20 Conservation easements illustrate how such a lawmaking process could

20 conservation easements illustrate how such a

This preview shows page 494 - 497 out of 513 pages.

20 Conservation easements illustrate how such a lawmaking process could facilitate property rights innovations. 21 These instruments enable property owners to lock in particular uses of their proper- ty in perpetuity. Many states have adopted laws providing for these easements, spurred by a federal tax break for conservation 19: L EGAL P ROCESS AND THE D ISCOVERY OF B ETTER P OLICIES ... 481 18 Nicole Garnett, Land Use Regulation, Innovation, and Growth , this volume, chapter 12. 19 Andrew P. Morriss, “The Role of Offshore Financial Centers in Regulatory Competition,” in Offshore Financial Centers in Regulatory Competition , ed. Andrew P. Morriss (Washington, DC: AEI Press, 2010), 116. 20 O’Hara and Ribstein, The Law Market . 21 Larry E. Ribstein, “The Market for Conservation Law,” May 17, 2010, 1609793.
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easements. The complexity and novelty of these property rights and the federal tax law have induced states to widely adopt the Uniform Conservation Easement Act. Letting property owners enter into easements provided for by the law of states other than where the property is located could spur a competitive lawmak- ing process and legal innovations. As with the other areas dis- cussed above, states would retain the ability to legislatively block local property owners from adopting certain types of laws. This combination of competition and mandatory rules could lead to the discovery of more efficient rules regarding this relatively new property right. Products Liability Litigation Nowhere is there a greater need for legal process to pave the way for innovation than in the area of products liability law. Manufacturers may be significantly discouraged from innovating because new products pose new risks of liability to consumers for product injuries. The expansion of tort law is sometimes viewed as a failure of state law that calls for federal safety regulation to preempt the states. But before sacrificing the benefits of the mar- ket for state law, it is worth trying the choice of law alternative. Current choice of law rules generally let plaintiffs choose to liti- gate in states with the most pro-plaintiff laws. Changing the pre- vailing rule to one that always applies the law where the product is manufactured could be too favorable to manufacturers. Applying the law of the state where the product is first sold might be a reasonable compromise because firms could determine their prices based on the product liability laws in each state where the product is sold. However, no states apply such a rule. A possible solution, as with the other areas discussed above, is a federal law enabling the parties to contract for the applicable state’s product liability law. Consumer groups might fear that this would cause a “race to the bottom” toward the laxest standards because consumers could be expected to shop on the basis of the applicable state law. However, states would have an interest in protecting their own residents from unsafe products rather than R ULES F OR G ROWTH 482
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just being states chosen in product liability contracts. Also, man-
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