Thursday, February 26, 2015
Two contracts issues have reappeared recently and both greatly affect the earning abilities of California citrus farmers, among others: the ability to ship products and the ability to grow them in the first place.
The shipping situation was - and still is - affected greatly by the recent employment contract dispute between shipping companies and dockworkers. Recently, the parties reached a tentative deal on a new five-year contract after months of discussions that ended with a roughly 3% wage increase each year, a hike in pensions and continued union jurisdiction over the maintenance of truck trailers. While the dispute was going on, many oranges destined for Chinese New Year celebrations overseas rotted away as activities in and around the ports of Los Angeles and Long Beach were impacted. The docks still aren’t expected to return to normal until well into the season for Valencia oranges and past the season for navel oranges. Importers of cars, among other things, have also recently expressed their problems keeping up with the demand for imported cars (which is huge in California).
For citrus and other farmers, the shipping problem is exacerbated by the ongoing very severe drought that California is experiencing for the fourth year in a row and that so far has resulted in 41% of the state finding itself in the most severe category of water shortages.
While farmers up and down California’s agricultural San Joaquin Valley vehemently protest
regulations limiting their access to freshwater, others are taking matters into their own hands: they simply steal water. From the apparently more and more typical situation of subcontractors using fire hydrants without permits to people driving away with water from fire hydrants in trucks, siphoning it off canals, or tinkering with the pipes of their neighbors or local water providers, farmers are not the only ones getting desperate for water.
Since we are talking California, there has to be a “weird” twist to the story: in the Silicon Valley, a water district has removed irrigation pipes that rangers say allowed … a nudist colony to make unauthorized water diversions from a waterfall.
There is even a phrase for thieves of this nature: “water bandits.” This situation is only about to get worse as the drought is predicted at above 80% certainty to become the worst in 1,000 years. Some cities such as Los Angeles are offering tax initiatives for removing residential lawns. Nonetheless, Californians will still have to grapple with the contractual and other rights to access to water – saline or otherwise - for some time to come.
Things may be a big sleepy here on the blog for the next two weeks. I leave today for a two-week Spring Break course with my law students.
I hope that I will be able to post a few times during the trip, at least keeping up with our regular weekly features, but things might get a big hectic once I leave the country.
Tuesday, February 24, 2015
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Monday, February 23, 2015
2012 American Idol winner Phillip Phillips has lodged a “bombshell petition” with the California Labor Commissioner seeking to void contracts that Phillips now finds manipulative, oppressive, and “fatally conflicted.”
Before winning season 11 of “American Idol,” Phillips signed a series of contracts with show producer “19 Entertainment” governing such issues as his management, recording and merchandising activities. These contracts are allegedly very favorable to 19 Entertainment, for example allowing the company as much as a 40% share of any moneys made from endorsements, withholding information from Phillips about aspects of his contractual performance such as the name of his album before it was announced publicly, and requiring Phillips to (once) perform a live show once without compensation. 19 Entertainment has also lined up such gigs for Phillips as performing at a World Series Game, appearing on “Ellen,” the “Today Show,” and “The View.”
It is apparently not unusual for those on successful TV reality shows to renegotiate deals at some point once their career gets underway. Phillips claims that he too frequently requested this, but that 19 Entertainment turned his requests down. Can he really expect them to agree to post-hoc contract modifications?
Very arguably not. Under the notion of a pre-existing legal duty, a party simply cannot expect that the other party to a contract should have to or, much less, should be willing to change the contractually expected exchange of performances. This seems to be especially so in relation to TV reality shows where the entire risk/benefit analysis to the producer is that the “stars” may or may not hit it big. For hopeful stars, the same considerations apply: their contracts may lead them to fame and fortune… or not. That’s the whole idea behind these types of contracts. Of course, if industry practice is to change the contracts along the way and if both parties are willing to do so, they are free to do so. Otherwise, the standards for contractual modifications are probably the same for entertainment stars as for “regular” contractual parties.
