ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

A Member of the Law Professor Blogs Network

Monday, January 23, 2012

Lady Duff Gordon Redux

When I teach Wood v. Lucy I attempt to put Lady Duff Gordon in context by describing her as a Martha Stewart of her time.  Now this parallel, as reported in the Washington Post:

NEW YORK — Macy’s Inc. has sued Martha Stewart Living Omnimedia Inc. in a bid to block a licensing deal between the housewares company and J.C. Penney Co.

The lawsuit was filed Monday in New York State Supreme Court. Macy’s claims Martha Stewart Living’s deal with J.C. Penney violates the terms of an exclusive pact Macy’s has to sell Martha Stewart Living products at its stores, according to reports in The Wall Street Journal and other publications.

The complaint comes after Plano, Tex.-based J.C. Penney acquired a 16.6 percent stake in Martha Stewart Living and announced plans last month to open mini-Martha Stewart shops inside most of its stores, beginning next year. The deal announced last month was seen as part of J.C. Penney’s efforts to re-image itself under its new CEO Ron Johnson, a former Apple Inc. executive.

Cincinnati-based Macy’s has asked the court for a preliminary injunction to block the deal.

Martha Stewart Living said it does not comment on legal matters, but issued a statement saying that it received a notification from Macy’s that it intends to renew and extend its commercial agreement with Martha Stewart Living to feature and promote the Martha Stewart Collection in Macy’s stores.

Waiter, bring us some more Bacardi, we'll order now what they ordered then:

[Meredith R. Miller]

January 23, 2012 in Celebrity Contracts, Famous Cases, Recent Cases, Teaching | Permalink | TrackBack (0)

More on the Blood Contract

A few years ago, the story of a "blood contract" between two Korean businessmen caught the attention of contracts profs. In that case, one of the men made a promise to the other to repay money -- and made the promise on a cocktail napkin in blood. The court ruled the promise was unenforceable because it lacked consideration. I wrote about the case for the Wake Forest Law review here and last year, the Wake Forest Law Review Online posted responses by Professor Scott Burnham here and Professor David Epstein here. I recently posted a reply to those responses here. Deborah Post, Associate Dean for Academic Affairs and Faculty Development and Professor of Law at Touro Law, has now added her thoughtful perspective to the discussion here.

January 23, 2012 in Contract Profs, Famous Cases, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, January 13, 2012

Professor Craswell's Song for Rose (Sherwood v. Walker)

And here it is: the last in our series of links to Professor Richard Craswell's series of first-year contracts cases put to song.   Previous installments in the series from Professor Craswell have included his takes on Frigaliment Lumley, Wood v. Lady Duff Gordon, Alaska Packers, Parker v. Twentieth Century Fox, and Wartzman v. Hightower Productions.

We have blogged about Sherwood v. Walker before, here, here, and here.  Professor Craswell provides the following summary of the case:

Boy meets cow. Boy loses cow. Boy files an action in replevin. And now Plymouth (Michigan) takes its rightful place beside Verona (Italy) and the upper West Side (Manhattan) as the home of legendary star-crossed lovers!

Oh, all right. The actual facts of the case are more prosaic. Theodore Sherwood, who wanted to buy the cow, was the 47-year-old PRESIDENT of the local bank, who would never have considered hopping a freight train out of town. Though his motive in purchasing the cow is obscure, there was of course no evidence that his interest in the cow was anything other than financial. And the eventual outcome of the case was far happier than that portrayed here, for the pedigreed cow in question ("Rose the Second of Aberlone") went on to have at least five additional calves, whose registration papers each listed none other than Theodore Sherwood as the breeder. Still, no Hollywood or Nashville producer would have settled for the facts described above. Make the banker a penniless but romantic youth; change his interest in the cow to something more than "just good friends"; then tack on an implausible but heart-wrenching ending (and label the result "inspired by a true story") ... well, do all that, and you might just have the next big musical hit!

The rather long list of poems inspired by Rose of Aberlone begins famously wiith Brainerd Currie, "Aberlone, Rose of (Being an entry for an index)," first published in the Harvard Law School Record, Mar. 4, 1954, p. 3, and stiill widely available on various web sites. See also Alan Garfield, "Basic Assumption: A Poem Based on Sherwood v Walker," 57 SMU L. Rev. 137 (2004); and the various verses that can be found (along with much background on the case itself) in Norman Otto Stockmeyer, "To Err is Human, To Moo Bovine: The Rose of Aberlone Story," 24 T.M. Cooley L Rev 491 (2007).

