Digital Commons Network^™

Rethinking Nudge: An Information-Costs Theory Of Default Rules, Oren Bar-Gill, Omri Ben-Shahar

Coase-Sandor Institute for Law & Economics Research Paper Series

Policymakers and scholars – both lawyers and economists – have long been pondering the optimal design of default rules. From the classic works on “mimicking” defaults for contracts and corporations to the modern rush to set “sticky” default rules to promote policies as diverse as organ donations, retirement savings, consumer protection, and data privacy, the optimal design of default rules has featured as a central regulatory challenge. The key element driving the design is opt-out costs—how to minimize them, or alternatively how to raise them to make the default sticky. Much of the literature has focused on “mechanical” opt-out costs—the …

Drugs, Patents, And Well-Being, Christopher Buccafusco, Jonathan S. Masur

Coase-Sandor Institute for Law & Economics Research Paper Series

The ultimate end of patent law must be to spur innovations that improve human welfare—innovations that make people better off. But firms will only invest resources in developing patentable inventions that will allow them to make money—that is, inventions that people will want to use and buy. This can gravely distort the types of incentives that firms face and the types of inventions they pursue. Nowhere is this truer than in the pharmaceutical field. There is by now substantial evidence that treatments for diseases that primarily afflict poorer people—including the citizens of developing nations—are dramatically under-produced, compared with drugs that …

The Economic Basis Of The Independent Contractor/Employee Distinction, Eric Posner

Coase-Sandor Institute for Law & Economics Research Paper Series

In recent years, a controversy has erupted over the distinction between employees and independent contractors. Commentators have argued that in the modern “gig economy,” many people traditionally classified as independent contractors are as vulnerable as employees and should be granted the legal protections that employees alone normally enjoy. However, the distinction between the two categories remains inescapable, and the theoretical basis for it has not been identified. I argue that the distinction is derived from market structure. Employees are workers who, because they must make relationship-specific investments in a single firm, are subject to labor monopsony. Independent contractors do not …

Sizing Up Categories, Lee Anne Fennell

Public Law and Legal Theory Working Papers

Categories intentionally create discontinuities. By breaking the world up into cognizable chunks, they simplify the information environment. But the signals they provide may be inaccurate or scrambled by strategic behavior. This Article considers how law might approach the problem of optimal categorization, given the role of categories in managing and transmitting information. It proceeds from the observation that high categorization costs can be addressed through two opposite strategies—making classifications more fine-grained (splitting), and making classifications more encompassing (lumping). Although continuizing and other forms of splitting offer intuitive answers to inaccurate classification and gaming along category lines, lumping is sometimes a …

Mopr Madness, Joshua C. Macey, Robert Ward

Public Law and Legal Theory Working Papers

Five years ago, in his piece on capacity markets, Jay Morrison discussed what he then viewed as the anticompetitive and arbitrary aspects of FERC’s shifting Minimum Offer Price Rules (MOPR) and their interference with private ordering and state policymaking. MOPRs allow administrative bodies, rather than market participants, to determine the minimum price per kilowatt that generators can submit as capacity market bids. Since then, energy regulators have extended MOPRs to an increasing number of market participants, and critiques of these rules have reached a fever pitch. To say that the latest permutation of price mitigation promotes a cure worse than …

Remixing Resources, Lee Anne Fennell

Public Law and Legal Theory Working Papers

This Essay argues for an approach to resource access that connects rather than separates questions of efficiency and distribution. It proceeds from the premise that putting together the most valuable combinations of resources—including human capital—is of central and increasing normative importance. Structuring law to facilitate these combinations should be a primary task for property scholars working in the law and economics tradition. Doing so requires engaging with the processes through which complementary resources produce value in a modern society, recognizing how property doctrines work to put together and keep together complementary resource sets, and confronting the ways in which material …

Toward The Democratic Regulation Of Ai Systems: A Prolegomenon, Mariano-Florentino Cuéllar, Aziz Z. Huq

Public Law and Legal Theory Working Papers

No abstract provided.

The Legal Envelope Theorem, David A. Weisbach, Daniel J. Hemel

Public Law and Legal Theory Working Papers

Non-tax legal rules regulating the workplace, the 6inancial sector, real property, and many other areas affect the ability of governments to collect revenues and provide public goods. Yet tax-collection considerations rarely enter into economic analyses of non-tax legal rules. Usually, tax-collection concerns are shunted aside to separate studies (and separate law-school courses) rather than being integrated into debates in non-tax spheres. This separation between non-tax legal rules and tax-collection considerations bears signi6icant negative consequences for the ability of law and economics to generate descriptively accurate and normatively attractive accounts of important non-tax legal questions.

