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Essay
The Constitutional Money Problem
Brian Galle
Professor of Law and Agnes Williams Sesquicentennial Chair in Tax Policy, Georgetown University Law Center.
Aziz Z. Huq
Frank and Bernice J. Greenberg Professor of Law, The University of Chicago Law School, supported by the Frank J. Cicero Fund.

Under the Supreme Court’s contemporary approach to constitutional meaning, there is a surprising degree of doubt about whether key aspects of the Federal Reserve (“Fed”)—its independence from Congress and the President, and even its power to create money—are constitutional. In particular, we propose that the structure and monetary authority of the Fed can be justified by Article I, Section 8 borrowing power, and by the Public Debt Clause of the Fourteenth Amendment. In 1935, eight members of the Court agreed that these provisions require credible commitments: to meaningfully exercise the borrowing power, Congress must be able to promise creditors it will not undermine the value of its debts. We argue that judicial enforcement of sovereign promises is unlikely to fulfill this goal. Instead, the exercise of monetary authority by independent central banks is the most promising current solution to the credible sovereign borrower problem.

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Essay
Legislating for the Future
Jonathan S. Gould
Class of 1965 Professor of Law, University of California, Berkeley.

For helpful comments and conversations, we are grateful to Dan Awrey, Daniel Farber, Brian Feinstein, Brian Galle, Aziz Huq, Howell Jackson, Kathryn Judge, Patricia McCoy, Arthur Wilmarth, and workshop participants at the University of Chicago Law School.

Rory Van Loo
Visiting Professor of Law, Harvard Law School.

For helpful comments and conversations, we are grateful to Dan Awrey, Daniel Farber, Brian Feinstein, Brian Galle, Aziz Huq, Howell Jackson, Kathryn Judge, Patricia McCoy, Arthur Wilmarth, and workshop participants at the University of Chicago Law School.

Public policy must address threats that will manifest in the future. Legislation enacted today affects the severity of tomorrow’s harms arising from biotechnology, climate change, and artificial intelligence. This Essay focuses on Congress’s capacity to confront future threats. It uses a detailed case study of financial crises to show the limits and possibilities of legislation to prevent future catastrophes. By paying insufficient attention to Congress, the existing literature does not recognize the full nature and extent of the institutional challenges in regulating systemic risk. Fully recognizing those challenges reveals important design insights for future risk legislation.

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Essay
Regionalism and the Federal Reserve Banks
Kathryn Judge
Harvey J. Goldschmid Professor of Law at Columbia Law School.

The authors are grateful to Scott Baker, Michael Held, Patricia Mosser, Nathan Tankus, and the participants at the Washington University Law and Economics Workshop and the Women in Law and Finance Workshop at Wharton for helpful comments on earlier drafts. Brian Japari and Alex MacDonald provided exceptionally helpful research assistance. Research for this publication is made possible in part by The Leichtman-Levine Faculty Research Fund at Columbia Law School.

Lev Menand
Associate Professor of Law at Columbia Law School.

The authors are grateful to Scott Baker, Michael Held, Patricia Mosser, Nathan Tankus, and the participants at the Washington University Law and Economics Workshop and the Women in Law and Finance Workshop at Wharton for helpful comments on earlier drafts. Brian Japari and Alex MacDonald provided exceptionally helpful research assistance. Research for this publication is made possible in part by The Leichtman-Levine Faculty Research Fund at Columbia Law School.

Regionalism is central to our country’s central banking system. Rather than rely on a single organization, Congress created twelve Federal Reserve Banks (FRBs), each in a different part of the country. These FRBs are an undertheorized example of how the federal government uses regional bodies to formulate and administer federal policy. This Essay examines the regional aspect of the FRBs, distinguishing between three types of regionalism: regional policy variation, regional policy formulation, and regional policy implementation. Regional policy variation makes less and less sense in today’s national and interconnected financial system. The trend of shifting decisions from the FRBs to national bodies should be continued. But regional voice and implementation should be retained. The Open Market Committee is critical for incorporating regional perspectives into uniform, national policy, and the FRBs carry out these policies at a regional level in ways that enhance legitimacy, improve efficacy, and promote resiliency.

