Law Commons^™

Banking On The Edge, Graham S. Steele‏‏‎‎

The University of Chicago Business Law Review

What’s old is new again. The risks of international banking have returned to prominence in the wake of the Russian invasion of Ukraine. Global banks are playing a central role in the economic sanctions regime imposed upon Russia in response to its acts of military aggression. Foreign banks have retrenched from serving the Russian economy. International markets for debt, equity, and commodities are experiencing significant disruptions. The solvency measures and quarterly earnings of global banks have been impacted. These risks are new versions of an old story. International banking has been a fraught endeavor dating back more than a century. …

Material Regulation Of Out-Of-State Production Processes As Impermissible Extraterritorial Law, Rebecca Zhu

The University of Chicago Business Law Review

A circuit split exists on whether the Supreme Court limited the Dormant Commerce Clause’s extraterritoriality doctrine to price affirmation statutes in Pharmaceutical Research & Manufacturers of America v. Walsh. This Comment argues that the Supreme Court has never drawn this limiting principle—in Walsh or otherwise—such that the Ninth Circuit incorrectly characterized Walsh in National Pork Producers Council v. Ross, and it should have held that the district court’s dependence on this reading constituted clear error in North American Meat Institute v. Becerra. Through synthesis of canonical and recent case law, this Comment proposes a new test for determining impermissible extraterritorial …

Antitrust Reform In The Digital Era: A Skeptical Perspective, Robert W. Crandall, Thomas W. Hazlett

The University of Chicago Business Law Review

The rise of large digital platforms, accompanied by claims of increasing industrial concentration, has prompted calls for antitrust policy reform. Yet, the observed market trends are consistent with improvements in welfare, as economies of scale often decentralize effective choices and disintermediate previously dominant structures, unleashing entrepreneurship. Evidence of deleterious impacts from the rise of the leading platforms—via mergers, predation, vertical foreclosure, and tying practices— is scant. The difficulty in amassing such evidence is implied in the argument that antitrust enforcement should no longer be focused on estimating consumer welfare impacts using traditional price theory. Recommendations for the creation of an …

Proceduralism: Delaware’S Legacy, Dalia T. Mitchell

The University of Chicago Business Law Review

“for law students or others who think of law as just a kind of a blunt instrument in which there are judgments and damages at the end of it, the fact is that the law grows through a sort of a conversation in the opinions . . .”¹

This article examines the Delaware courts’ 1980s shift from managerialism to a theory I label proceduralism. I argue that managerialism, which justified corporate law’s deference to directors in the preceding fifty years, was corporate law’s response to social, political, and cultural concerns outside corporations. At the turn of the twentieth century, …

The Chinese Antitrust Paradox, Wentong Zheng

The University of Chicago Business Law Review

Antitrust law faces a fundamental paradox between protecting competition and protecting competitors. This paradox is more structurally durable in China than in Western societies thanks to the oversized role of the Chinese state in its economy. This Article examines the changing market conditions in China following the adoption of China’s Antimonopoly Law (AML), and how these changes have led to paradoxical developments in Chinese antitrust. In a number of areas relating to enforcement authorities, transparency, courts, State-Owned Enterprises, cartels, internet platforms, and foreign companies, the tensions between protecting competition and protecting competitors have persisted or even deepened in the post-AML …

How To Fix Doj Privilege Teams, Anna Dincher

The University of Chicago Business Law Review

The federal government frequently executes searches and seizures in the course of criminal investigations. Many of the premises searched contain materials protected by privileges, placing them outside the reach of the Department of Justice. However, again and again those materials are swept up, potentially landing in the hands of government attorneys who are not permitted to review them—placing defendants’ Sixth Amendment right to effective assistance of counsel at risk of being violated. To rectify this risk, the DOJ employs “privilege teams” to filter through seized materials, removing those that are protected by privilege, before handing off the remaining materials to …

The Commission Goes To Walmart: Changing Patterns Of Ftc Enforcement, Jed Greenberg

The University of Chicago Business Law Review

The FTC Act allows the FTC to recover monetary relief only in certain circumstances. Under Sections 5 and 19, the Commission can recover monetary relief in federal court by showing that a party violated a final cease and desist order issued through administrative processes. Until recently, the FTC extensively used Section 13 of the Act, which courts had interpreted to provide some pathways to monetary relief. But the Supreme Court recently ruled in AMG that Section 13 only permits injunctive, rather than monetary, relief. After the case had been decided, many, including the FTC chair, predicted that this would erode …