 The whole series can be found here,

Thanks to Professor Craswell for sharing these songs and YouTube creations with us!

[JT]

January 13, 2012 in Contract Profs, Famous Cases, Music, Teaching | Permalink | Comments (0) | TrackBack (0)

Thursday, January 12, 2012

A Song for Wartzman v Hightower Productions, Ltd

We continue our series of postings of Professor Richard Craswell's contracts songs with this number about "Woody Hightower" and his pole-sitting gambit.  Other installments in the series from Professor Craswell have included his takes on FrigalimentLumley, Wood v. Lady Duff Gordon, Alaska Packers, and Parker v. Twentieth Century Fox.

Here is Professor Craswell's summary of the case:

Hightower Productions intended to employ a singer-entertainer who would live in a specially constructed mobile flagpole perch and set a new world record for flagpole sitting. The young man selected to perform this feat would be known as "Woody Hightower," and the venture was to be publicized by having him make appearances from his perch at concerts, shopping centers and the like.

Unfortunately, Hightower Productions' lawyer (Mr Wartzman) failed to prepare the paperwork needed for the company to sell stock legally to investors. As a result, no further money could be raised (nor could "Woody" be exhibited across state lines) and the project was abandoned. Unable to prove how much its flagpole-sitting venture might have made if it had gone forward, Hightower Productions instead sued its lawyer for some $170,000 in out-of-pocket expenses, known in contract law as reliance damages.

 

 

The whole venture seems a bit daft.  In order to defeat the record set by St. Simeon Stylites, "Woody" would have had to sit atop his pole for 37 years.  "What?" you say.  "That's not what my Guinness Book of World Records says!"  Well, Mr. Guinness, meet Mr. Tennyson.  Or, if you prefer a more modern take on such religious exercises, consider Joshua Mehigan.

[JT]

January 12, 2012 in Contract Profs, Famous Cases, Music, Teaching | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 11, 2012

Professor Craswell on Parker v Twentieth-Century Fox Film Corp.

Here is the latest from Stanford Law's Professor Richard Craswell.  This is his take on Shirley Maclaine's suits against 20th-Century Fox, a case we have previously posted about here and (more briefly) here.  Other installments in the series from Professor Craswell have included his takes on FrigalimentLumley, Wood v. Lady Duff Gordon, and Alaska Packers.

Professor Craswell provides the following case summary:

In 1965, Twentieth-Century Fox signed Shirley Maclaine Parker to play the lead in a movie based on the Broadway musical, "Bloomer Girl." The contract guaranteed Ms Maclaine at least $750,000; it also gave her approval rights over the movie's director. However, Fox later decided not to produce "Bloomer Girl" ... and then refused to pay Maclaine the guaranteed compensation unless she played the female lead in "Big Country, Big Man", a western set in the opal mines of frontier Australia. This role had no singing or dancing, gave her no control over the director, and was to be filmed on location in Australia. 

When Maclaine turned down this role, Fox said they owed her no money because she could have avoided (or "mitigated") any financial losses by appearing in the western. The California Supreme Court famously disagreed, and ordered Fox to pay the $750,000.

For more on the history and context of this case, see Victor P. Goldberg, "Bloomer Girl Revisited, or, How to Frame an Unmade Picture," 1998 Wis. L. Rev. 1051; and Mary Joe Frug, "Re-Reading Contracts: A Feminist Analysis of a Casebook, 34 American U. L. Rev. 1065, 1114-25 (1985).

 

[JT}

January 11, 2012 in Celebrity Contracts, Contract Profs, Famous Cases, Film, Teaching | Permalink | Comments (0) | TrackBack (0)

Monday, January 9, 2012

Professor Craswell on Alaska Packers

Continuing our series of posts on Professor Richard Craswell's first-year contracts course in song.  Previous installments have included Professor Craswell takes on FrigalimentLumley, and Wood v. Lady Duff Gordon.  Today, we present this little ditty about Alaska Packers v. Domenico, a case we have posted about previously here and here. Professor Craswell's summar is provided below:

In 1902, some inexperienced sailors (many of them Italian immigrants) signed a contract to work the gill nets in Pyramid Harbor, Alaska, for the Alaskan Packer's Association, a cartel made up of most of Alaska's canneries. The sailors' pay was to be determined partly by the size of their catch, at a rate of 2¢ per fish. When they arrived in Alaska, however, some of the sailors complained that the nets were inadequate and threatened to strike. They returned to work only when the cannery promised them higher wages -- a promise the cannery later refused to keep.