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Essay
Public Investment as Constitutional Power and Accountability Challenge
Saule T. Omarova
Earle Hepburn Professor of Law at the University of Pennsylvania.

We thank Aziz Huq, Adriana Robertson, and all participants in conferences and workshops at the University of Chicago and Cornell Law Schools.

Brian Richardson
Associate Professor of Law at Cornell University.

We thank Aziz Huq, Adriana Robertson, and all participants in conferences and workshops at the University of Chicago and Cornell Law Schools.

We offer a way of thinking about public-investment institutions as creatures of both public law and private markets. Placing public investment—a distinct public function—in the context of constitutional debates on the legitimate reach of the administrative state, we focus the search for legitimate institutional structure on the interaction between the entity’s efficacy as a market actor and the concept of public accountability. This tension, as well as synergy, is where the fundamental hybridity of public-investment institutions is most visible. We argue that only by considering the unique objectives and tools of public investment as a legitimate sovereign activity can we design workable mechanisms of democratic accountability for public-investment institutions. We hope that our observations shed light on the broader debate about the optimal implementation mechanisms for the nation’s reemerging industrial policy.

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Essay
Financial Stability and Bank Agency Discretion
Christina Parajon Skinner
Associate Professor, The Wharton School of the University of Pennsylvania; Co-Director, Wharton Initiative on Financial Policy and Regulation; Research Member, European Corporate Governance Institute.

The pursuit of financial stability goals over the past fifteen years has fueled the perception that a regulatory “expertocracy” governs the field of banking, rather than market forces. This Essay discusses four areas where financial stability or systemic risk mandates—either express or assumed—empowered bank regulators and supervisors to substitute their judgment for that of Congress: (1) the Financial Stability Oversight Council’s power to designate nonbank systemically important financial institutions; (2) the Federal Deposit Insurance Corporation’s power to bail out uninsured bank depositors; (3) the adoption of inter-national standards of bank regulation through Basel; and (4) the Federal Reserve and Office of the Comptroller of the Currency’s power to deny bank merger applications on financial stability grounds.

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Essay
Central Clearing the U.S. Treasury Market
Yesha Yadav
Milton R. Underwood Chair, Associate Dean and Professor of Law, Vanderbilt Law School.

We benefited greatly from thoughtful comments and conversations in the preparation of this Essay. The authors are enormously grateful to Dan Awrey, David Bowman, Jonathan Brogaard, Adam Copeland, Darrell Duffie, Ellen Correia Golay, Frank Keane, Kate Judge, Megha Kalbag, Mike Koslow, Dina Marchioni, Rebecca McCaughrin, Saule Omarova, Julie Remache, Morgan Ricks, Will Riordan, Pradeep Yadav and participants at the University of Chicago Law Review’s Symposium on Financial Regulation in the Crucible: Private and Public Law Perspectives on a Sector in Crisis. We are also most appreciative of the extraordinarily talented editors and staff at the University of Chicago Law Review for their careful edits, commentary and patience. The views expressed by the authors are their own and may not reflect the views of the Federal Reserve Bank of New York or the Federal Reserve System.

Joshua Younger
Policy Advisor at the Federal Reserve Bank of New York and Lecturer in Law at Columbia Law School.

We benefited greatly from thoughtful comments and conversations in the preparation of this Essay. The authors are enormously grateful to Dan Awrey, David Bowman, Jonathan Brogaard, Adam Copeland, Darrell Duffie, Ellen Correia Golay, Frank Keane, Kate Judge, Megha Kalbag, Mike Koslow, Dina Marchioni, Rebecca McCaughrin, Saule Omarova, Julie Remache, Morgan Ricks, Will Riordan, Pradeep Yadav and participants at the University of Chicago Law Review’s Symposium on Financial Regulation in the Crucible: Private and Public Law Perspectives on a Sector in Crisis. We are also most appreciative of the extraordinarily talented editors and staff at the University of Chicago Law Review for their careful edits, commentary and patience. The views expressed by the authors are their own and may not reflect the views of the Federal Reserve Bank of New York or the Federal Reserve System.

