Wednesday, January 11, 2012
Here is the latest from Stanford Law's Professor Richard Craswell. This is his take on Shirley Maclaine's suits against 20th-Century Fox, a case we have previously posted about here and (more briefly) here. Other installments in the series from Professor Craswell have included his takes on Frigaliment, Lumley, Wood v. Lady Duff Gordon, and Alaska Packers.
Professor Craswell provides the following case summary:
In 1965, Twentieth-Century Fox signed Shirley Maclaine Parker to play the lead in a movie based on the Broadway musical, "Bloomer Girl." The contract guaranteed Ms Maclaine at least $750,000; it also gave her approval rights over the movie's director. However, Fox later decided not to produce "Bloomer Girl" ... and then refused to pay Maclaine the guaranteed compensation unless she played the female lead in "Big Country, Big Man", a western set in the opal mines of frontier Australia. This role had no singing or dancing, gave her no control over the director, and was to be filmed on location in Australia.
When Maclaine turned down this role, Fox said they owed her no money because she could have avoided (or "mitigated") any financial losses by appearing in the western. The California Supreme Court famously disagreed, and ordered Fox to pay the $750,000.
For more on the history and context of this case, see Victor P. Goldberg, "Bloomer Girl Revisited, or, How to Frame an Unmade Picture," 1998 Wis. L. Rev. 1051; and Mary Joe Frug, "Re-Reading Contracts: A Feminist Analysis of a Casebook, 34 American U. L. Rev. 1065, 1114-25 (1985).
Tuesday, January 10, 2012
This year's AALS Contracts section program presentations were thought-provoking and interesting - thanks to Keith Rowley, Tom Joo and Lisa Bernstein for selecting the papers and to Aditi Bagchi, Mohsen Manesh and Emmanuel Voyiakis for their presentations.
At the conclusion of the meeting, Keith Rowley stepped down as Chair (but will remain as immediate past Chair and unofficial Godfather of the Section), and Tom Joo is the new Chair, Larry Garvin the Chair-Elect, and Nancy Kim the Secretary of the section. In addition, Curtis Bridgeman, Emily Houh and Danni Kie Hart will be the new at-large Executive Committee Board members. We look forward to seeing you all at next year's meeting.
After a jury trial, ATA Airlines (ATA) won a nearly $66 million verdict against Federal Express Corporation (FedEx). FedEx appealed that ruling to the 7th Circuit, and ATA filed a cross-appeal on its promissory estoppel claim in the event that FedEx should succeed on its appeal. The appeal was decided by Chief Judge Easterbrook, along with Judges Posner (picutured) and Wood. Judge Posner's opinion for the court can be found here.
The facts of the case are pretty complicated. FedEx is a team leader in the Civil Reserve Air Fleet program. That means that in the event of a national emergency, it and its junior team members, which icludes ATA, have agreed to make a certain number of aircraft for use by the Department of Defense. In return to this pledge, team members are assigned points that permit them to bid to provide non-emergency services to the government. It turns out, the little guys are more interested in these opportunities than are large carriers like FedEx, and they are willing to pay for the points, which are transferable within a team. The FedEx team earned $600 million a year providing non-emergency services to the government.
The agreements that created the team are also complicated. The contract at issue here was not really a contract at all but more of an agreement in principle about how the parties would divide up the non-emergency service contracts for the years 2007-2009. Because the parties could not know in advance what the government’s non-emergency needs would be, it could not know which of the air carriers would have the ability to meet those needs. Nonetheless, the parties agreed in principle to a 50/50 division of the work between ATA and another small carrier, Omni. But the following year, some of ATA’s work was siphoned off to Northwest Airlines, and then following Delta’s acquisition of Northwest, ATA was replaced on the team with Delta. In 2008, upon receiving notice that it would be replaced by Delta in 2009, ATA withdrew from the team and filed for bankruptcy, lacking sufficient non-government business to keep itself aloft.
The district court treated this agreement as an enforceable contract, but the 7th Circuit disagreed. Even if a court could somehow fill in terms relating to the various contingencies regarding the government’s needs and how those needs would be met, Judge Posner noted, the agreement had no price term relating to FedEx’s compensation for serving as team leader. That price had varied from 4.5% to 7%, and there was no set of facts or trade usage available which could provide a basis for a court-supplied price term.
