Contracting for Control of Landscape-Level Resources

• Author: Karen Bradshaw Schulz & Dean Lueck
• Position: Associate Professor of Law, Sandra Day O'Connor College of Law, Arizona State University/Professor of Agricultural and Resource Economics, University of Arizona
• Pages: 2507-2549

2507

Contracting for Control of Landscape-

Level Resources

Karen Bradshaw Schulz & Dean Lueck

ABSTRACT: Environmental governance increasingly focuses on public–

private partnerships. We focus on contracting as a subset of the role of private

actors governing landscape-level resources—such as wildlife habitats, scenic

vistas, and firescapes—that exceed individual parcel sizes and are thus

difficult for individual landowners to control unilaterally. Numerous

contractual arrangements have emerged to exert coordinated control over

landscape-level resources. We hypothesize that variations in laws and

transaction costs, which are controlled largely by the homogeneity of

landowner preferences across fragmented parcels, drive private control of

landscape-level resources. In the absence of effective private control,

government agencies may assume control of the landscape-level resources. A

series of case studies discusses how law shapes the conditions that favor

private contracting regimes of landscape-level resources, which highlight

broader themes of law as a catalyst for new governance.

 Associate Professor of Law, Sandra Day O’Connor College of Law, Arizona State

University.

 Professor of Agricultural and Resource Economics, University of Arizona.

The authors gratefully acknowledge the comments provided by George J. Busenberg, Robert

Fischman, Christine Klein, Rhett Larson, Yael R. Lifshitz Go ldberg, Troy Rule, and Eric Singer.

We benefitted from the contributions by the participants of the Spontaneous Order and

Emergence of New Property Systems of Property Workshop at New York University School of Law,

the Politics and Economics of Wildfire Policy Conference at University of California, Santa

Barbara, and the Junior Faculty Retreat at Arizona State University College of Law. We appreciate

the research assistance provided by Lauren A. Ferrigni and library services provided by Beth

DeFelice.

2508 IOWA LAW REVIEW [Vol. 100:2507

I. INTRODUCTION ........................................................................... 2509

II. LANDSCAPE GOVERNANCE .......................................................... 2513

A. CONTRACT AS A MECHANISM FOR PUBLIC–PRIVATE

ENVIRONMENTAL GOVERNANCE ............................................. 2513

B. LANDSCAPE-LEVEL RESOURCES ............................................... 2514

C. GOVERNMENT MANAGEMENT OF LANDSCAPES ........................ 2519

1. Legislation ................................................................... 2520

2. Common Law .............................................................. 2522

3. Executive and Agency Control ................................... 2523

III. EXAMPLES OF LANDSCAPE-LEVEL RESOURCES ............................ 2524

A. BIOLOGICAL LANDSCAPES: WILDLIFE AND MARINE FISHERIES .. 2524

B. UNDERGROUND LANDSCAPES: OIL–GAS AND GROUNDWATER ... 2526

C. THE SCENIC AND RECREATIONAL LANDSCAPE ......................... 2528

IV. CONTRACTING TO MANAGE THE WILDFIRE LANDSCAPE ............. 2529

A. OVERVIEW OF THE CASE STUDIES ............................................ 2530

B. COMMERCIAL TIMBERLANDS—PUBLIC AND PRIVATE .............. 2533

1. Contracting Between Private Commercial Timberland

Owners ......................................................................... 2533

2. Contracting Between Private and Public Commercial

Timberland Owners .................................................... 2534

C. WILDLAND URBAN INTERFACE AREAS ..................................... 2535

1. Southern California Homeowners ............................. 2535

2. The Four Forests Restoration Initiative ..................... 2537

D. CATTLE RANCHERS ............................................................... 2539

1. Wildfire and Texas Cattle Ranching .......................... 2540

2. Malpai Borderlands Group ......................................... 2542

V. FINDINGS AND IMPLICATIONS ...................................................... 2543

A. FINDINGS .............................................................................. 2543

1. Capacity of Private Parties to Manage Large

Landscapes ................................................................... 2544

2. Influence of Law on Landscape Governance ............ 2545

B. IMPLICATIONS ....................................................................... 2547

VI. CONCLUSION .............................................................................. 2548

2015] CONTRACTING FOR CONTROL OF RESOURCES 2509

I. INTRODUCTION

Policy discussions increasingly envision a role for private actors in a wide

variety of governance contexts.1 Growing awareness that industry actors and

nongovernmental organizations play vital leadership roles in the

development of law and policy call traditional notions of the government as a

unilateral decisionmaker into question.2 Environmental law is a particularly

fertile ground for studying public–private approaches.3 Collaborative

1. See Kenneth W. Abbott & Duncan Snidal, The Governance Triangle: Regulatory Standards

Institutions and the Shadow of the State, in THE POLITICS OF GLOBAL REGULATION 44, 70–71 (Walter

Mattli & Ngaire Woods eds., 2009) (discussing standard bargaining and public–private

governance arrangements); Orly Lobel, The Paradox of Extralegal Activism: Critical Legal

Consciousness and Transformative Politics, 120 HARV. L. REV. 937, 983 (2007) (explaining that non-

state actors play an important role in areas of management once thought to be controlled solely

by state actors). See generally Jody Freeman, The Private Role in Public Governance, 75 N.Y.U. L. REV.

543 (2000) (emphasizing the role of private actors in administrative regulations); Eric W. Orts

& Cary Coglianese, Debate, Collaborative Environmental Law: Pro & Con, 156 U. PA. L. REV.

PENNUMBRA 289 (2007) (debating the proper role of private actors in determining

environmental policy); R.A.W. Rhodes, The New Governance: Governing Without Government, 44 POL.

STUD. 652 (1996) (noting a trend towards “new governance” approaches that emphasize the role

of private parties).

2. See generally Freeman, supra note 1 (describing agencies and private organizations

working together to resolve conflict).

3. Burgeoning literatures on topics including regulatory negotiation, new governance,

bottom-up approaches, and insurers as regulators benefitted from early empirical studies in

environmental law. See, e.g., WILLIAM D. LEACH, CTR. FOR COLLABORATIVE POLICY, IS DEVOLUTION

DEMOCRATIC? ASSESSING COLLABORATIVE ENVIRONMENTAL MANAGEMENT 1 (2004) (proposing “a

framework for assessing devolution in terms of inclusiveness, representativeness, procedural

fairness, lawfulness, deliberativeness, and empowerment”); Jody Freeman, Collaborative

Governance in the Administrative State, 54 UCLA L. REV. 1 (1997) (using examples from

Occupational Safety and Health Administration (“OSHA”) and the Environmental Protection

Agency (“EPA”) to argue current collaborative models are not ideal); Cameron Holley, Aging

Gracefully? Examining the Conditions for Sustaining Successful Collaboration in Environm ental Law and

Governance, 26 ENVTL. & PLAN. L.J. 457 (2009) (investigating the factors that impact long-term

success of corporate collaboration); Guy Mundlak & Issi Rosen-Zvi, Signaling Virtue? A Comparison

of Corporate Codes in the Fields of Labor and Environment, 12 THEORETICAL INQ. L. 603 (2011)

(examining motivations behind corporate social responsibility in the labor and environ mental

sectors); Haitao Yin et al., Risk-Based Pricing and Risk-Reducing Effort: Does the Private Insurance

Market Reduce Environmental Accidents?, 54 J.L. & ECON. 325 (2011) (analyzing variations in

financing of cleanup of accidental leaks from underground fuel tanks).