March 21, 2012
Dances with Bison: South Dakota Supreme Court Hears Contract Case against Kevin Costner
Earlier this week, the South Dakota Supreme Court heard an appeal in a breach of contract case against Kevin Costner. An artist, Peggy Detmers, sued Costner because she was displeased with where he placed her 17 bronze sculptures of bison and American Indians (pictured here). The case includes questions such as whether "elsewhere" means "anywhere." Also, parol evidence issues. It is an opinion to watch for.
Here's a summary from Boston.com:
A lawyer for Kevin Costner told the South Dakota Supreme Court on Monday that the actor did not breach a contract with an artist when he placed commissioned sculptures of bison and American Indians at a different site than originally was agreed upon.
The Hollywood superstar, who filmed much of his Academy Award-winning movie "Dances with Wolves" in South Dakota, paid Peggy Detmers $300,000 to make 17 bronze sculptures for a resort called The Dunbar he planned in the state's Black Hills. The resort never was built and the sculptures are instead at his Tatanka attraction near Deadwood.
Detmers said she spent more than six years creating the artwork and gave Costner a price break because she anticipated selling smaller sculptures at the resort.
Detmers claims that because The Dunbar was not built and the sculptures were not "agreeably displayed elsewhere," as the contract stipulates, that the sculptures should be sold and she should be entitled to 50 percent of the proceeds.
But a circuit judge ruled last July that Detmers indicated her approval of the Tatanka location by participating in the site's development and several events related to its opening. The Tatanka site houses the sculptures, a museum and a visitor center.
Kyle Wiese, one of two lawyers representing Costner at Monday's hearing, noted Detmers took part in the construction and mock up process and ground breaking ceremony at Tatanka in June 2003.
"All of this conduct -- taking part in the dedication ceremony and giving a speech -- indicated she was agreeable to put these sculptures at this location for the long term," Wiese said. He added that Costner said he would not have put nearly $6 million of his own money into building the Tatanka site if Detmers had not been agreeable to the location.
The Tatanka site is located on 85 acres of land next to 915 acres of land where Costner had envisioned building The Dunbar.
Detmers' lawyer, Andrew Damgaard, concedes Detmers agreed to the placement in 2003 at Tatanka. But he said she was under the impression The Dunbar still would be built.
"It's very clear from the record that people were telling her the resort was intended to be built, that it was intended to be built on that property," he said.
Costner did not attend the argument, which as I understand from the audio recording was held at University of South Dakota Law School. Here is the list of issues on appeal. Here's a good summary of the appeal. And, finally, a link to the audio recording of the argument is found on this page.
[Meredith R. Miller]
New in Print
Jonathan D. Bateman, When the Numbers Don't Add Up: Oversigning in College Football, 22 Marq. Sports L. Rev. 7 (2011).
J. Herbie DiFonzo and Ruth C. Stern, The Children of Baby M. 39 Cap. U. L. Rev. 345 (2011)
David R. Hansen, A State Law Approach to Preserving Rair Use in Academic Libraries, 22 Fordham Intell. Prop. Media & Ent. L.J. 1 (2011)
Danielle Kie Hart, Cross Purposes & Unintended Consequences: Karl Llewellyn, Article 2, and the Limits of Social Transformation, 12 Nev. L.J. 54 (2011)
Daniel Markovits and Alan Schwartz, The Myth of Efficient Breach: New Defenses of the Expectation Interest, 97 Va. L. Rev. 1939 (2011)
Griffin Toronjo Pivateau, Preserving Human Capital: Using the Noncompete Agreement to Achieve Competitive Advantage, 4 J. Bus. Entrepreneurship & L. 319 (2011)
NY Times "Ethicist" on Charitable Subscriptions
We crossed virtual swords in the past with The New York Times' original ethicist Randy Cohen. We reported on harassing him with angry letters denouncing his conflation of law and ethics. Mr. Cohen saw the error of his ways and apologized sub silentio in a later column on which we reported here.
Now the Times' "The Ethicist" column is authored by Ariel Kaminer who is much better attuned to the distinction between ethics and law, as evidence in this week's column. Two weeks ago, a correspondent asked Ms. Kaminer if it was permissible to renege on a pledge to a university after learning that the university engages in dubious labor practices. Ms. Kaminer responded in her column that revoking a pledge is permissible because, "A pledge is a good-faith statement of intent, not a contract written in blood." This week, Kaminer acknowledges a comment from a Palo Alto attorney, Geoff Rapoport, informing her that charitable pledges are enforceable because the law assumes that they have been relied.on, so her advice could expose her correspondent to a lawsuit. Mr. Rapoport acknowledged that Ms. Kaminer is in the business of giving ethical advice, and that the ethcial and the legal "only sometimes overlap." She agreed but regretted not having noted the possibility of legal liability.