In the alternative, ATA argued that it relied on FedEx’s promise to give it 50% of the non-emergency business and was thus entitled to $28 million in reliance damages incurred in purchasing aircraft need to provide non-emergency services to the government. The district court had found this claim to be preempted under the Airline Deregulation Act. The 7th Circuit disagreed, but rejected ATA’s promissory estoppel claim on the merits, since it was not reasonable for ATA to rely on a conditional promise and FedEx could not have expected such reliance based on its non-promise.
“So,” Judge Posner, concludes on page 13 of the opinion, “ATA loses.” There follows another 15 pages about expert testimony and regression analyses which, happily, are not our concern. In sum though, Judge Posner was not impressed with ATA's expert. His conclusion:
Morriss’s regression had as many bloody wounds as Julius Caesar when he was stabbed 23 times by the Roman Senators led by Brutus.
The district judge does not escape without a bloody wound or two:
We have gone on at such length about the deficiencies of the regression analysis in order to remind district judges that, painful as it may be, it is their responsibility to screen expert testimony, however technical; we have suggested aids to the discharge of that responsibility. The responsibility is especially great in a jury trial, since jurors on average have an even lower comfort level with technical evidence than judges. The examination and cross- examination of Morriss were perfunctory and must have struck most, maybe all, of the jurors as gibberish.
Beware the Feast Day of Trophimus of Arles
Monday, January 9, 2012
Continuing our series of posts on Professor Richard Craswell's first-year contracts course in song. Previous installments have included Professor Craswell takes on Frigaliment, Lumley, and Wood v. Lady Duff Gordon. Today, we present this little ditty about Alaska Packers v. Domenico, a case we have posted about previously here and here. Professor Craswell's summar is provided below:
In 1902, some inexperienced sailors (many of them Italian immigrants) signed a contract to work the gill nets in Pyramid Harbor, Alaska, for the Alaskan Packer's Association, a cartel made up of most of Alaska's canneries. The sailors' pay was to be determined partly by the size of their catch, at a rate of 2¢ per fish. When they arrived in Alaska, however, some of the sailors complained that the nets were inadequate and threatened to strike. They returned to work only when the cannery promised them higher wages -- a promise the cannery later refused to keep.
The Goetz & Scott article referred to in the song is Charles J. Goetz & Robert E. Scott, "Principles of Relational Contracts," 67 Va. L. Rev. 1089 (1981). For the history of this case in particular, and of the Alaska canning business generally, see Deborah L. Threedy, "A Fish Story: Alaska Packer's Association v Domenico," 2000 Utah L. Rev. 185 (2000). There is also a well-made video ("Sockeye and the Age of Sail -- The Story of the Alaska Packer's Association") that can be found here:
I will be teaching express conditions in a few weeks and found a case that I hope will liven up discussion a bit. The casebook I use relies in part on Luttinger v. Rosen to illustrate the condition precedent concept. In Luttinger, the plaintiff buyers sought the return of their deposit on a home purchase. The sale contract was “conditional upon the buyers obtaining…mortgage financing…for a term not less than twenty years and at an interest rate which does not exceed 8 ½ %.” Because the Buyers could not obtain a mortgage on those terms (the closest they got was 8 ¾ %), they successfully argued that the condition was not satisfied. In the modern TMZ-worthy version of this kind of dispute, the Luttingers are “played by” Scarlett Johannson’s mother, Melanie Sloan, who is seeking return of her $130,000 deposit on a Manhattan apartment purchase. Ms. Sloan, like the Luttingers, argues that her inability to obtain financing (allegedly due to her daughter’s recent firing of her as her agent) amounts to the non-occurrence of a condition precedent. As a result, the now financially-strapped Ms. Sloan believes she no longer is obligated to purchase the apartment. Unnamed and unreal sources claim that she plans to buy a zoo instead.
[Heidi R. Anderson]
Okay folks, you are back from the AALS conference now and all jazzed about the latest contracts scholarship: let your voices be heard!
The polls remain open for the remainder of the month for the first annual ContractsProf Blog prize for the best contracts law article of the year, to be awarded at the Spring Contracts Conference . That conference will oe 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 firstname.lastname@example.org. 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.
The 7th Annual International Conference on Contracts will be hosted by the Thomas Jefferson School of Law in its new state of the art facility in San Diego California on March 2nd & 3rd 2012.
In the fine tradition of previous conferences held at Stetson, UNLV, McGeorge, South Texas, Texas Wesleyan and Gloucester, England, this conference will provide scholars and teachers at all experience levels the opportunity to present, discuss and receive feedback on a wide spectrum of scholarship. Articles recently published, articles-accepted-but-not-yet-published, works-in-progress, not yet fully formed ideas for scholarship or pedagogical innovations are welcome. The conference also provides an eagerly anticipated annual opportunity to network with colleagues, potential collaborators and mentors from the U.S. and around the globe.
