Law Commons^™

Getting To Yes: The Role Of Coercion In Debt Renegotiations, Vincent S.J. Buccola, Marcel Kahan

Coase-Sandor Institute for Law & Economics Research Paper Series

A debt contract’s value depends on the parties’ ability to alter its terms. But although the rules of alteration are for that reason an important part of the design of debt instruments, the academic literature lacks a framework for making sense of them. Recent upheavals in restructuring practice have emphasized the practical importance of a working theory of alteration, however, and in particular of the rules governing what debtors can do to procure creditor acquiescence to proposed changes. This article develops a comprehensive account of the methods of consent solicitation broadly construed. We offer four principal contributions. First, we identify …

A New Measure Of Surviving Children That Sheds Light On Long-Term Trends In Fertility, Anup Malani, Ari Jacob

Coase-Sandor Institute for Law & Economics Research Paper Series

The consequences of fertility decline flow primarily from reduction in the number of surviving children, i.e., both births and survival, not simply from reductions in births. Therefore, neoclassical economic theories that attempt to explain fertility decline (e.g., quantity-quality models) hinge on preferences for surviving children, not births per se. This paper provides a new measure of surviving children. Effective fertility rate (EFR) is the product of the current fertility rate and the projected probability that a child survives until some age A. This age A could be between 15-49 for a measure (EFRR) that tracks reproductive potential, or 15-65 for …

Noisy Factors In Law, Adriana Z. Robertson, Pat Akey, Mikhail Simutin

Coase-Sandor Institute for Law & Economics Research Paper Series

For years, academic experts have championed the widespread adoption of the “Fama-French” factors in legal settings. Factor models are commonly used to perform valuations, performance evaluation and event studies across a wide variety of contexts, many of which rely on data provided by Professor Kenneth French. Yet these data are beset by a problem that the experts themselves did not understand: In a companion article, we document widespread retroactive changes to French’s factor data. These changes are the result of discretionary changes to the construction of the factors and materially affect a broad range of estimates.

n this Article, we …

Does Paying To Pollute Make Pollution Seem Less Bad?, Hajin Kim

Coase-Sandor Institute for Law & Economics Research Paper Series

Does Paying to Pollute Make Pollution Seem Less Bad? Hajin Kim* October 2024 Abstract A common critique of market-based instruments is that they commodify pollution and so reduce its moral stigma. If true, the increasing use of market-based instruments could reduce concern for the environment. With a preregistered and demographically representative experimental vignette study of over 2000 Americans, this project finds evidence against the anti-commodification critique. Participants randomly assigned to learn about market-based regulations of a fictitious new pollutant, malzene, did not find malzene pollution to be less morally problematic than those randomly assigned to learn about a mandate dictating …

Price Discipline For Non-Price Loan Terms, Adam Badawi, Vincent S.J. Buccola, Greg Nini

Coase-Sandor Institute for Law & Economics Research Paper Series

A standard model of capital markets contracting posits that issuers select non-price terms to optimize future flexibility relative to the price they imagine investors will charge for it. To assess such a model’s capacity to explain term selection in the syndicated loan market, we study the secondary market reaction to events—the appearance and proliferation of a new type of restructuring transaction known as an uptier—that spurred change in primary market contracting. We find only weak (and fragile) evidence of a significant price effect. The imprecision of our results reveals, as a general matter, a challenge for scholars of fixed-income contracting …

Predictability And Adaptation In Law And Other Markets, Saul Levmore

Coase-Sandor Institute for Law & Economics Research Paper Series

People and enterprises that are subject to the law find it useful to know what the law is at present, but then also to anticipate future rules. If laws are stable this is easily done. Stability is more common where the judicial branch is concerned, because precedents are often valued, and for good reason. They are more often followed by judges than by those involved in other methods of law- making. But in all of lawmaking, and even in the private sphere, there is value to consistency and certainty. And yet, surprises can be attractive if they are not confronted …

An Apa For Tax, David A. Weisbach

Coase-Sandor Institute for Law & Economics Research Paper Series

Recent Supreme Court cases threaten to upend the administrative law applicable to the tax system. Loper Bright eliminates Chevron deference. Ohio v. EPA heightens the scrutiny given to regulatory preambles. And Corner Post effectively eliminates the statute of limitations for challenging the validity regulations. A number of lower court decisions move in the same direction, aggressively using administrative law to invalidate guidance. Combined, these decisions threaten to make issuing guidance much more difficult and to slow the guidance process.

