Monday, November 11, 2013
In Chavarria v. Ralphs Grocery Company, the Ninth Circuit found an arbitration agreement unconscionable and therefore affirmed the District Court's order denying Ralphs' motion to compel arbitration and remanded the class action case back to the District Court for further proceedings. In so doing, it rejected Ralphs' contentions that its arbitration clause was not unconscionable and that California's law on unconscionability is preempted by the Federal Arbitration Act (FAA).
Plaintiff worked at Ralphs for six months as a deli clerk. Plaintiff's employment application included an agreement to be bound by Ralphs' aribtration policy. The policy provided for arbitration by a retired state or federal judge to be agreed upon by the parties or selected through a process of elimination -- that is, each party would get to strike one of the other party's three proposed aribtrators until only one name was left, and that person would be the arbitrator. The process guarantees that the arbitrator chosen would be one of the three proposed by the party that did not seek arbitration. The Ninth Circuit described the arbitration agreement's promvision for allocation of costs of as arbitration "a little convoluted," but the basic default is that the parties split the costs of arbitration.
The District Court identified several aspects of Ralphs' arbitration policy that, taken cumulatively, rendered it procedurally unconscionable. The policy was offered to Chavarria on a "take it or leave it" basis, and the specifics of the policy were not shared with Chavarria until three weeks after she agreed to be bound by it. Quoting an earlier decision, the Ninth Circuit noted that “a contract is procedurally unconscionable under California law if it is ‘a standardized contract, drafted by the party of superior bargaining strength, that relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’” That standard was clearly met in this case (and in almost all other cases involving form contracts), and the problem was exacerbated here because, while Chavarria recieved a one-paragraph notice of the arbitration policy, it actual terms, which were in a complex, four-page document, were provided later.
As to substantive unconscionability, the Ninth Circuit agreed with the District Court's finding that substantive unconscionability is satisfied here because the arbitration policy shocks the conscience. It does so because the arbitrator selection process is designed so that Ralphs will always choose the arbitrator in a claim brought by an employee. Moreover, the allocation of arbitrator's fees is unfair, imposing costs on employees and precluding them from recovering those costs so as to render many claims "impracticable." The fees for a "qualified arbitrator" as defined in the policy would range form $7000 to $14,000 per day, so an employee seeking to arbitrate would likely have to pay at least $3500, a cost that would likely exceed any claim that people like Chavarria might bring.
[An aside: Ralphs argued that in a case such as this one, plaintiff would get to choose the arbitrator. Since Chavarria tried to sue in court and Ralphs moved to compel arbitration, Ralphs was the party seeking arbitration. The Ninth Circuit found this unpersuasive because inconsistent with the wording of the arbitration policy and because it requires employees to bring a frivolous lawsuit in order to force Ralphs to compel arbitration. Even if the Court is right about the language of the arbitration policy, wouldn't Ralphs be estopped from insisting on its right to choose an aribtrator by having argued against such a right in this case? And given that there is no bar to plaintiff proceeding in arbitration as part of a class, won't the cost of arbitration be allocated to the class? So, the arbitrator's fee is only excessive in relation to the claim if the claims of the class in the aggregate do not exceed the arbitrator's fee.]
The Ninth Circuit begins its analysis of the preemption issue with a summary of Concepcion, 131 S. Ct. 1740 (2011):
Like other contracts, arbitration agreements can be invalidated for fraud, duress, or unconscionability. Id. at 1746. A defense such as unconscionability, however, cannot justify invalidating an arbitration agreement if the defense applies “only to arbitration or [derives its] meaning from the fact that an agreement to arbitrate is at issue.” Id. The U.S. Supreme Court has held that state rules disproportionately impacting arbitration, though generally applicable to contracts of all types, are nonetheless preempted by the FAA when the rule stands as an obstacle to the accomplishment of Congress’s objectives in enacting the FAA. Id. at 1748.
Returning to the preemption argument, the Ninth Circuit noted that Concepcion had held that "the FAA preempts state laws that in theory apply to contracts generally but in practice impact arbitration agreements disproportionately." But since California's procedural unconscionability doctrine applies to all contracts, it does not disproportionately affect arbitration agreements.
As to substantive unconscionability, the Ninth Circuit noted a potential difficulty arising from the Supreme Court's recent decision in American Express Corp. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013). That case involved an argument that a class-action waiver in an arbitration agreement precluded plaintiffs from pursing their antitrust claims because the costs of proving such claims would exceed the value of any particular claim. This Ninth Circuit found this case distinguishable:
The class waiver provision did not foreclose effective vindication of that right, the Court reasoned, because “the fact that it is not worth the expense involved in proving a statutory remedy does not constitute an elimination of the right to pursue that remedy.” Id. at 2311. The Court explicitly noted that the result might be different if an arbitration provision required a plaintiff to pay “filing and administrative fees attached to arbitration that are so high as to make access to the forum impracticable.” Id. at 2310–11.
The Ninth Circuit found that this case presents the exact situation excluded from the scope of the Italian Colors precedent. The costs of arbitration alone, the Court found, "effectively foreclose pursuit of the claim." The Court then explained more fully its concerns about Ralphs' arbitration policy:
In addition to the problematic cost provision, Ralphs’ arbitration policy contains a provision that unilaterally assigns one party (almost always Ralphs, in our view, as explained above) the power to select the arbitrator whenever an employee brings a claim. Of course, any state law that invalidated this provision would have a disproportionate impact on arbitration because the term is arbitration specific. But viewed another way, invalidation of this term is agnostic towards arbitration. It does not disfavor arbitration; it provides that the arbitration process must be fair.
