Thursday, November 20, 2014
In a couple of previous posts I've described the International Commerical Arbitration Moot (ICAM) and detailed some aspects of this year's problem. None of this is news to the contracts, sales, and arbitration professors around the country who are involved in this activity. Still I am surprised at how many schools do not have teams. I have also noted the possible use of the yearly ICAM problem as a source or inspiration of exam questions.
For professors who are interested in starting a team there are many things to consider other than substance. These involve selecting and preparing a team. Here at Florida this means trimming a class of 30 or so hopeful students down to a team of 4 to 6. It is a complicated task. We try as much as possible to hold try outs that resemble the actual competition in Vienna. Other coaches know that the ICAM competition requires students to know the facts and law with precision and to have certain mannerisms that the mainly European judges find appealing. For example, speaking slowly is critical since many if not most judges will have English as a second language. Also, the closer the English spoken is to British English, the better. Why? Most of the arbitrators will have learned English abroad. The use of virtually any slang means you should move up your departure date from Vienna because you will not go far in the competition. "Gonna" must be "going to." "Wanna" must be "want to." No "big bucks." No "you guys." etc. If there such a thing as an eloquent yet casual style, that seems to work best. Yes, theater is involved and the coaches are directors as much as teachers. Even "costumes" seem to count. I watched a rather uncomfortable session in which an arbitrator dressed down a competitor who had, well, "dressed down" by not having the top button of his shirt buttoned. I think most coaches would agree the competition starts when the students arrive at the U.S. departure airport because from that point forward they may be rubbing shoulders with the arbitrators they will encounter in Vienna.
Monday, November 17, 2014
In The Blues Brothers, the band performs at Bob's Country Bunker. All things considered, the show goes rather well:
After the show, the Brothers ask to be paid. The owner offered to pay $200 for the performance, but the band owed $300 for beer. Elwood objects that they had been told that they would not have to pay for the first round, but the owner refuses to treat that as a waiver. A student asked me about the scene, and I'm not sure how it might be resolved. I would treat it as a matter of interpretation and expect that a court could hear expert testimony about the customary terms of contracts with bands at establishments such as Bob's Country Bunker.
But then there is a second issue (or third, if you think waiver is the second issue). The Brothers got the gig by pretending to be another band, The Good Ole Boys. So Bob has an argument that he was fraudulently induced to contract with Jake and Elwood. If that is so, they might be better off seeking to recover in quantum meruit, since Bob told them "that's some of the best goddam music we've had in the Country Bunker in a long time." The audience hurled what seemed like hundreds of bottles of beer at the band during the performance, so Bob must have made quite a bit in drink (or projectile) sales. On the other hand, I don't know what it costs to clean up that mess.
Hat tip to Valpo 1L Brandon Carter for calling my attention to the scene and to the fact that he is watching old movies when he should be studying law!
Friday, October 17, 2014
The Alliance for Justice has released a documentary on forced arbitration called Lost in the Fine Print. It's very well-done, highly watchable (meaning your students will stay awake and off Facebook during a viewing), and educational. I recently screened the film during a special session for my Contracts and Advanced Contracts students. It's only about 20 or so minutes and afterward, we had a lively discussion about the pros and cons of arbitration. We discussed the different purposes of arbitration and the pros and cons of arbitration where the parties are both businesses and where one party is a business and the other a consumer. Many of the students had not heard about arbitration and didn't know what it was. Many of those who did know about arbitration didn't know about mandatory arbitration or how the process worked. Several were concerned about the due process aspects. They understood the benefits of arbitration for businesses, but also the problems created by lack of transparency in the process. I thought it was a very nice way to kick start a lively discussion about unconscionability, public policy concerns, economics and the effect of legislation on contract law/case law.
I think it's important for law students to know what arbitration is and it doesn't fit in easily into a typical contracts or civil procedure class so I'm afraid it often goes untaught. The website also has pointers and ideas on how to organize a screening and discussion questions.
Monday, October 6, 2014
The problem is up for the 22nd Annual International Commerical Arbitration Moot. Between now and early December, teams will write the brief for the Claimant. In mid January the brief for the Respondent is due. And then, in March, 200-300 teams from law schools around the world will gather in Vienna for the competition.
