ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, July 30, 2015

Contracts for Trophy Hunting A Bad Idea

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. 


July 30, 2015 in Celebrity Contracts, Commentary, Current Affairs, Famous Cases, In the News, Legislation, Science, Travel, True Contracts | Permalink | Comments (0)

Thursday, July 23, 2015

Porn, Perry and the Pope

You cannot say that we are boring you this week.  Our blogs have included considerations on advertising on porn sites and having one’s illicit affairs forgotten contractually. Add to that the news that this week, Roman Catholic nuns, the archdiocese of Los Angeles, the formerly Jesuit student turned California Governor Brown and Pope Francis all had something to say about contracting about major and, admittedly, some minor issues.

To start with the important: Pope Francis famously issued his Encyclical Letter Laudato Si’ “On Care for our Common Home.”  In it, he critiques “cap and trade agreements,” which by some are considered to be a mere euphemism for contractual permits to pollute and not the required ultimate solution to CO2 emissions. In the Pope’s opinion, “The strategy of buying and selling carbon credits can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors.” Well said.

Governor Brown, however, disagrees: Brown shrugged off Francis' comments. "There's a lot of different ways," he told reporters, "that cap and trade can be part of a very imaginative and aggressive program."  Brown, however, does agree with the Pope that we are “dealing with the biggest threat of our time. If you discount nuclear annihilation, this is the next one. If we don’t annihilate ourselves with nuclear bombs then it's climate change. It’s a big deal and he’s on it.”

In less significant contractual news, Roar, Firework, and I Kissed a Girl and I Liked It singer Katy Perry is interested in buying a convent owned by two Sisters of the Most Holy and Immaculate Heart of the Blessed Virgin. Why? Take a look at these pictures. The only problem is who actually has the right to sell the convent to begin with: the Sisters or the archdiocese. When two of the sisters found out the identity of the potential buyer (Perry), they became uninterested in selling to her because of her “public image.” They now prefer selling to a local restaurateur whereas the archdiocese prefers to complete the sale to Perry, although she bid less ($14.5 million) on the property than the restaurateur ($15.5 million). Perry may be about to learn that image is indeed everything in California, even when it comes to the Divine. Perry is no stranger to religion herself as she was, ironically, raised in a Christian home by two pastor parents. 

July 23, 2015 in Commentary, Contract Profs, Current Affairs, Famous Cases, In the News, Legislation, Music, Religion | Permalink | Comments (0)

Monday, July 20, 2015

Statutory and Contractual Rights to be Forgotten - Also in Naughty Cases

In 2014, the Court of Justice of the European Union famously held that “[i]ndividuals have the right - under certain conditions - to ask search engines to remove links with personal information about them. This applies where “the information is inaccurate, inadequate, irrelevant or excessive” for the purpose of otherwise legitimate data collection. “A case-by-case assessment is needed considering the type of information in question, its sensitivity for the individual’s private life and the interest of the public in having access to that information.”

A few days ago, infamous adultery-enabling website Ashley Madison and “sister” site (no pun intended), which “connects ambitious and attractive young women with successful and generous benefactors to fulfill their lifestyle needs,” was hacked into by “The Impact Team,” a group of apparently offended hackers who threatened to release “all customer records, including profiles with all the customers’ secret sexual fantasies and matching credit card transactions, real names and addresses, and employee documents and emails” unless the owner of the sites, Avid Life Media, removes the controversial websites from the Internet permanently. 

Notwithstanding legal issues regarding, perhaps, prostitution, do customers have a right to be forgotten?  Not in general in the USA so far. Even if a provision similar to the EU law applied here, it would only govern search engines. Ashley Madison had, however, contractually promised its paying users a “full delete” in return for a fee of $19.  The problem? Apparently that the site(s) still kept purchase details with names.  Further, of course, that the company promised and still promises “100% discreet service.”  Both seemingly clear contractual promises.

Although the above example may, for perhaps good reason, simply cause you to think that the so-called “clients” above have only gotten what they asked for, the underlying bigger issues remain: why in the world, after first Target, then HomeDepot and others, can companies not find out how to securely protect their customers’ data “100%”? And why should we, in the United States, not have a general right to be deleted not only from companies’ records, but from search engines, if we want to? I admittedly live a very boring life. I don’t have anything to hide. But if I once in a blue moon sign up for something as simple as to go hiking with others, my name and/or image is almost certain to appear within a few days online. I find that annoying. I don’t want my students, for example, to know where I occasionally may meet friends for happy hour. But unless I invest relatively large amount of time in figuring out how to use and not use new technology (which I see that I have to, given the popularity of LinkedIn and the like), I may end up online anyway. That’s not what I signed up for.

As for Ashley Madison, the company has apparently been adding users so rapidly that it has been considering an initial public offering. You can truly get everything on the Internet these days, perhaps apart from data security.

July 20, 2015 in Commentary, Current Affairs, E-commerce, Famous Cases, In the News, Web/Tech | Permalink | Comments (0)

A Love Letter to Alex Blumberg & Gimlet Media

I LoveLetter was never a business person.  I grew up hoping to some day live in a commune.  That dream collapsed when I experienced the idiocy of rural life, so I did the next least practical thing and got a Ph.D. in German history.  But now I teach contracts and business associations.  My brother is still living the dream (sort of), residing on a kibbutz in the Arava.  But the kibbutz has a factory that makes sealable plastic bags, and my brother actually works for an engineering company located on a neighboring kibbutz.  In short, there is no escape from commercial enterprise.

In some ways, Alex Blumberg's project is the perfect fit for someone like me, who teaches and studies commercial transactions from the convenient distance of the academy.  Blumberg comes from public radio, where he co-hosted Planet Money and was a producer for This American Life.  He decided to go over to the dark side and created his own media company, which eventually became Gimlet Media, a producer and distributor of high-quality podcasts.  I am not yet hooked on its other projects, but I am extremely taken with StartUp, and I recommend it to people who teach business courses, including business and media law.

In StartUp, Blumberg and his team wrestle publicly with every private thing associated with setting up a new company.  The show provides a unique, well-edited but still very intimate, behind-the-scenes view of new companies.  The first season focused on Blumberg's own company, Gimlet Media, including hilarious episodes devoted to naming the company.  Blumberg had settled on the name "Orelo," but when he told his wife that he had selected that name because it means "ear" in Esperanto, she burst out laughing, and when she finally caught her breath, she gasped out "That's so . . . dumb. . . . So dumb!"  He was also considering American Podcasting Corporation.  He explained to one of his unimpressed investors that the name would be a throwback to older media companies like ABC.  The disenchanted investor said something like, "No, no, I get it."  My real question that I wish the podcast had addressed is why did you form a corporation rather than an LLC?  That would have been a great episode for my business associations course!!

