July 23, 2005
Today in History: June 23
1862: Maj. Gen. Henry Wager Halleck, a successful San Francisco lawyer and railroad president, becomes General in Chief of the U.S. Army, replacing George MacClellan. Among his books is International Law, or, Rules Regulating the Intercourse of States in Peace and War (1861).
1866: Congress cuts the number of Supreme Court Justices to seven and creates the modern circuit alignment in “An Act to fix the Number of Judges of the Supreme Court of the United States, and to change certain Judicial Circuits.”
1903: Dr. Ernst Pfenning of Chicago becomes the first person to buy a Ford Model A, a two-seater runabout known as the “Fordmobile.” Cost? $750, with options including rear seat ($100), rubber roof ($30) or leather roof for ($50).
1936: U.S. Supreme Court Justice and former law professor Anthony McLeod Kennedy (Harvard Law 1961) is born in Sacramento, California.
1940: The U.S. government announces that it will not recognize the Soviet annexation of Latvia, Lithuania, and Estonia. The Soviets do it anyway.
1950: U.S. Ninth Circuit Judge Alex Kozinski (UCLA Law 1975) is born at Bucharest, Romania. He's one of the few U.S. jurists to have been a successful contestant on The Dating Game.
1955: Secretary of State, United Nations architect and Nobel Prize-winner Cordell Hull (Cumberland Law 1891) dies at Bethesda, Maryland.
1973: Philosopher and occultist Robert Anton Wilson achieves telepathic communication with extraterrestrial aliens from Sirius.
1997: Digital Equipment Co., rapidly approaching dinosaur status in the computing world, files antitrust charges against Intel Corp.
July 22, 2005
Law school gets major artwork
Law students at the University of Washington will be surrounded not only by the high-tech features of William H. Gates Hall, the school’s fine library, and a coterie of bright and energetic peers, but by world-class art. Next Tuesday, July 26, the school will unveil Doris Chase’s "Monument for Law School" (left). Chase is "a prominent national and international figure whose works are in the collections of the Museum of Modern Art, the Smithsonian and many other public institutions," and she created the Monument to honor her father and brother.
The work, with its rocket-ship-like design, contrasts law’s aspirations and its claims to soar above mere politics by showing it nevertheless firmly earthbound, anchored to its pedestal by its legs, unable to escape the forces of everyday life. The pedestal itself is a wry reference to the way lawyers tend to hold the law up as something sacred and entitled to devotion. The hole in the center of the rocket ship recognizes the critical insight that despite traditional claims of law as an autonomous and self-contained body of knowledge, there is a void at the center (the very place where the direction of the rocket ship would be set) which can be filled only by non-legal values and interests.
The legal world is welcome to attend the festivities, which will be at 10:00 a.m. at the northwest entrance to Gates Hall. RSVPs are appreciated. Email here.
Getting paid without going to court
It's axiomatic that a contract is, in the famous words of the Second Restatement, a promise "for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty." What happens when you have a contract that a court can't enforce?
Well, there's always self-help. And when self-help is used in the case of a foreign sovereign debt contract, it tends to involve warships, guns, and the U.S. Marines. In a new paper from the National Bureau of Economic Research, Supersanctions and Sovereign Debt Repayment, Kris James Mitchener (Santa Clara Econ) and Marc D. Weidenmier (Claremont-McKenna Econ) investigate the use of what they call "super-sanctions," the self-help measures to which nations resort to get the money they're owed. Here's the abstract:
Theoretical models have suggested that sanctions may be important for enforcing sovereign debt contracts (Bulow and Rogoff, 1989a, 1989b). This paper examines the role of sanctions in promoting debt repayment during the classical gold standard period. We analyze a wide range of sanctions including gunboat diplomacy, external fiscal control over a country's finances, asset seizures by private creditors, and trade sanctions. We find that "supersanctions," instances where military pressure or political control were applied in response to default, were an important and commonly used enforcement mechanism from 1870-1913. Following the implementation of supersanctions, on average, ex ante default probabilities on new debt issues fell by more than 60 percent, yield spreads declined approximately 800 basis points, and defaulting countries experienced almost a 100 percent reduction of time spent in default. We also find that debt defaulters that surrendered their fiscal sovereignty for an extended period of time were able to issue large amounts of new debt on international capital markets. Consistent with policies advocated by Caballero and Dornbusch (2002) for Argentina, our results suggest that third-party enforcement mechanisms, with the authority to enact financial and fiscal reforms, may be beneficial for resuscitating the capital market reputation of sovereign defaulters.
