ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, April 1, 2011

Chicago Cubs Engage in Elaborate April Fools' Day Hoax

Cubs Perhaps they were miffed by the fact that this blog ruined the Cubs' planned opening day surprise when it announced the flurry of deals the Cubs had made in order to obtain the kind of starting line-up that could make them contenders.  

Or perhaps there were contractual problems that are preventing the Cubs from actually fielding their newly acquired talent.

Or perhaps they hope that by fielding a farm-club team on opening day, they will get their aging stars to retire or agree to set aside their no-trade options.

But the most likely explanation is that this season's starting line-up is just an April Fools' Day joke.  You gotta hand it to the Cubs, though.  If the Yankees fielded a team featuring a 1st baseman with a career batting average of .241, everyone would know it was a joke.  The Red Sox might be capable of that, but a first baseman with a lifetime batting average of .241 coupled with a no-pop, limited-speed second baseman who also hit .241 in 30 games last season?!?  Only the Cubs could make that believable.  

Still, the new motto, "At least we're not Pittsburgh" was a bit over the top.


April 1, 2011 in About this Blog, Commentary, In the News | Permalink | Comments (0) | TrackBack (0)

Blockbuster Trade Makes Cubs a Lock in 2011

Wrigley_field As those driving around Chicago have probably already noticed, there are new billboards advertising some of the team's latest acquisitions, including Derek Jeter and Albert Pujols.  The New York Times calls the billboards a stumble, but they misunderestimate the savvy of the Cubs' leadership.  Fans looking for those lovable losers this season will be disappointed by the new starting line-up.  

Here it is:

1. Ichiro Suzuki, RF
2. Derek Jeter, SS
3. Marlon Byrd, CF
4. Albert Pujols, IB
5. Aramis Ramirez, 3B
6. Joe Mauer, C
7. Chase Utley, 2B
8. Alfonso Soriano, LF 
9. Cliff Lee 

Barry Bonds has announced that he will come out of retirement to pinch hit on occasion, in keeping with his down-to-earth low-key style.


April 1, 2011 in In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, March 31, 2011

Will Glenn Beck Out-Fox His Network?

GlennBeck Glenn Beck (in a photograph by David Shankbone at right) and Fox News are as inseparable as peanut butter and jelly.  Or so we thought.  But Beck’s contract expires this December, and his declining viewership and problems with advertisers have led Fox News to start “contemplating life without Mr. Beck” according to the New York Times.

We learn from the New York Daily News that, during the first quarter of this year, Beck lost more than 1/3 of his audience, or more than one million viewers. He's lost more viewers than Keith Olbermann ever had.  Plus, according to the Kansas City Star, the viewers lost were predominantly young viewers: Beck lost nearly half of his 18-49 year old audience and nearly 40% of the 24-54 year old crowd.

Perhaps more importantly, Beck has had longstanding problem with advertisers. After Beck went on Fox and Friends and informed us all of President Obama’s “deep-seated hatred of white people”, around 300 advertisers bolted, as the New York Times noted, leaving Beck and Fox News relying on various gold dealers for advertising revenues. Fox News seemed, at first, to be willing to remain committed until death do them part and overlook the advertiser flight. But, according to AOL's Daily Finance site, as more and more advertisers choose Hardball or The Situation Room over Beck, the Beck taboo has become increasingly difficult for Fox to ignore. On top of that, TVNewser reports that when Beck recently went on vacation for a week, former New Jersey Superior Court Judge Andrew Napolitano filled-in and maintained the show’s ratings, perhaps because of his special feature in which he reviewed recent posts from the ContractsProf Blog.

As Seneca counsels, “Every new beginning comes from some other beginning’s end.” In this case, the demise of contract negotiations between Fox News and Glenn Beck could lead Beck to boldly go where Oprah has gone before: The New York Times suggests that he is considering forming his own cable channel. Despite recent losses in viewership, The Belfast Telegraph compiles evidence that Beck still retains a loyal following: his nationally syndicated radio show is the third most listened to in the country, his numerous books have consistently enjoyed great sales, and he can still summon 100,000-plus to travel cross-country and attend his rallies.

