October 6, 2006
For Sale: Hedy Lamarr Contract
Hedy Lamarr was a famous Hollywood star, but she is perhaps best known today as the owner of the most famous nose in contract law history. Lamarr was not a party to Sullivan v. O'Connor, but it her unusually fine olfactory organ played a major role in that case.
You can get your own piece of Lamarr contract memorabilia this week on eBay. On sale is Lamarr's original eight=page 1947 contract with the William Morris Agency. Happy bidding.
Contract Dispute at Goodyear
The United Steel Workers announced today that 15,000 members who work at 16 Goodyear plants in the United States and Canada are going on strike today. The union had entered into a three-year agreement with Goodyear that expired in July. Talks apparently broke down over planned plant closings. The union claims that it agreed to the closing of one plant in 2003 and also accepted wage, pension and health care cuts. Given those sacrifices, the union is now unwilling to accept Goodyear's current plan, which reportedly contemplates two more plant closings.
While Goodyear has yet to issue its own press release (stay tuned for updates!), the Houston Chronicle reports that the company characterizes its offer as containing terms to which the union agreed in its contracts with other tire makers. Goodyear intends to "minimize impact" on its customers by relying on non-union plants and salaried workers at its union plants.
[Update: Still no press release from Goodyear on the strike, but follow this link for news reports on this strike gathered by LabourStart.org.]
Sometimes a Contract Spoils the Mood: Contracting Academic Judgment
Over at Prawfsblawg, Michael Dimino set off an interesting comment-fest when he asked: what do you do about the chronically unprepared student? Oxford University, it seems, has attempted a solution with “good behaviour contracts.” As we’ve mentioned before, Oxford is requiring students to sign a contract as a condition of their study. The document outlines the obligations of the student and the University, and includes requirements that students:
undertake the reading of materials, carrying out prescribed activities such as practicals, the completion of written work, attendance in tutorials and classes and lectures, and the sitting of university and internal college examinations.
The contract also warns that:
failure to abide by these regulations may lead to the imposition of disciplinary measures, which may include suspension or expulsion.
Panton argues that the contracts are redundant of the expectations that lecturers already have for student preparation, and he asks why the university now feels it needs to reduce these expectations to a legal contract. The answer he got from the University: fear of litigation. The contract is a pre-emptive measure against litigation by students concerning the University’s obligations.
Panton criticizes the contracts as infantilizing students and (ironically) employing a the “consumerist mentality” it seeks to combat in the students. But, even more compelling, he argues that “[t]he contracts will serve to undermine the kinds of informal relationships that higher education is built on.” He writes:
The new contracts. . .seem to be based on the notion that students are potentially naughty schoolchildren who need to be reminded, explicitly, of the rules and regulations. The contracts also treat university tutors as high-school teachers who teach to a set syllabus and who must advise our charges on what is expected of them at all times.
Universities are more than a direct extension of schooling, and the role of a university tutor is different to the role of a shoolteacher. The Cambridge literary critic FR Leavis said of teaching in a university: ‘I see the word “teaching” in inverted commas. I don’t like it because of the suggestion it carries of telling – authoritative telling.’ ‘Authoritative telling’ plays some role in higher education; there are certain truths and facts students must know before they can fully explore their discipline. But such ‘telling’ only provides the building blocks from which the students must begin to construct, with the help of their tutors, their own intellectual development.
The new contracts also set up an oppositional relationship between students and academics, which is likely to undermine the possibility of real intellectual engagement.
[Meredith R. Miller]
October 5, 2006
Watch out, Charlie Brown. There may be a pumpkin shortage brewing:
Two types of fungus or rot have affected crops from the Midwest to New England, causing pumpkins to develop mold in some spots and then begin decomposing, said Daniel Egel, a Purdue University Extension plant pathologist. The entire inside of the pumpkin eventually rots until the shell falls apart.
A combination of high temperatures and record rain in August has helped the fungi flourish, Egel said.
Six Degrees of Webb v. McGowin
A discussion the other day on the AALS Contracts Listserv about Webb v. McGowin prompted me to recall that one of Joe Webb's co-workers at the W.T. Smith Lumber Co. in Chapman, Alabama (left), was a log train driver named Alonzo Huble "Lon" Wiliams. Lon and his wife Lillybelle had a son, Hiram, who later became better known under his stage name, Hank Williams.
Williams wrote a song about his father and the W.T. Smith lumber operation. Here are the lyrics:
The Old Log Train
(music and lyrics by Hank Williams)
If you will listen, a song I will sing
About my daddy who ran a log train
Way down in the southland in old Ala-bam’
We lived in a place that they call Chapman town.