There is no limit to the number of students on a team but they must argue in pairs. Typically one student handles the procedural issues and one the substantive or the CISG issues. There are 4 rounds to start with the 64 highest scoring teams moving on to a single elimination tournament.
The problems identify an actual arbitration agency whose rules govern the procedures, This year the procedural issues center around whether the Claimant the right to make an emergency appeal to the arbitration agency and whether the Respondent may join the parent company of the Claimant for purposes of its counterclaim. In one of those puzzles that charactizes the Moot, the parent company "endored" the contract at issue but claims not to be a party do it.
The substantive issue concerns a letter of credit which does not conform (or does it?) to what was called for in the contract. The buyer attempts to "cure" in a sense but the seller says "too late, we have already avoided the contract." Thus, it raises avoidance and cure isssues under the CISG.
This is, at best, a first cut on the problem. As the weeks pass, the problem will reveal itself as the layers are peeled off.
I am happy to trade notes and views with other interested profs.
[In the meantime, try to find the third man.]
Wednesday, July 9, 2014
By Myanna Dellinger
Recently, I blogged here on Aereo’s attempt to provide inexpensive TV programming to consumers by capturing and rebroadcasting cable TV operators’ products without paying the large fees charged by those operators. The technology is complex, but at bottom, Aereo argued that they were not breaking copyright laws because they merely enabled consumers to capture TV that was available over airwaves and via cloud technology anyway.
In the recent narrow 6-3 Supreme Court ruling, the Courts said that Aereo was “substantially similar” to a cable TV company since it sold a service that enabled subscribers to watch copyrighted TV programs shortly after they were broadcast by the cable companies. The Court found that “Aereo performs petitioners’ works publicly,” which violates the Copyright Act. The fact that Aereo uses slightly different technology than the cable companies does not make a “critical difference,” said the Court. Since the ruling, Aereo has suspended its operations and posted a message on its website that calls the Court’s outcome "a massive setback to consumers."
Whether or not the Supreme Court is legally right in this case is debatable, but it at least seems to be behind the technological curve. Of course the cable TV companies resisted Aereo’s services just as IBM did not predict the need for very many personal computers, Kodak failed to adjust quickly enough to the digital camera craze, music companies initially resisted digital files and online streaming of songs. But if companies want to survive in these technologically advanced times, it clearly does not make sense to resist technological changes. They should embrace not only technology, but also, in a free market, competition so long as, of course, no laws are violated. We also do not use typewriters anymore simply to protect the status quo of the companies that made them.
It is remarkable how much cable companies attempt to resist the fact that many, if not most, of us simply do not have time to watch hundreds of TV stations and thus should not have to buy huge, expensive package solutions. Not one of the traditional cable TV companies seem to consider the business advantage of offering more individualized solutions, which is technologically possible today. Instead, they are willing to waste money and time on resisting change all the way to the Supreme Court, not realizing that the change is coming whether or not they want it.
Surely an innovative company will soon be able to work its way around traditional cable companies’ strong position on this market while at the same time observing the Supreme Court’s markedly narrow holding. Some have already started doing so. Aereo itself promises that it is only “paus[ing] our operations temporarily as we consult with the court and map out our next steps.”
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.
Thursday, May 9, 2013
For many lawyers, To Kill a Mockingbird (TKAM) is at the top of their list of "favorite books/movies about a lawyer." TKAM is about more than lawyering, of course. It's about racism, family, class and much more. This week, TKAM also is about "fraudulent inducement," "consideration" (a lack thereof) and "fiduciary duty." All of those subjects are in the complaint filed by TKAM author, (Nelle) Harper Lee, against her purported literary agent.
In the suit, Lee alleges that Samuel L. Pinkus (and a few other defendants) fraudulently induced her to sign her TKAM rights over to one of Pinkus's companies in 2007 and again in 2011. According to Lee, Pinkus, the son-in-law of Lee's longtime agent, Eugene Winick, transferred many of Winick's clients to himself when Winick fell ill in 2006. Pinkus then allegedly misappropriated royalties and failed to promote Lee's copyright in the U.S. and abroad.
