Law and Economics Commons^™

Chapter 9 Bankruptcy: The Solution That Causes Problems, Peter C. Alexander

Brooklyn Journal of Corporate, Financial & Commercial Law

There is a little-known form of bankruptcy called a “Chapter 9,” reserved for insolvent cities, villages, and other municipalities. Occasionally, one reads about a city or a county that has filed for Chapter 9 relief, like Detroit, Michigan, or Orange County, California; however, it is very hard to file a Chapter 9 case, in part, because existing law requires a municipality to obtain permission from its home state before it can file for relief in the U.S. Bankruptcy Court. An additional constraint is that the only option municipalities have when seeking bankruptcy relief is to file a Chapter 9 because …

Barbarians At The Gate Or Angels At The Crossroads? Examining The Impact Of The Uk Green Taxonomy On Private Equity Firms, Melek Redzheb, Fatjon Kaja

Brooklyn Journal of Corporate, Financial & Commercial Law

This Article explores whether the UK Green Taxonomy will foster sustainable corporate governance in private equity-backed portfolio companies. We explore how the Taxonomy will address the greenwashing problem that plagues financial markets, including the private equity industry. Our analysis suggests that general partners will have a twofold response to the new reforms. In the short term, they will seek to address the social concerns of limited partners by negatively screening unsustainable companies and cherry-picking more sustainable ones (the so-called “exit” strategy). In the long term, however, they will adopt a dynamic strategy to transform unsustainable targets into sustainable enterprises on …

Show Me The Money: Approaches To Anti-Money Laundering Compliance For Digital Assets, Mollie Rouan

Brooklyn Journal of Corporate, Financial & Commercial Law

The European Union’s Markets in Crypto-Assets Regulation (“MiCA”) created a harmonized framework to regulate digital asset issuance and services that were not already covered by existing regulations. Notably, MiCA requires virtual asset providers to adhere to the Financial Action Task Force Recommendation 16 (“FATF”), also known as the Travel Rule. Though the Travel Rule has existed for almost 20 years, its application to crypto asset transfers is entirely new. The purpose of the Travel Rule is to detect and prevent money laundering and terrorist financing, but its application to cryptocurrency wallet transactions is criticized for being overly burdensome and invasive …

The Dubious Role Of Institutional Investors In Driving The Green Transition: Legal And Economic Constraints, Giovanni Strampelli

Brooklyn Journal of Corporate, Financial & Commercial Law

There is a well-established trend that the process of transition to a sustainable economic growth model marked by the pursuit of environmental, social and governance (“ESG”) objectives has large companies at its center, which are considered an essential hub for this purpose given their weight in the global economy. In this context, the role of shareholders, especially institutional investors, plays an important role. Indeed, it is widely recognized that they, having an increasing prominence in the shareholder base of large, listed companies, can push these public companies to adopt more virtuous conduct in the areas of, among others, environmental protection …

Emission Impossible: Challenging The Imposition Of New York City’S Local Law 97, Daniel Lopiccolo

Brooklyn Journal of Corporate, Financial & Commercial Law

New York City’s Local Law 97 was passed by the City Council in 2019 with the goal of reducing citywide carbon emissions. The law imposes civil penalties on property owners whose buildings fail to comply with carbon emissions limits stipulated by the city. While the law admirably aims to minimize New York’s carbon footprint, its present burden is excessive and disproportionate to the offense committed, making the cost of affording lower and middle-class housing units increasingly untenable for many New Yorkers, especially for property owners in co-op and condo communities. Many such as Glen Oaks Village Owners, Inc., the plaintiffs …

Why Financial Crises Recur, Gary B. Gorton, Jeffery Y. Zhang

Law & Economics Working Papers

Financial crises have occurred around the world for over two centuries. These crises have been so costly and frequent that one wonders why governments cannot prevent them from recurring despite repeated, wide-ranging attempts at legislation, regulation, supervision, and enforcement.

In this article, we argue that lawmakers repeatedly act in two ways that may appear to be intuitive but are actually detrimental to system-wide stability. First, lawmakers fail to understand that “banks”—both traditional banks and shadow banks—produce runnable short-term debt, unlike other firms in the economy. To produce short-term debt, banks operate with opacity. Yet a regulatory framework based on secrecy …

Build, Buy, Or Both?: On The Antitrust Laws' Supposed Preference For "Internal Growth" Over Acquisitions, Geoffrey A. Manne, Justin (Gus) Hurwitz

