Wednesday, March 2, 2016
This case out of California, Gilkyson v. Disney Enterprises, Inc., B260103, involves the song "The Bare Necessities," which, as you can see from the above, is readily available on YouTube. The song was written by Terry Gilkyson (this might come up in a trivia competition someday, you never know). His adult children are the plaintiffs in this case.
In the 1960s, Gilkyson wrote several songs for Disney pursuant to a work-for-hire contract under which Disney was deemed the author and owner of the songs and Gilkyson was paid $1,000 per song together with ongoing royalties for certain licensing. The contract specifically excluded royalties for use of the songs in "motion pictures, photoplays, books, merchandising, television, radio and endeavors of the same or similar nature." Disney has paid royalties on the song to Gilkyson and his heirs but Disney has never paid royalties for use of the songs in any audiovisual medium, including DVDs. The Gilkyson heirs disagree with Disney's interpretation of the contract and believe that they are entitled to royalties for use of the songs on VHS tapes and DVDs. Disney argues that the four-year statute of limitations on breach of contract actions bars all of the Gilkysons' claims, because all of the VHS tapes and DVDs complained about were first issued sometime prior to 2007. Therefore, according to Disney, Gilkyson should have brought this claim by 2011, not, as it did, in 2013.
Disney loses this argument, however, based on the continuous accrual doctrine: "[E]ach breach of a recurring obligation is independently actionable." Basically, California law interprets the contract with Disney as being divisible, with each breach of that contract actionable and subject to its own statute of limitation period. Therefore, the court concluded that the Gilkysons could seek recovery of the royalties that were due for a period beginning four years from the filing of their complaint (so, from 2009 onward). According to this court, the California state court jurisprudence on this appears to be clear (although note that, at the trial court level, this case was dismissed without applying the continuous accrual doctrine). Disney pointed to a Central District of California case from 2001 that rejected the plaintiff's continuous accrual doctrine argument, but this California state court noted that it did so without any citation to any California case and that this court disagreed with that case's conclusion.
So it's on to the next step for these parties: fighting over the interpretation of the contract. Or settlement.
Monday, February 22, 2016
Last weekend I watched, for the first time in my adulthood, "Willy Wonka and the Chocolate Factory." The 1971 version with Gene Wilder. I've never seen the more recent version with Johnny Depp, but, after reacquainting myself with Gene Wilder's Willy Wonka, I ask you why you would ever need another Willy Wonka. Wilder is perfect.
~~SPOILERS FOR THE MOVIE BELOW~~(IF YOU HAVEN'T SEEN IT, GO WATCH IT NOW, IMMEDIATELY. YOU HAVE SO MUCH TIME AND SO LITTLE TO DO. WAIT. STOP. REVERSE THAT.)
Because it was the first time I'd seen it since going to law school, it was also the first time I'd thought about it from the legal perspective. And, weirdly, contract law actually plays a central role in the movie. As soon as the children enter the factory, Wonka has them sign a contract.
Just the children, not their accompanying guardians, which is interesting to me, as I would have had everyone sign it. You'd think Wonka would be just as worried about the adults handing over Everlasting Gob-Stoppers to the competition, but then again, since the whole thing was just an elaborate set-up, I guess he didn't care. The only clause we can really see in the contract is a gigantic release from liability provision. The adult characters are instantly suspicious of the contract. They raise the argument that they need to read it before they sign it (an act which appears to be actually impossible, given the vanishing print at the bottom). Wonka sort of shrugs and says, "Eh, if you don't sign it, you can't come in." It seems to me like there's a good argument that there's procedural unconscionability showing up, given that Wonka's made it impossible to actually read the contract and is dismissive of their desire to know what they're signing before they enter the factory. Of course, the flipside to that is the flipside that almost always comes up when you talk about unconscionability: No one is forcing these people to tour the factory. They can walk out if they like. They don't have to enter the crazy Willy Wonka contract.
The other issue raised by this scene is that the children are all minors, so this contract is voidable.
(This scene also gives you the timeless assessment that contracts are "for suckers.")
The children all sign the contract, of course. (That would make for an interesting movie: Responsible Legal Decisions in Response to Willy Wonka's Craziness. Everyone turns and walks out instead of entering the factory run by the creepy guy no one's seen in years.) (Wonka really should be so much creepier than he is. I'm telling you, Wilder is genius in this role.)
