Transcript Document 7604817

MUSIC: Ethel Waters
Recordings 1929-39
Ghen v. Rich (KRYPTON):
DQ75: Application of Prior Cases
(d) Should the custom in Ghen be treated as law
under the analysis of Swift?
1. Doesn’t affect outsiders?
2. Used by entire business for a long time?
3. Legal rule harder to apply than custom?
4. Custom is reasonable?
Ghen v. Rich (KRYPTON):
DQ75: Application of Prior Cases
(d) Should the custom in Ghen be treated as law
under the analysis of Swift?
1. Doesn’t affect outsiders?
Ghen v. Rich (KRYPTON):
DQ75: Application of Prior Cases
(d) Should the custom in Ghen be treated as law
under the analysis of Swift?
1. Doesn’t affect outsiders: Sometimes does, but
maybe can’t process whale w/o people in industry
2. Used by entire business for a long time?
Ghen v. Rich (KRYPTON):
DQ75: Application of Prior Cases
(d) Should the custom in Ghen be treated as law
under the analysis of Swift?
2. Used by entire business for a long time: YES.
3. Legal rule harder to apply than custom?
Ghen v. Rich (KRYPTON):
DQ75: Application of Prior Cases
(d) Should the custom in Ghen be treated as law
under the analysis of Swift?
3. Legal rule harder to apply than custom? Unclear.
Court suggests killer might win either way.
4. Custom is reasonable?
Ghen v. Rich (KRYPTON):
DQ75: Application of Prior Cases
(d) Should the custom in Ghen be treated as law
under the analysis of Swift?
4. Custom is reasonable?
–
–
–
Whalers doing all they can.
Necessary for Continued Operation of Industry
Finder Gets Fee
Qs on Ghen?
PRACTICE DEMSETZ FIRST THESIS
Regular Part of Analysis in Unit III
•
•
•
•
•
•
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
DQ76 (Ghen Custom) : KRYPTON
• 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
DQ76 (Ghen Custom) : KRYPTON
• Activity = Collecting Whales from Beach
• Old Rule + Finder’s Keepers
• Ext. = Sometimes whaler lost whale & investment
• Change: Killing Finbacks w Bomb-Lances
• Does change increase neg. externalities?
• If cost of externalities > cost of change 
change in rule
DEMSETZ FIRST THESIS
DQ76 (Ghen Custom) : KRYPTON
•
•
•
•
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 & $$$
• Cost of externalities > cost of change 
change in rule? (Describe)
DEMSETZ FIRST THESIS
DQ76 (Ghen Custom) : KRYPTON
•
•
•
•
Activity = Collecting Whales from Beach
Old Rule = Finder’s Keepers
Ext. = Sometimes whaler lost whale he killed
Change: Killing Finbacks w Bomb-Lances
• Ext.  Industry arises/more whales & $$$
• High Externalities > Social Inertia  Custom
Develops
DEMSETZ FIRST THESIS
DQ76 (Ghen Custom) : KRYPTON
• Ext.  Industry arises/more whales & $$$
• High Externalities > Social Inertia  Custom Develops
• NOTE: If some folks on shore don’t follow custom (as in
Ghen), externalities remain high, so pressure for further
change should lead to litigation and (perhaps) adoption
of custom as law.
QUESTIONS?
Closing Up Whaling Cases
1.
2.
3.
4.
Whaling Cases on property rights & custom =
“Animals Cases” for purposes of exam
Treat salvage as alternative, not part of ACs
Useful exercise: Apply Whaling cases & Rose to
wolverine problem
Might do charts of these cases mapping, e.g.,
Labor; Marking; Applicability of Custom (fact Q);
Decision to Treat Custom as Law (legal Q)
QUESTIONS?
Rose Article & DQ 79 (Radium):
Characterize Cases in Rose’s Terms
• Shaw rejecting perfect net rule?
– Relationship to “Rewarding Useful Labor”
– Relationship to “Clear Act”
Rose Article & DQ 79 (Radium):
Characterize Cases in Rose’s Terms
Shaw rejecting perfect net rule?
