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Valparaiso Univ. Law School

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Friday, July 3, 2015

Weekly News Roundup

Trump
By Michael Vadon via Wikimedia Commons

Late night comedians everywhere celebrated when Donald Trump (pictured) announced his candidacy for President.  We too are grateful for the blog fodder.  Politico reports that the Donald is suing Univision over its decision to withdraw from a five-year $13.5 contract to broadcast the Miss USA and Miss Universe Pageants, which Trump co-owns.  As Time Magazine reports here, NBC has also backed out of airing the Miss USA Pageant, and several people involved have also given the Donald their notice.  Trump's partners were upset by statements he made as part of his Presidential campaign that disparaged Mexico and Mexicans.  Never fear, the pageant will still be broadcast on Reelz (whatever that is).  

Meanwhile, London's The Guardian reports that Harvey Keitel is suing E*Trade for withdrawing from a commitment with Keitel to feature him in a series of three commercials for $1.5 million.  According to The Guardian, E*Trade really wanted Christopher Walken for the spots.  It was willing to settle for Keitel, until Kevin Spacey became available.  E*Trade offered Keitel a $150,000 termination fee, but Keitel says that's not enough.

Students are often astonished that major corporations sometimes operate through informal arrangements such as letters of intent.  The fact that they do -- and that they can get in trouble by doing so -- is illustrated in Belfast International Airport's (BIA) attempt to enforce a letter agreement with Aer Lingus.  As reported by the BBC, BIA read the letter as embodying a ten-year commitment from Aer Lingus to fly out of BIA.  The court found that the agreement merely covered pricing should Aer Lingus continue to fly out of BIA for ten years.  Aer Lingus decided to switch to Belfast City Airport, claiming that its arrangement with BIA was no longer financially viable.

July 3, 2015 in Celebrity Contracts, E-commerce, In the News, Television, Travel | Permalink | Comments (0)

Monday, June 29, 2015

SCOTUS decision on the Spiderman Contract

Given the major U.S. Supreme Court opinions that were released last week, it's no surprise that the one involving contracts, Kimble v. Marvel Entertainment, LLC, didn't make the headlines.  The case involved an agreement for the sale of a patent to a toy glove which allowed Spidey-wannabes to role play by shooting webs (pressurized foam) from the palm of their hands.  Kimble had a patent on the invention and met with an affiliate of Marvel Entertainment to discuss his idea --in Justice Elena Kagan's words--for "web-slinging fun."  Marvel rebuffed him but then later, started to sell its own toy called the "Web Blaster" which, as the name suggests, was similar to Kimble's.  Kimble sued and the parties settled.  As part of the settlement, the parties entered into an agreement that required Marvel to pay Mr. Kimble a lump sum and a 3% royalty from sales of the toy.  As Justice Kagan notes:

"The parties set no end date for royalties, apparently contemplating that they would continue for as long as kids want to imitate Spider-Man (by doing whatever a spider can)*."

It wasn't until after the agreement was signed that Marvel discovered another Supreme Court case, Brulotte v. Thys Co. 379 U.S. 29 (1964) which held that a patent license agreement that charges royalties for the use of a patented invention after the expiration of its patent term is "unlawful per se."  Neither party was aware of the case when it entered into the settlement agreement.  Marvel, presumably gleeful with its discovery, sought a declaratory judgment to stop paying royalties when Kimble's patent term expired in 2010.

In a 6-to-3 opinion written by Justice Kagan (which Ronald Mann dubs the "funnest opinion" of the year), the Court declined to overrule Brulotte v. Thys, even though it acknowledged that there are several reasons to disagree with the case.  Of interest to readers of this blog, the Court stated:

"The Brulotte rule, like others making contract provisions unenforceable, prevents some parties from entering into deals they desire."

In other words, the intent of the parties doesn't matter when it runs afoul of federal law.  Yes, we already knew that, but in cases like this - where the little guy gets the short end - it might hurt just the same to hear it.  In the end, the Court viewed the case as more about stare decisis than contract law and it was it's unwillingness to overrule precedent that resulted in the ruling.