Not everyone is on-board with the idea, however. Marc Babej at Forbes argues that the idea is a non-starter. He points out key distinctions between the Oprah Winfrey Network and a possible Glenn Beck Network. Reverence for Oprah is near-universal, whereas Beck promotes a divisive, us vs. them politics. Oprah has been a landmark in television for quite some time, while Beck is a relative new kid on the block. Finally, Oprah has a proven track record of earning her investors a consistent return. Beck has profited greatly, but also shed substantial advertisers and viewers as of late, making such a venture risky.

Perhaps Beck is allowing rumors of a Glenn Beck Network to flourish in order to gain leverage in his upcoming contract negotiations with Fox. But it would not be inconceivable for Beck to make such a move. If it occurred, according to the Times, it would be a “landmark moment for the media industry, reflecting a shift in the balance of power between media institutions and the personal brands of people they employ.” All of this is contingent on the fact that the Progressives don’t nationalize television first. We shall see.

[Jon Kohlscheen & JT]

March 31, 2011 in Celebrity Contracts, In the News | Permalink | TrackBack (0)

Wednesday, March 30, 2011

D.D.C. Rejects Translator's Breach of Contract Claim

US_Army_Logo Back in 2003, a government contractor, L-3 Services offered Abdul Wahab Nattah, a dual U.S. and Libyan citizen, a position as a translator in Kuwait.  Mr. Nattah alleges that he was assured certain work conditions that would keep him cozy, well-fed and away from combat.  Despite these assurances, Mr. Nattah alleges that he spent a few unpleasant months in Kuwait before he L-3 transferred him to the custody of the U.S. Army, now in a condition he described as slavery.  The U.S. Army took him to Kuwait, and he provided language services there that frequently brought him into harm's way.  After a shell exploded near him, causing him hearing loss and other injuries, he was sent to Germany for treatment and then discharged, he alleges as a corporal in the U.S. Army.  Despite this alleged status, Mr. Nattah claims that he has been denied veterans' benefits.  

Mr. Nattah sued a number of government and private entities in 2006.   The U.S. District Court for the District of Columbia dismissed all claims in 2008.  In dismissing the claims against L-3, the court relied on a letter indicating that Mr. Nattah would be an at-will employee.  In dismissing claims against the government entities, the court relied on soveign immunity.

The D.C. Circuit Court of Appeals reversed in part.  Since sovereign immunity does not apply to claims for non-monetary relief, Mr. Nattah was allowed to amend his complaint to seek non-monetary relief against the Secretary of the Army.  Second, the Court of Appeals found that the existence of the written offer letter did not negate the possibility of a binding oral agreement with the terms described in Nattah's complaint.

DDC On remand, the District Court again dismissed all of Mr. Nattah's claims in a decision handed down on March 17.  The Court conceded that sovereign immunity was generally waived on non-monetary claims.  However, it noted an exception to the waiver for “acts of ‘military authority exercised in the field in time of war or in occupied territory.’”  The District Court noted that the gravamen of Mr. Nattah's remaining claims against the Secretary of the Army was that "the Army bought plaintiff as a slave from L-3 Services, improperly detained him, and forced him to participate in the war in Iraq."  Even though some of the conduct of which Mr. Nattah complained occurred before the actual war in Iraq began, the District Court still found that the military exception to the waiver of sovereign immunity applied and again dismissed Mr. Nattah's claims against the government.  

In the alternative, the District Court noted that Mr. Nattah's claims under the Geneva Convention, the 13th Amendment, the constitutional right to travel and international law do not state claims that give rise to a private right of action.  Moreover, even if they did, since Mr. Nattah no longer claims that he is enslaved, to the extent that he seeks non-monetary relief, his claims are moot.