Today in History: July 22
1587: Settlers arrive at Roanoke Island, Virginia and build a settlement. Before a return ship can arrive, all 117 of the colonists will disappear, leaving only the word "Croatoan" carved on a tree.
1796: Agents of the Connecticut Land Co., surveying the area that will become Ohio, name a newly created township in honor of the expedition’s commander, Moses Cleaveland.
1898: Writer Stephen Vincent Benét is born at Bethlehem, Pennsylvania. His The Devil and Daniel Webster is one of the most perfect pieces of legal literature ever written.
1908: Albert Fisher founds the Fisher Body Co. to manufacture bodies for carriages and automobiles. It will later be acquired by General Motors Corp.
1923: Future Senator and Presidential candidate Robert Joseph Dole (Washburn Law 1952) is born at Russell, Kansas.
1934: Bank robber and "Public Enemy No. 1" John Dillinger is shot to death by FBI agents outside the Biograph Theater in the Lincoln Park district of Chicago. He had just seen the gangster drama Manhattan Melodrama, with Clark Gable, William Powell, and Myrna Loy.
1937: The U.S. Senate rejects President Roosevelt’s plan to increase the size of the Supreme Court by adding as many as six new seats he could fill.
1950: Canada’s tenth Prime Minister, William Lyon Mackenzie King (Toronto Law 1896) dies at his home near Ottawa.
1966: Loral Corp. yields to pressure from Austin Instruments to make important contract concessions on subcontracts for a Navy contract, a decision that will later lead to Austin Instruments Inc. v. Loral.
July 21, 2005
Calandrillo promoted; will visit at Seattle
Steve Calandrillo (U. of Washington) has a promotion and a temporary change of venue coming up. He’s been promoted by the university to professor of law, and he’ll be spending the fall semester 2005 year as a visiting professor at Seattle University.
Calandrillo earned his B.A. from UC-Berkeley in 1994 and his J.D. from Harvard in 1998, where he was a John M. Olin Fellow and a member of the Harvard Journal of Legislation. He practiced in Seattle and clerked for Judge Alfred Goodwin on the U.S Court of Appeals for the Ninth Circuit before joining the Washington faculty in 2000. He was named the school’s Professor of the Year in 2003-04. He’s also on the advisory board of LifeSharers, a group dedicated to promoting organ donation.
Should have read it before you signed
You’re bound to the terms of the contract you sign, says the Texas Supreme Court in a recent decision, whether or not you’re aware of everything that’s in it. Thus, a customer who signed a brokerage contract with an arbitration clause in it was bound to go to arbitration, even though he thought he was only using a form to change the account name and set up a margin account.
Plaintiff Keith Rohlack had, while still a minor, received a substantial cash settlement out of the death of his father. The money was invested in a custodial account with broker Edward D. Jones & Co. When he turned eighteen, Rohlack transferred the account to his own name and opened a margin account so he could speculate in technology stocks. The form he signed contained an arbitration clause. When the technology bubble burst, his investment portfolio, which involved significant technology investments bought on margin, went down badly, and he sued Edward Jones.
