There are some economic and legal reforms which are hard to make now, but starting with a clean slate would have been better to have made differently, or which are just structural reforms.
Mineral Rights And Water Rights
* All mineral rights should be owned by the government and merely leased by firms exploiting them.
* The rights of surface owners of land over mineral rights leased by the government should follow the Colorado rule (which requires underground mining that preserves the rights to support of the surface owners) and not the Wyoming rule (which permits strip mining).
* All water rights should be owned by the government and leased annually to water users. All water users in the same watershed would pay the same lease rate based upon an auction. Market failures and transaction costs cause inefficient overallocation of water at very cheap prices to agricultural users to the detriment of fishing, recreational use, and municipal water use.
* Grazing land would be primarily publicly owned with the right to graze cattle on open ranges leased.
Wildlife Management
* To the extent possible, management of wildlife populations with natural predators, like bears, wolves, and mountain lions, would be preferred to hunting.
Real Property Rights
* Legal life estates and other present and future interests in real property should not be permitted. Someone wishing to create the equivalent to a life estate could establish a trust in which some beneficiaries had equitable life estates and others had equitable remainder interests. Existing legal life estates could be deemed to be trusts in which the present interest holder is the trustee for the benefit of themselves and all future interest holders.
* The race-notice statute should be modified so that a person with an interest in real property created by a written instrument could only benefit from the notice provisions for up to four months from the date of the instrument to gain priority over a recorded instrument creating rights in land. Written instruments creating an interest in real property that are more than four years old would be subordinate to the rights of the owners and encumbrances of record.
* Judgment liens would be possible to record against all real property in the state owned by a debtor in a single state filing.
* Ancillary probate of real estate would be replaced with a requirement to give full faith and credit to an executor, personal representative, or administrator appointed in the place of domicile, subject only to state homestead exemptions.
Property Taxes
* Education would be funded through state income, sales, and gifts and estate taxes, not through local property taxes.
* Non-profits, including churches and state government property, would not be exempt from property taxes, but state government property would be assessed at the state level rather than at the local level.
* Property tax assessors, and state and county treasurers, would be civil service appointments, not elected.
Limited Liability Entities and Judgment Liens
* Ownership interests in entities would have to be recorded with a state registrar, although this information would only be available to interested parties.
* Trusts would be registered with the state registrar rather than with courts of probate jurisdiction.
* Trusts and estates would be treated as entities for state law purposes.
* Judgment liens should be possible to record against all interests in entities in a state with a single state filing.
* All limited liability entities would be required to be bonded against the claims of trade creditors and insured to standards established by regulation, with the bonding agent and insurers made a matter of public record. The directors, officers, managers, and partners of the entity would have joint and several personal liability for any failure to do so, guaranteed by the owners if they, collectively, were unable to satisfy any debts of the company that should have been bonded or insured.
Local v. State Authority
* Occupational licensing in the construction trades, and building codes, should be regulated at the state level, rather than the local level.
* Local governments should not be permitted to have their own courts and instead would enforce their rights, including ordinance violations, in the appropriate state courts.
* Local governments should not be permitted to enact ordinances for which incarceration is a penalty, other than contempt of court punishments for violations of injunctions previously imposed against a particular defendant in a state court proceeding brought by the local government against that particular defendant.
* Zoning and use regulation by local governments would be limited at the state level.
Copyrights and Intellectual Property
* Copyrights should have a much shorter term, such as the pre-1976 rule of 26 years from publication and an additional 26 years if a copyright registration is renewed, which a separate regime protecting the exclusive right of the authors to publish and register unpublished works. Works not published within 26 years of the death of the author would be in the public domain. This might be accomplished with a one time buyout of existing copyrights more than 52 years old at fair market value or a nominal amount for unmarketed and unappraised copyrights.
* There would be mandatory licensing of copyrighted works, handled by one or more non-profits for performances of all musical works, all orphan works, translations of works for which had not been translated into a particular language pursuant to a license within some designated period of time after the publication of the work in its original language, and almost all other derivative works.
* The scope of the derivative work right for copyrights would be greatly narrowed.
* Statutory damages for copyright violations would be abolished. Economic damages for copyright violations would be limited to unjust enrichment relative to licensing the work, or lost profits relative to licensing the work, whichever was greater.
* Common law trademark rights in trademarks not registered in the principal register under the Lanham Act (including rights under state trademark filings) would be exclusively a matter of federal law.
* Rights of publicity would be exclusively a matter of federal law.
* Royalty income from intellectual property would be taxable where the sale giving rise to the transfer takes place, not where the owner of the intellectual property is domiciled.
Federal Court Jurisdiction
* Federal court diversity jurisdiction not involving international diversity would be abolished.
* Federal question jurisdiction in cases between private parties not involving other specific grants of federal court jurisdiction (e.g. in the cases of intellectual property, civil rights, certain class actions, and election law cases) would be abolished.
* Federal crimes for matters that can be prosecuted under state law, like bank robbery, intrastate controlled substances violations, and most murders, would be repealed.
* Felonies committed in Indian Country would be governed by new Indian Country District Courts and a U.S. Court of Appeals for Indian Country, and a related Indian Country law enforcement agency, rather than by the relevant U.S. attorney's office and the FBI.