StartUp's second season covered a very different type of company, Dating Ring, an online dating service that was supposed to have, as its special gimmick, a team of matchmakers who actually set you up with people you will likely connect with.  I don't know if this was Blumberg's design, but I really loved the contrast between Season 1, which covered a company that I wanted to succeed and that did succeed, and Season 2, which covered I company that I wanted to fail, and pretty much did fail.  I hated Dating Ring from the moment its founders announced that they wanted to be the Uber of dating.  As followers of this blog know, Uber has its own problems, but the analogy highlighted the tension at the heart of Dating Ring's model -- they want to help you find true love, but they want to do it in a seamless, mechanized way.  They also considered advertising on porn sites, because nothing says "I want to bring you home to my mother" like "I met her through a website that was linked to on my favorite porn site."  Season 2 provides great insights into some of the many reasons why a company can fail, despite having smart, dedicated people with talent and energy and an idea that some investors think promising.

But the second season was also invaluable for its reporting on fundraising, on the mindset of people who want to become entrepreneurs and the crazy rollercoaster ride that most new companies experience.  At one point, Dating Ring's founders go to a consultant who is really like a couple's therapist for start-up founders.  From a distance it seemed a bit ridiculous, but one could also easily imagine how in such an intimate relationship the idea "I don't have a large enough equity stake" could translate into "I don't think you really love me and value me the way you ought to do."

I am looking forward to Season 3 almost as much as I am looking forward to Season 2 of Serial.

July 20, 2015 in Commentary, Miscellaneous | Permalink | Comments (0)

Wednesday, July 8, 2015

Contracts News that Hits Home

There but for fortune . . . .  I spent three happy years teaching in the history department at the College of Charleston.  Having studied in New York for nearly ten years, I never imagined myself living in the South, but Charleston is a charming city, and the College of Charleston was a gem when I was there, with a dedicated faculty of scholars and teachers and an unbelievably beautiful campus.  When I learned that Charleston was opening a law school, I was very tempted to apply for a position.

Broad St., Charleston, by Khanrak

Charleston's Post & Courier reported on Monday that Charleston Law School (CLS) has terminated seven faculty members, including two tenured faculty members.  The two filed lawsuits in late June alleging breach of contract.  They are seeking an injunction that would allow them to retain their status as tenured professors while also enjoining the CLS's owners from making expenditures that might otherwise be used to pay them their salary.  The two fired professors were signatories of a letter published by 17 CLS faculty members in the Post & Courier in mid May.  I assume that they are alleging retaliatory firing in violation of the very thing tenure is designed to protect.  Certainly, the optics are bad.  A preliminary injunction hearing is scheduled for the end of the month. 

I have no doubt that, if I had decided to apply for a faculty position at Charleston and been hired there, I would have signed that letter.  And then I too might be experiencing the joy of having to file a lawsuit in order to keep my tenured position.  I do not know enough of the details to speak to the merits of the professors' claims, but my inclination it to root for them.

Stay tuned. 

July 8, 2015 in Commentary, Help Wanted, In the News, Law Schools, Recent Cases | Permalink | Comments (2)

Friday, June 5, 2015

Follow-up on Andermann v. Sprint Spectrum

We posted about this case last week.

It was an easy decision for Judge Posner; he granted Sprint's motion to compel arbitration without too much difficulty, leaving him time to ruminate more generally on the purposes of the Federal Arbitration Act.  We summarized his views as follows:

Having quickly dispensed with plaintiffs' opposition to the motion to compel arbitration, Judge Posner then focused his attention on Sprint's effusive celebration of arbitration provisions as "a darling of federal policy" (Judge Posner's wording).  Judge Posner emphasized that language encouraging judges to enforce arbitration clauses was a corrective to an era when judges disfavored arbitration.  The aim of federal policy is neither to favor nor disfavor arbitration but to compel arbitration when the parties have agreed to arbitrate claims.  Fortunately for Sprint, this case was, in Judge Posner's view, not a close call.

Judge Posner then when on to note Sprint's motives in challenging the denial for arbitration when, in Judge Posner's view, the Andermanns will lose on the merits wherever their claim is decided.  Judge Posner pointed out that Sprint wants to avoid class action litigation, which is prohibited under the applicable arbitration provision.  He also noted that without the class action option, the claim is unlikely to be brought at all.   Judge Posner then explained the absurd results that would follow from a finding that Sprint had violated the TCPA, thus effectively deciding a claim that the Seventh Circuit ruling will prevent from ever being brought, before catching himself and noting that the decision is really for the arbiter and limiting the Court's ruling to the instruction that the claim be sent to arbitration.

BagchiFordham Law Professor Aditi Bachi (pictured) now has a post up over at the New Private Law blog in which she uses Judge Posner's opinion as an occasion to ruminate on the need for a federal arbitration policy.  As she puts it:

Putting aside for the moment what stance federal courts should take (and which Congressional statutes might speak to the question), arbitration is too substantial a public policy issue for courts to approach these terms with ostensible neutrality.  In the absence of an articulated policy, we are likely to end up with courts that are in practice either friendly or hostile but march under the banner of neutrality.

We look forward to the ensuing policy debate, which is long past due.

June 5, 2015 in Commentary, Recent Cases, Weblogs | Permalink

Thursday, May 28, 2015

Can Terms of Use Stop Richard Prince?

According to this article, the photographer, Richard Prince, is ripping off using other people’s Instagram photos – and selling them for lots of money ($90,000)!  Arguably, he can do this because it’s fair use  -- he blows the images up and makes minor changes to them, like removing captions and adding comments.  (One could also argue that it’s not fair use because he doesn’t change them enough).  Putting aside the copyright related issue (fair use or not fair use) and the privacy issue (are there any privacy related claims when you post on Instagram for the world to see – but don’t mean to have your photos used in this way?) – what intrigues me are the contract related issues.  I took a quick peek at Instagram's latest terms of use and there’s nothing in there that would really help someone whose photos were being used by Richard Prince.   And while Instagram's Community Guidelines are thoughtful and cover a variety of topics, they don’t address this problem.  But could its TOU address this issue – and should it?  What if Instagram put in its Terms of Use a provision that forbade visitors to its site from using other people's photographs for any purpose?  If so, what could the company do if a user violated that term?  It could, of course, ban the offending user from Instagram.  Could it sue for breach of contract – and if so, what damages could it claim? If people started to copy users’ photographs from Instagram and use them for their own purposes that would likely hurt Instagram’s business.  Instagram should consider how its Terms of Use can be amended to protect their users from this type of unauthorized use.