• Relationship to “Rewarding Useful Labor”
– Net useful even if imperfect if gets lots of fish
• Relationship to “Clear Act”
– Probably most people see fish in net as owned
– Net has to be pretty bad to send signal that
net-owner doesn’t claim fish (cf. sunken boat)
Rose Article & DQ 79 (Radium):
Characterize Cases in Rose’s Terms
• Ghen adopting custom?
– Relationship to “Rewarding Useful Labor”?
Rose Article & DQ 79 (Radium):
Characterize Cases in Rose’s Terms
Ghen adopting custom
• Relationship to “Rewarding Useful Labor”
– Custom Rewards Labor of Whale Killer. Especially
important because:
• Whaling Industry Useful b/c Whales Valuable
• Custom Necessary to Industry to Give Enough $$$
– Finder Also Gets $$$ for Useful Labor of Reporting
• Relationship to “Clear Act”:
Rose Article & DQ 79 (Radium):
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 79 (Radium):
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 79 (Radium):
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
Rose Article & DQ 79 (Radium):
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”
– Tattoo tells everyone there is OO and specifically identifies OO
to insiders
– Court leaves open possibility of different result if truly
innocent finder
Rose Article & DQ 79 (Radium):
Characterize Cases in Rose’s Terms
I’ll also include in this set of slides
versions for Albers & Swift
LOGISTICS CLASS #24
• My Exam Workshops Today; Tue 10/30; Thu 11/1
• 12:30-1:50 Room F309
• Friday: 55-Minute Classes Begin
• On Course Page
– Now: Old Exam Q1: Comments & Best Answers
– By Noon Thursday: Info Memo #6, Including
• Group Written Assignment #3: Instructions & Teams
• Group Written Assignment #2: Comments & Models
Oil & Gas:
st
1
Possession (OXYGEN)
DQ80: 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:
st
1
Possession (OXYGEN)
DQ80: See Hammonds p.90:
“oil 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 of the severed
mineral estate, 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: 1st Possession (OXYGEN)
Are Pierson/Liesner/Shaw Good Tools for
Determining 1st Possession of Oil & Gas?
Three Common Approaches
1. Significance of Factual Similarities &
Differences (DQ81)
2. Usefulness of Doctrine (DQ82)
3. Usefulness of Alternatives (DQ83)
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ81. Arguments from Factual
Similarities re Usefulness of
Pierson/Liesner/Shaw
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ81. 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: 1st Possession (OXYGEN)
DQ81. Arguments from Factual
Differences re [Lack of]
Usefulness of
Pierson/Liesner/Shaw
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ81. Arguments from Factual Differences
re [Lack of] Usefulness of
Pierson/Liesner/Shaw
Could Try
Mineral Movement More Predictable
Value of Oil/Gas Generally Higher
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ82. Pierson/Liesner/Shaw:
Rules/Factors that Would Work
Fairly Well (and Why)
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ82. Pierson/Liesner/Shaw:
Rules/Factors that Would Work Fairly Well
(and Why)
Could Try
Actual Possession; Power & Control
Escape Practically Impossible
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ82. Pierson/Liesner/Shaw:
Rules/Factors that Would Be
Hard to Use (and Why)
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ82. Pierson/Liesner/Shaw:
Rules/Factors that Would Be Hard to Use
(and Why)
Could Try
Mortal Wounding; Continued Pursuit
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ82. On Exam, Can Have
Discussion About Whether
Particular Factor is Useful or Not
(with Arguments Both Ways)
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
DQ83. Possible Alternative
Ways to Allocate Initial
Possession of Oil & Gas?
Argument By Analogy
Oil & Gas: 1st Possession (OXYGEN)
• FRIDAY: DQ83. Pros & Cons
– Westmoreland (Rule of Capture) v.
– Distribution of Profits Proportional to Surface Area
(w Reasonable Fee to Drillers for Labor and Risks)
• Assume Some Large Oil/Gas Fields Under
Multiple Surface Lots
• Think About, e.g., Ease of Operation,
Incentives, Effects on Market, etc.