Another issue in this case is whether an “agent” is a company or a physical person. Under the California Talent Agencies Act (“TAA”), only licensed “talent agents” can procure employment for clients. Phillips is attempting to apply the TAA to entertainment companies like 19 Entertainment. If Phillips is successful, the ramifications may be significant for the entertainment industry in which companies very often negotiate deals with performers without taking the TAA into account. In Citizens United v. Federal Election Commission, the United States Supreme Court famously gave personal rights to corporations, albeit only in the election context. Time will tell how California looks at the issue of corporate personhood and responsibilities in the entertainment context.
Adjudications under the controversial TAA are notoriously slow and could leave contractual parites in “limbo” for a very long time. Time and patience is not what Hollywood parties are known to have a lot of, so stay tuned for the outcome of this dispute.
This Article offers a novel interpretation of contract law, which I call “Contract as Empowerment”. On this view, contract law is neither a mere mechanism to promote efficiency nor a mere reflection of any familiar moral norm—such as norms of promise keeping, property, or corrective justice. Contract law is instead a mechanism of empowerment: it empowers people to use legally enforceable promises as tools to influence other people’s actions and thereby meet a broad range of human needs and interests. It also empowers people in a special way, which reflects a moral ideal of equal respect for persons. This fact explains why contract law can produce genuine legal obligations and is not just a system of coercion.
The purpose of this Article is to introduce contract as empowerment and argue that it reflects the best general interpretation of contract. Contract as empowerment is an “interpretive” theory in the sense that it is simultaneously descriptive, explaining what contract law is, and normative, explaining what contract law should be.
To support contract as empowerment’s interpretive credentials, I identify a core set of doctrines and puzzles that are particularly well suited to testing competing interpretations of contract. I argue that contract as empowerment is uniquely capable of harmonizing this entire constellation of doctrines while explaining the legally obligating force of contracts. Along the way, contract as empowerment offers (1) a more penetrating account of contractual remedies than exists in the current literature; (2) a more compelling account of the consideration requirement and its standard exceptions; and (3) a concrete framework to determine the appropriate role of certain doctrines—like unconscionability—that appear to limit freedom of contract. Contract as empowerment also explains the main differences between claims for breach of contract, promissory estoppel, restitution and quasi-contract. It explains key doctrines and answers key puzzles at each basic stage of contract analysis: formation, interpretation and construction, performance and breach, the standard defenses and the standard remedies.
The whole of this explanation is, moreover, greater than the sum of its parts. Because of its harmonizing power, contract as empowerment demonstrates how a broad range of seemingly incompatible surface values in modern contract law can work together—each serving its own distinctive but partial role—to serve a more fundamental principle distinctive to contract. These surface values include the values of fidelity, autonomy, liberty, efficiency, fairness, trust, reliance and assurance. Although many people think that contract law must involve trade offs between these values, contract as empowerment suggests that tensions between them are not always real. So long as the complex system of rules that governs contracts is fashioned in the right way, these doctrines can work together to serve a deeper and normatively satisfying principle distinctive to contract. This framework can therefore be used to guide legal reform and identify places where market regulation is warranted by the principles of contract in many different contexts of exchange—from those involving consumer goods to labor, finance, credit, landlord-tenant, home mortgages and many others.
There is a further implication of contract as empowerment. Contract as empowerment absorbs many economic insights but gives them a fundamentally different interpretation. It suggests that contracting and modern market activities are not simply spheres where self-interest runs wild. They are instead spheres of moral interaction, which can engage people’s natural sense of obligation and generate genuine legal obligations—at least so long as contract law is simultaneously personally empowering and reflective of a moral ideal of equal respect for persons. An important moral fabric has, in other words, been running through contract law and many forms of modern economic activity for some time now. This fabric has been obscured by classical economic interpretations but cannot be ignored in any true social science of the phenomena. Understanding this moral fabric can help people lead better and more integrated lives, as both moral and economic agents. We must, however, learn to strengthen this fabric and protect it from growing tear.
