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Law, Rule of Law, and Property (Video Notes)

Law, Rule of Law, and Property

  • Law: the rules of the state backed up by enforcement.
  • Rule of Law (ROL): the general and equal application of laws, even to lawmakers.
  • Property: a bundle of private, exclusive rights in people to acquire, possess, use, and transfer scarce resources.
  • Law, Rule of Law, and Property provide the framework for the most functioning market in a modern nation.
  • Law as a formal social force: rules are written down, accessible, and understood by those who need to obey them.
  • Enforcement institutions: courts and the police maintain the legal system; without enforcement, trust, certainty, and long-term business arrangements collapse.
  • Rule of Law (4 universal principles):
    • The government and its officials, as well as individuals and private entities, are accountable under the law.
    • The laws are clear, publicized, stable, and just; they are applied evenly and protect fundamental rights, including the security of persons and property and core human rights.
    • The process by which laws are enacted, administered, and enforced is accessible, fair, and efficient.
    • Justice is delivered timely by competent, ethical, and independent representatives and neutrals who are sufficient in number, have adequate resources, and reflect the communities they serve.
  • Economic impact of ROL: high-quality economic growth arises when courts adhere to the rule of law, increasing investor confidence due to security; wealthier countries tend to embrace ROL.
  • ROL as an ideal, not a guaranteed fact: lobbying can bias lawmaking, but accountability mechanisms allow citizens to challenge favoritism.
  • Judges play a vital role in maintaining the rule of law.
  • Property as ownership: the right to use public authorities to prevent interference with what you own.
  • Types of ownership fences (ownership rights across resources):
    • Public property: resources owned by the government/state (e.g., roads, public buildings, public lands, monuments).
    • Private property: ownership by individuals or entities with rights to use and exclude others.
    • Common property: resources owned jointly by multiple individuals.

Jurisprudence

  • Jurisprudence: the science of the law, the practical science of giving a wise interpretation of the law; helps explain the origin and justification of laws.
  • Central western legal concept: the underlying framework for interpreting and applying laws.
  • Ownership classifications within jurisprudence:
    • Private property: resources owned by an individual.
    • Common property: resources owned jointly by several individuals.
    • Public property is considered separately (see above).
  • Regulatory frameworks and related areas:
    • Regulatory laws: protect ownership and set limits on private resource use.
    • Antitrust laws: forbid monopolies and set rules for competition to acquire ownership of new resources.
    • Security laws: regulate transfer of ownership in certain profit-making opportunities.
    • Environmental law: controls how owners can use resources to prevent or limit pollution.
    • Labor laws and anti-discrimination laws: involve property to protect employees’ self-ownership and prevent interference by employers.
    • Corporate governance: concerns the law protecting owners of a business organization from managers and regulating private owners’ productive resources.
  • Major jurisprudential schools:
    • Natural law: law contains universal moral principles observed in nature; the law originates from moral obligations (e.g., it is morally wrong to kill).
    • Positive law: law is the commands of the state backed by force and punishment; derives from state control; may contradict natural law.
    • Historical school: contemporary law should reflect principles that have withstood time; laws reflect cultural traditions; different nations have different traditions.
    • Sociological jurisprudence: law should evolve with societal changes.
    • Legal realism: analyzes what law actually does in practice by examining the actions of police, administrators, prosecutors, and judges.
  • Overlaps among schools: these perspectives can overlap in real-world legal interpretation.