These decisions are based on the Administrative Procedure Act or related statutes rather than constitutional principles. Therefore, to the extent that …

Should Unions Play A Role In Merger Review?, Eric A. Posner

Coase-Sandor Institute for Law & Economics Research Paper Series

Agencies currently evaluate mergers by conducting a truncated cost-benefit analysis in which the impacts of a proposed merger on various markets must be estimated. Many critics question this method, which requires data that are not always available and assumptions that are not always reliable. An alternative approach would be to conduct merger review as a “structured bargain” among affected parties or their representatives, on the model of corporate bankruptcy. For example, where merging firms are unionized, the unions could be given the right to block a merger that harms their members. Appointed representatives or the agencies themselves could be given …

Lost Time: Paying For Delays Associated With Labor Strikes And Traffic Jams, Saul Levmore

Coase-Sandor Institute for Law & Economics Research Paper Series

Waiting is often costly. In many settings, one party delays to impose costs on another. In other settings, delay yields a small gain while imposing significant costs on others who cannot easily bargain. Where the parties can bargain, at least one expects the other to relent and to bring about a settlement that is mutually beneficial. Inasmuch as time offers the opportunity to gather information, compare alternatives, and reach yet better bargains, law does not and should not simply discourage all delays. On the other hand, it is often the case that when parties delay before reaching a bargain, they …

Bankruptcy By Another Name, Anthony Casey, Joshua Macey

Coase-Sandor Institute for Law & Economics Research Paper Series

Abstract

In a recent Essay, Abbe Gluck, Elizabeth Chamblee Burch, and Adam Zimmerman object to the increasing use of bankruptcy to resolve mass tort claims. They and others are concerned that bankruptcy reduces plaintiff voice, impedes the development of state law remedies, and limits discovery that can drive state and federal regulation regulatory interventions. This Online Response Essay addresses these critiques. Contrary to popular descriptions of the bankruptcy system, bankruptcy courts do not simply aim to maximize economic efficiency and financial recoveries. Bankruptcy includes numerous procedures, including robust disclosure, bellwether trials, future claims representatives, and voting, to ensure a fair …

Simplicity And Complexity In Law And In Markets, Saul Levmore

Coase-Sandor Institute for Law & Economics Research Paper Series

No abstract provided.

Disclosure Puzzles In Patent Law, Jonathan S. Masur, Lisa Larrimore Ouellette

Coase-Sandor Institute for Law & Economics Research Paper Series

Since its inception, patent law has required that inventors publicly disclose information about their inventions in exchange for receiving patent rights. This foundational requirement is policed through multiple doctrines: patents fail enablement if “undue experimentation” is needed to practice the invention, and they lack adequate written description when they fail to establish the inventor’s “possession” of the invention.

Despite disclosure doctrines’ centrality, fundamental puzzles about their application remain unresolved. What are the boundaries between enablement and written description? Do equivalents claimed via the doctrine of equivalents have to be enabled or described? Are the rules different for after-arising technologies? Federal …

A Commitment Rule For Insolvency Forum, Anthony Casey, Aurelio Gurrea-Martínez, Robert K. Rasmussen

Coase-Sandor Institute for Law & Economics Research Paper Series

In this article, we propose a new rule for determining the proper forum for insolvency proceedings. Currently, the Model Law on Cross-Border Insolvency— promulgated by the United Nations Commission on International Trade Law (“UNCITRAL”)—looks to a debtor’s center of main interest (“COMI”) to determine the proper forum for a foreign main insolvency proceeding. This rule is flawed. It is both inflexible and manipulable. It is also indeterminate and neither requires nor allows advance commitment by debtors. As a result, it leads to uncertainty, increases litigation costs, and opens the door to opportunistic manipulation by debtors. These costs, in turn, raise …

Control Rights And Chapter 11'S Expanding Scope, Jared I. Mayer

Coase-Sandor Institute for Law & Economics Research Paper Series

Control rights are rights to control how a debtor uses certain resources, such as rights to foreclose on collateral, terminate a contract, or prevent assignment of contractual rights. Law and economics scholars have mused whether bankruptcy law should supplant control rights, but they’ve assumed that all control rights share the same goal: to protect a party’s investment in a company.

This Article rejects that assumption. It shows that there are two kinds of control rights that bankruptcy law should treat differently. One kind - what this Article dubs “investment-backed control rights” - aims to protect a party’s investment in the …

Private Security And Public Police, Ben Grunwald, John Rappaport, Michael Berg

Coase-Sandor Institute for Law & Economics Research Paper Series

Private security officers outnumber police by a wide margin, and the gap may be growing. As cities have claimed to defund the police, many have quietly expanded their use of private security, reallocating spending from the public to the private sector. It is difficult to know what to make of these trends, largely because we know so little about what private security looks like on the ground. On one prevalent view of the facts, a shift from public to private security would mean little more than a change of uniform, as the two labor markets are deeply intertwined. Indeed, academics, …

