Sunday, February 12, 2017
A recent case out of the Eastern District of Kentucky, Taylor v. University of the Cumberlands, Civil No: 6:16-cv-109-GFVT (behind paywall), has lots of causes of action, including an interesting dispute over whether an agreement between the university and its former President and Chancellor was supported by consideration.
While the decision itself, granting in part and denying in part the university's motion to dismiss, is behind a paywall, the dispute has been reported and described in the press. Dr. Taylor served as the President of the university for 35 years. He alleged that the school had agreed to pay him and his wife almost $400,000 annually after his retirement until they were both dead. The school disputed the validity of that agreement. The Taylors then brought several claims against the university, including breach of contract.
On the motion to dismiss, the main contract argument involved consideration. The university argued that the contract was given in recognition of the Taylors' successful fundraising efforts and service to the school, which had already occurred. This, the university contended, meant it was past consideration and rendered the agreement unenforceable.
The court acknowledged that the agreement discussed the Taylors' past behavior. However, the court also identified five current promises the Taylors made under the agreement: to continue to serve as president until he decided to retire; to accept the role of Chancellor until he decided to retire; to serve as an Ambassador of the university; to serve the university in any capacity requested; and to continue to fundraise for the university. Therefore, there was consideration.
The university then argued that the agreement had no definite end date, which would mean it was terminable at will. However, the court noted that that rule applies to contracts that would otherwise run forever. In such a circumstance, the right to terminate at will can be considered appropriate. In this case, the contract would terminate once both of the Taylors were dead. No one knew when that date would be, but presumably the Taylors will not live forever and therefore the contract will not run forever. Therefore, the contract was not terminable at will, and the Taylors lived to fight another day on their breach of contract claim (although the court noted that there were significant disputes surrounding the execution of the agreement and its proper interpretation).
Sunday, January 22, 2017
In times with enough serious and often depressing news, I thought I would bring you this little neat story (with profuse apologies to everyone, including my co-bloggers, for my virtual absence for a few months):
An Apollo 11 bag used to protect moon rocks samples was stolen by Max Ary, a former curator convicted in 2006 of stealing and selling space artifacts that belonged to the Cosmosphere space museum in Hutchinson, Kansas. Mr. Ary subsequently served two years in prison and was sentenced to pay more than $132,000 in restitution. Space artifacts found in his home, including the Apollo 11 bag, were forfeited to meet that debt. However, the Apollo 11 bag was incorrectly identified as Ary's and subsequently sold to Nancy Carlson for $995 in February 2015 at a Texas auction held on behalf of the U.S. Marshals Service.
The government petitioned the court to reverse the sale and return the lunar sample bag to NASA, alleging that due to a mix up in inventory lists and item numbers, the lunar sample bag that was the subject of the April 2014 forfeiture order was mistakenly thought to be a different bag and that no one, including the United States, realized at the time of forfeiture that this bag was used on Apollo 11. The government cited cases where federal courts vacated or amended forfeiture orders, including where inadequate notice was provided to a property owner, as a justification for the bag's return to NASA.
Judge J. Thomas Marten ruled in the U.S. District Court for Kansas that Ms. Carlsen obtained the title to the historic artifact as "a good faith purchaser, in a sale conducted according to law." With her title to the bag now ordered by the Kansas court, Carlson needs to file a motion in the U.S. District Court for Texas for its return from NASA's Johnson Space Center in Houston. However, “[t]he importance and desirability of the [lunar sample] bag stems solely and directly from the efforts of the men and women of NASA, whose amazing technical achievements, skill and courage in landing astronauts on the moon and returning them safely [to Earth] have not been replicated in the almost half a century since the Apollo 11 landing," the judge wrote … Perhaps that fact, when reconsidered by the parties, will allow them to amicably resolve the dispute in a way that recognizes both of their legitimate interests," J. Marten wrote.
H/t to Professor Miriam Cherry for bringing this story to my attention.
Saturday, January 7, 2017
Photo Source: hgtv.com
The main reason I have cable these days, honestly, is because of my HGTV addiction. I like that the shows are so predictable and formulaic, which makes them low-stress. It's a habit I started years ago as a stressed-out lawyer in a law firm, when I needed to come home and watch something that didn't require thought, and it's kept me company as I transitioned into academia. And I'm apparently not alone in using it as comfort television.
I use HGTV a lot in my Contracts class as the foundation of hypotheticals (so much that I'm contributing a chapter to a book detailing how I use it) and so I'm always interested when there is a real-life HGTV contract problem...such as is happening right now with "Flip or Flop."