Thursday, February 19, 2015
I never met Professor Chirelstein, but his book (at left) was a revelation to me. I read it while taking first year contracts. My first year contracts course was rigorous and stimulating, but Chirelstein's book gave me my first inkling that contracts law and lore could be entertaining and fun. I brought that edition with me to work, where it sat in my office until it went down with the World Trade Center. When I became a contracts prof, I started getting the new editions, and I was always happy to see how the book was updated. It still sits on my shelf as a trusted reference book that I recommend to students, hoping to kindle in them the same enthusiasm for the subject that it kindled in me.
A notice is available on the Columbia Law School website and in the New York Times.
Wednesday, February 18, 2015
Sarah Abramowicz, Contractualizing Custody, 83 Fordham L. Rev. 67 (2014)
Rachel Arnow-Richman, Mainstreaming Employment Contract Law: The Common Law Case for Reasonable Notice of Termination, 66 Fla. L. Rev. 1513 (2014)
Daniel P. O'Gorman, Contract Law and the Hand Formula, 75 La. L. Rev. 127 (2014)
Kaiponanea T. Matsumura, Binding Future Selves, 75 La. L. Rev. 71 (2014)
Benjamin Means, The Contractual Foundation of Family-Business Law, 75 Ohio St. L.J. 675 (2014)
Glenn D. West, That Pesky Little Thing Called Fraud: An Examination of Buyers' Insistence upon (and Sellers' Too Ready Acceptance of) Undefined "Fraud Carve-Outs" in Acquisition Agreements. 69 Bus. Law. 1049 (2014)
For those of you who are still trying to decide whether or not to attend, it looks like a great conference, featuring two of our bloggers, Nancy Kim and Myanna Dellinger.
10th International Conference on Contracts
William S. Boyd School of Law, UNLV
February 27 & 28, 2015
8:15-8:45 Registration and Continental Breakfast (Moot Court Lobby)
8:45-9:00 Welcome and Announcements (Moot Court Auditorium)
9:00-10:45 Whose Contract Law Is It Anyway? (Moot Court Auditorium)
Chair: Dov Waisman
Danielle Hart, How Does Bargaining Power Affect Contract Litigation Outcomes?
Larry DiMatteo, How Private is Private Contract Law?
H.G. Prince, How Does the California Supreme Court’s Contracts Jurisprudence Relate to Its Ideological Composition?
Hila Keren, Whose Freedom of Contract?
Consent (or Lack Thereof) (BSL 102)
Shawn Bayern, Offer and Acceptance in Modern Contract Law: A Needless Concept
Chunlin Leonhard, Consent in Contract: A Dangerous Fiction
Kenneth Ching, What We Consent to When We Consent to Form Contracts: Market Price
Eric Zaks, Bonding and Contract Drafting: Paying a Premium for Foregoing Genuine Consent
11:00-12:30 Contract Terms I (Moot Court Auditorium)
Royce Barondes, Frictions and the Persistence of Inferior Contract Terms
Mark Gergen, Privity's Shadow: Exculpatory Terms in Extended Forms of Private Ordering
Joshua Silverstein, Using the West Digest System as a Data Collection and Coding Device for Empirical Legal Scholarship: Demonstrating the Method Via a Study of Contract Interpretation
Comparative and International I (BSL 102)
Mateja Djurovic, Europeanisation of Contract Law Through the Judicial Activity of the European Court of Justice
Glennys Spence, A Pound of Flesh: A Comparative Analysis of the Group of Companies Doctrine and the Alter Ego Theory in International Commercial Arbitration
Jane Winn, Contracting Out of the Nation State: The Role of Global Private Regulators
12:30-1:45 Lunch (Barrick Museum Garden)
1:45-3:30 Roundtable: Perspectives on the Restatement (Third) of the Law of Consumer Contracts (Moot Court Auditorium)
Chair: Omri Ben-Shahar (U. of Chicago)
Robin Kar (U. of Illinois)
Nancy Kim (California Western)
Gregory Klass (Georgetown)
David McGowan (U. of San Diego)
3:30-3:45 Break (Moot Court Lobby)
3:45-5:30 Consumer Protection (Moot Court Auditorium)
