Monday, November 23, 2015
A lot of people are angry at the legal academy. They are angry about falling bar passage rates and limited career opportunities. They are angry that law schools do not do enough to prepare them for the bar or for practice and that tuition is too high given what traditional legal education can accomplish. The anger, to the extent that it comes from law graduates who worked hard and still cannot find satisfying work as attorneys, is understandable. Directing that anger at law professors is also understandable but in most cases unjustified.
We did not create the market conditions. We, for the most part, are not even the architects of the policies that determine admissions standards or tuition. We are very limited in the extent to which we can innovate because we are subject to ABA educational guidelines that increasingly (and often unhelpfully) micro-manage our operations. Almost every innovation that would improve legal education would also make legal education more expensive.
I want to outline two arguments in this post. First, legal academics and administrators at unranked law schools are people of good will who are trying to continue to serve people who ardently aspire to become attorneys. Second, the legal profession is also full of people of good will, but collectively the legal profession is behaving as professions always do in times of economic contraction: they are raising barriers to entry so as to protect their incomes and their self-created monopoly in the provision of specialized services.
What is going on at unranked law schools is pretty simple. For decades, such law schools accepted students who, for the most part, could not have gotten in to more highly-ranked law schools. For decades, the overwhelming majority of such students went on to pass the bar and enter the legal profession. As Michael Simkovic and Frank McIntyre have shown, those students are financially better off for having done so, and without the lower-ranked schools, they never would have had the careers they now have. Unranked law schools started dipping deeper into the applicant pool when that pool shrunk considerably in size, believing that they had the ability to identify students who could succeed in law school and in the legal profession and that they could address the needs of the academically underprepared with beefed-up academic success programs and curricula more geared towards bar preparation.
Evidence is mounting that law schools were overly sanguine about their ability to help students in the bottom quartile of the national LSAT pool. But evidence is also beginning to suggest that the pool has bottomed out and begun to grow again. That should mean that unranked law schools that are competing for students may have a larger pool of students to compete over, and so long as schools learn their lesson and keep growth and costs down, that should mean that they can begin to increase their admissions standards back towards where they were a decade ago. In five years, the crisis may well have passed and the law schools over which the sword of Damocles currently hangs will be crowing about gaudy bar passage and employment rates.
This result is far preferable to shutting down existing law schools. Right now, we have overcapacity, but it law schools disappear, they are unlikely to reappear. And if, as seems likely, the law schools that close are the unranked law schools, the losses will hit underserved communities the hardest. I will have more to say about who those communities are and why keeping them out of the legal profession is a big problem in the next post in this series.
The ABA is the guardian of our profession. What do professions and professional organizations do? Following Magali Sarfatti Larson, we can conceive of the legal profession as a group of trained experts attempting to establish a monopoly over a market in services. The key to control over a market for professionals becomes control over the production of producers. By limiting the supply of credentialed practitioners, professionals assure themselves a favorable bargaining position in the market for their knowledge and services. (Magali Sarfatti Larson, The Rise of the Professions: A Sociological Analysis 29-30 (1977)). As Larson points out, professions do not so much meet existing needs as shape or channel the needs of consumers (id. at 58). In order for a profession to succeed, it needs to convince the members of society as a whole that its services are necessary and that only people with a certain kind of expertise and credentialing are qualified to provide such services.
And so, when the going gets tough, barriers to entry rise. Recent trends of (often steeply) lower bar passage rates and the steady drumbeat calling for greater scrutiny of law schools viewed as underperforming are consistent with how Larson's model predicts professional organizations will respond to economic pressures. But it also threatens to add a new and ugly chapter to the history of the ABA.
Many have written about the racist bias underlying the establishment of the ABA (e.g., Daria Roithmyer, Deconstructing the Distinction between Bias and Merit, 85 Cal. L. Rev. 1449, 1476 (1997)). I do not think there is any such intentional bias at work today, but the organizations so eager to mete out death sentences to law schools that serve underrepresented minorities and the academically underprivileged need to think about what the legal profession will look like in 2025 if their wishes all come true.
Friday, November 20, 2015
The law firm of Andrews Kurth was recently hit with a nearly $200million dollar judgment for malpractice. Yes, that's right - nearly 200 MILLION dollars. At the bottom of this - an agreement which was deemed unenforceable as an "agreement to agree." As reported by Law 360 (which requires registration - apologies), the malpractice suit stemmed from representation in a dispute involving a family business, Martin Resource Management. Two brothers, Scott and Ruben Martin, were fighting over management issues until their mother stepped in to broker a deal. Andrews Kurth represented Scott Martin and sought changes to the deal to ensure its enforceability. Scott ended up suing Ruben to force him to comply with the terms of the settlement; however, the appeals court ruled that the settlement agreement revised by Andrews Kurth was unenforceable as an "agreement to agree." Many lawsuits ensued resulting in this incredibly large jury award.
Unfortunately, I couldn't get a copy of the actual agreement that was at issue - I would really like to see what the language looked like...
Wednesday, November 18, 2015
I'm not stopping because I'm burned out. I still love blogging, and I wouldn't be surprised if, after a hiatus, I want to come back to blogging in some form. I'm stopping because I think I've maxed out on the benefits I can derive for myself and my law school from this enterprise, and it is time for me to find new ways to contribute. Also, look how blogging has aged me, as evidenced in these photographs of me taken before I started blogging (left) and after (right).
