December 20, 2012
From Our Self-Promotion Department: Telman on Totten (Again)
They say that doing the same thing over and over and expecting different results is the hallmark of insanity. But it's also the hallmark of scholarship. I have just posted on SSRN the shortest version yet of my argument for why we should not conflate the state secrets privilege with the Totten doctrine. The good people over at the American University National Security Law Brief have agreed to publish it, so it should be up with them early next year.
Totten establishes a justiciability rule: people who enter into voluntary secret agreemetns with the government cannot sue to enforce those agreements because doing so would violate the implied terms that the agreements are to be kept secret. Thus, Totten, estate administrator for a man who alleged that he had entered into a spy contract with President Lincoln (here pictured before he became either a vampire hunter or Daniel Day Lewis) but had not been paid, could not recover on the contract. That basic principle was subsequently expanded in Tenet v. Doe to bar not just suits on contracts but all suits to enforce secret agreements with the government.
So, I have my issues with Totten, which I think has become overbroad, as I explained here. But the point of the current article is simple and straightforward: The state secrets privilege is an evidentiary privilege. It is neither a contracts doctrine nor a justiciability doctrine. The conflation of Totten with the SSP has resulted in the unwarranted pre-discovery dismissal of colorable claims alleging tort and constittuional violations by the government and its contractors.
But for those who want to see the draft, you can download it on SSRN here. This is the abstract:
The state secrets privilege (SSP) has become a major hindrance to litigation that seeks to challenge abuses of executive power in the context of the War on Terror. The Supreme Court first embraced and gave shape to the SSP as an evidentiary privilege in a 1953 case, United States v. Reynolds. Increasingly, the government relies on the SSP to seek pre-discovery dismissal of suits alleging torts and constitutional violations by the government. Lower federal courts have permitted such pre-discovery dismissal because they have confused the SSP with a non-justiciability doctrine derived from an 1875 case, Totten v. United States. The Totten doctrine only applies to claims brought by people who have entered into voluntary relationships with the government, but it is now being invoked when the government seeks dismissal of tort claims through the SSP. While the government should invoke the SSP whenever necessary to prevent disclosure of information that might jeopardize national security, such invocations of the SSP should never result in pre-discovery dismissal.
December 19, 2012
Thoughts on the Instagram Kerfuffle
Stop me if you've heard this one before - Facebook changes its Terms in a way that its users find offensive and invasive of their privacy. Uproar ensues and Facebook promises that the changes are harmless and everyone is just overreacting. Facebook backs off, a little, and then pushes the boundaries a little further next time, regaining even more ground against its users. Sound familiar?
I think the public backlash is a very good thing since it reminds companies that there are at least some people who are reading their online agreements. Unfortunately, they are usually only reading the terms of companies that already have a monopoly in the marketplace. It's not easy for unhappy Facebookers, Googlers or Instagramers to pick up their content and go elsewhere - where would they go?
What makes my skin crawl, however, is the misleading reassurances doled out by companies when they are called on their online agreements. Instagram, for example, states on its blog that users shouldn't fear, because it respects them, really it does:"Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed. We respect that there are creative artists and hobbyists alike that pour their heart into creating beautiful photos, and we respect that your photos are your photos. Period.
I always want you to feel comfortable sharing your photos on Instagram and we will always work hard to foster and respect our community and go out of our way to support its rights."
While it may be true that Instagram users own their content, Instagram does take a pretty broad license from its users:
As Instagram knows, it doesn't need to own your content in order to use it as if it owned it. All it needs is a broad license, like the one it has. Note that it has the right to "use" the content - and doesn't define what that means or restrict that use very much.
- "provide personalized content and information to you and others, which could include online ads or other forms of marketing
- provide, improve, test, and monitor the effectiveness of our Service
- develop and test new products and features
- monitor metrics such as total number of visitors, traffic, and demographic patterns"
I found this sentence particularly sneaky:
"We will not rent or sell your information to third parties outside Instagram (or the group of companies of which Instagram is a part) without your consent, except as noted in this Policy"
Did you like the "except as noted in this Policy" ? And, as Contracts profs know, "consent" means something other than what a layperson might think - it can mean just using a website in many cases. There is similar broad language here:
"We may also share certain information such as cookie data with third-party advertising partners. This information would allow third-party ad networks to, among other things, deliver targeted advertisements that they believe will be of most interest to you."
I'm not as concerned about the targeted advertisements (which doesn't mean I'm not concerned at all) as I am about the "such as" and "among other things."
And remember, the Terms do expressly state:
"Some or all of the Service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you."
The company reassures its users, on its blog that it is not their "intention" to "sell" user photos. The company says it is working on language to make that clear. Let's hope so, but my guess is that they are probably going to use more mealy language like "at the moment" or "sell as a good defined under the UCC," or something that leaves wide open the possibility that it can make money off user photos by selling them to third party advertisers.
