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Judging Bankruptcy Without Distress
No full textIn Harrington v. Purdue Pharma, the United States Supreme Court rejected the bankruptcy plan of OxyContin producer Purdue Pharma, which purported to settle claims against both Purdue (the bankruptcy debtor) and Purdue’s individual owners and managers, all members of the Sackler family who had not themselves filed for bankruptcy (the Sackler Release). Concluding that the United States Bankruptcy Code does not authorize settlement of claims against non-debtors without claimant consent, the Harrington Court appeared set to stem the tide of “bankruptcy without distress,” a flourishing practice in which solvent non-debtors (like the Sacklers) would settle their liabilities within the confines of an insolvent debtor’s bankruptcy case. Surprisingly, Justice Jackson was the only liberal Justice to join Justice Gorsuch’s strictly textualist majority opinion, even though her questions at oral argument and prior embrace of expansive bankruptcy law seemed more aligned with the functional approval of the Sackler Release found in Justice Kavanaugh’s dissent.
This Article’s central claim is that the aggregate litigation scholarship, through extended analysis and debate over the Sackler Release, has developed what Justice Jackson was looking for: a functional case for rejecting the Sackler Release. Even though the academic consensus is closer to Justice Kavanaugh’s embrace of the Sackler Release, the Article presents a case against the Sackler Release using the same framework that justified the release in the minds of scholars and Justice Kavanaugh. And it argues that the seeds of this case can be found in Justice Jackson’s questions during the Harrington oral argument.
In short, nothing about the law or facts forced plaintiffs to settle with the Sacklers in Purdue’s bankruptcy without requiring the Sacklers to (1) give each plaintiff an opportunity to opt-out of the bankruptcy settlement and (2) guarantee ongoing funding of settlement awards using their post-bankruptcy wealth. In supporting the Sackler Release, which did not allow opt-out or guarantee funding, the scholars placed significant independent weight on the value of giving “closure” to the Sacklers. But the very appeal of the Sackler Release was that the Sacklers managed to remove the bulk of their personal wealth from the territorial reach of the United States. Due to the Sacklers’ refusal to circulate any personal wealth in the United States, a condition of their own making, the Sackler Release would not have generated any of the independent “closure” value expected by supporters of the Sackler Release
Designing Related-To Bankruptcy Jurisdiction
No full textThis Note offers a framework for analyzing related-to bankruptcy jurisdiction under 28 U.S.C. § 1334 that courts can implement immediately within the bounds of the statute and case law. It argues that that the requirements for related-to jurisdiction should be better deployed in accordance with the relative merits of jurisdictional rules and standards. Part I describes the requirements that courts impose to test related-to bankruptcy jurisdiction. Part II demonstrates how the requirements for related-to jurisdiction can be better deployed in accordance with the relative merits of jurisdictional rules and standards. Part III proposes a broad threshold inquiry backstopped by a robust abstention doctrine, which will allow courts to both define bright boundaries where possible and fulfill the policy objectives of bankruptcy jurisdiction on a case-by-case basis
Built for Business: The Commercial Need for Aggregate Litigation
Get PDFCommercial actors long have argued that class actions are bad for business. But for even longer, business groups have supported other types of aggregate litigation that closely resemble class actions, such as expansive federal bankruptcy. While critics have successfully limited national aggregation via class actions, they have not even attempted to criticize aggregation via bankruptcy.
Why have business groups attacked aggregate litigation in some cases and supported it in others? This Article provides an answer by examining aggregation\u27s origins and development, and what emerges, it turns out, is very much the opposite of what aggregation\u27s pro-business critics would have us believe. Aggregate litigation is not bad for business--it was built for business. Lawmakers throughout history have provided aggregate litigation in response to demands and advocacy by wealthy commercial actors, who always have been aggregation\u27s foremost advocates and beneficiaries. Over time, different aggregate devices have emerged, prospered, and perished based on their benefits to contemporaneous market actors.
