ContractsProf Blog

New in Print

James Chang & Farnaz Alemi, Gaming the System: A Critique of Minors' Privilege to Disaffirm Online Contracts, 2 UC Irvine L. Rev. 627 (2012)

Frances E. Chapman, Canadian Contractual Duress and Criminal Duress: "Irrational, Anomalous, Perverse, Illogical and Fundamentally Wrong" or Just Misunderstood? 11 Wash. U. Global Stud. L. Rev. 215 (2012)

Michael A. Dorelli & Justin T. Walton, Recent Developments in Indiana Business and Contract Law. 45 Ind. L. Rev. 977 (2012)

Jon P. McClanahan & Kimberly M. Burke, Sharpening the Blunt Blue Pencil: Renewing the Reasons for Covenants Not to Compete in North Carolina, 90 N.C. L. Rev. 1931 (2012) 

Xiaojian Zhao, Economics of Contract Interpretation, 25 Research in L. & Econ. 61 (2012)

[JT]

Jersey Shore Star Sues Devotion Vodka for Breach of Contract

From TheHollywoodGossip.Com, here's the situation:

Jersey Shore's Mike "The Situation" Sorrentino filed a breach of contract lawsuit against Devotion Vodka, claiming he was cheated out of millions in a business deal gone awry.

In 2010, Situation agreed to endorse the protein-infused vodka (yes, it's apparently a real thing) and claims he has not been paid the money he's owed for doing so.

According to court documents, Mike's camp claims the company was valued at approximately $4 million then, and is now worth $35-50 million thanks to him.

Sitch received the 8 percent ownership stake, as promised, but Devotion failed to add 2 percent to his share on their one-year anniversary, as promised in the deal.

Additionally, he alleges Devotion failed to provide a $400,000 "buy back" option for his shares on their two-year anniversary and failed to supply him with sales reports.

He feels the company keeps looking for excuses to cut him out and not pay him. Sounds like this deal went down faster than the quality of Jersey Shore Season 6.

Sorrentino is suing for his entire 10 percent share in the company (an estimated worth of up to $5 million) and other damages. Devotion has not responded yet.

[Meredith R. Miller]

Eleventh Circuit Affirms District Court's Determination on Jurisdiction to Challenge to FCC Rule

Martha Self entered into a contract for cell phone service with AT&T in 1995.  AT&T subsequently notified her that, beginning in January 1998 she would be subject to a Universal Service Support charge, which consisted of charges under a Federal Communications Commission (FCC) Universal Service Order that AT&T passed on to its customers. Displeased with the new charges, Self filed a putative class action, alleging breach of contract, unjust enrichment and (in the Fifth Amended Complaint) violations of federal statutory law, in Alabama state court,which AT&T removed to federal court.  

At that point, the case went dormant for nearly a decade as the federal court system awaited resolution of disputes between the FCC and AT&T.  Eventually, in Texas Office of Public Utility Council v. FCC, the Fifth Circuit determined that the FCC Universal Service Fund (USF) inappropriately included fees for intrastate revenues.  However, the court's ruling did not call for refunds of payments that carriers had already paid into the USF.  Between January 1, 1998 and November 1, 1999, the FCC collected $1.6 billion in USF fees.  It ceased collecting such funds after the Texas Office opinion went into effect, but it did not refund any part of the money previously collected and found improper in Texas Office.  AT&T petitioned the FCC seeking a refund of that money, and it 2008, the FCC issued a Final Order declining to refund the money, apparently because the carriers had been permitted to pass the costs on to consumers and recovery of those costs was no longer feasible. 

The issue before the Eleventh Circuit in Self v. Bell South Mobility was whether the District Court had jursidiction over Self's various claims in light of Texas Office and the 2008 Final Order.  The District Court held that it did not, to the extent that Self sought retroactive application of Texas Office -- that is, to the extent that Self sought to recover her portion of fees paid in to the USF in 1998 and 1999.  The basis for that decision is 28 U.S.C. § 2342, which grants to the Federal Courts of Appeal exclusive jurisdiction over challenges to FCC final orders.  The Eleventh Circuit affirmed the District Court's finding that it lacked urisdiction to review the 2008 Final Order.

Judge Carnes, who authored the opinion for the panel, begins with a Holmesian aphorism: 

[W]hen you walk up to the lion and lay hold the hide comes off and the same old donkey of a question of law is underneath.

Throughout the opinion, Judge Carnes refers to his donkey metaphor.  That aspect of the opinion is quite witty.  Judge Carnes effectively uses Justice Holmes's remark as an organizational principle to separate the complex procedural background of the case from the rather straightforward legal question presented.  Nicely done.



Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 
September 21, 2012 to November 20, 2012

Rank	Downloads	Paper Title
1	232	Libertarianism, Law and Economics, and the Common Law  Todd J. Zywicki,  George Mason University - School of Law, Faculty
2	175	The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice  Ulrich G. Schroeter,  University of Mannheim - Faculty of Law
3	164	Seduction by Contract: Law, Economics and Psychology in Consumer Markets - Introduction  Oren Bar-Gill,  New York University (NYU) - School of Law
4	154	Another Step Towards Harmonization in EU Contract Law: The Common European Sales Law  Maud Piers, Cedric Vanleenhove,  Ghent University, Ghent University
5	148	Express Contract Terms and the Implied Contractual Covenant of Delaware Law  Mohsen Manesh,  University of Oregon School of Law
6	127	Contract in My Soup: Chinese Contract Formation and Ritual Eating and Drunkenness  Mary Szto,  Hamline University School of Law
7	123	CISG and CESL  Ulrich Magnus,  c/o Max Planck Institute for Comparative and International Private Law
8	99	Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism  Cheryl B. Preston, Eli McCann,  Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - affiliation not provided to SSRN
9	81	Misrepresentation: The Restatement's Second Mistake  Stephanie R. Hoffer,  Ohio State University (OSU) - Michael E. Moritz College of Law
10	74	An EU Law for Cross-Border Sales Only – Its Meaning and Implications in Open Markets  Jürgen Basedow,  Max Planck Institute for Comparative and International Private Law

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
September 21, 2012 to November 20, 2012

Rank	Downloads	Paper Title
1	175	The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice  Ulrich G. Schroeter,  University of Mannheim - Faculty of Law
2	153	Another Step Towards Harmonization in EU Contract Law: The Common European Sales Law  Maud Piers, Cedric Vanleenhove,  Ghent University, Ghent University
3	148	Express Contract Terms and the Implied Contractual Covenant of Delaware Law  Mohsen Manesh,  University of Oregon School of Law
4	126	Harmonization of Private International Law in Europe and Application of Foreign Law: The Madrid Principles of 2010  Carlos Esplugues,  University of Valencia - Faculty of Law
5	123	CISG and CESL  Ulrich Magnus,  c/o Max Planck Institute for Comparative and International Private Law
6	99	Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism  Cheryl B. Preston, Eli McCann,  Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - affiliation not provided to SSRN
7	80	Misrepresentation: The Restatement's Second Mistake  Stephanie R. Hoffer,  Ohio State University (OSU) - Michael E. Moritz College of Law
8	74	An EU Law for Cross-Border Sales Only – Its Meaning and Implications in Open Markets  Jürgen Basedow,  Max Planck Institute for Comparative and International Private Law
9	72	Markets as a Moral Foundation for Contract Law  Nathan B. Oman,  William & Mary Law School
10	71	Lexis Nexus Complexus: Comparative Contract Law and International Accounting Collide in the IASB-FASB Revenue Recognition Exposure Draft  Kurt S. Schulzke, Gerlinde Berger-Walliser, Pier Luigi Marchini,  Kennesaw State University, University of Connecticut, University of Parma - Department of Economics

[JT]

London Court Finds Breach of K in Terminating Man for Facebook Post Opposing Gay Marriage in Church

The Independent reports here that Adrian Smith, who was stripped of his managerial post with the Trafford Housing Trust (the Trust), won his breach of contract claim against his employer.  London's High Court found that Mr. Smith had not engaged in "gross miconduct" by posting on this Facebook page his view that gay marriages in the church were "an equality too far."  However, the High Court awarded Mr. Smith less than £100 on his breach of contract claim, despite the fact that his slaray had been reduced as a result of his demotion from more than £35,000 to £21,000.  

The limited damages may have been the only remedy available to Mr. Smith in a court.  He could have taken his case to an Employment Tribunal and gotten more substantial damages, but Mr. Smith claims that he did not bring the case for money.  He did it for the principle involved.  The Trust has apologized to Mr. Smith and claims that it attempted to settle with Mr. Smith for a much higher amount, but Mr. Smith rejected the offer and chose to proceed with his litigation.  

The Trust's action against Mr. Smith is somewhat surprising, given that Mr. Smith does not oppose civil marriage for gay partners.  He only spoke out against church marriages for gay couples  The Independent even quotes a "gay rights campaigner Peter Tatchell" as supporting Mr. Smith: 

This is not a particularly homophobic viewpoint,  In a democratic society, Adrian has a right to express his point of view, even if it is misguided and wrong.

A spokesperson from Stonewall, an LGB rights charity described the Trust's treatment of Mr. Smith as "a little heavy-handed given that he had temperately expressed his point of view, however disagreeable that point of view might be to many.”

[JT]