Moving on feels especially urgent given what is going on in the legal academy and in unranked law schools like mine in particular. Posts III and IV in this series will elaborate on that subject. Given the challenges that my current students face and that I face in teaching them, I am contemplating a complete re-tooling of my approach to teaching contracts. I have requested a year off from teaching contracts next year so that I can teach a couple of legal writing/legal reasoning courses and get better insights into where my students are at in those areas when they get to law school. I also need to learn from my skills-training colleagues so that I can better incorporate skills training into doctrinal teaching when I go back to teaching contracts, as I very much hope to do.
At the same time, at age 52, I am beginning to think about what remains of my career as an academic and what sort of an impact I think I can have in the 10-15 years that remain to me as an active scholar and teacher. It is already clear to me that my most important impact is going to be in the classroom. Although I would like to think that I have original ideas and can contribute to an academic debate that can move the law or inform policy decisions, the likelihood of that is small, as it is for most of us mortals. Still, perhaps out of vanity, I have three book projects that I think will keep me occupied into my sixties. One is an edited collection on Hans Kelsen, which is under contract and which I hope will come out next year. The second is an intellectual history of originalism in constitutional adjudication, as a judicial practice, an academic approach and a popular movement. The third will be on theories of public international law, I have a typology of public international law theories that I use in presenting the material to my students. I've always wished there were a book that did this the way it needs to be done. Oona Hathaway and Harold Koh edit a collection which is very useful, but for some reason they have not decided to organize the material the way I organize it. I'm kidding. My organization is unique, and I will only know if it makes sense once the book is well underway. So, I have assigned myself the task of writing that book.
None of these projects relates to contracts law, and so the prospects for me returning to contracts scholarship before retirement are remote. I expect that I will continue to follow the blog, use it as a resource, refer students to it, and feel pride that I contributed to it for nearly a decade. But I need to allocate my dwindling intellectual energies elsewhere. Producing a book every five years is something I think I can still handle while focusing on Job 1, which is helping my students pass the bar and prepare for their legal careers.
Monday, November 16, 2015
I have told my co-bloggers and the Blog Emperor that I intend to step down from the blog at the end of the semester. I am leaving things in good hands. Nancy Kim will continue as a contributing editor, and Myanna Dellinger has agreed to step up as editor. I hope that this post will aid Myanna in her efforts to attract new contributors. The more different voices we feature on the blog, the more we can attract new readers and move others from occasional to habitual readers.
Before I go, I have a few things to get off my chest, and I will do so in a final series of posts.
First come the thanks (and they will come again at the end). Nearly ten years ago, I sent a Limerick to Frank Snyder (pictured) and asked him if he would be interested in posting it on this blog. He responded by inviting me to become a regular contributor. He showed me the ropes and roped me in to the contracts law community, and for that service, I owe him continual thanks, as the benefits continue to accrue. While on the blog, I have had many great colleagues, who have helped keep the blog going and added new and interesting perspectives. Two such colleagues, Nancy Kim and Meredith Miller, merit special thanks because of their long tenure on the blog and because their contributions moved the blog in new directions, both scholarly and quirky, that expanded our readership in ways we could not otherwise have done. Both served me as sounding boards both in my contracts scholarship and in connection with issues that arose on occasion relating to the blog. It is a bit odd to describe as friends people you have only spoken with face-to-face on a handful of occasions. Yet, in unreflective moments, when I confess that I like to go to the International Conferences on Contracts because I get to see my friends there, I have Frank, Meredith and Nancy (and others) in mind.
Which brings me to the second subject I want to tackle in this post. When I started blogging, I was untenured, and there were a few articles circulating (as well as many more blog posts) suggesting that it might not be a great idea for junior faculty members to blog. The main concern was that blogging would interfere with serious scholarship. Based on my own experience, I think this is nonsense. Blogging can certainly spur scholarship, but I have never been much of a contracts scholar (with the exception of my forthcoming article so-authored with Nancy Kim, my publications tend not to be about contracts). But blogging also is scholarship, and it is scholarship that is much, much, much more widely read than are law review articles. This blog gets about 300 unique visitors A DAY. I think I am doing well if one of my articles gets to 300 downloads TOTAL on SSRN.
And my posts on this blog have been cited in law review articles. It doesn't happen all that often, but when it does, it is always for the unique substance of the blog post. My law review articles are sometimes cited for that purpose, but probably more often, my law review articles are cited for some proposition that the author could have found in ten other law review articles.
But the benefits of blogging to a junior faculty member can also lie elsewhere. Blogging has certainly kept me on top of new developments in a field in which I teach. But beyond that, blogging has helped me establish connections with contracts professors throughout the country and sometimes even internationally. Through our online symposia, I have gotten to work with contracts scholars who are doing the most exciting work in the field. I hope for better and not for worse, I am known as a contracts professor in ways that I think other contracts professors at "unranked" law schools generally are not, and I expect that my being known (for better and not for worse) also redounds to the benefit of my law school. By way of contrast, I am not equally well known in the field of international law, although that is where I do most of my writing, and in the community of American scholars who work on Hans Kelsen . . . . Just joking, all six of them know me.
On the more personal and less professional level, I have had innumerable, rewarding conversations with contracts professors at various conference and gatherings. Often, these conversations begin with something like, "I saw your post about . . . ." or "Oh yes, I know you from the blog . . . " We academics are awkward people. The blog provides a ready ice-breaker, and so I have the blog to thank for providing the gateway to many rewarding exchanges.