Aggregation critics never have grappled with this long history. When business groups criticize aggregate litigation, they are attacking a foundational tool of their own prosperity. Any assertion that group lawsuits stymie commercial enterprise is woefully incomplete if it does not account for the pervasive commercial need for aggregate litigation
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Built for Business: The Commercial Need for Aggregate Litigation
No full textCommercial actors long have argued that class actions are bad for business. But for even longer, business groups have supported other types of aggregate litigation that closely resemble class actions, such as expansive federal bankruptcy. While critics have successfully limited national aggregation via class actions, they have not even attempted to criticize aggregation via bankruptcy.
Why have business groups attacked aggregate litigation in some cases and supported it in others? This Article provides an answer by examining aggregation\u27s origins and development, and what emerges, it turns out, is very much the opposite of what aggregation\u27s pro-business critics would have us believe. Aggregate litigation is not bad for business--it was built for business. Lawmakers throughout history have provided aggregate litigation in response to demands and advocacy by wealthy commercial actors, who always have been aggregation\u27s foremost advocates and beneficiaries. Over time, different aggregate devices have emerged, prospered, and perished based on their benefits to contemporaneous market actors.
Aggregation critics never have grappled with this long history. When business groups criticize aggregate litigation, they are attacking a foundational tool of their own prosperity. Any assertion that group lawsuits stymie commercial enterprise is woefully incomplete if it does not account for the pervasive commercial need for aggregate litigation
The Republican Security Logic of NATO Enlargement
Get PDFThis study attempts a theoretical explanation for the United States\u27 leadership on NATO enlargement, under the past three administrations
Built for Business: The Commercial Need for Aggregate Litigation
No full textCommercial actors long have argued that class actions are bad for business. But for even longer, business groups have supported other types of aggregate litigation that closely resemble class actions, such as expansive federal bankruptcy. While critics have successfully limited national aggregation via class actions, they have not even attempted to criticize aggregation via bankruptcy.
Why have business groups attacked aggregate litigation in some cases and supported it in others? This Article provides an answer by examining aggregation’s origins and development, and what emerges, it turns out, is very much the opposite of what aggregation’s pro-business critics would have us believe. Aggregate litigation is not bad for business—it was built for business. Lawmakers throughout history have provided aggregate litigation in response to demands and advocacy by wealthy commercial actors, who always have been aggregation’s foremost advocates and beneficiaries. Over time, different aggregate devices have emerged, prospered, and perished based on their benefits to contemporaneous market actors.
Aggregation critics never have grappled with this long history. When business groups criticize aggregate litigation, they are attacking a foundational tool of their own prosperity. Any assertion that group lawsuits stymie commercial enterprise is woefully incomplete if it does not account for the pervasive commercial need for aggregate litigation
Judging Bankruptcy Without Distress
No full textIn Harrington v. Purdue Pharma, the United States Supreme Court rejected the bankruptcy plan of OxyContin producer Purdue Pharma, which purported to settle claims against both Purdue (the bankruptcy debtor) and Purdue’s individual owners and managers, all members of the Sackler family who had not themselves filed for bankruptcy (the Sackler Release). Concluding that the United States Bankruptcy Code does not authorize settlement of claims against non-debtors without claimant consent, the Harrington Court appeared set to stem the tide of “bankruptcy without distress,” a flourishing practice in which solvent non-debtors (like the Sacklers) would settle their liabilities within the confines of an insolvent debtor’s bankruptcy case. Surprisingly, Justice Jackson was the only liberal Justice to join Justice Gorsuch’s strictly textualist majority opinion, even though her questions at oral argument and prior embrace of expansive bankruptcy law seemed more aligned with the functional approval of the Sackler Release found in Justice Kavanaugh’s dissent.
This Article’s central claim is that the aggregate litigation scholarship, through extended analysis and debate over the Sackler Release, has developed what Justice Jackson was looking for: a functional case for rejecting the Sackler Release. Even though the academic consensus is closer to Justice Kavanaugh’s embrace of the Sackler Release, the Article presents a case against the Sackler Release using the same framework that justified the release in the minds of scholars and Justice Kavanaugh. And it argues that the seeds of this case can be found in Justice Jackson’s questions during the Harrington oral argument.