If state law could not require some level of fairness in an arbitration agreement, there would be nothing to stop an employer from imposing an arbitration clause that, for example, made its own president the arbitrator of all claims brought by its employees. Federal law favoring arbitration is not a license to tilt the arbitration process in favor of the party with more bargaining power. California law regarding unconscionable contracts, as applied in this case, is not unfavorable towards arbitration, but instead reflects a generally applicable policy against abuses of bargaining power. The FAA does not preempt its invalidation of Ralphs’ arbitration policy.
[Another aside: At first, reading through this opinion, I thought this might be an attempt by liberal judges on the Ninth Circuit to find ways to undermine the Supreme Court's 5-4 majorities' clear indications of support for the enforcement of arbitration agreements. But the three-judge panel consisted of two George W. Bush appointees and a Republican appointed late in the Clinton Presidency. Either this is not a case on which liberal and conservative judges would differ or the Supreme Court is out of step with the views of the judges on lower courts.
I have my doubts about the Court's procedural unconscionability analysis, and that analysis colors the substantive unconscaionability analysis. It would of course be unconscionable if Ralphs could appoint its own president as the arbitrator. But this arbitration agreement is facially neutral and would never result in Ralphs getting its preferred arbitrator. At best, it gets its third choice (assuming plaintiffs can accurately identify Ralphs' preferences). In any case, that choice will be a retired judge, so the Ninth Circuit's assumption that such a person would be incapable of impartiality is a bit insulting to retired judges. This case seems like a long-shot for Supreme Court review, but it would be nice if the Court could clarify whether this case does indeed present facts that evade the Italian Colors precedent.]
Wednesday, November 6, 2013
Over at The New York Law Journal, Joel Stashenko reports on Wu v. Xu, a case decided last month in the Rockland County Supreme Court. The case involves an alleged promise by Mr. Wu to pay Ms. Xu $500,000. The parties had a "relationship," about which the court refused to say much more except that Ms. Xu alleged that Mr. Wu had promised to divorce his wife and marry her. The alleged promise was to serve two purposes. Apparently, Mr. Wu felt bad about having hurt Ms. Xu in breaking off their friendship, and he wanted to make it up to her with the payments. He also wanted to secure her silence about their relationship.
Mr. Wu made payments in excess of $47,000, but when Ms. Xu's attorney sent a demand letter insisting on the enforceability of the promise to pay $500,000, Mr. Wu decided to seek a declaration that the promise was unenforceable as without consideration and in breach of public policy.
The Court begins its analysis by quoting Platt v. Elias, a 1906 case, which stated:
[t]hat which one promises to give for an illegal or immoral consideration he cannot be compelled to give; and that which he has given on such consideration he cannot recover. The law will not afford relief to either party,in pari causa turpitudinis; but leaves them just where they have placed themselves.
According to the Court, the application of this rule means that Mr. Wu cannot recover the money already paid, and Ms. Xu cannot enforce her alleged right to further payments.
All well and good if this is an illegal contract, but is it? The Court says that the alleged agreement violates public policy because it falls within the category of contracts that "tend to impair familial relationships." The Court then quotes the Restatement Second to the effect that "[a] promise that tends to encourage divorce or separation is unenforceable on grounds of public policy," and concludes:
Although the August 2012 letter is not an express agreement to marry or to encourage a divorce, it does involve the institution of marriage and the well-being of the familial relationship of Plaintiff and his wife to the extent that this Court finds is against public policy. As such, the Court finds that the letter is not a valid, enforceable contract.
So ends the discussion of the contract claim.
The Court then proceeds to the discussion of whether an award of attorneys' fees is appropriate. They are appropriate, the Court finds, because the legal claim was without merit and because it is extortionate to threaten to sue somebody based on a legal claim that is without merit. Q.E.D. The Court then approves a $2500 sanction of Defendant's counsel for frivolous conduct.
ADDENDUM: I have striven for even-handedness in the post above, but the more I think about it, the more outrageous I find the court's opinion. I do not think the promise is enforceable, because I think it is gratuitous, but there is an argument that consideration was given in the form of the defendant's silence. As a result, I do not think the demand letter was frivolous. What I do find frivolous is quoting 100 year old cases and the 30-year-old restatement on the sanctity of the institution of marriage when our public policy relating to marriage is in a state of violent flux. Moreover, the quotations are not on point, because the demand letter was not about impairing familial relationships; it was about enforcing a promise. Plaintiff had already done plenty of impairing on his own.
The Court's reasoning runs as follows:
1. The contract is unenforceable based on public policy and thus the demand letter was frivolous.
2. It is an act of extortion to threaten legal action based on a frivolous claim.
For the reasons given above, I think the demand letter was incorrect on the law but not frivolous. This is especially so because a court's refusal to enforce a contract based on something as elusive as public policy is always fraught. That being the case, the threatened legal action is very far from extortion. Defendant did not propose the arrangement. She did not threaten to blab about the parties' relationship unless the Plaintiff paid. The Plaintiff offered to pay and did pay two installments. The award of attorneys' fees and the imposition of sanctions does not seem justified based on the law as laid out in the opinion. There may be other sources of New York state law that relevant here, but the Supreme Court's opinion is not convincing.
Tuesday, November 5, 2013
One of the oddities of our new minimester system is that we have two, seven-week contracts courses back-to-back. All of my students from Contracts I and back for Contracts II. And I'm happy to see them. But because my students (well about 3/4 of them) filled out evaluations at the end of the first minimester, I know that not all of them are happy to see me. Ironically, one of the questions on the evaluation form asks students if they would be interested in taking other courses from the instructor. Bummer for those who answered no, given that first year law students don't generally get a choice.