The Goetz & Scott article referred to in the song is Charles J. Goetz & Robert E. Scott, "Principles of Relational Contracts," 67 Va. L. Rev. 1089 (1981). For the history of this case in particular, and of the Alaska canning business generally, see Deborah L. Threedy, "A Fish Story: Alaska Packer's Association v Domenico," 2000 Utah L. Rev. 185 (2000). There is also a well-made video ("Sockeye and the Age of Sail -- The Story of the Alaska Packer's Association") that can be found here:

 

[JT]

January 9, 2012 in Contract Profs, Famous Cases, Labor Contracts, Recent Scholarship, Teaching | Permalink | Comments (0) | TrackBack (0)

Friday, January 6, 2012

Professor Craswell Takes on Lady Duff

We have already presented Stanford Law's Richard Craswell's takes on Frigaliment and Lumley.  Today, we offer his song about Wood v. Lady Duff Gordon, a case we have previously mentioned, for example here, here, here, here, and here.

Here is Professor Craswell's summary:

Born Lucy Sutherland, she married a Baronet and became one of the first celebrity fashion designers, enjoying success in the UK and France. Her American ventures were less successful, though, especially the effort to sell her designs through Sears and other mass retailers. Among other problems, she had already granted her American marketing rights -- including the right to half of the profits on each sale -- to a publicity agent, Otis Wood.

When Mr Wood sued for the unpaid royalties, Lady Duff-Gordon defended on the ground that Wood had not explicitly PROMISED he would do anything in return, so Duff-Gordon's promise to Wood was unenforceable for lack of "consideration." New York's highest court disagreed, in a famous opinion by Judge Benjamin Cardozo,

For a discussion of the case's historical context, see Victor P. Goldberg, "Reading Wood v Lucy, Lady Duff-Gordon with Help from the Kewpie Dolls," in his book, Framing Contract Law: An Economic Perspective 43 (2006). Other useful discussions can be found in the symposium introduced by James J. Fishman, "The Enduring Legacy of Wood v Lucy, Lady Duff-Gordon," 28 Pace L. Rev. 161 (2008); and in Mary Joe Frug, "Re-Reading Contracts: A Feminist Analysis of a Casebook, 34 American U. L. Rev. 1065 (1985).

And here's the video:

 

[JT]

January 6, 2012 in Contract Profs, Famous Cases, Music, Recent Scholarship, Teaching | Permalink | Comments (1) | TrackBack (0)

Thursday, January 5, 2012

Craswell on Lumley v. Wagner

Here is today's installment of the first-year course set to music by Richard Craswell.  This time it's Lumley v. Wagner, Lumley v. Gye, a case we have not spoken about previously on the blog.  So here is Professor Craswell's summary of the case:


In 1852, soprano Johanna Wagner (the niece of the famous composer) agreed to perform for three months in London at Her Majesty's Theatre, operated by Benjamin Lumley. The contract, which described her as "cantatrice of the court of His Majesty the King of Prussia," specified that Wagner could not perform at any other London theatre during that time. However, after Lumley failed to pay Wagner the advance that her contract required, Wagner accepted a better-paying engagement at Frederick Gye's Royal Italian Opera Theatre in Covent Garden, London. ¶ Courts then (as now) were reluctant to issue injunctions compelling artistic performances, in part because a coerced performance might not be very good. Lord St Leonard, England's Lord Chancellor, found a solution by ordering Wagner NOT to sing at any OTHER theater during those months. ¶ For more on the history and context of this case, see Lea S. VanderVelde, "The Gendered Origins of the Lumley Doctrine: Binding Men's Consciences and Women's Fidelity," 101 Yale L.J. 775 (1992).

 

 

We note that the case is the subject of a recent law article, A New Tortious Interference with Contractual Relations: Gender and Erotic Triangles in Lumley v. Gye, by  Sarah Lynnda Swan.

[JT]

January 5, 2012 in Famous Cases, Music, Recent Scholarship, Teaching | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 4, 2012

Richard Craswell on Frigaliment

Stanford Law's Richard Craswell has shared with us a link to his collection of contracts YouTube videos.  But a pig this good you eat one leg at a time.  So for now, we just include his song about Frigaliment, Judge Friendly's great chicken coup.  It's not like we haven't written about this case before, for example, here, here, here, here and here

But we never tire of new approaches to the case.  Here's Richard Craswell's:

[JT]

January 4, 2012 in Contract Profs, Famous Cases, Music, Teaching | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 6, 2011

New York Times Provides Massive Archive for ContractsProfs Teaching Peevyhouse

Contracts profs love teaching PeevyhouseWe at the blog love Peevyhouse.  We have composed songs and poems, we’ve written scholarship about the case.  There is even a movie.  We just can’t get enough of it.  And as if there were not already enough materials available to profs looking to jazz up their Peevyhouse discussion, the New York Times has this big front-page story, which is part of an on-going series of articles, plus the Times has also established an online archive of oil and gas leases.

