May 7, 2010
An $18,000 Phone Bill. Can you hear me now?
Here’s the deal, according to the Boston Globe: Back in 2006, Bob St. Germain renewed his wireless phone service contract, which included his cellphone and cellphones for his son and daughter. Unbeknownst to St. Germain, the two-year promotional period allowing free downloads had expired, and Verizon was now charging for downloaded kilobytes.
But St. Germain’s son, Bryan, a student at Framingham State College, didn’t realize this, and started downloading a lot of stuff to his phone. The August 2006 bill was for $12,233. When St. Germain called to complain, Verizon told him that since that last bill, he’d run up an additional $5,000 in downloading fees.
“You can’t print what my husband said’’ when the bill came, Mary St. Germain said. “He was very shocked.’’
According to the Globe, Verizon eventually offered to reduce the bill by half. But St. Germain would have none of it. He rejected the offer and Verizon responded by sending the bill to a collection agency.
Verizon officials said that the charges were legitimate and that they have tried to work with St. Germain to resolve the dispute.
“We go to great lengths to educate our customers on their products and services so that they avoid any unintended bills,’’ two Verizon spokesmen wrote in an email to the Globe. Verizon also says the amount of the charges were laid out clearly in St. Germain’s agreement.
* * *
On the one hand, Verizon claims its charges were clearly stated. It’s also agreed to cut the charges down by half.
On the other hand, the St. Germains say the charges are ridiculous, that someone should have let them know that something odd was going on with their account. Others say consumers can’t be blamed for failing to read or comprehend the fine print of a user agreement. It also seems fair to wonder how much it cost Verizon to provide the 816,000 kilobytes of stuff to Bryan Germain’s phone, though telecom companies often argue that demand on their networks, and the costs to expand networks to allow for it, can add up.
Gotcha contracting? Is Restatement (2d) 211 up to the task? Or, should St Germain be held to the old "duty to read"?
[Meredith R. Miller]
May 6, 2010
Kunz & Chomsky: Contracts: A Contemporary Approach
Christina L. Kunz (pictured left) and Carol L. Chomsky (pictured right) have just published their new casebook, Contracts: A Contemporary Approach. Ordinarily, I don't get too excited about new casebooks, but this one is different and worth a look. If you don't have a copy of your own, you can look at substantial chunks of the book on West's website (theirs is the second book listed in the Interactive Casebook series). You really need to look at the sample pages to see for yourself the extent to which this is a departure from standard casebooks. But for those of you pressed for time, here is the marketing blurb.
This casebook allows students to learn more effectively by providing critical reading and thinking questions and well-situated text boxes with supplemental information to explain and expand understanding. With better advance preparation, class can begin at a more sophisticated level and proceed to deeper issues. The material is presented in a visually engaging manner, and the accompanying electronic version provides live links to cited sources and useful websites. Provisions from the Restatement, UCC, CISG, and UNIDROIT appear in text, alleviating the need for a statutory supplement. The book is organized chronologically in the traditional order for contract analysis. It includes classic cases foundational in the historical development of many concepts and newer cases chosen for their teachability and lessons about modern business practices and current issues. “Practice Pointers” provide a transactional focus by explaining the function of common contract clauses. The book includes both essay and multiple choice problems that encourage periodic review.
May 5, 2010
Weekly Top Tens from the Social Science Research Network
May 4, 2010
Now in Print
Michael J. Bales, Note, The Grapes of Wrathful Heirs: Terminations of Transfers of Copyright and "Agreements to the Contrary," 27 Cardozo Arts & Ent. L.J. 663 (2010).
Henry Barkhausen, Regulating in the Shadow of the U.C.C.: How Courts Should Interpret State Consumer Protection Laws, 119 Yale L.J. 1329 (2010).
Chunlin Leonhard & John M. Wunderlich, Identifying Fungible Goods under the UCC Through a Contextual Lens, 55 Wayne L. Rev. 901 (2009).
Chapin F. Cimino, Review Essay, Private Law, Public Consequences, and Virtue Jurisprudence, 71 U. Pitt. L. Rev. 279 (2010) (reviewing Colin Farrelly & Lawrence B. Solum eds., Virtue Jurisprudence (2008)).
Paul S. Davies, Contract and Unjust Enrichment: A Blurry Divide, 126 L.Q. Rev. 175 (2010).