The market for Treasury securities, a deep and liquid market for risk-free debt, has anchored an ambitious and creative U.S. dollar economy while also ensuring the safety and soundness of its financial and monetary system. But as the market has grown, a series of disruptions to Treasury market trading have prompted policymakers to explore measures to strengthen the market’s foundations and shore up its resilience. This Essay considers this regulatory response. It focuses on the introduction of mandatory central clearing for most trades in U.S. Treasuries—a proposal seeking to significantly reshape the day-to-day functioning of the Treasury market. Central clearing is a well-established means by which to reduce the risk of loss associated when trading parties default. We analyze this mandate, detailing its likely advantages as well as its potential trade-offs from a public policy perspective.

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Essay
Securities Regulation and Administrative Law in the Roberts Court
David Zaring
Elizabeth F. Putzel Professor, The Wharton School at the University of Pennsylvania.

Thanks to Vincent Buccola, Christine Chabot, Haiyun Damon-Feng, Donna Nagy, Christina Skinner, Chris Walker, and for comments at presentations at the University of Chicago, the 2024 ABA Administrative Law Section Spring Meeting, and the 2024 National Business Law Scholars Conference. Thanks also to Rachel Shoemaker and Elizabeth Weise for research assistance.

This Essay compares a judicial revolution that is happening to one that is not. Both the change and the status quo are being managed by the current Supreme Court. That Court has, when it comes to administrative law, shown a capacity to revisit everything. But when it comes to securities regulation, it has resisted change. What is the explanation for this divergent approach between general regulation, which the Court has sought to police, and securities regulation, which the Court has left alone? Some scholars have argued that the Supreme Court is simply uninterested in securities regulation, but the Court now hears proportionately more securities cases than it once did. Others dispute the premise that the Court supports corporate America. And, of course, the Roberts Court could change its approach to securities regulation in time. But I think the divergence suggests that the Court wants to police public rights and rights against the state but is less interested in reformulating the standards for private disputes, such as disputes between shareholders and managers.

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Article
Volume 92.1
Scrutinizing Sex
Jessica A. Clarke
Robert C. and Nanette T. Packard Professor of Law, University of Southern California Gould School of Law.

Thanks to Courtney Cahill, Mary Anne Case, David Cruz, Mike Dorf, Ben Eidelson, Katie Eyer, Aziz Huq, Courtney Joslin, Craig Konnoth, Laura Lane-Steele, Chan Tov McNamarah, Laura Portuondo, Camille Gear Rich, Naomi Schoenbaum, Ann Tweedy, Ezra Young, Adam Zimmerman, and workshop participants at the 2024 West Coast Sexuality & Gender Law Workshop, Cornell Law School, and Vanderbilt Law School for feedback, and to Molly Gray for research assistance.

Critics of the Supreme Court’s equal protection jurisprudence despair that the Court conceives of discrimination as the mere classification of individuals on forbidden grounds, such as race and sex, rather than systemic patterns of subordination. On the Court’s anticlassification theory, affirmative action, which relies on overt racial or gender classifications, is generally forbidden. Such context-insensitive anticlassification rules could, in principle, extend to individuals who are members of groups often regarded with hostility and suspicion, such as transgender people. Indeed, this is how most trial courts have approached recent laws that classify individuals based on sex to exclude transgender people. However, appellate courts have refused to take anticlassification rules seriously. This Article argues that all sex classifications, like all race-based ones, ought to trigger heightened constitutional scrutiny. It draws support from the principles undergirding anticlassification rules announced by the Roberts Court, most recently in its university affirmative action decisions.

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Article
Volume 92.1
Shedding Light on Secret Settlements: An Empirical Study of California's STAND Act
David Freeman Engstrom
LSVF Professor of Law at Stanford Law School (SLS) and Co-Director of the Deborah L. Rhode Center on the Legal Profession (Rhode Center).

We are grateful to Ari Berman, Devin Flynn, and Jessica Seigel for excellent research assistance and to SLS, the Rhode Center, and the Arthur & Charlotte Zitrin Foundation for supporting this research. We are additionally grateful to The Honorable Carolyn B. Kuhl for her enormous help with this project, as well as to Timothy Dai, Eric Helland, and Daniel Kang. Finally, we are indebted to the many practitioners and judges who spoke to us to share their experiences, wisdom, and insight.

