Real property intersects with IP, health, criminal law

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The reach of property law is expanding into other areas. Did you know, for instance, that intellectual property law is becoming “propertized?”

As property rights become stronger in other ways — a process termed “propertization” — real property tends to provide helpful analogies for other types of property claims, says a Marquette University Law School professor of both real and intellectual property.

Kali N. Murray offers an example of the “propertization” of IP law in In re Zoltek v. U.S., 442 F.3d 1345 (2006). Zoltek discussed whether patents can be subject to takings claims requiring just compensation from the government. The Federal Circuit Court of Appeals said no, and the U.S. Supreme Court recently denied certiorari on the matter. Notably, seven amici were involved in the case, one of whom was a group of approximately 30 legal academics who would have ruled differently.

“Real property issues become much more acute as we integrate our views and experiences into new experiences and systems,” Murray explains. “For instance, we’ve seen a rash of articles about whether property rights should apply in a virtual world.”

She then points to Bragg v. Linden Research Inc., a pending case filed just last fall in Pennsylvania state court, which poses the question about whether property rights can exist in video game virtual worlds — a place that really only exists on a computer server, is a completely new setting and is not the real world. The case’s outcome will undoubtedly be talked about among legal circles as well as on the ’Net.

So, why would practitioners want to merge real property with other new forms of property?

“Lawyers often want to appeal to judges with things they already know. By analogizing to property law, it becomes a concrete way of dealing with these types of claims.”

Property Proliferates in Health Law

IP isn’t the only practice area where property law principles intersect.

There’s a lot of variety of sub-concentrations among the concentration of health law, reminds Adam J. Tutaj, chairperson of the Health Law Section of the State Bar of Wisconsin. Tutaj, of Meissner, Tierney, Fisher & Nichols S.C. in Milwaukee, typically serves a physician and physician-group clientele in his health law practice.

When they wish to set up clinics in new or different facilities, it’s Tutaj’s job to be familiar with general lease agreements and construction agreements. Or, if they wish to operate research facilities or diagnostic centers, typically there are also regulatory schemes, both on the state and national levels, which must be complied with. For example, some facilities must be built out in particular ways to accommodate the operation and licensure of certain types of equipment, such as x-ray machines, MRIs, or advanced nuclear imaging equipment. These matters usually must be addressed in the lease documents or construction contracts.

Health lawyers who represent hospitals typically must be familiar with the workings of more sophisticated real estate financing techniques, such as tax increment financing and tax-exempt bond issuances. Because hospitals are often 501(3)(c) entities, hospital counsel must also be familiar with the intricacies of property tax exemption. In addition, when tax-exempt bond financing is involved, counsel must be mindful of the numerous restrictions on the uses of these facilities — such as IRS Revenue Procedure 97-13, which sets forth conditions under which a management contract would be considered not to result in prohibited private business use.

“There are a number of intersections between real estate practice and health law. This isn’t surprising, given the breadth of the statutory and regulatory matters generally considered to comprise the practice of health law. Indeed, it’s difficult to imagine any real estate transaction in the context of modern medicine that would not implicate at least one significant health-care-related legal regime.”

Disappearance, Destruction and Deception

At first glance, it might seem that there’s little overlap between real estate and criminal law. However, Wis. Stats. Chapter 943, Crimes Against Property, defines a number of crimes involving real property. Most of them involve the three Ds: disappearance, destruction and/or deception.

So says Attorney Gregory J. O’Meara S.J., a criminal law professor at Marquette University Law School and also the secretary and treasurer of the Criminal Law Section Board of the State Bar of Wisconsin.

For example, there’s sec. 943.215, absconding without paying rent; damage to property under sec. 943.01; arson of buildings under sec. 943.02; and or graffiti under sec. 943.07, to name a few.

Sec. 943.20(1)(d), Theft by fraud for transfer of encumbered property, exemplifies deception well, he says. It proscribes obtaining title to the property of another “by intentionally deceiving the person with a false representation which is known to be false, made with intent to defraud, and which does defraud the person to whom it is made.

‘False representation’ includes a promise made with intent not to perform it if it is a part of a false and fraudulent scheme.” O’Meara calls this “a simple statute, but it covers a wide range of issues quite elegantly. Although frequently we shy away from prosecuting some of these cases criminally — I don’t really know why.”

On a slightly tangential issue, O’Meara points to an Aug. 24 New York Times article stating that, in all, legislators in more than 30 states have introduced close to 100 bills intended to stem deceptive-lending practices and foreclosure, some by stiffening criminal penalties.

Finally, he notes that principles of property law used to play bigger role in Fourth Amendment cases, until Katz v. United States, 389 U.S. 347 (1967), when the U.S. Supreme Court held that, “The Fourth Amendment protects people, not places.” Real estate influences were present in “curtilage” cases as well, although that emphasis seems to be diminishing now.

Const. Lawyers Watching Post-Kelo Cases

Takings and due process issues are always on the radar screens of the constitutional law attorneys who make up the Individual Rights and Responsibilities Section of the State Bar of Wisconsin, says its chairperson, Laurence J. Dupuis of the American Civil Liberties Union in Milwaukee. Kelo v. City of New London, 545 U.S. 469 (2005), brought that issue to the fore.

“There’s a segment of our section that views those real property rights issues as a significant means of protecting individual rights and liberties of the people,” he says.

“There a number of members, and of board members, of IRR, who hold the view that property rights are protected for a reason — not just for the sake of protecting property, but because property is one mechanism of reducing the power of the government in relation to individuals. Individuals have a sphere over which they have control, and property is one of them, that sort of diminishes the power of the government.”