Ms. Kaminer is extremeely conscientious to do so. As she observes, while a suit is possible, it is not likely. We note that, as the picture on the left indicates, the doctrine in question derives from Judge Cardozo's opinion in Allegheny College, about which we have posted in the past, the holding of which can be found summarized in Section 90(2) of the Restatement (2d) of Contracts. It appears from Mr. Rarpoport's letter that California follows the Restatment (and Cardozo) on this issue.
March 20, 2012
Old Enough to Facebook, Old Enough to Choose a Forum*
In a putative class action, plaintiffs brought a lawsuit against Facebook alleging that the social networking site violated their right of privacy by misappropriating their names and likenesses for commercial endorsements without their consent. Plaintiffs, minors residing in Illinois, commenced the action in the Southern District of Illinois. Facebook moved to transfer the case to the Northern District of California pursuant to a forum selection clause in Facebook’s terms of service.
Before addressing the validity of the forum selection clause, the court had to determine whether plaintiffs (minors) could disaffirm the clause under the infancy doctrine. The court held that, because plaintiffs have used and continue to use Facebook, they could not disaffirm the forum selection clause. The court reasoned:
The infancy defense may not be used inequitably to retain the benefits of a contract while reneging on the obligations attached to that benefit. * * * Thus, “[i]f an infant enters into any contract subject to conditions or stipulations, the minor cannot take the benefit of the contract without the burden of the conditions or stipulations.” 5 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 9:14 (4th ed. 1993 & Supp. 2011) (collecting cases). California law is in accord with “the equitable principle that minors, if they would disaffirm a contract, must disaffirm the entire contract, not just the irksome portions.” Holland v. Universal Underwriters Ins. Co., 75 Cal. Rptr. 669, 672 (Cal. Ct. App. 1969). “[N]o person, whether minor or adult, can be permitted to adopt that part of an entire transaction which is beneficial, and reject its burdens. This commanding principle of justice is so well established, that it has become one of the maxims of the law . . . . [Minors] must either accept or repudiate the entire contract,” and “they cannot retain [the contract’s] fruits and at the same time deny its obligations.” Peers v. McLaughlin, 26 P. 119, 120 (Cal. 1891). “A party cannot apply to his own use that part of the transaction which may bring to him a benefit, and repudiate the other, which may not be to his interest to fulfill.” Id.
The court then held that the clause was valid and ordered the transfer of the case.
The lesson: a minor cannot accept the benefits of a contract and then seek to void it in an attempt to escape the consequences of clauses that minor does not like (especially when they “like” on Facebook).
E.K.D. v. Facebook, Inc., No. 11-461-GPM (S.D. of Ill. March 8, 2012) (Murphy, J.)
[Meredith R. Miller]
Solution to the Problem of Men Who Are Hard to Get: A Beth Din Approved Pre-Nup
Don't know what a Get is? We recommend The Sopranos: Season 1, Episode 3. Or you could read this report in Saturday's New York Times. Basically, a Get is a document that effects the religious divorce of a Jewish married couple. Even though a couple might be legally divorced, the woman needs the Get before she can marry again in the Jewish faith. Some observant Jews would consider illegitimate the children of a woman who remarries without a Get.
The problem: some men are hard to Get. They don't want to be married, but they seek to extract money from the wife or her family in order to agree to the Get. That's where Tony Soprano comes in. But the wise guy solution is not always practical, as the Times notes by referencing this criminal complait from New Jersey. It turns out that paying someone to kidnap and assault your ex-husband is a criminal act.
The solution: according to the Times, the Beth Din of America, a leading orthoox Jewish adjudicatory body, has created a pre-nuptial agreement that is consistent with Jewish law (halakhah). Among other things, this kosher pre-nup provides that the husband will pay $150 (adjusted for inflation) for every day during which the couple is separated but not religiously divorced. The effect is to force the husband to support the wife until he agrees to give her a Get.
According to the Times, about 70% of rabbis now either require or encourage the parties to sign the Halakhic pre-nup before stepping under the chuppah (pictured). A new documentary, "Women Unchained" explores the topic in further detail.