Further details about registration and hotel researations re now available here.
Friday, January 6, 2012
Please join us at 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.
We have already presented Stanford Law's Richard Craswell's takes on Frigaliment and Lumley. Today, we offer his song about Wood v. Lady Duff Gordon, a case we have previously mentioned, for example here, here, here, here, and here.
Here is Professor Craswell's summary:
Born Lucy Sutherland, she married a Baronet and became one of the first celebrity fashion designers, enjoying success in the UK and France. Her American ventures were less successful, though, especially the effort to sell her designs through Sears and other mass retailers. Among other problems, she had already granted her American marketing rights -- including the right to half of the profits on each sale -- to a publicity agent, Otis Wood.
When Mr Wood sued for the unpaid royalties, Lady Duff-Gordon defended on the ground that Wood had not explicitly PROMISED he would do anything in return, so Duff-Gordon's promise to Wood was unenforceable for lack of "consideration." New York's highest court disagreed, in a famous opinion by Judge Benjamin Cardozo,
For a discussion of the case's historical context, see Victor P. Goldberg, "Reading Wood v Lucy, Lady Duff-Gordon with Help from the Kewpie Dolls," in his book, Framing Contract Law: An Economic Perspective 43 (2006). Other useful discussions can be found in the symposium introduced by James J. Fishman, "The Enduring Legacy of Wood v Lucy, Lady Duff-Gordon," 28 Pace L. Rev. 161 (2008); and in Mary Joe Frug, "Re-Reading Contracts: A Feminist Analysis of a Casebook, 34 American U. L. Rev. 1065 (1985).
And here's the video:
Thursday, January 5, 2012
Here is today's installment of the first-year course set to music by Richard Craswell. This time it's Lumley v. Wagner, Lumley v. Gye, a case we have not spoken about previously on the blog. So here is Professor Craswell's summary of the case:
In 1852, soprano Johanna Wagner (the niece of the famous composer) agreed to perform for three months in London at Her Majesty's Theatre, operated by Benjamin Lumley. The contract, which described her as "cantatrice of the court of His Majesty the King of Prussia," specified that Wagner could not perform at any other London theatre during that time. However, after Lumley failed to pay Wagner the advance that her contract required, Wagner accepted a better-paying engagement at Frederick Gye's Royal Italian Opera Theatre in Covent Garden, London. ¶ Courts then (as now) were reluctant to issue injunctions compelling artistic performances, in part because a coerced performance might not be very good. Lord St Leonard, England's Lord Chancellor, found a solution by ordering Wagner NOT to sing at any OTHER theater during those months. ¶ For more on the history and context of this case, see Lea S. VanderVelde, "The Gendered Origins of the Lumley Doctrine: Binding Men's Consciences and Women's Fidelity," 101 Yale L.J. 775 (1992).
We note that the case is the subject of a recent law article, A New Tortious Interference with Contractual Relations: Gender and Erotic Triangles in Lumley v. Gye, by Sarah Lynnda Swan.
For those who don't want to jump to the link, here's a taste of what Scott has to say:
Contracts: A Context and Practice Casebook by Michael Hunter Schwartz and Denise Riebe is one of the new type of casebooks that combines doctrine, skills, and professionalism into the same course. This book does this very successfully, and it can serve as a model for future casebooks.
. . . .
It is on the chapter level that Schwartz and Riebe depart from the usual model of casebooks. While each chapter still largely consists of edited cases, the authors have added other materials on problem solving and other miniskills. Each chapter begins with a real-world problem, which the student is required to solve at the end of the chapter. The solution can be an exam answer, an office memo, a client letter, contract clauses, etc. Unlike traditional casebooks, each chapter introduces the subjects of that chapter, often with visual aids that help the students organize the doctrine. The authors organize each subtopic around cases. They ask focused questions before each case and have follow up questions and exercises afterwards. The exercises are hypotheticals, synthesis exercises, and problem-solving exercises. Each chapter ends with professional development reflection questions. (Where better to teach contracts ethics than in contracts?) Not only do these questions deal with contract ethics, they include questions and exercises on student well-being.
After having thoroughly studied this casebook over the last few weeks, I believe that it accomplishes what it sets out to do.
