ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, December 30, 2011

Courts Decide Arbitration Waivers, Says the 11th Circuit

11thCircuitSealIn 1996, two parties, Grigsby & Associates (Grigsby) and M Securities Investment (M) agreed to underwrite a $183 million municipal bond offering in Dade County, Florida.  GBR Financial Products failed to pay Grigsby, so Grigsby didn't pay M.  Lots of lawsuits followed.  In 2006 M initiated an arbitration proceeding against Grigsby seeking $2 million in damages, the amount allegedly owed to M for its role in the bond offering.  Grigsby then brought an action in the federal district court claiming that M had waived its right to arbitration and therefore should be enjoined.  The arbitration proceeded, and M won an award of $100,000, plus interest and attorneys' fees, and Grigsby was sanctioned $10,000 for failing to comply with discovery obligations.  

Grigsby challenged that award in federal court, but the district court confirmed the award.  Grigsby then appealed to the 11th Circuit.  Last week, the 11th Circuit issued its opinion, Grigsby & Associates Inc. v. M Securities Investment.  Before the district court, Grigsby had argued that the arbitration was barred by res judicata and because M had waived the right to arbitrate by filing several lawsuits against Grigsby before initiating arbitration proceedings. 

The 11th Circuit agreed with the district court that the res judicata issue is in the category of "disputes over whether a particular claim may be successfully litigated anywhere at all," and that such disputes are presumptively assigned to the arbitrator.  Grigsby's waiver claim would seem to be in the same category, since in Howsam v. Dean Witter Reynolds, Inc., 123 S. Ct. 588 (2002), the U.S. Supreme Court included "allegations of waiver" on the list of issues presumptively for the arbitrator.  The 1st, 3rd, and 6th Circuits have nonetheless treated waiver as issue presumptively to be decided by the courts rather than by arbitrators when the waiver is based on a party's conduct.  The 11th Circuit decided to follow the reasoning of these Circuits.  The district court's failure to decide the issue of waiver was legal error and therefore an abuse of discretion.  

The case was remanded to the district court to decide Grigsby's waiver claim on the merits.  Until it does so, the 11th Circuit vacated the district court's order denying an injunction of the arbitration award, subject to reinstatement if the district court determines that no waiver occurred.

[JT]

December 30, 2011 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Thursday, December 29, 2011

Apple’s Marketing Statements are Non-Actionable Puffery

Plaintiff Alan Vitt’s laptop "crapped out" (term of art) just after the 1-year warranty expired.  The crux of his complaint on behalf of all purchasers of the iBook G4: the laptop did not last “at least a couple of years,” which he allaged is the reasonable consumer expectation of a laptop.  He alleged that “this is because one of the solder joints on the logic board of the iBook G4 degrades slightly each time the computer is turned on and off, eventually causing the joint to break and the computer to stop working shortly after Apple’s one year express warranty has expired.”  Plaintiff further alleged that Apple “affirmatively misrepresented the durability, portability, and quality of the iBook G4 and did not disclose the alleged defect.”

In affirming the dismissal of his complaint, the 9th Circuit held that the marketing statements are non-actionable puffery:

Vitt challenges Apple’s advertising because it stated that the iBook G4 is “mobile,” “durable,” “portable,” “rugged,” “built to withstand reasonable shock,” “reliable,” “high performance,” “high value,” an “affordable choice,” and an “ideal student laptop.” The district court held that these statements are generalized, non-actionable puffery because they are “inherently vague and generalized terms” and “not factual representations that a given standard has been met.” We agree. Even when viewed in the advertising context as Vitt urges, these statements do not claim or imply that the iBook G4’s useful life will extend for “at least a couple of years.” For example, to the extent that “durable” is a statement of fact it may imply in context that the iBook G4 is resistant to problems occurring because of its being dropped, but not that it will last for a duration beyond its expressed warranty.

Vitt v. Apple Computer, Inc. (9th Cir. Dec. 21, 2011).