For Contracts professors, the Lee v. Pinkus suit provides some interesting hypos to discuss when teaching fraud, consideration, and assignments of rights. Regarding fraud, Lee alleges that Pinkus lied to her about what she was signing at a time when she was particularly vulnerable due to a recent stroke and declining eyesight. Consideration is in play because there allegedly was no consideration from Pinkus to Lee in exchange for Lee's transfer of rights to Pinkus. Assignment issues arose because the many companies who owed Lee royalties reportedly struggled to figure out which company or companies they should pay given Pinkus's many shell companies. Overall, it's a sad story for Ms. Lee but one that students may find particularly engaging.
[Heidi R. Anderson]
p.s. Although there are many quote-worthy passages in TKAM, a favorite of mine (useful when advising students about their writing) is: “Atticus told me to delete the adjectives and I'd have the facts.” Please feel free to share your favorites in the comments.
Tuesday, April 30, 2013
We are grateful to the website Lexology.com and to Ellen D. Marcus of Zuckerman Spaeder LLP for this informative and interesting post about this complaint filed in the Northern District of Illinois by Merry Gentlemen, LLC against actor and director, Michael Keaton. According to the complaint, Keaton breached his contract to act in and direct a film called Merry Gentlemen by failing to deliver it on time and by marketing his own version of the film to the Sundance Film Festival. The film cratered, grossing only $350,000 at the box office. Moreover, the producers allege that Keaton's various breaches caused "substantial delays and increased expenses in the completion and release of the movie," thus causing the producers to suffer "substantial financial loss."
Ms. Marcus's post picks it up there, citing Restatement 2d's Section 347 on the elements of expectation damages and illustrating what sort of sums the producers might be looking to recover. Ms. Marcus has to speculate, as the producers cite no figures beyond those required to meet the amount-in-controversy requirement to get their diversity claim into a federal court.
Whether or not the allegations of the complaint are true, they paint a nice picture of the behind-the-scenes machinanations invovled in getting a film out to the viewing public. According to the complaint, Keaton produced a "first cut" that all agreed was unsatisfactory. There then followed both a "Chicago cut," edited by the producers and by Ron Lazzeretti, the screenwriter and the producers' original choice for director, as well as Keaton's second director's cut.
The producers then shopped the Chicago cut to the Sundance Film Festival, where they were awarded a prime venue. Keaton then allegedly threatened not to appear at Sundance unless his cut was screened. That was a dealbreaker for Sundance, so despite already having sunk $4 million in to the film, the producers claim they had no choice but to agree to screen Keaton's second cut at the festival. They did so through a Settlement and Release (attached to the complaint, but not to the online version) entered into with Keaton, which they now claim was without consideration, despite the recital of consideration in the agreement, and entered into under duress.
Despite all of this, the complaint alleges that the Sundance screening was a success, since the USA Today identified "Merry Gentlemen" as one of ten stand-out films screened that year. But the producers were unable to capitalize on this success, since Keaton's alleged continuing dereliction of his directorial duties resulted in dealys of the release of the film from October of November 2008 to May 2009. The producers allege that the film was a Christmas movie (or at least was set around Christmas time), so Keaton's delays caused the movie to premiere during the wrong season.
The producers allege that Keaton continued to refuse to cooperate with them after Sundance. Somehow, the movie nonetheless was released to some positive reviews:
The movie, as released (based upon Keaton’s second cut and numerous changes made by plaintiff), received substantial critical praise. Roger Ebert called the film “original, absorbing and curiously moving in ways that are far from expected.” The New York Times’ Manohla Dargis called it “[a]n austere, nearly perfect character study of two mismatched yet ideally matched souls.” David Letterman said on his Late Night talk show, “What a tremendous film . . . . I loved it.”
Note to the producers' attorneys: if you've got Roger Ebert and Manohla Dargis in your corner, you don't need Letterman (or The USA Today for that matter).