I had not heard to this casebook before -- or even of this series. I note that the Casebook is somewhat shorter than others I have looked at, but it costs about half as much. Something to keep in mind in these troubled economic times.
Wednesday, January 4, 2012
Stanford Law's Richard Craswell has shared with us a link to his collection of contracts YouTube videos. But a pig this good you eat one leg at a time. So for now, we just include his song about Frigaliment, Judge Friendly's great chicken coup. It's not like we haven't written about this case before, for example, here, here, here, here and here.
But we never tire of new approaches to the case. Here's Richard Craswell's:
Tuesday, January 3, 2012
Ninth Circuit Upholds Immunity for Telecommunications Companies that Assisted in Warrantless Wiretapping
In re National Security Agency Telecommunications Records Litigation is a big case. How big? The caption alone takes up over twenty pages in the 9th Circuit's most recent opinion. The basic facts are fairly familiar. During he Bush administration, the National Security Agency (NSA) created a program called the "Terrorist Surveillance Program," which plaintiffs, supported by journalistic accounts, allege permitted warrantless wiretaps of their communications. Plaintiffs further allege that the telecommunications companies assisted the government in undertaking such warrantless surveillance of U.S. citizens who happened also to be their customers.
Congress stepped in to assist these good corporate citizens which had after all just done their part to aid their country and the NSA. In 2008, it amended the Federal Intelligence Surveillance Act (FISA) to grant effective immunity to the telecommunications companies against suits such as the ones consolidated in this case. At issue in this appeal was only Plaintiffs' challenge to the constitutionality of that grant of immunity.
The Ninth Circuit upheld the constitutionality of the amendment to FISA. Plaintiffs' claims against the government can proceed -- at least until they are dismissed on national security or state secrets grounds further down the road.
Monday, January 2, 2012
Last week, National Public Radio's Morning Edition had a report about contracts that pay celebrities six figures to show up at events. The ever-eye-catching Kim Kardashian (pictured at left) provides the lead, with news of a $600,000 contract that paid Ms. Kardashian to "host a party" (whatever that means) at a Las Vegas hotel and then pop in to the club for "special appearances" in 2012.
As Kim Masters,interviewed by NPR's Linda Wertheimer notes, that is a lot of money for someone who is "famous only for being famous." The deal works out very well for the club, which charges outrageous prices to those who want to attend its parties and have the pleasure of meeting Ms. Kardashian. It works out well for the latter as well, who has notorious difficulties finding a party date.
And though we lame academics might find it hard to imagine someone who will relish the memories of having attended a party hosted by the Kim Kardashian more than $225 spent on Las Vegas's more wholesome entertainments, we likely have to concede that all invovled did the appropriate hedonistic calculus and concluded that they were getting value for their money.
But not all celebrity contracts work out so well, NPR reminds us. Hilary Swank (pictured at right) recently made the faux pas of accepting payment to attend a birthday party for the Chechen dictator Ramzan Kadyrov. As the international Business Times reports, Ms. Swank has expressed embarrassment at having accepted the invitation, which apparently involved six-figure compensation. Although human rightsorganizations warned her not to attend the event,
Ms. Swank claims that she did not receive the warnings, and she plans to donate the proceeds to charity. Here, the motivations are a bit more mysterious. Ms. Swank was not the only celebrity to attend Mr. Kadyrov's party. Clearly, he benefits from basking in such reflected glory (such as only the likes ofJean-Claude Van Damme can provide). And it seems arguable that Mr. Van Damme does not have a lot of other opportunities on his plate right now. But one would think that a two-time Oscar winning actor in her prime would have better things to do with her time.
Moreover, those of us who object to paying celebrities for their existence are for the most part free to opt out. The people of Chechnya are likely paying the bills for the human baubles with which their dictator chooses to surround himself.
In his "Santaland Diaries" from 1992, David Sedaris's account of two seasons working as a Macy's elf, he admits that he got bored after being a Window Elf for a while. The Window Elf's job is to say, "Step on the Magic Star and you can see Santa!" After saying that a few hundred times, Sedaris improvised a bit: "Step on the Magic Star and you can see Cher!" People got excited. They left the Santa line to have a look, and then they got mad when they saw only Santa. Sedaris wonders what they really expected: "Is Cher so hard up for money that she would agree to stand behind a two-way mirror at Macy's?" Well, maybe by now she would be. I'm pretty certain Kim Kardashian would do it if Macy's agreed to throw in some swag.
The scene falls 3:45 in on the YouTube link above.