Yet, I wonder whether this might not be a little more about contract law after all.  The Court observed in a footnote that the patent holder in Brulotte retained ownership while Kimble sold his whole patent.  In other words, Brulotte was a licensing agreement, while Kimble was a sale with part of the consideration made in royalties. This made me wonder whether another argument could have been made by Kimble. If Kimble sold his patent rights in exchange for royalty payments, and those royalty payments are unenforceable, could he rescind the agreement?  If the consideration for the sale turns out to be void ("invalid per se"), was the agreement even valid?  The question is probably moot now given the patent has expired....or is it?  Although Kimble did receive royalty payments during the patent term, he presumably agreed to a smaller upfront payment and smaller royalty payments in exchange for the sale of the patent because he thought he would receive the royalty payment in perpetuity.  So could a restitution argument be made given that he won't be receiving those royalty payments and the consideration for the sale of the patent has turned out to be invalid?

 

 *Yes, I made an unnecessary reference to the Spiderman theme song so that it would run through your head as you read this - and maybe even throughout the day.

 

 

June 29, 2015 in Current Affairs, Famous Cases, In the News, Recent Cases | Permalink | Comments (2)

More Bad News on the Privacy Front

Surveillance_camerasJed Rubenfeld declared the end of privacy in an article that appeared in Stanford Law Review in 2008.  Around the same time, Danial Solove explored the role of social media in eroding privacy in Scientific American. National Public Radio introduced a series on the end of privacy back in 2009.  In January, Science Magazine devoted a special issue to the end of privacy.

But all is not lost!  Contracts can protect our privacy, and corporations routinely agree to privacy policies that restrict their right to sell or otherwise transfer or share the private information they collect when their customers use their services.

Such contractual provisions can protect consumers . . . unless the company itself is sold or transferred to (merged into) another company.  Then the private information that the company has collected just becomes another asset that can get sold off like any other asset.  So says a report in today's New York Times.  About 85% of the privacy policies of companies reviewed (including Amazon, Apple, Facebook, Google, LinkedIn and Hulu) provide that "the company might transfer users' information in case of a merger, acquisition, bankruptcy, asset sale or other transaction . . . "

D'oh!

June 29, 2015 in E-commerce, In the News | Permalink | Comments (0)

Tuesday, June 23, 2015

PayPal's New Agreement and the FCC

Last week, the Federal Communications Commission acted to approve a number of proposals that update the TCPA (Telephone Consumer Protection Act), popularly known as the  "Do Not Call" law that prohibits companies from interrupting consumers' dinner time conversations with pesky telemarketing calls.  They closed a number of existing loopholes and clarified that phone companies can now block robocalls and robotexts to cell phones. The ruling also makes it easier for consumers who have previously consented to withdraw consent. 

So what does this have to do with contracts?  We all know how easy it is to consent to online terms.  PayPal does, too.  PayPal recently informed its customers that it was unilaterally amending its User Agreement.  As anyone reading this blog knows, there are serious problems with unilateral modification clauses, especially in the context of wrap contracts that nobody reads.  Yet, some courts have found that these clauses are enforceable (others have found they are not because they lack consideration and/or notice/assent).  PayPal's recent announced modifications caught the attention of the Federal Communications Commission.  The FCC Chief expressed concern that PayPal's prospective agreement may run afoul of federal law.  The TCPA requires express written consent before any company can make annoying prerecorded telemarketing calls to consumers.  The written consent, however, isn't the ridiculous version of consent that suffices as contractual consent in some courtrooms.  There are certain requirements including that the agreement be "clear and conspicuous" and that the person is "not required to sign the agreement...as a condition of purchasing the property, goods, or services."  In other words, it can't be a "take it or leave it" situation.  Pay Pal's amended User Agreement, however, appears to contain "take-it-or-leave-it" language as it doesn't indicate how customers may refuse to consent to receive calls without having their account shut down.  Furthermore, unlike contract law where blanket assent is okay, blanket consent is not okay under the FCC rules.  (This blog post provides a nice overview of the issues and also notes that eBay (PayPal's soon-to-be former parent) encountered similar problems with the New York Attorney General). 