Nonetheless, the film did not succeed, grossing only $350,000, allegedly because of Keaton's failure to promote it. Indeed, some of the complaints allegations relating to Keaton's promotion efforts suggest some real issues. Upon being asked by an interviewer if she had accurately summarized the film's plot, Keaton allegedly responded that he had not seen it for a while.
We note also that Ms. Marcus's post is cross-posted on Suits by Suits, a legal blog about disputes between companies and their executives, a site to which we may occasionally return for more blog fodder.
Thursday, January 24, 2013
Nancy Kim beat me to the punch by posting about the contract that Bilbo Baggins enters into with Thorin's crew in The Hobbit. I was so upset that she beat me to the punch on the subject matter that I docked her a month salary from her position as contributing editor on the blog.
Now we've both been shown up (and how!), by James Daily, identifed here by Wired.com as
a lawyer and co-author of The Law and Superheroes, [who] typically focuses his legal critiques on the superhero world at the Law and the Multiverse website he runs with fellow lawyer and co-author Ryan Davidson.
Apparently, Mr. Daily got his hands on a replica of the five-foot-long scroll that was used as the contracts prop in the film. He then goes through the contract provision by provision and reaches the following conclusion:
One the whole, the contract is pretty well written. There are some anachronisms, unnecessary clauses, typos, and a small number of clear drafting errors, but given the contract’s length and its role in the film (which is to say not a huge one, especially in the particulars) it’s an impressive piece of work. I congratulate prop-maker and artist Daniel Reeve on a strong piece of work.
He provides a link for those interested in purchasing their own version of the contract, for a mere $500. " If you’d like an even more accurate replica of the contract, Weta’s online store has a version with hand-made touches by Mr. Reeve."
We tip our hats to Mr. Daily.
But I have my own thoughts about the contract that Mr. Daily does not mention. First, the price term of the contract is ambiguous, since it promises Bilbo "only cash on delivery, up to and not exceeding one fourteenth of total profits (if any)," which on my reading does not really guarantee him anything. On the other hand, the dwarves do promise to pay for Bilbo's funeral expenses, if necessary, so I think under the contract terms, he's better off dead.
This ambiguity is only partially clarified with the later provision that "the company shall retain any and all Recovered Goods until such a time as a full and final reckoning can be made, from which the Total Profits can then be established. Then, and only then, will the Burglar’s fourteenth share be calculated and decided." While this provision would strengthen any potential argument Bilbo might make that he should get no less and no more than a fourteenth share, if the contract does not define "full and final reckoning," he might have to wait quite some time to get that share, perhaps beyond his own final reckoning, and then it's Frodo's problem.
In addition, to address a matter of genuine concern; i.e., one that actually plays a role in the book, the contract does not specify the manner of delivery of payment. As Bilbo points out in Chapter 18 (spoiler alert: the mission to recover Smaug's treasure was a success), "How on [Middle] earth should I have got all that treasure home without war and murder all along the way, I don't know." Mr. Daily offers a solution: since the contract does not actually entitle Bilbo to any protion of Smaug's treasure but only to the value of a 1/14 share, the Dwarves could have wired a check to Bilbo's bank in the Shire (or the Middle Earth equivalent to a wire transfer). But in the book, Bilbo waived his right to the spoils of war beyond "two small chests, one filled with silver, and the other with gold, such as one strong pony should carry."
The fact that he did so suggests that really no part of the contract mattered much in the end. And that is as it should be, since the bonds formed by those who joined Thorin's crew went well beyond those that can be reduced to any writing or even to any trilogy of films.