I'd suggest you save Granny some embarrassment and delete that photo now.
New in Print
Martingayle, Non-Competition Agreements in Virginia in the Aftermath of Home Paramount Pest Control v. Shaffer. 47 U. Rich. L. Rev. 457 (2012)
Erin O'Hara O'Connor, Kenneth J. Martin and Randall S. Thomas, Customizing Employment Arbitration. 98 Iowa L. Rev. 133 (2012)
Daniel P. O'Gorman, Promises, Policies, and Principles: The Supreme Court and Contractual Obligation in Labor Relations. 22 Cornell J.L. & Pub. Pol'y 93 (2012)
Nathan B. Oman, Markets as a Moral Foundation for Contract Law. 98 Iowa L. Rev. 183 (2012)
Cheryl B. Preston, and Eli McCann, Llewellyn Slept Here: A Short History of Sticky Contracts and Feudalism. 91 Or. L. Rev. 129 (2012)
December 18, 2012
On Legal Ed Reform, Elephants and 800-Pound Gorillas
Jeremy has been writing thoughtfully on these pages about curricular reform. Those interested in the subject (and/or metaphors about elephants and 800 pound gorillas) may want to read the comment that my extraordinary colleague (and contractsprof) Jack Graves and I submitted to the ABA Task Force ont he Future of Legal Education. Here's the link.
[Meredith R. Miller]
Clickwrap Contract Containing Arbitration and Forum Selection Clauses Upheld in 10th Circuit
At this point, it should come as no surprise that consumers can be held to the terms of agreements they enter into by clicking on a box next the words "I agree" on a computer screen or simply by continuing to use services after being provided with notice of the terms. But what if the computer screen belongs to a technician who installs your television and voice communications services? And what if notice of the change in terms to your internet service comes in an e-mail notifying you that you are accepting new terms by continuing to use the service?
In Hancock v. American Telegraph and Telephone Co., Inc., the 10th Circuit held that contracts entered into through such mechanisms are enforceable. The 10th Circuit affirmed a District Court ruling dismissing all of plaintiffs claims based on forum selection and arbitration clauses.
On appeal, plaintiffs argued they did not knowingly accept AT&T's terms, claiming that the registration process to sign up for AT&T's services was complex and confusing and thus deprived them of an opportunity to give meaningful assent to governing terms. Plaintiffs also raised factual issues that they thought should have precluded dismissal. For example, one of the plaintiffs submitted an affidavit claiming that he was never informed of AT&T's terms of service and never agreed to them. When the "I agree" box is on a technician's computer rather than on the consumer's, how do we know who clicked the box? In a footnote, the court found immaterial the distinction between clicking a box on a technician's laptop and one on your own.
As to plaintiffs' arguments about the obscurity of the registration process, their best case was Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002), in which the court struck down terms that were hidden because the consumer would have had to scroll down a screen in order to find them. But the Tenth Circuit distinguished this case from Specht and found that AT&T's terms were not hidden. In order to register for AT&T's internet services, consumers must first acknowledge that they have read and agreed to AT&T's terms, and a technician may not install television and voice services until the consumer has acknowledged receipt of AT&T's terms.
Based on declarations providing information of AT&T's standard practices, the Tenth Circuit found that the District Court had not erred in resolving factual disputes in AT&T's favor.
Weekly Top Tens from the Social Science Research Council
December 17, 2012
World's #1 Golfer Sued for Breach of Endorsement Contract
As reported here in the Telegraph, Rory McIlroy (pictured), this year's world #1 golfer, is not Tiger Woods. In addition, it appears that Mr. McIlroy has been endorsing Oakley sportswar until recently and now wants to jump ship and join team Nike. Oakley is claiming a right of first refusal and claims that it offered to match Nike's offer to Mr. McIlroy. He apparently spurned that offer and so is, according to Oakley, in breach of contract.
Oakley is claiming that it is irreparably harmed by the breach and seeks to enjoin Mr. McIlroy from enjoying the benefits of his $200 million Nike agreement. In the alternative, Oakley is seeking unspecified damages.
Reading between the lines, there do appear to be issues that are of some interest. Usually a right of first refusal requires the holder of the right to match the competing offer. But ESPN.com suggests that Oakley was only offering McIlroy $60 million to continue endorsing its products. Perhaps that amount is equal to the portion of McIlroy's Nike deal that relates to Nike apparel. In addition, ESPN reports on an e-mail sent by Oakley to McIlroy's agent back in September when contract negotiations were breaking down. The e-mail read, "Understood. We are out of the mix. No contract for 2013."
McIlroy will argue that the e-mail suggests that Oakley waived its option to renew its agreement with McIlroy. Oakley contends that, notwithstanding the September e-mail, negotiations resumed and Oakley claims to have matched Nike's offer.
So, there will be unwonted excitement on the golf tour next year as viewers tune in to see what McIlroy is wearing.