And late in the evening when the sun was low,
Way off in the distance you could hear the train blow.
The boys would come runnin’ and mamma would sing,
"Get the supper on the table, here comes the log train."
Every morning at the break of day,
He’d grab his lunch bucket and be on his way.
In winter or summer, sunshine or rain,
Every mornin’ he’d run that old log train.
A sweatin’ and swearin’ all day long,
Shoutin’ "Git-up there, oxen, keep movin’ along!
Load ’er up boys, cause it looks like rain,
I’ve got get rollin’ this old log train."
This story happened a long time ago.
The log train is silent; God called daddy to go.
But when I get to heaven to always remain
I’ll listen for the whistle of the old log train.
"5 NO 5 EQUAL 1ST 60,000"
Second Circuit Orders New Trial on Contract Damages
A former employee of an investment firm has successfully convinced a Second Circuit panel to order a new trial concerning contract damages in a case arising out of his enforcement of a stock option agreement. The Second Circuit ordered a new trial based on “erroneous evidentiary rulings and erroneous jury instructions by the district court.”
The Second Circuit held that the district court abused its discretion in excluding certain evidence of the stock's value. (Notably, the valuation was complicated by the fact that the breach occurred as the stock was in the IPO process.). The appellate panel held that the trial court erred by employing a bright-line rule to exclude all of the employee’s evidence concerning the value of the stock that was dated after the employer’s breach (i.e., the day the employer refused to honor the stock option). The district court had excluded the post-breach evidence to avoid a valuation of the stock based on hindsight. The Second Circuit noted:
The district judge’s [post-breach] “bright-line” ruling was too mechanical and, ultimately, deprived [the employee/plaintiff] of the full benefit of his bargain. This is problematic as the primary purpose of damages is to put the wronged party in as good a position as if the breach did not occur.
The Second Circuit also held that two aspects of the court's jury instructions constituted reversible error. First, the employee was entitled to a “knowledgeable investor” instruction (“A damages award should be based on what knowledgeable investors anticipated the future conditions and performance what be at the time of the breach.”). Second, the district court confused the law when it delivered a “wrongdoer rule” instruction (“[T]he breaching party (read: “wrongdoer”). . . must shoulder the burden of uncertainty regarding the amount of damages.”)
Boyce v. Soundview Technology Group, Inc. (2d Cir. Sept. 29, 2006).
[Meredith R. Miller]
October 4, 2006
Contracts Prof Weekly Spotlight: Kerri Lynn Stone
Kerri Stone is a 2000 graduate of New York University School of Law, where she served as Developments Editor of NYU's Journal of International Law and Politics and was named a Robert McKay Scholar. She received her B.A. in English and Comparative Literature, magna cum laude, from Columbia University. Following her law school graduation, Kerri clerked for three federal judges: Judge Michael H. Dolinger (Magistrate Judge, Southern District of New York), Judge Julio M. Fuentes (Third Circuit Court of Appeals), and Judge Maryanne Trump Barry (Third Circuit Court of Appeals). She subsequently practiced with the firm of Proskauer Rose, LLP, as an associate in both the Litigation and the Labor and Employment Departments, and she was an adjunct professor of Business Law at the Business School of Montclair State University in Upper Montclair, New Jersey from 2001-2005.
Kerri is the author of four articles. The first three were published in the North Atlantic Regional Business Law Association's 2003 Business Law Review, the Columbia Journal of Gender & Law, and the NYU Journal of International Law and Politics, and her most recent article will be published in the Hastings Law Journal. Her areas of scholarship and teaching experience include employment law and discrimination, torts, disability law, and contracts.
Kerri is married to another lawyer, Josh, and lives on the upper west side of Manhattan. In her spare time, she enjoys taking jazz dance classes at Manhattan's 92nd Street Y, skiing beginner ski trails with her husband, and hanging out with her mom.
October 3, 2006
Hawai’i Supreme Court Enforces Non-Compete
The Supreme Court of Hawai’i recently enforced a non-compete
agreement and upheld an order enjoining an employee from working as a “briefer”
in the State of
The court held that:
(1) training that provides skills beyond those of a general nature may be considered in weighing the reasonableness of a non-competition covenant . . ., when such training is combined with trade secrets, confidential information, or special customer relationships weighing in favor of a protectable business interest, (2) the finding by the circuit court. . . that the training of a briefer such as [the employee] is "unique" was not clearly erroneous in light of the evidence in the record, (3) under the circumstances of this case, the court did not abuse its discretion in ruling that the reduction in [the employee’s] salary by [the employer] did not amount to "unclean hands," (4) the court did not err in ruling that [the employee] suffered irreparable harm from [the employer’s] continued work as a briefer following her resignation, and (5) the court did not err in concluding that the three-year non-competition period was reasonable.