May 28, 2015 in Commentary, Current Affairs, Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 20, 2015

Rising Minimum Wages

Should salary levels be regulated or mainly left to individual contractual negotiations between the employee and his/her employer?  The former, according to the Los Angeles City Council and governance entities in several other cities and states.  

On Tuesday, Los Angeles decided to increase the minimum salary to $15 an hour by 2020.  Other cities such as San Francisco, Chicago, New York, and Seattle have passed similar measures.  Liberal strongholds, you say?  Think again.  Republican-leading states like Alaska and South Dakota have also raised their state-level minimum wages by ballot initiative.  Some companies such as Walmart and Facebook have raised their wages voluntarily.

But the effect is likely to be particularly strong here in Los Angeles, where around 50% of the work force earn less than $15 an hour.  That’s right: in an urban area with super-rich movie studios, high-tech companies, hotels, restaurants, health companies and much more, half of “regular” employees barely earn a living salary.  In New York state, around one third of workers make less than $15 an hour.  Take into consideration that the cost of living in some cities such as Los Angeles and maybe even more so San Francisco and New York is very high.  In fact, studies show that every single part of Los Angeles is unaffordable on only $15 an hour if a person spends only the recommended one third on housing.  

“Assuming a person earning $15 an hour is also working 40 a week, which is rare for a minimum wage employee, and that they're not taking any days off, they'd be earning $31,200 a year.  An Economic Policy Institute study released in March found that a single, childless person living in Los Angeles has to make $34,324 a year just to live in decent conditions (and that was using data from 2013).”

Opponents, however, say that initiatives such as the above will make some cities into “wage islands” with businesses moving to places where they can pay employees less.  Others call the initiative a “social experiment that they would never do on their own employees” (they just did...)  But “even economists who support increasing the minimum wage say there is not enough historical data to predict the effect of a $15 minimum wage, an unprecedented increase.  A wage increase to $12 an hour over the next few years would achieve about the same purchasing power as the minimum wage in the late 1960s, the most recent peak.”  

Time will tell if the sky falls from the above initiative or if the system in a rich urban area such as Los Angeles can cope.  Said Gil Cedillo, a councilman who represents some of the poorest sections of the city and worries that some small businesses will shut down, “I would prefer that the cost of this was really burdened by those at the highest income levels.  Instead, it’s going to be coming from people who are just a rung or two up the ladder here.”

This is, of course, not only an issue of the value of low-wage work and fending for yourself to not end up at the bottom of the salary chain.  It is a matter of alleviating urban poverty and improving the nation’s overall economy for a sufficient amount of people to better get the economy back on track for more than the few.

May 20, 2015 in Commentary, Current Affairs, In the News, True Contracts | Permalink | Comments (9) | TrackBack (0)

Wednesday, May 6, 2015

Unbridled Growth and Companies that Never Learn

This week, Los Angeles City Attorney Mike Feuer famously filed suit against Wells Fargo claiming that the bank's high-pressure sales culture set unrealistic quotas, spurring employees to engage in fraudulent conduct to keep their jobs and boost the company's profits.  

Allegedly (and in my personal experience as I bank with Wells Fargo), the bank would open various bank accounts against its customer’s wills, charge fees for the related “services,” and refuse to close the accounts again for various official-sounding reasons, making it very cumbersome to deal with the bank.  The bank’s practices often hurt its customers' credit rankings.

Employees have described “how staffers, fearing disciplinary action from managers, begged friends and family members to open ghost accounts. The employees said they also opened accounts they knew customers didn't want, forged signatures on account paperwork and falsified phone numbers of angry customers so they couldn't be reached for customer satisfaction surveys.”  

The city's lawsuit alleges that the root of the problem is an unrealistic sales quota system enforced by constant monitoring of each employee — as much as four times a day.  "Managers constantly hound, berate, demean and threaten employees to meet these unreachable quotas," the lawsuit claims.  Last year, 26% of the bank’s income came from fee income such as from fees from debit and credit cards accounts, trust and investment accounts.  The banking industry is currently set up in such a way that around 85% of institutions would go bankrupt if they do not have fee income.  

This comes only three years after Wells Fargo agreed to pay $175 million to settle accusations that its independent brokers discriminated against black and Hispanic borrowers during the housing boom and treated these borrowers in predatory ways.

All this in the name of “growth,” traditionally thought of as the sine qua non of industrialized economies, even in financially tough times where simply maintaining status quo – and not going out of business - would seem to be acceptable for now from at least a layman’s, logical standpoint. 

In recent years, more and more economists have advanced the view that unbridled growth or even growth per se may simply not be attainable or desirable.  After all, we live on a planet with limited resources – financial and environmental - and limited opportunities.  This especially holds true in relation to the “1% problem.”  Nonetheless, questioning growth has been said to be “like arguing against gasoline at a Formula One race.”  So I’m making that argument here, although I acknowledge that I am not an economist: by setting our national (and personal) economies up for ever-continuing growth, we are playing with fire.  There is only so much of a need for various things and services, as the above Wells Fargo suit so amply demonstrates.  Granted, the global population is growing, but much of that growth is in developing nations where people frankly cannot afford to buy many of the products and services often so angrily pushed by modern companies worldwide.  In the Global North, C-level managers are often rewarded via measurements of growth and if they cannot produce the expected growth results, they risk being fired.  Sometimes, simply doing the right thing by customers and employees may actually be enough as long as the company would remain sound and in business.  Of course, this requires a shift in thinking by shareholders who contribute greatly under our current investment models to the demand for never-ending growth.  Overconsumption and waste is a vast ecological problem as well.  It has been said that “we must reform economics to reflect ecological reality: nature is not, after all, just a pile of raw materials waiting to be transformed into products and then waste; rather, ecosystem integrity is a precondition for society's survival.”

Growth is, of course, good and desirable if possible.  But if, as seems to be the case, it’s coming to a point where we destroy our own chances of healthy long-term survival and wreck the emotional and financial lives of employees and clients in the meantime, something is seriously wrong.

May 6, 2015 in Commentary, Current Affairs, Famous Cases, In the News | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 5, 2015

The Blogosphere Responds to Our Series on Legal Education

ScholarYesterday's post has inspired quite a bit of traffic here and elsewhere.  Over on Brian Leiter's Law School Reports, Michael Simkovic asks whether conditional scholarships are good for law students.  

Deborah Merritt responds on the Law School Cafe and answers the question in the negative.  She thinks conditional scholarships mostly help law schools, and they hurt students by creating a stressful competitive environment.

Michael Simkovic (again on Leiter) disagrees.  He argues that conditional scholarships motivate students to work hard in law school and cites to studies linking motivation and academic performance.

Deborah Merritt shoots back on the Law School Cafe.

And Michael Simkovic again responds on Leiter.  

