April 12, 2012
Didn't See This One Coming. . . . Yes We Did.
Keith Olbermann (left) and Al Gore's (right) Current TV have filed suit against each other in Los Angeles Superior Court. Olbermann claims Current TV violated his contract and owes him up to $70 million in unpaid compensation. Olbermann’s complaint specifies that he was publically terminated without cause, and he is suing for breach of contract, sabotage and disparagement. Current TV’s cross-complaint seeks a declaratory judgment on the grounds that it acted within its contractual rights when it terminated Olbermann, as well as a determination that it no longer has to pay Olbermann, having already paid him handsomely while receiving a “pauper’s performance” in return. As reported by FoxNews.com, Current TV claims that Olbermann was too often an absentee anchor and simply did not live up to the terms of his contract, especially in terms of ratings. Yet, Olbermann alleges that the subpar broadcast facilities at Current TV made it difficult for him to produce good ratings.
As chronicled in the Santa Francisco Examiner, this is just the latest episode in the picaresque story of broadcaster Olbermann. He anchored for ESPN until his unauthorized 1997 appearance on the “Daily Show” during which he referred to Bristol, CN, ESPN’s headquarters, as a “godforsaken place.” In the words of ESPN spokesman, Mike Soltys, when Olbermann left he did not merely burn his bridges; he napalmed them. From there, Olbermann went to MSNBC, but by 1998, he was so sick of reporting on the Monica Lewinsky scandal (who can blame him?), he left MSNBC, and joined Fox Sports. He soon returned to MSNBC to host “Countdown with Keith Olbermann.” As we have previously reported here, MSNBC agreed to pay him $7.5 million a year through the 2012 presidential election. However, as we reported here, Olbermann called it quits in the middle of that contract—while on the air--for reasons that remain unclear.
Which brings us to the current lawsuit. In a statement reported by businessweek.com, Current TV spokeswoman, Laura Nelson characterized the lawsuit as follows: ‘when the law is on your side, you argue the law. When the facts are on your side, you argue the facts. When neither the law nor the facts are on your side, you pound the table. . . It is well established that over his professional career, Mr. Olbermann has specialized in pounding the table.” On April 3, in an appearance on CBS’s “Late Show,” Olbermann said, “I screwed up really big on this.” “It’s my fault it didn’t succeed in the sense that I didn’t think the whole thing through.” Current TV quoted these comments in the first paragraph of its cross-complaint.
[JT & Christina Phillips]
The Trouble with Totten
At the Spring Contracts Conference last month, I presented the contracts law portion of my article, Intolerable Abuses: Rendition for Torture and the State Secrets Privilege. That article is now in print, 63 Alabama Law Review 429 (2012), but as the electronic version has not yet appeared on the Law Review website, you can get the draft version (which is substantively the same as the print version) on SSRN.
The portion that I presented at the conference, "The Trouble with Totten" is about an 1875 case brought by the estate of William Lloyd a Civil War spy. As I summarized the case previously:
In Totten, the administrator for the estate of William A. Lloyd brought a claim against the government, seeking to recover for the breach of an espionage contract. He alleged that Lloyd had entered into an agreement with President Abraham Lincoln in which Lloyd infiltrated enemy territory during the Civil War in order to provide the U.S. Government with vital information relating to the military forces and fortifications of the Confederacy. For these services, Lloyd was to be paid $200/month plus expenses. Honest Abe allegedly paid Lloyd only expenses.
Justice Field, writing in 1875, found that the subject matter of the contract was a secret and that both parties must have known at the time of their agreement that their lips would be “for ever sealed respecting the relation of either to the matter.” In order to protect the public interest in having an effective arm of the government that could engage in secret services, the Court ruled that there could be no claim for breach of a secret contract because the existence of the contract was itself a secret that could not be disclosed.
I have subsequently learned more details about Mr. Lloyd's exploits on behalf of President Lincoln (he was Lincoln's personal spy) and about why President Lincoln stiffed him (Lincoln was dead by the time Lloyd returned from his assignment). The source of the information is Douglas E. Markle's book, Spies and Spymasters of the Civil War. The information provided in the book is also available online here. Unfortunately, Mr. Markle's book contains a bibliography but no citation apparatus, so I cannot identify or further explore his sources. A letter to his publisher went unanswered and I have no other contact information for him.
As I would like to pursue the matter further -- I think the case would be a great subject for a Law Story -- I would appreciate any suggestions our readers might offer about how I might get further information about the life of William A. Lloyd, personal spy to Preisdent Lincoln.
