States of Bankruptcy
I am grateful to Barry Adler, Christopher Bruner, Joshua Fairfield, Anna Gelpern, Clay Gillette, Claire Hill, Margaret Howard, Richard Hynes, Tom Jackson, Lyman Johnson, John Langbein, Michael McConnell, Joshua Rauh, Roberta Romano, and to participants at the Yale Law School Corporate Law Center breakfast program in New York City, the State and Municipal Default Workshop at the Hoover Institution, the law and economics seminar at the University of Minnesota Law School, and a faculty workshop at Washington and Lee School of Law for helpful comments and conversation; to Bill Draper for comments and legislative analysis; to Elizabeth Hendee, Albert Lichy, David Payne, and Spencer Pepper for research assistance; to the University of Pennsylvania Law School for generous summer funding; and to the editors of The University of Chicago Law Review for terrific editorial suggestions.
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In the past several years, many states’ financial condition has been so precarious that some observers have predicted that one or more might default. As the crisis persisted, a very unlikely word crept into these conversations: bankruptcy. Should Congress provide a bankruptcy option for states, or would bankruptcy be a mistake? The goal of this Article is to carefully vet this question, using all of the theoretical, empirical, and historical tools currently available. The discussion is structured as a “case” for bankruptcy rather than an “on the one hand, on the other hand” assessment. But it seeks to be scrupulously fair and reaches several conclusions that veterans of the public and scholarly debate may find surprising.
The Article proceeds as follows. Part I briefly develops the theoretical basis for state bankruptcy. Part II explores each of six key benefits of a state-bankruptcy regime. Part III then turns to six principal objections, considering each in detail. After analyzing the response to New York City’s 1975 crisis and a number of states’ enactment of municipaloversight boards, Part IV focuses on the possibility of an analogous federal oversight alternative to a more general bankruptcy statute. Although bankruptcy seems superior overall, the oversight strategy would offer some of the same benefits if Congress failed to enact a bankruptcy law before a state crisis materialized.
I would like to thank Jack Brake, Anne Marie Hawley, and Jonah Klausner for their thoughtful edits and Jake Holland for his indispensable advice all throughout the drafting process.
Illinois’s Biometric Information Privacy Act (BIPA) is the country’s most powerful law governing biometric data—data generated from an individual’s biological characteristics, like fingerprints and voiceprints. Over the past decade, BIPA garnered a reputation as an exceptionally plaintiff-friendly statute. But from 2023–2024, the Illinois legislature, Illinois Supreme Court, and Ninth Circuit Court of Appeals all sided with BIPA defendants for the first time. Most significantly, in Zellmer v. Meta Platforms, Inc., the Ninth Circuit dismissed the plaintiff’s BIPA claim because the face scan collected by the defendant could not be used to identify him.
It is unclear whether these developments represent a trend or an exception to BIPA’s plaintiff-friendliness. Which path is charted will largely turn on how courts interpret Zellmer: While Zellmer established that a biometric identifier must be able to identify an individual, lower courts have construed its holding narrowly to require that the entity collecting biometric data must itself be capable of identifying, rather than it being sufficient for any entity to do so. Reading BIPA this narrowly would significantly weaken the statute’s protections.
After detailing how employer and consumer cases catalyzed this recent defendant-friendly shift, this Comment proposes a two-step framework to determine whether a biometric identifier is able to identify, falling under BIPA’s reach. Given BIPA’s broad influence, where courts ultimately land on this question will be crucial to the protection of biometric data nationwide."
I would like to thank Professor Lior Strahilevitz and the editors and staff of the University of Chicago Law Review for their thoughtful advice and insight.
Recently, many states have reacted to the growing data economy by passing data privacy statutes. These follow the “interaction model”: they allow consumers to exercise privacy rights against firms by directly interacting with them. But data brokers, firms that buy and sell data for consumers whom they do not directly interact with, are key players in the data economy. How is a consumer meant to exercise their rights against a broker with an “interaction gap” between them?
A handful of states have tried to soften the interaction gap by enacting data-broker-specific legislation under the “transparency model.” These laws, among other things, require brokers to publicly disclose themselves in state registries. The theory is that consumers would exercise their rights against brokers if they knew of the brokers’ existence. California recently went further with the Delete Act, providing consumers data-broker-specific privacy rights.
Assembling brokers’ reported privacy request metrics, this Comment performs an empirical analysis of the transparency model’s efficacy. These findings demonstrate that the transparency model does not effectively facilitate consumers in following through on their expected privacy preferences or meaningfully impacting brokers. Therefore, regulators should follow in the footsteps of the Delete Act and move beyond the transparency model.
