NARRATOR: Thanks for joining this episode of the No. 86 lecture series, where we discuss the foundational principles of Property Law as well as current topics in the academic literature. Today’s episode features Eric Claeys, Professor of Law at Antonin Scalia Law School. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. PUBLIUS: Professor Claeys, I want to start our discussion with a general question about public law versus private law. People often think of public law as being the more important of the two. Why do law students have to learn about both in their first year classes? ERIC CLAEYS: There are a lot of trends in legal education and the scholarship that lead law professors to suggest to students that public law is more important than private law. I mean, the U.S. Supreme Court has most of its docket focused on public law issues. Constitutional law is a really attractive, glamorous, interesting subject, and so that tends to turn people's interest to issues of public law. When a legislative majority in some state really, really wants to pursue some policy, it has a lot more power to do so by passing a statute than by hoping it can do it at once through the common law. Even so, I think it's safer, it's better learning for a student to start with the private law and work up to the public law. There are a few different reasons I say that. The simplest is that the private law operates like a backstop, and most lawsuits that arise in real life, most transactions that arise in real life, they rely on backstop law. Lawyers may need to consult some statutes to make sure that what they're doing for their clients to stay consistent with the statutes, but most of the rights that are passing or most of the rights that are in disputes are given in private law. A lawyer may need to know what an environmental statute says. A lawyer may need to know what a zoning ordinance says. The lawyer needs to start by saying, "An common law, the client has blank rights at common law in the law of nuisance, in the law of trespass, in parallel fields of property, and then once I know what the client can do generally as common law, then I need to check to see how that common law authority is limited by statutes." The lawyer cannot know what the client is allowed to do unless the lawyer starts with the client's right to private law and then subtracts out the prohibitions that the client faces at public law. PUBLIUS: Let’s now talk specifically about Property Law and why it’s important for a first year law student. How does Property relate to the other classes that they are taking? ERIC CLAEYS: One of the reasons that I like to teach property as a first year fall course is because it's a great gateway to think about how different parts of the first year curriculums relate to each other. Some first year courses are fields of wrongs, and a few of them are fields of rights. Property is a field about rights, and its rights specifically in relation to separable resources. When I say separable resources, I mean resources that are resources that don't obviously belong to any one person. A pen, a piece of land, an idea, a franchise, these are all separable because any one person could hold them as much as anybody else could. Property is not the only field of rights in this sense. A lot of the rest of the first year curriculum takes for granted that we have rights to our bodies. There are torts like battery that protect rights to bodies. There is a field that our upper level courses cover called unfair competition, and unfair competition protects a right to practice a calling. The fields of torts and contracts in criminal law are all fields about wrongs. You can't have a field focusing on bad acts unless there are rights and you know what wrongs there are in relation to other people's rights. The field of contract is a field about wrongs that people commit against each other if those people already are in some contractual relationship and then one person decides to breach. The field of torts is a field for wrongs that arise when people don't already have some preexisting contractual relationship. Basically, they're both strangers. Each owes the other's responsibilities to respect the other's rights, and one person breaches one of those responsibilities. Then the field of criminal law is a field of public wrongs. Somebody does a bad act that really disturbs the public in some sense. Fields like criminal law, tort law, and contract law take for granted that there are already these fields of rights out there. A tort like battery takes for granted there exists a right of bodily integrity, and the tort of battery is tailored to make sure that somebody respects somebody else's personal bodily integrity. A field like contract assumes that people have a right to contract that's got some limits, and then a field like contract works out what people need to do to enter into a contract and what they do to breach contracts in relation to one another. Then fields like tort and contract then apply differently depending on the kind of right, and so in tort, you'll study this when you go through property torts and torts to person and to see how negligence applies to personal injury and to property damage. Then the same thing can happen in contracts. You'll study contracts between people in an employment setting or contracts for one person to do something for someone else. Then there'll be contracts where property is exchanged. It turns out that principles of contract and principles of tort will differ in how they apply, depending on whether the right is a right of a person or right of property. Property gives the inputs to tort law and to contract law to know how principles of tort and contract should apply when the obligations that are being enforced are