April 11, 2012
A Song About Offers
This is a "Law Lessong" - a law lesson in a song - that I wrote to help students consider the issues surrounding the making of a contract offer. When does negotiation coalesce into an offer that may be accepted? This view looks to language, surrounding circumstances and certainty and definiteness as factors to consider in finding an outward manifestation of present intent to be bound to a contract. I hope that it is useful to you.
The Offer's Real
Lyrics by Mark DeAngelis
Tune: based on St. Anne's Reel (public domain)
Paul went off to work today,
Unaware of what might come his way,
Through e-mails, calls and letters and texts,
He wondered if he'd make a deal.
Negotiation seeming endlessly,
How can he tell when the offer's made
To step in and seal the deal? Manifestation of a present intent, To perform a contract in any event, Look at the language that was sent, To determine if an offer's real. I offer, I promise, I covenant to Render contract performance direct to you This is the language that will do To determine that an offer's real
A court of law with objective bent
Will not unearth subjective intent
Read the signs from what's been shown
To determine if the offer's real.
An advertisement it's been said
Is often not an offer, but instead
An invitation to make offers to buy
If the seller wants to seal a deal Manifestation of a present intent, To perform a contract in any event, What circumstances are present To determine if an offer's real. Language expression may hold the key, Along with what circumstances there may be, Definiteness and certainty Will determine if an offer's real.
With our terms now there must be
Sufficient definiteness and certainty
On each and every of the law's demands
For a contract to made for real.
Sufficiently certain, sufficiently clear
With evidence for the court to hear
To grant relief in the event of breach
Will determine if the offer's real. Manifestation of a present intent, To perform a contract in any event, Sufficiently certain and definite To determine if an offer's real. Language expression may hold the key, Along with what circumstances there may be, Definiteness and certainty Help determine if an offer's real. I offer, I promise, I covenant to Render contract performance direct to you This is the language that will do To determine that an offer's real
New in Print
Ian Ayres, Freedom. Using Commitment Contracts to Further Ex Ante Freedoms: the Twin Problems of Substitution and Ego Depletion, 62 Ala. L. Rev. 811 (2011)
Larry A. DiMatteo, Robert C. Bird and Jason A. Colquitt, Justice, Employment, and the Psychological Contract. 90 Or. L. Rev. 449 (2011)
Michael Feit, Attribution and the Umbrella Clause -- Is There a Way Out of the Deadlock? 21 Minn. J. Int'l L. 21 (2012)
Mary L. Heen, From Coverture to Contract: Engendering Insurance on Lives, 23 Yale J.L. & Feminism 335 (2011)
Alan Reed, The Rome I Regulation and Reapprochement of Anglo-American Choice of Law in Contract: A Heralded Triumph of Pragmatism over Theory. 23 Fla. J. Int'l L. 359 (2011)
Glenn D. West, and Natalie A. Smeltzer, Protecting the Integrity of the Entity-Specific Contract: The "No Recourse against Others" Clause-Missing or Ineffective Boilerplate? 67 Bus. Law. 39 (2011)
April 10, 2012
Weekly Top Tens from the Social Science Research Network
April 9, 2012
Professor DeAngelis on Substantial Performance
Today we have raided his YouTube site for this number on Substantial Performance. Here is his explanation of the song:
This is a "Law Lessong" - a law lesson in a song - that I wrote to help students consider the issues regarding substantial performance of a service contract. This song follows a hypothetical where a contractor builds a new dormitory at a college. At some point, the job is "done." But is a construction job ever really "done?" There are always punch list items to be completed. The song and example hopefully allow you to explore what level of performance is acceptable and what constitutes a breach. (In the heating work, the breach is material; in the case of the malfunctioning locks, the breach is likely minor depending on how many locks are involved.) Also, there is the opportunity to distinguish between substantial performance under the contract and the performance of substantial work under the contract.
The melody is based on "The Ship That Never Returned" written by Henry Clay Work in 1865. (This melody may also be recognizable as the tune that the Lettermen used in their 1959 hit song, "Charlie on the MTA"):
The Substantial Performance Song
Words by Mark DeAngelis
Tune: Ship That Never Returned (Work, H.C.)
Did he substantially perform?
Can the college use the dorm,
To keep the students safe and warm?
Look at substance over form,
Minor or material harm?
To determine if he substantially performed.
