Sunday, March 16, 2014
Property has always been treated somewhat exceptionally in the realm of conflict of laws, but today conflicts rules for property are more unusual than ever — not because they have changed, but because they haven’t. Decades ago, most states discarded the general body of traditional conflict-of-laws doctrines, a transformation referred to as the Conflicts Revolution. Property, however, remains mysteriously untouched. The basic common-law principle is that property is governed by the law of its location — the situs rule. Despite persistent academic criticism, the situs rule is still followed in every state.
This article argues certain structural features of property support the situs rule, notwithstanding the Conflicts Revolution. Theorists have increasingly stressed property’s “in rem” quality — the idea that property is “good against the world.” This article shows how that feature creates a special need for uniform treatment across jurisdictions, such that a single, exclusive source of law is applicable to questions concerning the division of rights in a given asset. Property’s in rem character is a consequence of the allocational model used as the central organizing concept in property law. That model treats each property entitlement as part of a zero-sum game, in that one person’s entitlement to an asset means no one else can validly hold an incompatible claim to the same asset. Using different rules to resolve the same legal issue both aggravates the information cost problems generated by such a system and undermines its overall coherence. The situs rule in turn responds to the elevated need for uniformity in the property context by creating a focal point that enables states to coordinate their conflicts rules. The article shows how uniformity devices pervade property, including intellectual property and even other fields with certain formal resemblances, such as marriage and corporations law. Beyond its implications for issues of property jurisdiction, this article helps show where property’s much discussed “in rem” character comes from, what it really means, and how it distinguishes property from other private law fields like contract and tort.
In this paper, Stern effectively defends the "situs rule" against "academic hostility." At the risk of oversimplifying, the situs rule states that the place where the property is located holds exclusive jurisdiction over cases relating to that property. Stern explains, "the rule calls for the resolution of property questions using the substantive law of the situs of the property in dispute."