It is hard for me to keep up with the pace at which these people blog.

I have only a few quick points to make in response to Professor Merritt, whose remarks are largely critical of the position I have taken here:

  • It seems we are all agreed that the disclosure problems related to conditional scholarships have largely been addressed through the ABA website that enables students to comparison shop among scholarship offers from various schools and know their chances of retaining their conditional scholarships.  Some law schools routinely offer a lot of merit scholarships in the first year knowing that most students will not retain them thereafter.  But that information is now easily available, and we will see if students vote with their feet against such a model.
  • Professor Merritt properly chastises me for treating Wikipedia's listing of normalization curves as authoritative.  I think Wikipedia is a good place to start, but my main point is that information about normalization curves should be readily available for each school a student is considering attending.
  • I find the absence of curves in undergraduate grading perplexing, and I find it astonishing that anybody would think non-curves are better than curves.  I could easily design an exam that all my students would ace (above 90% correct) and an exam that all my students would fail (below 60% correct).  But there is nothing holy about base ten, and my aim should not be to design a test so perfectly calibrated that the difference between a 91% and an 89% is meaningful but the difference between 86% and 84% is not.  My aim in assessment is, among other things, to have a tool that helps me distinguish within a group of students who have had the same educational experience.  A curve helps me do that better than random divisions at every point at which the score passes a 0.  
  • Professor Merritt points to a study in which the J.D. placed only sixth in a  ranking of the best graduate degrees.  As if that were a bad thing!  Three of the degrees that ranked more highly are Ph.D. programs likely to take twice as long as the J.D. and the others likely require higher math or computer programming skills.  This extremely high ranking for the J.D. is terrific news.  By the way, the MBA, a frequent alternative to the J.D., ranked 14th.
  • Professor Merritt tells an anecdote about a student who decided not to pursue a J.D. when she learned of conditional scholarships.  She decided to take her graduate tuition dollars elsewhere, but where?  Unless she earned a Ph.D. in statistics, computer science or physics, or a Masters Degree in human computer interaction or  biostatistics, according to the study cited by Professor Merritt, she made a poor choice.

Professor Merritt's second post turns on an anecdote about teaching the same course (torts) the same way to different students and getting very different results.  As a consequence, she had to give students in the "smart section" who did better on the exam worse grades than some students who did worse on the exam in the weaker section.  Three thoughts:

First, one cannot step into the same river twice.  One semester when I taught history at the College of Charleston in the 1990s, I had four sections of Western Civ., all on a Tuesday/Thursday schedule (they were long days!).  Same readings, same outside materials, same assignments, same lecture notes.  Each section developed its own identity.  They were four different courses.

Second, in fifteen years of teaching at both the college and law school level, I have never had a similar problem.  An anecdote is not an argument.  No system of grading is perfect, and I can live with small injustices around the edges of grade normalization.  Whether or not a student retains a conditional scholarship is not determined by her performance in any one course.  

Third, consider the insight of Professor Merritt's plucky college student who decided against a J.D.  Knowing only undergraduate education, the student remarked, “It’s not like there’s a quota on the number of A’s or anything.”  In that world, the undergraduate professor gives A's to all of the students in the "smart section" who "earned" them according to some mysterious but fixed standard.  Outside of the STEM courses, the undergraduate professor can also give As to the best students in the weaker section, even though the same performance would have earned them a B in the "smart section."  Within the STEM courses, imagine the stampede of angry pre-med students from the weaker section who will decry the injustice that there were no A's in their section but eight in the other. I pity the department chair who has to sort out that mess.

Links to Related Posts:

The Current Series 

XI:Another Transparency Issue: Conditional Merit-Based Scholarships
X: Siloing: The Next Unneeded Import from Undergraduate Education
IX: Legal Education in the News and on the Blogosphere
VIII: Myanna Dellinger, Caveat Emptor and Law School Transparency
VII: Myanna Dellinger, On Issue-Spotting and Hiding the Ball
VI: Issue Spotting: A Response to a Comment
V: Did Legal Education Take a Wrong Turn in Separating Skills and Doctrine?
IV: What Is the Place of Core Doctrinal Teaching and Scholarship in the New Curriculum?
III: My Advice to Law School Transparency: Declare Victory and Move On
II: SLOs and Why I Hide the Ball (and Why You Don't Have To)
I: Why Is the Legal Academy Incapable of Standing Up for Itself? 

Related Posts form 2012:

Thoughts on Curricular Reform VI: Preparing the Academically Adrift for Practice
Thoughts on Curricular Reform V: A Coordinated Curriculum and Academic Freedom
Thoughts on Curricular Reform IV: The Place of Scholarship in the 21st Century Legal Academy
Thoughts On Curricular Reform III: The Costs of Change
Thoughts on Curricular Reform II: Teaching Materials
Thoughts on Curricular Reform I: The Problem

May 5, 2015 in Commentary, Teaching, Weblogs | Permalink | Comments (11) | TrackBack (0)

Monday, May 4, 2015

Another Transparency Issue: Conditional Merit-Based Scholarships

ScholarOne of the ways in which law schools are allegedly inadequately transparent is in the award of merit scholarships conditional on the students’ achievement of a certain grade point average (GPA), usually 3.0, in law school.  The New York Times set the ball rolling back in 2011, with this article about a law student who lost her scholarship when she only managed a 2.967 GPA.  Law school critics allege that such conditional merit scholarships are a “bait and switch.”  It is an odd claim.  Law schools offer conditional merit scholarships for the same reasons colleges offer them, and there are no claims that the terms of the scholarship are unclear.  Why are law students assumed to be incapable of looking into standard grade normalizations curves for the first year? 

The real mystery is why conditional scholarships for law students come in for so much criticism when they seem to be generally regarded as valuable and successful on the undergraduate level.   The scholarships are, as their name suggests, conditional, and it would be completely unreasonable to continue to grant students merit scholarships when their performance in law school has been disappointing.  Students who lose their merit scholarship have gotten their first year of legal education for free, so what is their harm?  I think the claim for harm is derivative of the larger (and largely baseless) claim that law schools do not benefit their students.

 The Critique

Jerry Organ published an interesting article criticizing competitive scholarships and recommending best practices for the law schools that use them, including better disclosure of scholarship retention rates.  Law School Transparency proposed a new ABA standard that would require all law schools to publish on their websites data about the percentage of students who were able to retain their scholarships after the first year.  

As readers of this blog should know, disclosure is no panacea.  Professor Organ was able to find information about how scholarships work at 160 law schools.  That means that the information was out there.  Since Professor Organ was able to gather information about 160 law schools, it should not be difficult for students to gather relevant information about the one law school that they are considering attending.  Many students can find their law school’s curve by looking on Wikipedia.   Since a lot rides on the decision, one would expect students to investigate, especially since the investigation might not take more than a few mouse clicks.

