June 15, 2012
Update on Golden Globes Contract Dispute
I previously blogged about the parol evidence rule and interpretation issues at the heart of a dispute between Dick Clark Productions ("DCP") and the Hollywood Foreign Press Association ("HFPA") over broadcast rights for the Golden Globes. I now have two updates.
First, the District Court has ruled in favor of DCP in a 89-page opinion posted here by the Hollywood Reporter. Pages 65-78 contain the arguments and holdings regarding the "plain meaning" of the modified contract and the use of extrinsic evidence (citing the commonly-used PG&E case). Pages 79-81 review HFPA's argument that there was no consideration for the modified contract. The opinion even contains a helpful discussion of mistake at pages 81-83.
The second update is that Dick Clark Productions reportedly is up for sale (less than two months after Dick Clark's passing). It would be interesting to see the DCP-HFPA contract provisions regarding assignment and change of control. Perhaps there will be a post-sale lawsuit as well.
Ultimately, I predict that this case appears in Contracts casebooks very soon. The combination of issues, the high profile nature of the dispute, and the short contractual provision itself, all make it a great candidate. As one lawyer said to the LA Times,"So much litigation over 12 words...."
Stay tuned (pun intended).
[Heidi R. Anderson]
June 14, 2012
The Return of the Big Bang Theory
The Big Bang Theory, CBS's critical and commercial success, also is a Contracts professor's dream. This is due to the show's frequent references to "The Roommate Agreement" between the two main characters, Sheldon and Leonard. I previously blogged about using the show to illustrate anticipatory repudiation and contractual interpretation. I am now back with another clip, this time to illustrate duress and possible lack of consideration for an agreement modification. In this latest clip, Sheldon gets Leonard to agree to modify the roommate agreement by threatening to notify Leonard's girlfriend's parents about their relationship. The threat has meaning because the girlfriend, Priya, believes her parents in India would not approve of her relationship with the non-Indian Leonard. I'm not sure, however, if the threat is "wrongful" in the traditional duress scenario. The clip also features two key Star Trek references for all the Trekkies out there (someone should do a study, illustrated via Venn diagram, on the overlap between the "law professor" and "Trekkie" categories--I predict significant overlap). I hope to use the clip as a supplement the traditional duress cases of Loral and Totem Marine. Given that Sheldon appears not to give Leonard anything in exchange for the modification, it also could be used in the pre-existing legal duty rule context.
[Heidi R. Anderson]
June 13, 2012
New in Print
Curt Blake and student Joseph Probst, Loaded Question: Examining Loadable Kernel Modules under the General Public License v2, 7 Wash. J. L. Tech. & Arts 265 (2012)
Emily Gelmann, "I'm Just the Oven, It's Totally Their Bun": The Power and Necessity of the Federal Government to Regulate Commercial Gestational Surrogacy Arrangements and Protect the Legal Rights of Intended Parents, 32 Women's Rts. L. Rep. 159 (2011)
Celeste M. Hammond and Ilaria Landini, The Global Subprime Crisis As Explained by the Contrast Between American Contracts Law and Civil Law Countries' Laws, Practices, and Expectations in Real Estate Transactions, 11 J. Int'l Bus. & L. 133 (2012)
Stephen J. Leacock, Share Transfer Restrictions in Close Corporations as Mechanisms for Intelligible Corporate Outcomes, 3 Faulkner L. Rev. 109 (2011)
Judge Craig Smith and Judge Eric V. Moye, Outsourcing American Civil Justice: Mandatory Arbitration Clauses in Consumer and Employment Contracts, 44 Tex. Tech. L. Rev. 281 (2012)
John P. Woods, Civil Forfeiture As a Remedy for Corruption in Public and Private Contracting in New York, 75 Alb. L. Rev. 931 (2011-2012)
June 12, 2012
Weekly Top Tens from the Social Science Research Network
|1||580||The Perils of Social Reading
Neil M. Richards,
Washington University in Saint Louis - School of Law
|2||177||The Common European Sales Law (CESL) Beyond Party Choice
Jan M. Smits,
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
|3||146||A Minor Problem with Arbitration: A Proposal for Arbitration Agreements Contained in Employment Contracts of Minors
Matthew Miller-Novak, Richard A. Bales,
Unaffiliated Authors - affiliation not provided to SSRN, Northern Kentucky University - Salmon P. Chase College of Law
|4||143||The Irony of Privacy Class Action Litigation
Santa Clara University - School of Law
Stephen J. Lubben,
Seton Hall University - School of Law
|6||109||The Litigation Finance Contract
University of Iowa - College of Law
|7||101||'Offer to Sell' as a Policy Tool
Campbell University Law School
|8||101||Conceptualizing Contractual Interpretation
Alan Schwartz, Joel Watson,
Yale Law School, University of California, San Diego (UCSD) - Department of Economics
|9||81||An Empirical Study of Predispute Mandatory Arbitration Clauses in Social Media Terms of Service Agreements
Michael L. Rustad, Richard Buckingham, Diane D'Angelo, Katherine Durlacher,
Suffolk University Law School, Suffolk University - Law School, Suffolk University - Law School, Suffolk University - Law School
|10||79||Legal Epistemology in the Restatement (3d) of Restitution and Unjust Enrichment
McGill University - Faculty of Law - Quebec Research Centre of Private and Comparative Law
June 11, 2012
'Wrap Cases Yet to Hit NZ
Since much of my research tends to at least recognize that we live in a multicultural, global, interconnected world, I was a bit embarrassed to discover how U.S. -centric I am with some of my assumptions about contract law. During one class, I told my bright and engaging students at VUW how contract law theory might help them address some novel contracting issues that will likely arise in their practice. My "war story" was working at a software company in the early nineties and trying to figure out whether shrinkwrap and clickwrap licenses were enforceable (although we didn't call them that then). My students were too kind to tell me that there are no cases on this topic either in New Zealand or Australia. No New Zealand equivalent of ProCD v. Zeidenberg? No subversion of the rules of offer and acceptance? No replacing consent with reasonable notice? It may be that other laws (consumer protective legislation and the unique tort system) make such issues less relevant. In any event, it's possible that in the southern hemisphere at least there's still time to establish logical and doctrinally coherent precedent with respect to digital contracts. One can always hope...