A builder's bid was won
A job was to be done
To build a brand new college dorm
Excavators dug the land
Subcontractors followed plans
And soon substantial work they all performed
"We're done!" the builder said,
"Let's put this job to bed"
And the college inspectors came to see.
Though the structure did impress,
There were problems to address,
Before the college paid the final fee. Refrain
The inspectors checked the halls,
The plumbing, lights and walls,
And mostly they were satisfied and glad.
But when they checked the rooms for heat,
The work and standards did not meet,
The heating and the boiler work were bad.
Besides the heating ills
Leaving students with the chills,
A problem with security was found.
The college was appalled
When the locks that were installed,
In the students' rooms were junk and broken down. Refrain x2
If You Think Class Action Waivers Are Unconscionable, You Have No Concepcion of the State of the Law
In Coneff v. AT&T Corp., AT&T Wireless customers brought a class action suit against AT&T Wireless, Cingular Wireless LLC (“Cingular”) and related companies. As recounted in the District Court opinion (what is this new trend in the Circuit Courts to provide no recitation of the facts of the case?!?), plaintiffs alleged that, after Cingular bought out AT&T, the company deliberately degraded AT&T Wireless’s network in order to induce AT&T Wireless customers to transfer their plans to the more expensive and less favorable Cingular plans. Customers who refused to agree to the “upgrade” had to either complete their contract term with a degraded AT&T Wireless service or pay a $175 termination fee to cancel service.
Plaintiffs asserted claims under the Consumer Protection Acts of 14 different states, the Federal Communications Act, unjust enrichment and breach of contract. Plaintiffs also sought a declaratory judgment that an arbitration provision contained in their contracts, which included a class-action waiver, was unconscionable and therefore unenforceable. In response, AT&T filed a motion to compel arbitration, which the District Court denied, finding the class action waiver was substantively unconscionable and therefore unenforceable. Because the arbitration provision stated that it would be unenforceable in its entirety if the class-action waiver were struck, the District Court invalidated the entire arbitration agreement. AT&T then appealed to the United States Court of Appeals for the Ninth Circuit.
At the time the District Court denied AT&T’s Motion to Compel arbitration, the Ninth Circuit had held that the Federal Arbitration Act (“FAA”) did not preempt state unconscionability law pertaining to class-action waivers in arbitration clauses. However, the Supreme Court reversed that holding in AT&T Mobility LLC v. Concepcion (about which we’ve blogged before), holding that the FAA preempts state, in that case, California’s, rules banning class-action waivers.
Plaintiffs unsuccessfully attempted to distinguish Concepcion in four ways.
- Concepcion rejected the argument that the cost of arbitration could preclude a litigant from effectively vindicating federal statutory rights in the arbitral forum, and given the various fee-shifting and pro-consumer provisions in the arbitration agreement, this case was not distinguishable from Concepcion in that regard.
- The Court rejected plaintiffs’ claim that the Washington’s rule that some class action waivers are unconscionable is distinguishable from the California class-action waiver rule at issue in Concepcion.
- Plaintiffs attempted to argue that Washington’s class action waiver rule narrowly targeted such waivers that would make it economically absurd for plaintiffs to bring tiny claims via arbitration But, Concepcion specifically forecloses this argument, since it rejected the dissent’s position that “class proceedings are necessary to prosecute small-dollar claims that might otherwise slip through the legal system.” The Ninth Circuit followed the Eleventh Circuit’s approach in Cruz v. Cingular Wireless, LLC (about which we blogged here) which concluded that the argument “goes only to substantiating the very public policy arguments that were expressly rejected by the Court in Concepcion—namely, that the class action waiver will be exculpatory, because most of these small-value claims will go undetected and unprosecuted.”
- The Ninth Circuit also rejected Plaintiffs’ to distinguish Washington’s law on the ground that it would invalidate not only the class action waiver but the entire arbitration agreement observing that “by invalidating arbitration agreements for lacking class action provisions, a court would be doing precisely what the FAA and Concepcion prohibit—leveraging ‘the uniqueness of an agreement to arbitrate’ to achieve a result that the state legislature cannot.”
Some hope remains for Plaintiffs. The Ninth Circuit remanded the case to the District Court to apply Washington’s choice-of-law rule to Plaintiffs’ claim of procedural unconscionability. If, under some state laws, a showing of procedural unconscionability would result in success for those plaintiffs, the District Court must complete a conflict-of-laws analysis and decide which Plaintiffs, if any, may benefit.
[JT & Chrissy Phillips]