If law schools were more aggressive and sat down with students offered conditional scholarships and walked them all through the statistics, would anything change?  Would a student choose not to go to law school because she had been told that there was a 50/50 chance that she would lose her scholarship after year 1?  I doubt it.  She would feel confident that she would be one of the successful students and, even if not, she would still have enjoyed a year’s free tuition.


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May 4, 2015 in Commentary, Law Schools, Recent Scholarship, Teaching | Permalink | Comments (14) | TrackBack (0)

Tuesday, April 28, 2015

Legal Education in the News and on the Blogosphere

I began this series with the question: Why Is the Legal Academy Incapable of Standing Up for Itself?  Paul Campos thinks we are doing far too much of that, going so far as to compare those of us who think legal education is worth defending with Holocaust deniers.   Fortunately for us, I suppose, this blog isn't on anybody's radar, but in any case I think it bears noting that I value the contributions of people who have shed critical light on legal education, although I don't agree that it is anything approaching a scam.  I have gained valuable insights from the work of Law School Transparency, Brian Tamanaha, Deborah Merritt, and Bill Henderson on our sister blog, The Legal Whiteboard, among others.

That said, there is another side of the story.  Legal education is constantly re-forming itself in fundamental ways.  Clinical education has only been with us since the 70s; legal writing programs took off in a major way in the 80s and 90s.  Both represent fundamental shifts in pedagogy in response to perceived deficits in the legal education model.  Those programs continue to develop and expand, now supplemented with robust ASP programs.  All of these things jack up the costs of legal education and all in the name of better preparing students for the profession.  Nobody is fiddling while our students burn.  In fact, at this point, it is clear that everybody in the debate passionately believes that they have the best interests of our students at heart, and I do not doubt their sincerity.  

Meanwhile, just when you thought it was safe to read what the New York Times has to say about legal education, we get another one-sided piece based on a few anecdotes and one piece of scholarship.  I thought I had a lot to say in response, but others have beaten me to it, so I will just provide the links:

Simkovic on Leiter

Stephen Diamond on his own blog

Brian Galle on Prawfsblawg

Deborah Merritt, on whose scholarship the piece relies, on The Law School Cafe 

Links to Related Posts:

The Current Series 

VIII: Myanna Dellinger, Caveat Emptor and Law School Transparency
VII: Myanna Dellinger, On Issue-Spotting and Hiding the Ball
VI: Issue Spotting: A Response to a Comment
V: Did Legal Education Take a Wrong Turn in Separating Skills and Doctrine?
IV: What Is the Place of Core Doctrinal Teaching and Scholarship in the New Curriculum?
III: My Advice to Law School Transparency: Declare Victory and Move On
II: SLOs and Why I Hide the Ball (and Why You Don't Have To)
I: Why Is the Legal Academy Incapable of Standing Up for Itself?

Related Posts form 2012:

Thoughts on Curricular Reform VI: Preparing the Academically Adrift for Practice
Thoughts on Curricular Reform V: A Coordinated Curriculum and Academic Freedom
Thoughts on Curricular Reform IV: The Place of Scholarship in the 21st Century Legal Academy
Thoughts On Curricular Reform III: The Costs of Change
Thoughts on Curricular Reform II: Teaching Materials
Thoughts on Curricular Reform I: The Problem

April 28, 2015 in About this Blog, Commentary, In the News, Law Schools, Teaching, Weblogs | Permalink | Comments (0) | TrackBack (0)

Caveat Emptor and Law School Transparency

In this blog series, we recently raised the issue of whether there is sufficient transparency in relation to law schools via, for example, third-party “watchdog” websites and the law schools’ required ABA disclosures.

In my opinion, transparency is a boon to potential law students in this context.  Granted, much information is publicly available to anyone considering law school nowadays.  But for now, choosing a law degree still remains a surprisingly popular choice despite so many warning signs.  Caveat emptor is still a quasi-viable doctrine, that’s true, and some potential incoming students should, as potential future lawyers, learn to discern hope and belief from facts.  But do they?  Not so much, it appears.

Unfortunately, statistics still show that nationwide, only 51% of law graduates are employed in law firm jobs, well below the trend over the past 25 years.   I know, I know, not everyone wants to work for a law firm, but still; only half of our graduates getting a typical job is astonishingly shocking, I think.  An ABA website function lets the general public find out the number of “bar passage required” jobs held by 2013 graduates – not impressive unless the school is highly ranked or in a relatively remote area of the nation.  See another list of the best and worst performers here.

To put this in perspective: the average debt taken on by law school graduates is $84,000 (for public law schools) and $122,580 (for private law schools); a 37% increase over eight years.  Another source found the 2012 median debt to be $140,616.   So, a ballpark figure shows that an “average” student may well be more than $100,000 in debt for a – certainly in some states such as California – less than 50/50% chance of getting a “real” law job. 

Of course, hope springs eternal, and many students beat the odds and end up, over time at least, in good and hopefully mentally rewarding jobs.  For now, though, the more pressure that’s exerted on keeping law schools honest in relation to job prospects, debt, etc., the better, in my opinion.

April 28, 2015 in Commentary | Permalink | Comments (0) | TrackBack (0)

Thursday, April 23, 2015

On Issue-Spotting and Hiding the Ball

As for the series on law school instruction and law schools in general that Jeremy started here recently: count me in!

I agree with Jeremy’s views that issue-spotting is very important in helping students develop their “practical skills,” as the industry now so extensively calls for.  As Jeremy and Professor Bruckner do, I also never give up trying to have the students correctly issue spot, which in my book not only means spotting what the issues are, but also omitting from their tests and in-class analyses what I call “misfires” (non-issues).  In my opinion, the latter is very necessary not only for bar taking purposes, but also in “real life” where attorneys often face not only strict time limits, but also word limits.

But I’ll honestly admit that my students very often fail my expectation on final tests.  Some cannot correctly spot the issues at all.  Many have a hard time focusing on those aspects of the issues that are crucial and instead treat all issues and elements under a “checklist” approach overwriting the minor issues and treating major issues conclusorily.  Yet others seem to cram in as many issues as they can think of “just in case” they were on the test (yes, I have thought about imposing a word limit on the tests, but worry about doing so for fear of giving any misleading indication of how many words they “should” write, even if indirectly so on my part). 