[JT, with hat tip to Mark Edwin Burge of the Texas Wesleyan School of Law for directing us to the Wired.com site]
Monday, December 31, 2012
The other night, I finally got to see The Hobbit: An Unexpected Journey. Having recently spent several months in New Zealand (the home of Peter Jackson’s Weta studio), I had been surrounded by Hobbit-mania and was interested to see whether the movie proved worthy of the hype. I wasn’t disappointed. Although some critics were, well, critical, I thought it was an extremely entertaining movie that made time fly. Making a highly entertaining movie even better, a lengthy contract played a pivotal role. When Gandalf the Wizard, and Thorin and his company of dwarves seek Bilbo Baggins’ (i.e. the aforesaid hobbit’s) assistance to accompany them as burglar on an unexpected journey, they first ask him to sign a contract. The contract, several pages long, outlines in detail his compensation (i.e. consideration) and contains warnings and numerous disclaimers of liability in favor of Thorin & Co. Being a wise hobbit, Bilbo actually reads the contract, faints, and then refuses to sign it. The next morning, he awakens to a quiet house (dwarves know how to party, but apparently do so responsibly). Bilbo has a change of heart, decides he does want excitement and adventure, signs the contract, picks it up, and runs out of his house to join the departing dwarves. This is where --for a contracts prof -- the tension is most high. Having rejected the terms of the contract the night before, we know that the hobbit no longer has the power of acceptance. Therefore, when Bilbo thrusts his signed contract into the hands of one of the dwarves, he is only making an offer. It is the dwarf (who apparently has authority to accept on behalf of the other dwarves) who has the power of acceptance. I don’t think I need a spoiler alert before revealing that they do accept (there wouldn’t be much of a movie if they didn’t).
There were so many things to like about the movie, not the least of which was the way it illustrated how relational contracts set expectations, shape relationships and establish trust. At one point, Bilbo seeks to desert the dwarves. Although one could argue changed circumstances, I think a better explanation would be that given Thorin’s disparaging comments about Bilbo’s suitability for the journey, Bilbo decides to adjust his performance obligations accordingly. But events (and the always fascinating Gollum) intervene. In the end, Bilbo carries out his contractual obligations, proving that - even in Middle Earth - contracts are alive and well.
Thursday, September 20, 2012
As reported here by Entertainment Weekly, Anthony Puzo (“Puzo”), son of Mario Puzo—well-known author of popular mafia novel “The Godfather”—has alleged, on behalf of the Puzo Estate (the “Estate”), material breach of contract and tortious interference on the part of Paramount Pictures (“Paramount”), and has petitioned a Manhattan federal court to deny Paramount the right to make future Godfather films.
Paramount first brought suit in February of 2012 seeking to enjoin the Estate from publishing sequel novels written by new authors using elements and characters from “The Godfather.” Paramount sought a court declaration that a 1969 agreement that it entered into with Mario Puzo had granted it all rights and copyright interests, including literary rights and rights to the usage of its characters in any sequel or variation of “The Godfather.” Paramount claims that the only right left to the Estate was the right to publish the original novel.
However, in his Counterclaim, Anthony Puzo alleges that his father deleted the language that would have granted Paramount the exclusive right to publish any versions or adaptations of “The Godfather”, and instead opted to retain those rights himself (rights which, if so retained, now belong to his Estate). In addition, Puzo claims Paramount tortiously interfered with contracts between the Estate and Grand Central Publishing Company and Random House, which have agreed to publish various novels using characters from “The Godfather” written by new authors.
Puzo claims Paramount has attempted to either delay, or prevent entirely, the publishing of the new novels. In light of Paramount’s conduct, Puzo and the Estate seek a termination of the 1969 agreement and, which would then permit the publication of the books at issue and whatever else might follow. In addition to declaratory relief, Puzo seeks actual damages expected to be in excess of $5 million, punitive damages for Paramount’s alleged malicious conduct and costs of the suit.
As reported here on boston.com, the Estate-commissioned novel, “The Family Corleone,” was published in May, but profits from the book are to remain in escrow until the litigation between the parties has been settled.
[Christina Phillips & JT]
Friday, June 15, 2012
I previously blogged about the parol evidence rule and interpretation issues at the heart of a dispute between Dick Clark Productions ("DCP") and the Hollywood Foreign Press Association ("HFPA") over broadcast rights for the Golden Globes. I now have two updates.
First, the District Court has ruled in favor of DCP in a 89-page opinion posted here by the Hollywood Reporter. Pages 65-78 contain the arguments and holdings regarding the "plain meaning" of the modified contract and the use of extrinsic evidence (citing the commonly-used PG&E case). Pages 79-81 review HFPA's argument that there was no consideration for the modified contract. The opinion even contains a helpful discussion of mistake at pages 81-83.
