Tuesday, August 16, 2011
Monday, August 15, 2011
In March the National Football League Owners (NFL) elected to lockout the players organized through the National Football League Players Association (NFLPA) as the parties could not agree on a new Collective Bargaining Agreement (CBA). This lead to several star players, including Tom Brady and Payton Manning, brining an antitrust suit against the NFL. Four and a half months later, as reported here on National Football Post.com, the two sides have agreed to a new CBA that will last through the 2020 season and the 2021 draft. ESPN reports that as a condition of the new CBA, all pending litigation needed to be settled. In the end, as ESPN reports here, NFL players agreed to release their claims without any compensation.
National Football Post.com provides a detailed summary of the 300-page plus CBA. The new CBA introduces several changes from the prior agreement, focusing on the players’ health and safety, benefits for retired players, the draft and free agency, compensation for rookies entering the league, and the economics surrounding the salary cap. In order to promote player health and safety, the new CBA reduces the length of off-season programs and organized team activities. If limits on-field practice time and the amount of contact practices, and increases the number of days off for players. In addition, the CBA allows current players to remain in the player medical plan for life and offers enhanced financial protection for injured players. The NFL and NFLPA also agreed to a $50 million per year joint fund for medical research, healthcare programs and charities.
Increased benefits for retired players include the creation of a “Legacy Fund” devoted to increasing the pension for those players who retired before 1993. The two sides also agreed to improve post-career medical options, the disability plan, the 88 plan (which provides assistance to disabled players and those with certain diseases developed due to playing), career transition and degree completion programs, and player care plan.
Under the new CBA players become unrestricted free agents (UFA) after four accrued seasons in the league. Players can become restricted free agents (RFA) after three accrued seasons in the league. Teams with RFAs have a right of first refusal on players who sign an offer sheet with another team allowing teams the opportunity to match the offer or receive draft pick compensation for the players.
Another new element to the CBA is the creation of a rookie pay scale. Under the new agreement, all drafted players will receive 4 year contracts and all undrafted players receive 3 year contracts. The teams have a maximum total compensation they can spend for each draft class and there are limited contract terms within the rookie contracts. The CBA also contains strong rules against rookies holding out and not signing with the teams, and teams also have the option to extended the rookie contract of a first round draft pick to a fifth year based on an agreed upon tender amount. The money saved by teams based on this structure is creating a new fund starting in 2012 to redistribute the money to current and retired players as well as into a veteran player performance pool.
The two sides also agreed upon a new salary cap and revenue sharing agreement that will be in place over the length of the new CBA. Starting with the 2012 season the salary cap will now be based on a share of “all revenue,” and the players are to receive 55% of the national media revenue, 45 % of NFL ventures revenue, and 40% of local club revenue. Player minimum salaries also saw a 10% increase for this year and will continue to increase throughout the length of the agreement.
Finally, the agreement also stipulates that there is to be no judicial oversight of the CBA, and that if there are disputes the NFL and NFLPA will employ an independent third party arbitrator which they agree upon to settle the dispute. To insure labor peace, the new agreement contains a clause stating that the players will not strike nor will the owners lock out the players during the duration of the agreement.
Boogity, boogity, boogity, Amen.
[JT & Jared Vasiliauskas]
Thursday, August 11, 2011
We somehow missed this one when it was fresh, but watching The Daily Show this week we learned of a lovely contracts story. The relevant segment, which will probably go up on the The Daily Show website next week, was Jon Stewart's interview with Mark Adams, author of Turn Right at Machu Picchu: Rediscovering the Lost City One Step at a Time. In the interview, Adams mentions that Hiram Bingham III, the man credited with "discovering" Machu Picchu in 1911, brought back relics from the site which he subsequently donated to Yale University.
As recounted in this article from National Public Radio, the Peruvian government permitted Bingham to take relics back to Yale for study in return for his promise to return them upon demand by Peru. When Peru asked Yale to return its artifacts, Yale at first refused, claiming that the custom at the time of Bingham's discovery was more or less "finders, keepers" and dismissing Bingham's letters acknowledging his agreement with the Peruvian government as non-binding. Peru filed suit in 2008 (here is the complaint), and at the end of last year, the two sides entered into a Memorandum of Understanding.
