Friday, March 9, 2007

Isaacs on Takings and Patents

Davida H. Isaacs (Northern Kentucky University) has posted Not All Property is Created Equal: Why Modern Courts Resist Applying the Takings Clause to Patents, and Why They are Right to Do So on SSRN.  Here's the abstract:

After a century of disregard, the question of whether patents are entitled to protection under the Fifth Amendment's Takings Clause has recently become a topic of scholarly and judicial debate. While one might have expected this issue to have been settled long before, it is only the recent burgeoning of patentholders' regulatory takings claims that has made this question one of pressing interest. Thus far scholarship on the issue has focused on whether or not patents have historically been characterized as "property". Meanwhile, last year's rejection by the Federal Circuit of a patentholder's right to assert a Takings Clause claim led to both external criticism as well as a vocal dissent by an esteemed member of that court.

Considering the issue from a new angle, this article demonstrates that determination of patents' status as "property" is a relevant but incomplete analysis of the constitutional question. That is because the Supreme Court has already concluded that some "property interests," particularly federal benefits, are entitled to Due Process Clause protection but are not entitled to Takings Clause protection. Patents are similar federal entitlements, offered only because they serve society, and thus they are not entitled to the full panoply of constitutional protections. Moreover, if patentholders could assert regulatory takings claims, the fear of costly claims could very well deter the government from making worthwhile policy changes. For instance, there is currently significant public concern about the high prices of pharmaceuticals resulting from drug companies' patent privileges. Refusing to grant patentholders the right to a Takings Clause remedy will prevent society from being stuck with earlier suboptimal patent policies. In sum, permitting patents to trigger takings claims is neither compelled by modern Supreme Court precedent nor wise as a policy matter.

Ben Barros

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March 9, 2007 in Intellectual Property, Property Theory, Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (0)

Klein on Law of the Lakes

Christine A. Klein (University of Florida College of Law) has posted Law of the Lakes: From Protectionism to Sustainability on SSRN.  Here's the abstract:

There is something in the human spirit that responds with great passion and outrage when outsiders—however defined—look beyond their own back yards for a useable source of water. Ironically, that same outrage is conspicuously absent when nearby neighbors use water wastefully, as by excessive lawn watering during rainstorms, neglect of leaky faucets, or failure to modernize outdated bathroom fixtures that use large amounts of water simply to transport waste. Curiously, the outsider-neighbor distinction seems to be rooted in artificial human boundaries (such as state lines), rather than in meaningful ecological boundaries (such as watershed limits). In a well publicized Michigan dispute, for example, residents were outraged by a proposal of Nestlé Waters (a subsidiary of the Perrier Group of America) to construct groundwater withdrawal and water bottling facilities within the state. In that case, citizens responded with organized protests, blocking truckloads of bottled water by lying in the streets, and carrying banners with slogans, such as our water is not for sale. Presumably, the same response would not be triggered by the consumption of an equal amount of water by Michigan irrigators, or even by the incorporation of similar quantities of water into products sold outside the state as baby food or soft drinks.

Whatever its explanation, this protectionist response is powerful and widespread. The underlying energy can be harnessed for good, or allowed to express itself in ultimately unproductive ways. Residents of the Great Lakes basin, for example, have long feared that water users from other states will seek to acquire their lake water, exporting it to arid regions of the country. Basin residents have channeled that emotional energy into the development of the Law of the Lakes—a series of treaties, compacts, agreements, state and federal legislation, and common law designed to regulate and protect Great Lakes resources. To date, those documents have struck a precarious balance between the impulses of protectionism (regulating outsiders) and sustainability (regulating water use by basin residents, as well as by outsiders). Resolving the tension has taken on a new urgency, as the Great Lakes states and provinces recently agreed to develop a new and consistent series of state and provincial water laws.

