November 13, 2010
Today in History -- November 14
565 – Justinian, the Roman emperor whose codification of imperial laws would have an enormous impact on the development of the law around the world, dies at Constantinople.
1533 – Francisco Pizarro and 168 companions arrive at Cajamarca in the Inca Empire. Inca leaders see no reason to be worried. . . .
1765 – Robert Fulton is born at Little Britain, Pennsylvania. He will give up a planned career in art to invent the first commercially practical steamboat.
1832 – The only Catholic to sign the Declaration of Independence, Charles Carroll of Carollton, dies at Baltimore at age 95. He is the last surviving signer.
1840 – Future painter (Oscar) Claude Monet is born at Paris, the son of a grocer. He will later develop a plein-air technique that will cut down the time to produce paintings dramatically, thus lowering costs and allowing the prosperous bourgeoisie to purchase original art.
1889 – Reporter Nellie Bly, sponsored by the New York Telegraph, sets out from Hoboken, New Jersey, on the first leg of her attempt to circumnavigate the world in less than 80 days. She’ll finish in 72.
1954 – Future Stanford provost and U.S. Secretary of State Condoleezza Rice is born at Birmingham, Alabama.
1995 – A budget standoff between Democrats and Republicans in the U.S. Congress forces the federal government to temporarily run most government offices with skeleton staffs. Hardly anyone notices except reporters, who have nothing to report.
2003 – Astronomers discover a new dwarf planet that they name Sedna. It goes around the sun about once every 12,000 years.
Steamy Photo Shoot at Brooklyn Law School Challenges Stereotypes about Libraries
Oscar Wilde said: "There is only one thing in life worse than being talked about, and that is not being talked about." That was my first thought in the grocery store today when I noticed that Brooklyn Law School (my alma mater) got front page press in the New York Post. Why? Because of a salacious photo shoot in the library that, well, depicted everything that was the opposite of my experiences in that library (really, in law school generally).
The school allowed Diesel to use the library for a photo shoot under the impression that it was for a jeans ad. The photos do not feature any models in jeans. Actually, the models are only wearing underwear and they are writhing on top of each other in the library stacks. Apparently, the law school claims that Diesel is, therefore, in breach of contract.
Officials at the prestigious Brooklyn Law School rented the school's library to the fashion brand Diesel for an undisclosed fee, "expecting a tasteful photo shoot," because apparently they've never seen a single Diesel ad, and didn't bother to Google it. Shocking: True to its brand, Diesel's resulting ads aren't even Dolce & Gabanna-style suggestive, they're just quirky soft-core porn stills. In this case, the images are a whole bunch of campy, fairly cute library fantasies, featuring "students" wearing underwear reading "Tonight I am your teacher," and mounting each other on bookshelves. (See diagram.) One would think a place like Brooklyn Law might welcome this sexy attention, but no! Some uptight students now claim the ads are "gross" and "embarrassing," and the school might sue the brand. It's not yet determined whether the ads will even run outside the Diesel website, since Brooklyn Law claims they're a breach of contract.
That would make for the beginning of a fun exam question, unless you are at Brooklyn Law School.
[Meredith R. Miller]
Payday lending: good or bad?
Electronic essays on excused non-performance
Paul Wangerin (John Marshall) has posted Breach and Excused Non-Performance in Contract Cases: Electronic Essays on Selected Topics in USA Business Law. Here’s the abstract:
These electronic essays cover a topic that is probably (a) the single most commonly encountered real world Contract law topic for general practice lawyers and (b) tested more heavily on the bar exam than any other contract law topic. These essays all rest on the notion that the key to understanding contract disputes is an understanding that such disputes almost always come down to disputes about whether non-performance is a "breach" of the contract or an "excused non-performance." Two distinct categories of excuses are discussed, the "non-agreement" excuses (sometimes called the "real" defenses) and the "all-other" excuses (sometimes called the "personal" defenses.) Discussion includes extensive references to the cryptic concept of express and constructive (implied in law) "conditions." Discussion also includes brief references to the notion of "consideration" as well as to rules regarding writings, notably rules regarding the statute of frauds and the parol evidence rule. Analysis emphasizes situations in which rules in Article 2 of the UCC differ from rules in the common law of contracts (with the common law principally articulated in the Restatement Second of Contracts). These essays do NOT cover the topic of Remedies in Contract cases, a topic covered in another set of electronic essays.