PayPal's agreement is not the only reason the FCC acted last week, but as Bob Sullivan points out in this post here, it may have been the reason it acted so quickly.  Expect to see an updated version of PayPal's agreement in the near future.

 

 

 

June 23, 2015 in Current Affairs, In the News, Miscellaneous, Web/Tech | Permalink | Comments (0)

Thursday, June 18, 2015

Uber Is the New Britney Spears

We used to count on Britney Spears as the leading source for blog fodder.  Move aside Britney.  Uber just passed you by.  We have two new Uber stories just in California alone.

First, last week the District Court for the Northern District of California issued its opinion in Mohamed v. Uber Technologies.  Paul Mollica of the Employment Law Blog called that decision a "blockbuster," because it ruled Uber's arbitration agreement with its drivers unconscionable and therefore unenforceable.  The opinion is very long, so we will simply bullet point the highlights.  With respect to contracts entered into in 2013, the court found:

  • Valid contracts were formed between plaintiffs and Uber, notwithstanding plaintiffs' claims that they never read the agreements and that doing so was "somewhat onerous";
  • While Uber sought to delegate questions of enforceability to the arbiter, the court found that its attempt to do so was not "clear and unmistakable" as the contract included a provision that "any disputes, actions, claims or causes of action arising out of or in connection with this Agreement or the Uber Service or Software shall be subject to the exclusive jurisdiction of the state and federal courts located in the City and County of San Francisco, California"; 
  • In the alternative, the agreement was unconscionable and therefore unenforceable;
  • The procedural unconscionability standard of "oppression," generally assumed in form contracting, was not overcome in this instance by an opt-out clause; the opt-out was inconspicuous and perhaps illusory;
  • The procedural unconscionability standard of "surprise" was also met because the arbitration provision was "hidden in [Uber's] prolix form" contract; and
  • Uber's arbitration provisions are substantively unconscionable because the arbitration fees create for some plaintiffs an insuperable bar to the prosecution of their claims.

The court acknowledged that the unconscionability question was a closer question with respect of the 2014 contracts but still found them both procedurally and substantively unconscionable.

There is much more to the opinion, but that is the basic gist.

Eric GoldmanIn other news, as reported in The New York Times here, the California Labor Commissioner's Office issued a ruling earlier this month in which it found that Uber drivers are employees, not independent contractors as the company claims.  The (mercifully short!) ruling can be found here through the good offices of Santa Clara Law Prof, Eric Goldman (pictured).

The issue arose in the context of a driver seeking reimbursement for unpaid wages and expenses.  The facts of the case are bizarre and don't seem all that crucial to the key finding of the hearing officer.  Although plaintiff''s claim was dismissed on the merits, Uber has appealed, as it cannot let the finding that its drivers are employees stand.

But the finding is a real blockbuster, especially as Uber claims that similar proceedings in other states have resulted in a  finding that Uber drivers are independent contractors.  Here's the key language from the ruling:

    Defendants hold themselves out to as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation.  The reality, however, is that Defendants are involved in every aspect of the operation.  Defendants vet prospective drivers . . . Drivers cannot use Defendants' application unless they pass Defendants' background and DMV checks

Meredith    Defendants control the tools the drivers use . . . Defendants monitor the Transportation Drivers' approval ratings and terminate their access to the application if the rating falls below a specific level (4.6 stars).

As the Times points out,  few people would choose to be independent contractors if they had the option to be employees.  Our former co-blogger Meredith Miller has written about similar issues involving freelancers, and we blogged about it here.  So far, it appears that five states have declared that Uber drivers are independent contractors, while Florida has joined California in finding them to be employees.  For more on the implications of this ruling, you can check out this story in Forbes, featuring insights from friend of the blog, Miriam Cherry.