The second update is that Dick Clark Productions reportedly is up for sale (less than two months after Dick Clark's passing). It would be interesting to see the DCP-HFPA contract provisions regarding assignment and change of control. Perhaps there will be a post-sale lawsuit as well.
Ultimately, I predict that this case appears in Contracts casebooks very soon. The combination of issues, the high profile nature of the dispute, and the short contractual provision itself, all make it a great candidate. As one lawyer said to the LA Times,"So much litigation over 12 words...."
Stay tuned (pun intended).
[Heidi R. Anderson]
Wednesday, May 30, 2012
This weekend, I had a chance to see Tim Burton's latest, Dark Shadows. I mention it because it contains a tidbit about our favorite subject here at the blog - CONTRACTS. If you saw the movie, you might be wondering - huh? Too distracted by the blood (there's a vampire, what d'ya expect) and the erratic tone, you might have missed it. In fact, there are two scenes where contracts play a pivotal role. The first is when Johnny Depp's character, Barnabus Collins, approaches a fisherman honcho (I can't remember his name) and tries to get him to break his contract with the evil Angelique (I won't go into the details but basically Barnabus and Angelique are running competing fish canneries). You might be thinking, That's interference of contract, right? That's a tort - what's it doing on this blog? But when the fisherman honcho refuses to do it, professing loyalty (and embodying the notion that trust plays a vital role in contract performance), Barnabus puts him under a spell. I'm not quite sure whether that would constitute duress - there's no "improper threat", although there is "no reasonable alternative" and the so-called assent certainly wasn't voluntary. I think a stronger defense for the fisherman honcho would be a variation of an intoxication or insanity-like defense to show that he wasn't in his right mind and the assent was not voluntary.
The second contractual plot point sees Barnabus under duress this time. Angelique makes Barnabus an offer he can't refuse - in other words, she makes an improper threat that leaves him with no reasonable alternative. But rather than taking it, he makes her a "counterproposal" which is that she kiss off (or something along those lines). It's not really a counteroffer though, since there's no bargain. It's really just a rejection that he phrases as though it were a counteroffer - Hollywood again playing fast and loose with contract doctrine. Angelique, of course, hates being rejected. Her response is to throw him in a box (aka a coffin) and lock him up for eternity -- proving that there really was no reasonable alternative for ol' Barnabus. (Of course, he can't use duress as a defense because he took the unreasonable alternative to be locked in a box).
Anyway, other than the contract issues, the movie didn't really work for me. But reasonable minds may differ.
Tuesday, May 1, 2012
Film financer David Bergstein has filed suit against the his co-venturers in the 2010 acquisition of the Miramax Film Company (Miramx). Bergstein alleges that his former business partners denied him money and an equity stake owed for his role in the acquisition of the film label from the Walt Disney Company. The suit, filed in Los Angeles Superior Court, is for breach of contract, fraud, unjust enrichment, and other claims, and named as defendants Miramax Chairman Richard Nanula, Colony Capital and Filmyard Holdings. According to the Chicago Tribune, non-party Ron Tutor and his group of partners created Filmyard Holdings to finance the deal for Miramax and control the studio after the sale was complete. Colony Capital, an investment firm, was one of the investors, and Nanula, a former Disney executive who is now Miramax’s chairman, is one of Colony’s principals.
Bergstein claims that he is owed tens of millions of dollars for his part in structuring and negotiating the purchase. Bergstein acknowledges that he was paid his $6.1 million “Closing Fee” but claims that he is owed an additional $6.1 million “Transaction Fee.” In addition, Bergstein maintains that, although he was originally promised a non-dilutable 5% stake in the equity of the transaction, he agreed to reduce his non-dilutable stake to 3.3%, in return for a promise from Colony that his interest would not be further reduced. He claims that defendants then sought to further reduce his stake “[a]s soon as the ink was dry on the operative agreements.” The heart of the suit seems to be a claim that his share was further diluted by transactions about which the defendants have refused to provide information.