Having signed the contract, they are let loose in the wonders of the factory, where they immediately proceed to get themselves grievously injured one by one, all taken in casual stride by Wonka, perhaps buoyed by his release from liability provision:
The conclusion of the movie, once again, revolves around contract law. Charlie inquires as to the lifetime supply of chocolate he's supposed to receive, and Wonka points out that he's no longer entitled to it because he breached the contract he signed at the beginning. Wonka quotes the contract, and my main reaction to it is to shake my head and say, "All those Latin words! All those hereinbefores!" It's an excellent example of an incomprehensible contract. I propose we start calling all contracts filled to the brim with Latin and hereinbefores "Wonka contracts." And my second reaction is: That's another movie I'd watch: Willy Wonka in Law School.
(Random fact, but the actor playing Charlie apparently did not know that Wilder was going to yell so furiously in that scene. His startled reaction is genuine.)
Don't worry, if you haven't seen the movie, there's a happy ending.
One closing thought on Willy Wonka and contracts. I figure that there are two choices when it comes to Contracts classes: You're either the room of Pure Imagination...
...or you're the tunnel scene...
Wednesday, December 2, 2015
Do you need a three-minute break with some adhesion-contract humor? Want to restore your faith that there is some utility to the unconscionability doctrine? Watch the video linked at the end of the excerpt below from Elite Daily. Here is their lead-in:
How many times have you checked off “agree to terms and conditions” without reading said terms? The better question may be, have you ever read any terms and conditions before signing?
Many times, you’re signing away any right to the content you share, including photos and videos, while allowing big companies to make huge profits off your work. Often, you’re signing away your private data, addresses, friend’s information or more. You’re also usually signing away your right to ever take legal action against the company.
YouTuber Jena Kingsley wanted to prove just how quickly we will all sign away our information for the chance at gaining something for free. But, as the saying goes, you never get something for nothing.
Check out just how fast people will sign up to win a free iPad and the hilarious consequences that follow, in this video.
H/T: Miriam Cherry (St. Louis University)
Tuesday, December 23, 2014
I recently saw the last Hobbit movie, The Battle of the Five Armies. I found it highly entertaining and was delighted to find a discussion about contracts between Bard, the leader of Laketown, and the King of the Dwarves, Thorin Oakenshield, during a pivotal moment in the movie. The two engage in a back-and-forth about the meaning of a bargain, contract defenses (coercion and duress), and the importance of keeping promises. In short, all the issues that come up regularly on this blog. This isn't the first time that contracts have come up in a Hobbit movie. The morality of promise-keeping is an important theme in the movie as it has been in the others.
Speaking of the Hobbit, the Weinstein brothers have lost their fight against Warner Bros. over the profits to the last two Hobbit movies. As discussed previously on this blog, the issue involved the meaning of "first motion picture" of each book but not "remakes." The Hobbit book was split into three movies and the Weinsteins argued that they should get a percentage from each movie; Warner Bros. claimed that they should only get royalties from the first Hobbit movie. Unfortunately for contracts enthusiasts, the matter was sent to arbitration against the wishes of the Weinstein Bros. who wanted it to play out in court so we may never find out the basis for the arbitrator's ruling.
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!
Tuesday, August 12, 2014
On HBO’s Last Week Tonight, John Oliver was joined by Sarah Silverman and they took on the payday loan industry. Here's the clip (NSFW, especially Sarah Silverman's bit at the end):
From the pseudo PSA at the end of the clip: “Hi, I’m Sarah Silverman. If you’re considering taking out a payday loan, I’d like to tell you about a great alternative. It’s called ‘anything else.’ The way it works is, instead of taking out a payday loan you literally do anything else.”
[Meredith R. Miller]
Monday, August 4, 2014
Christopher Gorog was the CEO of Roxio, Inc., which acquired Napster in 2002. He thereby become the CEO of Napster, which was acquired by Best Buy in 2009. Gorog entered into an Employment Agreement with Best Buy, which provided that he would stay on as a Napster employee, with Napster now a wholly-owned Best Buy subsidiary. The Employment Agreement included a $3 milllion performance award to which Gorog would be entitled based on his and the company's performance on four target dates if he were still employed by Napster.
At the end of 2009, Gorog resigned. In 2011, Best Buy sold Napster to Rhapsody, an Internet Music Service. Gorog signed a Separation Agreement which provided that Gorog’s employment would be terminated without cause and that Gorog would not release any claims to a performance award. Gorog sued claiming that he was entitled to performance awards despite his resignation. The District Court found that Gorog's best arguments rose under Section 2.4(b) of the relevant Award Agreement:
(b) If, prior to the end of the Performance Period, your
employment is terminated by Napster without Cause or you
terminate your employment with Napster for Good Reason,
the Performance Period will continue and you will be
entitled to receive a Performance Award equal to a pro-rata
portion, based on the number of Whole Months you served
during the Performance Period, of the Performance Award
that otherwise would have been earned in accordance with
the Performance Criteria Schedule . . . .