6a00d8341bfae553ef0120a4feabbf970b-pi.jpg

The Times story relates the experience of Scott Ely and his father, who entered into a lease to allow Cabot Oil and Gas engage in gas drilling on their land.  They were left with “toxic drilling sludge stored in large waste ponds” on their property.  When the waste seeped out, it contaminated the drinking water on a separate property.  Mr. Ely sued.   Cabot’s spokesman contends that “the company’s cleanup measures met or exceeded state requirements.”

The Times review of 111,000 similar leases suggests that many or most such leases do not provide all of the contractual protections that landowners like the Elys expect.

For more very interesting information on the complications associated with oil and gas exploration in Pennsylvania, we recommend this episode of This American Life.  

[JT]

December 6, 2011 in Famous Cases, In the News, Teaching | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 23, 2011

Let's Dance: Hoffman on Mentoring v Scamming

Disco-ball1
In a characteristically insightful blog post, Dave Hoffman uses Vokes v. Arthur Murray as a nice launching point to discuss some aspects of the scam-critiques aimed at law schools.  Vokes is such a great teaching case, and Dave's post leaves me feeling like I could have done a better job teaching it this year.  

There's not much to add to the mix in the scamosphere, as many bloggers, including some of our own here at ContractsProf, have already commented very thoughtfully.  In my humble opinion, the law school scam coverage is old news often sloppily reported with the vitriol amps turned up higher.  And the coverage of these law school scam stories, at the New York Times in particular, seems completely disproportionate to the coverage of the number of other significant things happening in the world.  (You really want cynicism?  These stories get linked all over and end up on the most read and emailed list on the newspaper's website, driving page views. Page views drive advertising revenue.  So, why not write another law-school-is-a-scam article?).

Anyhow, perhaps ironically in light of the recent spate of "scam" coverage about law schools, it seems that the vast majority of my students had very little sympathy for Ms. Vokes.

[Meredith R. Miller]

November 23, 2011 in Famous Cases, In the News, Law Schools | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 8, 2011

Hitler's Take on the Chicken Case

Ever wonder how the facts and primary arguments in Frigaliment, a.k.a. The Chicken Case, could be illustrated via a humorous video clip involving Hitler?  Yeah, me neither.  Until now

 

Last night, a former student of mine sent me a link to a "Hitler Rant" on this very case.  For those who, like me, are too old and boring busy to have heard of HItler Rants before, they are an internet meme in which various "authors" craft humorous captions on all sorts of topics and insert them into the same clip from the critically-acclaimed German film, Downfall.  For those who, like me, are children of the '80s, think Mad Libs for movie trailers.  (Our fearless leader, Jeremy Telman, previously blogged about the phenomenon, and its application to contract doctrine, here.)  As you likely recall, in Frigaliment, the core of the dispute was whether an agreement to purchase "chicken" should be interpreted as applying to only "young" chicken or any chicken.  As for the Hitler Rant regarding Frigaliment?  Well, you just have to see it for yourself

[Heidi R. Anderson, h/t anonymous student]

November 8, 2011 in Famous Cases, Film Clips | Permalink | Comments (0) | TrackBack (0)

Monday, October 31, 2011

Volatility in the Cotton Market Leads to Record Number of Breaches

Cotton-field-England-ArThe WSJ reports on the volatile cotton market and the record number of contract disputes that have arisen as a result.  Here's a sample:

Just how binding is a binding agreement?

In the cotton market, dozens of remorseful buyers are putting that question to the test.

Since they agreed earlier this year to buy thousands of bales of cotton when prices were at record highs, cotton mills have seen prices tumble 54%. So, as delivery time nears and bills come due, some have decided not to pay up.

In a phenomenon that may be unique to the cotton market, contracts are considered by many buyers to be little more than a message of intent, with any agreement up for negotiation. And because the market is so farflung—merchants in the U.S. often trade with thousands of small buyers in Bangladesh or Indonesia—regular legal battles can be costly and lengthy.

Thanks to the wild swings in cotton prices, the industry is facing a record number of contract disputes. The International Cotton Association has received 168 requests for arbitration this year. That is the most since the industry's self regulator starting keeping track in 2000.

This year, it is mostly mills and other buyers backing out, industry officials and traders say. They bought when cotton was as pricey as $2.1515 a pound, the record hit in March. On Monday, cotton for December delivery rose 0.9% to close at 97.94 cents a pound on ICE Futures U.S.

Shrugging off those contractual obligations has made cotton prices jumpy. Having backed out of deals struck in the futures market, buyers have gone into the spot, or cash, market to get what they needed to spin thread for T-shirts, underwear and the like. Those reverberations have been felt by clothing makers of all sizes, whose margins were squeezed by the run-up in prices and now have to decide whether they can lower prices ahead of the holiday season.

"Both the textile mills [and] the merchant...have had a great deal of trouble in managing their risk," said Joe Nicosia, chief executive of Allenberg Cotton Co., the cotton arm of French trading house Louis Dreyfus Group, during an industry conference call in July.

When mills don't live up to their end of the deal, cotton merchants, including big, multinational commodity-trading firms, are at times left holding the bag.

Each year, 100,000 to 200,000 cotton contracts are signed, said Terry Townsend, executive director of the International Cotton Advisory Committee, a group that advises cotton-growing nations. For the crop year that ended July 31, about 10% of contracts have been defaulted on, said Mr. Townsend.

Defaults are a fixture in the cotton market.

You mean the buyer and seller didn't agree to shipment of the cotton on the Peerless?

For more (including a snazzy graphic with data), scale the WSJ paywall and read the article.  As one commenter wrote: "A deal's a deal until a better deal comes along."

[Meredith R. Miller]

October 31, 2011 in Famous Cases, In the News | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 23, 2011

Lucy v. Zehmer, Interrupted

I've survived a contracts conference shipwreck.  And now I can say I've experienced an earthquake in the middle of teaching Lucy v. Zehmer. Apparently the epicenter is in Mineral, Virginia, population 500.  Coincidentally, this looks to be only about a two-hour drive from MCKenney, Virginia, home of the Ye Olde Virginnie

I hope everyone and everything nearby is safe.

[Meredith R. Miller]

August 23, 2011 in Famous Cases, Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Friday, July 1, 2011

Protection of Domestic Industry UK Style

Bombardier Train Today's Guardian has a story about two cabinet ministers who have sent a carefully worded letter of complaint to British Prime Minister David Cameron protesting the award of a £3 billion contract for the manufacture of train carriages (cars) to the German company, Siemens.  The ministers are upset that the contract was not awarded to Bombardier, which employs 3,000 people in Derby and is the last remaining train factory in Britain.

The ministers apparently express concern that Britain EU partners do not play fair.  After all, the German government recently awarded a £5.4 billion high-speed train contract to German-based Siemens.  And just last year, the French government awarded a £540 million contract to Siemens rather than to Paris-based Alstom.  

Wait a minute.  Doesn't this suggest that Siemens always wins these big contracts rather than that member states of the EU engage in favoritism?  Moreover, Bombardier is not even a UK company.  It's Canadian!  A union representative in Derby is quoted by the Guardian as expressing concern that Bombardier will shut down operations in England.  After all, if it can't win a UK contract, what's the point of even having a factory there?  Simple solution.  Sell the factory to Siemens.  They seem pretty busy.

[JT]

 

July 1, 2011 in Famous Cases, Government Contracting, In the News | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 22, 2011

Must See TV: Hot Coffee Premieres on HBO on Monday 6/27

Trust me when I tell you that it is very difficult to get friends, family, students and acquaintances engaged in a meaningful discussion of "mandatory arbitration."  Trust me further that there is now a wonderful documentary that manages to make this and other civil justice topics interesting and engaging for everyone.  (Indeed, my viewing companion, proudly not a lawyer, turned to me at one point in the movie and whispered "didn't you write a paper about something like that?")

Last night, I was fortunate enough to invite myself via twitter get invited to a screening of Hot Coffee at HBO.  Hot Coffee is a must see documentary about the way that business interests, "tort reform," judicial elections and "mandatory arbitration" have systematically worked in concert to deny plaintiffs access to civil justice.  It is the work of the energetic and passionate director Susan Saladoff who spent 25 years as a trial lawyer before becoming a filmmaker.  The documentary is well-conceived and thought provoking.  It takes some very complex topics and organizes them and presents them through compelling personal stories.  