Classifications of Law

  • The two major legal systems:
    • Common law: body of law derived from judicial decisions, as opposed to legislatively enacted statutes and administrative regulations.
    • Civil law (legal system): area of law governing rights and duties between private parties, described as codified law with a preference for legislative codes over judicial decisions.
  • Public law vs Private law:
    • Public law: regulates the relationship between individuals/organizations and society (governmental power and public interests).
    • Private law: concerns relationships among private legal entities (e.g., individuals, corporations).
  • Civil law vs Criminal law:
    • Civil law: usually involves a request for damages or other relief that does not punish the wrongdoer; the plaintiff proves liability by preponderance of the evidence; the plaintiff (and their attorney) bears the burden of proof; often the plaintiff sues for damages or remedies.
    • Criminal law: the government prosecutes offenses against society; the standard is proof beyond a reasonable doubt; penalties can include incarceration, fines, and other sanctions.
  • Characteristics of common law and civil law (as discussed in notes):
    • Emphasize the role of judges in interpreting and applying laws (especially in common law).
    • Relative emphasis on legislation vs. judicial decisions in defining the law; practical application varies by system.
  • Public law and private law details:
    • Government official represents society (the people).
    • Constitutional law: interpretation and application of federal or state constitutions.
    • Administrative law: governs government agencies, bureaus, boards, or commissions.
    • Criminal law: offenses against the proper order of the state.
    • Private law concerns problems related to private resource relationships (e.g., property, contracts, torts).
    • Property law: recognition of rights in tangible and intangible resources.
    • Contract law: rules governing transfer of resources via exchange.
    • Tort law: rules for compensation when legal boundaries are crossed.
  • Civil law and criminal law (note: these are not the same as the legal system themselves):
    • Civil cases involve disputes such as breach of contract or torts; remedies typically include money damages.
    • Criminal cases involve the state prosecuting a wrong against society; outcomes include punishment.
  • Substantive law vs Procedural law:
    • Substantive law: defines the legal rights and duties of people relative to each other and to the state.
    • Procedural law: governs how legal claims are enforced and how law is administered (the process of handling cases).

Substantive vs Procedural in Practice

  • Substantive law defines legal relationships and rights.
  • Procedural law governs the method by which those rights are enforced and how cases move through the courts.
  • Together, they determine how legal disputes are resolved and how the law is applied in concrete situations.

Sources of Law

  • Attorney’s role: consult judicial decisions as a source of law (case law).
  • Precedents are important: decisions in one case guide future cases.
  • Stare decisis: the doctrine of prior precedents; means to let prior decisions stand; provides certainty and predictability in the law.
  • Dicta: statements in judicial opinions that are not essential to the decision.
  • Constitutional relativity: understanding the Constitution in light of historical context and contemporary times.
  • Originalism: interpret the Constitution according to the intent of the framers (debated approach).
  • Federal law hierarchy:
    • The U.S. Constitution is the supreme law; any law conflicting with it is void.
    • Legislation passed by Congress (acts/statutes).
    • Administrative law/regulations.
  • State law hierarchy:
    • State constitution.
    • Statutes/acts.
    • State administrative regulations.
    • Local ordinances.
    • Judicial decisions/case law.
  • Advantages of case law:
    • Increased investor confidence due to predictable court protections based on prior decisions.
  • Disadvantages of case law:
    • Volume of cases can be overwhelming.
    • Conflicting precedents can complicate following prior rulings.
    • Rejection of precedent and conflicts of law between states.
  • Common examples of sources and usage:
    • Precedents and case law guide application of statutes and constitutional principles.

Sanctions, Remedies, and Legal Remedies

  • Sanctions: methods used to encourage or force compliance with the law.
  • Remedy: the right to take another party’s resources when law requirements are not met.
  • Tort and contract distinctions:
    • Intentional torts: requires proof that the defendant intended to cross a legal boundary.
    • Negligence: requires proof that the defendant’s unreasonable behavior caused harm.
    • Strict liability: plaintiff needs only prove injury caused by defendant’s activity.
  • Legal sanctions serve preventative and compensatory roles:
    • Prevent wrongdoing and provide legal remedies for harm.
  • Criminal sanctions: crimes are public wrongs against society; punishments include death, imprisonment, fines, removal from office, and disqualification from office or voting.
  • Breach of contract remedies:
    • Compensatory damages, possibly consequential or specific performance.
  • Tort remedies:
    • Compensatory damages; potentially punitive damages in some cases.

Property and Corporate Governance

  • Corporation: a business chartered by the state to operate as a legal person in a specific organizational form.
  • Corporate governance: the legal rules that structure, empower, and regulate the agents (board of directors and managers) of corporations and define their relationship to the owners (shareholders).
  • Formal governance framework components:
    • Legislative branch (Congress, with House of Representatives and Senate).
    • Executive branch (President, Vice President, Cabinet).
    • Judicial branch (Supreme Court and other federal courts).
  • Exclusionary rights of property provide a basis for the private market and modern business.
  • Ownership and control in corporations:
    • Owned by shareholders who hold stock.
    • Shareholders vote to elect the board of directors who oversee management.
    • Managers handle day-to-day operations under the board’s oversight.
  • Objective of corporate governance: protect property interests of owners and ensure efficient and lawful management of corporate resources.