There are about thirty individual electronic essays in this overall set of electronic essays, and about thirty accompanying graphics-only versions of these e-essays. The electronic essays themselves are .swf files and can be watched / listened to on Windows PC’s or Macs. These files, which are 10-15 megs in size, are filled with media, including music and narration. The graphics only versions of the essays are ppt files. They too can can be viewed on Windows PC’s or Macs. These ppt files are 2-3 megs in size.
This set of electronic essays on Breach and Excused Non-Performance in Contract Cases coordinates with other sets of lessons in an overall group of electronic essays on selected topics in USA Business law.
November 12, 2010
Today in History -- November 13
354 – St. Augustine of Hippo is born at Thagaste in Numidia, now Algeria. His drunken early life will later make him the patron saint of brewers.
1002 – Hoping to stop the Viking invasions of England, King thelred II (the Unready) orders all the Norsemen in the country killed. It doesn’t work; he will die as the kingdom is later overrun by Danes under Canute.
1312 – The future King Edward III is born at Windsor Castle. As king, he will battle inflation with wage and price controls, which won’t work.
1724 – John Dickinson (left) is born at Talbot County, Maryland. He will be one of the literary leaders of the American Revolution with his Letters from a Farmer in Pennsylvania), the President/Governor of two American states (Pennsylvania and Delaware) and the namesake of what is now Penn State’s Dickinson School of Law.
1856 – Future U.S. Supreme Court Justice Louis Dembitz Brandeis is born at Louisville, Kentucky, where the law school named for him is located.
1864 – A new constitution goes into effect in Greece, creating a democratic monarcy.
1956 – The U.S. Supreme Court lets stand the district court decision in Browder v. Gayle, 142 F. Supp. 707 (1956), holding that state laws requiring segregated buses are unconstitutional.
1994 – Swedish voters vote to have their country join the European Union.
Horton on AT&T v. Concepcion
David Horton (Loyola-L.A.) filed one of the amicus briefs in the AT&T Mobility LLC v. Concepcion case in the Supreme Court. We asked him for his take on the likely outcome, and he graciously responded:
I could see Breyer, Ginsburg, Kagan, Sotomayor, Kennedy, and perhaps even Thomas (who has routinely expressed his belief that the FAA doesn't apply in state court) affirming the Ninth Circuit. But I can't imagine them employing broad strokes and holding that the Court can never second-guess a state's purported application of its own contract law. That would create too broad a loophole for states to regulate arbitration under the guise of unconscionability holdings.
Thus, if there's a liberal majority, I think it'll have to delve into the nitty-gritty of California unconscionability law. I actually think that there's plenty of grist for a majority opinion there: AT&T's evidence of discrimination isn't very persuasive. For example, AT&T faults the Discover Bank opinion for deviating from traditional unconscionability analysis by gauging unconscionability from an ex post perspective. But the supposedly ex post aspects of the Discover Bank test are its requirement that a plaintiff allege that a defendant cheated many customers out of small sums of money. That's a limit on the unconscionability doctrine, not an aggrandizement of it. Moreover, AT&T's strongest point--that the lower court insinuated that litigants would prefer to arbitrate under AT&T's supposedly "pro-consumer" rules than participate in a class action--also adopts an ex post perspective. The relevant perspective for assessing the clause's fairness isn't after a dispute has arisen, but rather at the time of contracting. And the relevant question is whether it's unfair for AT&T to impose a class arbitration waiver on consumers that gives them incentives to arbitrate individually but also saddles them with the responsibility of policing AT&T's misconduct themselves.
I could also see a conservative majority of Roberts, Alito, Kennedy, Thomas, and Scalia (who at first seemed surprisingly hostile to AT&T's position, but then swung around). I envision a relatively short opinion that basically says: (1) the default rule under the FAA is bilateral arbitration, see Stolt-Nielsen v. AnimalFeeds, and (2) thus it can't be unconscionable for AT&T to insist on the default rule. One downside to this approach is that it would totally eviscerate class arbitration, rather than simply holding that AT&T's "pro-consumer" clause is fair.