"Absent fraud, misrepresentation, or deceit," said the court in a per curiam decision, "a party is bound by the terms of the contract he signed, regardless of whether he read it or thought it had different terms." It went on:
Therefore, Rohlack's contention that he did not understand his signature's significance does not negate his acceptance of the contract terms. Moreover, when parties enter into an agreement based on a writing that is not ambiguous, the court will give effect to the parties' intention as expressed in the writing. Here, the agreement that Rohlack signed recited: "THIS IS A BINDING CONTRACT. I HAVE READ IT CAREFULLY BEFORE SIGNING." It further alerted him on the signature page that it incorporated an agreement to arbitrate and explained elsewhere in the agreement what that meant. Considering these undisputed facts, the only decision that the trial court could have reasonably reached was that Rohlack, by signing the agreement, had consented to arbitrate future disputes. [Citations omitted.]
In re McKinney, 2005 Tex. LEXIS 511 (July 1, 2005).
Today in History: July 21
1831: Leopold I is crowned as King of the newly independent Belgians. His military prowess is such that he had been colonel of a regiment at age 5.
1873: Jesse James and the James-Younger gang pull their first train robbery, taking $3,000 from a Chicago, Rock Island & Pacific train at Adair, Iowa.
1911: Herbert Marshall ("The Medium is the Message") McLuhan is born at Edmonton, Alberta.
1948: Film director and entrepreneur David Lewelyn Wark "D.W." Griffith, who "almost single-handedly invented modern cinema," dies at Los Angeles, California. The Directors Guild of America, embarrassed by him, will later rename its D.W. Griffith Award.
1984: According to the United Auto Workers, the first "robot related death" in the U.S. occurs when a die cast operator is crushed between the back of a robot and a safety post at a factory in Jackson, Michigan.
2002: WorldCom, formerly America’s second-biggest telephone long-distance company files for bankruptcy, the largest in U.S. history.
July 20, 2005
Navratilova, card company settle dispute
Martina Navratilova and a "gay-friendly" credit card company called Do Tell, Inc., have settled their contractual dispute. The tennis star had licensed her name to be used for the company’s "Rainbow Card," but later became "very dissatisfied" with the marketing program, which targeted Showtime TV programs "The L Word" ("Lesbian") and "Queer as Folk," which she called "depraved."
The details of the settlement were not announced.
The new issue of the Cyberspace Law Committee’s Miscellaneous Internet-Related Legal News is out. As usual, editor Vince Polley has crammed it with news across the legal gamut. The latest issue and back issues are here.
Among the interesting stories in the July 15 issue:
* Software users are banding together to create a pro-user version of the Uniform Computer Information Transactions Act as an alternative to the stalled statute.
* France and Germany have found U.S.-style anonymous whistleblower hot lines, under which employees report possible misconduct, to be illegal.
* More than 98 percent of U.S. libraries are offering free Internet connections, without even requiring the purchase of a latte.
* A British web site that offers online gambling to Americans (illegally, say prosecutors) is going public on the London Stock Exchange, probably making billionaires of its owners.
* Internet bloggers are finding themselves subject to growing attention from federal regulators.
* Australia has decided not to implement a national identity card, on the grounds that it would just make identity theft easier.
* A Florida man has been arrested for using his neighbor’s Wi-Fi signal to access the Internet on his own laptop. It’s a third-degree felony.
Today in History: July 20
1519: Lawyer Gian Antonio Facchinetti de Nuce (Bologna Law 1544) is born to a family of modest means at Cravegna, Italy. In 1591 he'll be elected Pope as Innocent IX.
1861: The new Congress of the Confederate States of America takes up residence at Richmond, Virginia.
1872: Mahlon Loomis of West Virginia receives the first patent for wireless telegraphy. In 1868 he had transmitted signals 18 miles between two mountain tops, using kites as antennas.
1885: England's Footbal Association agrees to allow professionals to compete.
1922: The League of Nations goes happily about parceling out Africa to European powers, giving Togoland (Togo and part of Ghana) to France and Tanganyika (now part of Tanzania) to Britain.
1923: José Doroteo Arango Arámbula, better known as "Pancho Villa," is assassinated at Parral, in Chihuahua, Mexico. Last words: "Don't let it end like this. Tell them I said something."