As to Mr. Nattah's claims against L-3, the District Court first found that the were barred by the applicable three-year statute of limitations on contracts claims and that D.C. does not recognize the doctrine of equitable tolling.  Mr. Nattah's allegation that his captivity and his injury from Iraq prevented him from filing a claim within the three-year period was thus unavailing.

While the District Court relied on D.C. law to establish the statute of limitations, it relied on Virginia law to determine that Mr. Nattah's contractual claims were also barred under the statute of frauds.  The District Court reasoned that the alleged oral agreement created a potentially indefinite term for Mr. Nattah's service agreement with L-3, thus putting the alleged agreement in violation of the statute of frauds.  The partial performance exception to the statute of frauds is an equitable doctrine and in Virginia is not applicable in cases such as Mr. Nattah's that seek money damages.


March 30, 2011 in Government Contracting, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Court of Federal Claims Finds Illusory Promise Claim Illusory

Usfs_shield Crewzers Fire Crew Transport, Inc. v. U.S. arose out of a solicitation issued by the U.S. Forest Service in connection with contemplated Blanket Purchase Agreements (BPAs) for the purchase of buses that would be used by the Service to transport crews in emergencies.  The vendors would have to convert school buses to suit the Service's purposes.  Once the BPAs were issued, the Service reserved the right to order buses based on "cascading set-aside procedure" that gave preference to certain categories of bidders.  The Service wanted to make certain that it would be able to identify vendors who could provide the needed buses in a hurry, so it granted BPAs to multiple bidders.  The Solicitation included he following provision:

Since the needs of the Government and availability of contractor’s resources during an emergency cannot be determined in advance, it is mutually agreed that, upon request of the Government, the contractor shall furnish the resources listed herein to the extent the contractor is willing and able at the time of the order. Due to the sporadic occurrence of Incident activity, the placement of any orders IS NOT GUARANTEED.

The Court of Federal Claims interpreted this and other language to mean that neither party was actually promising much.  The Service made no promise to order buses to vendors awarded a BPA, and the the vendors only had a duty to maintain their readiness to provide such buses or to notify the Service of changes in their readiness to do so.  

Crewzers was never a happy camper.  It filed two pre-bid protests that the Government Accountability Office (GAO) rejected.  At that point the contracting officer notified all potential bidders that, due to delays in the bidding process (caused at least in part by Crewzers), bidders could not change key terms of their bids.  At that point, Crewzers challenged the solicitation as "illusory and unenforceable."  Crewzers filed its amended complaint in December 2010.  Briefing on cross-motions for judgment on the administrative record was completed in February and oral argument was held on March 11.

On March 18th -- how's that for efficiency?! -- the CoFC ruled for the Service.  In so doing, the court noted that the a BPA is not a contract.  Rather, "[i]t is instead a collection of provisions that may mature into a contract between the government and a supplier if and when a purchase order – in this case, a “resource order” -- is entered into by each."  Crewzers' arguments focused on the tension in the language of the Solicitation quoted above.  While contractors "shall furnish" resources; they only need do so if "willing and able."  Crewzers characterized this tension as giving rise to an illusory promise.  And so it would be, the CoFC acknowledged, if the BPAs were contracts, but they are not.

The CoFC then proceeded to reject Crewzers' alternative construction of the BPA as an option contract.  Actually, it refused to consider the argument, because it was raised as a new argument in Crewzers' reply brief.  However, the opinion then spends several pages carefully explaining why, even if the argument had been properly raised, it would have been rejected, which pretty much amounts to a rejection of the claim compounded by a criticism of Crewzers' litigation strategy.  

The CoFC rejected Crewzers' attacks on the integrity of the contacting officer's determinations as "fly-specking the solicitation" and also rejected a statutory claim.