Finally, there's always the possibility of a wild card. The Court has punted before when asked to square the FAA and the class action device (see Green Tree v. Bazzle). Although it never came up in the briefing and oral argument, there's a similar way out here: the AT&T contract incorporates by reference the rules of the American Arbitration Association, including a rule that empowers the arbitrator to rule on the validity of the arbitration clause. In Rent-a-Center v. Jackson, the Court recently explained that these "delegation clauses" require the parties to arbitrate the issue of the arbitration clause's enforceability unless a party can specifically show why the delegation clause itself is invalid. The Court could always "split the baby" by holding that because only the arbitrator may resolve the issue of the class arbitration waiver's validity, the district court here never had jurisdiction.
We shall see!
Happy one millionth page view!
Early this morning ContractsProf recorded its 1,000,000th page view. In a little over six years, that comes to -- well, if we could do the math we wouldn't be law professors. But if we only had a nickel for every view, we'd have . . . well, more than we have now.
Contract law as "smoke and mirrors"
Danielle Kie Hart (Southwestern) is not exactly a cheerleader for laissez-faire contract law. She’s just posted the thought-provoking Smoke, Mirrors & Contract Law. I’m more sanguine about the utility of contract law and the fairness of binding people to their promises than she is (and probably more dubious about what might replace the current view of contract), but it’s a good read and got me rethinking a few of my assumptions. Here’s the abstract:
Contract law is set up to be transaction enforcing, that is, to be binding. Binding means two different but related things. First, "binding" means that the contract is valid as between the parties (because it satisfies contract law's formation requirements) and, second, it means that the rights and obligations set forth in that contract will be enforced by the state on behalf of one of the parties over the objection of the other, now resisting party. Modern contract law uses several well-established assumptions about the contracting parties, including the way they behave when contracting, and the roles of the market and state, to justify binding people to their contracts. The problem with making contracts binding, however, is that all of the assumptions are deeply flawed both theoretically and in practice. They are flawed in theory as the work of the Legal Realists, Critical Legal Studies scholars, relational contract theorists and, more recently, behavioral law and economics scholars show. They are also flawed in practice as an examination of a subprime mortgage loan hypothetical, one that implicates disclosure statutes, will demonstrate. Because the assumptions are dubious at best, modern contract law cannot justify holding parties to their contracts. Nevertheless, contract law continues to do just that. Consequently, continuing to bind parties to their contracts, absent the justification that the assumptions provide, is an unmitigated exercise of state power. Contract law's formation rules and disclosure statutes help justify this grant of power by masking the power imbalance embedded in the modern contract law system and by diverting critical attention and analysis away from that system as a whole. As a result, making contracts binding comes with unacknowledged costs, all of which work to the detriment of parties with less bargaining power, regardless of whether they are individuals or business entities. Specifically, the extent of state power that actually exists within the modern contract law system and its uses are concealed. As a specific consequence, unequal bargaining power becomes institutionalized within the system such that the party with superior bargaining power can, if it so chooses, impose bad bargains on its contracting partners with impunity. Exploring the premise that contracts are made binding thus allows us to see the powerful role that the state plays in creating and maintaining a deeply flawed contract law system, one in which imbalances of power, not freedom and consent, are the hallmark. These imbalances are so deeply embedded that even mediocre remedial efforts, like disclosure statutes, reify rather than mitigate them. This result should be troubling for contract scholars and others who adhere to the notion that freedom and individuality are epitomized in the freedom of contract ideal.
What is "chicken"?
Courtesty of a student of Bill Dodge (UC-Hastings), a nice illustration for use when you teach Frigaliment Importing Co. v. B.N.S. International Sales Corp., 190 F.Supp. 116 (S.D.N.Y. 1960).
November 11, 2010
Today in History -- Novembert 12
1035 – Canute the Great, King of England, Denmark, and Norway, dies at Shaftesbury in Dorset. Quarrels between his sons will cause his Anglo-Scandinavian empire fall to pieces within a decade of his death.
1595 – Sir John Hawkins, the father of the English slave trade (and the man who introduced the potato to Ireland), dies at sea off the coast of Puerto Rico.
1815 – Future abolitionist and women’s rights advocate Elizabeth Cady Stanton is born at Johnstown, New York.
1840 – François-Auguste-René Rodin, the self-taught sculptor man who will show modern artists how to use art to get wealthy and hang out on equal terms with the rich and famous, is born the son of a police clerk at Paris.
