Monday, November 26, 2007
Shameful Behavior
Have you heard of this? I can't think of what to call it except legalized theft. It's absolutely jaw-dropping.
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10 comments:
Interesting to see this come up because any lawyer would be completely familiar with the concept of "adverse possession."
Admittedly, the first time I heard of this as a first-year law student I was shocked. However, over time I've reconciled myself to the notion. So, here, I'll try to at least explain it...but Dave, you might be an even better interpreter because the primary justification for the law has always been economics.
The basic idea is that valuable resources like real estate should not be left fallow or abandoned, instead they should be circulating in the market economy. So, the idea is that if someone leaves their land to the extent that for practical purposes they've abandoned it, then someone else should be able to take possession of it.
The main elements of an adverse possession claim are usually time (from 5-20 years, depending on jurisdiction), sole possession, and hostile possession (in other words, the adverse possessor has to occupy the land in a way that would alert the rightful owner that someone was trying to take the land--you can't just hide out on someone's land and then 10 years later announced you've adversely possessed it).
It's actually quite hard to successfully adverse possess someone's land. For example, all the rightful possessor generally has to do is occupy the property from time to time. If the rightful owner finds a potential adverse possessor on his land, up until the moment of the completion of the time element (on average about 10 years), the rightful possessor can simply have the person thrown off his property.
Anyway, I think this doctrine offends almost everyone's sensibilities. But, again, Dave, it's the "law and economics" people who basically prop up the idea. So, I'd be interested to hear your thoughts on the economics of the matter.
Just to say a bit more, I like your heading "shameful behavior." I guess, for me, this has always been a sticking point on economic arguments. Something can be economically effecient, but still "shameful behavior." You'll recall, I'm sure, our discussion of anti-price gouging statutes. To me, "adverse possession" brings up the same issues. It might be something that's economically efficient (depending on how you define value), but maybe it should be illegal anyway.
My best stab at the economics of the matter:
It's just a simple property rights perspective. A couple purchased an asset when prices were low. That they weren't even given fair compensation, from any account I've seen, for what was taken is mind boggling.
The problem with the "fallow is bad" argument is that use is in some circumstances a poor measure of intent. I don't try to claim somebody's shares of Apple Computer that they purchased in 1980, despite the fact that they have not been traded and are now much more valuable, because their purchase price included the option to use - or not use - the property as they see fit. In certain (very limited and very extreme) circumstances, I can see the need for seizure with compensation, and eminent domain covers that.
Secure property rights are a rather fundamental basis of any market economy. Laws which grant hundreds of thousands of dollars worth of one person's property to another without compensation... that's a bad thing in my book. That the perps were knowingly tresspassing and using the property, and that they happened to be well-connected, well, that just makes the story jucier.
I suppose it's just a pitfall of life that the average non-lawyer knows nothing about. If I were the owners, I'd probably have had no problem with people using my land while I wasn't, believing that it was still my land because I had paid for it. And I can imagine buying some land with the plan of one day building on it when I can afford it.
On the other hand, there's (in my mind) harm done to people under price gouging laws - harm that those calling for such laws don't recognize, the harm of shortages in time of need. The price gouger and the buyer make a free choice to do business. That, for me, is a major difference.
Super long comment:
I think the “intent to use” aspect is measured two ways by the doctrine of adverse possession: 1) by the time element; 2) by the requirement of sole possession of the adverse possessor. Both these elements can be adjusted via the legislature, and many states do this.
Would you agree or disagree that ‘after some amount of time at some point, say 100 years, a person has abandoned their property’? I could imagine reasonably saying ‘no, a person never abandons such a valuable resource.’ But, the idea is that property rights can be too static—the law and economics idea wants you to do something with your resources. The policy argument used for adverse possession is to “punish the sleeper” and reward the active.
Also, if you were to have no problem with someone being on your property while you weren’t using it, that is, if you gave someone permission to be on your property, then they wouldn’t have an adverse possession claim—because their possession wouldn’t be “hostile.”
The theoretical concept behind adverse possession is the same as that of eminent domain, and believe it or not, the concept is essentially “to the victor go the spoils.” In early American law there was a stage where people would show up in court with deeds to land given them by Indian tribes. In response, the courts said things like “these issues aren’t about abstract justice, but about positive exertions of power, and the courts of the conqueror can’t reach outside of the power by which they were established (conquest) and give the land back to the Indians.” The way this is the same as adverse possession is that people aren’t deemed to have inherent, inalienable rights in their property. Instead, their property rights are positive creations of the State, enforced by the guns of the state. Therefore, the State, when its in its best interest, will award those rights to whomever it pleases. So, relying on the economic justification of rewarding activity over passivity (to the extent believed most efficient), the State, at some point says, “hey, tough luck, we’re taking your land.”
To me, this is one of the examples of moving, philosophically, to economics instead of natural rights. Natural rights (such as those Locke believed people had in land), at this point, are basically rejected by current Constitutional law. (I’m not anti-economics because I think it’s one way of determining the Natural Law, just not the only way).
