Black Metropolis Research Consortium
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Privacy Protection, At What Cost? Exploring the Regulatory Resistance to Data Technology in Auto Insurance
Get PDFRegulatory and sociological resistance to new market-driven technologies, particularly to those that rely on collection and analysis of personal data, is prevalent even in cases where the technology creates large social value and saves lives. This article is a case study of such tragic technology resistance, focusing on tracking devices in cars which allow auto insurers to monitor how policyholders drive and adjust the premiums accordingly. Growing empirical work reveals that such “usage-based insurance” induces safer driving, reducing fatal accidents by almost one third, and resulting in more affordable and fair premiums. Yet, California prohibits this technology and other states limit its effectiveness, largely in the interest of privacy protection. The article evaluates the justifications fueling the restrictive regulation vis-à-vis the loss of lives resulting from this regulation. It concludes that the social benefits of the tracking technology dramatically outweigh the privacy and related costs
Did the Dependent Coverage Mandate Reduce Crime?
Get PDFThe Affordable Care Act’s dependent coverage mandate (DCM) induced approximately 2 million young adults to join parental employer-sponsored health insurance plans. This study is the first to explore the impact of the DCM on crime, a potentially important externality. Using data from the National Incident-Based Reporting System, we find that the DCM induced a 2–5 percent reduction in property crime incidents involving young adult arrestees ages 22–25 relative to those ages 27–29. This finding is supported by supplemental analysis using data from the Uniform Crime Reports. An examination of the underlying mechanisms suggests that declines in large out-of-pocket expenditures for health care, increased educational attainment, and increases in cohabitation of parents and adult children may explain these declines in crime. Backof- the-envelope calculations suggest that the DCM generated approximately 512 million in annual social benefits from crime reduction among young adults
The Commission Goes to Walmart: Changing Patterns of FTC Enforcement
Get PDFThe 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 the Commission’s ability to police fraud and pursue monetary redress.
However, that does not seem to be the case. A substantial majority of FTC enforcement actions still involve monetary redress of some form. The FTC continues to pursue such redress through novel interpretations of the laws it enforces. For instance, the FTC recently made headlines for initiating an enforcement action against Walmart using a novel interpretation of the Telemarketing Sales Rule. This approach, what I term to be a pattern of novel interpretation, raises serious concerns of notice and overbreadth, potentially leading to a system of regulation by enforcement.
A better alternative to the pattern of novel enforcement is Penalty Offense Authority. Sending parties notices of penalty offenses can achieve the same goal as the pattern of novel enforcement but with fewer drawbacks, particularly in areas of due process and notice. This Comment first discusses the circumstances that led to the pattern of novel enforcement and subsequently describes the drawbacks of this practice through examples of recent FTC actions before concluding with a discussion of how Penalty Offense Authority is superior
Grid Reliability in the Electric Era
Get PDFThe 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 largely on clean but intermittent renewable resources. These new resources demand new approaches to electric grid reliability—approaches that the NERC model of reliability governance may inadequately deliver.
This Article traces NERC’s history, situates NERC in ongoing debates about climate change and grid reliability, and assesses the viability of reliability selfregulation in the coming electric era. It may have made sense to delegate the task of maintaining U.S. electric grid reliability to a self-regulatory organization in prior decades, when regulated monopolies managed nearly every segment of electricity production. But many of the criteria that NERC used to justify selfregulation earlier in its history—electric utilities’ expertise, widespread agreement about the organization’s goals, and an industry structure in which regulated parties’ interests align with the public’s—no longer hold. The climate crisis creates a need for expertise beyond NERC’s domain, while the introduction of competition to large parts of the electricity sector blurs lines of accountability for reliability failures. NERC’s structure also perpetuates an incumbency bias at odds with public goals for the energy transition.