For years, I have introduced myself to students as "the editor of the ContractsProf Blog, the official blog of the AALS Section on Contracts." As I look out at their impassive faces, I tell them that they have now heard my best pick-up line. I love the joke, especially since I don't know what it means to be the official blog of the AALS Section on Contracts. I also love it because I think my students think it might be an impressive thing but also that my joking about suggests that I don't take myself too seriously.
They are dead wrong about that. When my teenage daughter gets too sassy, I remind her that I am a famous contracts professor. I sign various school forms "D. A. Jeremy Telman, FCP," and I explain that FCP stands for famous contracts professor. "Dad," my daughter groans, "you are not a famous contracts professor." "Oh yeah?" I counter. "Can you name one who is more famous?"
She cannot, and now I have a plaque (Fathers' Day 2015) to prove it!
Thursday, November 12, 2015
I was thinking of that dictum this morning as I renewed an overdue library book (on CD, to be honest). The librarian graciously renewed the item but noted that I owe a five cent fine because I renewed one day late. I threw a hissy fit. Yesterday was Veterans Day! The library was closed. How could I renew when the library was closed?!? I'm a poor law professor on a very fixed income! Have you no sense of decency, sir, at long last? Have you left no sense of decency?
No, I didn't.
My public library seems to understand that there is no moral opprobrium associated with a breach of this kind of implied promise. Since I became addicted to listening to books on CD in the car, I have borrowed well over 100 such books from my public library. Almost invariably, I have to renew them, as it takes me more than two weeks to finish them. Only once have I had to return a book that I wanted to renew because it had been requested by another reader (listener). My delict is de minimis and likely harms nobody.
But here's the rub. I used to always return/renew my library materials on time. But a few times I've held on to the items a few extra days so that I could finish them and make just one trip to the library to renew and pick out a new book. That saves me time, which I value more than the five cents a day. Still I feel a bit guilty about this new habit (that's why I am busy rationalizing my behavior), and I wish my library would charge me $1/day for overdue books. I can afford it, but it would hurt enough to nudge me into being a better citizen.
Friday, November 6, 2015
The other day, I had lunch with a friend who is preparing to teach a course for the first time. I asked him how his preparation was going, and he told me that he was reading a book by a law professor on the subject matter of the course. That is a perfectly reasonable way to prepare to teach a course.
But it's not what I do.
After our conversation, it occurred to me that I now increasingly bifurcate my mind between subjects about which I write and subjects that I teach. In cases where I write about what I teach, I read one set of materials for scholarship and another set to prepare for teaching. There is very little overlap.
In order to write scholarship, I read books and law review articles, as well as case law and other relevant primary sources of law. In order to teach, I review the cases I am teaching, as well as the supplementary material that I assign -- usually a treatise or a book from the Examples & Explanations series, (or something similar) and then spend most of the rest of my preparation time designing exercises and reading students' work product. Of course, I have various electronic news feeds that keep me abreast of developments relevant to the fields I teach, but it is rare that developments in the law change my approach to teaching contracts. I still read books and law review articles about contracts in pursuit of a scholarly agenda (and for fun!), but what I read rarely affects the way I present the material.
I spent the evening after my conversation with my friend giving myself a 40-question multiple choice exam on contracts. The questions were provided by a vendor with which my law school has contracted. The vendor provides bar-style questions to help our students review material. I wanted to make certain that the questions were appropriate for my students and that the test-designers understood the material the same way I did. Of the 40 questions, I found that 22 were appropriate for my students, and so I decided to warn them away from just jumping into the quiz bank. Too many of the questions related to sales topics not covered in the first year course or to other topics that I don't get to in a four-credit course. Instead, I edited the 40 questions I reviewed in order to come up with two practice quizzes for my students.
This approach to teaching has become mine through a slow process that I did not notice until I spoke with my friend and then later reflected on how it had struck me as quaint that he was preparing to teach a new course by reading a book of scholarship with a distinctive and unorthodox take on the subject matter. I remember that the doctrinal courses that I took in law school were not just about doctrine; many of my teachers were able to teach me doctrine in the context of a semester-long or year-long sustained argument incorporating overarching themes that my professors used to organize, understand and critique the doctrine. They were not just teaching the law; they were teaching an approach to the law, and they were trusting us to sort things out.
Perhaps I do so as well, and I don't read scholarship in connection with teaching anymore because, twelve years into teaching, I have read enough scholarship on contracts to suffice for a lifetime of 1L teaching. But I think slipping bar passage rates are also a factor in the transformation of my approach to teaching. I worry that introducing critical perspectives and theoretical approaches will confuse more than enlighten. I still encourage students to engage critically with the case law, but I tend to do so by asking them to think about the facts and the law from each party's perspective rather than by encouraging them to question the doctrines.
Monday, November 2, 2015
Danish toy building brick maker Lego recently turned down an order for several million lego bricks that were to have been used in an art exhibit by Chinese artist and human rights activist Ai Weiwei in Melbourne. Why? Because Lego refrains from “actively engaging in or endorsing the use of Lego bricks in projects or contexts of a political agenda.”
The bricks would have been used for two projects, one of which would have consisted of mosaic portraits of twenty Australian advocates for human rights and for information and Internet freedom. Prominent lawyers such as Michael Kirby and Geoffrey Robertson would have been depicted as would have WikiLeaks founder Julian Assange.