Michael Feit, Responsibility of the State Under International Law for the Breach of Contract Committed by a State-Owned Entity, 28 Berkeley J. Int'l L. 142 (2010).
George S. Geis, An Empirical Examination of Business Outsourcing Transactions, 96 Va. L. Rev. 241 (2010).
Anna Gelpern & Adam J. Levitin, Rewriting Frankenstein Contracts: Workout Prohibitions in Residential Mortgage-Backed Securities, 82 S. Cal. L. Rev. 1075 (2009).
Nathalie Hofmann, Interpretational Rules and Good Faith as Obstacles to the UK's Ratification of the CISG and to the Harmonization of Contract Law in Europe, 22 Pace Int'l L. Rev. 145 (2010).
David Horton, The Shadow Terms: Contract Procedure and Unilateral Amendments, 57 UCLA L. Rev. 605 (2010).
Marco J. Jimenez, The Many Faces of Promissory Estoppel: An Empirical Analysis Under the Restatement (Second) of Contracts, 57 UCLA L. Rev. 669 (2010).
Jeremy Johnson, Contract: Missed Opportunity?,  N.Z.L.J. 50.
Richard T. Karcher, The Coaching Carousel in Big-Time Intercollegiate Athletics: Economic Implications and Legal Considerations, 20 Fordham Intell. Prop. Media & Ent. L.J. 1 (2009).
Alan C. Lazerow, Comment, Give and "Get"? Applying the Restatement of Contracts to Determine the Enforceability of "Get Settlement" Contracts, 39 U. Balt. L. Rev. 103 (2009).
Todd Evan Lerner, Comment, Playing the Blame Game Online: Who is Liable When Counterfeit Goods are Sold Through Online Auction Houses?, 22 Pace Int'l L. Rev. 241 (2010).
Martin P. Levin, The Contemporary Guide to Negotiating the Author-Publisher Contract, 54 N.Y.L. Sch. L. Rev. 447 (2009/10).
Lee Mason, Rethinking Negligence in Force Majeure Clauses: Risk, Allocation, Fairness and Certainty in Commercial Contracts,  J. Bus. L. 199.
Catherine S. Neal, The Role of the Judiciary in Advancing Public Policy to Promote Ethical Business Practices: Comparing Gray Market Tires to Tiffany Silver Jewelry, 19 Kan. J.L. & Pub. Pol'y 171 (2010).
Brent O'Callahan, Contract Interpretation: Prior Negotiations,  N.Z.L.J. 69.
Pauline Ridge, Pre-Judgment Compound Interest, 126 L.Q. Rev. 279 (2010).
Stephanie K. Savino, Comment, Puppy Lemon Laws: Think Twice Before Buying that Doggie in the Window, 114 Penn St. L. Rev. 643 (2009).
Andrew A. Schwartz, A "Standard Clause Analysis" of the Frustration Doctrine and the Material Adverse Change Clause, 57 UCLA L. Rev. 789 (2010).
Robert E. Scott, Hoffman v. Red Owl Stores and the Limits of the Legal Method, 61 Hastings L.J. 859 (2010).
Irina Slavina, Note, Don't Bet on It: Casinos' Contractual Duty to Stop Compulsive Gamblers from Gambling, 85 Chi.-Kent. L. Rev. 369 (2010).
Jeffrey W. Stempel, The Insurance Policy as Social Instrument and Social Institution, 51 Wm. & Mary L. Rev. 1489 (2010).
Benjamin A. Templin, The Marriage Contract in Fine Art, 30 N. Ill. U.L. Rev. 45 (2009).
Paul Todd, Excluding and Limiting Liability for Misdelivery,  J. Bus. L. 243.
William C. Whitford & Stewart Macaulay, Hoffman v. Red Owl Stores: The Rest of the Story, 61 Hastings L.J. 801 (2010).
Tina M. Woehr, Note, The Use of Parol Evidence in Interpretation of Plea Agreements, 110 Colum. L. Rev. 840 (2010).
[Keith A. Rowley]
When Does the False Claims Act's Jurisdictional Bar Preclude Qui Tam Actions?