These shifting conditions have caused NERC to fail to keep pace with the reliability challenges of the electric era. Worse still, outdated NERC standards often help entrench fossil fuel interests by justifying electricity market rules poorly suited to accommodate renewable resources. We therefore suggest a suite of reforms that would increase direct government oversight and accountability in electricity reliability regulation
The Effect of Bankruptcy Exemptions on Consumer Credit
No full textChapter 7 of US bankruptcy law allows consumers to exempt a portion of the value of their homes and personal property from unsecured creditors. The levels of exemptions vary widely across states and change frequently. We study the effect of increases in these exemptions on the supply of and demand for credit card, mortgage, and auto loan credit. We use detailed account-level administrative data to directly observe applications for new credit and new accounts following the applications instead of using proxies such as debt loads as in prior literature on this topic. We find no effect of homestead exemptions on access to credit and only modest effects on access to credit and credit card interest rates from increases in nonhome property exemptions. We find no effect of changes in exemption rates on demand for credit
Introduction to the Symposium on Labor Market Power
Get PDFRecent empirical work on labor markets reveals that they are beset by frictions, including high levels of concentration and frequent collusion, contrary to the traditional view of labor markets as being perfectly competitive.1 The implications of this work for law and policy have only begun to be explored. The University of Chicago Law Review convened a symposium to bring together scholars from various disciplines and with different subject matter expertise but with a common interest in understanding the regulation of labor markets in light of new empirical results. The papers delivered at the symposium have been published in this symposium issue
Worker Welfare and Antitrust
Get PDFThe field of antitrust and labor has gone through a profound change in orientation. For the great bulk of its history, labor was viewed by antitrust enforcers as a competitive threat. The debate over antitrust and labor was framed around whether there should be a labor “immunity” from the antitrust laws. In just the last decade, however, the orientation has flipped. Most new writing views labor as a target of anticompetitive restraints imposed by employers. Antitrust is increasingly concerned with protecting labor rather than challenging its conduct.
Antitrust interest in labor markets is properly focused on two things. The smaller concern is the impact of anticompetitive restraints in the labor market, such as anti-poaching agreements and noncompete covenants. While antitrust enforcement in this area is critically important, these restraints cover only a portion of the employment market. The bigger labor interest is in output-reducing restraints in product markets, and here antitrust policy has unfortunately had little to contribute. The demand for labor is derivative of product-market demand. If firms do not produce goods, workers do not work. Because most labor is a variable cost, the demand for employment varies with product output. As a result, when antitrust pursues a goal of higher output in product markets, it benefits labor and consumers alike.
Both antitrust’s neoliberal Right and its progressive Left have advocated policies that are harmful to labor. The Right did so by developing a cynical vision of “consumer welfare” that incorporated producer profits into the definition and advocated for lower output in product markets. The Left has done the same thing with its hostility to large firms, even when firm size is dictated by scale economies or network effects, and its protection of small business
Fixing the Powerhouse of the Cell: Challenging the FDA’s Prohibition of Mitochondrial Replacement Therapy
Get PDFSponsor Control: A New Paradigm for Corporate Reorganization
Get PDFBankruptcy 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 that better accounts for a changed world. Today, more often than not, equity sponsors rather than senior lenders have practical control over the way that distressed companies respond to their financial problems. Lenders no longer hold the big sticks that they once wielded to establish precedence, and the people guiding today’s modal large, distressed business have powerful incentives to preserve the value of sponsor investments. The predictable effect of the new locus of control has been to stand familiar restructuring dynamics on their head. Indeed, a number of seemingly unconnected trends in reorganization practice may best be understood as resulting from sponsors’ first-order incentives to postpone a reckoning that might crystallize losses. Identifying the dynamics of sponsor control thus promises to shed light on a variety of scholarly and policy debates around corporate reorganization
Material Regulation of Out-of-State Production Processes as Impermissible Extraterritorial Law
Get PDFA 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 regulation. Under the first prong, a law violates the extraterritoriality doctrine when it materially regulates out-of-state physical production processes to prevent out-of-state harm. The test uses a factor-based inquiry to determine whether a state law constitutes material (as opposed to incidental) regulation of out-of-state production activity. Under the second prong, a law that does not materially regulate out-of-state production should be upheld as per se permissible for purposes of extraterritoriality analysis in certain circumstances. Finally, this Comment applies the proposed test to Proposition 12, the law at issue in Ross and Becerra, and argues that it conforms with the extraterritoriality doctrine because it does not materially regulate the production processes of out-of-state farmers, and because it seeks to regulate out-of-state conduct only through a sales ban attaching restrictions to such production activity. Proposition 12 should survive extraterritoriality scrutiny on these grounds, not because it avoids price controls