Nora Freeman Engstrom
Ernest W. McFarland Professor of Law at SLS and Co-Director of the Rhode Center.

We are grateful to Ari Berman, Devin Flynn, and Jessica Seigel for excellent research assistance and to SLS, the Rhode Center, and the Arthur & Charlotte Zitrin Foundation for supporting this research. We are additionally grateful to The Honorable Carolyn B. Kuhl for her enormous help with this project, as well as to Timothy Dai, Eric Helland, and Daniel Kang. Finally, we are indebted to the many practitioners and judges who spoke to us to share their experiences, wisdom, and insight.

Jonah B. Gelbach
Herman F. Selvin Professor of Law at UC Berkeley School of Law and a Non-Resident Fellow at the Rhode Center.

We are grateful to Ari Berman, Devin Flynn, and Jessica Seigel for excellent research assistance and to SLS, the Rhode Center, and the Arthur & Charlotte Zitrin Foundation for supporting this research. We are additionally grateful to The Honorable Carolyn B. Kuhl for her enormous help with this project, as well as to Timothy Dai, Eric Helland, and Daniel Kang. Finally, we are indebted to the many practitioners and judges who spoke to us to share their experiences, wisdom, and insight.

Austin Peters
Non-Resident Fellow at the Rhode Center and a Harry A. Bigelow Teaching Fellow at the University of Chicago Law School. He is also a recent graduate of SLS and holds a Ph.D. in Political Science from Stanford.

We are grateful to Ari Berman, Devin Flynn, and Jessica Seigel for excellent research assistance and to SLS, the Rhode Center, and the Arthur & Charlotte Zitrin Foundation for supporting this research. We are additionally grateful to The Honorable Carolyn B. Kuhl for her enormous help with this project, as well as to Timothy Dai, Eric Helland, and Daniel Kang. Finally, we are indebted to the many practitioners and judges who spoke to us to share their experiences, wisdom, and insight.

Garrett M. Wen
Recent graduate of SLS and former Civil Justice Fellow at the Rhode Center.

We are grateful to Ari Berman, Devin Flynn, and Jessica Seigel for excellent research assistance and to SLS, the Rhode Center, and the Arthur & Charlotte Zitrin Foundation for supporting this research. We are additionally grateful to The Honorable Carolyn B. Kuhl for her enormous help with this project, as well as to Timothy Dai, Eric Helland, and Daniel Kang. Finally, we are indebted to the many practitioners and judges who spoke to us to share their experiences, wisdom, and insight.

Catalyzed by the #MeToo movement, states have adopted a spate of laws restricting secret settlements. In 2018, California led the charge with the Stand Together Against Non-Disclosure (STAND) Act, which targets secrecy in the resolution of sex discrimination, harassment, and abuse cases. Transparency advocates hail these reforms as a major win for victims. Critics, meanwhile, warn that the reforms will hurt those they intend to help.

Nested within this debate sit a raft of confident, conflicting—and eminently testable—claims about what exactly happens in the wake of reform. Will defendants still settle, even if secrecy isn’t on offer? Will case filings disappear? Debate over these questions has raged since the 1980s, and, over these decades, the debate has always centered on fervent predictions regarding each.

Our findings tell a clear and consequential story. Contrary to critics’ fears, the STAND Act did not yield a sharp increase or decrease in case filings. Nor did the Act appear to significantly prolong cases or amplify their intensity. The upshot: cases still settle even when secrecy isn’t on offer. Perhaps most importantly, it appears that positive effects did come to pass.

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Article
Volume 92.1
Reestablishing Religion
Richard Schragger
Walter L. Brown Professor of Law, University of Virginia School of Law.

For comments and discussion, we thank Arvind Abraham, Alan Brownstein, Richard Garnett, Frederick Gedicks, Linda Greenhouse, Aziz Huq, John C. Jeffries, Jr., Michael Klarman, Andrew Koppelman, Martin Lederman, Leah Litman, Ira C. Lupu, James Nelson, James Oleske, Richard Primus, Frank Ravitch, Kate Redburn, Zalman Rothschild, James E. Ryan, Elizabeth Sepper, Anna Su, Mark Tushnet, and participants in the Nootbaar Workshop at Pepperdine Caruso Law; the Workshop in Law, Philosophy, and Political Theory at the Kadish Center for Morality, Law & Public Affairs at UC Berkeley School of Law; the “Text and (What Kind of) History?” conference hosted by the Stanford Constitutional Law Center at Stanford Law School; and the Cornell Summer Faculty Workshop. Generous support was provided by the Milton and Eleanor Gould Fund at Cornell Law School. For research assistance, we thank Io Jones, Mackenzie Kubik, Leah Schwartz, and Mary Triplett.