Maybe all this is my fault … but maybe it isn’t (this too will hopefully add to Professor Bruckner’s probably rhetorical question on how to teach issue-spotting skills).  Every semester, I post approximately a dozen or so take-home problems with highly detailed answer rubrics.  I only use textbooks that have numerous practice problems long and short.  I review these in class.  I also review, in class, numerous other problems that I created myself.  I give the students numerous hints to use commercial essay and other test practice sources.  Yes, all this on top of teaching the doctrinal material.  All this is certainly not “hiding the ball.”  Frankly, I don’t really know what more a law professor can realistically do (other than, of course, trying different practice methods, where relevant, to challenge both oneself and the students and to see what may work better as expectations and the student body change).

So what seems to be the problem?  As I see it, it doesn’t help that at least private law schools at the bottom half of the ranking system have to accept students with lower indicia of success than earlier.  But even that hardly explains the problem (who knows what really does).  Some law schools have to offer remedial writing classes and various other types of extensive academic support to students in their first semesters and beyond.  Some of the problem, in my opinion, clearly stems from the undergraduate-level education our students receive.  In large part, this makes extensive use of multiple-choice questions for assessments and not, as future lawyers would benefit from, paper or essay-writing tests or exercises.  Thus, undergraduate-level schools neither teach students how to spot "issues" from "scratch" nor do they teach them how to write about these.  Numerous time have my students told me that they have not really written anything major before arriving in law school.

Why is that, then?  Isn’t that problem one of time and resources; in other words, the fact that not just law professors, but probably most university professors, are required to research and write extensively in addition to teaching and providing service to their institutions?  For example, see Jeremy’s comments on his busy work schedule here.  Something has to give in some contexts.  At the undergraduate level, maybe it’s creating and grading essays and instead resorting to machine-graded multiple-choice questions and not challenging students sufficiently to consider what the crux of a given academic problem is.  Just a thought.  I am, of course, not saying that we should not conduct research.  I am saying, though, that I find it frustrating that lower-level educations, even renowned ones, cannot seem to figure out how to use whatever resources they do, after all, have to train their students in something as seemingly simple as how to write and how to think critically.

At the law school level, some “handholding” and various types of practical assistance is, of course, acceptable.  But to me, the general trend in legal education seems to be moving towards a large extent of explaining, demonstrating, giving examples, setting forth goals, assessments, and so forth.  I agree with what Jeremy said in an earlier post that we should at some point worry about converting the law school education process into one that resembles undergraduate-style (or high school style!) education.

Recall that the United States is not an island unto itself.  Many studies show that our educational system is falling behind international trends.  Where in many other nations in the world (developed and developing), students are expected to come up with, for example, quite advanced research and writing projects for their degrees, we are - at least in some law schools - teaching students just how to write, and what to write about.  This is a sad slippery slope.  Until the American educational sector as such improves, I agree that we should do what we can to motivate and help our students.  But I also increasingly wish that our “millennial” students would take matters into their own hands more and take true ownership of learning what they need to learn for a given project or class with less handholding, albeit of course still some guidance.  Nothing less than that will be expected from them in practice. 

April 23, 2015 in Commentary, Contract Profs, Current Affairs, In the News, Law Schools, Teaching | Permalink | Comments (4) | TrackBack (0)

Issue Spotting: A Response to a Comment

Howard Law's Matthew Bruckner has posed some challenging questions for me in the comments to the second post in this series.  He writes:

To the point raised in your post though, even experienced lawyers benefit from headnotes on cases, reading treatises, learning to pick up on contextual clues, etc. And your casebook likely has a table of contents that situates the case you're reading in class within a range of issues and sub-issues. I suppose that if you situate the case for the students, there is a risk that students will stop trying to pick up these contextual clues for themselves. But if you don't, there is also a risk that students won't ever appreciate why you read a case in the first instance, etc.

ScholarMatthew has a point.  There are lots of shortcuts to issue spotting for those students who are on top of things enough to use them.  I have a running joke with my students in both contracts and business associations.  If a student has a hard time identifying the issue in the case or (in contracts) tells me that the issue is whether one party breached (always a good place to start), I tell them to check the syllabus and see what subject matter we are covering on that day.  After some laughter and shuffling of papers, we approach an identification of the issue and establish once again that students do not look at syllabi and certainly would not benefit from 12-14 page syllabi identifying SLOs.

But that is just the beginning of an issue-spotting exercise, because as we progress through the semester, I also use issue-spotting as a mechanism of review.  So, for example, when we get to affirmative defenses, we may have cases in which extrinsic evidence, the statute of frauds and interpretive issues also arise.  In discussing damages, in addition to those issues, there might also be questions of affirmative defenses or even problems in formation.  I use Socratic questioning to see if students can find those issues as well.  And I really do aspire to treat the Socratic questions as means of reminding them, through step-by-step questioning, of things they knew in their past life (that is, three weeks ago, when the relevant doctrine was still stored in short-term memory).  For me the Socratic method is, in this instance, both about teaching them the right questions to ask of a case and about reminding them that they can do this on their own.

Matthew Bruckner's comment continues:

We definitely practice reading cases, extracting relevant facts and issues, understanding a case' procedural history in my 1L contracts class. But by second semester, I'm giving them the issue flat out and then we spend the whole class working on legal analysis trying to understand why the court reached the conclusion that it did.

I never give up on issue spotting.  It is not only relevant in the litigation context.  But as I'm sure Professor Bruckner knows, it is also the best mechanism for helping transactional lawyers prevent the contract they are drafting from becoming Exhibit A to the complaint.  Issue spotting is relevant whether the client is coming to you with a transaction gone wrong or a contemplated transaction.  The challenge facing transactional attorneys is all the harder because they have to entertain ideas of what might go wrong and figure out the best way to insulate the client from liability if what might happen does happen.

I am near the end of teaching a bar prep course for the first time.  I had my 3L students write about twenty practice bar exam essays, and at the end of the semester, I am still reminding them: IRAC, IRAC, IRAC.

Links to Related Posts:

The Current Series 

V: Did Legal Education Take a Wrong Turn in Separating Skills and Doctrine?

IV: What Is the Place of Core Doctrinal Teaching and Scholarship in the New Curriculum?

III: My Advice to Law School Transparency: Declare Victory and Move On

II: SLOs and Why I Hide the Ball (and Why You Don't Have To)

I: Why Is the Legal Academy Incapable of Standing Up for Itself?

Related Posts form 2012:

Thoughts on Curricular Reform VI: Preparing the Academically Adrift for Practice

Thoughts on Curricular Reform V: A Coordinated Curriculum and Academic Freedom

Thoughts on Curricular Reform IV: The Place of Scholarship in the 21st Century Legal Academy

Thoughts On Curricular Reform III: The Costs of Change

Thoughts on Curricular Reform II: Teaching Materials

Thoughts on Curricular Reform I: The Problem

April 23, 2015 in Commentary, Teaching | Permalink | Comments (2) | TrackBack (0)

Did Legal Education Take a Wrong Turn in Separating Skills and Doctrine?