You might not be anxiously following HGTV shows, so let me tell you that the world was recently rocked (well, a small corner of the world) by the revelation that Christina and Tarek, the married couple with two young children at the center of the house-flipping show "Flip or Flop," were separated and/or getting divorced. And now come reports that HGTV has threatened them with a breach of contract action if their ongoing marital problems affect the filming of the show.
This is an example of the interesting issues that arise when your personal life becomes the equivalent of your contractually obligated professional life. Christina and Tarek no longer want to be married to each other, apparently, which is a stressful enough situation, without adding in the fact that their marriage is also the source of their livelihood. HGTV has a point that the show is less successful when you know that their personal life is a mess. The network was running a commercial pretty steadily through the holiday season where Christina and Tarek talked about their family Christmas, and every time I saw it I thought it was so weird and that they should pull the commercial. But that was clearly the advertising campaign HGTV had long planned for the show and it was probably costly for HGTV to change it at that point.
I am curious to see what the resolution of this is. I'm unclear how much longer Christina and Tarek were under contract for. They probably hoped to keep their separation quiet for as long as they could (they had, after all, kept it quiet for several months). But now that it's out in the open, we'll have to see how the parties recalibrate not just their personal but also their contractual relationships with each other. There is always a lot of talk about how "real" the shows on HGTV is. This situation is testing where our boundaries on "real" vs. "fake" actually lie.
Thursday, December 29, 2016
Multiple sources report that Syracuse University is suing its long-term law firm over the firm's failure to put a "time is of the essence" clause into one of the university's contracts. I can't seem to track down the docket online so I haven't been able to look at the actual court documents but if you're teaching "time is of the essence" clauses next semester and looking for a recent controversy, here's one!
Wednesday, December 28, 2016
There is major drama happening in the world of high fashion, and it all revolves around an alleged non-compete. Carolina Herrera has sued Oscar de la Renta to keep Laura Kim from working for the rival company. According to CH, Kim signed a non-compete with CH which gave it the option of paying Kim fifty percent of her salary and health benefits in exchange for Kim not competing against it for six months. The six months seems like a suitably short period of time in the fast-moving fashion industry, especially as it has important impacts on New York Fashion Week in February.
The judge ordered a TRO which has since been lifted pending a preliminary injunction hearing in the new year. In the meantime, you should go to this article for all of the juicy details on what exactly went down between Kim and CH.
Friday, December 23, 2016
Just a quick entry in advance of a weekend that is a holiday for many, but this post on Inside Higher Ed caught my eye, discussing an in-progress case against NYU. An appellate court allowed two professors' complaint to survive a motion to dismiss based on sufficient allegations that the faculty handbook was a formal binding contract. One to keep an eye on in the new year.
However you plan to spend this upcoming weekend, I hope it's full of peace and joy.
Monday, December 19, 2016
Confidentiality provisions are everywhere these days, especially in all of those arbitrations most contracts now require. I've blogged about them in connection with Donald Trump, and now they are playing a starring role in the very messy divorce between Johnny Depp and Amber Heard, in which Depp is allegedly refusing to provide Heard's divorce settlement because he alleges she breached their agreement's confidentiality provision when she spoke out publicly against domestic violence.
It's unclear to me what the wording of the confidentiality provision was and whether Heard's behavior really did violate it. What is clear to me is that the confidentiality provision is being used to prevent communications of encouragement and support to people who are victims of domestic violence. There is a dual tragedy here: Not only are words of encouragement being muffled, but victims of domestic violence are now receiving the message that those words of encouragement could lead to punishing consequences.
Confidentiality provisions can make sense, and there are definitely situations where they are vital to a deal getting done. But there are also situations where they seem to be operating against public policy.
Wednesday, December 7, 2016
When the legendary musician Prince died suddenly, he left behind an enormous volume of music and no will. The courts have already been dealing with how to distribute Prince's assets to a complicated and squabbling cadre of potential heirs. The rights to all of his music have raised their own complicated issues that have most recently manifested themselves in a lawsuit in the District of Minnesota, NPG Records, Inc. v. Roc Nation LLC, Case No. 16-cv-03909.