But that little awkwardness aside, getting evaluations at this point is very valuable, and based on the constructive criticism contained in the evaluations, I have made some changes to Contracts II, which otherwise is structured similarly to Contracts I. These changes are as follows:
- As I have mentioned in this space before here, rather than having a casebook and statutory supplment, my colleague Mark Adams and I have edited the cases that we teach, and our Digital Services Librarian, Jesse Bowman (pictured) has put together a LibGuide that features our edited cases, links to the R.2d and UCC and lots other goodies. Many students complained that without a casebook to place the cases in context, they really didn't know what to look for in the readings. I think students are wrong if they think that a casebook would guide them through the cases, since that's not really the pedagogical model in law school. Nor should it be, really. However, given that many students are relying on supplements, I decided to abandon my usual disclaimers about supplements, and I recommended one particular supplement (Blum's Examples and Explanations for Contracts). Students can read the introductory material on each topic before reading the cases to get a sense of what to look for. They can also do the problems at the end of each chapter, which I think are excellent.
- Although I think most of my students understand why I ban laptops and other electronic devices from my classrooms, some students complained of their inability to take notes while also listening to class discussion and viewing the PowerPoint slides. Stealing an idea (which she neglected to copyright) from my co-blogger Nancy Kim, I have appointed three official note takers in each section of contracts. While students are still encouraged to do their own note-taking, the hope is that that official note-takers' work (which I put up on the LibGuide without reviewing them) will serve as a helpful backstop. Students do not need to obsess about getting everything down in their notes. If they miss something, they can rely on the official note-takers to cover it.
- In general, I try to discourage students from obsessing over careful in-class note-taking in any case. I tell them the course is mostly just a friendly discussion about the law -- a party to which everyone is invited. They should just relax and ride the waves, and they can do so, within reason, because at the end of the semeser I hold a comprehensive review session in which I deliver (orally) an outline of the course material at the level of detail for which they will be responsible on the exam. If they have been keeping up with the readings, following class discussion and outlining on their own, that review session should pull it all together for the students (which is why I usually do not recommend supplementary materials). However, I now give short in-class quizzes to my students every two weeks, and that limits their ability to remain carefree until the review session. So, I added a mid-semester (mid-minimester) review session that covers the first half of the course.
So, we'll see. I try wherever possible to adjust my course in response to serious student criticisms. Even if I don't entirely agree with the criticisms, there is no point in persisting with a pedagogy that students actively resist. Still, there are some bedrock principles on which I won't compromise, and so the adjustments I have made are an attempt to improve the delivery of the curriculum in a manner consistent with my ideas about optimal teaching methods.
Monday, November 4, 2013
this story on NBC Affiliate WECT, a jury awarded over $50,000 to a student who sued his college for breach of contract. The damages reflect not only tuition and fees but also the student's opportunity costs. The student's argument was that the school was contractually obligated to screen applicants for criminal backgrounds that could prevent them from completing their coursework in medical fields which require that some coursework be done at hospitals.
The school did not screen the student until he had been enrolled in the program for 18 months. At that point, the student was dismissed from the school. He sought readmission but was denied. The school offered $25,000 in settlement but withdrew the offer during trial.
This is a rather surprising result. We wonder whence comes the contractual duty for the school to screen applicants for criminal backgrounds. One would think that the obligation would run the other way. That is, students ought to have a duty to disclose criminal backgrounds, because it is far cheaper and more effective to require such disclosure than it is for colleges to independently investigate each student. One would expect that the application form would have a section requesting such disclosure, but even if it does not, all it would take would be some sort of statement somewhere on a website or in a student bulletin describing the college's policies. If the college does have a duty to investigate, we wonder why the duty would run to the student rather than to some accrediting or professional body.
Finally, there is a the question of damages. Apparently, the student was awarded both a full tuition rebate and compensation for the income he forewent by pursuing his education. If it is indeed the case that the college had a contractual obligation to screen the student's criminal background and that contractual duty ran to the student, the jury award assumes that the college gave the student nothing of value because he could not enter his chosen field of study. There are two problems with this: 1) even in a professional school, the value of a degree exceeds its value as a means of entry into an occupation; and 2) even if the student had completed his education, he would not be guaranteed a position. There ought to be some sort of set-off from the jury award to account for the benefit that the college conveyed to the student. Otherwise, the case is a bit of a stick in the eye to educators.
Thursday, October 31, 2013
Upon reflection, Judge Traynor may have had it right when he wrote:
Words, however, do not have absolute and constant referents. "A word is a symbol of thought but has no arbitrary and fixed meaning like a symbol of algebra or chemistry, ..." * * * The meaning of particular words or groups of words varies with the "... verbal context and surrounding circumstances and purposes in view of the linguistic education and experience of their users and their hearers or readers (not excluding judges). ... A word has no meaning apart from these factors; much less does it have an objective meaning, one true meaning."
I say this because, today, I learned what "chicken" apparently means in one specific context in Suffolk County, New York. You don't suppose that this is was what Frigaliment and B.N.S. meant by "chicken"?
[Meredith R. Miller]
According to this scary report from National Public Radio, children are not entirely rational. Well, perhaps we should not overstate the conclusions one can draw based on the relevant research. Children are only boundedly rational when it comes to Halloween candy.
A psychologist at Dartmouth College discovered that children were happier when they got a candy bar than they were when they got a candy bar and a piece of gum. This research calls into question our earlier assumption that more is better.
And it turns out that, according ot the same NPR report, Halloween candy is not the only realm in which people's responses to experiences can defy our expectations. It turns out that, while colonoscopies are bad, colonoscopies in which a tube is left inserted in the patient for a while, causing additional discomfort, are . . . (if you guessed worse, you're getting colder), at least according to a survey of patients on what they thought of the experience.
The trick (or treat) is to save the best (or the least bad) for last. If y0u are handing out candy tonight, and you don't want to get your house egged back into the stone ages, give the children some prunes, and then as they reach for their mace, offer a candy bar. They will leave happy and nominate you for a Nobel Prize. Similarly, if you are going to perform an invasive procedure on someone, make sure you have something less bad with which to follow it up.
