February 24, 2012
Another Rowling contract
In other news about J.K. Rowling, it turns out that the hugely successful author of the Harry Potter series has just signed a contract for an adult novel (no not an adult novel, but an adult novel). The Washington Post has the story here What's interesting is that the book did not go to "auction" but was negotiated by her new agent with Little Brown, a new publisher. I would love to see the terms of that publishing contract!
Rowling Settles Contract Dispute with Former Agent
The Telegraph reports here that JK Rowling has settled a dispute with her former literary agent, Christopher Little. Little was the agent who pulled Rowling's manuscript for the first Harry Potter book out of the slush pile. Much to Little's surprise, Rowling decided to join a former agent of Little's, Neil Blair, at Blair's new agency. It seems like there's loads of contract law issues here - Little undoubtedly had an exclusive agreement with Rowling to represent her, Blair may have had a non-compete with Little. Did Little's agency agreement contain the exclusive right to represent Rowling with respect, not just to her published works and associated film rights, but "new media" such as Rowling's Pottermore website (which she and Blair were working on while both were with Little)? Did the work done by Rowling and Blair on Pottermore violate their agreements with Little? Unfortunately for us contracts profs, the terms of the agreements are all confidential....
This situation brings up an issue that I've always wondered about with respect to exclusive agency agreements -contract law seems to me somewhat one-sided, in favor of agents, when it comes to exclusive agency contracts. Wood v. Lucy, Lady Duff Gordon held that an exclusive agency agreement that did not specify performance targets did not lack consideration because it was implied that an exclusive agent would exercise reasonable efforts to perform, otherwise the agent wouldn't get paid. But I think it's not uncommon for agents representing uknown writers, actors and singers, to spend their time on their established clients and only use minimal efforts to promote their new, lesser known, clients. Clients typically terminate the agency after the period of exclusivity in that situation, but under the rationale in the Lady Duff Gordon case, couldn't the clients sue for "breach" of the duty to use reasonable efforts? I would think the answer is yes. The bigger hurdle would be damages, which would be hard to calculate with any certainty for a new, unproven artist. There's also the bargaining power issue. There's typically a lack of bargaining power between a new client and an agent (we're not talking here about Rowling the rich and famous author, but Rowling the unpublished struggling single mom on government benefits). Theoretically, a client could terminate an agency agreement during the period of exclusivity if the agent is not exercising reasonable efforts - but a client would only do that if she had another agent or was able to sell her [insert creative work here] on her own. In that case, the terminated agent would likely sue the client for a share of any royalties, claiming that the client did not give the agent adequate time to perform under the agency agreement.
Did Fabio Capello Breach His Contract by Criticizing the Football Association?
According to The Guardian, Fabio Capello (pictured), manager of England’s national football team could be in breach of contract after publicly challenging the Football Association’s (FA) decision to strip John Terry, England’s national football team captain, of his captaincy. The Guardian reports that the FA made this decision after John Terry allegedly racially abused English footballer, Anton Ferdinand. Capello was upset that this decision was taken without consulting him. Capello said that he felt “undermined by the FA decision to notify him after the decision had been made.
Capello also objects to the substance of the decision, finding it premature. Preferring civil justice to sports justice, Capello believes that Terry should remain captain until the courts decide whether he committed the crime.
While the details of Capello’s contract are unknown, People Management reports the contract likely gives the FA final say regarding squad selection, but does that also relate to choosing the team captain? People Management also suspects that the contract contains some sort of gag provision and notes that in the UK, senior executive contracts often contain a provision preventing the employee from bringing the company into disrepute or making a public statement that is in direct conflict with a statement made by the employer. If Capello’s contract contained this provision, he may be in breach for making his views, opposing the FA’s decision, public. Whether such a remedy entitles the FA to treat Capello’s conduct as a repudiation of the agreement or can serve as grounds for dismissal will turn on the precise contractual language.
As the Guardian reports here, Capello resigned as Manager on February 8th, and the parties agreed to a £1.5 million settlement. Capello's annucal salary was £6 million. A confidentiality agreement means we will never get to explore the issues of breach in more detail.
