In legal terms, appropriation means claiming or setting aside something for a specific use, and the word carries several distinct meanings depending on the area of law. It can describe Congress authorizing money from the federal treasury, a person’s name or image being used commercially without consent, the theft of confidential business information, a fiduciary helping themselves to assets they manage, a corporate accounting entry, or a water-rights claim in the western United States. The common thread is that someone is directing a resource — public money, an identity, a secret, an asset, or a stream — toward a particular purpose.
Appropriation of Public Funds
The most familiar legal use of the word comes from the federal budget. Article I, Section 9 of the U.S. Constitution says no money can leave the Treasury unless Congress has passed a law authorizing it.1Cornell Law School. Appropriations Clause – U.S. Constitution Annotated This “power of the purse” means the President and federal agencies cannot spend a dollar on their own initiative. Every expenditure requires a law that specifies how much an agency receives, what the money can be used for, and how long the agency has to spend it.
An appropriation bill starts in the House of Representatives, passes both chambers, and goes to the President for signature. If the President vetoes, Congress can override with a two-thirds vote in both chambers. Once signed into law, an appropriation acts as a hard ceiling. If a bill allocates $500 million for a highway program, the responsible agency cannot spend $500,000,001 without going back to Congress. Federal law prohibits government employees from authorizing any expenditure that exceeds the amount available in an appropriation, and violations carry administrative penalties and, in serious cases, criminal consequences.2Office of the Law Revision Counsel. 31 USC 1341 – Limitations on Expending and Obligating Amounts
Congress is supposed to pass all appropriation bills before the new fiscal year starts on October 1, but it rarely finishes on time. When deadlines pass, Congress can buy time with a continuing resolution, which temporarily extends the prior year’s funding levels so agencies can keep operating.3GAO.gov. What Is a Continuing Resolution and How Does It Impact Government Operations If neither a full appropriation nor a continuing resolution passes, agencies funded by annual appropriations lose their legal authority to spend money, and a shutdown begins.
Appropriation as a Privacy Tort
In privacy law, appropriation refers to using someone’s name, image, or other identifying features for commercial gain without their permission. Courts recognize it as one of four privacy-related torts, closely linked to what is commonly called the right of publicity.4Cornell Law School. Privacy Torts – Amdt1.7.5.10 The classic example is a company putting a person’s photograph in an advertisement without a signed release. The claim protects everyone from private individuals to public figures whose voices get mimicked in commercials.
To win an appropriation claim, you need to prove three things: the defendant used your identity, you did not give permission, and the use caused you some injury. Injury can take several forms, including lost endorsement income, emotional distress, or the diminished commercial value of your likeness. Damages vary by state but typically include the fair market value of what a legitimate endorsement would have cost, plus any additional harm you can prove. More than half of states have statutes specifically addressing the right of publicity, and many set minimum damage floors that apply even when actual losses are hard to quantify.
The right of publicity does not disappear when someone dies. Depending on the state, it can survive for decades after death, with protection periods ranging roughly from 40 to 70 years. That is why estates of deceased celebrities can still sue over unauthorized merchandise or AI-generated likenesses.
Two defenses come up often. The first is newsworthiness: using a person’s name or image in news reporting, commentary, or public interest coverage is protected, as long as the use is not primarily a disguise for commercial promotion. The second is transformative use. If a work adds significant creative expression to a person’s likeness rather than simply replicating it for commercial purposes, the First Amendment interest outweighs the publicity claim.
Misappropriation of Trade Secrets
Trade secret misappropriation occurs when someone obtains confidential business information through improper means — theft, bribery, or breach of a confidentiality agreement — and uses or discloses it without the owner’s consent. The federal Defend Trade Secrets Act allows the owner of a misappropriated trade secret to file a civil lawsuit, provided the secret relates to a product or service used in interstate commerce.5Office of the Law Revision Counsel. 18 USC 1836 – Civil Proceedings Nearly every state has also adopted the Uniform Trade Secrets Act, creating overlapping state-level protections.