This Article has a practical goal: to convince state lawmakers of the need to regulate in a comprehensive and evenhanded manner, avoiding short-sighted fixes or politically appealing shortcuts. To accomplish that goal, Part I focuses upon another region of the country—the Colorado River basin—where residents have also undertaken the task of managing a water system that includes two nations (the United States and Mexico) and numerous states. Learning from the successes and failures of the resultant Law of the River, this Article derives guiding principles for the emerging Law of the Lakes. Part II makes a crucial distinction between protectionism and true sustainability, examining the existing Lake documents for evidence of each. Part III offers a description of six essential components of any sustainable state water code, and provides references to a menu of draft legislative provisions available for adoption (with or without modification) by the Great Lakes states. This Article concludes with the hope that the Great Lakes states and provinces realize the tremendous opportunity now facing them, and take full advantage by developing a sustainable body of water law.

Ben Barros

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March 9, 2007 in Natural Resources, Recent Scholarship | Permalink | Comments (0) | TrackBack (1)

Thursday, March 8, 2007

A Twist on Land Assembly


Seven families on Lori Lane -- who together make up the entire population of the dead-end road -- are selling their homes en masse for a combined asking price of $4.2 million. Their motive? To get out before a massive commercial development being built on Route 105, directly across from Lori Lane, boxes them in, further changing the nature of their once rural neighborhood.

In a kind of "if you can't beat them, join them" approach, the neighbors hope a developer will buy the parcel to put up a strip mall or something similar.

"This is absolutely the most unusual sale I've ever seen in my 20 years in real estate," said C.F. Cawley of Keller Williams Realty in Easton, the broker handling the sale. . . .

The Lori Lane houses of various shapes, sizes, and assessments, will be sold as a 3.5-acre parcel upon which they collectively sit. The families will split the sale money evenly, no matter the individual value of their homes. If the neighbors get their asking price of $4.2 million, each would get $600,000.

The land is zoned residential but the neighbors have the support of the Planning Board to seek a change at Town Meeting to commercial zoning. Town officials said they expect the change to pass because much of the area is already commercial.

The "Steet for Sale" strategy was simple, said Lori Lane resident Pat Rand, who came up with the idea. It was clear that the huge development going in at the end of the lane -- constructed by National Development and including, among other things, a Stop & Shop, Target, and Chili's -- would send residential property values plummeting. The development is being built on the site of the former Lakeville Hospital.

"There won't be a light for our street, we'll be facing the back end of Target, and we won't be able to get out easily. There will be a light up the street at a new Walgreens, but not here, and we'll be trapped by all the traffic.

"We'll be a little street," she said, "amongst this giant commercial area."

And that means that no one would want to live there. "Our property value will go down, without question," she said.

Ben Barros

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March 8, 2007 in Property Theory | Permalink | Comments (0) | TrackBack (0)

Vargas on Mexican Real Estate Acquisition

Jorge A. Vargas (University of San Diego) has posted Acquisition of Real Estate in Mexico By U.S. Citizens and American Companies on SSRN.  Here's the abstract:

For purposes of acquisition of real estate by foreigners and foreign legal entities, the Republic of Mexico is divided into two large areas: a) the “Restricted Zone;” and, b) the “Permitted Zone.” The Restricted Zone is the real estate located in a strip of 64 miles along Mexico's border with the United States and along Mexico's coastlines in the Pacific Ocean, the Gulf of California, the Gulf of Mexico, and the Caribbean Sea. The entirety of the Baja California peninsula is also comprised under this zone. The Permitted Zone is the remaining real estate located in the inland part of that country.

These two areas derive from the mandate found in Article 27, paragraph I, of Mexico's Federal Constitution of 1917 that prescribes that only Mexicans by birth and Mexican legal entities (with no foreigners or foreign investment in them) are the only ones who are allowed to have the direct ownership of real estate in the Restricted Zone. This outright constitutional prohibition against foreigners and the resulting two zones, have resulted in two contrasting legal regimes for the acquisition of real estate by Americans and American companies in that country under Mexican law.