Susanne Augenhofer, Self-Regulation and the Interface of Consumer Protection and Corporate Governance
David Friedman, Addressing Fictitious Pricing: Discounting of Retail Goods and Deceptive Prior-Reference Pricing
Timothy Hall, Contractual Limitation of Personal Fitness and Health Data Tracking: An Empirical Analysis
Jim Hawkins, Are Bigger Companies Better for Low-Income Borrowers?: Evidence from Payday and Title Loan Advertisements
Performance & Enforcement (BSL 102)
Pamela Edwards, “The Best Interests of the League”: Contractual Limits of Sports Leagues Commissioners' Powers to Discipline Team Owners
Orit Gan, The Justice Element of Promissory Estoppel
Victor Goldberg, Buffalo’s Field of Dreams: Kenford Co. v. Erie County
Jennifer Martin, Avoiding Unpleasant Surprises in Resales Under 2-706
6:00-9:00 Reception & Dinner (Barrick Museum Exhibition Hall)
8:30-9:00 Breakfast (Moot Court Lobby)
9:00-10:30 Storytelling and Contracts (Moot Court Auditorium)
Chair: Keith Rowley
Lenora Ledwon, Bonds, Promises, and Contracts in the Narco-Western: Freedom of (and From) Contract in Breaking Bad
Deborah Post, Story Telling and Normative Analysis
Debora Threedy, Cooper on Contracts: Popular Culture and the Paradox of Relational Contracts
Comparative and International II (BSL 102)
Myanna Dellinger, Rethinking Force Majeure in U.S. and International Contracts Law
Larry DiMatteo, A Case Study in Comparative Contract Law: Late Acceptance, Right to Cure, and Anticipatory Repudiation in Common, Civil, and Chinese Contract Laws
Irina Sakharova, Finance Lease Contracts: International and Comparative Perspectives
10:45-12:15 Digital Giants Gone Wild! (Moot Court Auditorium)
Michael Rustad & Thomas Koenig, Wolves of the World Wide Web: Reforming Social Media Provider’s Contracting Practices
Nancy Kim, Internet Giants as Quasi-Governmental Actors and the Limits of Contractual Consent
Joasia Luzak, Wanted: A Bigger Stick – On Unfair Terms in Consumer Contracts with Online Service Providers
Sacred Cows (BSL 102)
Mark Burge, Thinking Outside the Four Corners of Contract Doctrine in the Legal Education Crisis
Victor Goldberg, Rethinking Jacob and Youngs v. Kent
Jeff Lipshaw, Does Contract Theory Matter?
12:15-1:45 Lunch (RAJ 4th Floor Faculty Lounge)
Keynote: Stewart Macaulay
Comments: Chuck Knapp
1:45-3:30 Roundtable: Perspectives on More Than You Wanted to Know: The Failure of Mandated Disclosure (Moot Court Auditorium)
Chair: Omri Ben-Shahar (U. of Chicago)
Susanne Augenhofer (Humboldt U.-Berlin)
Jeffrey Stempel (UNLV)
Stacey Tovino (UNLV)
3:30-3:45 Break (Moot Court Lobby)
3:45-5:15 Contract and Families (Moot Court Auditorium)
Erez Aloni, Mistaking Neoclassicism for Pluralism in Family Law
Christie Matthews, Contract Law, Race, and Intrafamilial Transactions
Contract Terms II (BSL 102)
Sid DeLong, Construction Contracts (N.B.: It’s not what you think)
Peter Gerhart, Good Faith Contract Performance and the Reasonable Person
Allen Kamp, UCC Interpretation versus Plain Meaning Interpretation: A Question of Purpose
5:15-5:30 Conference Wrap-Up (Moot Court Auditorium)
According to this story in the LA Times, James and Catherine Emmi are seeking the return of $3 million that they have already donated as part of a $12 million charitable pledge to Chapman University. They are also asking the University to renounce any claim to the remaining $9 million. If the account is accurate, the Emmis seem to be claiming that:
- they never made the $12 million pledge;
- the University took advantage of James Emmi's "confusion in his old age" and preyed on him for the donation (are they alleging mental incapacity or undue influence?);
- the University harassed the couple by inviting them to events, sending them cards and "referring to them as family";
- the University breached its agreement with the Emmis by
- not publicly recognizing them in a 2013 ceremony, and
- not making sufficient progress on "Emmi Hall."