What qualifies as a trade secret is broader than most people expect. Customer lists, manufacturing processes, pricing algorithms, supplier terms, and software source code can all qualify, as long as the owner took reasonable steps to keep the information secret. The moment a company stops treating data as confidential, it risks losing trade secret protection entirely.
Courts have several remedies available. The most immediate is an injunction blocking the defendant from using or disclosing the secret, but the order cannot prevent someone from simply taking a new job; restrictions on employment must be based on evidence of a real threat.6Office of the Law Revision Counsel. 18 U.S. Code 1836 – Civil Proceedings Damages typically include the actual losses the owner suffered plus any profits the defendant gained. When the misappropriation was willful and malicious, a court can award exemplary damages up to two times the compensatory amount.
Federal trade secret claims must be filed within three years of the date you discovered the misappropriation, or should have discovered it through reasonable diligence. A continuing misappropriation counts as a single claim for purposes of this deadline, so the clock starts when you learn of it, not from each individual use.6Office of the Law Revision Counsel. 18 U.S. Code 1836 – Civil Proceedings
Misappropriation of Fiduciary and Corporate Assets
When someone in a position of trust takes assets they manage and uses them for personal benefit, the law calls it misappropriation or conversion of fiduciary assets. This is a direct violation of the duty of loyalty, which requires fiduciaries to act entirely in the interest of the people they serve. An executor paying off personal credit card debt from estate funds, or a corporate officer using company money to buy a vacation home, are textbook examples.
Remedies are designed to put the beneficiaries back where they would have been. Courts routinely order the fiduciary to return the property or pay its full value plus interest. The fiduciary also faces removal from their position and forfeiture of any fees or commissions they would have earned. In egregious cases, courts award punitive damages on top of the compensatory award.
Federal securities law adds another layer for public company officers. Under the Sarbanes-Oxley Act, if a company has to restate its financials because of misconduct, the CEO and CFO must reimburse the company for any bonuses, incentive pay, or stock sale profits they received during the twelve months after the flawed statements were first published.7Office of the Law Revision Counsel. 15 U.S. Code 7243 – Forfeiture of Certain Bonuses and Profits The misconduct does not have to be the CEO’s or CFO’s own.
Appropriated Retained Earnings
In accounting, appropriation has a quieter meaning. A company’s board of directors can formally set aside a portion of retained earnings for a specific future use, such as funding a factory expansion, preparing for a pending lawsuit, or satisfying the terms of a loan agreement that restricts dividend payments until the debt is repaid.
This step does not move cash into a separate account or reduce total equity. It is a bookkeeping reclassification. Total retained earnings get split into “appropriated” and “unappropriated” categories on the balance sheet, signaling to shareholders that the appropriated portion is not available for dividends. Once the purpose is fulfilled, the appropriation is reversed and the earnings return to the unappropriated column. Many modern companies skip the formal entry and simply disclose the restriction in the footnotes.
Prior Appropriation of Water Rights
In the western United States, appropriation is the legal doctrine that governs who gets to use water and how much. Unlike eastern states, where water rights belong to whoever owns land next to a river or stream, western states treat water as a public resource that anyone can claim by putting it to beneficial use, such as irrigation, hydropower, or municipal supply.
The core rule is “first in time, first in right.” Whoever first diverts water and applies it to a beneficial use holds a senior right. Everyone who comes later holds a junior right. During droughts, senior rights get their full allocation before junior rights receive anything, which can mean complete cutoffs for junior holders in dry years.
Prior appropriation rights also come with a condition: you have to keep using the water. Most western states enforce some version of a “use it or lose it” rule, where rights holders who stop putting water to beneficial use for an extended period risk forfeiture. The original logic was to prevent speculation, though many states have been broadening exceptions in recent years to avoid encouraging wasteful use solely to preserve a right.