We thank Lucian Bebchuk, Alon Brav, Ryan Bubb, Ed Cheng, Quinn Curtis, Elisabeth de Fontenay, Jared Ellias, Jill Fisch, Joe Grundfest, Cam Harvey, Scott Hirst, Colleen Honigsberg, Marcel Kahan, Louis Kaplow, Jonathan Klick, Brian Leiter, Saul Levmore, Dorothy Lund, John Morley, Mariana Pargendler, Elizabeth Pollman, Roberta Romano, Paolo Saguato, Holger Spamann, George Vojta, and Michael Weber for valuable suggestions and discussions. This Article has benefited from comments by workshop participants at Columbia Law School, George Mason University Antonin Scalia Law School, Georgetown University Law Center, Harvard Law School, Stanford Law School, UC Berkeley School of Law, the University of Chicago Law School, the University of Oxford Faculty of Law, the University of Pennsylvania Carey Law School, the University of Toronto Faculty of Law, the University of Virginia School of Law, and the Washington University School of Law, as well as at the American Law and Economics Association Annual Meeting, the Corporate & Securities Litigation Workshop, the Labex ReFi-NYU-SAFE/LawFin Law & Banking/Finance Conference, and the Utah Winter Deals Conference. Robertson gratefully acknowledges the support of the Douglas Clark and Ruth Ann McNeese Faculty Research Fund. Katy Beeson and Levi Haas provided exceptional research assistance. All errors are our own.
We thank Lucian Bebchuk, Alon Brav, Ryan Bubb, Ed Cheng, Quinn Curtis, Elisabeth de Fontenay, Jared Ellias, Jill Fisch, Joe Grundfest, Cam Harvey, Scott Hirst, Colleen Honigsberg, Marcel Kahan, Louis Kaplow, Jonathan Klick, Brian Leiter, Saul Levmore, Dorothy Lund, John Morley, Mariana Pargendler, Elizabeth Pollman, Roberta Romano, Paolo Saguato, Holger Spamann, George Vojta, and Michael Weber for valuable suggestions and discussions. This Article has benefited from comments by workshop participants at Columbia Law School, George Mason University Antonin Scalia Law School, Georgetown University Law Center, Harvard Law School, Stanford Law School, UC Berkeley School of Law, the University of Chicago Law School, the University of Oxford Faculty of Law, the University of Pennsylvania Carey Law School, the University of Toronto Faculty of Law, the University of Virginia School of Law, and the Washington University School of Law, as well as at the American Law and Economics Association Annual Meeting, the Corporate & Securities Litigation Workshop, the Labex ReFi-NYU-SAFE/LawFin Law & Banking/Finance Conference, and the Utah Winter Deals Conference. Robertson gratefully acknowledges the support of the Douglas Clark and Ruth Ann McNeese Faculty Research Fund. Katy Beeson and Levi Haas provided exceptional research assistance. All errors are our own.
We thank Lucian Bebchuk, Alon Brav, Ryan Bubb, Ed Cheng, Quinn Curtis, Elisabeth de Fontenay, Jared Ellias, Jill Fisch, Joe Grundfest, Cam Harvey, Scott Hirst, Colleen Honigsberg, Marcel Kahan, Louis Kaplow, Jonathan Klick, Brian Leiter, Saul Levmore, Dorothy Lund, John Morley, Mariana Pargendler, Elizabeth Pollman, Roberta Romano, Paolo Saguato, Holger Spamann, George Vojta, and Michael Weber for valuable suggestions and discussions. This Article has benefited from comments by workshop participants at Columbia Law School, George Mason University Antonin Scalia Law School, Georgetown University Law Center, Harvard Law School, Stanford Law School, UC Berkeley School of Law, the University of Chicago Law School, the University of Oxford Faculty of Law, the University of Pennsylvania Carey Law School, the University of Toronto Faculty of Law, the University of Virginia School of Law, and the Washington University School of Law, as well as at the American Law and Economics Association Annual Meeting, the Corporate & Securities Litigation Workshop, the Labex ReFi-NYU-SAFE/LawFin Law & Banking/Finance Conference, and the Utah Winter Deals Conference. Robertson gratefully acknowledges the support of the Douglas Clark and Ruth Ann McNeese Faculty Research Fund. Katy Beeson and Levi Haas provided exceptional research assistance. All errors are our own.
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. In this Article, we show how these retroactive changes can have enormous impacts in precisely the settings in which experts have pressed for their use. We provide examples of valuations, performance analysis, and event studies in which the retroactive changes have a large—and even dispositive—effect on an expert’s conclusions.