It is not clear how the Emmis account for their having already made a $3 million payment towards the $12 million pledge that they claim they never made.
[H/T Miriam Cherry]
Tuesday, February 17, 2015
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I've been away from the submission process for a few years. In the meantime, Scholastica has entered the picture, which from an author's view is simply an expensive headache, and more journals are encouraging authors to submit directly through either e-mail or their own online submissions process.
Having been a historian before becoming a law professor, I am still grateful for the advantages of student-edited law journals and authors' ability to submit to scores of journals simultaneously. I still believe that this process is better for authors and not significantly less arbitrary that double-blind peer review. Lots of scholarship gets published that does not end up getting used or cited under both systems, but the peer review process banishes lots of possibly meritorious scholarship to the dung-heap of history based on the opinions of two people whose reasoning might be insufficient to justify such a heavy penalty.
That said, I do find a new feature of online submission processes disquieting. At least one journal that encourages authors to submit through their online submission form features a Submission Agreement that includes a link to a separate page containing the journal's "attribution and usage policies." The latter are incorporated by reference, and thus one must agree to them in advance before submitting the article. There is nothing particularly onerous in the Submission Agreement or the usage policies, but the problem is that authors submit to dozens or scores of journals. The journals cannot really expect authors (or their administrative assistants who submit on their behalves) to read through boilerplate terms. So there we have it -- forms that purport to bind law professors to terms to which they have not meaningfully consented. This is especially ironic if, like me, you have been writing about the dangers of form contracts and the degraded version of "consent" in this context.
The practice is especially irksome as the submission process does not otherwise involve a contract. When I submit my article to multiple journals for publication, I am submitting an invitation for offers. I have no obligation to the journals, and they have no obligation to me. They don't even have to read my piece before rejecting it, nor do they have to respond in any way to me. And if they do offer to accept my piece (which, note, is typically described as an "offer to publish" not as an "acceptance"), I can reject that offer and go merrily on my way.
The introduction of form contracts at the submission state -- a point at which the parties have no legal relationship -- is simply unnecessary.
Monday, February 16, 2015
An interesting test for contracts rights of first refusal. As reported here in Indianapolis Business Journal (IBJ.com), an Indianapolis-based media company, Emmis Communications (Emmis) is suing a Los Angeles radio personality Kurt Alexander (known as "Big Boy"). The latter received a generous offer from iHeartMedia, which Emmis claims to have matched. Big Boy is jumping ships nonetheless, so Emmis is suing for breach of contract.
According to this account in the Bangor Daily, a Maine author, Tess Garritsen will get to refile her claims against Warner Bros. for breach of contract in connection with the studio's film, Gravity. A District Court in California dismissed her complaint but has allowed her twenty days to amend and refile. The complaint is based on a $1 million contract Gerritsen signed in 1999 to sell the book’s feature film rights to a company that was eventually purchased by Warner Bros. Gerritsen has admitted that the film "is not based on" her book, but she asserts that the book clearly inspired the film.
According to this story on NJ.com, a Federal District Judge rejected a motion to set aside a $7.3 million jury award in Wendy Starland's suit against record producer Rob Fusari. The payoff was in consideration of Starland's discovery of Stefani Germanotta, aka Lady Gaga (pictured).
Back in 2013, we mused about the seeming disconnect between public outrage at NSA data mining and the lack of comparable outrage with respect to private data mining. Nancy Kim and I have been writing in this area, and a recent report in the ABA Journal provides additional fodder for our scholarship.
One of the things that makes television's "smart" these days is that they have the ability to respond to voice commands. If you have this feature on, the television transmits your information to a third party, according to Samsung. If you turn the voice recognition feature off, your television still gathers the data but it does not transmit it.
Thursday, February 12, 2015
This year, I am teaching a bar preparation course on contracts, which is being offered for the first time at my Law School. This is a lot of fun for me -- I like teaching contracts both semesters because it keeps my mind more focused on the subject. It's also fun to teach the material in a different way -- no cases, as some familiarity with the case law is assumed at this point, so I just give mini refresher lectures and then move on to the homework assignment.