The 7’s Enterprises, Inc. v. Del Rosario, __ P.2d __, 2006
WL 2620637 (
[Meredith R. Miller]
October 2, 2006
Dance 10, Bargaining Skills 3
The Guardian has picked up a story originally reported in The New York Times (whose website is not available to the unregistered) about the original dancers who sold their life stories to Michael Bennett for $1 in return for a chance to play themselves on Broadway in A Chorus Line. Perhaps in the hope that his conduct might one day become the basis for a Contracts course hypothetical, Mr. Bennett later agreed to pay the dancers some royalties for the original production, which provided up to $10,000 a year for the dancers
Now the show is being revived, but the executor of Bennett's estate has apparently concuded that the dancers are not entitled to their share of the take on the revival. The dancers are consulting with attorneys but "acknowledge that they are in a tough place," according to the Times.
Limerick of the Week
Last week, I taught the companion cases, Hill v. Gateway 2000 and Klocek v. Gateway. I thought it appropriate to provide my students with companion Limericks:
Hill v. Gateway 2000
Could a problem with contract formation
Save the Hills from forced arbitration?
No, the court will compel
(And consign you to Dell).
It ain't court, but it sure beats damnation.
Klocek v. Gateway
UCC Section 2-207
Provided the unlikely leaven.
Ralph Nader is smiling,
And consumers are filing
In Kansas, the new plaintiffs' heaven.
I welcome suggestions for improvements of these Limericks.
Okay, Maybe the Kid Isn’t William Story's Nephew
A loving London dad has been stuck with £250,000 in legal fees after losing his breach of contract action against Marlborough College. The extremely expensive ($41,000 a year) prep school says it bounced his son, 17-year-old Rhys Gray for an "appalling" record of "swearing, smoking, and bullying." His father claimed the real reason was his son’s learning difficulties, and says he was entitled to a hearing
A three-judge panel ruled that since young Gray could be expelled for either "poor progress" or "misconduct," there was no merit to the breach of contract claim. (Top left: Old Marlburian School Tie, which Rhys will presumably not now be entitled to wear.)
Law Prof Wins K Case
A tenured University of Calgary law professor, fired for failing to return from his sabbatical on time, has won his breach of contract claim against the University. An Alberta small claims judge found that the University was negligent and breached its contract with Peter Bowal, but that there was no bad faith.
Bowel, a law professor in the University's Haskayne School of Business, spent his sabbatical as a fellow at the United States Supreme Court. Interestingly, the school features him on its "Great Teachers at U of C" web page.
We Have Some Good News, and Some Bad News
The town of Huntington, Arkansas (pop. 688), won the breach of contract case filed against it by its former police chief -- but lost the chief’s wrongful termination suit because it fired him in retaliation for bringing it.
After the Huntington Town Council decided to stop letting Chief Robert Mikles use a city vehicle for his personal use, Mikles sued. The Council fired Mikles. The Arkansas Court of Appeals held that refusing to let him use a city vehicle was not breach of Mikles’s contract, but that the Council acted improperly when it fired him in retaliation for the lawsuit.
October 1, 2006
Film Clips: Telephone Scams
Duckman: She's a bigger ripoff than those talk-to-a-nympho-in-prison hotlines that double charge you on your phone bill when they know you can’t do a thing about it ’cause you can't tell anyone you called them in the first place . . . so I heard.
Bank Seeks Cert in Contract Case
A fourteen-year-old breach of contract case against the federal government may go yet another round, if the U.S. Supreme Court decides to grant cert. True, cert is about as likely in a contract case as Elvis still being alive, but the directors of Rhode Island’s late Old Stone Bank will give it a shot, after the Federal Circuit slashed their contract verdict against the government by $112 million.
Back in 1984-85, the feds apparently encouraged Old Stone to take over a pair of ailing saving and loans, promising that Old Stone in return could use some creative accounting to keep its balance sheet from going south. After Old Stone took over the institutions, the government disallowed the accounting treating, leading to Old South’s ultimate decline. The Court of Federal Claims hit the government with a $192.5 million judgment, which the Federal Circuit reduced to $74.5 million.
The Old Stone Bank building (the dome is visible against the skyline, top left) was sold to Brown University by the Resolution Trust Corporation, and will now be a museum.
Following up our post of a couple of days ago, the Wilmington North Carolina Business Law and Litigation Attorney Blog weighs in on whether necessary preparations for Ramadan would excuse a hotel’s breach of its promise to have a tent available for a wedding.