Last year, Mr. Ai used Legos to create mosaic portraits of 176 political exiles and prisoners of conscience in an exhibit on Alcatraz Island in San Francisco. At that time, Mr. Weiwei bought the toys via a nonprofit helping him develop the Alcatraz exhibition.
This is apparently not the first time that the Lego Group is turning down otherwise valuable contracts for its popular bricks. Just this year, Lego rejected a proposal to make Lego figures of the female United States Supreme Court justices, also because such use was considered “political.” (Huh?!) Previously, Lego has tried to persuade a Polish artist to withdraw an installation that used Lego bricks to depict a Nazi concentration camp (Lego, in turn, withdrew that request after lawyers got involved.).
China’s reaction to the Ai Weiwei story? The state-run Chinese Global Times reported that “as China becomes more powerful, commercial organizations and national governments will become more well behaved and more scared to apply a double standard to China.” (Link to Global Times not available, but see here for coverage from NPR and the NY Times) Surely, at least part of that statement must be a mistranslation. If not, then let’s indeed hope that governments and corporations alike become better behaved (if not, could we give them time out?).
Does this case make sense from a business point of view? Perhaps, if the company wants to err on the extremely cautious side of avoiding negative PR in general. Or is this perhaps rather an issue of not risking to upset a very valuable and increasingly affluent country such as China? Should it matter to a manufacturer what its products are sold for? Said Weiwei: “A company that sells pens [also] cannot tell a writer that he or she can’t do political or romantic writing. It’s really none of their business.”
Having been born and raised in Denmark, Lego’s attitude surprises me somewhat. Danes – whether organizations or individuals – often weigh in on important social issues. Danes are often not afraid to speak their minds on important social issues. That is simply how “small talk” and opinion-making is formed in the nation. As a nation, Denmark often touts itself as a world leader when it comes to other complex issues such as comprising the environment, energy and health care even though those could also be seen as “political” in nature. On that backdrop, Lego’s attitude seems even more conservative from a PR point of view, but of course, it is a multi-million dollar company worried about the bottom line. Fair enough, but in a way, it would be refreshing if companies would take more responsibility for the ultimate effects of their products. Some are. For example, some companies are voluntarily reducing the sugar content in their products or at least providing less sugary alternatives to traditional products. Others are not (the gun industry, to mention one). But where, such as in the Lego case, companies decide to be overly cautious in relation to issues that do not seem all that controversial and that are not even funded or otherwise supported by the vendor itself, it seems that we are risking censorship via corporatism.
The future of Weiwei’s exhibits is unknown, but he is reported to be making use of Lego collection points after having received numerous offers of Lego donations on social media.
Monday, October 26, 2015
I expect that when I am retired I will have time to devote myself full time to the joy of dealing with the utility and telecommunications companies, because avoiding being ripped off by these monopolists is really a full-time job. Two recent examples:
I recently travelled to Europe, and I needed to make exactly one phone call when I arrived. There was no simple way to avoid making the phone call, and having a phone with which to place the call was easier than stealing an iPhone from an unsuspecting tourist. I called my service provider and asked if there was a simple and inexpensive way for me to use my phone for three days in Belgium. Three disconnections and over an hour later, I thought I had a way to do so FOR FREE! I was told that they would send me a new sim card. If I sent the card back within 30 days, there would be no charge. A $26 charge would show up on my credit card, but it would be removed once I returned the sim card. This sounded too good to be true. Had my call been re-routed to some scam artist? On the Internet, I checked and re-checked the number I had called while I was on hold (I had a lot of time to check), and I had the customer service person repeat himself several times to make certain I understood the terms.
Very long story short, my service provider did charge me $26, and then wanted to add something like $80/month for the new phone service I had allegedly ordered. After perhaps another two hours on hold/arguing with "customer service" people, the service provider did what they had repeatedly told me was impossible. They gave me a full refund (except for the original $26, which was a shipping and handling charge). I could live with that. I could console myself that being able to make that phone call was worth $26, even though I would never have agreed to that in advance.
One week later, I received a $50 refund from the telephone service provider. I have no idea how they arrived at that figure. I chalk it up to even more incompetence. I wanted to try to return the refund, to which I am not entitled (beyond the $26), but I know that doing so will take far more time than it is worth. I will consider the "refund" a partial payment for the extensive legal advice I offered about the fraud in which they had engaged by repeatedly telling me that the sim care would cost me nothing and then trying to charge me for it.
- Unannounced, guys from the cable company dig a hole in our backyard and leave us with an open cable box with cables shooting out of the top of it. They tell me they will be back in a day or two to close the box and bury the lines going across my yard and the yards of my neighbors on either side.
- We receive notice that we must upgrade our cable box, and we follow onscreen instructions to have it sent to us.
- We receive an invoice with a new charge for "additional outlets"
- We install the new cable box and while speaking with someone who activates it remotely, I set up a service call so that they can come back, close up the cable box, fill in the hole and bury the cable before the ground freezes.
- The next morning I receive a call confirming the cancellation of my service call.
- I call back immediately, outraged that I have to re-schedule a service call that I never cancelled, and I am able to get it rescheduled, although the cable company still says that they have a record indicating, that in the 12 hours since I scheduled the service call, I called them to cancel it.