June 18, 2015 in In the News, Recent Cases, Travel, Web/Tech | Permalink | Comments (0)

Wednesday, June 17, 2015

Sign of the Times - The Post-Prom Waiver

The New York Times had an article in last weekend's Style section about the post-prom waiver.  Apparently, in some suburbs, liability conscious parents and schools hosting a post-prom after party are asking teenagers and their parents to sign a waiver.   My initial reaction was, Really?  Has it come to this?  But the more I thought about it, I could understand why some schools and parent- hosts might think it was a good idea. I did a quick search of "post prom waivers" and it seems that they serve several purposes. 

First, they waive liability.  The waiver would probably not be enforceable to stop lawsuits based upon negligence -- none of the ones I found even sought release for negligent acts on the part of the host - and certainly would not be effective to bar suits claiming gross negligence or recklessness on the part of the host.  They generally did not overreach by which I mean they did not seek to waive liability for everything under the sun (like this Borat release). 

Second, and related to the waiver, was an assumption of the risk clause.  This requires the student and the student's parent to knowingly and voluntarily assume the risk of harm relating to the student's participation in post-prom activities.  It seems as though post-prom activities have become much more active than when I was in high school - I found parties where there are extreme sports challenges and what looked like sumo wrestling!(?)  The waivers also contained a medication release form, which given the laws in this area, is a prudent measure.

Third, and most useful, all the post-prom waivers I found established guidelines or rules of conduct.  These clearly outline the school's (or host's) expectations for student behavior as well as parental responsibilities.  They establish, for example, whether the event is a "lock-in" (meaning the students can't leave the premises) and the rules regarding pick-up times and who may attend the event.  Given this is prom night, they also set out very clearly the expectations regarding drugs and alcohol - i.e. there will be NONE of that.  Students and parents know that drugs and alcohol are not allowed, but putting this in the waiver allows the conversation to happen.  More importantly, I think, it communicates to them that the school is not messing around. The language tends to be very express that illegal activity will not be tolerated and police will be called.  Some people may think these types of reminders (and other disclosures) are not useful.  I think it depends upon the disclosure.  In a post-prom waiver, where the students and parents will be reading it for useful information, such as what to bring, etc, it reinforces expectations and allows parents to set up their own rules in the event the student breaks the school rules (i.e. no leaving the house all summer if I have to bail you out of jail at 3am...)   All the waivers I read were also short and, for the most part, clearly written.

Finally, there are the indemnity type clauses.  Unlike exculpatory clauses (which free the school/host from liability), an indemnity clause makes the student responsible for harm caused to others.  Most of the ones I saw seemed fine - they required the students/parents to assume responsibility for any damages they caused.  Again, I don't think this gives the host any more rights than they would otherwise have since you are generally liable for any property damage that you cause.  It is useful, however, for setting expectations for conduct.  Sure, you might have to check some of your wild physical activity -  no whirling dervish dancing around the Ming vases - but from the host's point of view, understandable.  It's also useful for setting expectations after you break the vase.  You can't pretend it's unfair that you have to pay for it because you knew in advance.  Kind of like those "You break it, you buy it," signs in stores.

I'm still not convinced that these waivers are a good idea although I don't think they are necessarily a bad idea as long as they are clearly written, short and, most of all, reasonable and limited in scope.  It's unclear whether they will be enforceable, and again, I think it depends upon how reasonable they are in terms of scope and  process (they are signed well in advance of the event and both the student and a parent/guardian must sign it).  Given our litigious and form contracting society, I don't think they are going away.

 

June 17, 2015 in In the News, Miscellaneous, True Contracts | Permalink | Comments (0)

Monday, June 15, 2015

Weekly News Roundup

CoyotesTwo years ago, the National Hockey League's Phoenix (Arizona) Coyotes signed a 15-year lease on a facility in Glendale, Arizona.  Now, the city is claiming a right to terminate the lease because of an alleged conflict of interest that has arisen affecting the team's former legal counsel.  ESPN has the story here.  According to ESPN, the city does not really want the team to leave; it just wants to negotiate a more favorable deal.  

