December 30, 2011
Courts Decide Arbitration Waivers, Says the 11th Circuit
In 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.
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 28, 2011
Weekly Top Tens from the Social Science Research Network
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 25, 2011
Vote for the Best Contracts Article of 2011!
Announcing the first annual ContractsProf Blog prize for the best contracts law article of the year, to be awarded at the Spring Contracts Conference to be held at the Thomas Jefferson School of Law in San Diego in March. The winner will receive a cash prize!
Vote (once only, folks) by sending an e-mail with your favorite contracts law review article from the list below to email@example.com. If your favorite article is not on the list, you may nominate (and/or vote for) an article that is not on this list through the same e-mail address.
Kenneth A. Adams, Making a Mess of Ambiguity: Lessons from the Third Circuit’s Opinion in Meyer v. CUNA Mutual Insurance Society, Bus. L. Today (the ABA Business Law Section's Online Resource) (Nov. 24, 2011)
Sofia Adrogue, Recent Developments in Fifth Circuit Business Torts Jurisprudence, 43 Tex. Tech. L. Rev. 843 (2011).
Miriam Albert, Lenne Espenschied and Grace M. Giesel, Exercise Showcase, 12 Transactions 335 (2011)
Luca Anderlini, Leonardo Felli, and Andrew Postlewaite, Should Courts Always Enforce What Contracting Parties Write? 7 Rev. L. & Econ. (2011)
Sally Andersen, Mapping the terrain: The last decade of payday lending in Australia, 39 Australian Bus. L. Rev. 5 (2011)
Aditi Bagchi, Unequal Promises, 72 U. Pitt. L. Rev. 467 (2011)
Glen Banks, Lost Profits for Breach of Contract: Would the Court of Appeals Apply the Second Circuit's Analysis? 74 Alb. L. Rev. 637 (2010/2011)
Ian Bartum, Thoughts on the Divergence of Contract and Promise, 24 Canadian J. L & Jurisprudence 225 (2011)
Stephen F. Befort, Unilateral Alteration of Public Sector Collective Bargaining Agreements and the Contract Clause, 59 Buff. L. Rev. 1 (2011)
Uri Benoliel, The Behavioral Law and Economics of Franchise Tying Contracts, 41 Rutgers L.J. 527 (2010).
Omri Ben-Shahar and Eric A. Posner, The Right to Withdraw in Contract Law, 40 J. Legal Stud.115 (2011)
Norman D. Bishara, Fifty Ways to Leave Your Employer: Relative Enforcement of Covenants Not to Compete, Trends, and Implications for Employee Mobility Policy. 13 U. Pa. J. Bus. L. 751 (2011)
Deborah Burand, Kojo Yelpaala and Peter Linzer, Teaching Transactional Skills and Law in an International Context, 12 Transactions 275 (2011)
Adam Candeub, Contract, Warranty and the Patient Protection and Affordable Care Act, 46 Wake Forest L. Rev. 45 (2011)
William J. Carney, Ronald J. Gilson and George W. Dent, Jr., Keynote Discussion: Just What Exactly Does a Transactional Lawyer Do? 12 Transactions 175 (2011)
Vincent Chiappetta, Patent Exhaustion: What's It Good For? 51 Santa Clara L. Rev. 1087 (2011)
Carl J. Circo, Will Green Building Contracts Transform Construction and Design Law? 43 Urb. Law. 4837 (2011)
Ronnie Cohen and Shannon O'Byrne, Burning Down the House: Law, Emotion and the Subprime Mortgage Crisis, 45 Real Prop. Tr. & Est. L.J. 677 (2011)
Mateja Djurovic, Serbian Contract Law: its development and the New Serbian Civil Code, 7 Eur. Rev. of Contract L. 65 (2011)
Christopher R. Drahozal, and Peter B. Rutledge, Contract and Procedure, 94 Marq. L. Rev. 1103 (2011)
Shelley Dunck, Brian Krumm and Sharon Pocock, Teaching Contract Drafting Using Real Contracts, 12 Transactions 359 (2011)
W. David East, Douglas Wm. Godfrey and Carol D. Newman. Teaching Transactional Skills and Tasks other than Contract Drafting, 12 Transactions 217 (2011)
David M. Epstein, Helen S. Scott, Carole Heyward and Daniel B. Bogart, Simulations in Clinics, Contract Drafting, & Upper-Level Courses, 12 Transactions 55 (2011)
Horst Eidenmüller, Why Withdrawal Rights? 7 Eur. Rev. of Contract L. 1 (2011)
Carlos A. Encinas, Clause Majeure?: Can a Borrower Use an Economic Downturn or Economic Downturn-Related Event to Invoke the Force Majeure Clause in Its Commercial Real Estate Loan Documents? 45 Real Prop. Tr. & Est. L.J. 731 (2011)
Mark Fagan, Tamar Frankel, Eric J. Gouvin and Kathy Z. Heller, Upper-level Courses: Three Exemplars, 12 Transactions 377 (2011)
Thomas A. Gabriele, Could the Weapon Systems Acquisition Reform Act of 2009 Have Fixed the Problems that Plagued the F-22 Acquisition Project Back in 1981?40 Pub. Cont. L.J. 741 (2011)
Eric J. Gouvin, Robert Statchen, Anthony J. Luppino and William A. Kell, Interdisciplinary Transactional Courses, 12 Transactions 101 (2011)
Jack M. Graves, Arbitration as Contract: The Need For a Fully Developed and Comprehensive Set of Statutory Default Legal Rules, 2 Wm. & Mary Bus. L. Rev. 227 (2011).