The case revolves around Roc Nation's streaming of Prince's music on its streaming service Tidal, and whether or not it had the contractual rights to do so. Roc Nation alleges yes, based on what it terms both written and oral agreements that it struck with Prince before his death. Commentators have tried to draw conclusions about these agreements based on Prince's statements and other behavior before his death. NPG, meanwhile, claims that there was a single contract between Prince and Roc Nation and that it only allowed Roc Nation to stream a very limited number of songs, which Roc Nation has now violated in streaming a much wider variety of Prince's song catalog. The case has been reported on in multiple places, including here and here and here and here.
If this case progresses, it seems like it's going to require an untangling of written contracts between the parties, whatever oral statements Prince will allege to have been made, and the interaction between the two. It adds an interesting layer to consider that Prince was notorious for fighting for artists' rights to their music and had a fraught relationship with online streaming of music. He does seem to have favored Tidal above the other Internet services. In any case, although NPG claims that there was never any such license and Tidal has been infringing the songs' copyright since it began streaming them, NPG has already proactively sought to cancel any license that Prince may have granted to Roc Nation to stream the music in question.
(I'd post something Prince-related from YouTube, but Prince didn't like his music to be on YouTube. And, in fact, Lenz v. Universal Music Corp., the recent case that wended its way through the Ninth Circuit and is currently on petition to the Supreme Court, involves a Prince song in a YouTube video.)
Recently, Donald Trump famously tweeted that “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!” Trump has not said why he believes the planes will cost "more than $4 billion." Boeing says it currently has an Air Force One contract worth $170 million.
This raises several contractual issues that could be used as an interesting issue-spotting practice for our students. At first blush, it seems like an impossible attempt at a breach of contract that would, conversely, at least give very reasonable grounds for insecurity if not constitute an anticipatory repudiation outright.
Needless to say, Trump’s remark that “[w]e want Boeing to make a lot of money, but not that much money” finds no support in contract law. One contractual party has no control over how much money the other party should make. One would have thought that Trump – as a staunch “market forces” supporter – would have understood and embraced that idea, but that either was not the case or he is flip-flopping in that respect as well.
Digging deeper into the story, however, it turns out that “not even [Boeing] can estimate the cost of the program at this time, since the Pentagon has not even decided all the bells and whistles it wants on the new Air Force One." Further, “without knowing all the security features, it is hard to estimate the cost … and the Air Force isn't even sure whether it wants two or three of the planes.” Does a contract even exist at this point, then, when the essential terms have apparently not been mutually agreed upon, or is there simply an unenforceable agreement to agree? A valid argument cold be made for the latter, I think.
Mr. Trump has been accused of overestimating the cost of the planes. Does he, however, have a point? “So far[,] the Air Force has budgeted $2.9 billion through 2021 for two new Air Force Ones.” It is not inconceivable that the price tag may, in these circumstances, run higher than that. That circularity goes back to the essential terms – the price in this case – arguably not having been decided on yet.
There might, of course, be other issues in this that I have not seen in my admittedly hasty review of the story, but it is interesting how the media jumps at a legally related story without thoroughly or even superficially attempting to get the law right.
Wednesday, November 30, 2016
I am always saying to my students that if they care about something, they should put it in their contract, and they should be specific about what it is they want. I think sometimes people might think there's something to gain strategically by being vague, but introducing ambiguity into a contract can work out very poorly (and also takes control out of the hands of the parties). A recent case out of Florida, Boardwalk at Daytona Development, LLC v. Paspalakis, Case No. 5D15-1944, is a case where the court, faced with an ambiguous description of the land at issue in a contract, just threw up its hands in frustration.
The dispute between these two parties has been long and contentious. According to this article, it's dragged on for over a decade. It was originally rooted in an eminent domain proceeding in which Boardwalk at Daytona ("BDD")'s predecessor obtained property belonging to Paspalakis and the other appellees. The appellees contested BDD's acquisition of their land and eventually that lawsuit was settled. The settlement agreement provided the appellees with an option to purchase and operate 7500 square feet of retail space on the Daytona Boardwalk. The agreement contained no legal description or street address for the property at issue. The agreement said that the land would: (1) be adjacent to another particular business; (2) have a minimum of 50 boardwalk frontage feet; and (3) have sufficient land to build a 7500-square-foot, one-story building. Unfortunately for the appellees, there were at least three parcels of land that met this description, and they ranged drastically in size from around 7700 square feet to over 17,000 square feet.
The problem with the description of the land in the settlement agreement was exposed when the appellees tried to operate their option. BDD offered a piece of property that met all three criteria set forth in the settlement agreement. However, the property required unusual structural design features that troubled the appellees and also came with a negative easement for light, air, and unobstructed view that benefitted the BDD property next door. The appellees therefore objected to this plot of land and asked for another one.