Under the MOU, the artifacts are to be returned to Peru by the end of 2012. In return for the return of its property, Peru has agreed to build a museum in Cuzco, the ancient Incan capital, to house them and to establish an international center at which scholars from around the world can have access to them.
Wednesday, August 10, 2011
Tuesday, August 9, 2011
Survivors of and heirs to those killed in the February 2007 crash of a Chinook helicopter in Afghanistan sued the defense contractors (Boeing, Honeywell, Goodrich, and AT Engine Controls), claiming that design and manufacture flaws caused the crash. The District Court dismissed the claims against AT Engine Controls, a British corporation, based on lack of personal jurisdiction. It also granted summary judgment to the U.S. based companies, finding that the federal government contractor defense preempted plaintiffs' claims.
In this opinion filed last week, the Ninth Circuit affirmed the District Court's rulings. According to the court, the government contractor defense "protects government contractors from tort liability that arises as a result of the contractor’s 'compli[ance] with the specifications of a federal government contract.'" In Boyle v. United Technologies Corp., the U.S. Supreme Court set out a three-part test for establishing the defense: “(1) the United States approved reasonably precise specifications; (2) the equipment conformed to those specifications; and (3) the supplier warned the United States about the dangers in the use of the equipment that were known to the supplier but not to the United States.” The Ninth Circuit provides a full analysis, especially of the first prong, and concludes that the test is satisfied in this case.
Monday, August 8, 2011
On July 13, 2011, the Court of Federal Claims released its opinion in California Industrial Facilities Resources, Inc. v. United States. California Industrial Facilities Resources (CIFR) challenged the award to Alaska Structures, Inc. (AKS) of a sole source contract to build large, tent-like structures used as living quarters for troops in Afghanistan. By the time CIFR's protest was filed, AKS had almost completed the work, and the court refused to enjoin it from completing its task. Nonetheless, the court accepted jurisdiction and ruled in CIFR's favor. The court summarized its reasoning as follows:
In brief summary, the Court finds that this case is not moot because the Government’s violation of statutory competition requirements for the war effort in Afghanistan is capable of repetition, and could again evade review. The challenged actions were too short in duration to be fully litigated prior to completion, and there is a reasonable expectation that the complaining party will be subject to the same actions in the future. Fed. Election Comm’n v. Wis. Right to Life, Inc., 551 U.S. 449, 462-63 (2007); Humane Soc’y v. Clinton, 236 F.3d 1320, 1331 (Fed. Cir. 2001); Ameron, Inc. v. U.S. Army Corps of Engineers, 787 F.2d 875, 880-81 (3d Cir. 1986). The Court has jurisdiction of this matter under 28 U.S.C. § 1491(b) (2006).
On the merits, the Court finds that the Government’s award of a sole source contract to AKS violated the competition requirements in 10 U.S.C. § 2304(e) (2006) and Federal Acquisition Regulation (FAR) 6.302-2(c)(2). Even when confronted with unusual and compelling urgency, the Government still must request offers from as many potential sources as is practicable. The Government was well aware that other sources would have been interested in competing for the contract, but the Government made no effort to contact any source other than AKS. The Government had 26 days between its awareness of the shelter system requirement (April 1, 2011) and the award of the contract to AKS (April 27, 2011), and it easily could have obtained competitive prices from other sources. The Government’s failure to do so was in violation of law.