Stefan Grundmann & Sebastian Uhlig, German Contract Law – Nearly a Decade After the Fundamental Reform in the Schuldrechtsmodernisierung, Eur. Rev. of Contract L. 78 (2011)
Surya Gablin Gunasekara, "Other Transaction" Authority: NASA's Dynamic Acquisition Instrument for the Commercialization of Manned Spaceflight or Cold War Relic? 40 Pub. Cont. L.J. 893 (2011)
John M. Garon and Elaine D. Ziff, The Work Made for Hire Doctrine Revisited: Startup and Technology Employees and the Use of Contracts in a Hiring Relationship, 12 Minn. J. L. Sci. & Tech. 489 (2011)
David Hahn, The Internal Logic of Assumption of Executory Contracts, 13 U. Pa. J. Bus. L. 723-750 (2011)
Sam Foster Halabi, Efficient Contracting between Foreign Investors and Host States: Evidence from Stabilization Clauses, 31 Nw. J. Int'l L. & Bus. 261 (2011)
Trevor C. Hartley, Choice of Law Regarding Voluntary Assignment of Contractual Obligations under the Rome I Regulation, 60 Int'l & Comp. L. Quarterly 29 (2011)
Joan MacLeod Heminway, Michael A. Woronoff and Lyman P.Q. Johnson. Innovative Transactional Pedagogies, 12 Transactions 243 (2011)
Alec Hillbo, Fifty Years of Restrictive Covenants in Arizona Law, 4 Phoenix L. Rev. 725 (2011)
Michael H. Hoffheimer, Conflicting Rules of Interpretation and Construction in Multi-jurisdictional Disputes, 63 Rutgers L. Rev. 599 (2011)
Grace Hum, Miki Felsenburg, Barbara Lentz, Carolyn Broering-Jacobs and Ted Becker, Legal Writing Professors Morphing into Contract Drafting Professors, 12 Transactions 127 (2011)
John Patrick Hunt, Taking Bubbles Seriously in Contract Law, 61 Case W. Res. L. Rev. 681 (2011)
Anne Layne-Farrar, An Economic Defense of Flexibility in IPR Licensing: Contracting around "First Sale" in Multilevel Production Settings, 51 Santa Clara L. Rev. 1149 (2011).
Stephen J. Leacock, Fingerprints of Equitable Estoppel and Promissory Estoppel on the Statute of Frauds in Contract Law, 2 Wm. & Mary Bus. L. Rev. 73 (2011)
Chunlin Leonhard, Subprime Mortgages and the Case for Broadening the Duty of Good Faith, 45 U.S.F. L. Rev. 621 (2011)
Michael H. LeRoy, The New Wages of War--Devaluing Death and Injury: Conceptualizing Euty and Employment in Combat Zones, 22 Stan. L. & Pol'y Rev. 217 (2011)
Brittnay M. McMahon, The Science behind Surrogacy: Why New York Should Rethink Its Surrogacy Contracts Laws, 21 Alb. L.J. Sci. & Tech. 359 (2011)
Kemit A. Mawakana, In the Wake of Coast Federal: The Plain Meaning Rule and the Anglo-American Rhetorical Ethic, 11 U. Md. L.J. Race, Religion, Gender & Class 39 (2011)
Roy S. Mitchell, Cultural Sensitivities in International Construction Arbitration, 2 Faulkner L. Rev. 325 (2011)
Jim.Moye, Let's Put the Fear in the FERA! Suggestions to Make the Fraud Enforcement and Recovery Act of 2009 a Strong Fraud Deterrent, 35 S. Ill. U. L.J. 421 (2011)
Sondra Bell Nensala, Homeland Security Presidential Directive 12: How HSPD-12 May Limit Competition Unnecessarily and Suggestions for Reform, 40 Pub. Cont. L.J. 619 (2011).