The Distirct Court dismissed Gorog's claims finding that he did not meet the performance criteria under the section.
In appealing to the Eighth Circuit in Gorog v. Best Buy, Inc., Gorog relied on Section 2.4(c) of the Award Agreement which he claimed was not mutually exclusive with Section 2.4(b). Section 2.4(c) provides that
If, prior to the Performance Target Date, majority
ownership of Napster (or any successor entity) is sold by
Best Buy or spun-off to its shareholders, or if the venture
ceases operations (the “Event”), you shall be entitled to
receive a Performance Award equal to 100% of the
Performance Award Target Value, regardless of whether
the Performance Criteria have been met. . . .
Gorog claimed that the fact that he was no longer employed at Napster was irrelevant to the question of his entitlement to a performance award, as that award was triggered by the sale of Napster.
The Eighth Circuit sided with Best Buy, which argued that the two provisions are indeed mutually exclusive. Read in context, the Court noted, each section of Section 2.4 relates to conditions of Gorog's termination that would entitle him to a performance award. The Court also found no way to reconcile Gorog's claim that the provisions of Section 2.4 were not mutually exclusive with other terms in his agreement with Best Buy.
Once again, life fails to imitate art (if the amusing heist movie The Italian Job is art):
Thursday, September 26, 2013
NFL v. MIA: we've mentioned issues related to this incident on this blog in the past. But, if you ask me, it just got good.
Here's the background: at the 2012 Superbowl, this little flip of the bird happened during the halftime show:
The NFL has since sued (in arbitration) M.I.A. (the bird-flipping artist in the video above) for $1.5 million. The NFL’s claim? It claims that M.I.A. breached her contract because the “offensive gesture” was “in flagrant disregard for the values that form the cornerstone of the NFL brand and the Super Bowl." In the contract, she apparently acknowledged “the great value of the goodwill associated with the NFL and the tremendous public respect and reputation for wholesomeness enjoyed by the NFL."
The case, it sounds, comes down to what is “offensive” and what exactly are the “wholesome” values of the NFL. This FoxSports column does a great job explaining why the lawsuit is “laughable” – with video footage as evidence of just how wholesome the NFL is.
A video of M.I.A. has recently surfaced. In the video, she (rather articulately) explains the absurdity of the lawsuit. As 411Mania.com describes:
[M.I.A.] says the NFL is "scapegoating me into trying to set the goalpost for what is offensive in America." She notes that the picture in which she is seen giving the middle finger also has a group of sixteen year-old girls who were selected from a high school in Indianapolis who are in cheerleader outfits with their "hips thrusted in the air, legs wide open, in this very sexual...sexually provocative position."
Here’s M.I.A. regarding the lawsuit, which she describes as "a massive display of... powerful corporation dick shaking." In light of the 16-year-old cheerleaders on stage behind her, she frames the issue in the lawsuit as whether female sexual exploitation or empowerment is more offensive. Interesting stuff:
[Meredith R. Miller]
Friday, August 16, 2013
Touro Law starts up on Monday. Around this time of year, I am always reminded of this Rodney Dangerfield clip from the movie Back to School:
Dangerfield to Econ Prof: "What's a widget?"
Econ Prof: "It is a fictional product. It doesn't matter."
Dangerfield: "Doesn't matter? Tell that to the bank."
Have a great semester!
[Meredith R. Miller]
Friday, February 15, 2013
CNN's Erin Burnett did some intrepid reporting and "went to book a cruise . . . on Carnival so we could look at the contract..." The contract apparently says that, even after 5 days of being stuck on a disabled ship with no electricity or plumbing, "you're out of luck":
Shute v. Carnival Cruise Lines reprise?
[Meredith R. Miller]
Tuesday, February 12, 2013
We had previously blogged about the demand letter that Donald Trump sent to Bill Maher. Maher dedicated a segment on his show to the dispute, taking aim at Trump's lawyer. Maher begins: “Donald Trump must learn two things: what a joke is and what a contract is.”
The segment is reminiscent of the Leonard v. Pepsico decision when Judge Wood takes on the task of explaining why the harrier jet commercial was "evidently done in jest." Here, Maher continues the humor in explaining why it was parody when challenged Trump to prove that he (Trump) was not born of an orangutan.
Here's the clip:
[Meredith R. Miller]
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.
Wednesday, December 5, 2012
In a recent episode of 30 Rock ("Mazel Tov, Dummies!"), Liz Lemon (Tina Fey) gets married. Liz attempts to subvert the wedding industrial complex by tying the knot in her gym clothes at City Hall. She fights any desire to make it a "special day," leading her boyfriend/fiance to tell her "it is ok to be a human woman."
Interesting for our purposes: there is a sub-plot in the episode that is reminiscent of Leonard v. Pepsico. It begins at a little past 4 minutes into the episode. A creepy character played by John Hodgman comes to collect a woman (the character Jenna Maroney) that he says he earned by collecting $1,000,0000 Surge points. Surge is a soda and his claim to the money is based on a tv advertisement. The Surge points catalogue entitles Hodgman to the item or its equivalent value. Since it is "illegal to own someone," Jack Donaghy (Alec Baldwin) has to determine Jenna's value (and Jenna is not happy with the assessment of her worth).
Take a study/grading break:
[Meredith R. Miller - h/t 1L Matthew Gray]
Tuesday, August 14, 2012
Docracy is an open source legal document site. The site has launched a video campaign called "Don't Get Screwed Over" - it very effectively conveys the importance of freelancers having written contracts:
A free open source contract site is a great idea. I am not convinced, however, that it obviates the need for an attorney. That said, it is true that, regardless of whether an attorney is involved, freelancers should always get their deals in writing and carefully express expecations and payment schedule. The site's founder Matt Hall appears to share in my sentiment and believes that his site is a starting point for freelancers to figure out what they need and to find an attorney. Hall told .net magazine:
[T]he video was designed to "make sure freelancers are aware how important it is to have a contract for work they do, and that there are resources like Docracy that can take the fear and mystery out of the process". He said it's increasingly common that freelancers don't get paid for work they've done, starkly highlighted by projects like the World's Longest Invoice.
Hall recommended "upfront and clear communication with your client about what's expected, when it's expected and when you'll be paid", and then getting this all down in writing and signed. "Clear communication can go a long way to avoiding problems in the future," he added. And while Docracy can be a starting point, Hall said such sites are not a replacement for proper legal advice: "A good lawyer who understands your business will save you money over the long term, so get educated and then find a good lawyer you like working with. We have a bunch of great, tech-savvy lawyers on the site who have already shown their willingness to help freelancers, so they might be a good start."
[Meredith R. Miller]
Friday, May 25, 2012
Since Meredith has decided to take an unpaid leave-of-absence this summer, we have to take some short-cuts to make sure we can continue to feed our readers' voracious hunger for new contracts-related stimuli.
Here, for example, is a YouTube clip that bears the caption "All I need to know about contracts"
The comments following the video suggest that 1) Charlie Brown's cause of action would lie in promissory estoppel, not in contract; or 2) that the contract is binding if signed by both parties even in the absence of notarization.
As Charlie Brown might say to express exasperation in this context, *Sigh*. Isn't this obviously a case of tort rather than breach of contract? What contractual damages has Charlie suffered? What non-tort damages would he have based on a theory of promissory estoppel?
Thursday, May 24, 2012
Tuesday, November 8, 2011
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]
Thursday, November 3, 2011
Wednesday, June 22, 2011
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]
Wednesday, February 9, 2011
Yesterday's New York Times reported that Beverly Hills, California has let go its ambassador, Gregg Donovan, who for the past decade has greeted tourists in a top hat and red tailcoat with polyglot shouts of "Welcome to Beverly Hills!" According to the Times, the official position of Beverly Hills Ambassador was created to help establish a friendlier atmosphere on Rodeo Drive after it developed a bad reputation when a fictional storekeeper demeaned a fictional prostitute played by Julia Roberts in a film about how the real lives of prostitutes are really quite a bit like the lives of every other character Ms. Roberts has ever portrayed. This is a bit confusing, since as the clip below illustrates, the simple solution is not to have the government throw money at problems by hiring yet another public employee at taxpayer expense. The solution, as any self-respecting woman knows, is to have a rich guy pay to enhance the self-esteem of working women.
Although Mr. Donovan is "without a doubt" the human being most photographed by tourists in the world, we have no copyright-free photograph to share, perhaps in part due to a contract dispute over Beverly Hills' right to continue to use Mr. Donovan's image in its brochures. When Beverly Hills gave Mr. Donovan his notice, it sent him a separation agreement in which he was to permit the city to continue to use his image in its promotional materials. Mr. Donovan refused to sign. According to the Times, he will still occasionally shout greetings to people on Rodeo Drive, just out of sheer love of his vocation, but he is also looking for other gigs.
Anybody out there looking for an ambassador? New York? Hollywood? Las Vegas?
Actually, after The Paper Chase, perhaps Harvard Law would benefit from an ambassador in Mr. Donovan's mold.