Daniel Kirk, a Vietnam War veteran, worked at Millar Elevator Industries beginning in the late 70s. In 2002, Millar's operations were integrated into those of the Schindler Elevator Company. In 2003, Millar was demoted and resigned. Eight months later, Kirk sued, alleging that he had been fired in violation of VEVRAA, the VIetnam Era Veterans Readjustment Assistance Act. That claim was dismissed and the dismissal was affirmed last year.
Meanwhile, Kirk brought suit under the False Claim Act in the name of the U.S. government. In 2007, the government elected not to intervene and Kirk pursued his claim as a relator. His suit alleged that Schindler had entered into hundreds of contracts subject to VEVRAA requirements but that Schindler had failed to comply with those requirements. Among other claims, Kirk alleged that Schindler failed to submit required VETS-100 reports in some years and had filed false VETS-100 forms in others. The district court dismissed the action finding, among other things, that the claim was bared under the FCA, 31 U.S.C. s. 3730(e)(4), which provides that information that has been publicly disclosed cannot be a basis for a FCA claim. The information at issue here related to the allegedly missing and/or falsified VETS-100 forms that Mr. Kirk had discovered through FOIA requests.
The relevant section of the FCA provides:
No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
The Second Circuit vacated and remanded. There was no question that Mr. Kirk was not the original source of the information, so the only question whether a FOIA request counts as "public disclosure" for the purposes of the statute. The Third Circuit answered that question in the affirmative. The Ninth Circuit concluded that only a FOIA request that results in the production of an "enumerated source;" that is, one of the types of sources expressly named in the statute, creates a jurisdictional bar to an FCA claim. The Second CIrcuit followed the Ninth. It was supported in its position by the U.S. government as amicus curiae.
The full opinion in the case, United States of America ex rel. Daniel Kirk v. Schindler Elevator Corp. can be found here.
May 3, 2010
Business Associations Limerick of the Week: CTS Corporation v. Dynamics Corproation of America
I turned up a Limerick from a case I haven't taught in a few years, so I thought I would share it. The connection to contracts law is pretty attenuated, but I'm sure we could find one if we looked hard enough. The issue in the case was whether or not Indiana's anti-takeover statute, the Control Share Acquisitions Chapter of Indiana's Business Corporation law, should be struck down as inconsistent with the Williams Act and the Commerce Clause.
The Williams Act provides for disclosure when any party gains control of over 5% of an issuer's shares. It also provides for certain procedural and substantive limitations on tender offers. The Indiana Act provided additional protections against tender offers for Indiana corporations by requiring a shareholder vote on whether or not the acquiror would be permitted to vote its shares once it crossed certain thresholds of ownership: 20%, 33.3%, 50%.
Judge Posner, writing for the Seventh Circuit and following the Supreme Court's plurality decision in Edgar v. MITE Corp., struck down the Indiana Act as inconsistent with the Williams Act and also with the Commerce Clause. Justice Powell (pictured), writing for the majority of the Supreme Court, reversed. While the Illinois statute at issue in MITE favored existing management over the rights of acquirors and shareholders alike, the Indiana Act was consistent with the aims of the Williams Act, in that it favored neither acquirors nor incumbent management and sought only to protect the rights of shareholders. It's impact on interstate commerce was negligible, and even if there was some slight discriminatory effect, that discrimination was acceptable in light of the internal affairs doctrine, that for the most part leaves the regulation of corporations to the state legislators that create corporations in the first place.
Justice Scalia concurred. He had no disagreement with Justice Powell on the law, but he was irked that Justice Powell ventured a judgment on the aim of the statute. He regarded it as "extraordinary to think taht the constitutionality of the Act should depend on" whether the Court thought that the Indiana Act aimed to protect shareholders of incumbent management. Justice Scalia seemed open to the view that the Indiana Act was idiotic but lawful and should be upheld regardless of its folly. Three dissenting Justices, following Posner's reasoning, would have found the Indiana Act to be a kind of unlawful folly.
CTS Corporation v. Dynamics Corporation of America
The Williams Act does not preclude
A state from protecting its brood.
Posner dislikes it;
Scalia won't strike it:
"It's law, so what if it's crude?"
Blawgosphere Roundup on Contracts Issues
Since we crowed a few weeks back about our imperialistic tendency to write on topics beyond contracts law (conventionally conceived), we would also like to note the other worthwhile blog posts of interest to our readers: