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The State as the Foundation of Property


Ezra Rosser (@EzraRosser) is a Professor of Law and Associate Dean for the Part-Time and Evening Division at American University Washington College of Law.

A few years ago, I set out somewhat deliberately to publically out myself as being at the far left extreme when it comes to property law scholarship. I attacked progressive property scholarship from the left and attacked information theorists as rationalizing the status quo. So perhaps it is surprising that my 1L Property class is a fairly standard, establishment-type class. Given the vaguely progressive bent of most of my students, I find that doing so forces them to think harder (and, as Jed Purdy notes, we do have an independent obligation to prepare students for the bar exam). Indeed, early in the semester I do a lot of work encouraging conservative and libertarian students to be active participants in the class. Though their peers may not change their minds, having a critical mass of vocal conservatives or libertarians in the classroom forces the rest of the class to be more careful when they make arguments and more critical about even matters of progressive consensus.

But I do subtly introduce critical perspectives throughout the semester. In particular, the emphasis I place on the state provides space for students to question existing property rules and to recognize the malleability of those rules. Though I resist directly telling students that one of the main things I want them to get from the course is an appreciation for the role the state places in creating, defining, and protecting property rights, throughout the semester I emphasize the singular importance of the state.

The first property case that students read is Johnson v. M’Intosh, in which the Supreme Court held that a person who acquired title from the federal government has superior right relative to a person who acquired title from an Indian tribe. Racism in the form of devaluation of Indian peoples and Indian nations runs throughout the decision, and my students, with some prodding, pull out the most egregious parts of the case. But the decision—which technically relies on the Doctrine of Discovery and Conquest—also highlights the importance that state recognition plays in securing property rights. As Professor Greg Gregory Ablavsky’s recent article, The Rise of Federal Title, shows, property rights depend not simply on government recognition but recognition by the right government, the government with the power to declare title valid or invalid.

In the second class, I do an extended classroom exercise that positions the state (as opposed to natural law or economic necessity) as the foundation of property. I ask students if they have a property right in their seat. Usually they begin by saying that they do not because the school owns the chair. I respond by highlighting the fact that they signed a seating chart. I ask what would happen if they arrived one day and found someone else sitting in their chair. Some students say they would simply sit somewhere else, but most admit that they would complain to the professor. Building off of Demsetz, students acknowledge that they expected to have an enforceable property right in the seat. In a large class, usually a handful of students acknowledge arriving at least an hour early before the first class just to claim the best seats for the semester. Other years there are students who are stuck in a seat right next to the podium because they arrived late on the first day and would willingly pay other students to move to a less exposed seat.

Once the class agrees that they do have a (limited) property right in the seat, I ask one of the students to stand up and I sit in his or her seat. It is a deliberately destabilizing move, with the student left awkwardly standing off to one side. I then ask the student, and the class, how he or she might be able to get the seat back. If the chair I am now sitting on “belonged to” a built, bigger student, inevitably someone will suggest physical force. If the student was a small student, someone in the class will suggest that a group of students collectively could use force to make me give up the seat. But quickly students reach for authority, for some version of the state, arguing that they could report me to the Dean or to the associate deans. It makes for a light-hearted way to highlight the role of the state in establishing, defining, and protecting property rights. It is also relatively unscripted, which leads to great reversals, such as the year when a displaced student immediately walked to the front of the classroom and sat in my chair.

A few weeks later, when we cover nuisance, I introduce the box of four from Calabresi and Melamed’s classic 1972 article. According to Calabresi and Melamed, there are two central functions of the law. First, the state decides who gets an initial entitlement; second, the state determines whether that entitlement is protected by a property rule or a liability rule. As we do not live in a world without transaction costs, we do not spend much time on the Coase Theorem. Instead, we spend considerable time unpacking what it means for the state to set the initial entitlement and determine how that entitlement is protected (in other words, whether the initial entitlement holder sets the price or the state sets the price). The box of four serves as a valuable teaching device to remind students of cases covered earlier in the semester while also providing a theory-laden way of emphasizing the central role of the state.