Eric Wemple of The Washington Post reports here on the latest troubles experienced by Al Jazeera American (AJAM).  Shannon High-Bassalik, who served as AJAM's Senior Vice President of Programming and Documentaries, is suing for breach of contract, discrimination and retaliation.  She alleges that the network promotes proclaims neutrality but actually pushes a pro-Arab, anti-Israel perspective.  High-Bassalik claims that she was terminated for objecting to AJAM's racist and misogynist practices.

We reported a couple of months ago about suits brought by students, parents and alumni challenging the closing of Sweet Briar College.  Today, we note that according to this report in the Lynchburg, VA News & Advance, faculty are challenging the propriety of the closing as well.  Plaintiff faculty members are seeking a declaratory judgment that there is no financial emergency justifying the closing of the college.  They allege the the college would breach faculty contracts by closing.  The seek monetary damages and orders requiring the reinstatement of the faculty plaintiffs.

June 15, 2015 in In the News, Sports | Permalink | Comments (0)

Tuesday, May 26, 2015

Airbnb Update

We have previously blogged about “sharing economy” short-term rental company Airbnb at various times here.  Time for an update: The City of Santa Monica, California, just passed an ordinance that prohibits property owners and residents from renting out their places unless they remain on the property themselves.  This is estimated to prohibit no less than 80% of Airbnb’s Santa Monica listings (1,400 would be banned).  

The city plans to spend $410,000 in the first year to enforce the rule using three new full-time employees.  Violators may be fined by up to $500.  However, because Airbnb does not list addresses, staff will have to look at photos of the properties and drive around the city streets to try to identify the violators.   Doing so sounds awfully invasive and awkward, but that is nonetheless the plan.  Adds Assistant Planning Director Salvador Valles: “We can issue citations just based on the advertisement alone when we're using our business regulations.”  Other major cities are also trying to crack down on short-term rentals.

But why, you ask?  Good question.  In times when, as I have blogged about before and as is common knowledge, medium- and low-income earners are falling behind higher-income earners to a somewhat alarming extent, you would think the government could let people earn some additional money on what is, after all, their own property.  Cities, however, claim that short-term rentals drive up the rental prices by cutting into the number of residences that are available for long-term rentals.  “Even a study commissioned by Airbnb itself earlier this year found that Airbnb increases the price of a one-bedroom apartment in San Francisco by an average of $19 a month.”    Traffic concerns are also often mentioned in this context as are potential tax avoidance issues, although Airbnb has now started to deduct taxes from rental fees before transferring these to the landlords.

Airbnb’s end goal?  To go IPO.  The goal for at least some landlords?  Eighty-year-old Arlene Rosenblatt, for example, rents out her home in Santa Monica whenever she and her husband leave town to visit their seven grandchildren. She charges anywhere from $115 to $220 a night for her home, listing it on Airbnb and other sites and thus earning as much as $20,000 a year.  "I'm a retired schoolteacher," Rosenblatt says. "We don't get a lot of retirement income. My husband, all he has is his Social Security." 

Time will tell what happens in this latest clash between private property and contractual rights and government regulations. 

May 26, 2015 in Current Affairs, E-commerce, Famous Cases, In the News, Legislation, Travel, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 20, 2015

Rising Minimum Wages

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

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

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

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

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

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

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

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

Monday, May 11, 2015

Weekly News Roundup

BoxingAccording to Philadelphia Magazine, two men who paid to watch the Mayweather-Paaquiano fight on pay-per-view are suing on behalf of a class of viewers who did not get their money's worth because Paquino had an undisclosed shoulder injury.  The suit claims damages for  breach of contract, fraud conspiracy and violation of consumer protection laws. Viewers paid between $89 and $100 to watch the fight.  The suit alleges that the fight should have been cancelled or postponed.

The LA Times reports that a group of students who contracted Leishmaniasis, a parasitic disease that causes painful skin ulcers, while on a trip to Israel are suing the trip's organizers for failing to take adequate precautions to protect the students.  The illness is allegedly caused by sand fly bites.  The suit names the North American Federation of Temple Youth and the Union for Reform Judaism as defendants.  It alleges that the organizations failed to take precautions such as providing the students with insecticides or insect netting and that the organizations provided the students with bug-infested bedding.