1925: Clarence Darrow cross-examines William Jennings Bryan outdoors as part of the Scopes Monkey Trial circus at Cleveland, Tennessee. Bryan wins the case, but Darrow gets all the good lines in the play.
1940: Billboard Magazine introduces its Music Popularity Chart, successor to the Hit Parade and forerunner of the Hot 100. The first number one song: Frank Sinatra's I'll Never Smile Again.
1945: The U.S. Senate ratifies the Bretton Woods Agreement, the first international monetary pact in history.
1984: Officials of the Miss America pageant ask Vanessa Williams to turn in her crown after Penthouse magazine publishes nude photos of her. She'll go on to become the most successful former Miss America of recent decades.
2001: The two-hundred year-old London Stock Exchange goes public, with stock trading under the symbol LSE.
July 19, 2005
Leib on Contract theory
In a recent article, Daniel Markovits (Yale) tackled one of the Big Issues: a general theory of contract. Now Ethan Leib (UC-Hastings) (left) takes a respectful but critical look at Markovits's thesis in Collaboration, Organizations, and Conciliation in the General Theory of Contract, forthcoming in the Quinnipiac Law Review. Here's the abstract:
This short piece exposes a central shortcoming of all general theories of contract that purport to be comprehensive and descriptive: they tend to exclude whole types of contracts to make their theories fit. As the essay explains, there are contracts between individuals (Type (1)), between organizations (Type (3)), and between individuals and organizations (Type (2)). By carefully analyzing Daniel Markovits’s recent attempt at a contract theory in his Contract and Collaboration, 113 Yale L.J. 1417 (2004), as well as looking at Schwartz and Scott’s recent effort in Contract Theory and the Limits of Contract Law, 113 Yale L.J. 541 (2003), I am able to expose how contract theorists ignore various Types of contracts to their theories’ detriment. At the conclusion, I suggest how Types of contracts are relevant to contract theory construction -- and how a focus on Types can point to a resolution of some of the ongoing debates in contract theory.
Today in History: July 19
711: An invading force of North Africans destroys the Visigothic army at the Battle of Medina Sedona, killing King Rodrigo and putting most of Iberia under Muslim control. A survivor of the battle, Pelayo of Asturias, will retreat to the northern mountains to organize resistance.
1814: American entrepreneur Samuel Colt is born at Hartford, Connecticut. "God made men," people will later say, "but Col. Colt made them equal."
1848: Led by Elizabeth Cady Stanton and Lucretia Mott, the two-day Women's Rights Convention opens at Seneca Falls, New York.
1898: American Marxist philosopher and sociologist Herbert Marcuse is born at Berlin in the German Empire.
1922: Future Dakota Wesleyan history prof and presidental candidate George Stanley McGovern is born at Avon, South Dakota.
1944: Retailer Montgomery Ward's Chicago properties are seized and Chairman Sewell Avery is carried from his office by soldiers after the firm refuses to obey what it considers to be an illegal executive order imposing a labor contract on it.
July 18, 2005
Weekly Top Ten
There's a new paper at the top of this weeks Top 10 chart, but not a new name. Government contracts continues to be hot, with a new paper by Christopher Yukins grabbing the top spot in its first week on the chart. Following are the top ten most-downloaded papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending July 17, 2005.
• 1 (-) Understanding the Current Wave of Procurement Reform - Devolution of the Contracting Function, Christopher R. Yukins (Geo. Washington).
2 (5) Contracts and the Division of Labor, Daron Acemoglu (MIT Econ), Pol Antras (Harvard Econ) & Elhanan Helpman (Tel Aviv Econ)
3 (4) The Political Economy of International Sales Law, Clayton P. Gillette (NYU) & Robert E. Scott (Virginia).
4 (6) Trust as 'Uncorporation': A Research Agenda, Robert H. Sitkoff (Northwestern).
5 (7) Juries, Judges, and Punitive Damages: Empirical Analyses using the Civil Justice Survey of State Courts 1992, 1996, and 2001 Data, Theodore Eisenberg (Cornell), Michael Heise (Cornell), Martin T. Wells (Cornell Stats), Paula Hannaford-Agor (National Center for State Courts), Neil LaFountain (NCSC), G. Thomas Munsterman (NCSC), & Brian Ostrom (NCSC).