Richard K. Neumann, Jr., Tina L. Stark and Howard Katz, Negotiations, 12 Transactions 153 (2011)
Raymond T. Nimmer, Copyright First Sale and the Over-riding Role of Contract. 51 Santa Clara L. Rev. 1311 (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)
Kingsley S. Osei, The Best of Both Worlds: Reciprocal Preference and Punitive Retaliation in Public Contracts, 40 Pub. Cont. L.J. 715 (2011).
Heidi Lynn Osterhout, Maj. U.S. Air Force. No More "Mad Money": Salvaging the Commander's Emergency Response Program, 40 Pub. Cont. L.J. 935 (2011)
Francesco Parisi, et al., Optimal Remedies for Bilateral Contracts, 40 J. Legal Stud. 245 (2011)
Lisa Penland, David Thomson, Susan Duncan, Karen J. Sneddon and Susan M. Chesler, New Ways to Teach Drafting and Drafting Ethics, 12 Transactions 187 (2011)
Lynn C. Percival, IV, Public Policy Favoritism in the Online World: Contract Voidability Meets The Communications Decency Act, 17 Tex. Wesleyan L. Rev. 165 (2011)
Abigail Lauren Perdue, For Love or Money: An Analysis of the Contractual Regulation of Reproductive Surrogacy, 27 J. Contemp. Health L. & Pol'y 279- (2011).
Ryan Peterson, Regulating the Global Marketplace: Why the U.S. Government Must Revise the Current Rules on Contracting with Foreign-Controlled U.S. Businesses, 40 Pub. Cont. L.J. 1061 (2011)
Lucille M. Ponte, Getting a Bad Rap? Unconscionability in Clickwrap Dispute Resolution Clauses and a Proposal for Improving the Quality of These Online Consumer "Products," 26 Ohio St. J. on Disp. Resol. 119 (2011)
David Robbins, et al, Path of an Investigation: How a Major Contractor's Ethics Office and Air Force Procurement Fraud and Suspension/Debarment Apparatus Deal with Allegations of Potential Fraud and Unethical Conduct, 40 Pub. Cont. L.J. 595 (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)
Kara M. Sacilotto, Deja Vu All Over Again: Cost-Reimbursement Contracts Fall out of Favor (Again), but Should They? 40 Pub. Cont. L.J. 681 (2011).
Jane Scott and Charles Fox, Contract Drafting in 90 Minutes, 12 Transactions 7 (2011)
Andrew A. Schwartz, Consumer Contract Exchanges and the Problem of Adhesion, 28 Yale J. on Reg. 313 (2011)
Jan M. Smits, Rethinking the Usefulness of Mandatory Rights of Withdrawal in Consumer Contract Law: The Right to Change Your Mind? 29 Penn St. Int'l L. Rev. 671 (2011)
Tina L. Stark, Welcome & Opening Remarks, 12 Transactions 3 (2011)
Marina Tsikun and Kuei-Jung Ni, Using Licensing Contracts to Protect Holders of Traditional Knowledge Related to Genetic Resources -- a Reflection on ICGB Projects, 42 IIC: Int'l Rev. Intell. Prop. & Competition L. 299 (2011)
Megan S. Vahey, A Discussion on the District of Columbia's Procurement Law and the Spark That Led to Renewed Reform Efforts, 14 U.D.C. L. Rev. 115 (2011)
Florian Wagner-von Papp, European Contract Law: Are No Oral Modification Clauses Not Worth the Paper They Are Written On? 63 Current Leg. Problems 511 (2011)
Christine M. Westphal, Restrictive Covenants in Employment Contracts: Regulating Employee Solicitation. 37 J. Legis. 108 (2011)
Chris Willett, The Functions of Transparency in Regulating Contract Terms: UK and Australian Approaches, 60 Int'l & Comp. L.Q. 355 (2011).
John J.Worley, Karl Okamoto and Sherry Porter, Transactional Centers and Certificate Programs, 12 Transactions 299 (2011)
Huma T. Yasin, Playing Catch-up: Proposing the Creation of Status-based Regulations to Bring Private Military Contractor Forms within the Purview of International and Domestic Law. 25 Emory Int'l L. Rev. 411 (2011)
Noah D. Zatz, Beyond Misclassification: Tackling the Independent Contractor Problem without Redefining Employment. 26 A.B.A. J. Lab. & Emp. L. 279 (2011).