BDD sought a declaratory judgment that the plot of land it proposed was sufficient under the settlement agreement and that it did not have to provide another plot of land. The appellees, in response, sought specific performance that BDD provide a plot of land fitting the description in the settlement agreement, without the restrictions of the land BDD had offered. In the face of the counterclaim, BDD shifted stance and argued that the settlement agreement was too ambiguous to be enforced.
The trial court sided with the appellees and ordered BDD to convey the largest possible plot of land to the appellees. BDD appealed, and this court agreed with BDD. The court noted that a description of the land in question is usually considered an essential part of any land purchase agreement, and that without any such description there are serious doubts whether the parties reached a meeting of the minds. The description of the land in the settlement agreement here was ambiguous. The trial court correctly examined parol evidence to try to resolve the ambiguity, but it didn't help. The contract terms at issue here simply could have been fulfilled by any of three very different parcels of land. To this court, there was no contractual way to choose between them and no parol evidence that shed light on which parcel of land the parties had in mind. Indeed, the court was skeptical the parties ever really agreed on which parcel of land would be conveyed, and so the parties never reached a meeting of the minds that could be enforced. Therefore, the court reversed the order of specific performance and entered judgment for BDD instead.
A bitter pill here for the appellees, who doubtless thought that they were getting something of value in the settlement agreement they struck and end up with nothing to show for it. But it does seem like there was considerable confusion about which land was affected by the situation here. I guess it's a lesson to all of us: try to be as specific as possible. I tell my students drafting contracts is frequently like playing a game of what-if with yourself. What if BDD offers this parcel of land instead of that parcel of land? If the answer to that question is that you would prefer one parcel of land over the other, best to be specific in the contract.
The lease for the Trump International Hotel, housed in Washington’s historic Old Post Office Pavilion owned by the federal General Services Administration (“GSA”), contains a clause forbidding elected officials from involvement. Trump, as president, essentially would be both landlord and tenant.
That may be an ethical problem as well as a federal contract law violation. Trump would oversee the GSA and appoint its administrator ― a conflict of interest with his hotel interest. GSA officials are looking into the matter.
Steven Schooner and Daniel Gordon, former government officials who specialize in federal contract law, have recommended that GSA “immediately end the hotel lease relationship, before Trump becomes president” to avoid ethics problems. Of course, if GSA terminates the lease contract, it risks litigation potentially with… Trump as a winner.
However, says Schooner, that’s a risk worth running. “In the end, it’s just a frigging lease.” It would also be a president heavily involved in private business affairs over which he would exercise significant power, real and perceived. But that may just be how our country is developing these days. We frown on similar behaviors in relation to other countries, but when it comes to our own, we are apparently either becoming accepting of unacceptable behaviors or powerless to do much about them.
Thursday, November 24, 2016
As our friends on the Faculty Lounge just announced, Dean Schwartz was just forced to step down as Dean of the University of Arkansas, Little Rock, School of Law. Why? After the recent presidential election, he sent an email to students offering counseling to those upset by the results. Similar initiatives were undertaken around the nation in places so politically and geographically different as the University of South Dakota and Occidental College in Los Angeles.
Apparently, what really cost Dean Schwartz his position was his personal opinion given in the email, namely that the services would be offered to students who “feel upset” following the “most upsetting, most painful, most disturbing election season of my lifetime.”
A colleague of Schwartz's, Robert Steinbuch, who previously tussled with Schwartz over diversity in admissions, explained [cite to FL]: “If you tell people every time they lose they’re entitled to counseling, you elevate the perceived level of wrong beyond what it is. Most assuredly, Democrats are disappointed a Republican won. I recall when the Democratic Party won the Presidency twice each of the previous two elections. I knew plenty of people who were disappointed at that time, but I didn’t know anybody that needed grief counseling. I think when we tell people that they need some form of grief counseling we are normalizing hysteria and suggesting there’s something immoral or wrong about our democratic process.”
How incredibly misunderstood and off point. First, there really is something wrong about our democratic process when repeatedly, the person winning most of the popular votes in an election does not become the president. Similarly, our two-party only, “winner takes it all” system is arguably not a sufficiently faceted system that can be considered to be a true representative, deliberative democracy. But I get that, the system should then be changed before the next election. That won’t happen, just like time after time, mass shooting episodes don’t cause a change to our gun laws or the mass murder situation in general. Such is our country, and so be it, apparently.