This Article takes a step toward …

Death As Divorce For The Abandoned Spouse: Davis V. Combes And The Cautious And Gender-Sensitive Judiciary, Saul Levmore

Public Law and Legal Theory Working Papers

No abstract provided.

Illiberalism And Islam, Aziz Z. Huq

Public Law and Legal Theory Working Papers

This chapter analyzes the role of anti-Islam and anti-Muslim discourse in North American and European ‘illiberal’ parties, movements, and ideologies. Its first aim is to situate those deployments in a longer history. Occidental engagements with Islam and Muslims, including anti-Islamic tropes, long predate the emergence of liberalism, let along illiberalism. It should not be a surprise that liberalism as it emerged in the nineteenth century partook of such ideas. Contra some theorists, however, I argue that there is no strong evidence that anti-Islam was constitutive of liberal theory or early practice. Rather, it was in the second half of the …

Constitutional Rights In The Machine Learning State, Aziz Z. Huq

Public Law and Legal Theory Working Papers

A new class of “machine learning” tools is able to make better predictions and inferences from data than was previously feasible. For the state, machine learning is a powerful and supple device to reveal citizens’ beliefs, actions, and expected behaviors. Its deployment to allocate investigative resources, material benefits, and coercive penalties to particular individuals, though, can implicate due process, privacy, and equality interests. Substantive doctrinal frameworks and enforcement regimes for those entitlements, however, arose in the context of human action. Neither is apt for a machine learning context. This Article offers a start to the larger project of developing a …

The Bound Executive: Emergency Powers During The Pandemic, Tom Ginsburg, Mila Versteeg

Public Law and Legal Theory Working Papers

Emergency governance, we are often told, is executive governance. Only the executive branch has the information, decisiveness, and speed to respond to crises, and so the executive is not capable of being effectively constrained by other branches. Ordinary checks and balances, then, are believed to effectively disappear during a crisis. Referring to the classic theorist of emergency rule, conventional accounts describe crisis governance as “Schmittian” and “post-Madisonian,” characterized by an unbound executive that faces few, if any, legal constraints.

This Article interrogates these propositions using evidence from how countries around the world have responded to the 2020 global pandemic. It …

Rethinking Nudge: An Information-Costs Theory Of Default Rules, Oren Bar-Gill, Omri Ben-Shahar

Public Law and Legal Theory Working Papers

Policymakers and scholars – both lawyers and economists – have long been pondering the optimal design of default rules. From the classic works on “mimicking” defaults for contracts and corporations to the modern rush to set “sticky” default rules to promote policies as diverse as organ donations, retirement savings, consumer protection, and data privacy, the optimal design of default rules has featured as a central regulatory challenge. The key element driving the design is opt-out costs—how to minimize them, or alternatively how to raise them to make the default sticky. Much of the literature has focused on “mechanical” opt-out costs—the …

Changing Places, Changing Taxes: Exploiting Tax Discontinuities, Julie Roin

Public Law and Legal Theory Working Papers

President Trump’s decision to move his official state of residence from high-tax New York to no (income)-tax Florida has brought public attention to an issue that has long troubled scholars, designers and administrators of income tax systems: how the interaction of tax rules deferring the taxation of income and tax rules based on residency allows taxpayers to reduce and even avoid taxation of their deferred income. These discontinuities in tax treatment may lead to excessive migration, as well as reductions in state income tax revenues. This article explains what states would have to do to eliminate these avoidance opportunities. However, …

Drugs, Patents, And Well-Being, Christopher Buccafusco, Jonathan S. Masur

Public Law and Legal Theory Working Papers

The ultimate end of patent law must be to spur innovations that improve human welfare—innovations that make people better off. But firms will only invest resources in developing patentable inventions that will allow them to make money—that is, inventions that people will want to use and buy. This can gravely distort the types of incentives that firms face and the types of inventions they pursue. Nowhere is this truer than in the pharmaceutical field. There is by now substantial evidence that treatments for diseases that primarily afflict poorer people—including the citizens of developing nations—are dramatically under-produced, compared with drugs that …

Outside Advisers Inside Agencies, Brian D. Feinstein, Daniel J. Hemel

Public Law and Legal Theory Working Papers

Advisory committees are a ubiquitous, yet understudied feature of the administrative state. More than seventy-five thousand experts from out-side the federal government serve on over one thousand committees across the Executive Branch, providing agencies with informed “second opinions” to complement their in-house experts in the civil service. By law, these committees must be “fairly balanced in terms of the points of view represented.” Yet little is known about whether advisory committees live up to this standard, under what circumstances agencies utilize these panels, and how advisory committees influence agency decisionmaking.