Workers Of The World, Differentiate: Expanding Protections For Workers In The Age Of Labor Antitrust, Sarah Hammond Roberts

The University of Chicago Business Law Review

Antitrust has traditionally served consumers—how can the law regulate firms in a manner that prevents monopolization and preserves competition among sellers of goods? A recent turn in scholarship and shifting application of antitrust law from a regulatory perspective suggests the possibility for a broader expansion of antitrust protections into the labor market. Rather than considering monopoly effects in a market (where a market is dominated by a single seller), this line of work suggests a turn to focus on monopsony effects (where a market—such as a labor market—is dominated by a single buyer), and a particular focus on the risk …

A Disclosure Gap In The Market For Order, Joshua Nathanson

The University of Chicago Business Law Review

Wholesalers in U.S. equity markets are once again a focus of the SEC and scholarly debate. In this Comment, building on the empirical work of Schwarz, et. al. (2022), I present a model of the broker-wholesaler relationship based on the duty of best execution under FINRA Rule 5310 and the antifraud provisions of the federal securities laws as well as public disclosures by brokers and wholesalers. I suggest that the arrangement between a broker and a wholesaler on any given day is determined by the technology of the wholesaler, the likelihood of adverse selection, and the overall strategy of the …

Be Careful What You Wish For, Albert W. Alschuler

Public Law and Legal Theory Working Papers

[A]ny change in sentencing practices is likely to be an improvement. Judge Marvin Frankel in 1973 ¹

Fifty years ago, Marvin E. Frankel published an elegant, timely, and extraordinarily influential book, Criminal Sentences: Law Without Order. Four years after this book called for the appellate review of sentences and for greatly limiting the discretion of both sentencing judges and parole boards, California became the first state to limit sharply judicial sentencing discretion and abolish parole.²

Twenty other states joined the reform movement before Congress embraced the move from individualized to wholesale sentencing in 1984.³ The Sentencing Reform Act …

Toward Principled Background Principles In Takings Law, Lior Strahilevitz, Becca Hansen

Public Law and Legal Theory Working Papers

Blunders made by lawyers, judges, and scholars have caused the Supreme Court’s recent opinion in Cedar Point Nursery v. Hassid to be deeply misunderstood. In Cedar Point, the Court re-wrote takings law by treating temporary and part-time entries onto private property as per se takings. Prior to Cedar Point these sorts of government-authorized physical entries would have been evaluated under a balancing framework that almost invariably enabled the government to prevail. As it happens, there were two well-established rules of black letter law that California’s lawyers and amici mistakenly failed to invoke in defending the Cedar Point union organizer access …

Cross-Border Influencers: Democracy And Externalities, Saul Levmore

Public Law and Legal Theory Working Papers

The United States1does not allow foreigners to influence U.S. elections by giving money to political parties or candidates, but many other countries do allow cross-border influencing. Indeed, the variety of policies among countries is remarkable.2 Some countries, like the United States, that forbid financial contributions from outside the country, do permit cross-border contributions across domestic borders, such as those of states and cities. Meanwhile, Canadians cannot contribute to the campaigns of U.S. political candidates, and cannot even (lawfully) influence the American political process by purchasing campaign t-shirts or bumper stickers. This prohibition is in place even though, like constituents of …

The Hidden Judicial Springs Of U.S. Foreign Policy, Mariano-Florentino Cuéllar, Aziz Z. Huq

Public Law and Legal Theory Working Papers

No abstract provided.

The Corporate Governance Of Public Utilities, Aneil Kovvali, Joshua Macey

Public Law and Legal Theory Working Papers

Rate regulated public utilities own and operate one-third of U.S generators and nearly all the transmission and distribution system. These firms receive special regulatory treatment because they are protected from competition and subject to rate caps. In the past decade, they also have been at the center of high-profile corporate scandals. They have bribed regulators to secure subsidies for coal-fired generators and nuclear reactors. They have caused wildfires and coal ash spills that resulted in hundreds of deaths and billions of dollars in liability. Their failure to maintain reliable electric service has contributed to catastrophic blackouts. Perhaps most consequentially, they …

A Constitutional Perspective On Institutional Neutrality, Tom Ginsburg

Public Law and Legal Theory Working Papers

We live in an era of the academic corporate statement, in which university leaders issue pronouncements on various issues as if they were political figures. Like their counterparts in large corporations, they apparently feel the need to state institutional values publicly and often. Commentary on the issues of the day is seen as projecting pastoral empathy and solidarity; silence is viewed as complicity. We want leaders who can craft the perfect statement satisfying all, and in the right font size.

