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Dispatches From Amendment Valley, Alison Lacroix

Articles

No abstract provided.

The Backstop Party, Vincent S.J. Buccola, Adi Marcovich Gross, Matthew R. Mcbrady

Coase-Sandor Institute for Law & Economics Research Paper Series

Bankruptcy exit financing has become a site of recurring conflict in the intra-class creditor skirmishes that now so often mark corporate reorganization. When creditors in an ad hoc group sufficiently large to accept a plan of reorganization on behalf of an impaired class agree to underwrite, or “backstop,” the debtor’s plan-contemplated capital raise, creditors who hold identical claims but are excluded from the backstop group cry foul that the Bankruptcy Code bars their unequal treatment. All-or-nothing arguments have proved unsatisfying, however, because, on the best reading of the Code, the merits depend on a matter of fact that is not …

Fraudulent Transfer Law’S Forgotten Foundations, Douglas G. Baird

Coase-Sandor Institute for Law & Economics Research Paper Series

Fraudulent transfer law is one of the principal bulwarks of private law. Fraudulent transfer law, however, now faces a crisis. Courts have long assumed that it was easy to determine whether a debtor made a fraudulent transfer of its property. One could use traditional markers of ownership to determine whether the debtor transferred property to a confederate. But today most assets are intangible. Transactions happen in the blink of an eye, and they take place entirely on corporate books. Reliance on simple notions of what constitutes a “transfer” of property are wholly inadequate. Understanding what it means for a debtor …

Musical Chairs: Vertical Antitrust Should Prevail Over Congressional Payola Prohibitions To Protect Musicians, Maria Stevenson

The University of Chicago Business Law Review

The music industry is highly concentrated at multiple stages along the production chain between the Big Three music group conglomerates (Universal, Sony, and Warner) and the three largest streaming services (Spotify, Apple, and YouTube). The Big Three and the streaming services have extensive vertical arrangements, from the Big Three having ownership stakes in the largest streaming services to their contracts for the streaming services’ algorithms to prioritize Big Three artists. This resembles historical radio era payola arrangements. This double layer of market concentration and the arrangements between music production and distribution primarily harm musicians, who lack the bargaining power to …

Decolonial Constitutionalism, Richard Albert

Chicago Journal of International Law

The American Declaration of Independence kindled the first successful decolonial movement in the modern world, culminating in the enactment of the United States Constitution. From colony to sovereign state to great power, the United States modeled for subordinated peoples abroad how to win their own battles for sovereignty. Since the end of the Second World War, however, America’s eighteenth-century precedent of revolutionary self-determination is no longer the prevailing path to decolonization. The traditional warmaking toolkit for winning independence—revolution, illegality, and violence—has been replaced by more orderly tactics consonant with the rule of law. Evolution, lawfulness, and continuity are the touchstones …

Premium Justice: An Egalitarian Defense Of Risk-Based Insurance Pricing, Travis Luis Pantin

The University of Chicago Business Law Review

Should insurance companies be allowed to charge different prices based on a policyholder’s likelihood of making claims? This Article challenges the common view that “risk-based pricing” in insurance presents a tradeoff between the twin goals of efficiency and fairness. It argues that the most compelling justification for charging policyholders prices that reflect their individual risk is grounded not in efficiency, but in egalitarian distributive justice. The Article begins by shifting the focus of distributive analysis from the burdens of insurance (i.e., premium costs) to the benefits of insurance, measured as the consumer surplus each participant gains from coverage. It then …

Let’S Nms With Texas: The Implications Of The Texas Stock Exchange For Self-Regulation, Onnig H. Dombalagian

The University of Chicago Business Law Review

The Texas Stock Exchange’s registration as a new national securities exchange is arguably the most formidable challenge to the NYSE and Nasdaq duopoly in recent memory. TXSE has raised expectations not only among those who champion the rise of Texas as a financial center and resist the imposition of progressive norms through securities law, but also among scholars who favor competition as a solution to structural problems in the national market system (NMS) for equity trading. This Article explores the extent to which a new exchange can manage these expectations. It further considers what it means to be a “fully …

Taxing Corporate Payouts, David A. Weisbach

Public Law and Legal Theory Working Papers

Corporate distributions total about $1.5 trillion per year, yet the system for taxing distributions is a mess. It favors buybacks over dividends, and therefore is a possible cause of the growth of buybacks in recent years. It is almost comically complex. And even with its fantastic level of complexity (or perhaps because of the complexity), it provides opportunities for egregious shelters.