1892 – Three-time All-American William "Pudge" Heffelfinger—whose Yale teams were 54-2 during his time there—becomes the first professional American football player when the Allegheny Athletic Association pays him $500 for a game against archrival Pittsburgh A.A. Allegheny wins 4-0 as Heffelfinger scores the only points..
1908 – Future U.S. Supreme Court Justice Harry Blackmun is born at Nashville, Illinois.
1970 – The Oregon Highway Division attempts to remove a dead Sperm whale from the beach using explosives. Below, this turns out to be a bad idea.
1998 – Speaking of bad ideas, Germany’s Daimler-Benz completes a merger with America’s Chrysler to form Daimler-Chrysler.
Conceptions about AT&T v Concepcion
As Frank mentioned earlier, over at Concurring Opinions, Lawrence Cunningham (Geo Washington) provides a recap of the oral argument in AT&T v. Concepcion. Cunningham wrote that the argument was "riveting." Jean Sternlight (UNLV) described the case as potentially "momentous." David Horton (Loyola - LA) anticipated that the case "should be a wild one." What about Dahlia Lithwick at Slate? She seemed peeved that she had to bother to report on it. She begins her column:
Every Supreme Court reporter waits—often in vain and for decades—for a case like AT&T Mobility v. Concepcion. It is a case at the white-hot epicenter of three almost completely inexplicable doctrines: federal preemption, federal arbitration policy, and class action. (I can hear the clamor now from all of you who want me to skip right ahead to the juicy arbitration explanations.) Phrases like contracts of adhesion, exculpatory provisions, ex ante,nonclassable claims, and obstacle preemption fill up the Supreme Court chambers today, like some kind of hideous jargon spill in the Gulf of Mexico. At some point the phrase post ante was uttered, which I don't think even makes sense. Indeed the only moment in the entire hourlong argument that might have happened in Technicolor came with Justice Stephen Breyer's baffling metaphor involving a "9,000-foot cow." And even he seemed to be confused about what that had to do with preemption, arbitration, or cellular telephones.
Everyone is making predictions about the case, but the only one that I endorse is Lithwick's prediction of what the case really means for all of us: "For one thing, it means that if you want to meet someone cute at a bar tonight, you'll do best to avoid discussions of classable claims or obstacle preemption." I wish someone had told me that 10 years ago.
[Meredith R. Miller]
Does overregulation waste human capital?
It does in universities, according Alan Chen at Concurring Opinions. We noted a couple of days ago that Ohio State President Gordon Gee boasted about how evading government construction requirements saved 15% on a $1 billion project, and complained that compliance with government contracting standards costs far more than the amount of money those standards save. Chen points out the enormous amount of time and effort wasted in the accreditation process, which frequently takes a couple of years and untold thousands of manhours to complete.
As someone who's had a couple of small non-law-related businesses, I've realized that it's hard for the average academic to realize just how much of a business's productive capacity is tied up in regulatory compliance. If you think that working with your accrediting bodies is tedious, time-wasting, and expensive, you should try working with, say, the Texas Alcoholic Beverage Commission.
As universities are forced to retrench, maybe they'll become more sympathetic to claims that overregulation is a big problem.
Cunningham on AT&T v. Concepcion
Over at Concurring Opinions, Lawrence Cunningham (Geo. Washington) offers a recap of the argument in AT&T v. Concepcion (the Supreme Court case that pits the big telephone company against the plaintiffs' class action bar) with his commentary. His take on the likely result:
Based on what was said during the argument, I predict a 8-1 or 7-2 vote for the consumers and California, with Alito dissenting and Roberts a toss up. Thomas, who never speaks at oral argument, will vote for the consumers and state on federalism grounds, as he always does in FAA cases.
Pretty gutsy call. I think most folks see it as closer.
Learning law on line with very attractive women
It's pretty common for law schools (like other college and university departments) to feature their better-looking students when they feature them in advertisements and promotional materials. That makes sense; most guys (at least) would rather go to law school with Reese Witherspoon than -- well, no point in getting specific.
But Florida Coastal is using the very attractive women at left in the promotional materials for its online foreign LL.M. program. Which means that if you're involved in the program you'll never actually see her because she's going to be on a computer at a sidewalk cafe in Paris, France.
In the online world, as the saying goes, nobody knows you're a dog.