The LA Times also reports on a new trend on the hot, new social media: suing your co-founder.  The report suggests that combining handshake deals undertaken in college dormitories, coupled with youthful hasted makes for a dangerous mix.  We are all familiar with the strife among the founders of Facebook, but it turns out that Snapchat, Tinder, Maker Studios and Beats Electronics have all also experienced co-founder difficulties sounding in allegations of breaches of founders' agreements.

May 11, 2015 in In the News, Sports, Travel, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 6, 2015

Unbridled Growth and Companies that Never Learn

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

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

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

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

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

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

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

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

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

Friday, May 1, 2015

Caveat Vendor in a Banksy Sale in Gaza?

Banksy in BethlehemIn March, while I was co-teaching  a course called International Humanitarian Law in Israel and Palestine with Professor Yaël Ronen, I visited Bethlehem with my students.  Among other things, we saw the image at left, attributed to Banksy, on a wall in Bethlehem.

So today's New York Times story about Banksy's other creations in Gaza caught my eye.  The heart of the story, for the purposes of this blog, is that Banksy apparently painted an image of a weeping Greek goddess an the iron door of a destroyed home in Gaza.  An enterprising Gazan artist bought the door for less than $200, saying he wanted to protect the goddess.  The owner of the door was unaware that the painting could be worth hundreds of thousands of dollars.

According to the Times, the local authorities, Hamas, have confiscated the door, and its ownership and value are to be determined by a court.  I'm not sure what law the courts in Gaza would apply to such a dispute.  Does anybody think the buyer of the door has a duty to disclose its possible worth to the vendor?  

May 1, 2015 in In the News, Recent Cases, True Contracts | Permalink | Comments (1) | TrackBack (0)

Tuesday, April 28, 2015

Legal Education in the News and on the Blogosphere

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

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

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

Simkovic on Leiter

Stephen Diamond on his own blog

Brian Galle on Prawfsblawg

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

Links to Related Posts:

The Current Series 

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

Related Posts form 2012:

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

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

Monday, April 27, 2015

Weekly News Roundup

In yet another government outsourcing scheme gone wrong, KOLO TV news is reporting that Nevada is alleging breach of contract against the companies it hired to administer Common Core testing in the state's schools.  Apparently, when thousands of students attempted to log on so that they could take their exams, they received an error message and could not proceed.  Educators across the state are aggrieved, but students across the state are generally fine with it. 

Las_Vegas_slot_machines
Photo by Yamaguchi先生

Nonprofit Quarterly reports that three students, three parents and three alumnae are alleging breach of contract and seeking an injunction to keep open Sweet Briar College in Lynchburg, VA.  They allege that they had entered into express and implied agreements with the College that they would not only have the benefit of a four-year degree from the College but would also enjoy the benefits of being alumnae or of having children who were alumnae.

According to the Des Moines Register, in 2011, an 87-year-old grandmother was playing the slots, when the screen told her that she had a "bonus award" of $41797550.16.  Last week, Iowa's Supreme Court ruled unanimously that she had won $1.85.  They rejected claims of breach of an implied contract and found that the "bonus award" was just the product of a computer glitch.   

April 27, 2015 in Games, Government Contracting, In the News | Permalink | Comments (0) | TrackBack (0)

Contractual Issues and the Chicago Cubs' Kris Bryant

April is the finest month for a Chicago Cubs fan, because even the Cubs are within a few games of first place in April.  

CubsAnd hope springs anew with each Spring Training  This year Cubs fans have extra reason to hope because of young prospect, Kris Bryant.  There was only one catch.  Bryant did not start the year playing for the Cubs.  As reported here in Business Journalism, despite hitting nine home runs in 40 at bats and earning a .425 batting average, Bryant was demoted to the Cubs' Triple-A affiliate for the start of the season.  Cubs GM, Theo Epstein, gave Bryant's need to develop his defensive skills as the reason for the demotion, but many believe that the purpose is to delay Bryant's eligibility for arbitration and free-agency.  Bryant's ability to avail himself of these mechanisms would kick in 2017 and 2020 respectively  if Bryant was on the Cubs' roster to start the season, but they will kick in a year later if Bryant misses the season's first ten games.  