obligations about a thing or separable resource and the rights that the owner has to be left alone by people who are not the owner. Then the same thing runs through with criminal law too. You can have crimes to property, like larceny or arson. You can also have criminal trespass. For those crimes to hang together, you need to know that there's a property right. Most crimes you can be secure that in knowing that the resource that's been damaged or destroyed or stolen, that is something that's ownable. PUBLIUS: You mentioned things that are “ownable.” Is that how you define property? ERIC CLAEYS: If a student asks me how to define property, I'll warn them that I think there's three different ways to think about property. Property can mean different things in different contexts. In one context, property's referring to a field of law. In that field, property is the field covering what I call separable resources, and property is the set of all legal relationships that help people have access to different separable resources. The field of property says who has prior access and who has responsibilities to respect other people's rights of access. In another definition, property is a synonym for the word ownership, and ownership is a legal relation where one person has authority that's unlimited in time and as unlimited as it can be in real life to manage the resource. Everybody else needs to respect that person's near unlimited authority to manage the resource. There's a third sense in which property refers to a right that's got a certain set of characteristics. Rights with those characteristics are things that we can recognize as rights even if they're not as strong as rights of ownership and rights that are property in the sense are things that are going to get protection in court by injunctions or specific performance, so equitable protection. If a bankruptcy court says, "We have to figure out all the property in this person's estate, these are the kinds of rights that'll count as property." If the government takes land or some resource, the government needs to pay just compensation to people who have property and people who have property in this sense are people who can claim that they have a right to just compensation. PUBLIUS: Why does a society need property rights and protection for them? ERIC CLAEYS: Property's a wonderful subject to think about why societies go to the trouble to organize access to resources. There are a few basic reasons. One has to do with freedom. People have their own life priorities, and there are only so many resources in any community to go around. A system of property is a way to give some people strong, close access to some resources, and then tell them, "Stay away from these other resources. Other people are going to have the highest rights of access in relation to those." When everybody agrees to a system where resources are distributed in that way, people then have some resources they can put more of their personas into, and they can make those things more of what they want. A system of property coordinates access to resource so everybody has a extra special control over a few resources and can then promote their own free projects with those resources. That's all a long way of saying property secures the condition to freedom. Then property also has a lot of other social benefits for a community. A system of property, it sends signals to people that there are one or two people who are the gatekeepers to a resource, and those gatekeepers deserve broad managerial authority. That set of signals that some few people have the strongest rights of access to a resource give the people with those rights protection. The protection encourages them to make risky investments to work with their labor, to invest capital, to improve resources and make those resources more productive. Property makes resources more productive, and then that increases the number of resources available in the community, and a rising tide lifts all boats. Then a system of property also helps coordinate people's behavior. I've been talking in a lot of my examples so far assuming that there's one person who's the complete owner of a resource. Lots of time, people do end up being sole owners, but lots of time, somebody who is a sole owner uses that power of sole ownership to enter into social relations with others. If a property can be understood as a gate, the gatekeeper gets to decide who to let in through the gate and who not. A system of property rights lets somebody build a big building and then to rent it out to a thousand tenants, and each of those tenants can have one small property interest in the apartment complex. The system of property has coordinated the relationship between everybody outside the building, the landlord and the tenants, so that the landlord and the tenant are all getting some use out of the building in a way that's beneficial for each of their specialized needs. The term property is a catchall term, and it sends a really broad signal. Then that signal can be adjusted to different kinds of resources. When somebody hears the term property, most often, the signal that's being sent is to say when one person says, "I have property," saying "This resource is what I would call a separable resource. It's not part of my body. It's not my reputation. It's not my name. It's not one of my talents. This is a thing I could own, you could own, I can use, you can use. When I say it's my property, it's I'm the one who has priority to decide who gets to use it and how much it ought to be used." The word property signals right away, the resource we're talking about, it's land, it's a tangible article. It's something intangible like wealth or an idea. The word property then signals I've got a right of a certain