What is incredible to me in relation to the above is not Schwartz’ alleged normalization of “hysteria” (read: justified outrage), it is attempts to make this particular election appear normal. It simply was not. Everyone seems to agree on that, Democrats and Republicans alike. In fact, note that many Republicans were outraged as well – and for good reason. Should it be acceptable that we now have a President who, for example, is proud that he “grabs women by the pussy” and “just start[s] kissing them” whether or not they want it? Someone who claims that he is “smart” for not paying taxes for, apparently, many years to a country that he wants to lead, even though he could easily afford doing so? A person who, in spite of sound science proving otherwise until at least yesterday claimed that climate change is a “hoax made up by the Chinese”?
I would hope not. But as we see, apparently that is what we just have to put up with and not even opine about, even in legal academia, in the form of a sentence as innocuous as one that refers to simple, but honest, feelings shared by millions of other people as well.
Throughout history, censorship has never proved particularly effective. As a nation, if we seek to revert to such strategies, we are truly in trouble. Schwartz’ comments may well have upset Republican law students, but maybe that in and of itself would have had some value, especially in an academic setting where thoughts are valued for being just that; thoughts that just might help improve our nation.
On an up note: Happy Thanksgiving, and thanks to Michael Schwartz for being a such a courageous, thoughtful dean and legal scholar!
Greetings from Berlin.
November 24, 2016.
Monday, November 21, 2016
My love for the British car show "Top Gear" over the past few years was deep and abiding, despite the fact that I am not interested in cars at all. Like most of the people I know, I watched Top Gear for the hosts, Jeremy Clarkson, Richard Hammond, and James May--a trio of men whose friendly and hilarious chemistry was, I thought, a little like capturing lightning in a bottle; it comes around so infrequently that it's striking when it does.
For a taste of what this version of Top Gear was like, please enjoy my personal favorite, one of the caravan episodes:
Or maybe you would prefer one of the boat-car episodes:
The Top Gear Wikipedia entry details that the show's popularity resulted in consistently high ratings, a waiting list for tickets to the stage-filmed portion of the show that numbered in the hundreds of thousands, and a Guinness World Record for the world's most widely watched factual television show.
There have been a number of high-profile Top Gear events over the years that I could document here, from Richard Hammond's terrifying crash while filming the show to the fascinating contractual dispute over the Stig, the show's famously anonymous racing driver, revealing his true identity.
But what I'm really focusing on in this entry is the fact that the Top Gear hosts have a new show, "The Grand Tour," that looks a whole lot like their old show, and it made me wonder what their contracts looked like.
The hosts left Top Gear over controversially. The BBC declined to renew Jeremy Clarkson's contract in March 2015, following an attack by Clarkson on one of the producers on the show (later the subject of a lawsuit that Clarkson settled for a hundred thousand pounds and a formal apology). The other two presenters, Hammond and May, also had contracts up for renewal and chose not to re-sign with the BBC, instead following Clarkson to Amazon, where the trio have launched a show called The Grand Tour.
I didn't know what to expect from The Grand Tour but it turns out to be Top Gear by a different name. Where Top Gear had a Stig, The Grand Tour has "the American" -- and they tell us who he is right off the bat, rather than get embroiled in that kind of controversy again. Top Gear had a segment called, simply, "The News"; The Grand Tour launched a similar segment called "Conversation Street." Top Gear had a segment called "Star in a Reasonably Priced Car"; The Grand Tour...well, you should watch the show for its take on that segment. This review does a nice job running down all the similarities between the old show and the new.
This all fascinated me from a contract perspective. I knew that Clarkson had previously co-owned the commercial rights to Top Gear. He sold them to the BBC in 2012 for fourteen million pounds. So, having given up those rights and left the BBC, Clarkson clearly couldn't keep making "Top Gear." But he is making a motoring show that is almost identical in every cheeky winking respect to the one he left behind (right down to a simple title highlighting a prominent "T" and "G").
I do think, from an IP point of view, the new show seems safe: they've been careful to avoid any trademarks and only seem to resemble Top Gear in the uncopyrightable idea level, i.e., being a playful show about cars. But I assumed that Clarkson, Hammond, and May had to have had a non-compete with the BBC, so I went looking for it, and I did find evidence that there was one. It apparently prohibited the three from presenting a competing car program for a period of two years. The two years aren't up yet, leaving lawyers to speculate that a conclusion was drawn that the non-compete only applied to terrestrial broadcast stations and not to Amazon's streaming Internet television. The entertainment industry is changing so quickly, it doesn't surprise me that the contracts are having trouble keeping up.