- While on the phone, I ask them about the "additional outlet" charge, and they inform me that it is a shipping and handling charge for the new cable box (that they insisted that I needed).
I pointed out that it is misleading (to say the least) to call a shipping and handling charge an "additional outlet" charge. Because I was livid, or perhaps just because I bothered to ask, they agreed to remove the "additional outlet" charge. Similarly, we are now enjoying a $50 "discount" on our cable services because I threatened to switch to a satellite dish and because we "had not had a discount in a while."
It does now seem to be the policy of the monopolists that they will just keep raising the rates of loyal customers until they crack, and then they will lower them until they see an opportunity to start ratcheting up the price again. Last year, I got fed up with what we were being charged for garbage collection, placed a phone call, and got the bill reduced by 50%. I then told my neighbors that they should all do the same. And they did. And it worked.
How all of this slips below the radar and is not the subject of federal regulation or class actions is beyond me!
Thursday, October 22, 2015
23andme just issued a report that indicates that it has received 4 requests for customer information from law enforcement agencies and the FBI. The company was able to fend off those requests. Given that the company has over a million customers, that's not a large number, but the implications are chilling. As Jeremy Telman and I argue in a forthcoming article, the personal data collected by private companies may be used by the government in ways that may surprise us (and, in some cases, deprive of us basic constitutional rights....) 23andme extracts its customers consent by including the following in its TOS:
"Further, you acknowledge and agree that 23andMe is free to preserve and disclose any and all Personal Information to law enforcement agencies or others if required to do so by law or in the good faith belief that such preservation or disclosure is reasonably necessary to: (a) comply with legal process (such as a judicial proceeding, court order, or government inquiry) or obligations that 23andMe may owe pursuant to ethical and other professional rules, laws, and regulations; (b) enforce the 23andMe TOS; (c) respond to claims that any content violates the rights of third parties; or (d) protect the rights, property, or personal safety of 23andMe, its employees, its users, its clients, and the public. In such event we will notify you through the contact information you have provided to us in advance, unless doing so would violate the law or a court order."
Nevermind that this provision is not one that most customers would have bothered to read, hidden as it is behind a hyperlink and buried in the text. You can read more about the potential use of DNA test kits by law enforcement agencies here and here.
But wait - there's more! As I was scrolling through 23andme's terms, I found another provision that potentially affects even more customers:
"Genetic Information you share with others could be used against your interests. You should be careful about sharing your Genetic Information with others. Currently, very few businesses or insurance companies request genetic information, but this could change in the future. While the Genetic Information Nondiscrimination Act was signed into law in the United States in 2008, its protection against discrimination by employers and health insurance companies for employment and coverage issues has not been clearly established. In addition, GINA does not cover life or disability insurance providers. Some, but not all, states and other jurisdictions have laws that protect individuals with regard to their Genetic Information. You may want to consult a lawyer to understand the extent of legal protection of your Genetic Information before you share it with anybody.
Furthermore, Genetic Information that you choose to share with your physician or other health care provider may become part of your medical record and through that route be accessible to other health care providers and/or insurance companies in the future. Genetic Information that you share with family, friends or employers may be used against your interests. Even if you share Genetic Information that has no or limited meaning today, that information could have greater meaning in the future as new discoveries are made. If you are asked by an insurance company whether you have learned Genetic Information about health conditions and you do not disclose this to them, this may be considered to be fraud."
This is information that might be very useful to a potential customer. So why is this buried way down in the TOS? Maybe because it might make potential customers think twice about purchasing the kit? (Ya think?) Back in the good old days, companies posted potential dangers relating to the use of their products and services where you could see them. We used to call them notices and they had to be conspicuous. Now they bury them in the fine print and call them "contracts."
Friday, October 16, 2015
Class action plaintiffs began working with Cellular Sales (Cellular), which sells Verizon wireless services, in 2010. Cellular required that they form a business entity like an LLC and that they sign a sales agreement that identified them as independent contractors. The sales agreements did not contain arbitration clauses. In 2011, the plaintiffs became employees of Cellular and signed new compensation agreements that did contain arbitration clauses. When plaintiffs brought claims that, before the compensation agreements entered into force, they were misclassified as independent contractors when they were really employees, Cellular sought to compel arbitration. The District Court denied that motion.
In Holick v. Cellular Sales of New York, the Seventh Circuit affirmed. Although the Court acknowledged that an arbitration clause can apply retroactively, it cannot do so when the cause of action arises under a contract that does not contain an arbitration clause. In construing arbitration clauses, courts must give effect to the parties' intentions, and the Seventh Circuit saw no evidence that the parties intended to arbitrate disputes arising pursuant to their sales agreements.
Not so small aside: in its opinion the Seventh Circuit notes that plaintiffs relied heavily on an unpublished Fourth Circuit opinion. I found this curious and so I dug a bit. According to the Illinois Bar Journal the Seventh Circuit changed its rules relating to unpublished opinions in 2006. It is now permissible to cite to unpublished opinions issued on or after January 1, 2007. Citation to unpublished opinions issued prior to 2007 is still prohibited. Well, this is progress. As my colleague, David Cleveland has argued in numerous articles, unpublished opinions are a bad idea, and allowing parties to cite to them goes a long way towards eliminating the dangers of the designation.