character and a certain strength. One of the messages that the word property sends is that the right is what's called an in rem right. The in rem is a Latin phrase meaning "toward the thing." In rem is to be understood opposite to in personam, toward the person. I said a contractual promise is in personam. The two people each need to make a promise. They each need to do something in their own persons to create the obligation between the two people. In rem obligations are obligations that people owe, and they don't need to know anything about the person who's the bearer of the in rem right to know they owe the obligation. In the property scholarship, the best illustration of this is to ask yourself when you walk down a street and you see all these cars in the street, can you take a key and scratch the sides of any of those cars? Answer no, but then the important question is, did you need to ask the permission or ask for an objection from any of the car owners before knowing you couldn't do that? You don't need to know anything about who owns those cars. The fact that the obligations one, you don't need to know anything about the identity of the car owners to know you the obligation tells you that's an in rem obligation. When someone says, "I have property," they're signaling there's some separable resource in play. I have a right to it, and it's an in rem right, so leave my stuff alone until you come find me and I give you some permission. Then those in rem rights can be structured in different way for different resources. Rights for real estate can differ a lot for rights in personal property like tools and animals. Those rights can differ a lot from rights in minerals underground. Then mineral rights can differ depending on whether you're talking about stationary minerals or what are called fugacious minerals like oil and gas. Then those rights differ from rights in water and rights in all of those different tangible resources differ from rights in intangibles like ideas and wealth. Then property law and policy focus on asking how should the rights be structured in different situations and given what we know about the resource and how people are likely to transact with it or how they're likely to use it? PUBLIUS: What basic concepts do you start with in Property class? ERIC CLAEYS: Property professors like to start off property courses talking about acquisition. Acquisition doctrines focus on resources that aren't yet owned and ask what does somebody need to do to become an owner of them? A good property professor then backtracks somewhere later in the course and warns not every resource is ripe for acquisition or capture the way a fox on a beach is. It turns out that one of the other functions of property law is to consolidate different packages of resources into one, I'm going to use irony or legal quotes here, res, R-E-S, it's Latin for thing. Think about a lot of land. If somebody owns a lot of land, they own the land. If there's a house on the land, the house is real estate. It's part of "the land." If there are chickens on the land, chickens are domesticated animal, the chickens are personal property, but by operation of law, when somebody owns land, they own by operation of law the domesticated animals that have habitats on that land. If there's coal under the land or dirt under the land, the owner of the land owns the coal or dirt as real estate too because minerals that are by law stationary minerals run with the land, and they're treated as real estate unless the landowner assigns a mineral lease or some other minerals rights to some third party. Then the person who owns the land owns by operation of law the use of water in a stream that's right on the edge of the land. The riparian rights run by operation of law. They're part with the ownership of the land. The riparian rights are real estate too. Then the landowner also is entitled to the more or less exclusive use of the air over the land too. A deed gives somebody property, not only in the land but also in the minerals and in the air and in the water rights and then some sort of secondary rights in the domesticated animals. Lots of property ask questions about whether different clusters of resources should be consolidated or kept separate. If a fox runs across your land, you have exclusive access to catch that fox while it's on your land. If it runs off your land, you cannot say, "That fox is still mine even though it's left my land," because a fox is a wild animal. If there's oil under your land, a landowner cannot make the argument about the oil that he could make about the coal. A landowner can say that "Coal is underneath my land, so it's my coal." For the oil, the landowner can say, "I'm entitled to exclusive priority to drill on my own land to get that oil," but if a neighbor drills on her own land and siphons the oil from underneath of the person's land and siphons it onto her own land and her own well system, she hasn't done anything to commit any kind of tort or theft against the landowner. Oil does not run by operation of law with land the way that coal does. Different theorists use different terms to talk about this, but property doctrine focuses a lot and property policy focuses a lot on questions about what's accession or race composition or resource consolidation. All of these are different terms asking why does property law bundle or consolidate some real-world resources into packages so that there's one thing in law, and why in some other cases, does it treat some resources separate in separate things? PUBLIUS: You made a reference to the famous fox case, which most law students will be familiar with. Why do Property classes often start with that? ERIC CLAEYS: When I start off a property course, I start with the case Pierson