So it's fun, but it's also a lot of work. I give my students four multiple choice questions each day, and they have to turn in their answers -- explaining why the right answer is wrong and the wrong answers are wrong. The idea is to both solidify their understanding of the doctrine and alert them to the strategy behind bar exam "distractors" -- that is, wrong answers that are trying to trick students into mistaking them for correct answers. Most days, they also have to write a short essay, designed to be akin to MEE questions.
Because I am teaching such a course myself, I read with some interest David Frakt's recent post on The Faculty Lounge on the value of in-house bar prep courses. But I was taken aback by the comments. The anonymous or pseudonymous commentators asked the following rhetorical questions:
- Does bar prep make students better lawyers?
- What good is passing the bar when there are no jobs for lawyers anyway?
- Don't law schools have an obligation to refrain from flooding the market with unemployable lawyers?
I think this is a case of massive anger that is massively misdirected. Students are in law school. They want to stay in law school and they want to become lawyers. I have met with many students facing dismissal from my Law School for poor academic performance. The ones I have spoken to all are willing to do whatever it takes to stay in, and they are furious with us when we dismiss them. So we put the time and the energy into bar prep courses because it is what our students need. Some of them need it because they won't do the work without the additional kick in the pants. Others need it because they have many natural gifts that will make them great lawyers, but excelling at standardized tests is not one of them. We are trying to get them over that hurdle so that they can have the careers for which they are otherwise qualified.
I certainly understand the anger of the unemployed law students. I was an unemployed Ph.D. before I went to law school. I know what professional devastation feels like. It seems like the "Law School Scam" crowd thinks the solution is to just shut law schools like the one I teach at. But how would throwing me, my colleagues, and our support staff out of work improve the situation? It certainly would not improve things for the students we serve, most of whom pass the bar, find work, and do better than they would have done without their degrees. Law school opened for me a range of career options that would have been completely unthinkable without my J.D. Why should that opportunity be denied to the current generation of potential law students?
We just received the sad news of Chancellor John E. Murray's death, at age 82. An obituary can be found here in the Pittsburgh Post-Gazette. I met Chancellor Murray only once, at the International Conference on Contracts two years ago at which we honored him. That being the case, I am not well positioned to post a remembrance, and I hope our readers will avail themselves of the comments space to share their recollections.
But I will say this. Less than two weeks ago, Chancellor Murray chimed in on a thread on the Contracts Prof listserv. He shared a sober, scholarly rumination on the parol evidence rule and the CISG. Two weeks earlier, he posted a succinct and complete answer to a question that I had posed on the listserv. According to the Post-Gazette report, on the day he died, Chancellor Murray thought to get word to his law school Dean that he would need somebody to cover his classes the next day. From what little I know of him, I can say that he was absolutely dedicated to his students and his colleagues, and he died with his contracts law boots on.
Wednesday, February 11, 2015
Property development is often considered a way for local communities to earn more taxes and evolve with times in general. But when construction and other development is approved in geologically risk areas such as flood zones and things go awfully wrong, is this a mere property and contracts issue, or may criminal liability lie?
In France, the answer is the latter. The former mayor of the small French seaside town La Faute-sur-Mer was just sentenced to jail for four years for deliberately hiding flood risks so that he and the town could benefit from the “cash cow” of property development, a French court has held. His deputy mayor received a two-year sentence in the same plot.
In 2010, the cyclone Xynthia hit western Europe and knocked down seawalls in the French town, leading to severe floods and 29 deaths.
Wait… a cyclone in France? Yes. Climate change is real and it’s here. Unless we do something about it (which apparently we don’t), things will only get worse. As on-the-ground steps that could prevent extreme results such as the above are often simply ignored or postponed while more and more research is done and money saved at various government scales, lawsuits will necessarily follow. The legal disciplines, including contracts law, will have to conform to the new realities of a rapidly changing climate. For starters, we need to seriously question the wisdom and continued desirability of constructing more and more homes in coastal and other flood prone areas. Ignoring known risks is, well, criminal.