This is the fifth in a series of posts on reform in legal education.  Related posts are listed at the bottom of this post.

ScholarA few years ago, I was at a conference on national security law, and one of the scholars there, a Navy veteran, suggested that the military had made a wrong turn in entrusting knowledge of the law of armed conflict to JAG officers.  As impressed as he was with the commitment of those JAG officers to the rule of law, he thought it would be better if all officers were expected to know the law of armed conflict rather than having a rudimentary introduction to the relevant law but relying on the expertise of JAG officers in the decision-making process.  The attendant JAG officers were unanimous in their opposition to this notion, and I'm in no position to judge the merits of the claim, but the idea stuck with me.  

I think we have a similar situation in law schools.  In the 1980s and 1990s, law schools created legal writing programs, and they hired a legal writing faculty to teach in those programs.  Like JAG officers with respect to the law of armed conflict, dedicated legal writing faculty members have thought about legal writing -- and related subject matters such as legal reasoning and legal research -- in different and deeper ways than traditional doctrinal instructors had done or now do.  They are our trusty repository of information about how our students think, write and reason and of pedagogical innovations that will help them do better.  

It is a problematic model.  It creates a hierarchical division of labor within faculties, generating resentments on all sides, and it does not serve our students as well as would an integrated curriculum in which legal writing, reasoning and research were treated as integral to every doctrinal course.  Students think that legal writing is a separate subject matter, and they don't all have the instinct to apply the skills, techniques and intellectual habits to which they are exposed in legal writing to their work for doctrinal courses.  

One response has been to ask doctrinal courses to incorporate more skills training into doctrinal courses.  Another has been to add additional courses and required credits in courses in which students work on legal writing and reasoning skills.  To keep with the theme of this series, the result is that traditional legal education gets squeezed.  We are asked to do more in less time.  I propose we consider doing more in more time by integrating legal writing and reasoning into the traditional doctrinal curriculum and eliminate independent writing programs.

Schools have been  very creative in staffing their legal writing programs (involving visiting faculty, contract faculty, adjuncts, VAPs, and tenured and tenure-track faculty in teaching legal writing and research).  There likewise could be innumerable models (which would preferably involve integrating current legal writing faculty members into traditional classroom teaching) for integrating teaching doctrine and skills.

Let the innovations begin!

Links to Related Posts:

The Current Series 

IV: What Is the Place of Core Doctrinal Teaching and Scholarship in the New Curriculum?

III: My Advice to Law School Transparency: Declare Victory and Move On

II: SLOs and Why I Hide the Ball (and Why You Don't Have To)

I: Why Is the Legal Academy Incapable of Standing Up for Itself?

Related Posts form 2012:

Thoughts on Curricular Reform VI: Preparing the Academically Adrift for Practice

Thoughts on Curricular Reform V: A Coordinated Curriculum and Academic Freedom

Thoughts on Curricular Reform IV: The Place of Scholarship in the 21st Century Legal Academy

Thoughts On Curricular Reform III: The Costs of Change

Thoughts on Curricular Reform II: Teaching Materials

Thoughts on Curricular Reform I: The Problem

April 23, 2015 in Commentary, Teaching | Permalink | Comments (0) | TrackBack (0)

Friday, April 17, 2015

My Advice to Law School Transparency: Declare Victory and Move On

I'm going to keep this one brief and provocative.

Six years ago, when Law School Transparency (LST) came into existence, law schools had some problems with transparency.  The problems were not actionable.  As Michael Simkovic details here and elsewhere (and I will have many more positive things to say about Simkovic's and Frank McIntyre's scholarship in later posts), law schools have always disclosed employment outcomes in accordance with federal Bureau of Labor Statistics categories of employment and unemployment.  Now, all law schools include on their websites 509 disclosures that are far more detailed about employment outcomes, as well as lots of other useful information about bar passage rates and the scores of incoming students (new 1Ls only, alas).  

The fight is now mostly over debt loads, but again, as Michael Simkovic puts it:

Data from the U.S. Department of Education shows that law students, even at low ranked law schools, remain much less likely to default than most student borrowers.  This is true even though law students typically graduate with higher debt levels.

While student debt loads are a huge concern, law students still are not defaulting on their loans.  

So, at this point what exactly is the purpose of LST's campaign against law schools? 

LST's website identifies its goals as Reform, Information and Accountability.  I would say that LST has succeeded on Information and Accountability.  Don't take it from me.  Here is what Deborah Merritt, who has been quite critical of Simkovic and McIntyre, has to say on the subject:

[T]oday’s law schools publish a wealth of data about their employment outcomes; most of that information is both user-friendly and accurate.

As to LST's main claim on Reform: "American legal education is broken because it is systematically unfair and unaffordable," LST and I will have to agree to disagree.  Still, two out of three ain't bad.  LST can take credit for having contributed to an environment in which law schools are forced to provide information about student outcomes in a way that really helps students make more informed decisions about whether to go to law school or whether to choose a particular school.

Congratulations, LST.  You've won.  You've done some real social good.  You and others have persuaded college graduates not to go to law school.  Unfortunately, that might not be good advice, since Simkovic and McIntyre's research shows that students who go to law school are, on the whole, better off for having done so.  

So you can now declare victory and move on to larger projects.  Why not use your model to attack other sectors of the economy that, when compared with law schools, are much less transparent, much more important, far less inclined to self-criticism and far more resistant to outside calls for change?


April 17, 2015 in Commentary, Teaching | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 15, 2015

SLOs and Why I Hide the Ball (and Why You Don't Have To)