If you want to read a fascinating but horrifying case on the subject, check out
http://www.law.nyu.edu/kingsburyb/spring03/indigenousPeoples/classmaterials/class10/A.%20Johnson%20v_%20McIntosh.htm
And, this to me is some of the greatest proof we don’t live in a Christian nation. We’ve been stealing people’s stuff since the beginning.
P.S. – another interesting aspect is the judge’s connections. I don’t believe that the judge got “special favors” from his pals in the system, but I’m sure knew about the doctrine of adverse possession and acted on his knowledged.
If it's any consolation, the McLeans probably wouldn't have an actionable claim in Nevada because it appears the Kirlins, not the McLeans, have been paying property taxes (generally a prerequisite for a successful adverse possession action in Nevada). The requirements for adverse possession vary from state to state.
Therefore, the State, when its in its best interest, will award those rights to whomever it pleases. So, relying on the economic justification of rewarding activity over passivity (to the extent believed most efficient), the State, at some point says, “hey, tough luck, we’re taking your land.”
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I understand that property rights are creations of the State, and so it has rules for how those rights are distributed. But it's in the State's interest to willfully abstain from violating those rights because as a State develops a reputation for not honoring the rights it has already assigned it both lowers the value of those rights for everyone (because the expected future value of any one person's rights are generally tied up in the present value; it would be hard to sell 100 acres of prime real estate if you suspected the government would transfer it with no reimbursement to someone else at some point).
I don't think the judge cheated either, though I thought the "lawyers shouldn't use the law for private gain at the expense of someone who doesn't know the law" ethical question sounded valid, and like a good description of what happened here.
Stealing from the beginning. Sounds pretty accurate. But... didn't the Israelites steal their land from the Canaanites? How might that apply?
The primary consolation, cousin Ken, is that it's a rare thing. It's just aggravating when the law works in such a way that the average person hears the story and thinks "That sounds totally backward." Even if I go into the store and lick the food to claim it as my own, I still have to pay for it. But it's also nice to know that Nevada sounds a little more reasonable. If you're paying property taxes on the land, then you reasonably might believe you own it. And it seems like adverse posession is probably meant for such a scenario - a legitimate dispute about who owns real estate X.
I have heard of this before- I remember Heather mentioning it to me. At first I was a bit shocked, but like Ken / Alicia mentioned, if someone else is paying property taxes on a real property, after a certain amount of time they may possess the land via common law.
I think that is a reasonable way to keep the real market moving and not stagnant.
Dave, I kind of think your shock (and, truly, everyone's the first time they hear of this doctrine) goes to show that Adverse Possession doesn't have a significant adverse impact on the value of property because it shows how it rarely happens (otherwise you wouldn't be shocked to hear of it).
Regarding the Israelites taking the promise land by force, I think it's the same dynamic, only it's sanctioned by God. I think that's why there's so much psychological power in a nation believing that it's chosen by God to do certain acts, and it's pretty well established that many early Americans (not to mention modern-day Americans) believed that they were establishing a God-ordained "city on a hill." In the same way that the State creates property rights, God also is sovereign to say 'see the Promise Land, I'm taking it from them and giving it to you.'
Of course, that also addresses the importance and power of arguing that a certain nation (say, the USA) is not necessary on a mission from God.
Another early argument that was used (whether cynically or not, I don't know) was that if we left the land to the "savages" (Indians) then it would just languish as a wilderness, whereas the good English Christians knew how to cultivate and improve land, which was in accordance with God's command to 'subdue and fill the land.' And, I think you can see how from there you can get to adverse possession.
Again, not necessarily the most savory teaching at a moral/ethical level. But also, interestingly, not totally incoherent or inreconcileable to a Christian or economic world-view.
I agree that the current state of adverse posession doesn't have a significant impact on property values, for the reasons you stated. I was speaking in broader terms that, should the State become known for regularly not respecting property rights - though it has the power to do so, it harms its own interests.
When Zimbabwe siezed farmland owned by white farmers to parcel it out to native blacks, it both drove those who knew how to work the land out and discouraged investment in the farms and in the country at-large because potential investors now had to wonder if they would be allowed to see the expected fruits of their labor.
So, though the State has the ability to create and destroy property rights, it has an incentive to respect the phantom rights it creates.
The case of the small exceptions that people might not notice may not prove a strong incentive, until they come into the public eye. But to the extent that this case is now in the public eye, what sort of impact might it have? In this case it's not the actual application of the law that matters, but the perception: for me, the perception that properly purchased land was to be given to those who knowingly trespassed.
I think the perception could stretch beyond the acual impact of the adverse posession law... but probably only to a trivial, though potentially non-zero, amount.
Two ideas to get at the logic of adverse possession:
1) abandonment: if you abandon something, at some point doesn't someone have a right to take it?
2) statute of limitations: in every law I'm aware of there is a 'statute of limitations,' a time after which one can no longer bring a claim. This is justified as a measure to bring some stability so that people don't have to forever worry that someone might bring suit. Adverse possession is sort of like a statute of limitations for tresspassing. So, say there's an abandoned piece of land, and you move in there...if you're going to invest in building up the property, you need to know at some point the original owner isn't going to show up and demand you leave.
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