Nevada Law Journal

This Article challenges recent claims by antitrust enforcers that the U.S. antitrust laws embody a preference for “internal” or “organic” growth over external expansion through acquisition. It begins by examining the modern use of this claim in speeches, enforcement actions, and the 2023 Merger Guidelines issued by the Federal Trade Commission and Department of Justice. It then considers the legislative history of the 1950 Celler-Kefauver and 1976 Hart-Scott-Rodino Acts, which are frequently cited as showing congressional support for internal growth. Careful reading of these Acts, however, shows that Congress’s central goal was to close a loophole regarding asset acquisitions, and …

Crypto Regulation In The Time Of Trump, Lawrence J. Trautman

Michigan Technology Law Review

Donald Trump’s election as president during November 2024 results in perhaps the most dramatic philosophical change in approach to governmental regulation in over ninety years. The Great Depression of the 1930s created a need for regulatory reform and resulted in the advent of such new regulatory frameworks as the U.S. Securities and Exchange Commission (SEC). It has been the purpose of the SEC to create and nurture efficient securities markets enabling vibrant capital formation while preventing fraud upon the investing public. At issue is the contrast between the regulatory regime in place since 1933-34 and the Trump Administration’s desire to …

Remedies For Non-Disclosure In Asset Sales: Voidance Vs. Damages, Albert H. Choi, Kathryn E. Spier

Law & Economics Working Papers

This paper analyzes the problems of non-disclosure in the context of an asset sale between a buyer and a seller. The seller can have important information about the asset and can opportunistically decide not to disclose that information to the buyer, and the buyer may sue the seller ex post for remedy. The buyer and the court have a choice over different types of remedy. The paper considers three different remedy regimes: (1) no liability; (2) voidance; and (3) damages. Under voidance, the buyer can rescind the transaction (return the asset and get the price back), while with damages, the …

No Trade Wars Without Taxation -Who's To Blame, And What Comes Next?, Domenico Imparato, Reuven S. Avi-Yonah, Doron Narotzki

Law & Economics Working Papers

As tariff policy once again shapes U.S. trade strategy, this article makes a foundational claim: trade wars are, at their core, tax wars. Against the backdrop of escalating economic tensions with the United States’ trade partners, this article argues that tariffs cannot be understood apart from the fiscal architecture that sustains them. What appears to be protectionism often masks deeper structural asymmetries in the U.S. tax system.

The discussion proceeds through three interrelated dimensions: reshoring production, promoting fair trade, and raising revenue. In each, the interaction between tariffs and the tax system reveals deeper distortions. U.S. export mechanisms such as …

Merger Remedies Unbound, Dhruv Aggarwal, Albert H. Choi, Geeyoung Min

Law & Economics Working Papers

How should foundational contract law doctrines apply to corporate mergers? This Article argues that recent changes in Delaware law grant parties expansive contractual freedom to define their preferred remedies in merger agreements, untethered from the limits imposed by traditional contract law. A new provision in the Delaware corporate code permits penalty clauses in merger agreements, departing from the traditional “anti-penalty doctrine” that forbids punitive liquidated damages in contract. Delaware courts have also shown deference to specific performance provisions, treating them as presumptively enforceable commitments instead of retaining their traditional judicial discretion over the choice of remedies. Given that Delaware law …

Out Of Sight, Out Of Mind: Nearby Branch Closures And Small Business Growth, Benjamin Ranish, Andrea Stella, Jeffery Y. Zhang

Law & Economics Working Papers

Since 2010, the total number of commercial bank branches in the United States has decreased by about 20%. Do branch closures meaningfully affect economic activity? We investigate the impact of branch closures on small businesses, whose access to credit may be facilitated through local relationships with banks. Using exogenous variation in closures related to mergers and acquisitions, we show that the closure of nearby bank branches leads to decreased small business employment growth and entry while increasing business exit. Our results are robust to variations in our measure of employment, proximity, and construction of the instrument. We use subsample analyses …

Private Equity And The Public Good, Daniel J. Morrissey

Buffalo Law Review

Private Equity (PE) is a term for large funds that use mostly borrowed money to buy and restructure companies, supposedly to make them more profitable. They manage trillions of dollars in holdings and have come to dominate many sectors of our economy, often not for the better. Private Equity is perhaps a more genteel form of the hostile take-overs that were so prevalent several decades ago, because now instead of ousting management of the firms they acquire, Private Equity offers their officials sweet deals to stay on. Those arrangements often raise conflicts which result in the shareholders of the target …

Is R&D Rivalry Slowing The Growth Of Productive Firms?, Yoshiki Ando, James Bessen, Xiupeng Wang

Faculty Scholarship

The reallocation of jobs to more productive firms is a substantial component of aggregate productivity growth, yet job reallocation rates have declined substantially in the United States. This paper explores the hypothesis that greater technological rivalry has exacerbated adjustment costs, slowing reallocation. Using microdata at the US Census and estimates of technological rivalry in firm growth regressions, we find that technological rivalry slows firm responses to productivity shocks. Firms do not expand as rapidly in the face of higher obsolescence risk. Estimating counterfactual firm growth from 1997-2018, we find that growing technological rivalry accounts for most of the decline in …