March 30, 2011 in Government Contracting, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 29, 2011

Weekly Top Tens from the Social Science Research Network

SSRN RECENT HITS (for all papers announced in the last 60 days) 

TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 
January 28, 2011 to March 29, 2011

RankDownloadsPaper Title
1 282 Policy Options for Progress Towards a European Contract Law: Comments on the Issues Raised in the Green Paper from the Commission of 1 July 2010, COM (2010) 348 Final 
Jürgen BasedowGregor ChristandlWalter DoraltMatteo FornasierMartin Illmer,Jens KleinschmidtSebastian A.E. MartensHannes RöslerJan Peter Schmidt,Reinhard Zimmermann
2 207 Emerging Policy and Practice Issues (2010) 
Steven L. SchoonerDavid J. Berteau
3 149 Trust, Expert Advice, and Realtor Responsibility 
Brent T. White
4 135 American Indian Tribal Law 
Matthew L. M. Fletcher
5 130 Contracts: Law in Action, Volume I: The Introductory Course – Introduction (Chapter 1) 
Stewart MacaulayJean BraucherJohn A. KidwellWilliam C. Whitford
6 127 Metaphor, Models, and Meaning in Contract Law 
Jeffrey M. Lipshaw
7 122 When Money Grew on Trees: The Untold Story of Lucy v. Zehmer 
Barak D. RichmanDennis Schmelzer
8 118 The Regulation of Reputational Information 
Eric Goldman
9 104 A New Legal Theory to Test Executive Pay: Contractual Unconscionability 
Lawrence A. Cunningham
10 96 Contract and Procedure 
Christopher R. DrahozalPeter B. Rutledge,

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  

January 28, 2011 to March 29, 2011

RankDownloadsPaper Title
1 130 Contracts: Law in Action, Volume I: The Introductory Course – Introduction (Chapter 1) 
Stewart MacaulayJean BraucherJohn A. KidwellWilliam C. Whitford,
2 122 When Money Grew on Trees: The Untold Story of Lucy v. Zehmer 
Barak D. RichmanDennis Schmelzer
3 104 A New Legal Theory to Test Executive Pay: Contractual Unconscionability 
Lawrence A. Cunningham,
4 61 Five Political Ideas of European Contract Law 
Martijn W. Hesselink
5 51 Intolerable Abuses: Rendition for Torture and the State Secrets Privilege 
D. A. Jeremy Telman
6 50 Afterthoughts: International Commercial Contracts and Arbitration 
Luke R. Nottage
7 49 Contracting in China: Comparative Observations on Freedom of Contract, Contract Formation, Battle of Forms and Standard Form Contracts 
Nicole KornetNicole Kornet
8 48 Contract is Not Promise; Contract is Consent 
Randy E. Barnett
9 39 Promoting Business Success Through Contract Visualization 
Gerlinde Berger-WalliserRobert C. BirdHelena Haapio





Optional Law: A Plea for Multiple Choice in Private Law 
Jan M. Smits

March 29, 2011 in Recent Scholarship | Permalink | TrackBack (0)

Not Much Fallout from Stolt-Nielsen in the Second Circuit

2nd Cir. We referred our readers to other sources on the Supreme Court's decision in Stolt-Nielsen v. Animalfeeds Int'l Corp. last term.  This time, we are going to bear our share of the burden by reporting on the limited consequences flowing from that case in the Second Circuit case, In re: American Express Merchants' Litig.,although we freely admit that Jill Gross of the ADR Prof blog has beaten us to the punch here.

The issue in American Express is the enforceability of a "class action waiver" provision within a mandatory arbitration agreement.  The Second Circuit originally ruled on the issue in 2009, finding the provision unenforceable because enforcement "would effectively preclude any action seeking to vindicate the statutory rights asserted by the plaintiffs."  The Supreme Court vacated that decision and remanded for reconsideration in light of Stolt-Nielsen.  Although the parties filed supplemental briefs on the impact of that decision, the Second Circuit found that its original analysis was unaffected by Stolt-Nielsen and thus affirmed its original decision without oral argument.  