versus Post, affectionately known as the fox case. In it, Post sued Pierson to get the value of a fox pelt, and the fox pelt was worth about $50. Post had been riding a horse, and he'd had a pack of hounds and had been chasing the fox. He chased the fox onto a beach, and the beach was public property. Pierson was on that beach and saw the fox coming and clubbed it to death. Sorry. Post thought he had had possession of the fox by hunting it down and having it in hot pursuit. Pierson said, "No, I have possession of the fox because I'm the one who killed it." That tees up an important question in property law, what exactly must one do to completely come to acquire a fox pelt or more generally, what must one do to come to completely acquire some article of personal property? Now the case is fun on a lot of different levels. Just even before you get into property law in theory, the case is fun because of a backstory. Post's family was a new money family. The family had made money during the Revolutionary War by running privateer boats and sinking British merchant ships, and that's a good way to make money, but he was kind of nouveau riche. He had tacky wealth. Pierson's family was a good Yankee family, one of the families that had lobbied for the Revolution to happen. Pierson was from a family that viewed itself as old money, established, respectable wealth in the same town. It was also part of the backstory that the Yankee families like Pierson's assumed that this beach, even though it was a public beach, was one that only these respectable families could use. When Post flushed his hounds and rode out like a British aristocrat onto this beach, Pierson was sending a social message that, "You're using a beach that only the real upper crust here can use, and we Yankees don't want these new money rich people pretending to be British fox hunting aristocrats on our beaches." The insult that Post took motivated Pierson's dad and Post's dad to take this to the highest court of New York, even though the fox pelt was worth what we'd say now is only like $3,000. Students enjoy hearing that backstory, and it reminds them right away that litigation or the cases we'll read are not just about the policy issues we're going to cover. They're about real people and sometimes people with real deep seeded quarrels. Now then for the case itself, Pierson teaches a basic proposition that normally when you have an article of personal property and nobody yet owns it, the way that you come to acquire it is by having actual control over it, by capturing it. The capture rule is not self-executing. They're going to be hard cases, and Pierson's one of these cases. You could say that coming into hot pursuit of a fox is close enough to capture that we're going to treat it by law as capture. Why would we? Why would we not? That's a good set of topics to talk about. Pierson's also interesting on the first day of class because it's a good way to introduce students to legal reasoning. When you reason as a lawyer about an issue like whether or not the fox was captured, there's a hierarchy of authorities you have to go through. You have to look at whether there's any controlling statute. Then you have to ask whether there are any cases from the jurisdiction that might be relevant and then are there any other persuasive authorities from other jurisdictions that are closely on point? The Pierson case itself runs through that hierarchy. The court asks whether there are any statutes in New York, and the case is decided only 30 years after the United States separated from and revolted from Britain. The court also has to look at English authorities, and it says acts of parliament are not on point because Britain never has parliamentary legislative jurisdiction over New York. The court also runs through case law in New York. There's none. There is case law from England, but it's not quite close enough on point. At that point then, the court has to start consulting the international law treatises that lay the groundwork for property, treatises by people like Grotius and Pufendorf and then even Locke's Second Treatise of Government. Eventually, we get into looking to see what the canonical treatises say about the basics of property and how the basics of property apply to Pierson, but we only get there after a process of elimination. We've ruled out any statutes in all the cases that might apply but don't. I like to teach Pierson on the first day of class because it's a wonderful case just to situate students who don't know anything about law to make them understand some basics about law. Pierson, it's a cause of action in tort called an action on the case. The action on the case is as extinct as the dinosaurs are, but it's a really important cause of action for any law student to know, so I want to familiarize them with that. It's a tort about a property right, and so I like to ask the students, so why are we studying a tort on the first day of property class? Gradually, I'll make the student see there's an action on the case, and Post is going to have his action only if he has a property right and he can show that Pierson committed a tort to his property right. Right then, I've got the students to think tort is a field about wrongs that somehow relate to property rights and rights in other parts of people's lives. Then once we see that there's a property issue that's crucial to settle the tort question, then we have to consult the different kinds of legal sources that might tell us whether Pierson had established a property right yet in the fox. That's when we ask, is there a New York statute on point? No. Are there any New York precedents of saying when someone can catch wild game? No. Are there any English statutes on point? They wouldn't be on point. They