• 6 (10) The Comparative Law and Economics of Pure Economic Loss, Francesco Parisi (Geo. Mason), Vernon V. Palmer (Tulane) & Mauro Bussani (Trieste).
7 (8) Harnessing Litigation by Contract Design, Robert E. Scott & George G. Triantis (Virginia).
8 (9) Private Contractual Alternatives to Malpractice Liability, Jennifer Arlen (NYU).
9 (-) The Lurking Rule Against Accumulations of Income, Robert H. Sitkoff (Northwestern).
10 (-) Decisionmaking & the Limits of Disclosure: The Problem of Predatory Lending, Lauren E. Willis (Loyola-Los Angeles).
What exactly is a "classic" film?
Are the films Jaws 3-D, Home Alone 2, and Smokey and the Bandit "classics"? That was the question a New York judge had to answer after Time Warner Cable sued the American Movie Classics channel for running such fare instead of the "classic" films it had agreed to air.
And the answer, said Supreme Court Justice Bernard Fried, is "no." He ruled that AMC breached its contract with Time Warner, thus allowing the cable company to drop the channel. The audio of an NPR story is here.
Cases: Student not TPB of school district contract
A high school football player who died at a YMCA outdoor facility is not a third-party beneficiary of the school's contract with the youth organization, according to a recent decision by the Georgia Court of Appeals.
Daniel Sterling, a high school football player, went to the Athens YMCA Camp in Talullah Falls, Georgia, for a three-day football training camp. Under the contract between the YMCA and the school, the school and its coaches were to be responsible for the safety of the students over the weekend. Sterling was playing on a "zip line," a cord that swimmers can use to swing and drop themselves in the lake, when he drowned. His parents sued the head coach and the school district for breach of contract, claiming that Sterling was a third party beneficiary of the agreement with the YMCA.
For a third party to have legal standing to sue on a contract, said the court, the contract language must express the parties' intent to benefit the third party or a class of third parties of which the plaintiff is a member. Here, the school and the YMCA were merely agreeing between themselves who would be responsible for accidents. There was no express intent to benefit anyone other than the two parties. Sterling therefore was not a third-party beneficiary, so summary judgment should have been granted.
Donnalley v. Sterling, 2005 Ga. App. LEXIS 764 (4th Div., July 13, 2005).
Today in History: July 18
1811: Novelist William Makepeace Thackeray is born, the son of an East India Company employee, at Calcultta (now Kolkata), India.
1867: A Parisian gardener, F. Joseph Monier, receives a patent for reinforced concrete. The insertion of steel rods makes the stuff useful for large projects for the first time.
1872: Oaxaca lawyer Benito Juárez, who rose from being a domestic servant who could not speak Spanish to being twice President of Mexico, dies at his desk in the National Palace in Mexico City.
1936: The first Oscar Mayer Wienermobile rolls out of the General Body Co. factory in Chicago.
1947: President Truman signs the Presidential Succession Act, providing that in the event the offices of President and Vice President become vacant, the Speaker of the House of Representatives shall become president, followed by the President Pro Tempore of the Senate and then members of the Cabinet in the order that their departments were created.
1950: British entrepreneur Richard Charles Nicholas Branson is born at Sharnley Green, Surrey. In 1970, at age 20, he'll begin his Virgin Group empire by starting small mail-order record store.
1968: Two former employees of Fairchild Semiconductor, Gordon Moore and Robert Noyce, incorporate their new business, which they call Intel Corp.
1969: Follow a party on Chappaquiddick Island, Senator Edward Kennedy drives his Oldsmobile off a bridge.
1969: Under pressure from the NFL, football star Joe Namath gets out of the nightclub business by selling his interest in New York's Bachelors III.