The title "Hot Coffee" refers to the iconic case that is ubiquitous in pop culture as a symbol of the frivolous lawsuit: the woman who sued McDonalds because she was served a coffee that was too hot.  The film starts very strong by retelling this story through interviews with the plaintiff's family.  This challenged me (and from the gasps in the theater, I suspect everyone else viewing the film) to see the case in an entirely different light.  With that strong start, the viewer is engaged and ready to hear about damage caps, judicial elections and mandatory arbitration in consumer and employment contracts.

Here's the trailer:

After the film, there was a Q&A session moderated by Jeffrey Toobin.  He appeared to receive the movie very favorably, noting that the fine print in a cell phone contract is not one of the sexy topics that CNN hires him to discuss on the evening news segments (which reminded me of this Dahlia Lithwick piece in Slate, which seemed to begrudgingly report on AT&T v Concepcion).  

Toobin did mention one frustration, which could be leveled as a critique of the film -- that it only presents one point of view.  Notably absent and/or unwilling to participate were voices from the "other side," i.e., those in favor of damage caps and mandatory arbitration.  Saladoff's response, I thought, hit the nail on the head: in so many words, she said that she wanted to tell this side of the story, and the voices in favor of these reforms already had a well-financed platform (and, indeed, overtaken the public consciousness).  Perhaps I am partial to her response because her film paints a picture in line with my world view, and I am just so thrilled to finally see an engaging and accessible presentation explaining the systematic erosion of civil justice at the behest of corporate interests.

Our students come to law school generally ignorant of or misinformed about tort reform, mandatory arbitration and many of the other topics presented in this film.  However, they do at least know of handful of cases -- OJ, Bush v Gore and, of course, the hot coffee case.  I have no doubt that this film will be used in the classroom.  It is masterfully done and captivates those uninitiated with these topics as well as those who have studied them (and even includes a few clips of interviews with George Lakoff).  Please tune in to HBO on Monday night.

[Meredith R. Miller]

June 22, 2011 in Current Affairs, Famous Cases, Film, Film Clips, Law Schools, Miscellaneous, Teaching, Television | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 20, 2011

Charlie Sheen Claims that Arbitration Provision is Unconscionable.

Charlie-sheen Just when I thought that the Charlie Sheen saga was over (at least from a Contract Law blogging perspective), this comes along.  Charlie Sheen--entangled in a contractual dispute with his employer, Warner Brothers--first claimed that his contract had no morals clause (which turned out to be false) and later claimed (and said) all sorts of much crazier things.  Now, Sheen and his lawyers are arguing that the provision in his contract requiring any dispute to be resolved via arbitration is unconscionable.  Yes, you read that correctly.  Charlie Sheen--whom many have described as having no conscience--is claiming unconscionability.  

When I teach the concept of unconscionability, I emphasize that  a provision is unconscionable only if there is both procedural unconscionability (one party has substantially more bargaining power than the other, among other factors) and substantive unconscionability (the term itself unreasonably favors one party).  I also state that there is a sliding scale--the more procedural unconscionability you can show, the less substantive unconscionability you need to show, and vice versa.  Admittedly, these are generalizations, but they're the kind of generalizations that tend to work well for first-year Contracts students. 

I doubt Charlie Sheen could show either procedural or substantive unconscionability here.  As Warner Brothers' lawyers note, the procedural element likely is lacking when the party claiming that he had little bargaining power was able to bargain for "$2 million dollars for [every] 22 minute[s] of television."  To counter that point, Sheen's lawyers understandably emphasize that Sheen's contract was "non-negotiable" and, on the substantive side, was quite "onerous."  I am not familiar with the nuances of California law on this subject so it will be interesting to see how this particular case is decided.

It's not unheard of for courts to rule that arbitration provisions are unconscionable (see our earlier post regarding the AT&T case recently heard by the Supreme Court).  However, if you are tired of hearing about Mr. Sheen, you should hope that the court finds that the arbitration term was valid.  That's because...if it is unconscionable, the case most likely will be heard in a California court, where the whole thing will be filmed and potentially broadcast to us all.  Yikes. 

For previous ContractsProf Blog posts about other Sheen-focused Contract Law topics, see here (Warner Brothers' termination notice), here (Warner Brothers' complaint), here (Sheen's countersuit alleging interfence with contractual relations), here (Sheen's bargaining power--perhaps relevant to his unconscionability claim), and here.  At this point, I'm wondering if I could teach every Contract Law topic via Charlie Sheen.  The textbook, entitled, "Winning at Contract Law!" sure would be fun to write. 