Micah Schwartzman
Hardy Cross Dillard Professor of Law, University of Virginia School of Law.

For comments and discussion, we thank Arvind Abraham, Alan Brownstein, Richard Garnett, Frederick Gedicks, Linda Greenhouse, Aziz Huq, John C. Jeffries, Jr., Michael Klarman, Andrew Koppelman, Martin Lederman, Leah Litman, Ira C. Lupu, James Nelson, James Oleske, Richard Primus, Frank Ravitch, Kate Redburn, Zalman Rothschild, James E. Ryan, Elizabeth Sepper, Anna Su, Mark Tushnet, and participants in the Nootbaar Workshop at Pepperdine Caruso Law; the Workshop in Law, Philosophy, and Political Theory at the Kadish Center for Morality, Law & Public Affairs at UC Berkeley School of Law; the “Text and (What Kind of) History?” conference hosted by the Stanford Constitutional Law Center at Stanford Law School; and the Cornell Summer Faculty Workshop. Generous support was provided by the Milton and Eleanor Gould Fund at Cornell Law School. For research assistance, we thank Io Jones, Mackenzie Kubik, Leah Schwartz, and Mary Triplett.

Nelson Tebbe
Jane M.G. Foster Professor of Law, Cornell Law School.

For comments and discussion, we thank Arvind Abraham, Alan Brownstein, Richard Garnett, Frederick Gedicks, Linda Greenhouse, Aziz Huq, John C. Jeffries, Jr., Michael Klarman, Andrew Koppelman, Martin Lederman, Leah Litman, Ira C. Lupu, James Nelson, James Oleske, Richard Primus, Frank Ravitch, Kate Redburn, Zalman Rothschild, James E. Ryan, Elizabeth Sepper, Anna Su, Mark Tushnet, and participants in the Nootbaar Workshop at Pepperdine Caruso Law; the Workshop in Law, Philosophy, and Political Theory at the Kadish Center for Morality, Law & Public Affairs at UC Berkeley School of Law; the “Text and (What Kind of) History?” conference hosted by the Stanford Constitutional Law Center at Stanford Law School; and the Cornell Summer Faculty Workshop. Generous support was provided by the Milton and Eleanor Gould Fund at Cornell Law School. For research assistance, we thank Io Jones, Mackenzie Kubik, Leah Schwartz, and Mary Triplett.

In the last few years, the Supreme Court has upended its doctrine of religious freedom under the First Amendment. Now, the government must treat religion equally with respect to providing public benefits. But it must also grant special exemptions from regulations that burden religion. We refer to this regime as structural preferentialism. This Article offers an external, political account of changes in Free Exercise and Establishment Clause jurisprudence by analyzing them as if they were the result of political conflicts between competing interest groups. Focusing on the role of religion in political polarization, rapid disaffiliation from denominations, and shifting strategies to fund religious schools, this political perspective has explanatory and predictive power that extends beyond conventional legal arguments about text, history, and precedent. Applying this approach, we predict that structural preferentialism will transform First Amendment doctrine and provide material grounds for its own entrenchment.

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Essay
Volume 92.1
Bankruptcy's Turn to Market Value
Mark J. Roe
Professor of Law, Harvard Law School.

Thanks for comments and conversations on the topic go to Barry Adler, Scott Altman, Ken Ayotte, Jordan Barry, Lucian Bebchuk, Emiliano Catan, Jared Ellias, Allan Ferrell, Jesse Fried, Stuart Gilson, Jeffrey Haas, Jonathan Hirschfeld, Edith Hotchkiss, Ted Janger, Ed Morrison, Kristin Mugford, Michael Ohlrogge, Paul Oudin, Robert Rasmussen, Roberto Tallarita, George Triantis, Sophie Vermeille, Andrew Verstein, and participants in the American Law & Economics Association 2023 and the USC–Lewis & Clark March 2023 conferences, the Boston-area bankruptcy seminar group, and a Harvard Law School workshop. Excellent extended research assistance came from Trace Dodge, Bobby Farnham, Nicholas Juan, Claudia Luyt, Nikki Ovaisi, Domenic Reyes, Priyal Thakral, Yusuke Tsuzuki, and Amanda White.