Wednesday, October 30, 2013
A contract dispute powers A Man of Property, the first volume of John Galsworthy's The Forsyte Saga, to its conclusion. Now, I admit, the synopsis that follows is not based on the novels, which I have not read. It is based on the 2002/2003 television mini-series. I will happily stand corrected if any Galsworthy fans want to point out discrepancies between the film and novel accounts of the contracts case.
Soames Forsyte loved his wife Irene, but he wanted to possess her, and she only consented to marry him. Difficulties arose when Irene took an interest in a young architect, Bosinney, who was to wed Soames's second cousin (I believe), June.
Soames, unaware at this point of the connection between Bosinney & Irene, decides to build a country home to get Irene away from the distractions of London -- in particular he means to separate her from June. Meanwhile, Bosinney and Irene become lovers, and at the same time, rather unwisely, Bosinney keeps raising the contract price for the home he builds for Soames.
Bosinney and Irene finally push Soames beyond all endurance, and he decides to sue Bosinney for breach of contract because Bosinney has exceeded the agreed-upon, adjusted contract price for the house. Bosinney is in a bad spot. He can't afford to pay Soames for the extra costs -- they approach Bosinney's annual income. Nor can he afford to have a breach of contract claim hanging over him in connection with his first major project. Indeed, based on the success of his first project, other well-bred Englishmen are beginning to approach him as potential clients, but when they learn of his dispute with Soames, all is put on hold.
From the outset, one senses that Soames has Bosinney cornered and will destroy him. Bosinney believes, rather absurdly, that he can win the case, but Soames is a solicitor and he can hire the best trial lawyer in London. Bosinney hasn't a chance. Perhaps it's all for the best then when he is run over by a carriage and killed just before the case is lost. Soames ends up selling the house to his Uncle. The sale price might give us a better sense of the extent of the legal injustice wrought in Forsyte v. Bosinney.
Monday, October 21, 2013
In case you didn't see it, Adam Liptak's Sidebar column in the New York Times takes aim at student-edited law reviews with such zingers as: "Law reviews are such a target-rich environment for ridicule that it is barely sporting to make fun of them." Liptak gets it mostly right in describing the dismal status quo, incluing the utter lack of relevance of most law review articles to the practicing bar. (I had a law professor who said the best way to keep a secret is in a law review article and I tend to think he was right).
I am shocked that this story is newsworthy and I don't necessarily agree with the prescription that "blind screening, peer review and more training for the student editors" would make all the difference. But I am most grateful that Liptak's column references a 1936 essay by Yale Professor Fred Rodell titled “Goodbye to Law Reviews.” It made my day. Check out the abstract:
It is doubtless of no concern to anyone that this is probably my last law review article. As a matter of fact, this makes one more article than I had originally planned to write. It was something in the nature of a New Year's resolution. Yet the request to do a piece about law reviews seemed a golden opportunity to make my future absence from the "Leading Articles, Authors" lists a bit more pointed than would the business of merely sitting in a comer, sucking my thumb, and muttering Boo. Keeping well in line with two traditions—a course which lawyers will readily understand—I decided to break the resolution and not wait for opportunity's second knock. This, then, is by way of explaining why I do not care to contribute further to the qualitatively moribund while quantitatively mushroom-like literature of the law.
There are two things wrong with almost all legal writing. One is its style. The other is its content. That, I think, about covers the ground. And though it is in the law reviews that the most highly regarded legal literature—and I by no means except those fancy rationalizations of legal action called judicial opinions—is regularly embalmed, it is in the law reviews that a pennyworth of content is most frequently concealed beneath a pound of so-called style. The average law review writer is peculiarly able to say nothing with an air of great importance. When I Used to read law reviews, I used constantly to be reminded of an elephant trying to swat a fly.
Just proves that there is nothing new to say.
[Meredith R. Miller]
Saturday's New York Times featured a story about a family that was nearly ruined by medical bills resulting from their infant daughter's emergency heart surgery. Although the hospital was in network, not all of the doctors who treated the infant were, and so the insurer passed on "balance payments" to the family for the difference between what out-of-network medical personnel charged and what insurance covered for such out-of-network medical personnel.
According to the story, the family was never informed that some of the people treating the child were out-of-network. Then they were billed thousands of dollars. Fortunately, the child's grandmother had the resources to fight the insurers every inch of the way and the story has a relatively happy ending. They were able to appeal some of the out-of-network charges, and then their insurance company agreed to kick in a bit more of a contribution and the out-of-network provider wrote off the rest. The family only ended up paying around $10,000.
That result is likely the result of a compromise that relied on the facts of the particular case, but it also seems like the right result under a theory of restitution. The family did not agree to have an out-of-network provider provide medical services for their daughter. When such services were provided, they were provided officiously to the extent that the medical provider sought compensation beyond what the family was willing to pay. They should not be required to pay in excess of that amount when nobody ever asked them if they would accept services out of network.
However, the facts of this case are relatively easy. The answer to the question of whether a family would accept out-of-network medical services necessary to save their infant daughter is almost certainly yes. But what follows from that. One could argue that whether or not there is actual consent to treatment by out-of-network providers in an emergency situation, recovery should be limited to in-network charges. Consent is not meaningful when given under conditions of such emotional duress. Or one could argue that, because a family would always consent if asked, the officious intermeddler argument above is specious. Families that want better coverage will have to pay for better insurance.
According to the Times, it is not clear that the Afffordable Care Act (ACA) addresses this problem. One expert says it doesn't and that the ACA could exacerbate the problem because networks may be smaller on many ACA plans. On the other hand, the Times reports that under the ACA, annual out-of-pocket expenses should not exceed $6,350 for individuals and $12,700 for a family of two or more in 2014.
The distinction between in-network and out-of-network is likely a historical accident in the United States. I would guess that it is unknown in many of the 45 countries whose health care systems are regarded as more efficient than that of the United States. Twenty-three of these countries have higher life expectancies than the U.S. Overall, in a 2000 study, the World Health Organization ranked the United States 38th overall in the quality of its healthcare system, despite the fact that the U.S. in #1 in per capita expenditures on health care.
Thursday, October 17, 2013
I have been periodically reporting in this space on my Law School's new curriculum, which features a new approach to contracts. We have broken each semester into two, seven-week minimesters, and the traditional four-credit, fourteen-week contracts course has been broken into two, two-credit, seven-week courses. As a result, I have just finished grading my students' final exams.
Here are some preliminary thoughts on the experiment thus far:
1. The frequent assessments that we did helped me to understand that students have difficulties with concepts that I had forgotten were difficult. I'm sure these concepts were difficult for me as well when I was a law student, but after teaching for ten years, they have become dangerously familiar. For example, I discovered that the distinction between "additional" and "different" terms in UCC 2-207 is not obvious to a lot of students. I never paused to consider that in past years, but we had a quiz on the battle of the forms, and many students preparing for the quiz asked me to explain it. Similarly, I learned this year that the phrase "within the statute of frauds" does not obviously and easily translate into "a type of contract that, in order to be enforceable, must be in a writing signed by the party to be charged."
2. I had some concerns going in that it would be difficult for students to prepare themselves for a law school exam just seven weeks into their first semester, and there were no doubt students for whom seven weeks was not enough time to digest all the material we covered in the first minimester. So, I am a bit concerned that some students will underperform on this exam because they are slower than the median at making the adjustment to the law school environment, and I suspect there are students who are slow at the start but nonetheless are capable of developing a profound understanding of the law. But see #4.
3. I also had concerns about our students' preparation for law school essay exams, but I actually found that this year's essays were not qualitatively different from those of past years, to the extent that comparison is possible. There was, as always, a tremendous range in students' approaches to writing the essays, but it was all within expected parameters.
4. The purpose of the minimester in contracts is to give students a meaningful assessment early on. This will give students a realistic sense of where they stand in relation to their peers. It will also help us to identify the students who need additional academic support, and it may even help us to identify what sort of academic support they need. Since all law students are above average, I expect that many of my students will be disappointed by the grades they receive in Contracts I. I hope that their response will not be to become discouraged but to re-double their efforts and get the support they need from our able academic support team.
5. In years past, when a student would perform dismally in contracts, there was not much I could do beyond handing tissues and hoping that the poor performance was a fluke. This year, because of the minimester system, I have a real opportunity to work with students to address difficulties before they become career-threatening. And if students perform consistently poorly in both Contracts I and Contracts II, I will feel much more confident not in showing students the door but in encouraging them to prepare themselves for the possibility that a career in the law may not be in the cards.
My students will get their first minimester grades at the end of the week. I expect that I will be very busy next week meeting with students who want to go over their exams and extract valuable lessons from the experience. Part II of this post will address the extent to which that expectation is met.
Monday, October 14, 2013
After posting earlier today on the privacy issues associated with Gmail for those of us whose work accounts are Gmail accounts, I learned that Google's general terms of service do not necessarily apply to institutional accounts.
Here's some language from the Google Apps for Education website:
Any data you put into Google Apps is yours, and it says just that in our contracts. Your information is safe from other organisations, even though it's all on the same servers. Apps’ powerful, easy-to-use tools help administrators manage things like users, documents and services, and keep track of usage and data via dashboards. And of course you fully own the data, not Google.
That's rather comforting, but then there is this:
I find this less comforting because of the word "inapropriately" and because US privacy law and FERPA may not be enough to address all of the privacy issues involved.
If anybody has knowledge or information about this, pelase feel free to chime in.
Nancy Kim (pictured) , author of the recent book Wrap Contracts: Foundations and Ramifications and contributing editor to the ContractsProf Blog (the official blog of the AALS Section on Contracts), has published an op-ed in the San Diego Union Tribune California's new "eraser" law.
Nancy's post clarifies what the bill accomplishes and what it doesn't and makes a succinct argument for the law's importnace.
You can read it here.
Nancy posted last week on this lawsuit that claimed that Google’s practice of scanning users' emails violated federal and state wiretapping laws. Nancy discusses the excellent opinion of Judge Lucy Koh (pictured) in the case.
I have a few observations, some of which take me beyond my areas of expertise. My university switched over to Gmail a couple years ago, so our work e-mail is now Gmail. I do not recall there being an option to opt-out of the switch over, so if Google eventually gets its way and is permitted to read its users e-mails:
- Can employees really be said to have consented to Gmail's terms of service?
- What is the status of confidential communications that are sent on our university accounts?
- Is it a breach of confidentiality if employee A uses a university Gmail account to discuss a confidential personnel decision with employee B?
- Is it a breach of confidentiality if a faculty member or staff member responds via a universityGmail account to a student complaint relating to sexual or race-based harrassment?
- Is attorney-client privilege defeated if a university staff member communicates with university counsel via a university Gmail account, since the parties have allegedly agreed that Google can read their communications?
- Can anyone claim a reasonable expectation of privacy in their electronic communications if they are held to have consented to sharing those communications with a third party?
- If Google's terms of service include a statement that Google may, if asked, share both data and the contents of your e-mails with federal or state law enforcement agencies, would that elminate any possible claims of constitutional violations in connection with NSA datamining?