[Meredith R. Miller]

December 29, 2011 in Recent Cases, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 28, 2011

Weekly Top Tens from the Social Science Research Network

SSRNRECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 

October 27, 2011 to December 26, 2011

RankDownloadsPaper Title
1 212 Incentive Contracting 
Ralph C. Nash
George Washington University - Law School, 
Date posted to database: September 16, 2011 
Last Revised: September 26, 2011
2 195 Endogenous Institutions: Law as a Coordinating Device 
Gillian HadfieldBarry R. Weingast
USC Law School and Department of Economics, Stanford University - The Hoover Institution on War, Revolution and Peace, 
Date posted to database: November 24, 2011 
Last Revised: December 8, 2011
3 176 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
4 142 Political Risk and Sovereign Debt Contracts 
Stephen J. ChoiG. Mitu GulatiEric A. Posner
New York University (NYU) - School of Law, Duke University - School of Law, University of Chicago - Law School
5 88 Introduction: The Three and a Half Minute Transaction: Boilerplate and the Limits of Contract Design 
G. Mitu GulatiRobert E. Scott
Duke University - School of Law, Columbia University - Law School
6 78 Theories of Contract Law and Enforcing Promissory Morality: Comments on Charles Fried 
Brian Bix
University of Minnesota Law School
7 65 Credit on Wheels: The Law and Business of Auto Title Lending 
Jim Hawkins
University of Houston Law Center
8 63 Beyond the First Amendment: Shaping the Contours of Commercial Speech in Video Games, Virtual Worlds and Social Media 
Jon Garon
NKU Chase College of Law
9 60 Subprime Mortgages and the Case for Broadening the Duty of Good Faith 
Chunlin Leonhard
Loyola University New Orleans College of Law
10 59 The Holmesian Bad Man Flubs His Entrance 
Barbara H. Fried
Stanford Law School

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

October 29, 2011 to December 28, 2011

RankDownloadsPaper Title
1 179 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
2 71 Contract Versus Statute in Internet Governance 
Lee A. Bygrave
University of Oslo
3 60 Subprime Mortgages and the Case for Broadening the Duty of Good Faith 
Chunlin Leonhard
Loyola University New Orleans College of Law
4 59 The Holmesian Bad Man Flubs His Entrance 
Barbara H. Fried
Stanford Law School
5 58 Promissory Autonomy, Imperfect Courts, and the Immorality of the Expectation Damages Default 
George G. Triantis
Stanford Law School
6 49 Consumer Protection and the Islamic Law of Contract 
Muhammad Akbar Khan
International Islamic University
7 46 Will Firms Consider a European Optional Instrument in Contract Law? 
Gary Low
Maastricht European Private Law Institute
8 33 Acquis Principles 
Hans Christoph GrigoleitLovro Tomasic
Ludwig Maximilians University of Munich - Faculty of Law, Ludwig Maximilians University of Munich - Faculty of Law
9 30 Mandatory Law: Fundamental Principles 
Hans Christoph Grigoleit
Ludwig Maximilians University of Munich - Faculty of Law
10 29 In-House Counsel’s Role in the Structuring of Mortgage-Backed Securities 
Shaun BarnesKathleen G. CullySteven L. Schwarcz
Duke University - School of Law, Kathleen G. Cully PLLC, Duke University - School of Law

[JT]

December 28, 2011 in Recent Scholarship | Permalink | TrackBack (0)

Monday, December 26, 2011

AALS Contracts Annual Meeting Program

If you are attending next week's AALS Annual Meeting, please join us for the Contract Section's program, New Voices in Contracts Scholarship, scheduled for Saturday, January 7, 2012, from 1:30 to 3:15 p.m., at the Marriott Wardman Park Hotel.  The program will feature three junior scholars whose proposals the selection committee chose from the many quality responses to our CFP.

In alphabetical order, the featured speakers and their topics are

Aditi Bagchi (University of Pennsylvania Law School), Parallel Contract;

Mohsen Manesh (University of Oregon School of Law), Contractual Freedom under Delaware Alternative Entity Law; and

Emmanuel Voyiakis (London School of Economics & Political Science, Department of Law), Contract Law and Reasons of Social Justice.

There will be a brief business meeting following the program.

I look forward to seeing many of you in less than two weeks.

[Keith A. Rowley]

December 26, 2011 in Conferences, Meetings, Recent Scholarship | Permalink | TrackBack (0)