Progress Snapshot
Release 1.16 October 2005

By James V. DeLong

The Property Rights Alliance (PRA) has arrived to end all confusion about whether laws on intellectual and physical property intersect. They do. Move along now, there is nothing more to see here. [2]

Its prospects of success will get an early workout, as the randomness of political timing forces the PRA to deal with the most contentious of all real property issues: the Endangered Species Act.

To the advocates of rights in tangible property, the ESA is a target of fury because of its effects on both private land holdings and on the use of the federal lands, on which much of the West depends. (The Feds own over half the land in the West, ranging up to 85% in Nevada.)

On the other and so far victorious side, the ESA is holy to the environmentalists of NYC, LA, and other urban centers, a group which includes most workers in the content industries.

So, to hold its coalition together, the PRA must sell its content wing on the proposition that ESA reform is fair, just, and not really anti-environmental. If this fails - then the tangible property wing of the coalition will lose interest in helping the content types, and 20 votes in the Senate that might otherwise support content industry issues are likely to switch to the other side, out of indifference or spite.

In a rational world, the Alliance would be able to make the sale, because the proposition is totally true. The ESA is a "Don Quixote of federal laws" [3] -- both unjust and ineffective. But in this world, it will be a dicey proposition.

For purposes of analysis and explanation, the battle over the ESA involves two separate debates, and they should be separated. The first is whether every species should be preserved and protected. The law answers this in the affirmative. In fact, this is a silly rule, and the ESA is one of many laws that depend on the public's rational ignorance for its power. Because everyone wants to preserve grizzly bears and eagles, they assume the ESA must be a good thing, and don't inquire into the details. [4]

However, it is best to bypass the basic issue and focus on the second question, which is: Accepting as given the social desire to protect and preserve every species, how should the effort be paid for?

Under current law, the method of payment is simple impressment. A statute with the unexceptionable goal of preventing people from killing a member of an endangered species was expanded by regulation to forbid any action that might reduce the habitat of such a creature. Then the list of protected species was expanded geometrically. Thus a landowner is barred from doing anything that would affect the habitat of a slew of species not normally regarded as poster children for the cause.

Nor is the landowner compensated for this; under the peculiar rules that determine whether a regulatory seizure of land qualifies as a "taking" for which compensation must be paid, no payment is due unless the total value of the land is destroyed. If the value is merely reduced from, say, $2 million to $200,000 -- tough.

Furthermore, the government erects too-clever-by-half barriers to even getting to court to argue that the property has been taken. You can't sue until you have exhausted your administrative remedies; so the Department of the Interior sits on your plea so those remedies are never exhausted. Then it can send you back to amend, and start the process over.

One result of these laws is destruction rather than preservation of habitat. Any landowner whose property might harbor an endangered species is crazy if he fails to adopt a scorched earth policy to render this impossible. And this happens.

Another result is gross injustice. The Supreme Court has often noted that the lodestar principle for determining whether a taking via regulation requires compensation by the government is the question whether the action "forc[es] some people alone to bear burdens which, in all fairness and justice, should be borne by the public as a whole." [5]

Unfortunately, when it comes to environmental law, the Court's search function for this principle seems to have broken. But it is hard to think of anything that is more of a public good and less of a private one than the protection of species, and thus it is hard to think of a better case for compensation. The ESA is not even arguably a law that prevents noxious uses of real estate; it is simple impressment in the name of something valued by politically powerful people, most of whom are themselves not at risk from the law, since all species of any sort except for dogs, cats, and pigeons were long ago extirpated from NYC and LA.

An excellent reform bill (TESRA) passed the House last week, providing for compensation for landowners, improved procedures, and more respectable procedures for adding species to the list. [6] But war is expected in the Senate, waged by the urban enviros. Having nothing to fear for themselves from the ESA, they can righteously oppose compensating the Western landowners whose property is at risk, fearing that if the public had to write checks to cover the costs it might be less willing to pay, and might actually begin to examine the details. And without ignorance of these details, the law might not be so popular.

This is a fair concern. It is probably absolutely correct. So the job of the PRA is going to be to convince its content constituency that a bigger issue is at stake -- the degeneracy of the whole idea of paying for things that particular portions of the population want by impressments from a limited group of unlucky victims.

To make this sale, the PRA must make this constituency realize the fundamental truth: that it has a huge stake in supporting a governing principle of not funding public benefits through impressments, because the content community itself suffers greatly from the Congressional tendency to be generous with other people's property.

As noted in a recent communication to the IPCentral.Info blog:

Those seeking limitations on IP rights are often the real rent seekers - they ask the government to limit the rights of copyright holders in order to benefit themselves. Like the cable, satellite, and webcasting industries before them, elements of the P2P industry seek a compulsory copyright license at the expense of copyright holders in order to benefit their business models and business interests. Similarly, "public interest" entities often ask government to create exceptions to copyright, like the TEACH Act, so they can make certain uses of copyrighted works without having to seek licenses from copyright holders. [7]

In other words, rather than having various special interests pay for a particular use of IP, wave a congressional wand and impress it from the copyright holder for their benefit. It does indeed look a lot like the ESA, doesn't it? That is because it is like the ESA; impressments are impressments. (The Brits used to staff their navy that way. Maybe we should bring back the press gang, since it is cheaper than paying a volunteer army.)

Nor is this tendency showing any sign of abatement. The proposed Digital Media Consumers' Rights Act of 2005 ( H.R. 1201) is a form of impressment, designed to destroy copyright holders' ability to protect their IP, thus redefining property rights in favor of particular classes of users, and to the disadvantage of creators. [8] (Like the ESA, it would soon turn out that it was injuring its supposed beneficiaries, but in political discourse it is often the proclaimed intent that counts, not the reality.)

So, in fact, the content people have a great opportunity. Use the drive for TESRA as what the academics call "a teachable moment," to do more than simply reform the ESA. Push recognition of the broader and more important principle, which is "no funding of programs or special benefits by impressments," including impressments of IP. This is a principle upon which both landowners and copyright holders should be able to agree, to their great mutual benefit.

It will be interesting to see if the content companies can sell their own people. They should be able to -- being right should be a big advantage. For their own sake, they better. Those Westerners have memories.

James V. DeLong is Senior Fellow and Director of the Center for the Study of Digital Property at The Progress & Freedom Foundation. The views expressed here are his own and do not necessarily reflect those of The Progress and Freedom Foundation, its officers or Board of Directors.

1. http://www.propertyrightsalliance.com/
2. National Journal's Tech Daily , "Property to the People" (Oct. 4, 2005) (subscription required)
   http://nationaljournal.com/pubs/techdaily/features/people/peop051004.htm
3. Shikha Dalmia, "Habitat & Humanity," TechCentralStation , Oct. 5, 2005, http://www.techcentralstation.com/100505D.html
4. For a review of the issues involved, see James V. DeLong, Property Matters: How Property Rights Are Under Assault-- And Why You Should Care (Free Press 1997), pp. 91-122.
5. Armstrong v. United States, 364 U.S. 40, 49 (1960).
6. Threatened & Endangered Species Recovery Act of 2005, http://thomas.loc.gov/cgi-bin/query/D?c109:1:./temp/~c109bfkaQ5::
7. Alec French, Comments on IP & Rent-Seeking, Oct. 5, 2005, http://weblog.ipcentral.info/archives/2005/10/index.html
8. Patrick Ross, "Here's a surefire way to stifle innovation" C|Net News, Oct. 6, 2005 http://news.com.com/2010-1025_3-5889596.html