As the last bullet point suggests, I am curious about the relationship between data-mining by internet service providers and data-mining by the U.S. government. It is hard to generalize about people's feelings about such matters, but my impression is that there is a large sector of the population that considers Edward Snowden a hero for having revealed massive invastions of privacy by the U.S. government. At least some of these same people respond with a shrug to revelations of Google's interpretation of its terms of service based on some version of the idea that "everyone knows" that Google's profit model is based on exploiting the personal information of its users.
I think it is equally true that, at least since the Bush Administration, "everyone knows" or should have known that the federal government has established a massive datamining operation whose purpose is to screen communications for evidence of terrorism or terrorism-related activities. Nonetheless, my impression is that there is more anti-NSA outrage than there is anti-Google outrage. This is (to me) counter-intuitive, since most people believe that combatting terrorism is an important national interest and that permitting Google to identify our habits of consumption is not. So, why aren't the levels of outrage reversed?
- People buy Google's argument that when we use Google we consent to all of its terms of service (but what of the people who send or receive e-mails to people with Gmail accounts?);
- NSA datamining is arguably a constitutional violation, while Google's reading our e-mails is arguably only a violation of a statute;
- The NSA doesn't market any useful products, but Google is awesome;
- Google, while powerful, cannot use personal information to mess with individual liberties in the ways that the NSA can
Friday, October 11, 2013
Since I favor national health insurance, I have a hard time understanding the passionate opposition to the Affordable Care Act (ACA). But as a contracts professor, I also have a hard time understanding the Congressional Republicans' negotiating position. What consideration are they offering in return for passing a funding measure? As I understand it, their positions have been variously:
- We won't pass a funding measure unless the President agrees to defund the ACA;
- We won't pass a funding measure unless the President agrees to postpone the launch of the ACA for one year; and
- We will give the President an additional six weeks to postpone the launch of the ACA or we will refuse to raise the debt ceiling.
These positions take the rhetorical form of concessions. The Congressional Republicans seem to be offering compromise positions to the administration. But they are not in fact concessions because (by analogy to contracts doctrine), they are seeking a modification of an agreement without offering any new consideration. Funding the government is one of Congress's constitutional duties. Shutting down the governement and throwing (or threatening to throw) the economy over a cliff because one party opposes one piece of legislation is a reckless and irresponsible derogation of that duty. Moreover, all of these concessions are merely delays. Many Congressional Republicans have made clear that they intend to continue their strategy of threats to harm the country unless the administration concedes seriatim to an agenda driven by the GOP's most conservative members.
It is not as if there are not issues on which Congressional Republicans could give some ground -- and some of these issues would not even be costly. Are they offering real concessions on assault weapons? On environmental protection? On increasing taxaction on the wealthy or doing something to address the growing gap between rich and poor in this country? Is there any significant legislative realm in which the congressaional republicans are willing to make real concessions in return for an agreement that the ACA will be changed in some way or postponed?
Until the Republicans come forward with some serious consideration offered in return for a compromise on the ACA, I would be disappointed if the Senate or the administration gave any ground, just as I generally would not counsel a client to make concessions in a business context without negotiating some meaningful new consideration (absent unforeseen material changes in circumstances that have not occurred here). Modifications without consideration make sense in a relational context in which the parties value their on-going ability to continue engaging in mutually beneficial transactions more than the anticipated profits from any single contract. But that is not how I would characterize the relationship between Republicans and Democrats. These two entities have adopted mutual enmity as their raisons d'être, and they've been thrown together because members of each group are purportedly committed to the common good.
Well, it's time to show some evidence of allegiance to that purpose.
Wednesday, October 9, 2013
I am very interested to see what the Law School Deans have to say on their new blog on legal education. This is a subject that interests us over at the ContractsProfs Blog as well. The Deans have already posted in praise of the ABA recommendation that the 20-hour/week limit on employment for full-time students be eliminated. I agree with the logic of the argument -- the ABA does not prohibit students from doing anything else (moot court competition, law review, student government, video games) more than twenty hours a week, so why should it prohibit employment?
Still, I think there is an answer. There may be students who can work more than 20 hours a week and still excel in law school, but I think they would be exceptional. For most students, law school is hard in ways that college is not. And they do not realize that coming in. They worked through college, so they think they can work their way through law school. But by the time they learn that law school presents new challenges, they have already done permanent damage to their transcripts. The 20-hour rule is profilactic, so it is bound to be overinclusive, but this is probably a situation where a bright-line rule makes sense.
It is true that students can spend time in non-remunerative activities to their heart's content but I think there is a difference. Students can tell both themselves and their professors, "I'm sorry; I don't have time to prepare for your class because I have a job." That excuse will not work as well with any other activity. And to the extent that students are putting in extra hours in activities like moot court competitions, law review, clinical work or pro-bono legal activities, those are all part of their legal educations.
The argument that students need to work to support themselves doesn't necessarily fly, since many of them are working in jobs that pay very little compared to the debt they are incurring. They are far better off getting the most out of their investment in legal education than they are earning pocket money. These sentiments open me up to the accusation of paternalism, and I cannot deny that the accusations score a palpable hit. But in an educational context in which much of the curriculum is required, and a good deal more of it is very strongly recommended, I think we crossed that line long ago in far more substantial ways.
One of the main things that I try to get across, especially to first-year students, is that this, meaning law school, is their job now. There may be personal crises and family emergencies that call out for our students' attention, but students have to negotiate those demands and the demands of law school just as they would those demands and the demands of the working world. The law school curriclum is not going to wait for them. If students are distracted when we go over the statute of frauds and the parol evidence rule, they should not expect to be able to catch up when we are covering remedies. There just won't be time.
It is fine with me if the ABA gets rid of the 20-hour rule, but if it did so, I would recommend that my own law school adopt its own 20-hour rule for our students, with the possibility of exemptions (perhaps issued by the Dean of Students) in special cases when we know the student can handle the demands of both work and school. If we are going to have paternalist rules, they should come from within the house rather than from our ABA Big Brother's house.