Surely the BBC would have preferred to keep Clarkson, Hammond, and May from kicking a rival car show into production so quickly, especially while the BBC's relaunched Top Gear has reportedly struggled. But apparently their contracts failed to give them sufficient protection to save them from the result.
I will leave for another day the issues of contracts made during the filming of Top Gear itself; like, for instance, the time Clarkson offered to save Hammond from a sinking boat in exchange for a bucket...that turned out to have holes.
And instead I will leave this entry with an acknowledgment that Jeremy Clarkson is a problematic and controversial figure who is not a stranger to making offensive statement. That's beyond the scope of this article about the BBC's contracts, but this review, I think, does a decent job of capturing the internal tension of a former Top Gear fan contemplating the new Grand Tour.
Wednesday, November 2, 2016
Thanks to InsideHigherEd, I became aware of this recent case out of the First Circuit, Walker v. President and Fellows of Harvard College, No. 15-1154, and seeing as it involved JOLT, the Harvard Journal of Law and Technology that I was an executive editor of when I was in law school there, I couldn't resist digging into the case.
And I'm glad I did, because it's a really interesting case about the lingering effect of honor code violations and the wording of school academic policies.
The plaintiff graduated from Harvard Law School in 2009. During her time at Harvard, she was a member of JOLT. In that capacity, she drafted a student note. However, when she sent the note to senior editors at JOLT, they became concerned about plagiarism issues and referred the note to the HLS Administrative Board. The Board concluded that the plaintiff's note contained plagiarism that violated the school's Handbook of Academic Policies and a notation was placed on her transcript. The plaintiff still graduated from HLS but had a "lucrative" offer of employment withdrawn after the notation was placed on her transcript. So the plaintiff sued to have the notation on her transcript removed. HLS won summary judgment at the district court level and this appeal followed.
The court affirmed the judgment of the district court. The parties agreed that the Student Handbook constituted a contract between the plaintiff and HLS. (The court noted that this was not actually obvious under Massachusetts law but that it would treat the handbook as a contract because the parties did not dispute it.) Therefore, the court focused its review on whether the plaintiff's behavior violated the stated plagiarism policy in a way that the plaintiff should have reasonably expected.
The Handbook stated: "All work submitted by a student for any academic or non-academic exercise is expected to be the student's own work." The plaintiff's main argument was that the student note she sent to the JOLT editors was just a draft that she planned to edit in the future, and the Handbook policy should be read as only applying to completed work that was not expected to undergo further editing. The court disagreed, however. The wording of the Handbook was extremely broad, referring to "all work." A student in the plaintiff's position should reasonably have expected that any student note submitted to the editors, whether a draft or in final form, would be held to the standards of the policy. Nothing about "all work" would make a student think that drafts were omitted from the definition, according to the court.
Saturday, October 22, 2016
A friend of mine asked me the other day about the ongoing controversy over all of that unaired Apprentice footage that is apparently sitting around somewhere. MGM and Mark Burnett have both claimed that they are not allowed to release the tapes due to confidentiality provisions in their contracts with Donald Trump. (Fortune has an article about this here, as does the New York Times.) My friend's question basically boiled down to this: Yeah, sure, maybe that deal made sense when the contract was signed with a New York self-professed billionaire but now he's running for President of the United States, and shouldn't that mean something?
Other people have raised this issue. What seems to me unique about the Donald Trump situation isn't necessarily the confidentiality provisions over the Apprentice tape, but how often, during this political campaign, we've been debating the secrecy Trump requires from all of those around him. The Apprentice contract is just the latest example of this. Over the summer, several news outlets reported on the unusually broad terms of the NDA Trump required his staffers to sign. To be fair, NDAs are not unusual during a Presidential campaign and Hillary Clinton has allegedly had her staffers sign them as well. But Trump's apparently are unusually broad, and he requires them even of volunteers who show up to make calls for Trump's campaign and presumably never even really meet Trump? What confidential information could these volunteers even know? Well, Trump is the one who gets to tell them that. And he's not afraid to sue on the NDAs: We know of at least one arbitration filed against a former staffer, alleging damages of $10 million.
