ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, August 22, 2008

Court Addresses Class Action Waiver in Commercial Contract

Plaintiff advertisers commenced a class action suit against Yahoo!, alleging that Yahoo! breached its advertising agreement in numerous ways. For example, plaintiffs alleged that Yahoo! promised to place plaintiffs' advertisements in a way that targeted plaintiffs' likely customers but, instead, Yahoo! placed ads in an untargeted way.

Yahoo! moved for summary judgment, pointing to a class action waiver in its standard form advertising agreement. The plaintiffs argued that this class action waiver was unenforceable. Yahoo! argued that the Discover Bank line of cases did not apply because the advertisement agreement was not a consumer contract but, rather, between two commercial entities. The District Court for the Central District of California held that "although Discover Bank's holding addresses only consumer contracts, nothing in that decision forecloses the possibility that a class action in a commercial contract may be deemed unconscionable under certain circumstances." The court then denied Yahoo!'s motion for summary judgment, holding that genuine issues of material fact existed concerning the enforceability of the class action waiver.

In re Yahoo! Litigation, __ FRD __, 2008 WL 1882786 (C.D. Cal. 2008)

[Meredith R. Miller]

August 22, 2008 in E-commerce, Recent Cases | Permalink | TrackBack (0)

Tuesday, August 19, 2008

Innovative Teachers' Contracts in Danger in Denver

The Wall Street Journal reports that school teachers in Denver do not like the pay for performance concept. They are staging sick-out and there is talk of a strike. According to the Journal, the Denver School District district is willing to offer bonuses of up to $3000 as a incentive pay to teachers willing to work in impoverished schools or to teach unpopular subjects. An interesting aspect of the program is that the bonuses are not merely one-time rewards; they are added to base salary and thus are cumulative.

The Union would like to see pay increases of course, but would like to see them more evenly distributed. Also, the current policy favors the young, ambitious and mobile over more veteran teachers. This may become a big issue around the time of the Democratic National Convention, because Barack Obama has often cited the Denver pay-for-performance plan as a model.

[Jeremy Telman]

August 19, 2008 in In the News, Labor Contracts | Permalink | Comments (1) | TrackBack (0)

Monday, August 18, 2008

NY Codifies "Professor Review Copy Not for Resale"

I vaguely recall a discussion on the Contracts Listserv about the legal weight (if any) of the publisher's stamp on textbooks proclaiming: "Professor Review Copy Not for Resale." Well, New York has passed the Textbook Access Act, the central purpose of which is to "promote open and transparent marketing, choice, pricing and purchasing of course materials." Section 724(1) happens to prohibit instructors from reselling complimentary copies of textbooks. The full text of the statute is made available by Prof. Minna Kotkin over at Clinicians With Not Enough To Do.

New York profs with bags packed for the Strand, consider yourselves forewarned.

[Meredith R. Miller]

August 18, 2008 in In the News, Legislation | Permalink | Comments (1) | TrackBack (0)

Back To School...

Here at ContractsProf Blog, we tend to shy away from sartorial advice.  That is, unless it is back to school time.  In the past, we have recommended this t-shirt for the first day of school:


Here's yet another fine possibility (click on the shirt for a better view):


Have another great year!

[Meredith R. Miller]

August 18, 2008 in Miscellaneous, Teaching | Permalink | TrackBack (0)

Now in Print

Lawbooks_2 - Dara K. Newman, Note, If You Can't Build It, They Won't Come: Condominium Construction Moratoria and Gentrification, 35 B.C. Envtl. Aff. L. Rev. 593-623 (2008).

- Jennifer Young, Case Note, Contracts: The Price of Dignity is $3.19: Should Mutual Mistake Apply to the New WIC Tobacco Rule? ... (Hy-Vee Food Stores, Inc. v. Minnesota Department of Health, 705 N.W.2d 181, 2005), 34 Wm. Mitchell L. Rev. 1457-1487 (2008).

[Meredith R. Miller]

August 18, 2008 in Recent Scholarship | Permalink | TrackBack (0)

Limerick of the Week: Sea-Land

Spices Sea-Land Services v. Pepper Source is another delightful case, a real joy to read.  I knew it would be a good one when Chief Judge Bauer began his opinion by calling it "spicy."  The case involves one Mr. Marchese (also the name of the driver in Walkovsky v. Carlton -- coincidence?  I don't think so!) who, as the court notes, really knew how to "'run' the expense accounts!"  Marchese "borrowed" money from his various corporations for personal expenses, such as child support and alimony, educational expenses for his children and maintenance of his automobiles and pets. 

So, seems like Marchese's corporate empire ought to be pierced.  But whether or not it could be turned on the "second prong," of the Van Dorn test, which governed the relevant jurisdiction.  That is, it was not enough that Marchese comingled funds, undercapitalized his corporations and failed to abide by corporate formalities.  Plaintiff also had to show that honoring the corporate form in this instance would "sanction a fraud or promote injustice."   So, here's the rule from the case:

Sea Land Services, Inc. v. Pepper Source

Veil piercing has a new hitch:
More than a corporate formality glitch
Must have occurred
If the court's to be stirred
To disgorge the unjustly enriched.

[Jeremy Telman]

August 18, 2008 in Famous Cases, Limericks, Teaching | Permalink | Comments (0) | TrackBack (0)