Michael Simkovic
Professor of Law, University of Southern California Law School.

Thanks for comments and conversations on the topic go to Barry Adler, Scott Altman, Ken Ayotte, Jordan Barry, Lucian Bebchuk, Emiliano Catan, Jared Ellias, Allan Ferrell, Jesse Fried, Stuart Gilson, Jeffrey Haas, Jonathan Hirschfeld, Edith Hotchkiss, Ted Janger, Ed Morrison, Kristin Mugford, Michael Ohlrogge, Paul Oudin, Robert Rasmussen, Roberto Tallarita, George Triantis, Sophie Vermeille, Andrew Verstein, and participants in the American Law & Economics Association 2023 and the USC–Lewis & Clark March 2023 conferences, the Boston-area bankruptcy seminar group, and a Harvard Law School workshop. Excellent extended research assistance came from Trace Dodge, Bobby Farnham, Nicholas Juan, Claudia Luyt, Nikki Ovaisi, Domenic Reyes, Priyal Thakral, Yusuke Tsuzuki, and Amanda White.

Chapter 11 was widely viewed as a failure in the first decade of the Bankruptcy Code’s operation, the 1980s. While basic bankruptcy still has its critics and few would say it works perfectly, the contrast with bankruptcy today is stark: bankruptcies that took years in the 1980s take months in the 2020s.

Multiple changes explain bankruptcy’s success and we do not challenge their relevance. But in our analysis, one major change is missing from the current understanding of bankruptcy’s success: bankruptcy courts and practice in the 1980s rejected market value; today bankruptcy courts and practice accept and use market value. This shift is a major explanation for bankruptcy’s success.

We argue that valuation improvements explain much of the increased speed and efficiency of Chapter 11 practice over the decades. We provide evidence that valuation conflicts narrowed and that the corporate reorganization process accelerated. The switch to market thinking across the bankruptcy spectrum—in bankruptcy transactions, in judging, and in lawyering—goes far in explaining why.

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Article
Volume 91.8
The Reconciliation Roots of Fourth Amendment Privacy
Sophia Z. Lee
Professor of Law, University of Pennsylvania Carey Law School.

I am indebted to my Penn Carey Law colleagues, fellow members of the Writers’ Bloc(k), participants in the Privacy Law Scholars Conference, the Harvard Law School Legal History Workshop, the American Bar Foundation’s Legal History Roundtable, as well as Laura Edwards, Scott Heerman, Orin Kerr, Sandra Mayson, Ajay Mehrotra, Shaun Ossei-Owusu, Nicholas Parrillo, and David Rudovsky for especially generous and helpful feedback. I am immensely grateful to Alana Bevin, Madeline Bruning, Miles Gray, Susan Gualtier, Paul Riermaier, Anna Rosenfeld, Austin Severns, Mary Shelly, and David Sowry for their phenomenal research assistance, as well as to the National Archives and Records Administration staff who made accessing case records amid a pandemic possible.

The Roberts Court has made protecting “the privacies of life” a catchphrase of Fourth Amendment law in the digital era. The time is thus ripe for revisiting the doctrinal and political roots of this newly influential quote from the Court’s 1886 decision Boyd v. United States. This Article makes a novel argument that Boyd and its elevation of protecting the “privacies of life” to an animating principle of the Fourth Amendment was instead a product of Reconstruction and its dismantlement. Fourth Amendment privacy was produced by and helped secure Reconciliation—the process through which White Americans North and South, Democrat and Republican came together to limit Reconstruction, preserve White supremacy, and pave the way for the violent disenfranchisement of newly freed Black men. The Article concludes by considering the divergent doctrinal implications of resituating Boyd and Fourth Amendment privacy in the politics of Reconciliation.