In-Class Recap and Foundational Themes

  • Three branches of U.S. government (legislative, executive, judicial) as a basic framework for governance.
  • Law is rules established by the government and backed by enforcement; theory of adequate enforcement institutions is necessary to maintain order.
  • Rule of Law principles should apply generally and equally to all members of society, including the government itself.
  • Property rights enable a private market and modern business operations.
  • Ownership types: public, private, and common property.
  • Classifications of law (common vs civil; public vs private; civil vs criminal; substantive vs procedural).
  • Common law vs Civil law distinctions emphasize how law is created and interpreted within each system.
  • Key jurisprudential debates (natural law vs positive law, historical vs sociological vs legal realism) influence how laws are interpreted and applied in practice.
  • Sources of law include constitutions, statutes, regulations, and case law; precedents guide future decisions via stare decisis but can be overridden or distinguished.
  • Practical examples and cautions:
    • Loving v. Virginia (1967): used as a constitutional-era precedent; later cited in cases regarding same-sex marriage.
    • Citations and case references help locate authority in legal research (e.g., Katyle v. Penn Natl. Gaming Inc). The 11th Circuit is a notable jurisdiction in certain cases.
  • Prayer for relief concept: remedies sought by plaintiffs (e.g., monetary compensation for hardship and medical bills).
  • Hierarchy of legal sources often places the U.S. Constitution at the top, followed by statutes, then administrative regulations; state hierarchies follow a similar pattern at the state level.
  • The law is both a descriptive and normative framework: it describes what the rules are and prescribes how disputes should be resolved and how power is allocated.

Key Terms to Remember

  • Law, Rule of Law, Property
  • Jurisprudence (Natural Law, Positive Law, Historical School, Sociological, Legal Realism)
  • Regulatory, Antitrust, Security, Environmental, Labor, and Discrimination Laws
  • Corporate Governance, Board of Directors, Shareholders
  • Common Law vs Civil Law; Public Law vs Private Law
  • Substantive vs Procedural Law
  • Stare Decisis, Dicta, Constitutional Relativity, Originalism
  • Precedent, Case Law, Judicial Decisions
  • Federal vs State Law hierarchies
  • Remedies and Sanctions (Civil, Tort, Contract, Criminal)
  • Prayer for Relief, Damages (Compensatory, Consequential, Punitive), Specific Performance
  • Ownership Types: Public, Private, Common
  • Exclusionary Rights of Property
  • Loving v. Virginia (1967) as a case study

Formulas, Numbers, and Notable References

  • Loving v. Virginia, 1967
  • 11th Circuit (jurisdiction referenced in case notation)
  • The general structure of government as a framework for law: Legislative, Executive, Judicial
  • Where applicable, cases function as precedents for future decisions under the doctrine of stare decisis.

Connections to Real-World Relevance

  • Strong property rights and rule of law attract investment and support market efficiency.
  • Clear and fair processes in enacting, administering, and enforcing laws reduce transaction costs and increase predictability for businesses.
  • Corporate governance structures influence how effectively owners’ rights are protected and how resources are allocated within firms.
  • Understanding the difference between civil and criminal processes helps in evaluating legal risk and potential remedies in disputes.

Ethical, Philosophical, and Practical Implications

  • The tension between ideal ROL and political realities (lobbying, favoritism) raises questions about fairness and legitimacy of law.
  • Balancing individual property rights with collective societal needs (environment, public resources) requires careful regulatory design.
  • The role of precedent fosters stability but can also impede necessary legal reform; debates around constitutional interpretation (originalism vs living document) affect policy directions.
  • Access to justice and timely delivery of remedies impact trust in legal institutions and overall social welfare.

Quick Reference Points (summary)

  • Law = state rules + enforcement; Rule of Law = accountability, clarity, accessibility, and timely justice; Property = ownership rights.
  • Jurisprudence provides multiple lenses for interpreting law (natural/positive, historical/sociological/legal realism).
  • Law classifications: common vs civil; public vs private; civil vs criminal; substantive vs procedural.
  • Sources of law: constitutions, statutes, regulations, case law; doctrine of stare decisis governs precedents.
  • Remedies and sanctions span contracts, torts, and crimes; punishments and money-based relief are common outcomes.
  • Corporate governance centers on protecting owners’ rights and regulating managers via a board structure.
  • Case examples (Loving v. Virginia, 1967) illustrate how precedents shape later jurisprudence.