Congress has repeatedly attempted reforms to fix these problems, with at best mixed success and often outright failure. Numerous commentators have proposed reforms but all either fail to eliminate the tax differential between buybacks and dividends or require significant …

The Supreme Court Under Threat: Early Lessons In Judicial Self- Protection, Curtis Bradley, Neil S. Siegel

Public Law and Legal Theory Working Papers

This Essay explores how the U.S. Supreme Court, despite being vulnerable to defiance of its decisions and political retaliation, has developed tools of judicial self- protection to preserve its institutional authority as well as the Constitution and the rule of law. Arguing that the Court performs not only a legal role that requires interpretation of the law but also a political one that demands institutional preservation, the Essay examines how the Court has historically navigated political threats by using a range of tools—including avoidance, delay, narrow rulings, strategic dicta, and rhetorical appeals. The Essay focuses on three nineteenth-century episodes: the …

The Genesis Of Constitutions: A Natural Language Processing Approach, Tejas Ramdas, Patrick Chung-Chia Huang, Nuno Garoupa, Martin T. Wells, Yun-Chien Chang, Tom Ginsburg

Public Law and Legal Theory Working Papers

The diffusion of constitutional ideas and models has been the subject of extensive scholarship. In this paper, we use natural language processing methods to examine the persistence of constitutional ideas and models, focusing on how 16 core and iconic constitutions influence 572 newer constitutions over a long period (1900–2020). Our findings indicate that “old” core constitutions (such as those of the U.S. of 1789, Spain of 1812, France of 1848, and to a lesser extent France of 1791) have maintained significant influence over those 121 years. Austria of 1920 and France of 1946 are the most influential among the 20th …

Reorganization By Force, Jared I. Mayer

Coase-Sandor Institute for Law & Economics Research Paper Series

Nearly every chapter 11 is “voluntary” in that it’s initiated by the company’s managers. Yet the Bankruptcy Code also allows unsecured creditors to force a company to reorganize under an “involuntary chapter 11.” Involuntary chapter 11s are rare and largely ignored by scholars. That’s potentially because bankruptcy and corporate law largely defer to managers’ business judgment as to how to maximize the company’s value, and investors have several contract and corporate law tools designed to discipline underperforming managers. So, what work can involuntary chapter 11s do?

This Article shows that an involuntary chapter 11 can be the optimal solution for …

The Genesis Of Constitutions: A Natural Language Processing Approach, Tejas Ramdas, Patrick Chung-Chia Huang, Nuno Garoupa, Martin T. Wells, Yun-Chien Chang, Tom Ginsburg

Coase-Sandor Institute for Law & Economics Research Paper Series

The diffusion of constitutional ideas and models has been the subject of extensive scholarship. In this paper, we use natural language processing methods to examine the persistence of constitutional ideas and models, focusing on how 16 core and iconic constitutions influence 572 newer constitutions over a long period (1900–2020). Our findings indicate that “old” core constitutions (such as those of the U.S. of 1789, Spain of 1812, France of 1848, and to a lesser extent France of 1791) have maintained significant influence over those 121 years. Austria of 1920 and France of 1946 are the most influential among the 20th …

Purdue Pharma And The New Bankruptcy Exceptionalism, Anthony Casey, Joshua Macey

Coase-Sandor Institute for Law & Economics Research Paper Series

No abstract provided.

A Companion Guide To The Restatement Of Consumer Contracts, Oren Bar-Gill, Omri Ben-Shahar, Florencia Marotta-Wurgler

Coase-Sandor Institute for Law & Economics Research Paper Series

This short Essay, written by the Reporters of the recently published Restatement of Consumer Contracts, is intended as a companion to the Restatement. It highlights three areas, where the Reporters’ ambition was only partially reflected in the final version of the Restatement. The first was to ground the restated rules and principles in a systematic, empirical analysis of the entire body of consumer contracts cases. The second goal was to avoid an emphasis on disclosure mandates that have been shown to be unhelpful and even counter-productive. The third goal was to infuse the Restatement with social science realism, especially in …

Algorithmic Selection Of Iconic Constitutions, Tejas Ramdas, Patrick Chung-Chia Huang, Nuno Garoupa, Martin T. Wells, Yun-Chien Chang, Tom Ginsburg

Coase-Sandor Institute for Law & Economics Research Paper Series

This chapter examines the influence of pre-20th century constitutions using a quantitative approach, comparing expert-selected “iconic” constitutions with those identified algorithmically. In prior work, human experts identified four influential constitutions: the U.S. 1791, France 1791, Spain 1812, and France 1848. Here, we employ a genetic algorithm and Document Term Matrix (DTM) analysis to assess which one or four of 180 pre-1899 constitutions had the greatest textual impact on 581 post-1900 constitutions. Two criteria guide the selection: coverage and originality. Through iterative optimization, the algorithm identifies the most textually influential constitutions, allowing for a direct comparison with expert selections. This chapter …

