force Decision-Maker to Take External Costs or Benefits Into Account. Generally Imposed from Outside. Beneficial Because Means Price of Activities Will Better Reflect Real Costs & Benefits Pollution costs  Damages & Regulation Charitable services  Subsidies/Gov’t Operation

INTERNALIZING EXTERNALITIES Changing Rules, Laws or Circumstances to Force Decision-Maker to Take External Costs or Benefits Into Account; Generally Imposed from Outside. Several Ways to Do: Require Payment of Damages or Fees (or Subsidize) Regulate Activity: Criminalize or Limit (or Require) Private Negotiation (“Bribes” to Do or Not Do Activity) (BUT Limited by Transaction Costs)

DEMSETZ ARTICLE DQ1.31: Uranium Examples of internalizing externalities from outside the reading?

DEMSETZ FIRST THESIS (Descriptive)

DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.”

DEMSETZ 1st THESIS: DQ1.33 New ppty rts tend to develop “when the gains of internalization become larger than the cost of internalization.” Gains = Having more effects considered by decision-maker, presumably leading to: Reduction in harmful effects AND/OR Increase in beneficial effects Maximum Potential Gain = Total elimination of externalities (unlikely)

DEMSETZ 1st THESIS: DQ1.33 Uranium New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” What are relevant “costs”? Focus on people who might want to change the game (force internalization), not on decision-maker who is source of externalities.

DEMSETZ 1st THESIS: DQ1.33 Uranium New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” What are relevant “costs”? Costs of bargaining privately Costs of collectively creating new rules (can be expensive) Multi-party negotiation Legislation or agency regulation

If harm from externalities > cost of change  change in rule. DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” If harm from externalities > cost of change  change in rule.

DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” = If cost of externalities > cost of change  change in rule Rough Approximation (Not Precise Math)

DEMSETZ FIRST THESIS New property rights tend to develop “when the gains of internalization become larger than the cost of internalization.” = If cost of externalities > cost of change  change in rule Rough Approximation (Not Precise Math) Resulting Change in Rule Unpredictable E.g., Legislature responding to public outcry must do something Lots of possibilities; legislators might not make good choices