Textual influences on development of contract rules
Reinhard Zimmermann of the Max Planck Institute for Comparative and International Private Law has a new paper coming out in a Festschrift für Helmut Koziol. It’s called Unworthiness to Inherit: The Development of a Legal Rule in the Mirror of European Codifications and he’s posted a version on SSRN. Here’s the abstract:
The article examines how the rules on formation of contract and on mistake, contained in the various transnational model rules that have been published over the past two decades, have taken shape. The approach adopted here is based on an analysis of the "textual stratification" of European private law. The relevant instruments (Convention on Contracts for the International Sale of Goods, Principles of European Contract Law, UNIDROIT Principles of International Commercial Contracts, Draft Common Frame of Reference, Principes contractuels communs) are analysed and compared in their historical sequence. To what extent and why have the texts been transformed in the process? The article demonstrates that there is a very considerable common ground reflecting the state of art of comparative research in these fields over the past hundred years. It also highlights issues on which consensus must still be reached, and it suggests patterns towards reaching such consensus. It is argued that the Principles of European Contract Law, rather than the Draft Common Frame of Reference, should provide the point of departure for a comparative "textual stratification" analysis. The scene for the article is set by a critical examination of the concept of contract and legal act, as used in the Draft Common Frame of Reference.
November 10, 2010
Today in History -- November 11
1620 – At Provincetown Harbor near Cape Cod, 41 passengers aboard the Mayflower—who had expected to join the existing colony at New York but who were blown off course—sign a Compact to form a new colony in the unsettled stretch of Massachusetts where they landed.
1673 – Forces of the Polish-Lithuanian Commonwealth under Jan Sobieski defeat a larger Muslim army at the Battle of Khotyn in the Ukraine.
1821 – Writer Fyodor Mikhaylovich Dostoyevsky is born at Moscow. His Crime and Punishment is actually much better than the stuff written about it would lead you to think.
1855 – Danish Existentialist philosopher Søren Aabye Kierkegaard dies at Copenhagen. Too bad he can't tell us what he's since discovered about the meaning of life.
1869 – The government of the Colony of Victoria enacts the Aboriginal Protection Act, giving it nearly total control of the housing, employment, education, wages, and children of indigenous Australians. For some reason this doesn't lead to the increased health, wealth, and happiness of the aborigines.
1889 – Washington is admitted as the 42nd U.S. state. They thought about naming the place "Columbia" because it lies between the Columbia River and British Columbia, but were afraid that there would be too much confusion with the existing "District of Columbia." No one could get confused if they called it "Washington."
1904 – Future U.S. lawyer, Supreme Court clerk, bureaucrat, and Russian spy Alger Hiss is born at Baltimore.
1938 – "Typhoid" Mary Mallon—who over her career as a cook would infect more than 50 people with typhoid—dies on North Brother Island in New York . . . of pneumonia.
1964 – Future TV lawyer Calista (Ally McBeal) Flockhart is born at Freeport, Illinois.
1999 – The House of Lords Act goes into effect in Britain, excluding hereditary (i.e., real) peers from sitting in the House.
Man bites dog: Supreme Court hears contract case
Oral arguments went down yesterday in AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court case that involves California's invalidation of a class-action-suit waiver in the arbitration clause in a consumer constract. Here's the link to the argument.
Given that the Supreme Court deals with contract law about as often as the Cincinnati Bengals reach the Super Bowl, it's worth reading to see the approaches that the various Justices take as they try to remember back to their law school contracts course.
Law schools and the changing legal job market
Via our colleagues at TaxProf, this piece by William Henderson (Indiana-Bloomington), looking at how changes in law practice will affect the historically credential-heavy recruitment of young lawyers.
It's an interesting piece, and I agree with much of what he's talking about. The key to getting a job in this market is to be the kind of young lawyer that clients want to hire. Clients are much less interested in credentials, and much more interested in expertise and communications skills, than the law firm hiring partners have been. Lawyers who have clients have much less trouble getting jobs than lawyers without clients.
The whole article is here.
Superior bargaining power, for sure
It's not clear whether this is duress, or undue influence, or unconscionability, or something else, but Charyl Preston (Utah) passes on this link she got from a student:
UNH law picks chief Justice as new dean
The University of New Hampshire School of Law (formerly the Franklin Pierce Law Center) has gone outside the ivory tower for its new dean, New Hampshire Chief Justice John Broderick.
Broderick has been on the state's highest court for 15 years, and has taught business as an adjunct at Dartmouth.