wouldn't control because England doesn't have jurisdiction over New York. Are there any old English case laws that are part of the background decision on law in New York? There are some decisions, but they're not exactly on point for somebody catching a fox on a public beach. Just by walking through those series of questions, I'm familiarizing the students with the fact that there are different fields of private law. They can overlap a little, but they've got different focuses, and then you need to look at statutes. You need at common law. You need to look at common law from other jurisdictions, and you have to look at secondary treatises to figure out what the law is. PUBLIUS: Are all acquisitions governed by the same type of rules? ERIC CLAEYS: Different resources are going to be regulated by different principles of acquisition. Land is a resource that doesn't move. The way to come to acquire land if you don't have some statute settling things is to just go put your stuff on it, and these are called occupancy rules. Now tangible personal property, those are things that can be held and somebody can hold, carry away. For personal property, then the rules you expect to have are rules of capture. Then somebody has to establish complete control. If you're talking about water and the flow of water in streams, rivers, and other water courses, water can't be captured, and it isn't stationary like land is. There, the compromise that's been worked out is to focus the property in water on use of the water. You establish property by starting to use the water for some continuous purpose. When you're talking about ideas, the kinds of ideas that can turn into authorial works and copyright or they can turn into business projects that could be trade secrets or business method patents, there the analog to capture and occupancy, if the idea's already out there, there's no reason for you to have property. Anybody could use it. Instead, the focus, common law, is first on creating the idea and then second on keeping it secret. Then you can use those basic paradigms for occupancy, for capture, for use, and for creation and keeping secret. You can use those then for more complex forms of property, like the property that somebody has in a dollar bill. The dollar bill, if you have to stop and say, on one stance, that's an intangible measure of property, but on the other stance, there's a piece of paper with a sign on it, that piece of paper will treat like tangible personal property. If there's a loose dollar bill on the ground, you have to capture it. Most property professors spend a lot of time early in the course asking when somebody acquires an unknown resource. When they do so, they have two agendas in mind. One is to ask as a policy matter in what circumstances is it appropriate for somebody who does not yet have rights in a resource to then claim rights that have priority over the rights of everybody else who might have gotten that resource too. Then the acquisition doctrine then answers much more specific questions if we're talking about fox pelts, if we're talking about land, if we're talking about an idea. What are the doctrinal details you need to master to know whether one person has acquired prior access over this resource to the exclusion of everybody else? The acquisition lets us focus both on the doctrinal details about particular resources, and it lets us tackle high level questions about why have property at all. Why not let resources be in a free for all where anybody could get them? I guess then let me start with the higher level questions. In the tradition, there are two main sets of answers to the question if a resource is unowned, why give someone prior access? One answer comes from Locke, and Lock's answer is labor. If one person does work to find a resource and then incorporate it into his life plans and uses it then to make his life better, the search, the effort, and then most important, the use of the resource for that person's wellbeing give that person a reason to tell everybody else, "I'm now using this. You go find other things that are not yet owned and use those for your own wellbeing." This process of undertaking purpose of work to make one's own life better and incorporating a resource into that purpose of work, that's labor. The other justification for having property comes from Grotius and Pufendorf. Grotius and Pufendorf talk about possession, and possession, it's conduct that signals to other people that you've done something to signal, "I now have incorporated this thing into my projects. Stay away." Law professors and philosophers like to ask which is more important, labor or possession? I think the answer is they're both important. They're two different ways of focusing on the same kind of behavior. They're just focusing on different implications of the behavior. If you have a resource, the resource is going to implicate the person who ends up with property and then all the people who are going to owe duties to the person who ends up with the property. If you think about a triangle between the resource at one corner, the person who's going to be the proprietor on another corner, and the duty holders in the third corner. Labor focuses on the leg of the triangle between the resource and the right holder. The person who ends up with the right claims the right saying, "I am laboring on this resource to make my own life better or to help carry out plans that'll make me and other people better off." Labor is the justification that the proprietor has in his own life to signal here's why I deserve an entitlement. Anybody could take that same resource and try to incorporate it into her life plans, as well as the first person. When somebody starts laboring on a resource, it's not quite enough to say, "I'm