But why draw the line at 2007? When I was in college, I saw a play called Sister Mary Ignatius Explains It All to You. I have no idea what compelled me to see that play and even less idea why I remember this one joke, but here it is: Sister Mary Ignatius explains that before Vatican II, unbaptized babies were consigned to limbo. After Vatican II, they are allowed to enter heaven. Sister Mary Ignatius is asked what becomes of the pre-Vatican II babies that were in Limbo. She pauses. "They are still in limbo." Maybe it was the delivery, but I still love that line, and remember it 30 years later. Yup, the rest of my college years are a blur.
Interestingly enough, I read on Slate that in 2007, the Vatican investigated the concept of limbo and either eliminated it entirely or at least determined that unbaptized babies do not end up there. The articles I read suggest that limbo was just for unbaptized babies, but I thought the virtuous pagans (like Virgil pictured right) were there as well (discussing prosody I am told). In any case, 2007. The very same year that unpublished opinions emerged from limbo! Coincidence?
Monday, October 12, 2015
Some shoppers on Sears.com thought it was their lucky day when they saw expensive play sets and fancy toys available for the low price of $11.95. Consumerist has the story here. If you saw a storybook cottage that typically costs hundreds of dollars listed for sale at the low, low price of $11.95, what would you think? That's right. Unless it was advertised as a huge blowout sale, you would probably guess it was a mistake. Apparently, Sears lists items sold by third parties and gets a cut - and this time, a third party had made a pricing error on its items. Of course, some Sears sellers were upset - even though Sears refunded their money and gave them a $5 gift card. So, for all those upset sellers, let's run through the mistake scenario to see whether the law would be on your side:
Was this a mistake of a basic assumption? - Yes, it was a pricing error and pricing errors are generally considered basic assumption mistakes.
Was the mistake made by one or both parties (was it a mutual or unilateral mistake?) - Here, Sears mistakenly believed that the prices listed on its website were accurate (not all $11.95) while the customers saw what the prices were - $11.95 - so it was a unilateral mistake made by Sears.
Did it have a material effect? Yes, there's a big difference between $11.95 and hundreds of dollars so Sears would make less money on the transaction.
Did the non-mistaken party (the Sears customers) know or should they have known of the mistake? - Yes, because they should know that expensive playsets are typically not sold for such a low price unless it is part of a promotion or clearance sale.
Did the mistaken party bear the risk of the mistake? You might think Sears would, since it is their website. But based upon existing case law (i.e. Donovan v. RRL Corp), since there's no lack of good faith here and Sears presumably acted reasonably in managing its website - it does not constitute "neglect of a legal duty" and Sears likely doesn't bear the risk of the mistake.
So - there you have it. Sorry kids - guess you'll just have to go outside and build your own play castles with branches and old bed sheets...
Monday, October 5, 2015
This week, the The New York Times Magazine's the "The Ethicist" column is finally given over to an actual ethicist, Kwame Anthony Appiah, who is a fabulous choice. Similarly excellent is the editors' choice to add a bonus advice column from "Judge John Hodgman" and to print said column in a font that people over 40 can read (Judge Hodgman's column used to appear on a page designed to appeal to young hipsters and to put off people who really need to just bite the bullet and use reading glasses).
I hate to disagree with so learned a judge, but I think Judge Hodgman errs in his opening opinion in the new format. His column assesses whether a written commitment is binding. The writing reads as follows, "I, Taylor W., will allow Cora W. to dress me as a woman this Christmas." Judge Hodgman describes the writing as "contract," his end of which Taylor W. must uphold.
Sorry, Judge. I see nothing more than a gratuitous promise here. There is no consideration. Moreover, this seems to be a social and not a legally binding agreement. I question whether the parties ever intended to be legally bound. Taylor W. may be bound in foro conscientiae, but he is not bound under the law of contracts.
Thursday, October 1, 2015
Because we're all not insecure enough, there's a new app out there that let's people rate other people on a scale of 1-5. There's no need to take their class,(Rate Your Professor) or eat at their restaurant (Yelp) or ride in their car (Uber)- now you can rate someone just for breathing, and if you don't like the way they breathe, you can tell the whole world about it on the Peeple App.
They may be truly naive or they may be disingenuous (we've seen greed and self-serving rhetoric masquerading as idealism from other companies), but the two founders claim that the purpose of the app is about uplifting people --to borrow from The Princess Bride, I don't think that word means what they think it means. As with all things digital, there are terms and conditions that the founders say will allow them to prevent bullying on the site. But I'm not so sure - Twitter and Facebook have no-bullying policies (or their equivalent) and that hasn't really stopped the bullying....
It's unclear whether the app will survive regulators' scrutiny as it requires the poster to submit the subject's phone number in order to create the subject's profile.
Friday, September 11, 2015
A woman visits a Nordstrom Rack store and sees a cardigan that she really likes. It costs $49.97, but features a “Compare At” price tag of $218.00 representing “77% worth of savings.” The woman buys the sweater, allegedly believing that the sweater really had been sold by Nordstrom itself or other department stores at the higher price. The receipt states, “You SAVED: $168.03 Congratulations! You saved more than you spent. You're a shopping genius!” If neither Nordstrom, Nordstrom Rack nor other retailers ever sold the cardigan at the higher price, is that common-law fraud, breach of contract, or unjust enrichment?