Such trends cut directly against the intuition behind the Kalven report, which is that academic institutions should remain spaces of …

Foreign Affairs, Nondelegation, And The Major Questions Doctrine, Curtis Bradley, Jack Landman Goldsmith

Public Law and Legal Theory Working Papers

Some of the Supreme Court Justices and scholars who support a reinvigoration of the nondelegation doctrine would allow for an exception for grants of authority relating to foreign affairs. Others have criticized such an exception as unprincipled or as reflecting improper “foreign affairs exceptionalism.” This Article argues against a foreign affairs exception to the nondelegation doctrine but contends that the doctrine should be applied less strictly when a statutory authorization relates to an area of independent presidential power. The President has more independent power relating to foreign affairs than domestic affairs, so this limitation on the nondelegation doctrine will do …

The Independent State Legislature Theory, Federal Courts, And State Law, Carolyn Shapiro

University of Chicago Law Review

During the litigation surrounding the 2020 election, the independent state legislature theory (ISLT) emerged as a potentially crucial factor in the presidential election. The ISLT rests on the Electors and Elections Clauses of the Constitution, which assign decisions about federal elections to state legislatures. Proponents of the ISLT, including Supreme Court Justices, assert that state constitutions’ substantive provisions cannot apply to state election laws governing federal elections; that state courts’ statutory interpretations of such laws must be rigidly textualist and are reviewable, apparently de novo, by federal courts; and/or that delegations of decisionmaking authority to nonlegislative bodies may be limited, …

Stakeholderism Silo Busting, Aneil Kovvali

University of Chicago Law Review

No abstract provided.

Sponsor Control: A New Paradigm For Corporate Reorganization, Vincent S.J. Buccola

University of Chicago Law Review

Bankruptcy scholars have long organized their field around a stylized story, a paradigm, of lender control. When lenders extend credit, the story goes, they insist on the borrower agreeing to strict covenants and granting blanket liens on its assets; then, if the borrower later encounters financial distress, they use their bargained-for rights as prods to steer the company toward a resolution favorable to themselves, whether or not that resolution is value maximizing for the investors as a group. As fruitful as the lender-control heuristic has been, however, it no longer corresponds to reality.

This Article introduces a new interpretive paradigm …

Against Political Theory In Constitutional Interpretation, Christopher Havasy, Joshua Macey, Brian Richardson

Public Law and Legal Theory Working Papers

Judges and academics have long relied on the work of a small number of Enlightenment political theorists—particularly Locke, Montesquieu, and Blackstone—to discern meaning from vague and ambiguous constitutional provisions. This Essay cautions that Enlightenment political theory should rarely, if ever, be cited as an authoritative source of constitutional meaning. There are three principal problems with constitutional interpretation based on eighteenth-century political theory. First, Enlightenment thinkers developed distinct and incompatible theories about how to structure a republican form of government. That makes it difficult to decide which among the conflicting theories should possess constitutional significance. Second, the drafters did not write …

Labor Mobility And The Problems Of Modern Policing, Jonathan S. Masur, Aurélie Ouss, John Rappaport

Public Law and Legal Theory Working Papers

We document and discuss the implications of a striking feature of modern American policing: the stasis of police labor forces. Using an original employment dataset assembled through public records requests, we show that, after the first few years on a job, officers rarely change employers, and intermediate officer ranks are filled almost exclusively through promotion rather than lateral hiring. Policing is like a sports league, if you removed trades and free agency and left only the draft in place.

We identify both nonlegal and legal causes of this phenomenon—ranging from geographic monopolies to statutory and collectively bargained rules about pensions, …

Investments In The Magnificent Ambersons: Business, Marriage, And Law-Making, Saul Levmore

Public Law and Legal Theory Working Papers

Successful investments often reflect insight, implementation, and good fortune. In Booth Tarkington’s Pulitzer Prize-winning novel, The Magnificent Ambersons1 (written in 1918, adapted by Orson Welles in a celebrated 1942 film, and recently rediscovered and scheduled for release with material that had been removed over Welles’ objection), horses give way to the automobile and the characters’ fortunes rise and fall as the world changes with the advent of this new technology. Meanwhile, the decision to marry, like one to enter other partnerships, also depends on insight, effort, and good fortune. I aim to show these parallel themes in the novel. The …

Sharing Where Bargains Are Impossible, Saul Levmore, Andrew Verstein

Public Law and Legal Theory Working Papers

Cooperation sometimes breaks down, and former teammates will disagree about what happens next. For example, when can an employee quit to join a competitor? Courts often resolve disputes by looking at the parties actual or hypothetical bargain. Thus, a court may ask whether there was a non-competition agreement (and whether it was reasonable), or whether the employee is taking a “corporate opportunity” as she departs. These are all-or-nothing determinations by courts; either the bargain, or law, fully allows or fully prohibits the disputed conduct.