Grading Machines: Can Ai Exam-Grading Replace Law Professors?, Kevin L. Cope, Jens Frankenreiter, Scott Hirst, Eric A. Posner, Daniel Schwarcz, Dane Thorley

Coase-Sandor Institute for Law & Economics Research Paper Series

In the past few years, large language models (LLMs) have achieved significant technical advances, such that legal-advocacy organizations are increasingly adopting them as complements to—or substitutes for— lawyers and other human experts. Several studies have examined LLMs’ performance in taking law school exams, finding mixed results. Yet there have been no published studies systematically analyzing LLMs’ competence at one of law professors’ chief responsibilities: grading law school exams. This paper presents results of an analysis of how LLMs perform in evaluating student responses to legal analysis questions of the kind typically administered in law school exams. The underlying data come …

Stubhub For Courts? Technology, Markets, And New Solutions To Court Congestion, Ronen Avraham, William H. J. Hubbard

Coase-Sandor Institute for Law & Economics Research Paper Series

Rescheduling of court hearings is ubiquitous but virtually ignored by academic scholarship. This is so, despite its contributions to court congestion, a perennial problem for courts that has been the subject of repeated, and repeatedly unsuccessful, efforts at reform. In this Article, we aim to show that rescheduling merits scholarly attention, and by diagnosing why and how it contributes to court congestion and delay, we both explain why most efforts at reducing delay fail and identify new possibilities for speeding up dockets. We draw inspiration from online platforms such as StubHub and SpareFare, technologies that have facilitated rescheduling through easy-to-use …

Pillar Two: Much Ado About Next To Nothing?, Julie Roin

Coase-Sandor Institute for Law & Economics Research Paper Series

The OECD has spent the last fifteen years working on the design and implementation of rules for the taxation of the income derived from international transactions, rules that its members hope will both increase corporate tax revenues and minimize “destructive” tax competition. In 2021, it released its two-part “Inclusive Framework.” Although Pillar One of this Framework still languishes, legislation necessary for the implementation of Pillar Two, which is designed to force all countries to impose a minimum tax on income derived by large multinational enterprises, has been enacted by most of the countries in the European Union, Japan, South Korea …

Constitutional Drafting Processes And Constitutional Success, Adam Chilton, Murat C. Mungan, Mila Versteeg

Coase-Sandor Institute for Law & Economics Research Paper Series

Several recent constitution-making processes have been celebrated for being participatory, inclusive, and representative. However, many of these processes also failed. We theorize that aspects of these kinds of constitutional drafting processes could reduce the probability of constitutional success. To show why, we construct a “Constitution Drafting game” (CD game) in which representatives from different interest groups must draft a constitution. We consider the case where the probability of constitutional success is single peaked, but the value from successful adoption is increasing in the degree of issue protection chosen. The drafting process then leads to protection choices that are above those …

Space Over Time: Housing For The Life Cycle, Lee Anne Fennell

Coase-Sandor Institute for Law & Economics Research Paper Series

People need housing throughout the life cycle, and what they need from that housing changes over time. Yet the menu of residential options is often too static, rigid, and limited to respond to these changes. What would it mean to configure housing to adapt to households’ evolving spatial requirements, risk tolerances, health challenges, and financial statuses? How could greater flexibility in the built environment enable communities to deliver better residential services to their populations? Elder housing offers a illuminating window into these questions and their answers. Addressing life-stage correlated housing mismatches could help to loosen the larger supply constraints—and failures …

Informative Jury Disagreement, Roy Baharad

Coase-Sandor Institute for Law & Economics Research Paper Series

The article introduces a counterintuitive argument, contending that jury disagreement on the defendant’s guilt—a nonunanimous conviction—may well provide a more informative signal, compared to consensus. Because stronger consensus implies higher likelihood of herding, it is shown that beyond some threshold, further accumulation of votes to convict would carry negligible epistemic contribution, barely enhancing the posterior probability of guilt. On the other hand, while dissenting votes provide a direct signal of innocence, they indicate that herding has not been involved in the decision-making process, hence increase the epistemic contribution of any vote generated by said process— including votes to convict—and may …

Forced Migration And Women’S Empowerment: Evidence From Rohingya Refugees, Adam Chilton, Katerina Linos, Anup Malani

Coase-Sandor Institute for Law & Economics Research Paper Series

We explore a paradox: high levels of satisfaction among forcibly displaced Rohingya women in informal camps in Hyderabad, India. Despite experiencing extreme poverty, loss of family and community, and high levels of gender-based violence after resettlement, both men and women—particularly women—report significant increases in satisfaction. We structured a representative household survey, employed a trusted female Muslim interviewer with deep ties to the local community, interviewed comparable numbers of men and women, and embedded list experiments in our questionnaire, to allow people to answer sensitive questions indirectly. We attribute this paradoxical finding to increased freedom post-resettlement, facilitated by economic, legal, and …