As reported by The Wrap, Bergstein has been a controversial figure in the movie industry in recent years and has said that Nanula and other investors planned to use the bad publicity surrounding his legal problems as a way to keep from honoring their deal. As the complaint in this case makes clear, Bergstein can give as good as he gets when it comes to bad publicity.
Monday, April 23, 2012
Last night, I watched Tim Burton's "Big Fish," a film that somehow escaped my notice when it first came out. The film is a collection of tall tales told by the protagonist's father. The father is a gifted raconteur, but the son is troubled by the fact that the autobiographical stories the father tells are all lies, and as the father nears death, the son despairs of knowing his real father.
In any case, the film illustrates two means of entering into a contract, written and oral, in rapid succession. The first contract is between Amos (played by Danny DeVito -- pictured left) and Karl (played rather hauntingly by the late Matthew McGrory). The second is between Amos and the young father (Edward Bloom, played by Ewan McGregor).
Here are the contracts scenes from the script:
AMOS Tell me Karl, have you ever heard of the term "involuntary servitude?" Karl shakes his head. AMOS "Unconscionable contract?" Nope. AMOS Great, great. That's fantastic.
Karl then signs the contract on the back of a clown, whom Amos introduces as his attorney, Mr. Soggybottom. Meanwhile, Edward has caught sight of a beautiful woman, played as a young woman by the beautiful Allison Lohmann and played as an older woman by the even more beautiful Jessica Lange. Amos knows who she is, but he at first refuses to help Edward find her.
EDWARD I'll work night and day, and you won't have to pay me. You just have to tell me who she is. Amos takes a long look at him. Ultimately, there's no way he can say no. He shrugs. What the hell. AMOS Every month you work for me, I'll tell you one thing about her. That's my final offer. Edward shakes Amos's hand before he can retract the offer. We move into a MONTAGE:
Shockingly, DeVito plays an unscrupulous circus impressario. But he honors his contract with Edward, even though it doesn't seem like something he would do. Still, Edward has to work for three years before he discovers the identity of his true love.
Here's a trailer to give a better flavor of the film:
Wednesday, January 11, 2012
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 Frigaliment, Lumley, 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).
Friday, November 25, 2011
As you may have heard, the new Muppets movie is out. Yes, your old favorites are back - Kermit, Miss Piggy,Fozzie Bear, the whole gang. You might have also heard that there's a new star in the movie. No, not is-he-a-man-or-a-muppet Walter. It's....a CONTRACT! That's right, the star of the new Muppets movie is a long, scrolled, fine print contract signed by none other than Kermit the Frog. The entire plot hinges on it. Without giving too much away - (c'mon, the Muppets are not about cliff hangers) - a condition in the contract requires the Muppets to raise $10,000,000 by a certain date or else they lose their beloved, but now decrepit and abandoned, theatre. A real live condition - but is it a condition precedent or condition subsequent? In addition, there are issues of nondisclosure (there's oil under the theatre, but the evil Tex Richman isn't telling). Is there a duty to disclose? When did Tex learn about the oil - at the time the contract was formed? Does it matter? Was Kermit tricked? Is the contract unconscionable? And finally, there's the interpretation issue -- the "theatre" is also called a "studio." Is it the same building? Is there possibly a misunderstanding here? Strangely, the Muppets movie doesn't even try to answer these questions. No, they make the movie all about finding love and relevancy in the digital age. But we contracts profs know - as Tex Richman's henchmen point out - the contract is the critical plot point. There would be no movie without it. Keith Rowley - are you listening? Pirates of the Carribean - make way for the Muppets!
Saturday, October 22, 2011
John Singleton, director, producer, writer, overall film extraordinaire, now may add "plaintiff in a breach of contract action" to his long resume. Singleton's case and claims somewhat mirror those of a modern Contracts casebook staple, Locke v. Warner Bros, Inc. Singleton, like the actress/director plaintiff in Locke, claims, inter alia, that a production company, Paramount Pictures, breached the implied duty of good faith and fair dealing (as well as some express promises) when it failed to finance at least two of Singleton's later-proposed film projects. According to the complaint, Singleton previously had traded some of his rights to two highly acclaimed films, Hustle & Flow and Black Snake Moan, in exchange for cash and for Paramount's promise to finance two of his future projects, subject to some conditions. Paramount's defense likely will be that those conditions were not satisfied. And just for good measure, Singleton's complaint also includes an unjust enrichment claim, the basis of which is that he would have demanded more cash for his Hustle & Flow and Black Snake Moan rights had he known that Paramount would not finance the later pictures. Thus, the case could be useful in illustrating various contract law concepts to a group of students, some of whom were not even born when Boyz N the Hood was released.