Property Moves: Assembling Service Streams, Lee Anne Fennell

Coase-Sandor Institute for Law & Economics Research Paper Series

In this essay, I consider how we might retrofit property rights to meet modern urban and environmental challenges, which have foundationally rewritten property’s job description. The way forward requires attending to the beneficial services that resources provide, and to the central role of assembly (and reassembly) in generating and sustaining those service streams. To that end, I catalog a repertoire of “property moves” aimed at the moving target of resource optimization. While these moves can be pursued in limited ways within our current property framework, pursuing them in concert at scale requires ownership that is built for ongoing reconfiguration. I …

Trade Secrecy's Information Paradox, Christopher Buccafusco, Jonathan S. Masur, Deepa Varadarajan

Coase-Sandor Institute for Law & Economics Research Paper Series

Trade secret law is meant to encourage socially beneficial behaviors by permitting firms to protect their investments in the creation of valuable information. In theory, the ability to protect valuable information will make firms more likely to create that information in the first instance. But the law can also be used to shield socially harmful behaviors from public oversight. Firms can assert trade secret protection to prevent journalists, watchdogs, and criminal defendants from learning whether they are engaged in dangerous, wrongful, or biased activity. Ideally, trade secret law should sort socially beneficial uses from socially harmful ones, permitting only the …

Restructuring Support Agreements: An Empirical Analysis, Katherine Waldock, Anthony Casey, Frederick Tung

Coase-Sandor Institute for Law & Economics Research Paper Series

Restructuring support agreements (RSAs), or contracts that commit bankruptcy parties to supporting a plan of reorganization that will conform to certain requirements, are now a common feature of Chapter 11. Parties utilize these agreements in nearly half of all large cases. While prior literature has debated the normative value of RSAs, we take an empirical approach to look at what provisions the parties include in these agreements and how those provisions have changed over time.

Our analysis looks at all RSAs associated with large bankruptcies through the end of 2020. We characterize the types of firms with RSAs, the parties …

Invisible Work And Labor Market Power; Or, Why Labor Should Be Commodified, Eric A. Posner

Coase-Sandor Institute for Law & Economics Research Paper Series

Certain types of work-like behavior are not treated as paid labor in the law—and thus are not taxed or given workplace protections, for example—and often are not understood to be work by ordinary people. This kind of “invisible work” is exceedingly common. It encompasses not only the frequently discussed example of household labor, but also the work, or some of the work, of (for example) athletes, soldiers, students, artists, volunteers, religious and political figures, and consumers who implicitly trade work as well as money for products and services. Invisible work is the product of cultural understandings left over from the …

Predictability And Adaptation In Law And Other Markets (Chapter In A Coming Book: Research Handbook On Law And Time), Saul Levmore

Coase-Sandor Institute for Law & Economics Research Paper Series

People and enterprises that are subject to the law find it useful to know what the law is at present, but then also to anticipate future rules. If laws are stable this is easily done. Stability is more common where the judicial branch is concerned, because precedents are often valued, and for good reason. They are more often followed by judges than by those involved in other methods of lawmaking. But in all of lawmaking, and even in the private sphere, there is value to consistency and certainty. And yet, surprises can be attractive if they are not confronted on …

It’S Raining Rockets: Heightening State Liability For Space Pollution, Sraavya Poonuganti

Chicago Journal of International Law

The uptick in outer space exploration activity by spacefaring nations has resulted in the increased proliferation of space debris orbiting Earth and reentering its atmosphere. The current liability regime, which was enacted as a result of the U.S.–Soviet Union space race in the 1960s and ’70s, is ill-equipped to mitigate and deter such proliferation. Without proactive measures, the space debris buildup could escalate into the Kessler Syndrome, a proposed scenario in which space exploration, and its corresponding benefits, may be rendered infeasible due to the extreme risk of high-impact space object collisions. This Comment first analyzes existing proposals for amending …

Discursive Constitutionalism, Ngoc Son Bui

Chicago Journal of International Law

“Constitutionalism” has been contentiously debated at national and international levels. This Article develops the concept of discursive constitutionalism, defined as the construction of constitutionalism through public discourse. It theorizes about four elements (ideas, actors, actions, and spaces) and the constructive logic of discursive constitutionalism. Public constitutionalist discourse can be shaped by the existing relations of political power. At the same time, it can constrain the political monopoly of constitutional thinking, shape the design of institutions to limit political power, and prevent the arbitrary use of political power in practice. This study provides an explanatory account of three models of discursive …

Reconstructing Klein, Helen Hershkoff, Fred Smith, Jr.