Posting any kind of “before” prices that have never truly been in effect does, at first blush, seem fraudulent. But it is not fraud, at least according to Shaulis v. Nordstrom, Inc., d/b/a/ Nordstrom Rack. “It is well-settled that a common-law action for fraud requires a pecuniary loss.” Here, the court found none as “plaintiff did not allege that she did not receive the sweater or that she paid more than the sweater is worth. Maybe so, but what about fraud in the inducement? This was not at issue in the case, but arguably should have been. “Fraud in the inducement occurs when a party contends it would not have entered into the agreement ‘but for’ the fraudulent statements made by the other." That is precisely what the plaintiff here seems to claim. Could the pecuniary loss then not simply be the price paid for an item believing it was a better deal than it actually was? If I buy a painting I like, but it is not the Rembrandt I was told it was, can I not sue for fraud simply because I actually got a painting that can hang on a wall and has the value it was sold for? Alas, that goes to show that plaintiffs must “win their own cases,” as the saying goes.
Plaintiff also claimed that Nordstrom was unjustly enriched by obtaining revenues and profits that it would not otherwise have obtained absent its conduct. The court found this to be a conclusory statement that did not allege that Nordstrom retained a benefit that would be inequitable without payment for its value.
Bad faith, at least? Not even that. Plaintiff complained that Nordstrom “either explicitly violated” the contract or violated the implied covenant of good faith and fair dealing by including a “Compare At” price that “does not exist in the marketplace within the meaning of the requirements of the Code of Massachusetts Regulations.” Having found that the common law allegations are not coextensive with or suffice under a regulatory claim, the court found no breach of the good faith covenant since the “complaint does not allege that the sweater was worth less than what plaintiff paid, or that plaintiff did not receive the benefit of the bargain. By charging this agreed price in exchange for ownership of the clothing, [Nordstrom] gave the plaintiff[ ] the benefit of [her] bargain.”
This case shows what we probably all know: you cannot really trust retailers’ “sales” prices, “before and after” statements and the like. They simply rank alongside puffery. Whether this is acceptable under the common law or state regulations is another story. The practice seems widespread, however, so buyer beware. “The more you shop, the more you save”? I don’t think so. As one of my students recently commented in class when I asked the somewhat philosophical question of why businesses exist: “to rip you off.” Well, maybe not quite, but some business behavior does seem questionable and at least unnecessary.
Tuesday, September 1, 2015
Uber. It just seems to always be in the news for one more lawsuit, doesn’t it. In late August, the district attorneys for San Francisco and Los Angeles filed a civil complaint against the company alleging that it is making misrepresentations about its safety procedures. The complaint, i.a., reads that Uber’s “false and misleading statements are so woven into the fabric of Uber’s safety narrative that they render Uber’s entire safety message misleading.”
On its website, Uber promises that “from the moment you request a ride to the moment you arrive, the Uber experience has been designed from the ground up with your safety in mind” and that “Ridesharing and livery drivers in the U.S. are screened through a process that includes county, federal, and multi-state criminal background checks. Uber also reviews drivers’ motor vehicle records throughout their time driving with Uber.”
However, Uber does not use fingerprint identication technology, which means that the company cannot search state and federal databases, only commercial ones.
The result? People with highly questionable backgrounds end up being on Uber’s payroll. For example, one “Uber driver was convicted of second-degree murder in 1982. He spent 26 years in prison, was released in 2008 and applied to Uber. A background report turned up no records relating to his murder conviction. He gave rides to over 1,100 Uber customers.” Yikes. Another “Another driver was convicted on felony charges for lewd acts with children. He gave over 5,600 rides to Uber customers.”
Add this to the ongoing lawsuit about whether Uber’s drivers should be legally classified as “employees” or “contractors,” and Uber is in a mound of legal trouble.
Certainly, a misrepresentation seems to have been made if the company deliberately touts its safety and its “industry-leading background check process” yet only uses a commercial database that does not even necessarily ensure that its drivers are who they say they are.
Still, Uber remains one of the most valuable start-ups in the world. It and similar “sharing economy” companies such as Airbnb have gained a good foothold on a market with a clear demand for new types of services. So far, so good. But initial success should not and does not equate with a “free-for all” situation just because these new companies are highly successful, at least initially. It seems that they are learning that lesson. Lyft, for example, already settled with prosecutors in regards to its safety. Perhaps Uber will follow suit.
Friday, August 21, 2015
Earlier this summer, I blogged on cheating website Ashley Madison promising to provide "100% discreet service" and a group of hackers threatening to reveal the website's customers if the website was not removed. Well, it was not, and this past week, the group made good on its promise or threat, depending on how one views the issue, to make the stolen database easily available to the general public.
In spite of Ashley Madison's promise to be "100% discreet" (whatever that means), the fine print used in its contracts also states, "We cannot ensure the security or privacy of information you provide through the Internet." No contractual promises seen to have been breached if that had been the only promise made. But as Steve Hedley wrote in his comment (see below), some of those inconvenienced by the hack include a number who paid a fee of $19 specifically for a "full delete". Does US contract law really allow Ashley Madison to take their money and then rely on fine print to justify a complete failure? That is a very good point and indeed does not seem to be the case. It could, of course, be that those who paid for a full delete got it and were _not_ among the ones in the publicized batch, but judging solely from media reports on this account, complaints have been made that the promised "full deletes" were not undertaken, so it seems that at least some that paid _additional_ money to become deleted from the website did not get what they paid for. That's a breach. Thanks, Steve Hedley, for that comment.