This Article sheds light on the composition and operation of …

A Public Health Framework For Covid-19 Business Liability, Daniel Hemel, Daniel B. Rodriguez

Public Law and Legal Theory Working Papers

Businesses that reopen amid the COVID-19 pandemic face potential legal liability to customers and workers who contract the coronavirus through those enterprises’ operations. Federal and state lawmakers are actively considering proposals to narrow or expand such liability. These proposals have important economic and public-health implications. This article presents an analytical framework for evaluating liability regimes in the context of a communicable disease. The framework highlights the contrasting public-health consequences of liability before and after a customer or worker is exposed to the virus. Ex ante (before exposure), potential liability generates incentives for businesses to take precautions that reduce the risk …

Clarifying Vagueness: Rethinking The Supreme Court’S Vagueness Doctrine, Emily M. Snoddon

University of Chicago Law Review

For over a hundred years, the Supreme Court has struggled to articulate a coherent test for analyzing constitutional challenges based on vagueness. The current formulation of the vagueness test is rooted in due process principles and calls for invalidation of laws when they either (1) fail to “give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden” by the law, or (2) encourage “arbitrary arrests and convictions.” Certain aspects of this test suggest that the separation of powers is relevant to the analysis. Nevertheless, it is currently unclear what role this constitutional protection plays.

Recent Supreme …

Legal Fictions And Foreign Frictions: An Argument For A Functional Interpretation Of Jesner V Arab Bank For Transnational Corporations

University of Chicago Law Review

The Alien Tort Statute (ATS) allows noncitizens to bring civil actions in US federal courts for a select class of particularly egregious violations of international law. Human rights activists have pushed the boundaries of the ATS in recent decades, and the Supreme Court has responded by establishing several limiting rules for ATS jurisdiction. Most recently, in April 2018, the Supreme Court ruled in Jesner v Arab Bank that foreign corporations cannot be defendants in ATS suits. Following Jesner, plaintiffs in ongoing ATS suits have dropped key corporate defendants from their complaints. This Comment argues that courts and litigants should pause …

Exculpatory Evidence Pre-Plea Without Extending Brady, Brian Sanders

University of Chicago Law Review

Innocent defendants sometimes plead guilty. This is a problem. Some suggest fixing this problem with a constitutional requirement that prosecutors disclose exculpatory evidence before a defendant pleads guilty. A circuit split has thus developed concerning whether Brady, which requires disclosure of exculpatory evidence, extends to the pre-plea context. The Supreme Court’s jurisprudence, however, likely bars a constitutional requirement for pre-plea disclosure of exculpatory evidence. Faced with this exigency, this Comment argues that contract law should form the legal basis for pre-plea disclosure. Specifically, the contract doctrine of constructive fraud provides a suitable remedy. While big boy clauses, which defeat constructive …

Jurisdictional Realism: Where Modern Theories Of Choice Of Law Went Wrong, And What Can Be Done To Fix Them, Lea Brilmayer, Charles Seidell

University of Chicago Law Review

An American Law Institute project on the conflict of laws is preparing to bring forth a new Restatement on the subject. The issues most hotly debated behind the scenes are those involving choice of law, a somewhat technical legal specialty with a well-earned reputation for impenetrability. Despite the theoretical difficulty of the topic, the drafting of the new Restatement (Third) has been the cause of intense interest on the part of the bench and bar. Selection of the applicable law—while deeply influenced by theoretical considerations—has immense practical consequences because of the recurrence of the issue in contemporary litigation.

The leading …

Federal Expansion And The Decay Of State Courts, Diego Zambrano

University of Chicago Law Review

At the turn of the twenty-first century, the country entered its third era of judicial federalism. That era is defined by federal judicial expansion into areas of statecourt power and federal monopolization of large and complex litigation. These changes, in turn, have coincided with the decay of state courts. Whether measured by funding, delays, or docket loads, state courts—the true workhorses of the American legal system—have declined relative to federal courts. Indeed, over the last decade, state chief justices have complained that state courts are “financially bankrupt,” “at ‘the tipping point of dysfunction,’” and “on the edge of an abyss.” …

High-Value, Low-Value, And No-Value Guns: Applying Free Speech Law To The Second Amendment, Joseph E. Sitzmann

University of Chicago Law Review

Like the First, Fourth, Fifth, and Fourteenth Amendments, the Second Amendment stirs fervent debate among legal academics and the American public. Unlike these Amendments, however, the Second Amendment has received very little treatment from the Supreme Court until recently. In District of Columbia v Heller, the Court established that the “right of the people to keep and bear Arms” includes the right to bear arms for self-defense. Without further guidance from the Court, lower courts have struggled to consistently and uniformly determine when the Constitution permits gun regulations in spite of the Second Amendment.