1986: One of the most profitable movies made to date, the $18 million Aliens, opens in theaters. Star Sigourney Weaver, a gun control advocate, says she's troubled about making a movie glorifying gun violence, but she gets over it.
1994: The U.S. Senate Guido Calabresi to the U.S. Court of Appeals for the Second Circuit
July 17, 2005
Hall gets promotion at Louisville
He earned his J.D. in 1993 from Cornell, where he was Articles Editor of the Cornell Law Review. He spent three years teaching at Northern Kentucky after a stint in legal practice with Cincinnati’s Taft, Stettinius & Hollister. In addition to Contracts, he teaches and writes in the area of health law, particularly on the doctor-patient relationship in managed care situations and in legal attitudes toward the mentally disabled. He’s also apparently a baseball fan, given that he’s got a piece called "Mickey Mantle and the Role of Celebrity in Regulating Organ Allocation," in a new book called Courting the Yankees: Legal Essays on the Bronx Bombers.
Cases: Policy language trumps employee representation
The provisions of the U.S. Postal Service's insurance contract trump the statements of one of its clerks to a customer, according to a federal district court in New York, and a customer who receives the policy acts unreasonably if he relies on the statements instead of the contract terms.
In the case, Arieh Gildor went to the post office in Cobleskill, New York to mail some gold rings to France. At the recommendation of an employee, he paid $49 to insure the package for $5,000. The package was not, in fact delivered, and was returned to Gildor -- but minus the gold rings. Gildor filed a claim with the USPS, which was denied on the ground that gold jewelry was explicitly excluded from coverage under the policy. Ultimately, he sued.
His first claim, negligence, was knocked out on sovereign immunity grounds, so he changed his claim to breach of contract. Trouble was, said the court, the back of the mailing label that Gildor was given listed all the prohibited items, which included both gold and jewelry. Since gold rings were clearly and unambiguously excluded from the policy, Gildor could not recover. Gildor then claimed that the post office, through its clerk, misrepresented the insurability of the rings to him. This, too, was a loser, because negligent misrepresentation is covered by the USPS's sovereign immunity. Finally, Gildor claimed equitable estoppel, claiming he relied on the statements of the clerk. But this reliance wasn't reasonable, said the court, since Gildor had been given the actual terms of the policy and should have seen that the goods were excluded. The court granted the motion for summary judgment.
Gildor v. USPS, 2005 U.S. Dist. LEXIS 13792 (N.D.N.Y., July 12, 2005).
Today in History: July 17
1787: Friedrich Krupp, the patriarch of one of the world's great industrial families is born at Essen, Germany, to a family of gunmakers. In 1811 he'll start a small steel foundry in Essen.
1790: Scots economist and philosopher Adam Smith dies at Edinburgh.
1889: California trial lawyer Erle Stanley Gardner, the creator of Perry Mason, is born at Malden, Massachusetts.
1897: The Klondike Gold Rush begins as news reaches the United States of a gold strike at Rabbit Creek near Dawson, Yukon Territory. By the end of 1898, 40,000 gold-seekers and hangers-on will arrive.
1899: Nippon Electric Corp. (now NEC) becomes the first Japanese joint venture created with foreign capital. Its partner is the Western Electric division of AT&T.
1917: In the middle of a war with Germany, Britain's royal Saxe-Coburg-Gotha family (a branch of the ancient Wettin family) changes its name to "Windsor."
1955: Walt Disney's widely ridiculed Disneyland park opens at Anaheim, California. The Disney board had opposed the project, so Walt built it with his own money.
1961: Tyrus Raymond "Ty" Cobb, the greatest player of baseball's "dead ball" era, dies at Atlanta, Georgia. Cut from his first professional team, the Augusta Tourists, his contract was sold to the Detroit Tigers in 1905 for $750.
1995: The Nasdaq stock market index, which had started at a base of 100 in 1971, closes above 1,000 for the first time. Less than five years later it will hit 5,000; today it's 2,156.78.
1997: The Wal-Mart of its day, the 117-year-old F.W. Woolworth Co. closes its its last handful of U.S. stores.