But the matter is more serious and sad than that: the website was/is apparently also used for finding homosexual partners, which is illegal and carries the death penalty in countries such as Iran, Saudi Arabia, and the United Arab Emirates, where two users were listed.
Not surprisingly, this story again shows the importance of internet data security. One would think that after the recent HomeDepot, Target and other database breach episodes, people would have learned, but apparently, this is not the case.
Thursday, August 20, 2015
We started up again this week, so I am once again having the pleasure of introducing students to the glorious realm of contracts law. Today, we will be delving into Article 2 of the Uniform Commercial Code for the first time, starting with concepts like "goods" and "merchants." I use Blum's Examples and Explanations as a supplement to the cases I use with my students. He has a series of questions about whether various transactions are sales of goods. One involves the sale of a cow.
Me: Is a cow a good?
Student: Yes, it is a good.
Me: How do you know that a cow is a good?
Student: A cow is a good because UCC §2-105 defines "goods" to include all things moveable at the time identified for sale. It also specifies that the unborn young of animals are goods, so it follows a fortiori that the animals themselves also must be goods.
Me: Interesting, but the answer I was looking for was "because it moooooooooves."
Blum then moves on to more difficult examples involving hybrid contracts. The Contracts Listserv has been hopping with discussion of this very topic. I remain puzzled by the preference for the preponderant purpose test. As I argued here, the gravamen of the action test makes far more sense to me.
Monday, August 10, 2015
We shared with our readers Professor Robin Kar's views on the case a while back.
You can find Professor Kar's latest here.
Tuesday, August 4, 2015
A new Los Angeles Times investigation has revealed that nine out of ten students drop out of unaccredited law schools in California. Of the few students that graduate, only one in five ultimately become a lawyer. In other words, a mere 2% of the people that initially enroll in an unaccredited law school end up being attorneys. Shameful at best. One example of one person who did not make it as an attorney is former Los Angeles mayor Antonio Villaraigosa who went to “People’s College of Law” and took the bar four times, but never passed.
Unaccredited law schools are said to flourish in California. The state is one of only three in the nation that allow students from unaccredited law schools to take the bar test (the others are Alaska and Tennessee). Unaccredited schools in California are held to very few academic standards by regulatory bodies and, by their very nature, none by accrediting agencies.
Most of the unaccredited law schools are owned by small corporations or even private individuals. One, for example, is owned by a“Larry H. Layton, who opened his school in a … strip mall above a now-shuttered Mexican restaurant. He thought the Larry H. Layton School of Law, which charges about $15,000 a year, would grow quickly. But according to the state bar records, he has had six students since 2010.”
Experts again say that action must be taken. For example, Robert Fellmeth, the Price Professor of Public Interest Law at the University of San Diego School of Law, has stated that unaccredited schools “aren't even diploma mills, they are failure factories. They're selling false hope to people who are willing to put everything out there for a chance to be a lawyer."
As before, the problem goes beyond unaccredited law schools. Several ABA accredited law schools also demonstrate both poor employment and bar passage statistics, although the problem seems to be the most severe when it comes to unaccredited schools.
This story is not new to your or many others. However, it serves as a reminder of the continued importance of both insiders and outsiders taking a renewed look at regulations for (and broader expectations of) law schools in California and beyond. As always, purchasers of anything including educational “services” (which, as the above other and many other studies show, can all too easily turn out to be disservices) should be on the lookout for what they buy. A great deal of naivety by new students seems to be contributing to the problem. However, that does not justify the tactics and perhaps even the existence of some of these educational providers. Having said that, I also – again – cannot help ask myself what in the world some of these students are thinking in believing that they can beat such harsh odds. Hope springs eternal, it seems, when it comes to wanting to become a California attorney.
Thursday, July 30, 2015
I earlier blogged on an American TV personality's contract to hunt and kill one of the most highly endangered species on earth: a black rhino. That hunt has now been completed at a price tag of $350,000. The asserted reasoning for wanting to undertake the hunt: the money would allegedly help the species conservation overall and the local population. Studies, however, show that only 3-5% of that money goes to the local population. Some experts believe that the money could be much better spent for both the local population and the species via, for example, tourism to see the animals alive. This brings in three to fifteen times of what is created through so-called "trophy hunting."
This past week, the world community was again outraged over yet another American's hunt - this time through a contract with a local rancher and professional assistant hunter - of Cecil the Lion. The price? A mere $50,000 or so. This case has criminal aspects as well since the landowner involved did not have a permit to kill a lion. The hunter previously served a year of probation over false statements made in connection with his hunting methods: bow and arrow.
This is also how the locally famous and collared Cecil - a study subject of Oxford University - was initially hunted down, lured by bait on a car to leave a local national park, shot, but not killed, by Minnesota dentist Walter Palmer, and eventually shot with a gun no less than 40 hours after being wounded by Palmer.
Comments by famous and regular people alike have been posted widely since then. For example, said Sharon Osbourne: ""I hope that #WalterPalmer loses his home, his practice & his money. He has already lost his soul."
I recognize that some people - including some experts - argue for the continued allowance of this kind of hunting. Others believe it is a very bad idea for many biological, criminal, ethical, and other reasons to allow this practice. If you are interested in signing a petition to Zimbabwe Robert Mugabe to stop issuing hunting permits to kill endangered animals, click here. It will take you less than 60 seconds.