Two things I take away from this:
(1) Donald Trump seems to be obsessed with controlling his image, which makes total sense, as he's made an entire career out of Being Donald Trump and it could even make him President. Trump is so fond of restricting what those around him can say about him that he's even said he'll make his federal employees sign NDAs if he does become President. At the same time, of course, Trump himself doesn't appear to feel restrained in any way to say any thought that comes into his head. So we seem to have a situation where part of the advantage of being rich is being able to say absolutely anything you want and also control to some degree what the people around you get to say, even once your relationship with them has been terminated.
(2) Despite this, however, we all know more about Donald Trump than I think he wants us to know. In the relentless glare of a Presidential campaign, no matter how many NDAs you leave in your wake, is it just impossible to keep secrets forever? And, maybe, is there something comforting about that? My friend wants to see the Apprentice tapes, but we don't know what's in the Apprentice tapes, and we don't know who even has time to review them. But we do know a great deal, maybe not Apprentice-related, but maybe enough?
P.S. This is not the first time I've blogged about Donald Trump's contracts. If you're curious, that case hasn't really progressed since that blog entry.
Wednesday, October 12, 2016
'Tis the season!
No, not that season--yet--although last week I was shopping and noticed that the shelves are full of Christmas merchandise already so maybe it is that season.
But the real season is Halloween! Now I enjoy Halloween well enough but I'm not much of a haunted house person (or even a scary movie person), so I don't know much about them, and I was fascinated to learn that there are several haunted houses around the country that require attendees to sign waivers. In the words of this Cosmo article, "A 'if you're so scared that you actually die, your family won't sue us into oblivion' type of waiver." (Some haunted houses even involve electric shocks, I was told. Electric shocks!! I had no idea.)
I was able to locate a couple of these haunted house waivers online. Here's one that acknowledges risk of animal bites and contacts with poisonous plants (yikes!). Here's another one (with I have to admit a fair amount of typos) that contains a little clause down at the bottom acknowledging that you've been offered safety glasses.
At least one article queries whether this practice is entirely legal. The article asks, "Is it okay to mentally and even physically abuse individuals if they sign a waiver? Is there a limit to what should be legally acceptable?" and notes that few people are able to complete the experience and that it frequently leaves participants bruised, cut, and apparently shivering with shock. The haunted house they're talking about in the article requires guests to go through a health check first, I guess to try to minimize the possibility that they will suffer any lasting harm--either physically or mentally--from whatever crazy thing is going on in there. While this might sound terrifying to me, it apparently just sounds like an awesome time to a bunch of people. According to this article, there's a 17,000-person waiting list to get into this haunted house.
Another interesting thing I learned while researching this stuff (peering at the scary descriptions from between my fingers) is that apparently some of the haunted houses also make the guests sign confidentiality provisions? I guess to preserve the surprise for others. At any rate, now I've creeped myself out just looking at this stuff and I need to go watch some HGTV just to stop shuddering!
Btw, if you are a haunted house person and you're curious if one of these extreme you-would-have-to-pay-me-a-million-dollars-to-go-in-here experiences is near you, I found lists here and here. Or feel free to leave your personal favorite in the comments! Happy haunting!
Monday, October 3, 2016
In 2003, 50 Cent released the song "P.I.M.P." The song was a huge top-ten hit for the hip-hop artist, achieving gold status in sales.
The problem is that Brandon Parrott alleges that the song contains, without his prior consent, a track he wrote called "BAMBA."
The parties had apparent discussions about this in 2003, entering into a settlement agreement under which Parrott received some royalties on "P.I.M.P." in exchange for Parrott licensing the pieces of his song that were used in "P.I.M.P." and agreeing to release all of his remaining claims. According to the defendants, the contract between the parties contained a clause in which Parrott represented "that no promise, representation, or inducement not expressed herein" was made in connection with the contract.
The parties are back in court, though, with Parrott alleging in a pro se complaint filed in the Central District of California, Parrott v. Porter, #2:16-cv-04287-SJO-GJS (behind paywall), that that the settlement agreement is invalid because he was basically tricked into signing it "under false and fraudulent pretenses." Parrot argues that he thought the defendants acted in "Good Faith" and used "BAMBA" in "P.I.M.P." entirely accidentally. However, Parrott claims that he has now realized that the defendants knew that "P.I.M.P." contained Parrot's music and deliberately released "P.I.M.P." without attempting to contact Parrot for permission beforehand. In addition, Parrott appears to contend that there are inconsistencies with the royalty statements he's been sent under the settlement agreement that he has been unable to reconcile due to the defendants' lack of cooperation.