In short, nothing about the law or facts forced plaintiffs to settle with the Sacklers in Purdue’s bankruptcy without requiring the Sacklers to (1) give each plaintiff an opportunity to opt-out of the bankruptcy settlement and (2) guarantee ongoing funding of settlement awards using their post-bankruptcy wealth. In supporting the Sackler Release, which did not allow opt-out or guarantee funding, the scholars placed significant independent weight on the value of giving “closure” to the Sacklers. But the very appeal of the Sackler Release was that the Sacklers managed to remove the bulk of their personal wealth from the territorial reach of the United States. Due to the Sacklers’ refusal to circulate any personal wealth in the United States, a condition of their own making, the Sackler Release would not have generated any of the independent “closure” value expected by supporters of the Sackler Release
Designing Related-To Bankruptcy Jurisdiction
Get PDFThis Note offers a framework for analyzing related-to bankruptcy jurisdiction under 28 U.S.C. § 1334 that courts can implement immediately within the bounds of the statute and case law. It argues that that the requirements for related-to jurisdiction should be better deployed in accordance with the relative merits of jurisdictional rules and standards. Part I describes the requirements that courts impose to test related-to bankruptcy jurisdiction. Part II demonstrates how the requirements for related-to jurisdiction can be better deployed in accordance with the relative merits of jurisdictional rules and standards. Part III proposes a broad threshold inquiry backstopped by a robust abstention doctrine, which will allow courts to both define bright boundaries where possible and fulfill the policy objectives of bankruptcy jurisdiction on a case-by-case basis
Water Bankruptcy Through the Bankruptcy Code
Get PDFWater scarcity due to climate change is forcing the state and local government agencies that regulate water use to prioritize certain water uses and users above others. Water agencies could just stand pat and enforce existing priorities, even if doing so would cut off valuable collective uses of water that are lower in priority than uses by narrow private interests. Alternatively, the agencies could try to adapt water priorities to climate change by reducing water obligations owed to certain groups of users in order to free up water supplies for other groups of users, even if doing so would trigger a mass of litigation from users set to receive less water than they were promised. Anticipating these dynamics, water law scholars developed the concept of “water bankruptcy,” a set of principles for better resolving the multiparty lawsuits bound to follow adaptation of water priorities to climate change. To date, however, proponents of water bankruptcy in principle have urged lawmakers to amend their own state and local procedures, overlooking the possibility that water bankruptcy in practice is already available to water agencies through the federal law of municipal bankruptcy, Chapter 9 of the Federal Bankruptcy Code.
This Article is the first attempt to examine the promise of water bankruptcy through Chapter 9 of the Bankruptcy Code, which allows local government units to readjust their debt obligations into more sustainable arrangements. As it turns out, the Code makes available a litigation process that is readymade for water bankruptcy, maximizing flexibility for eligible water agencies to consolidate in a single forum all claims to specific water sources, to breach and compensate obligations owed to large groups of water users, and even to pay for emergency water supplies. Water bankruptcy through the Bankruptcy Code also would not implicate the efficacy or constitutional concerns raised by recent Chapter 9 bankruptcies of general municipalities. Faced with dwindling freshwater supplies, water agencies and advocates of water bankruptcy in principle should appreciate the promise of water bankruptcy through the Bankruptcy Code
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Designing Related-To Bankruptcy Jurisdiction
No full textThis Note offers a framework for analyzing related-to bankruptcy jurisdiction under 28 U.S.C. § 1334 that courts can implement immediately within the bounds of the statute and case law. It argues that that the requirements for related-to jurisdiction should be better deployed in accordance with the relative merits of jurisdictional rules and standards. Part I describes the requirements that courts impose to test related-to bankruptcy jurisdiction. Part II demonstrates how the requirements for related-to jurisdiction can be better deployed in accordance with the relative merits of jurisdictional rules and standards. Part III proposes a broad threshold inquiry backstopped by a robust abstention doctrine, which will allow courts to both define bright boundaries where possible and fulfill the policy objectives of bankruptcy jurisdiction on a case-by-case basis
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