going to make my life better to do so." The person also needs a signpost to communicate to others, "I'm taking this thing out of the commons. I'm going to to start using it for my benefit, and I've given you enough notice that it's now reasonable for you to go somewhere else." The phenomenon on possession is focusing on the leg of the triangle between the person who's going to end up the proprietor, and the people who are going to be the duty holders. Conduct that signals claims of possession is the conduct that signals from the proprietor to the duty holders, "You're now duty holders. Go somewhere else." Then in acquisition doctrine, you see this play out. The trial acquisition doctrines tend to focus on simple behavior that seems to focus on possession. Have you occupied land? Are you farming it, or have you put a fence around it? Have you captured a resource? If you've invented a new idea, have you invented it? Are you using it? Are you keeping it secret? Those are all things that focus on possession. Possession in simple contexts, it's a twofer because conduct like capturing, fencing, keeping secret, it's claiming possession, but 999 times in 1,000 you expect that the person who has possession is also going to labor in a productive way with the resource. PUBLIUS: So if you possess something, do you have to put labor into it? Are you required to make use of your resource? ERIC CLAEYS: In hard cases where you might worry that the person who's the first to possess might not put the resource to its best use, then property doctrine often gives people opportunities to argue, "Well, even though I didn't possess in the most literal sense, even though I didn't acquire in the most literal sense, I should still be regarded as the person who ended up being the proprietor." There was a custom in the 19th century, especially in New England among whalers. When a whaling company fitted a boat and the boat hit a whale, more often than not, the whaling company could not be able to pull the whale right in there and then and bring the whale back. Whaling companies and all of the people who resided in the beach towns up and down New England settled on a custom. The whaling companies would have these specialized marks on their lances, and every company had its own special markings. The whale would wash up onto shore, and then everybody in New England knew you then sent the lance to Provincetown on Cape Cod. In Provincetown, then there'd be a bazaar or a forum, and a whaling company representative would be there. If the lance came back, they'd send representatives to go get the whale, and they'd pay the person who found the whale a 10 or 15% finders fee for the find, and then the company would get back the whale. That custom was not consistent with rules of capture. The beach resident who finds the whale ends up as the person who's in control of it. It's on that person's land. Like normally, if capture requires total physical control, the whaling company did not establish total physical control. They didn't lash the whale to the side of the boat. The courts that saw this custom said, "This custom is a perfectly sensible way to carry capture norms and property norms into effect when you're dealing with a special case like a whale." The whaling company is laboring in a moral sense when it fits out a boat, borrows lots of money to buy the boat and the equipment, borrows money to pay the workers, the seamen, and sends the boat out to then spend like six weeks finding a whale and getting it. All that activity is morally productive. All that activity finds the whale and brings the whale into human commerce. The whaling company does something that's kind of sort of some form of capture when it puts a bomb lance that has markings on it. The markings claim possession as much as can be done consistent with the labor. In that sense, labor justifies having these possession rules, but then when real bright-line possession rules don't facilitate labor so well, then courts are willing to relax bright-line possession rules and go to more flexible possession rules to reward the labor. It's important to understand and study these rules when you're dealing with whales just to see how these rules work out in the common law. There are examples like this still in the common law today, and the best example in contemporary litigation would be about boats that sink. If a boat that sinks and a boat comes along trying to salvage the old boat, does the boat need to pull up the sunken boat? Is it enough for the boat to leave a buoy over the sunken boat? Is it enough to have a video camera that does what's called telepossessions and gets a picture of the boat on the surface of the ocean? The same ideas from the whale cases apply forward. Then even when you're dealing in a really sophisticated economy with very formalized property rights with deeds or record systems, these same basic ideas about facilitating search via labor and having clear rights of possession, you can then evaluate recordation systems and deed systems by whether they carry into effect the same policies that the common law is thinking about when it's talking about possession and labor. NARRATOR: Thank you for listening to this episode of the No. 86 Lecture series on Property Law. The spirit of debate of our Founding Fathers animates all of the No. 86 content, encouraging discussion and critical reflection relative to how each subject is widely understood and taught in law schools and among law students. Subscribe to the No. 86 Lecture series on your favorite podcast platform to have each episode delivered the moment it’s released. You can also go to fedsoc.org/no86 for lectures and videos on Federalism, Separation of Powers, the Judiciary and more. Thanks for listening. See you in class!