The articles discusses the specific requirements applicable to the acquisition of real estate by Americans and American companies in each of those two zones, with special attention to real estate for commercial purposes and real estate under the so-called Fideicomiso regime (i.e., fifty-year real estate trust contract). The articles ends with a discussion on the indispensable professional involvement of Notary Public (Notarios Públicos) and Mexican fiduciary institutions in Fideicomiso transactions, the special legal characteristics of the Federal Maritime Land Zone, the questionable validity of the Article 27 Permit, and the need to erase the discriminatory treatment against foreigners.

Ben Barros

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March 8, 2007 in Real Estate Transactions, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Klein on The New Nuisance

Christine A. Klein (University of Florida College of Law) has posted The New Nuisance: An Antidote to Wetland Loss, Sprawl, and Global Warming on SSRN.  Here's the abstract:

Recently, a remarkable shift in environmental attitudes has begun to gain traction. For example, just fifteen years ago, the Supreme Court agreed in Lucas v. South Carolina Coastal Council that coastal property was valueless in its natural condition, and that the state could not prohibit its development without providing compensation to the affected landowner. Today, the highest court in at least one state has come to the opposite conclusion, determining that the development of coastal marshlands would constitute a public nuisance under state common law. An even more striking shift is underway in the area of climate change. In early 2005, one U.S. Senator—echoing the sentiments of many—denounced the threat of catastrophic global warming as "the greatest hoax ever perpetrated on the American people." The following year, An Inconvenient Truth was released, moving Al Gore from the status of unsuccessful presidential candidate to accidental folk hero (in some quarters) and nominee for the 2007 Nobel Peace Prize. At the same time, a sizeable group of prominent business leaders began a campaign to encourage Congress to regulate their own industries by enacting mandatory caps on greenhouse gas emissions. What factors could account for this remarkable shift? The attached article suggests two responses to that question. First, as the Lucas Court set forth a new categorical rule of governmental liability for regulatory takings, it also established a new defense that draws upon the states' common law of nuisance and property. That defense has taken on a life of its own— forming what this article calls the "new nuisance doctrine"—evolving from defense, to offense, to catalyst for legislative change. Second, in 2005 Hurricanes Katrina and Rita struck New Orleans and the Gulf Coast of Louisiana and Mississippi. The hurricanes and their resultant storm surge swept away levees, life, and property. They also shattered our skepticism that wetlands indeed perform valuable flood control functions, and challenged our belief that society can continue to emit carbon dioxide and other greenhouse gases into the atmosphere without adverse impact upon the climate, weather patterns, and sea levels. As expressly contemplated by Lucas, changed circumstances and new learning should guide courts as they determine the appropriate contours, respectively, of property rights and the public interest. This article undertakes a survey of such new learning in the areas of wetland destruction, sprawling land patterns, and global warming. It concludes by considering the extent to which this new information has been incorporated into the law of new nuisance.

Ben Barros

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March 8, 2007 in Land Use, Recent Scholarship, Takings | Permalink | Comments (0) | TrackBack (1)

Adler on Rapanos and SWANCC

Jonathan Adler (Case Western Reserve) has posted Once More, with Feeling: Reaffirming the Limits of Clean Water Act Jurisdiction on SSRN.  Here's the abstract:

The Supreme Court's decision reaffirming limits on federal regulatory jurisdiction in Rapanos v. United States was significant, but hardly revolutionary. The Court's holding that the Clean Water Act only reaches those wetlands with a "significant nexus" to navigable-in-fact waters followed directly from its prior decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, in which the Court held the CWA did not extend to isolated, intrastate waters because they lack a "significant nexus" to navigable waters. Rapanos and SWANCC suggest the Court is reluctant to conclude Congress has authorized far-reaching federal regulatory controls over private land use, absent explicit statutory language to the contrary. Such a federalism "clear statement rule" may be in tension with some environmental concerns, but it need not hamper environmental conservation. Environmental progress is wholly consistent with meaningful limits on federal power. If the federal government is to play an optimal role in the protection of wetlands, and match its efforts to those aspects of wetland conservation that require action of a federal scope, it would concentrate its efforts in those areas where non-federal efforts are most likely to be insufficient. The challenge to policy makers is to adapt conservation measures to the broader legal landscape and recognize that environmental protection can live within legal limits.