The District Court had originally dismissed the action, finding that the issue of the enforceability of the challenged provision was for the arbitrator to decide.  The Second Circuit found otherwise in 2009 and the parties did not challenge that ruling.

American_Express The Second Circuit's reasoning in the 2009 opinion was as follows: 1) The Supreme Court's 2000 decision in Green Tree Financial Corp-Alabama v. Randolph was controlling and imposed on plaintiffs the burden of establishing that the challenged provision rendered arbitration prohibitively expensive; 2) plaintiffs had met that burden; and therefore 3) to enforce the class action waiver would be to grant American Express de facto immunity from antitrust liability.  However, in Stolt-Nielsen, the Supreme Court that "a party may not be compelled . . . to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so."  American Express interpreted this ruling to mean that courts must simply enforce the parties' agreements, not construe them.  In this case, the consequence of Stolt-Nielsen, according to American Express, is that coruts "may not impose class arbitration on unwilling parties."  

The Second Circuit was unmoved.  There was no confusion about what the parties agreed to.  The question was whether such an agreement could be enforced, and on that topic, the Second Circuit concluded, Green Tree still controls. While Stolt-Nielsen prohibits the use of public policy as a means of divining the parties intent, the Second Circuit does not bar a court from using public policy to find contractual language void.  The case is now remanded to the District Court for further proceedings.


March 29, 2011 in Commentary, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Monday, March 28, 2011

Pageant Update: Crown Restored; Entire State of Texas Breathes a Sigh of Relief.

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We previously shared the breach of contract case between the organizers of the Miss San Antonio pageant and the pageant's winner, Domonique Ramirez.  The most oft-reported aspect of the story was Ms. Ramirez's claim that she was dethroned after failing to "lay off the tacos."  Pageant officials responded that the alleged breach was based not on taco over-consumption but on chronic tardiness and other acts and omissions of Ms. Ramirez.  On Friday, a Texas jury agreed with Ms. Ramirez.  The result?  She gets her crown back and gets to compete at the next level--the Miss Texas pageant.  She also has a great story for her law school admissions essay should she go that route later in life.  "I knew I wanted to become a lawyer when..."


March 28, 2011 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Nugget Trouble in Tennessee

McDonalds A Tennessee family is suing McDonald’s for breach of contract, promissory estoppel, negligence, and consumer protection violations for playing keep away with a chicken nugget.  The case is Howell v. McDonald's Food Corp.

This bizarre case began when father and son went to McDonald’s for dinner and the boy order a chicken nugget happy meal.  The 6-year old boy realized that last chicken nugget that looked “redish”  and refused to eat it.  The local McDonald’s offered a fresh chicken nugget- which the parents declined.  That might have been because when their child glimpsed the nugget, he made the sign of the cross and began reciting the lyrics to Beatles' albums backwards.  For some reason, the family preserved the crimson nugget.  Over the next couple days the child was sick with various stomach ailments, and the parents became concerned.  After notifying the local health department, they froze the suspect nugget until they could send it to a nugget testing facility.

NuggetsMcDonald's' insurer, Traveler’s Insurance, offered and the Howells agreed to send the nugget out for tests.  The family was assured that they would be notified of the results.  The nugget was sent for testing in November of last year.  In January, defendants notified the Howells that defendants would not share the test results.  Instead, the family received what remained of the nugget -- which was about 20% of the original nugget, now "ashy and charcoal-like" in appearance.

The Howells seek an order compelling McDonald’s to give them the results.  They also seek pain and suffering damages, punitive damages, and treble damages for the consumer protection claim.  The real damages to the family likely will not be known unless the court compels McDonald's to release the test results.  Assuming that the chickens that went into the nugget were not free-range Chernobyl hens, there's probably no reason to think that the Howell's son will face serious long-term effects not already foreseeable from having consumed food.purchased at a McDonald's.  One wonders what information defendants are trying to keep concealed.

[Katherine Freeman & JT]


March 28, 2011 in Food and Drink, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)