My most self-indulgent teaching moment comes mid-semester, when I dedicate an entire class period to “housing and the poor.” The class involves first presenting students with the way low-income housing has changed and the array of low-income housing programs (traditional housing projects, Hope VI, LIHTCs, vouchers, and inclusionary zoning). But since most poor people live in private housing, I also cover theories of urban growth and the filtering model (trickle-down economics in the housing sector). The class ends with discussion of the biggest government housing subsidy, but one that primarily benefits the top of the income spectrum, the mortgage-interest deduction. I end that class by asking students if property rules can be justified if some people are never in a position to obtain property.

My favorite moment of the semester most years is one I never would have expected when I first starting teaching: the class debate about Brown v. Voss, a relatively simple case about whether a property owner can unilaterally extend an easement. Appurtenant easements are supposed to attach to the land; so, for example, an easement to cross lot A for the benefit of lot B is limited to lot B. In Brown v. Voss, the owner of lot B purchased a neighboring parcel as well, lot C, and sought to use the easement across lot A to access both lots B and C. It is, in other words, the sort of case that can make Property Law seem a lot less exciting than other 1L classes. But for some reason, year-after-year, Brown v. Voss inspires a heated discussion about fairness, formal rules, and freedom. Most students, regardless of where they fall on the political spectrum, think the owner of lots B and C should be able to do what he or she wants with the land and that the easement should of course extend to lot C.

Of course, there are other points during the semester when students predictably and emotionally insist on the rights of owners: some students instinctively think adverse possession is wrong because it transfers title from the “rightful” owner to a wrongdoer, for instance. The notion that ownership is absolute is so ingrained in them that they have trouble thinking about ownership as something limited by an obligation to monitor the property. I expected some students to dislike adverse possession, especially when done deliberately.

But strong student reactions to a case about extension of an easement? The angst the case produces, and the impassioned debate between students who insist on the formal “no extension” rule and those who find it almost inconceivable that the owner of lots B and C might not have a right to access C, helps hammer home the importance of the state. The no extension of the easement rule conflicts with the intuition students bring to the class in part because it defines the rights to use lot C as dependent on the rights to cross lot A. Though students imagine property through what Professor Joseph Singer called the “castle” model of absolute dominion, Brown v. Voss shows how the state can severely restrict ownership rights through background rules.

At other points in the course, the state looms large naturally. Eminent domain not only puts the power of the state front-and-center, but also brings the class full circle. Just as Johnson v. M’Intosh showed the tremendous importance of state recognition of property rights, so too eminent domain shows the power of the state to take away property, often without compensation. After we cover Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, a regulatory taking case in which the Supreme Court denied compensation for a temporary building moratoria, I insert a personal anecdote. My father-in-law’s construction business collapsed and he lost his home to the bank in part because the state (in his case, El Salvador) blocked construction on land my father-in-law was developing as they were considering a planned highway. Even though, ultimately, the road was built elsewhere and construction was allowed to proceed, the temporary regulation had real consequences for my in-laws (and not for me). The point of the interjection is to highlight both the costs of state action and the degree to which even seemingly secure property rights depend on ongoing state recognition and protection.

Though some of the ways I deviate from a conventional property law class are perhaps a bit heavy-handed, my view is that emphasizing the role of the state creates more space to challenge how property law operates in practice. Facially, many of the rules covered in property law seem at first divorced from questions of inequality or injustice. Perhaps because of that seeming disconnect, many students come to the study of property law with something close to faith in property as a natural right. Market exchange, inequality, and the rights of property owners are such important parts of students’ lives pre-law school and so naturalized, that a great deal can be accomplished simply by challenging that faith. Foregrounding the state forces students to question not only the abstract logic of the rules (which is less interesting) but also the appropriateness of particular rules given our society’s economic structure and the state-mediated decisions that go into creating that structure.