Friend of the blog, Miriam Cherry (pictured) is quoted in this story about a spat between Facebook CEO Mark Zuckerberg and a former neighbor. The story seems much creepier than the classic icehouse case, Mitchill v. Lath. Here, plaintiff Mircea Voskerician claims he offered to sell his house to Zuckerberg after pointing out to Zuckerberg that Voskerician was planning to build a large house that overlooked Zuckerberg's master bedroom. Voskerician alleges that he sold the property to Zuckerberg at a significant discount in return for an oral promise that Zuckerberg would introduce Voskerician, a real estate developer, to Zuckerberg's Silicon Valley contacts.
Voskerician alleges that Zuckerberg has not honored his end of the deal. Zuckerberg seems to be denying there was any such deal. So the interesting contracts question is whether the parol evidence rule will permit introduction of Voskerician's evidence of the oral promise. Noting that California is quite permissive in the admission of parol evidence, Professor Cherry suggests that Voskerician will be permitted to introduce the evidence.
If the newspaper account cited above is accurate, it is hard to imagine how Zuckerberg's introduction would have helped Mr. Voskerician. It might run something like this: "Hey there, Captain of Virtual Industry! Let me introduce you to this man, here, who was almost my backyard neighbor. He threatened to do a Rear Window number on me unless I bought him out. Would you like to do some business with him?"
Tuesday, February 10, 2015
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In Sussex v. U.S. Dist. Ct. for the Dt. of Nevada, Las Vegas, Petitioners filed a writ of mandamus seeking to overturn the District Court's disqualification of an arbitrator for "evident partiality." The underlying arbitration involved several civil actions against Turnberry/MGM Grand Towers, LLC, the developer and seller of a condominium project. Turnberry sought removal of the arbitrator, who had become involved in business ventures, which he characterized as "completely dormant," through which he sought to create a fund as an investment vehicle that would provide capital for litigation. The District Court granted Turnberry's motion to disqualify the arbitrator.
On a writ of mandamus, the Ninth Circuit applies the "clear error" standard. The Ninth Circuit articulated its test for when a District Court may intervene in an arbitration in Aerojet-General Corp. v. Am. Arbitration Ass’n, 478 F.2d 248 (9th Cir. 1973). That test provides that a court should intervene only in "extreme cases." The Ninth Circuit characterized this standard as very close to a blanket rule against court intervention in an ongoing arbitration.
Applying this standard, the Ninth Circuit found that the District Court had clearly erred in disqualifying the arbitrator. The Court stressed that this case, in which it was not established that the arbitrator's modest business venture would prejudice him against either party, was "emphatically not" the sort of extreme case that would warrant court intervention.
The Petition was granted.
Monday, February 9, 2015
According to Randall Roberts in the L.A. Times, a Los Angeles Superior Court jury ruled for the Sylvester Stewart (aka funk legend Sly Stone, at left) in his action against his ex-manager Gerald Goldstein, attorney Glenn Stone and Even St. Productions Ltd. It's the usual story. Sly Stone suffered from drug addiction and ran into hard times when defendants proposed a commercial association in 1989. Stone successfully alleged unjust enrichment and breach of contract, claiming that he never saw the money that the enterprise earned through his music. A jury awarded Stone $5 million. Even St. Productions filed for bankruptcy in 2013, and the other defendants say that they plan to appeal.
According to Fox Connecticut, a fraternity member who was suspended from Quinnipiac University in a hazing incident is suing the university and four of its officers for breach of contract. He alleges that his tuition payment entailed a contractual commitment and that the university did not live up to its end of the bargain because he was not fairly treated. He has other claims against the university sounding in Connecticut's Unfair Trade Practices Statute and in the implied duty of good faith and fair dealing.
And . . . at long last, the Steven Salaita saga has made its way into a complaint. We blogged about this story before here and here and here. His 39-page complaint alleges statutory violations under 42 USC §§ 1983 and 1985, as well as promissory estoppel, breach of contract, tortious interference, and spoilation of evidence.