Monday, October 7, 2013
One of my students, Maison Haines (pictured) gave herself a practice exam by writing up a summary of the contracts issues in Disney's film, The Little Mermaid. Indeed, there is much of value to be learned from the exercise, some of which relates to defenses and so was beyond Maison's contracts education at this point. Still, I have used her essay as a point of departure for this post.
Maison summarizes the plot as follows:
Ariel, a hopeless romantic mermaid, defies her father by constantly going to the . She dreams of living on land and how wonderful it would be. . . . One night, she notices bright lights in the sky, so she once again wanders to the surface to investigate. She swims upon a ship with none other than Prince Eric aboard it. She notices the dapper prince right away because he is handsome and is playing the snarfflak [flute]. She falls in love immediately. . . . Meanwhile, the wicked witch Ursula is keeping a close eye on King Triton’s youngest daughter. Ursula is looking to get revenge on King Triton, and what better way than through his curious, love-struck daughter. Ursula proposes an offer to Ariel, which is really where our story begins.
The wicked witch offers to turn Ariel into a human for three days. Ursula tells Ariel about how she can be with her prince, fall in love, and live happily ever after. Ursula tells Ariel she can remain a human forever if she makes Eric fall in love with her. He has to prove his true love for her by kissing her before “the sun sets on the third day.” The only thing Ursula wants in payment is Ariel’s voice. . . . Next, Ariel signs on the dotted line, loses her voice to the sea witch, and makes her way to the surface of the water where she will live for the next three days.
Now, as it turns out, our blog is not the first blawg to consider the contractual issues in Disney's The Little Princess. Findlaw's Legal Grounds blog posted on the subject back in August and The Utter Meaninglessness of Everything (Meaninglessness) blog did so back in 2008. There is considerable overlap among the posts.
All noticed, for example that Ariel's contract with Ursula should have been voidable, because Ariel was an infant (under 18) when she signed it. Maison expressed outrage that the whole plot of the movie is now implausible to her because the infancy doctrine precludes most of it. Never fear! We don't actually know whether the infancy rule applies under the sea.
In addition, Ariel also has a strong argument that Ursula did not act in good faith. She interfers in various ways with Ariel's attempts to get Eric to kiss her, sending her eels to interrupt a kiss and ultimately seducing Eric herself with the help of Ariel's purloined voice and a bit of magic. Once again thought, it may be asking a bit too much to apply these concepts to the watery realms inhabited by the parties to this agreement. After all, can one really make a straight-faced claim that Ursula the Sea Witch did not perform her contract in good faith? She's a sea witch. If you want a fair deal, try Glinda.
Legal Grounds thinks the contract may be void for vagueness, as the key term "true love's kiss" is unclear. I'm not sure I buy that one, as the parties do not seem to be in any doubt. It's a Disney movie, after all, so the ingredients for true love's kiss are: prince, two-legs, pulse (functioning neurons optional).
Meaninglesness suggests that Ariel's father, King Triton, could have declared the contract void as contrary to public policy, which seems about right, except that I'm not entirely comfortable with empowering the executive with authority to avoid commercial contracts involving family members. I think, under the sea, an Article Trident judge ought to make that call.
But getting back to Maison's take on all this, she points out that, after Triton's failed attempt to avoid the contract by blowing it up with his Trident, the contract was effectively modified. Triton offers himself up in Ariel's place in Ursula's collection of unfortunate souls. His agreement with Ursula is made in consideration of Ursula's promise to free Ariel. But Ursula is now no mere sea witch, she is the ruler of the seas, and things don't look so great for Ariel and Eric. Fortunately, the happy couple is able to impale Ursula, disembowel her and then ride the stream of entrails into calmer and more familiar seas. Or that's how I remember it. I haven't watched the movie in a while.
The Hans Christian Anderson story on which the movie is based is similar but much, much stranger. In Anderson's version (memorialized in the statute above right), the sea witch is even more grotesque than in the movie, and here is what she offers the little mermaid:
I will mix you a potion. Drink it tomorrow morning before the sun rises, while you are sitting on the beach. Your tail will divide and shrink, until it becomes what human beings call 'pretty legs.' It will hurt; it will feel as if a sword were going through your body. All who see you will say that you are the most beautiful human child they have ever seen. You will walk more gracefully than any dancer; but every time your foot touches the ground it will feel as though you were walking on knives so sharp that your blood must flow. If you are willing to suffer all this, then I can help you.
Some deal! The little mermaid takes the deal because she is after an immortal soul. If she fails to make the prince so love her "that he forgets both his father and mother, because his every thought concerns only you, and he orders the priest to take his right hand and place it in yours, so that you become man and wife" (less ambiguity about the promise here!), she will immediately become foam on the ocean.
In Anderson's version, the little mermaid fails to fulfill her end of the bargain, as the prince falls in love with a beautiful princess. This time, it is the little mermaid's sisters (rather than her father) who offer up a modification of the contract with the sea witch. They trade their hair for a knife that the little mermaid is to use to kill the prince, but . . . ah, I don't want to spoil the ending for you.
Wednesday, October 2, 2013
I have posted before about my approach to review sessions, which I have summed up in a picture to the left. I have colleagues who ask students to come with questions and hold forth on whatever issues the students raise, but in my experience, the students cannot be relied upon to identify the "unknown unknowns" and they may be too shy or embarrassed to articulate the "known unknowns." I just deliver an outline of the course to my students while they frantically type.
But wait, why am I even talking about review sessions only seven weeks into the semester? Well, I am holding review sessions for my contracts students this week because we are teaching contracts this year in two, seven-week, two-credit units. My students have their exams for the first "minimester" next week.