2d Circuit Denies Rehearing En Banc in an Arbitration Case
On May 29th, a fractured Second Circuit denied rehearing en banc in In re: America Express Merchants' Litigiation, a case decided by a Second Circuit panel on February 1st after its earlier decisions were succesively vacated by the US Supreme Court in light of its decisions in Stolt-Nielsen & Concepction. After each of these decisions, the case was remanded to the Second Circuit. Each time, the Second Circuit found that the recent Supreme Court decisions do not necessitate a different outcome. Its most recent en banc decision leaves its prior rulings undisturbed.
The underlying facts are complicated and relate to the difference betweeen credit cards and charge cards. Under the latter, American Express (Amex) traditionally charged fees at least 35% higher than it did under ordinary credit cards. Plaintiffs allege that Amex is now using its market power to force merchants that accept Amex to pay higher fees on both credit cards and charge cards.
Unfortunately for the merchant plaintiffs, their card acceptance agreement with Amex included an arbitration clause and a class-action wavier. Back in 2006, based on these provisions, the District Court granted Amex's motion to compel arbitration. The Second Circuit found as an initial matter that the compulsory arbitration combined with the class action waiver effectively deprived plaintiffs of any mechanism for pursuing their anti-trust claims. As a result, the Second Circuit declared the arbitration clause unenforceable and reversed the Distirct Court's order compelling arbitration.
Judge Pooler was part of the panel that decided the case. As she explained in her concurring opinion to the denial of rehearing en banc, the Supreme Court's recent decisions holding that the Federal Arbitration Act (FAA) trumps state laws that might otherwise defeat compulsory arbitration or class-action waivers do not apply to challenges to arbitration based on federal statutes:
Because its analysis focused wholly on the issue of preemption of state law by federal law, Concepcion is silent on the holdings of the Court's earlier cases which enforce arbitration clauses only when those clauses permit parties to effectively vindicate their federal statutory rights.
Chief Judge Jacobs, along with Judges Cabranes and Livingston, dissented from the denial of rehearing based on previous holdings permitting compulsory arbitration of anti-trust claims. According to the dissenters, the panel opnion (Amex III) turns on the court's determination that anti-trust claims are not economically feasible because of the class-action waiver, but the dissenters do not regard it as the proper role for courts to determine the economic feasibility of a category of potential claims. Amex III thus subverts the policy goals informing the FAA by requiring a trial on the merits (more or less) in federal court to determine whether or not the claim is suitable for arbitration. The FAA requires that such deterinations be made by the arbiter.
The case has been relied on by several District Courts. Given its influence, it ought to be reviewed en banc, say the dissenters especially since Amex III is inconsistent with a 9th Circuit case, Coneff v. AT&T. which upheld an abitration clause and class action waiver despite the fact that plaintiffs brought claims under the Federal Communications Act.
The dissenters express some incredulity at the majority's reasoning. State laws that expressly make class-action waivers unenforceable are swept aside by Concepcion's logic but somehow federal claims that make no reference ot class actions surivive it. They also expressed some skepticism about whether or not arbitration really would be economically infeasible in this case.
Judge Cabranes wrote separately to flag the case for Supreme Court review. Judges Raggi and Wesley dissented from the denial of rehearing mainly on the ground that they view the case as inconsistent with Coneff. Before creating a Circuit split, one really ought to hear reargument, reason these dissening judges.
Television Without Commercials?!? Say It Ain't So, Dish
In its Complaint filed against Dish Network (“Dish”), Fox Broadcasting Company (“Fox”) (along with ABC, NBC, and CBS, all separately) alleged Dish’s new AutoHop service, which allows customers to skip television ads, violates the license granted to Dish for video-on-demand service to consumers. According to Fox, the license to Dish was granted under certain conditions, apparently including provisions that prohibited any form of rebroadcast of Fox programming that would enable viewers to skip commercials.
In case the Court has been living in cave for the past seventy years or so, Fox points out that commercial advertising is vital to broadcast television. If it weren't for its advertisers, Fox would be unable to bring us the hit shows without which life would not be worth living.
Nonetheless, Dish has recently launched its own video-on-demand service called PrimeTime Anytime that is available to top-tier Dish subscribers who lease the Hopper set top box from Dish. PrimeTime Anytime makes available to subscribers the entire primetime broadcast schedule for all four major networks every night and commercial free. According to Fox’s Complaint, “unlike traditional DVR, the Primetime service was specifically and deliberately designed by Dish so that Dish can record, and/or encourage and facilitate unauthorized recording of hundreds of hours of copyrighted television programs and distribute those copies in a revised format so they can be viewed commercial-free.”
In addition to the DVR-like aspects of Dish's new service, Dish will also redistribute and stream Fox’s programming over the Internet. Fox claims that this too constitutes a violation of copyright law and Dish’s agreements with Fox. Fox points out that this aspect of Dish's new services also constitutes unlawful competition with iTunes and Amazon who must pay for the right to offer commercial-free versions of Fox’s programming.
Further information is available through this report on hollywoodreporter.com.
[Christina Phillips & JT]