To provide clarity, this Comment offers …

“Unfair Or Unconscionable”: A New Approach To Time-Barred Debt Collection Under The Fdcpa, Jon D. Fish

University of Chicago Law Review

Since the 1990s, the trade in second-hand debt has exploded. Debt collectors now relentlessly pursue decades-old debts, purchased for pennies on the dollar from primary creditors. To avoid the bar that statutes of limitations place on judicial enforcement of these debts, third-party debt collectors seek “acknowledgment” from unwitting consumers, which resets the limitations periods under state law. Under the Fair Debt Collection Practices Act (FDCPA), federal courts have struggled to deal with these attempts at resetting the statutes of limitations—a practice that often feels inherently unfair. So far, courts have focused on whether collection attempts have violated the FDCPA’s ban …

Liability For Data Scraping Prohibitions Under The Refusal To Deal Doctrine: An Incremental Step Toward More Robust Sherman Act Enforcement, Ioannis Drivas

University of Chicago Law Review

The digital economy has become increasingly consolidated in recent years as a handful of companies (namely Google, Facebook, Microsoft, and Amazon) have come to dominate every corner of the internet. Several of these companies have attained such size and influence that labelling them monopolists seems unavoidable. These companies have reinvigorated the debate regarding how antitrust law should treat monopolists. Many scholars, typically associated with the Chicago School of antitrust, believe that courts should hesitate before taking action against internet monopolists because judicial intervention may discourage investment in the digital economy without benefiting consumers. Critics of the Chicago School meanwhile argue …

Settlement Malpractice, Michael Moffitt

University of Chicago Law Review

Lawyers routinely settle lawsuits or advise their clients about settlement. One might expect, therefore, that clients routinely complain about some aspect of their lawyers’ settlement services. Ten years of data from eleven jurisdictions paint a vivid, different picture: although the vast majority of civil lawsuits are resolved through negotiated settlements and although complaints against lawyers are common, fewer than 1 percent of reported legal malpractice cases and only about 1.5 percent of bar complaints relate in any way to lawyers’ settlement-related conduct or advice. Even in those instances when clients do raise such complaints, clients rarely prevail. In short, even …

Reviewing Presidential Orders, Lisa Manheim, Kathryn A. Watts

University of Chicago Law Review

Beginning with President Ronald Reagan, presidents of both political parties increasingly have relied on executive orders and other unilateral written directives as a means of exerting significant control over agencies’ policymaking activities. Nevertheless, no coherent or well-theorized legal framework exists to guide courts as they review presidential orders. In contrast, a robust body of administrative law principles—rooted largely in the Administrative Procedure Act (APA)—exists to guide courts in their review of agency action, including agency action that is heavily influenced by the president. Until recently, this gap in the legal framework did not prove particularly problematic because litigants generally waited …

Law School Announcements 2019-2020, Law School Announcements Editors

Announcements

• Officers and Faculty
• The Law School - History
• Programs of Instruction
• Curriculum
• Student Activities and Organizations
• Funds and Endowments

Standing For Statues, But Not For Statutes? An Argument For Purely Stigmatic Harm Standing Under The Establishment Clause, Merav Bennett

University of Chicago Law Review

In the wake of Obergefell v Hodges, a number of state legislatures passed laws exempting individuals with religious objections to same-sex marriage from state antidiscrimination laws. By granting special privileges to religious adherents, these laws may violate the Establishment Clause. This Comment concerns the threshold issue of which plaintiffs have standing to bring such an Establishment Clause challenge. Specifically, can the emotional harm caused by a law’s stigmatizing message—for example, the message that individuals in same-sex relationships are lessvalued members of the community—constitute a judicially cognizable “injury in fact” in the Establishment Clause context? This question has split the lower …

Clarity Doctrines, Richard Re

University of Chicago Law Review

Clarity doctrines are a pervasive feature of legal practice. But there is a fundamental lack of clarity regarding the meaning of legal clarity itself, as critics have pointed out. This Article explores the nature of legal clarity as well as its proper form. In short, the meaning of legal clarity in any given doctrinal context should turn on the purposes of the relevant doctrine. And the reasons for caring about clarity generally have to do with either (i) the deciding court’s certainty about the right answer or (ii) the predictability that other interpreters (apart from the deciding court) would converge …