Thirteen days into the season, the Cubs brought Bryant up from the minors.  Mike Olt and his lifetime .158 batting average kept third base occupied while Bryant was improving his defensive skills.  

April 27, 2015 in Celebrity Contracts, In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, April 23, 2015

On Issue-Spotting and Hiding the Ball

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

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

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

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

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

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

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

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

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

Wednesday, April 22, 2015

Tiered Water Pricing System Declared Unconstititional in California

On Monday, a California Appellate Court declared the tiered water payment system used by the city of San Juan Capistrano unconstitutional under Proposition 218 to the California Constitution.  The California Supreme Court had previously interpreted Prop. 218’s requirement that “no fees may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question” to mean that water rates must reflect the “cost of service attributable” to a particular parcel.

At least two-thirds of California water suppliers use some type of tiered structure depending on water usage.  For example, San Juan Capistrano had charged $2.47 per “unit” of water (748 gallons) for users in the first tier, but as much as $9.05 per unit in the fourth.  The Court did not declare tiered systems unconstitutional per se, but any tiering must be tied to the costs of providing the water.  Thus, water utilities do not have to discontinue all use of tiered systems, but they must at least do a better job of explaining just how such tiers correspond to the cost of providing the actual service at issue.  This could, for example, be done if heavy water users cause a water provider to incur additional costs, wrote the justices. 

The problem here is that at the same time, California Governor Jerry Brown has issued an executive order requiring urban communities to cut water use by 25% over the next year… that’s a lot, and soon!   Tiered systems are used as an incentive to save water much needed by, for example, farmers.  The California drought is getting increasingly severe, and with the above conflict between constitutional/contracting law and executive orders, it remains to be seen which other sticks and carrots such as education and tax benefits for lawn removals California cities can think of to meet the Governor’s order.  Happy Earth Day!

April 22, 2015 in Current Affairs, Famous Cases, Food and Drink, Government Contracting, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Monday, April 20, 2015

Weekly News Roundup

DouglasMollThe Texas Lawyer reports that Texas has amended a statute that allows plaintiffs to recover attorneys' fees in breach of contract claims.  The statute originally allowed for recovery from an individual or a corporation.  The amendment permits recovery from any non-government entity.  As law Prof. Doug Moll (pictured) explains, the purpose of the policy is to encourage settlement and permit parties that could not pay their own attorneys' fees to sue for breach. "There is not a policy justification I can see for distinguishing between business forms in an attorney fee-shifting statute,"  Moll noted in defending the amendment.  The bill faced some opposition from groups that would not want to exempt state entities and from others who wanted the law to allow either side, not just plaintiffs, to collect attorneys' fees.  But lawmakers did not want to mess with Texas law.  

From the Philadelphia Business Journal, we get yet another classic municipal contracting case.  City meets company, city hires company to do some fancy, technical thing it can't do itself, city and company exchange allegations of breach of contract, and the parties settled for $4.8 million.  In this case, the city is Baltimore and the company is Unisys.  

As reported here in USA Today, one bi-product of the new nuclear deal with Iran is that Russia now feels free to send Iran S-300 missiles for use in its air-defense system.  The missile deal has been suspended since 2010, and Iran had sued Russia in Geneva, alleging breach of contract and seeking $4 billion in damages.  Iran now says that it will drop the case if Russia delivers the missiles.

April 20, 2015 in In the News, Legislation | Permalink | Comments (0) | TrackBack (0)

Thursday, April 16, 2015

SeaWorld in a World of Trouble

A potential class-action lawsuit against SeaWorld was filed in Florida on April 8 just two weeks after the company was sued over its killer whale care in San Diego in another purported class action suit.    The Florida lawsuit alleges unjust enrichment and fraud, among other issues.  The lawsuit claims that if members of the public knew about SeaWorld’s mistreatment of the orcas, they would not visit the theme parks.  Plaintiffs asks the court to require SeaWorld to reimburse ticket prices to all the people who purchased tickets to the Orlando park in the past four years.  Visitors to the park pay much as $235 per person.  The complaint states that more than five million people attended the Florida theme park in the years 2010 through 2012. 