The Economics Of Healthcare Fraud, Jetson Leder- Luis, Anup Malani

Coase-Sandor Institute for Law & Economics Research Paper Series

Healthcare fraud imposes a sizable cost on U.S. public healthcare budgets and distorts health care provision. We examine the economics of health care fraud and enforcement using theory and data and connect to a growing literature on the topic. We first offer a new economic definition of health care fraud that captures and connects the wide range of activities prosecuted as fraud. We define fraud as any divergence between the care an insurer says a patient qualifies for, the care a provider provides, and the care a provider bills for. Our definition clarifies the economic consequences of different categories of …

Introducing The Corporate Restructuring Machine: An Open Platform Approach, Horst Eidenmüller, Jared I. Mayer

Coase-Sandor Institute for Law & Economics Research Paper Series

The promise of Artificial Intelligence (AI) has become apparent. Yet how will AI affect corporate reorganizations? Based on previous work on the use of AI applications in negotiations, we argue that the potential of such applications to increase the efficiency of corporate workout negotiations is significant. To do so, we imagine the “Corporate Restructuring Machine” (CRM). This is a private, online platform armed with AI tools and services that are designed to support or even automate corporate workouts (out-of-court restructurings). Stakeholders, particularly creditors and shareholders, could join the platform and opt into AI applications at different times, for different services, …

Taxing Corporate Payouts, Neil Dokurno, David A. Weisbach

Coase-Sandor Institute for Law & Economics Research Paper Series

Corporate distributions total about $1.5 trillion per year, yet the system for taxing distributions is a mess. It favors buybacks over dividends, and therefore is a possible cause of the growth of buybacks in recent years. It is almost comically complex. And even with its fantastic level of complexity (or perhaps because of the complexity), it provides opportunities for egregious shelters.

Congress has repeatedly attempted reforms to fix these problems, with at best mixed success and often outright failure. Numerous commentators have proposed reforms but all either fail to eliminate the tax differential between buybacks and dividends or require significant …

Judge Ai: Assessing Large Language Models In Judicial Decision-Making, Eric A. Posner, Shivam Saran

Coase-Sandor Institute for Law & Economics Research Paper Series

Can large language models (LLMs) replace human judges? By replicating a prior 2 x 2 factorial experiment conducted on 31 U.S. federal judges, we evaluate the legal reasoning of OpenAI’s GPT-4o. The experiment involves a simulated appeal in an international war crimes case, with two altered variables: the degree to which the defendant is sympathetically portrayed and the consistency of the lower court’s decision with precedent. We find that GPT-4o is strongly affected by precedent but not by sympathy, similar to students who were subjects in the same experiment but the opposite of the professional judges, who were influenced by …

The Uneasy Case For Copyright Disgorgement, Roy Baharad

Coase-Sandor Institute for Law & Economics Research Paper Series

Along with lost profits damages that are designed to put copyright owners in the position they would have occupied in the absence of infringement, copyright law entitles rightsholders to seek disgorgement of any additional profits elicited by infringers. The disgorgement remedy is designed to infuse principles of unjust enrichment into copyright doctrine, allowing owners to collect any ill-gotten gain creditable to the infringement. Despite its prominence, this Article reveals a hitherto overlooked problem in applying the disgorgement remedy to copyright infringement. As a baseline for the analysis, the Article embraces the canonic distinction between two types of infringements: imitations and …

Can Consumers Protect Themselves Against Privacy Dark Patterns?, Matthew B. Kugler, Lior Strahilevitz, Marshini Chetty, Chirag Mahapatra

Coase-Sandor Institute for Law & Economics Research Paper Series

Dark patterns have emerged in the last few years as a major target of legislators and regulators. Dark patterns are online interfaces that manipulate, confuse, or trick consumers into purchasing goods or services that they do not want, or into surrendering personal information that they would prefer to keep private. As new laws and regulations to restrict dark patterns have emerged, skeptics have countered that motivated consumers can and will protect themselves against these manipulative interfaces, making government intervention unnecessary. This debate occurs alongside active legislative and regulatory discussion about whether to prohibit dark patterns in newly enacted comprehensive consumer …

Lawyer Ceos, M. Henderson, Irena Hutton, Danling Jiang, Matthew Pierson

Articles

No abstract provided.

Colonial Experiences And Contemporary Laws, Adam Chilton, Yun-Chien Chang, Nuno Garoupa, Mila Versteeg

Articles

No abstract provided.