* The lowest level immigration offense of illegal entry would be made a civil offense governed primarily by the immigration courts, and decriminalized (this makes up a significant share of the total criminal docket in many U.S. District Courts).
* The immigration courts would be reformed and made Article III courts. A right to an attorney at public expense would be established in the immigration courts.
5 comments:
Hi Andrew, This one is a complete mystery to me "The race-notice statute should be modified so that a person with an interest in real property created by a written instrument could only benefit from the notice provisions for up to four months from the date of the instrument to gain priority over a recorded instrument creating rights in land." Could you simplify what your intent is here?
In U.S. real estate law, the general rule is that deeds and mortgages and liens have priority based upon the time that they are recorded in the real property records of the county where the real estate is located.
But there is an exception to this rule. People who have knowledge of a document related to real property that has been executed but not yet recorded in the real property records are subordinate in priority to the unrecorded documents of which they have knowledge.
Sometimes this knowledge is "actual" and sometimes this knowledge is as a consequence of what is called "inquiry notice" (i.e. that there was something that should have prompted you to investigate if an unrecorded document is out there, even if you don't actually know that it exists) which is treated as actual knowledge of what a reasonable inquiry based upon the inquiry notice would have revealed.
So, if someone has an unrecorded document related to real estate, it is very easy to bring a lawsuit claiming that this unrecorded document should have priority based upon an actual or inquiry notice theory, which can make determining who has what rights in property expensive, slow, and uncertain, which impacts even transactions that you ultimately win (the losing party almost never pays the winning party's attorneys' fees and costs in these situations, let along the harder to quantify costs of delay and uncertainty of title).
This fundamental structure of real estate law in the U.S., adopted by statute on a state by state basis, is called the "race-notice statute."
Now, a race-notice statute does make sense to some extent, so that an uncivilized literal rush to the recording office with a document doesn't affect substantive rights that someone else actually does know about.
But when someone with an unrecorded document waits in the weeds to file it for a long period of time, it deceives everyone else who is relying on the documents in the public real estate records to accurately disclose title to the property.
Imposing a four month deadline to file documents in the public real estate records strikes a balance. It eliminates uncivilized rushes to file a document to gain unfair advantage, but it also greatly limits the extent to which unrecorded documents related to real estate (sometimes called "secret liens" although the effect of these documents can involve ownership as well as liens) can gain priority over documents in the public record.
The choice of four months coincides with the extent to which another kind of unrecorded right in real estate called a "mechanic's lien" (which gives someone who does work on real estate for which they are not paid the legal rights of a mortgage holder if they make a claim of a right to payment within four months in public real estate records) can gain priority over recorded documents related to real estate that were executed after the obligation to pay the "mechanic" who did work on the property.
FWIW, liens in property other than real estate are governed by a pure "race" statute, without this notice exception.
Patents were originally also governed by a pure "race" statute, but due to some controversial incidents around the time that Mr. Edison and Mr. Tesla were fighting over patent priorities, patent filings are also governed by a modified pure "race" statute that has a grace period of about a year after the first patent filing, if you can prove that you invented the invention that is patented before the person who filed first (which is similar to what I am suggesting for real estate - having some grace period that doesn't automatically deny priority to unrecorded documents, but not an unlimited duration grace period).
I am aware and thinking about the issue, in part, because I've litigated it IRL in cases where there have been very long delays between the execution of documents related to real estate and their recording, with the recording taking place after someone else has recorded a document without actual knowledge of the unrecorded document. But simply eliminating "inquiry notice" doesn't get th job done because proving a lack of even actual notice still leaves room for costly and slow litigation over who has legal rights in real estate, and uncertainty related to how a court will make credibility determinations about a claim of not having actual knowledge.
I'll give an example. Someone buys a building to operate their business in. The lender finances it and has the person who bought the building sign a mortgage making the building purchased collateral for the loan. But the first lender, due to incompetence, doesn't record the mortgage right away.
The business needs money takes out a loan from a second lender, and gives that second lender a mortgage to serve as collateral for the loan, which the second lender promptly records, after the second lender confirms that there are no other mortgages shown in the public record. The second lender knows the the first lender provided money to the business, but not that the first lender obtained a mortgage. The business is going broke, despite the second loan, however, so the business signs a deed-in-lieu of foreclosure to the second lender which the second lender records making the second lender the sole owner of the property. Then, after all of this has happened, two years after the first lender had the business owner sign the mortgage to it, the first lender wakes up and records its mortgage. The second lender had no actual knowledge of the first mortgage (although the business owner lies about this and claims to have told the second lender about this, despite contrary evidence in writing in which the business owner swears tht there is no first mortgage, in order to curry favor with the first lender whose debt the business owner guaranteed). Whether or not the second lender should have inquired about a first mortgage is unclear. The result is years of litigation at great expense and uncertainty over title for the second lender (with no hope of getting any compensation for the attorney fees or delay or uncertainty), even though this could have all been avoided if the first lender wasn't grossly incompetent and had recorded the first mortgage that the first lender obtained sooner than two years after it was signed.
Hi Andrew, Thanx for the education. As with most lay people there are many parts of law that make perfect sense when explained. However, without a guide we would wander in the wilderness for forty years.
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