MUSIC: THERE WILL BE BLOOD Movie Soundtrack (2007) Music by Jonny Greenwood Trey’s Monday DF Sessions Moving to 9:30-10:20 am Room F200 Fajer’s Exam Technique Workshops: Wed. 11/5 & Tue. 11/11 both in Room 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 1 st 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.Reward useful labor 2.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: 1 st 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: 1 st 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 This theory of ownership or, perhaps more accurately speaking, lack of ownership is practically universally recognized....” “[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: 1 st Possession Are Pierson/Liesner/Shaw Good Tools for Determining 1 st 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: 1 st Possession (OXYGEN) DQ2.23. Arguments from Factual Similarities re Usefulness of Pierson/Liesner/Shaw

Argument By Analogy Oil & Gas: 1 st 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: 1 st Possession (OXYGEN) DQ2.23. Arguments from Factual Differences re [Lack of] Usefulness of Pierson/Liesner/Shaw

Argument By Analogy Oil & Gas: 1 st 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