Oriented Data-Generating Processes: A Categorization Of Roc Curves, Claude Fluet, Murat C. Mungan

Faculty Scholarship

Decision makers attempting to classify a binary state of the world may commit two types of errors. Even when the two alternative states have equal prior probabilities and when the two types of errors are equally costly, a classification criterion may be chosen which leads to one type of error being committed more frequently than the other, because of asymmetries in the data that informs their decisions. We formalize this possibility through a categorization of data-generating processes (DGPs), which may be ‘oriented’ towards evidence favoring one of the two alternatives, or which may be ‘unoriented’. We identify the shape properties …

High-Tech Industries' Global Resource Utilization And Transaction Cost Economics, Bei Johnson

Akron Law Review

No abstract provided.

Can The Law Protect My Craft? How Gaps In Copyright Of Knitting Patterns Symbolize A Greater Struggle For Protecting Traditionally Feminine Forms Of Intellectual Property, Kysa Walzer

Seattle University Law Review

The purpose of this article is to demonstrate the application of intel-lectual property rights within the context of copyright protection of knit-ting patterns. The article will discuss the underutilization of copyright pro-tection for knitters and crafters and its larger impact upon craft and indus-try traditionally comprised of women. Part I introduces knitting patterns and a short history of copyright protections. Part II discusses the specific areas within knitting patterns and the knitting community which give rise to legal grey areas for copyright protection. Part III discusses the larger implications of copyright and intellectual property in spaces where women traditionally make …

Table Of Contents

Seattle University Law Review

Table of Contents

Volume 48 Masthead

Seattle University Law Review

Volume 48 Masthead

Keynote Address: Community Over Constitution, Riddhi Mukhopadhyay

Seattle University Law Review

In this keynote address, Riddhi Mukhopadhyay challenges the veneration of the U.S. Constitution by highlighting its origins in exclusion and its continued failure to protect marginalized communities. Drawing from her experience in civil legal aid and gender justice, she argues that the Constitution was drafted to consolidate power among white, wealthy men and continues to reflect that legacy through racial, gender, and class-based inequities. While acknowledging the significance of constitutional amendments and landmark cases, Mukhopadhyay emphasizes that meaningful change has always come from community-led action, not top-down reform. Additionally, Mukhopadhyay calls on lawyers and legal advocates to center community, practice …

The Lost Child: A Critique On Transracial Adoption Rhetoric, Hallie Conyers-Tucker

Seattle University Law Review

Transracial adoption in the United States reflects a deeply rooted history of colonialism, cultural assimilation, and racial hierarchy, masked by rhetoric focused on the “best interest of the child.” The author critiques that rhetoric and traces how adoption practices and policies, both domestic and international, have evolved to reinforce systemic inequities. Through historical analysis of the forced adoption of Native American, Black, and Asian children, it reveals how the best interest standard has been wielded not to protect children but to uphold political and racial ideologies. The author argues that the prevailing adoption framework relies on child-saving and color-blind narratives …

A Global Reconstruction: Black Internationalism And The Human Rights Regime, Britta Redwood

Seattle University Law Review

Black American advocates for civil, political, and economic rights have long taken an internationalist approach and fostered connections with international organizations and transnational movements. This engagement has also been a generative force and played role in shaping international law. Beginning in the early years of the twentieth century, Black intellectuals and leaders, spearheaded by the NAACP and the UNIA, focused on human rights as a means for addressing and repairing the harms wrought by slavery, Jim Crow, and racism. From the Paris Peace Conference of 1919 through the Universal Declaration of Human Rights, the Genocide Convention, and the drafting of …

The Gap: Addressing The Missing Piece In HawaiʻI’S Anti-Discrimination Laws On Credit And Lending, Wendy Mun

Seattle University Law Review

This author addresses the significant gap in Hawaiʻi’s anti-discrimination laws, specifically the lack of explicit protections for LGBTQ+ individuals against credit and lending discrimination. Although federal laws like the Equal Credit Opportunity Act (ECOA) and recent interpretations by the Consumer Financial Protection Bureau (CFPB) extend some protections, they remain vulnerable to shifting federal priorities and interpretations. The author explores how other states, particularly California and Washington, have enacted robust statutory protections that clearly prohibit credit discrimination based on sexual orientation and gender identity. They argue that Hawaiʻi, despite its large LGBTQ+ population, must amend its credit protection laws to reflect …

The U.S. Drug Policy Hamster Wheel: A Critical Discourse Analysis Of Seattle’S New Drug Ordinance, Hallie Conyers-Tucker