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Thursday, August 4, 2011
In an unpublished memorandum, the Federal Court of Appeals for the Ninth Circuit reinstated Julie Riggs' claim for beach of an implied-in-fact contract with MySpace in Riggs v. MySpace, Inc. The laconic Ninth Circuit tells us nothing of the underlying claims. Here's the paragarph relating to the implied-in-fact contract claim:
However, the district court improperly dismissed Riggs’s implied-in-fact contract claim, arising from her ideas for a MySpace website devoted to celebrities, because Riggs alleged in her First Amended Complaint at paragraph 120 that she told the News Corporation’s executive’s assistant that she wanted to “sell” her ideas before she disclosed them. See Grosso v. Miramax Film Corp., 383 F.3d 965, 967 (9th Cir. 2004) (under California law, to establish a breach of an implied-in-fact contract for disclosure of an idea, “the plaintiff must show that the plaintiff prepared the work, disclosed the work to the offeree for sale, and did so under circumstances from which it could be concluded that the offeree voluntarily accepted the disclosure knowing the conditions on which it was tendered and the reasonable value of the work”); Desny v. Wilder, 299 P.2d 257, 270 (Cal. 1956) (there may be an implied-in-fact contract “if the idea purveyor has clearly conditioned his offer to convey the idea upon an obligation to pay for it if it is used by the offeree and the offeree, knowing the condition before he knows the idea, voluntarily accepts its disclosure (necessarily on the specified basis) and finds it valuable and uses it”).
Santa Clara Law Prof Eric Goldman posted some helpful information at the time of the District Court's ruling in the case back in in 2009. His discussion can be found here. He has some critical things to say about that ruling that might be of interest to readers interested in the law of the internet. He also provides this useful background on the case:
An earlier decision in the case upheld the venue selection clause in MySpace's user agreement. The reinstated claim relates to Riggs' idea for a MySpace page devoted to celebrities. The Ninth Circuit tells us no more than that.
Wednesday, August 3, 2011
N. Pieter M. O'Leary, Bullies in the Sandbox: Federal Construction Projects, the Miller Act, and a Material Supplier's Right to Recover Attorney's Fees and Other "Sums Justly Due" under a General Contractor's Payment Bond, 38 Transp. L.J. 1 (2011)
Regina Robson, Paying for Daniel Webster: Critiquing the Contract Model of Advancement of Legal Fees in Criminal Proceedings, 7 Hastings Bus. L.J. 275 (2011)
Tuesday, August 2, 2011
Monday, August 1, 2011
The Southern District of New York issued its opinion last week in Marvel Worldwide v. Kirby. The New York Times describes the decision, which granted summary judgment to Marvel, as a major victory for the comic book company and its parent, the Walt Disney Company.
Jack Kirby, whose heirs brought the suit, played a key role in developing a number of important characters in recent movies, such as The Incredible Hulk, Spider Man, Iron Man, Thor (trailer below), and the X-Men. We learn from the Southern District's opinion that these stars of the silver screen got their start as comic book characters. Who knew?!? Kirby's heirs send notice to Marvel in 2009 that they intended to reclaim ownership of Mr. Kirby's creations under the 1909 Copyright Act, but Marvel brought suit seeking a declaration that the property at issue belonged to Marvel and not to Mr. Kirby, because Mr. Kirby had created them as part of a "work for hire" arrangement. Under federal copyright law, the work product created in such circumstances belongs to the employer.
Although Mr. Kirby's heirs argued that his work product was not the result of a "work for hire" agreement with Marvel, the District Court disagreed and ruled that the property belonged to Marvel alone. During the relevant period when Mr. Kirby created the characters at issue, Mr. Kirby never had a written contract with Marvel. Rather, he was a freelance writer paid based on the number of pages that he drew that Marvel used in its comics. Later, in 1972, Mr. Kirby entered into an agreement with a Marvel predecessor assigning all rights he might have in material that he created to Marvel. The same agreement acknowledged that Kirby had created such material in the context of a work for hire relationship.
The Kirby heirs tried to argue that the lack of a written contract during the relevant period meant that there was no contractual relationship between Kirby and Marvel at the time the characters were created. The District Court pointed out that the contract arose through conduct. The court found that the characters at issue were created at Marvel's "instance and expense" and that the Kirby heirs could not rebut the resulting presumption in favor of Marvel's "authorship" for copyright purposes of the characters.
Marc Toberoff, the Kirby family's attorney was respectfully defiant. As quoted in the New York Times, he said, “We respectfully disagree with the court’s ruling and intend to appeal this matter to the Second Circuit. Sometimes you have to lose to win.”