[JT & Janelle Thompson]
February 23, 2012
Supreme Smack Down of West Virginia on the FAA
In yet another arbitration case, on Tuesday the Supreme Court decided per curiam Marmet Health Care Center, Inc. v. Brown. The Court chastised West Virginia’s Supreme Court of Appeals for handing down three decisions that disregarded the Court’s interpretations of the Federal Arbitration Act (FAA). The Court vacated the West Virginia rulings, which had held unenforceable pre-dispute arbitration agreements that apply to claims alleging personal injury or wrongful death at nursing homes.
In all three cases, a family member of a deceased patient sued the nursing home for negligent injuries or harm resulting in the patient’s death. The nursing homes sought to compel arbitration. The cases were consolidated, and the West Virginia Supreme Court of Appeals held, as a matter of public policy, that no agreement could compel arbitration of a claim of negligence that results in personal injury or wrongful death. Calling the Supreme Court’s interpretation of the FAA “tendentious” and reasoning that Congress did not intend for the FAA to apply to personal-injury or wrongful-death suits, the West Virginia Supremes refused to compel arbitration.
The Court pointed out that the FAA does not contain exceptions for wrongful-death or personal-injury claims. Instead it enforces the parties’ bargain to arbitrate disputes and “reflects an emphatic federal policy in favor of arbitral dispute resolution.” Furthermore, the court explained that in AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court held that “when state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.”
Although the West Virginia Court had also found the arbitration agreements invalid because unconscionable, the U.S. Supremes remanded on that issue, indicating suspicion that the West Virginia had held the agreement unconscionable because it violated West Virginia public policy, a notion the Court held preempted under the FAA. On remand the state court must decide if the arbitration clauses at issue are unconscionable under state common law principles that somehow escape federal preemption.
[JT and Janelle Thompson]
Law and Social Norms: The Jumbotron Kiss
It is common at sporting events to have a segment during time-outs at which the camera focuses on couples (always heterosexual, natch) and, as the crowd looks at their images on the Jumbotron, the couples almost invariably kiss. This practice is known as the Kiss-Cam.
This week's installment of This American Life includes a short introductory segment in which tv producer Bill Langworthy recounts how he was induced by the Kiss-Cam to kiss his ex-girlfriend's best friend, a woman whom, according to Bill, he would not otherwise kiss for any amount of money.
This American Life's host, Ira Glass, points out that Bill "did not have to kiss her; there would be no penalty; there was no contract; no money had changed hands. . . . " Bill explains that he felt that, with everyone watching, and with a producer looking at him, expecting him to act, he felt compelled to kiss his ex-girlfriend's best friend. This is a nice little gloss on the view that we often comply with our obligations (or even our perceived obligations) whether or not we are legally obligated to do so for reasons apart from contractual obligation. And so, a surprisingly high percentage of commercial obligations -- even among sophisticated parties who could lawyer the relationship to death if they so choose -- arise informally.
But we offer a different perspective on what is going on here. Bill explains that he attended the ball game with two friends, a married couple. Someone who coordinates the Kiss-Cam segment came around and asked the married couple if they would mind kissing for the Jumbotron. They agreed. This was already a revelation, since the parties often look as though they are taken by surprise when the Kiss-Cam seizes upon them. Who knew it was all a set-up? In any case, according to Bill, a few beer runs later, the parties had switched seats, so when the Kiss-Cam alighted, it hit him and his ex-girlfriend's best friend, instead of their married neighbors.
Since Bill is himself a producer, it seems reasonable to assume that he understood how things like the Kiss-Cam operate. Having identified its prey, the Kiss-Cam was going to focus on a particular seat, rather than on, for example, the tall guy wearing a baseball cap and the home team's jersey., since that latter description lacks specificity in the context of a sporting event.
Come on Bill, maybe you really wanted to kiss her and were just waiting for the Jumbotron to permit you to break the taboo?
February 22, 2012
New in Print
Schillig, Michael. Directive 93/13 and the 'Price Term Exemption': A Comparative Analysis in the Light of the 'Market for Lemons' Rationale. 60 Int'l & Comp. L.Q. 933 (2011)
What's More Exciting than FarmVille?
Well, anything really. . . .