[HR Anderson] 

April 20, 2011 in Celebrity Contracts, Famous Cases, In the News, Teaching | Permalink | Comments (1) | TrackBack (0)

Monday, April 18, 2011

A Passover Retreat: Good or Service?

Img_0065 It is time to get into the Passover spirit by revisiting Fallsview Glatt Kosher Caterers v. Rosenfeld, 7 Misc.3d 557 (Civ. Ct. Kings County, NY, 2005), which gave us the opportunity to pause and consider: is a “Passover retreat” predominantly a good or service under the UCC?  (Which, also came to be known as an added, fifth question for the youngest child at the seder).

Plaintiff Fallsview operated a retreat during Passover at Kutscher’s Country Club. (A Jewishy resort in the Catskills where, as a young child, I spent all of my grandmother’s laundry quarters on Ms. Pac-Man).  For those that did not grow up going to B’nai Brith conventions in “The Country” (that’s what the NYC Jews called it), see this video, which comports with my memory. 

Fallsview’s “retreat” included accommodations, entertainment and kosher food service.  Willie Rosenfeld allegedly reserved spaces for 15 members of his family and agreed to pay $24,050 for the retreat.  Fallsview made necessary arrangements, but Rosenfeld failed to appear at the hotel and did not remit the payment.  Fallsview sued Rosenfeld for breach of contract.

Rosenfeld moved to dismiss, pointing to the statute of frauds.  Rosenfeld argued that there was no agreement and, even if there was, it was oral and did not satisfy UCC 2-201, which requires that contracts for the sale of goods for the price of $500 or more be in writing.  Fallsview’s response: the UCC does not apply because the Passover retreat is a service, not a good.

Because the alleged contract called for accommodations, entertainment and food, it was a hybrid transaction, and the court looked to whether goods or services predominated.  Rosenfeld argued that the retreat was about food, a conclusion that he argued was “compelled by the very nature of the Passover holiday”:

The essential religious obligation during this eight day period- and the principal reason why people attend events similar to the Program sponsored by plaintiff- is in order to facilitate their fulfillment of the requirement to eat only food which is prepared in strict accordance with the mandate of Jewish law for Passover, i.e., food which is ‘Kosher for Passover’. It is the desire to obtain these ‘goods'-and not the urge for ‘entertainment’ or ‘accommodations'-that motivates customers to subscribe to such ‘Programs.’

But the court noted all of the possible daily activities at the retreat included “tennis, racquetball, swimming, Swedish massage, ‘make over face lift show,’ ‘trivia time,’ aerobics, bingo, ice skating, dancing, ‘showtime,’ ‘power walk,’ arts and crafts, day camp, ping-pong, Yiddish theater, board games, horse racing, horseback riding, wine tasting, and indoor bocci-and that is only through Wednesday.”  There were also “ traditional and Orthodox religious services, lectures on religious and other subjects (presumably with a religious or cultural perspective), and a series of activities that are clearly designed to be of interest to families of observant Jews during a highly significant period in their calendar. “  The all-inclusive price covered these activities, as well as accommodations and food.

The court (Battaglia, J., who coincidentally, used to teach at my home institution), sided with Fallsview and decided the essence of the retreat was a “family and communal ‘experience’” and, therefore, was defined primarily by services and not by goods.  Rodenfeld’s motion to dismiss was denied.

Chag Smaech!

[Meredith R. Miller]

 

April 18, 2011 in Famous Cases, Food and Drink, Miscellaneous, Religion | Permalink | Comments (0) | TrackBack (0)

Monday, March 14, 2011

Audiofile of Interview with Son of Plaintiff in Lucy v. Zehmer

Richmanb Schmelzer_Dennis Barak Richman (pictured, left) and Dennis Schmelzer (pictured right) have a new article up on SSRN on the celebrated case of Lucy v. Zehmer, about which we have posted in the past.  Here is the abstract of the article:
This article reexamines Lucy v. Zehmer, a staple in most contracts courses, and makes the following discoveries: (1) Lucy, acting as a middleman for southern Virginia’s burgeoning pulp and paper industry, sought the Ferguson Farm for its rich timber reserves; (2) Lucy was one of scores of aggressive timber middlemen eager to purchase timberland across the region, in what amounted to a chaotic land grab that left a wake of shady transactions and colorful litigation; and (3) Within the eight years of winning injunctive relief from the Virginia Supreme Court and purchasing the Ferguson Farm from Zehmer for $50,000, Lucy earned approximately $142,000 from the land and its natural resources. These findings bring into question the opinion’s assertion that $50,000 was a fair price, its conclusion that Zehmer’s actions indicated contractual intent, and its confidence that the objective method captured the relevant background in which Lucy’s and Zehmer’s exchange took place. More generally, they suggest that conclusions reached by the objective method are highly dependent on the facts that are retold and the context in which they occur.
Professor Richman was kind enough to share with us an audiofile of an interview with John C. Lucy's son, John II, recounting his memories of his father's business and the case.  The audio file is available here
[JT]