University of Chicago Law Review

This Article interrogates the conventional understanding of United States v. Klein, a Reconstruction Era decision that concerned Congress’s effort to remove appellate jurisdiction from the Supreme Court in a lawsuit seeking compensation for abandoned property confiscated by the United States during the Civil War. Scholars often celebrate the decision for protecting judicial independence; so, too, they applaud the decision for shielding property rights against arbitrary legislative action and for preserving executive clemency from legislative encroachment. Absent from all contemporary accounts of Klein is its racialized context: The decision allowed an unelected judiciary to disable Congress from blocking the president’s promiscuous …

Searching For Standing: Are Improper Acquisition Or Threatened Misappropriation Of Trade Secrets Cognizable Injuries Sufficient For Article Iii Standing?, Josh J. Leopold

University of Chicago Law Review

Trade secret litigation is on the rise. Meanwhile, modern standing cases have forced courts and commentators to reevaluate what sorts of legal injuries bring factual injuries with them, such that federal courts can adjudicate them as a “case” or “controversy” under Article III of the Constitution.

his Comment studies the intersection of Article III standing and federal trade secret law. It is the first piece to provide a taxonomy of trade secret violations and factual injuries in the shadow of standing doctrine’s demand for an injury-in-fact. This Comment submits a bold yet plausible claim: Article III standing should be in …

Seizure Or Due Process? Section 1983 Enforcement Against Pretrial Detention Caused By Fabricated Evidence, Jorge Pereira

University of Chicago Law Review

Can an individual who was held in pretrial detention but not criminally convicted as a result of fabricated evidence raise a due process claim under 42 U.S.C. § 1983? The answer is unclear. In 2017, the Supreme Court in Manuel v. City of Joliet held that claims for unlawful pretrial detention are governed by the Fourth Amendment. Since then, the Seventh Circuit has asserted that the Fourth Amendment is the only source of redress under § 1983 for wrongful pretrial detention caused by fabricated evidence. By contrast, several circuits have opined that Manuel does not foreclose the possibility that individuals …

Closing A Loophole In Exchange Act Enforcement: A Framework For Assessing The Enforceability Of Delaware Forum Selection Bylaws In The Context Of Derivative § 14(A) Claims, Amanda K. Williams

University of Chicago Law Review

Over the past decade, a growing number of Delaware corporations have adopted forum selection bylaws. These bylaws often require that all derivative claims against a company’s officers or directors be resolved in Delaware state courts. But what happens when a shareholder brings a derivative claim that Delaware courts do not have jurisdiction to adjudicate?

This issue arises when Delaware forum selection bylaws are applied to derivative claims arising under § 14(a) of the Securities and Exchange Act of 1934, because the Exchange Act instructs that only federal courts may resolve such claims. In this context, Delaware corporations may seek to …

Undefined “Ground”: Form Or Substance In Pto Estoppel, Tanvi Antoo

University of Chicago Law Review

This Comment seeks to resolve a dispute among district courts on how to interpret the term “ground” in 35 U.S.C. § 315(e)(2), the America Invents Act’s (AIA) estoppel provision. The question of whether a party that asserts a printed publication or patent in an inter partes review (IPR) proceeding is estopped from asserting real- world prior art, such as a device, in a later civil action under § 315(e)(2) has resulted in a district court split. Some courts have construed the estoppel provision narrowly, reasoning that because a physical object like a device is not something that could have been …

Decarcerating Immigrant Detainee Medical Care: A Path To Doctrinal Redemption, Kieran Dosanjh

University of Chicago Law Review

Government detention is a quid pro quo: the government may deprive persons of their physical liberty, but in exchange, it owes them a level of care. The critical question is, how much care does the Constitution require the government to provide? In a series of federal judicial decisions (collectively, the detainee medical care doctrine), courts have found that the Constitution requires different standards of care for different classes of government detainees. These courts’ standard of care for immigrant detainees is erroneous. Modern U.S. immigration detention’s descriptive resemblance to criminal confinement has prompted courts to (wrongly) find that immigrant detainees are …

Hiding In Plain Sight: An Ilo Convention On Labor Standards In Global Supply Chains, James J. Brudney

Chicago Journal of International Law

This Article proposes a solution to the primary challenge currently confronting governments, employers, and workers under international labor law: how to promote and protect decent labor conditions in global supply chains (GSCs).

The Article begins by summarizing why existing public law and private law approaches have failed to meet this challenge over several decades. It describes the shortcomings of law and practice in developing countries as well as the weakness of corporate social responsibility (CSR), including the most ambitious version of CSR, the U.N. Guiding Principles on Business and Human Rights. It then analyzes the problems with recent national laws …

Accounting For The Selfish State: Human Rights, Reproductive Equality, And Global Regulation Of Gestational Surrogacy, Claudia Flores

Chicago Journal of International Law

Gestational surrogacy is a relatively new method of procreation made possible by advances in assisted reproductive technology (ART). In gestational surrogacy, a woman (gestational carrier) gestates a fetus that is often biologically unrelated to her on behalf of a third party. While this form of procreation has often been celebrated for allowing infertile and fertility-challenged persons to parent biological offspring, it has also prompted a series of complex human rights-related debates. Inconsistent and extreme state responses to gestational surrogacy have led to myriad tragedies: states have arrested gestational carriers, forced carriers to raise children born through the process, denied individuals …