Weekly Top Tens from the Social Science Research Network
March 19, 2012
Objections to NYT Arbitration Fairness Op-Ed
One respone from attorney Steven B. Borris objected to the op-ed, providing in part:
Professor Kessler writes that “arbitration awards do not need to be based on the law” and that “arbitrators have their own procedures.” To the contrary, the current federal statute — and the many state ones modeled on it — provides that an arbitration award may be overturned for a variety of reasons, including evident partiality, corruption and misconduct by the arbitrators.
The vast majority of consumer and employment-related arbitrations are administered through independent companies, such as the nonprofit American Arbitration Association. These neutral companies recruit and train experienced attorneys and former judges to sit as arbitrators. We neutrals are beholden to no one. These companies provide a barrier between consumers and the corporations inserting arbitration clauses in their consumer contracts
Prof. Theodore J. St. Antoine (Michigan) wrote that Kessler made some "good points" but "oversimplifies a complex problem." He wrote:
For example, several reputable studies indicate that employees generally do at least as well in arbitration as in court. Even more important, many low-income employees who have been fired unfairly simply cannot afford a lawyer to take their case to court. Arbitration, cheaper and less formal, is their most realistic recourse.
The solution is not the outright prohibition of all pre-dispute agreements to arbitrate, as proposed by the ill-advised Arbitration Fairness Act. It is legislation that would guarantee due process in arbitration, including neutral arbitrators, and ensure that grievants have a voice in their selection and all the remedies that could have been obtained in court.
Finally, Donald L. Kreindler, a lawyer specializing in arbitration, took "strong objection" to the op-ed, disagreeing with claims that arbitration is too costly and that arbitrators are sytematically biased.
Read the responses in full here.
[Meredith R. Miller]
Trendspotting: Suing the Alma Mater for Breach of Contract
Recently, as reported in the Richmond-Times Dispatch, three former John Tyler Community College (“JTCC”) students are suing the school for breach of contract, seeking compensatory and punitive damages. The suit also names the Virginia Community College System and the Dean of Health Services at JTCC.
The students allege that because the surgical technology program from which they graduated never obtained accreditation, they are unable to find jobs. The students claim that they joined the program with assurances that the program would be accredited before they completed their studies. However, just weeks before they graduated, they learned that the school had not received accreditation, and as a result the students cannot sit for the state certification exam
They claim to have combed through job postings, most of which they are unable to apply for because the jobs require applicants to be certified from an accredited program. The students maintain that potential employers have informed them that JTCC’s lack of accreditation prevented the employers from extending job offers.
According to the Richmond-Times Dispatch, JTCC’s President claims that certification is not required for work as a surgical technologist in Virginia, and that the college would not have started the program without accreditation if such a prerequisite existed. However, the Commission on Accreditation of Allied Health Education Programs (“CAAHEP”) strongly encourages program accreditation. According to jobs.virginia.gov, certification is generally required or strongly preferred for Surgical Technologist positions in state government.
JTCC’s surgical technology program was shut down after one year. JTCC’s President attributes the program’s discontinuation to lack of enrollment
[JT & Christina Phillips]
Sheldon G. Adelson Faces $375 Million Lawsuit from Former Macau Partner
American casino magnate, billionaire Sheldon G. Adelson (pictured) has been in the news a lot this election year because of his generous donations to a super PAC associated with New Gingrich. Now he is in the news again because he is being sued for breach of contract by a former partner. The New York Times reports that Asian American Entertainment (AAE), controlled by Shi Sheng Hao, aka Marshall Hao, has sued Mr. Adelson's Las Vegas Sands casino and is seeking $375 million in compensation.
The suit alleges that Las Vegas Sands broke off a 2001 agreement to bid for a Macau casino license. According to the Times, Las Vegas Sands won a license to operate a casino in Macau in February 2002. It did so in partnership with a Hong Kong based entity that has since dissolved. AAE sued Las Vegas Sands in Nevada in 2007, but that case was dismissed in 2010 after AAE failed to retain attorneys to press the case. So now AAE has filed its claim in Macau. A Hong Kong Businessman, Richard Suen, won a $58.6 million judgement against Las Vegas Sands in 2008 in a separate suit relating to the Macau license, but that judgment was vacated on appeal and the case is set for retrail.
Gambling revenue rose to $33.5 billion in 2011 in Macau, more than five times that of the Las Vegas strip.