March 14, 2011 in Famous Cases, Recent Scholarship | Permalink | Comments (1) | TrackBack (0)

Thursday, March 10, 2011

Self Promotion: Telman on the Totten Doctrine

Lincoln I have floated my ideas about Totten on this blog before here and here.  My students booed and hissed when I scolded Honest Abe for having breached his promise to pay William Lloyd for espionage services provided during the Civil War.  "Too soon," they howled.  Undeterred, I have developed my ideas about Totten in a new article, Intolerable Abuses: Rendition for Torture and the State Secrets Privilege, now available for dowload on SSRN.  The discussion of the Totten doctrine takes up pages 15-45 of the draft.  

That part explores the ambiguities of the case and decries its deployment in the state secrets privilege context in cases that do not involve contractual claims.  The case is ambiguous because in the space of a two page opinion, the Supreme Court gives numerous reasons for refusing to enforce the government's alleged promise to Mr. Lloyd.  Perhaps there was an implied promise of secrecy.  Perhaps public policy forbids the disclosure and thus the enforcement of such a policy.  Perhaps there is some sort of evidentiary privilege that prevents the claim from going forward, but if so, its operation is unlike that of any other evidentiary privilege.  And then in the end, what is the Totten doctrine?  Is it simply the application of one of the above-mentioned contracts or evidentiary doctrines or is it a principle of non-justiciability?

The discussion of Totten takes up about 1/3 of the piece.  Here is the abstract for the whole thing:

In Mohamed v. Jeppesen Dataplan, Inc., the Ninth Circuit, sitting en banc, issued a 6–5 opinion dismissing a complaint brought by five men claiming to have been victims of the U.S. government’s extraordinary rendition program, alleged to involve international kidnapping and torture at foreign facilities. Procedurally required to accept plaintiffs’ allegations as true, the court nonetheless dismissed the complaint before discovery had begun based on the state secrets privilege and the Totten doctrine, finding that the very subject matter of plaintiffs’ complaint is a state secret and that the defendant corporation could not defend itself without evidence subject to the privilege. This Article contends that courts should almost never dismiss suits based on the state secrets privilege and should never do so in a case like Jeppesen Dataplan, in which plaintiffs did not need discovery to make out their prima facie case alleging torts by the government or its contractors.

While much has been written on the state secrets privilege since 9/11, this Article focuses on the role of the Totten doctrine in transforming the state secrets privilege into something like a government immunity doctrine. The Article first argues that Totten was wrongly decided because it is overprotective of state secrecy and requires dismissal with prejudice of suits that would more appropriately be dismissed without prejudice, subject to re-filing when the relevant secrets are declassified. The Article next contends that Totten is a very narrow doctrine that cannot and should not have any role in informing cases such as Jeppesen Dataplan in which plaintiffs did not contract with the government. 

In addition, the Article argues that the state secrets privilege, as laid out in the 1953 Reynolds case and subsequently expanded by lower courts, permits pre-discovery dismissal of suits based on the state secrets privilege and thus exacerbates the pro government bias already present in Reynolds. The Article explores seven ways in which lower court decisions have all tended to make it easier for the government to assert the state secrets privilege, while the lack of penalties for overly aggressive assertion of the privilege results in intolerable abuses. 

While the Article thus offers fundamental critiques of both the Totten doctrine and the state secrets privilege, it does not advocate disclosure of state secrets. Rather, in a concluding section, the Article draws on federal statutory schemes relating to the introduction of classified information in criminal trials and offers numerous alternatives to judgment in favor of the government and its contractors before discovery has begun in cases implicating state secrets. Congress has repeatedly empowered courts to make decisions that protect government secrecy while facilitating limited access to secret information when necessary in the interests of justice and open government. In some cases, the government’s inability to defend itself may necessitate the socialization of the costs associated with national security secrets, but that result is preferable to forcing plaintiffs to bear all the costs of government secrecy.

Comments welcome!

[JT]

March 10, 2011 in Famous Cases, Government Contracting, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)