TeachingThe ABA, and I hear, I other accreditation bodies are now looking for faculty members to identify student learning objectives and student learning outcomes (SLOs) on a class-by-class, hour-by-hour basis.  I have been told that there are model syllabi circulating that include such learning objectives and learning outcomes, and that they are 12-14 pages long. 
I have Googled the subject and everything the literature I have seen on student learning outcomes and objectives strikes me as thoughtful, sophisticated, and completely misguided as to the nature and purposes of legal education.  Sophisticated schools like Stanford and the University of Connecticut circulate complex documents with graphs and charts and tables about how to draft the perfect SLOs.   These documents are clearly oriented towards undergraduate education.
The model syllabi (and PowerPoints) that Hastings Law provides on the subject provide about as much information about SLOs as I typically include in a course description.  But I don't put that course description in my syllabus because it is more usefully placed in our Bulletin, which students look at when they are deciding what course to take.  I could cut and paste the same information into a syllabus, but students will not read it if it is on the syllabus, and I will just waste paper in distributing it.  What really amazes me about the model syllabi that Hastings supplies is that they lack the things that I think make a syllabus valuable: daily schedules of assigned readings, assignments due and topics to be discussed on a given day (which is my preferred version of SLOs).
ScholarYou are not a great educator because you announce student learning objectives and student learning outcomes or because you use the words formative and summative assessments to refer to periodic quizzes, homework assignments and a final exam or because you use the word intentional as an adjective usually preceded by "more" when intention is not really a matter of degrees.  All of that jargon just demonstrates that you have drunk the Kool-Aid and not that your students can pass the bar and function as lawyers.
Students already cannot be relied on to read my 3-5 page syllabus.  They certainly would not read a 12-14 page syllabus, so adding SLOs to my syllabus just wastes effort and trees.  But that is not my main objection to SLOs.  My main learning objective is to teach law students how to figure out on their own what lessons they are supposed to be deriving from reading cases, statutes, treaties, regulations, deposition testimony or a news story, etc..  Telling students the SLOs undermines my pedagogy.
And hiding the ball is part of the pedagogy.  Unless they are dealing with corporate counsel, my students' clients will not come into their offices and say, "I have a contract dispute and I need you to research how these three jurisdictions (the only three that could possibly matter) will deal with different terms under UCC § 2-207."  Even if corporate counsel did say that, a good lawyer will usually have to look over the entire transaction and see if there are additional issues worth looking at.  But the usual situation is that your client tells you a version of the facts and you have to find the legal issues in a fluid situation in which you discover through the use of your legal skills that your client did not tell you the full story.  The process of dealing with that world has to begin in law school, and it will not begin well if I tell my students  at the beginning of every hour what skills or doctrine they are supposed to develop in the next 50 minutes.  
Fellow educators: Perhaps you disagree with me.  Perhaps you had terrible experiences as a law student with professors who never told you what you were supposed to be accomplishing in a course, and you would never teach the way you were taught.  To you I say, fine.  If you have found a way to teach that enables you to transmit the material to your students, and your students emerge enriched and empowered, keep doing what you are doing.  My way would not work for you, and your way might not work for me.  But legal education will not be enriched if we replace one system in which everybody teaches the same way (the myth of the Socratic drone faculty) with another system in which everybody teaches law school as if it were college (or high school).

April 15, 2015 in Commentary, Teaching | Permalink | Comments (7) | TrackBack (0)

Friday, April 3, 2015

Playing Fair Down Under

In New Zealand, a ban on unfair terms in consumer contracts has taken effect and will, according to the Commerce Commission, will be enforced starting immediately.   The regulation forms part of the 2013 Fair Trading Act.  Australia introduced a similar ban in 2010.

The Consumer Organization “Consumer NZ” has launched its “Play Fair” campaign to increase awareness of the new law and related consumer issues.   According to Consumer NZ, companies had been given plenty of notice of the upcoming ban and thus to review their contracts in order to remove unfair terms, but had to a large extent failed to do so.

The Act will apply to standard-form consumer contracts often used by electricity retailers, gyms, TV service providers and many others.

But what makes a term “unfair”?  The Act defines a term as unfair if it would “would cause a significant imbalance between the rights of the company and the consumer, is not reasonably necessary to protect the legitimate interests of the company, [or] would cause detriment, whether financial or otherwise, to the consumer if it were to be applied or relied on.”   The Act contains a list of terms that courts are likely to regard as unfair.  This covers terms that would allow a company to unilaterally vary the terms of the contract, renew or terminate it, penalize consumers for breaching or terminating the contract, vary the price without giving consumers the right to terminate the contract, or vary the characteristics of the goods or services to be supplied.  

After intense lobbying by the insurance industry, that industry was exempted from the ban.

Even though this Act is a consumer protection device, only the New Zealand Commerce Commission can, for now, enforce it.  The contemplated fine for violations is $600,000.

In the USA, there are, of course, various statutory and common law protections against unfair terms such as those contained in the UCC as well as fraud protections.  However, the deterrence effect of these does not seem effective in relation to at least some industries.  Alternatively, perhaps the protections are not broad enough, sufficiently well-known, or sufficiently easy to enforce.  Or perhaps people just give up and deal with other companies, or pay what they are asked to do by the companies. 

I personally just spent no less than two hours chatting online with a major health care provider over their sudden allegation that a certain doctor I had used was “not in network” (with me thus allegedly owing a few thousand dollars to the insurance company) despite that particular provider being listed on the provider’s own website as “in network” and the doctor having confirmed this.  Eventually and after numerous contractual and factual arguments, I was able to persuade provider that I was right.  But how many others in my situation would simply give up and cave in to, as was the case, the provider’s repeated bootstrapping arguments that “their ultimate price was fair”?

Only two days later, I heard from a moving company that had agreed to move a car for me for $500 (and confirmed this twice) that the “price is actually $600.”  When I told them no, it is not, they repeated their allegation that “we did not have a contract.”  After telling them a few things about contract formation and modification principles and after declining listening to their attempted, time-consuming warnings about using other companies that were “scam artists,” I am now looking for a new contract another vendor.

Despite whatever legal protections we may officially have in this country against consumer fraud, it is still rampant.  New Zealand’s government enforcement system is interesting, but time will tell if they have more success preventing consumer fraud than we do here.

April 3, 2015 in Commentary, Current Affairs, Legislation, True Contracts | Permalink | Comments (0) | TrackBack (0)

Thursday, April 2, 2015

August Wilson's Two Trains Running and R.2d Section 228

HamI just saw the Goodman Theater's production of August Wilson's Two Train's Running.  It is a great play, and this is a first-rate production in every way.  One character, Hambone, is a reification of contracts injustice.  Hambone painted a fence for an offstage character, Lutz.  Lutz promised to pay Hambone a chicken for his work and a ham if Hambone did an especially good job.  Lutz paid Hambone a chicken.  This occurred nine years prior to the action in the play.  Hambone's lines in the play consist almost entirely of "Give me my ham!" and "He gonna give me my ham!"  At one point, another character teaches him some additional slogans like "Black is beautiful," but Hambone is never too far from his mantra, as the aggrieved non-breaching party.

Although the play never references R.2d § 228, we are clearly in the realm of conditions of satisfaction.  Hambone's entitlement to the ham should have been determined on an objective basis.  All of the characters in the play seem agreed that, were such a standard applied, a finder of fact would certainly award Hambone a ham.  But Hambone is Black, poor, and ill-equipped for a legal battle.  Lutz is white and so powerful that he is able to define Hambone's character without ever suffering the indignity of appearing on stage. 

Does Hambone ever get his ham?  I don't want to give away too much so I will just say, yes and no.

April 2, 2015 in Commentary, Miscellaneous | Permalink | Comments (0) | TrackBack (0)