This is a suitable approach when fair and efficient bargains are possible. But, this article argues …

International Agreements By U.S. States: Federalism, Foreign Affairs, And Constitutional Change, Curtis A. Bradley

Public Law and Legal Theory Working Papers

The text of the U.S. Constitution appears to require that, to the extent that individual states are ever allowed to conclude agreements with foreign governments, they must obtain congressional approval. In practice, however, states conclude many agreements with foreign governments and almost never seek congressional approval. This practice is an illustration of both the importance of federalism in U.S. foreign relations and the significant role played by historical practice in informing U.S. constitutional interpretation. The phenomenon of state international agreements assumed new prominence in 2019 when the Trump administration sued to challenge a climate change agreement that the state of …

Twilight-Zone Originalism: The Peculiar Reasoning And Unfortunate Consequences Of New York State Pistol & Rifle Association V. Bruen, Albert W. Alschuler

Public Law and Legal Theory Working Papers

In New York State Rifle & Pistol Ass'n v. Bruen, the Supreme Court held unconstitutional a New York Statute that, as construed by the state courts, allowed an individual to carry a firearm outside her home or business for purposes of self-defense only if she could show licensing authorities "a special need for self-protection distinguishable from that of the general community." By a vote of six-to-three, the Court concluded that this statute violated the right to keep and bear arms guaranteed by the Second Amendment and applied to the states by the Fourteenth Amendment.

The Court announced a general standard …

Grid Reliability In The Electric Era, Joshua Macey, Shelley Welton, Hannah Wiseman

Public Law and Legal Theory Working Papers

The United States has delegated the weighty responsibility of keeping the lights on to a self-regulatory organization called the North American Electric Reliability Corporation (NERC). Despite the fact that NERC is one of the largest and most important examples of industry-led governance—and regulates in an area that is central to our economy and basic human survival— this unusual institution has received scant attention from policymakers and scholars. Such attention is overdue. To achieve deep decarbonization, the United States must enter a new “electric era,” transitioning many sectors to run on electricity while also transforming the electricity system itself to run …

Constrained Income Redistribution And Inequality: Legal Rules Compared To Taxes And Transfers, David A. Weisbach

Coase-Sandor Institute for Law & Economics Research Paper Series

A widely accepted result, associated with Louis Kaplow and Steve Shavell, is that it is more costly to use legal rules to redistribute income than to use the tax and transfer system (the income-tax only result). An assumption behind this result is that if a legal rule is changed to eliminate its income-redistributive effects, the tax and transfer system can be adjusted to counteract the effects of those changes on the distribution of income. A number of commentators have questioned this assumption, suggesting that political constraints may limit the ability of the tax and transfer system to adjust to changes …

Real-World Prior Art, Jonathan S. Masur, Lisa Larrimore Ouellette

Coase-Sandor Institute for Law & Economics Research Paper Series

The most fundamental requirement of patent law is that a patented invention must be new. Given the longstanding, foundational nature of this novelty requirement, one might expect its contours to be well settled. And yet some of its most basic aspects remain unresolved. At the center of these unresolved issues lie what we term “real-world prior art.” In patent law, prior art is something that predates an invention and may render it not new. “Real-world” prior art activities involve using or selling real-world embodiments of the invention. Consider a few examples. Suppose Aleida demonstrates her invention to members of the …

The Flawed Arguments Against Bankruptcy Releases, Anthony Casey

Coase-Sandor Institute for Law & Economics Research Paper Series

As the bankruptcy of Purdue Pharma heads to the United States Supreme Court, the bankruptcy world is once again in a frenzied debate about “third-party” or “nondebtor” releases. This debate often devolves, unfortunately, into one of rhetoric producing, as they say, more heat than light.

It can be difficult to address all the nuances in short form. I have laid out a long-form academic argument in favor of nondebtor releases elsewhere. And I have addressed some of the policy considerations here and here. But it may be useful to use this space to counter two of the weaker arguments against …

The Unbounded Home: Property Values Beyond Property Lines, Lee Anne Fennell

Books

No abstract provided.