As I explained back in 2009:
One of my main pedagogical goals, and I make no claim to originality here, is to get students to think of law school as being about much more than just learning a bunch of rules. Nobody would need a lawyer if they could simply use Google to find the answers to their legal questions. Rather, lawyers help solve complex problems that may well fall between clear legal rules or where several competing rules may apply. In order to persuade a court to apply the rules most favorable to their clients or to apply the rules in the most favorable ways, lawyers need persuasive tools beyond knowledge of the black-letter law.
We spend most of the semester working on those skills through broad-ranging and perhaps rambling discussions on the interaction of law and policy. If students are too fixated on learning rules, they can't fully engage in what I consider the more important part of the course. In any case, in lots of areas of contracts doctrine, the rules are far from fixed.
I remind my students throughout the semester that I will feed them some red meat at the end of the semester. I hope to thereby enable them to relax and partake of the joy-filled fun ride that is the law of contracts.
My approch to teaching has become more challenging to implement with the advent of the minimester and with more frequent assessments. We no longer have the luxury of relaxed conversations over the course of a 14-week semester during which students' understandings of legal doctrinces gestate and coalesce. Rather, every other week, they are tested on how well they are assimilating the doctrine.
From my perspective, I think my students are better prepared after the first seven-week minimester than they were at the half-way point of the semester in years past. But they are better prepared in the sense that we have focused more narrowly on basic doctrine and made sure that they are grasping that doctrine. What is lost are the free-flowing discussions of the consequences of legal doctrines that in my mind has always been the stuff of lawyering.
Hopefully we'll have more time to work on that stuff in the second minimester.
Tuesday, October 1, 2013
IF YOU ARE NOT UP-TO-DATE ON BREAKING BAD EPISODES,
READ NO FURTHER
Monday, September 30, 2013
My student, Sam Henderson (who blogs here), alerted me to this cartoon which references the Paradox of the Court, of which I was previously unaware. We have a summary here from Joshua J. Mark on the Ancient History Encyclopedia. Here are the basics:
The Sophist Protagoras (pictured at left with his homie, Democritus) offered to teach a young man, Euthalos (or Euathlus), to argue in court. Departing from the Sophists' custom of demanding pay for sharing their wisdom, Protagoras offered the lessons for free, allowing Euthalos to pay him once he won his first case. Protagoras taught Euthalos, but Euthalos escaped indebtedness by avoiding taking any cases. Protagoras got fed up and sued Euthalos for his fee, but Euthalos claimed that either way the case came out, he still would not have to pay. If the court found in Euthalos' favor, the original agreement was unenforceable, and if it found in Protagoras's favor, Euthalos still would not have to pay because he still would not have won a case.
Sam was curious how a modern court would rule, and I think there is no answer that is clearly correct, and that's why it's such a great paradox. I think a court could reach different conclusions depending on how it ruled on implied terms and Euthalos's good faith (or lack thereof). Leaving aside the possibility that Euthalos could hire a Sophist to represent him and avoid any possible debt, I have a few takes:
1. A court could find that the parties assumed that Euthalos would pursue a career in the law and that such a career would entail arguing in court. If that was a reasonable implied term, Euthalos might have accepted Protagoras's lessons in bad faith (if he never intended to argue a case) and should have to pay the value of the lessons either as a matter of contract or in quantum meruit.
2. But perhaps it is not reasonable to imply the term. Is it really the case that all who are trained in the law practice? Some data on industry custom would be useful here. We in the legal eduaction business have been saying for years that job placement data can be misleading because not all who attend law school do so in order to practice law. Moreover, it may be arguable that a student of even the great Protagoras may never win a case. And so, even if both parties expected that one day Euthalos would have to pay for the lessons, Protagoras was assuming some risk.
3. Or perhaps Euthalos did not act in bad faith. Perhaps he entered into the agreement expecting to have a fabulous career as an advocate. He had agreed to study with Protagoras in the hopes of overcoming a speech impediment, but he found that trying to speak with pebbles in his mouth (Protagoras's proposed cure) only triggered his gag reflex. As a result, after completing his studies with Protagoras, Euthalos felt that he had learned nothing of value and owed Protagoras nothing. Protagoras should have thought twice before making an offer that could take the form: "You'll win a case or you don't have to pay!" Protagoras should have taken some lessons from Pufferitus.
4. Or a court could find in Euthalos's favor by finding against him as the paradox suggests. The court could rule that Euthalos will owe Protagoras his fee as soon as Euthalos wins a case, and as he has not yet done so, Euthalos need pay nothing for now. Of course, all of this turns on what one means by "winning" a case. If Protagoras seeks only a declaration that the parties have a contract, he loses by winning. If Protagoras seeks money damages, he wins by losing.
Thursday, September 26, 2013
Breaking Bad, I just thought I would never again have anything to which I could look foward. I did just turn 50, so there is AARP membership and a colonoscopy, but I thought there would be nothing in my future that I would anticipate enjoying.
But then came this in today's New York Times. Vince Gilligan, the creator of Breaking Bad just sigend an agreement for a new show on CBS. The timing of the announcement speaks well of both Mr. Gilligan and CBS, capitalizing on the current fan feeding frenzy surrounding the end of the series. But the fact that CBS is belatedly pouncing on a Gilligan script originally offered to CBS ten years ago speaks less well of that party to the deal.
Mr. Gilligan has an exclusive deal with Sony Pictures Television, which negotiated for him an unsual deal in which CBS agreed up front to air 13 episodes of Mr. Gilligan's series, Battle Creek. There's a lot of money involved, but who cares? If Battle Creek is anything like Breaking Bad, I will forgive CBS for not airing a single show that I have wanted to watch in the last 25 years.
Or am I forgetting something? Has CBS had any good comedies or dramas in prime time?