(sorry about the commercial)
But the answer we were looking for is a lawsuit about FarmVille:
According to a decision issued on February 6, 2012, by Oakland, California Judge Yvonne Gonzales Rogers, popular game developer Zynga, Inc., (“Zynga”), may owe some of its success to rival game creator, SocialApps, LLC, (“SA”). As stated in SA’s First Amended Complaint, the company invested substantial time, resources and money to develop “myFarm,” the first social networking game to allow players to create their own virtual farms, which it released on Facebook in or about November 2008. In or about May of 2009, Zynga approached SA about a possible purchase or license agreement regarding intellectual property rights, confidential information and source code for myFarm. The parties subsequently entered into a letter agreement wherein SA agreed to provide information to Zynga for “due diligence” purposes. Under both the express and implied terms of the agreement the parties had a mutual expectation that if Zynga used SA’s myFarm concept and distinct features, Zynga would compensate SA for such use. However, once SA provided Zynga with its source code for myFarm, Zynga stopped communicating and never compensated or credited SA.
After Zynga’s June 19, 2009 release of its own game, FarmVille, SA filed suit, believing Zynga had used its confidential source code without permission or compensation to develop the game. Zynga subsequently filed a Motion to Dismiss SA’s claims of misappropriation of trade secrets and various breach of contract claims. Judge Rogers allowed the various breach of contract claims to move forward, but dismissed the claim in regards to theft of trade secrets related to images and various features of myFarm, on the grounds that these images were available to the public before the May 2009 letter agreement or June 2009 release of FarmVille.
While Zynga obtained a partial win, Judge Rogers let stand the three claims for breach of implied contract, confidence, and implied covenant related to the myFarm source code. According to the Judge, “the allegations here are sufficient to allege conduct beyond a mere breach of the terms of the agreement which would support a claim for tort damages." As reported by Law.com, Zynga has yet to seek dismissal of SA’s claims for copyright infringement and breach of written contract.
[JT & Christina Phillips]
February 21, 2012
Weekly Top Tens from the Social Science Research Network
|1||412|| The Scope and Implications of Stern v. Marshall, 131 S. Ct. (2011)
Michael St. Patrick Baxter, Elizabeth Gibson, Randal C. Picker, R. Patrick Vance,
Covington & Burling LLP, University of North Carolina (UNC) at Chapel Hill - School of Law, University of Chicago - Law School, Jones Walker - New Orleans Office
|2||338|| Choice of Law in the American Courts in 2011: Twenty-Fifth Annual Survey
Symeon C. Symeonides,
Willamette University - College of Law
|3||153|| Bankruptcy, Backwards: The Problem of Quasi-Sovereign Debt
American University Washington College of Law
|4||111|| The Proposal for a Regulation on a Common European Sales Law: Shortcomings of the Most Recent Textual Layer of European Contract Law
Horst Eidenmueller, Nils Jansen, Eva-Maria Kieninger, Gerhard Wagner, Reinhard Zimmermann,
University of Munich, University of Muenster, University of Wuerzburg, University of Bonn, Max Planck Institute for Comparative and International Private Law
|5||101|| Contract Theory: Is There a Path Through the Theoretical Jungle?
University of Edinburgh - School of Law,
Date posted to database: January 12, 2012
Last Revised: February 3, 2012
|6||90|| Judging Lite: How Arbitrators Use and Create Precedent
Mark C. Weidemaier,
University of North Carolina (UNC) at Chapel Hill - School of Law,
Date posted to database: January 10, 2012
Last Revised: January 27, 2012
|7||89|| Boomer-Ang Eldercare: Deductible Claim?
Wendy C. Gerzog,
University of Baltimore - School of Law
|8||81|| The WTO’s Revised Government Procurement Agreement - An Important Milestone Toward Greater Market Access and Transparency in Global Public Procurement Markets
Robert D. Anderson, Steven L. Schooner, Collin D. Swan,
World Trade Organization, George Washington University - Law School, George Washington University - Law School
|9||76|| A Radical View of Legal Pluralism
Jan M. Smits,
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
|10||69|| Aggregation and Law
Ariel Porat, Eric A. Posner,
Tel Aviv University, University of Chicago - Law School
February 19, 2012
"Lady" Spears Settles Exclusive Licensing Dispute
In a previous post, I outlined some parallels between Britney Spears and Lady Duff Gordon, both of whom were sued for violating allegedly exclusive licensing deals. Britney's dispute was with Brand Sense, who sued upon discovering that Britney was entering into fragrance deals with other parties despite their allegedly exclusive arrangement with her to promote the fragrance, Radiance (ad embedded). According to the ever-reliable TMZ, Britney and Brand Sense have settled their dispute, with Britney agreeing to pay the overdue commissions. Bummer. I was hoping for a reported opinion.