SeaWorld finds itself in a lot of trouble these days over its treatment of its killer whales.  The park was, for example, subjected to heavy criticism in the CNN documentary “Blackfish” and in a book written by one of its former orca trainers.  Perhaps as a result, its shares have been tanking recently…

SeaWorld, in turn, claims that the criticism and in particular the most recent lawsuit “appears to be an attempt by animal [rights] extremists to use the courts to advance an anti-zoo agenda. The suit is baseless, filled with inaccuracies, and SeaWorld intends to defend itself against these inaccurate claims.”  It also claims that it is a leader in orca care.  SeaWorld’s parks are regularly inspected by the U.S. government and two organizations.  The accreditations of the California and Florida parks expire in 2020.

As part of the experience park visitors purchase, they unquestionably expect to see relatively healthy and happy whales kept under standards of good animal husbandry.  But in reality, according to the lawsuits and other statements about the park, SeaWorld does not live up to this end of the bargain.  Frequent allegations have been made that SeaWorld’s orcas have a shorter lifespan than wild orcas (usually, animals in captivity live longer than their wild counterparts), are kept in chemical-filled and way too small pools, are drugged with antipsychotic medicines, are not provided with sufficient shade, and are subjected to forced breeding.

Either somebody is not telling the truth here or people’s expectations of what constitutes good ethics in relation to keeping and displaying orcas as well as other show and zoo animals, for that matter.  Does this matter under the law?  Of course, the general public has a purely legal right to buy tickets to see various performance and exhibit animals as long as no state or federal law is violated as regards how the animals are treated.  Ethics are a different story.  But misrepresentation is actionable under contracts law.  If the above allegations made by TV producers, former trainers, and numerous consumers are correct, SeaWorld has indeed not lived up to the wholesome, animal-friendly image it portrays of itself in order to sell tickets.  Its alleged questionable conduct has been going on for years.  It’s been almost twenty since a friend of mine (otherwise not very interested in animals) visited SeaWorld San Diego and went on a backstage tour.  He told me about the deplorably small pools in which the animals were kept after their performances.  In this area, ethics and contracts law interface and have finally come head-to-head.  The eventual outcome may be that SeaWorld will not be able to continue making money off its orca shows as it has in the past.  Ringling Bros. is voluntarily phasing out its use of elephants after similar protests about their treatment.   This may not be a bad thing from a public policy point of view.   Time has come to consider how we treat animals in many contexts, and certainly so for mere entertainment and profit-making motives. 

See the Florida complaint here: http://ia902707.us.archive.org/24/items/gov.uscourts.flmd.309289/gov.uscourts.flmd.309289.1.0.pdf

April 16, 2015 in Current Affairs, Famous Cases, In the News, Travel | Permalink | Comments (0) | TrackBack (0)

Monday, April 13, 2015

Rejecting a Rejection Letter

A few weeks ago, 17-year old Siobhan O’Dell became known online for her bold and unusual rejection of Duke University’s rejection of her college application.  She wrote:

"Thank you for your rejection letter of March 26, 2015.  After careful consideration, I regret to inform you that I am unable to accept your refusal to offer me admission into the Fall 2015 freshman class at Duke.  This year I have been fortunate enough to receive rejection letters from the best and brightest universities in the country.  With a pool of letters so diverse and accomplished I was unable to accept reject letters I would have been able to only several years ago."

Alas, applying for college does not work like that.  Accordingly, Duke’s response was simply that Ms. O’Dell’s only option is to appeal the decision, but that her chances of a reversal are not good: “If you choose to appeal, we welcome your request, but I do not wish to raise unreasonable expectations on your part," the university representative writes.

Nice try, though!  It sounds like Ms. O’Dell would do well in a Contracts Law class.

April 13, 2015 in Current Affairs, In the News | Permalink | Comments (0) | TrackBack (0)