Ben Barros

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March 8, 2007 in Land Use, Natural Resources, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 7, 2007

Fox on Conceptualising Home

Lorna Fox (University of Durham) has a new book out called Conceptualising Home.  Here's the blurb:

It is difficult to overstate the everyday importance of home in law. Home provides the backdrop for our lives, and is often the scene or the subject of legal disputes. In addition, in recent decades there has been growing academic interest in the meaning of home, which has prompted empirical studies and theoretical exploration in a wide range of disciplines. Yet, while the authenticity of home as a social, psychological, cultural and emotional phenomenon has been recognised in other disciplines, it has not penetrated the legal domain, where the proposition that home can encapsulate meanings beyond the physical structure of the house, or the capital value it represents, continues to present conceptual difficulties. This book focuses on the competing interests of creditors who lend money against the security of the property and the occupiers who dwell in the property, in the context of possession actions. By mapping the concept of home as it has evolved in other disciplines against existing legal frameworks, Conceptualising Home examines the possibilities for developing a coherent concept of home in law.

I've been a fan of Lorna's previous work on home, and I'm looking forward to getting my hands on a copy of her book.  As many readers know, this is a subject near and dear to my heart.

Ben Barros

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March 7, 2007 in Books, Property Theory, Recent Scholarship | Permalink | Comments (2) | TrackBack (0)

Mortgages in a Downward Spiral

The NY Times has an interesting article on the tough times hitting the mortgage business, especially lenders who focused on the subprime market.  An excerpt:

Just as the technology boom of the late 1990s turned twenty-something programmers into dot-com billionaires, and leveraged buyouts a decade earlier turned Wall Street bankers into Masters of the Universe, the explosive growth in subprime lending turned mortgage bankers and brokers into multimillionaires seemingly overnight.

Now an escalating crisis in the market, which seemed to reach a new crescendo late last week, is threatening a wide band of people. Foremost are the poor and minority homeowners who used easy credit to buy houses that are turning out to be too expensive for them now that mortgage rates are going up, but the pain is also being felt widely throughout the business world.

Large companies that bought subprime lenders during the boom, like H&R Block and HSBC, are now scrambling to sell them or scale back their exposure. Many investors are also likely to suffer: Wall Street firms made billions in fees, commissions and trading revenue from packaging and selling subprime mortgages to them as bonds.

New Century has emerged as a poster child for the lenders that rode that boom to the top and are now in free fall. The company disclosed on Friday that federal prosecutors and securities regulators were investigating stock sales and accounting errors. The latter could jeopardize billions of dollars in financing for the company, which issued $39.4 billion in subprime loans in the first nine months of last year.

Weakening home prices and rising default rates have rocked the subprime business. But for those who cashed out before the market turned, the ride up was particularly sweet. The three founders of New Century, for example, together made more than $40.5 million in profits from selling shares in the company from 2004 to 2006, according to an analysis by Thomson Financial. They collected millions of dollars more in dividends, salaries, bonuses and perks.

The company said in a statement yesterday that the founders were “still significant shareholders,” noting that they collectively owned about 7 percent of the company at the end of last year.

New Century’s stock price, which seemed to mirror the trajectory of the subprime business, peaked at nearly $66 a share in December of 2004 and traded in the $40s most of last year; on Friday, it was trading at $11 a share after the market closed. In a series of sales from August to November, two of the company’s founders sold shares for an average price of about $40 a share, for a total profit of $21.4 million.

We've discussed the downward trend, and potential litigation fallout, before.

Ben Barros

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March 7, 2007 in Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Monday, March 5, 2007

Safrin Guest Blogging at the VC

Sabrina Safrin is guest blogging this week at the VC on her latest article Chain Reaction: How Property Begets Property.

Ben Barros

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March 5, 2007 | Permalink | Comments (0) | TrackBack (0)