[Heidi R. Anderson h/t (and it pains me to type this) TMZ]
Monday, August 1, 2011
The Southern District of New York issued its opinion last week in Marvel Worldwide v. Kirby. The New York Times describes the decision, which granted summary judgment to Marvel, as a major victory for the comic book company and its parent, the Walt Disney Company.
Jack Kirby, whose heirs brought the suit, played a key role in developing a number of important characters in recent movies, such as The Incredible Hulk, Spider Man, Iron Man, Thor (trailer below), and the X-Men. We learn from the Southern District's opinion that these stars of the silver screen got their start as comic book characters. Who knew?!? Kirby's heirs send notice to Marvel in 2009 that they intended to reclaim ownership of Mr. Kirby's creations under the 1909 Copyright Act, but Marvel brought suit seeking a declaration that the property at issue belonged to Marvel and not to Mr. Kirby, because Mr. Kirby had created them as part of a "work for hire" arrangement. Under federal copyright law, the work product created in such circumstances belongs to the employer.
Although Mr. Kirby's heirs argued that his work product was not the result of a "work for hire" agreement with Marvel, the District Court disagreed and ruled that the property belonged to Marvel alone. During the relevant period when Mr. Kirby created the characters at issue, Mr. Kirby never had a written contract with Marvel. Rather, he was a freelance writer paid based on the number of pages that he drew that Marvel used in its comics. Later, in 1972, Mr. Kirby entered into an agreement with a Marvel predecessor assigning all rights he might have in material that he created to Marvel. The same agreement acknowledged that Kirby had created such material in the context of a work for hire relationship.
The Kirby heirs tried to argue that the lack of a written contract during the relevant period meant that there was no contractual relationship between Kirby and Marvel at the time the characters were created. The District Court pointed out that the contract arose through conduct. The court found that the characters at issue were created at Marvel's "instance and expense" and that the Kirby heirs could not rebut the resulting presumption in favor of Marvel's "authorship" for copyright purposes of the characters.
Marc Toberoff, the Kirby family's attorney was respectfully defiant. As quoted in the New York Times, he said, “We respectfully disagree with the court’s ruling and intend to appeal this matter to the Second Circuit. Sometimes you have to lose to win.”
Friday, July 29, 2011
For anyone in need of a current case/hypo to help illustrate promissory estoppel (and perhaps the statute of frauds along with unjust enrichment), consider the latest suit filed by famous actor, Joe Pesci. In his breach of oral contract complaint,* Pesci claims that he was promised the role of round-faced Angelo Ruggiero in a new film about famed gangster, John Gotti, to be played by John Travolta. In reliance on that promised role, Pesci abandoned his usual diet and exercise routine and gained thirty pounds to look more like Ruggiero. After the weight gain, producers advised Pesci that he no longer would be playing Ruggiero in exchange for the initially-promised $3 million; instead, he would be offered a lesser role (playing the man who allegedly killed Gotti) for $1 million. Pesci alleges that the film producers were enriched because they used his established mobster-playing cache to help promote the movie and obtain funding. The film's current producer claims that Pesci was the one who backed out of the deal after Pesci's preferred director, Nick Cassavetes, quit. Pesci acknowledges that there was no written contract but a signed writing likely would not be required in this case. If Pesci can't show an otherwise valid oral contract, promissory estoppel issues to ponder include...Was there an actual promise? (Pesci points to a press conference and a website announcement as possible sources of the promise.) Was Pesci's reliance reasonable? Is there injustice absent enforcement of the promise? And what exactly are his damages?
* Pages missing