Seattle University Law Review

The author critically examines Seattle’s new drug ordinance using Critical Discourse Analysis (CDA) to reveal how legislative language influences the policy's actual effect. Although the ordinance claims to prioritize diversion and community health, the use of permissive language such as “may” and “shall” grants broad discretionary power to law enforcement and undermines the stated intent. The author situates the ordinance within a broader historical context, highlighting how drug policy in the United States has consistently been shaped by racialized and stigmatizing narratives. Additionally, the author argues that meaningful reform requires reframing the discourse around substance use to support public health …

Something Concrete: How Labor Advocates Can Best Respond To The Ambiguity Of Glacier Northwest, Ateş Serifsoy

Seattle University Law Review

The Supreme Court’s much-anticipated decision in Glacier North-west, Inc. v. International Brotherhood of Teamsters Local No. 174 (Glacier) marked a critical moment for workers’ rights under the National Labor Relations Act (NLRA) and the longstanding practice of Garmon preemption. Yet, initial fears of a significant rollback of workers’ rights, driven by sensational headlines, were met with an unexpectedly narrow Court opinion. This Comment examines Glacier’s implications for Gar-mon preemption and the right to strike. It offers the historical background of the doctrine of labor law preemption before Glacier; presents a detailed analysis of Glacier itself, including its …

A New Exclusionary Rule To Protect Bodily Integrity And Discourage Pretext Stops, Josephine Ross

Seattle University Law Review

The author proposes a novel state-level exclusionary rule to reduce racial profiling and protect bodily autonomy during police encounters. The current Fourth Amendment jurisprudence fails to deter pretextual stops and frisks because the exclusionary rule often turns on officer fault and "good faith," allowing racially motivated practices to go unchecked. As federal rollbacks on diversity and data collection hinder efforts to track racial bias, the author argues for a statutory evidentiary rule that automatically excludes drug evidence found during (1) traffic stops, (2) pat-downs for weapons, and (3) consent searches, regardless of an officer’s intent or the legality of the …

Navahine V. HawaiʻI Dept. Of Transportation: The Keiki Will Lead Us, Catherine Smith

Seattle University Law Review

The author analyzes the landmark case Navahine v. Hawaiʻi Department of Transportation, which culminated in the world’s first constitutional climate settlement. Catherine Smith, serving as an expert for the youth plaintiffs, situates the case within Hawaiʻi’s legal tradition of prioritizing children’s rights and intergenerational equity. She explores the evolution of children’s constitutional protections, contrasting Hawaiʻi’s progressive jurisprudence with the dominant adult-centric legal framework on the mainland. She critiques four recurring analytical missteps in U.S. courts that marginalize children’s interests and highlights Hawaiʻi’s public trust doctrine and cultural values, such as the Aloha Spirit, as models for addressing climate-related harms. …

Constitutional Futurism As Pedagogy, Jeremiah Chin

Seattle University Law Review

Constitutional Law has transformed from a course on history to a discussion of current events. Cases like Students for Fair Admissions v. Harvard College, Dobbs v. Jackson Women’s Health Organization, and Loper Bright Enterprises v. Raimondo reveal that the study of constitutional law is not a static, or even linear, discussion of constitutional text and history. Law is a shifting, changing enterprise that reflects social constructions of power, authority, and identity. How do we teach, learn, and understand constitutional law that is so laden with history, riddled with theories of consistency and adherence to precedent, but ultimately subject …

Ai Regulation: Competition, Arbitrage & Regulatory Capture, Filippo Lancieri, Laura Edelson, Stefan Bechtold

Georgetown Law Faculty Publications and Other Works

The commercial launch of ChatGPT in November 2022 and the fast development of large language models have catapulted the regulation of artificial intelligence to the forefront of policy debates. A vast body of scholarship, white papers, and other policy analyses followed, outlining ideal regulatory regimes for AI. The European Union and other jurisdictions have moved forward by regulating AI and LLMs. One overlooked area is the political economy of these regulatory initiatives—or how countries and companies can behave strategically and use different regulatory levers to protect their interests in the international competition on how to regulate AI.

This Article helps …

Wither, Religious Liberty, Amanda Harmon Cooley

BYU Law Review

During the oft-deemed Constitutional Revolution of 1937, the U.S. Supreme Court effected a significant sea-change in its substantive due process liberty analysis. In West Coast Hotel v. Parrish, the Court held that the Due Process Clause’s liberty provision does not protect absolute freedom of contract, signaling the demise of the Lochner era. Almost a century later, the current Supreme Court’s supermajority bloc is now infamous for its own seismic shift in liberty analysis. This Court’s incontrovertible Constitutional Revolution of 2022 was not limited to only substantive due process, which the Court shifted with its decision in Dobbs v. Jackson Women’s …