The defendants have now responded to the complaint with a motion to dismiss, apparently resting mainly on the fact that the settlement agreement is valid and governs the situation between the parties, under which Parrott has been collecting royalties for years.
Where is 50 Cent in all of this? Preoccupied with his own ongoing bankruptcy proceedings.
(Hollywood Reporter article on all this here.)
Tuesday, September 20, 2016
New York Attorney General Eric Schneiderman has launched an investigation into whether now-notorious EpiPen manufacturer Mylan inserted potentially anticompetitive terms into its EpiPen sales contracts with numerous local school systems.
EpiPens are carried by those of us who have severe allergies to, for example, bee stings. The active ingredient will help prevent anaphylactic shocks that can quickly result in death. In 2007, a two-pack of EpiPens sold for $57. Today, the price is $600. The company touts various coupons, school purchase programs and the like, but in my experience, at least the coupons are mere puffery unless you are very lucky to fit into a tiny category of users that I have not been able to take the time to identify.
However, there is finally hope for some real competition in this field: Minneapolis doctor Douglas McMahon has created an EpiPen alternative that he is trying to market. This doctor claims that Mylan and companies like it have lost sigh of patient needs and are catering to investors. In his opinion, that is the true reason for the skyrocketing prices. Well said.
The doctor is even resorting to something as unusual as a fundraising website to raise money for the required FDA testing and other steps.
Another contractual issue seems to be why customers have to buy at least two Epipens at a time. The active ingredient only lasts for one year. Those of use who carry EpiPens hope never to have to use them, but if we will, it is extremely unlikely that we will have to do so twice in a year! But alas, in the United States at least, you have to buy this product in a two-pack (EpiPens are sold individually in countries such as Canada and the UK). It may be a regulatory and not a pure contractual issue, but if the company truly sticks to its current story that it is on the up-and-up in all respects in this context, they should at least enable people to offer to buy only what they need, which in many cases would be only one EpiPen at a time.
Hat tip to Professor Carol Chomsky of the University of Minnesota School of Law for the information on the Minnesota doctor.
Monday, September 19, 2016
An interesting recent case out of Texas, Deuell v. Texas Right to Life Committee, Inc., No. 01-15-00617-CV (behind paywall), deals with political advertisements, cease-and-desist letters, First Amendment free speech rights, and yes, contract.
In the case, Deuell was a candidate for state senate. Texas Right to Life Committee (TRLC) ran some radio ads stating, among other things, "Bob Deuell sponsored a bill to give even more power to . . . hospital panels over life and death for our ailing family members. Bob Deuell turned his back on life and on disabled patients." Deuell's lawyers sent cease-and-desist letters to the radio stations stating that the ads were defamatory and "respectfully demand[ing]" that the radio stations cease airing the ads. The radio stations, upon receipt of the letters, contacted TRLC and told it they were suspending the ads. TRLC then produced a new advertisement that the radio stations found acceptable to air, and also contracted "for additional airtime to compensate for the lost advertising time." TRLC then sued Deuell for tortious interference with contract and sought recovery of the amount it expended to produce the new ad and buy more airtime. Deuell moved to dismiss, arguing that the Texas Citizens Participation Act (TCPA) protected his cease-and-desist letter as free speech and that TRLC's allegations were not sufficient to overcome this.
The court disagreed and denied the motion to dismiss. The court found that TRLC had adequately alleged the existence of contracts with the radio stations and that the cease and desist letters were "clear and specific evidence" (the relevant standard under the TCPA) that Deuell had intentionally and willfully interfered with these contracts that proximately caused TRLC to suffer the damages it alleged. The TCPA and Deuell's free speech rights therefore did not operate to prohibit TRLC's cause of action.
Deuell did attempt to argue other things, including that TRLC's ads were illegal under the Texas Election Code, rendering TRLC's contracts with the radio stations to run the ads illegal contracts that could not result in tortious interference, as "a defendant cannot be held liable for tortiously interfering with an illegal contract." The court concluded, however, that there was no basis for declaring the contract illegal because the section of the Texas Election Code at issue had actually been declared unconstitutional.
There was a dissent in this case that would have held that Deuell's cease-and-desist letter implicated free speech rights under the TCPA and that TRLC did not provide the "clear and specific evidence" that would permit its case to survive in the face of those free speech implications.
Friday, September 16, 2016
A British start-up company called Luminance, which is also the name of its flagship due diligence analysis, “promises” to read documents and speed up the legal process around contracting, “potentially cutting out some lawyers.” (See here and here).
Luminance says that its software “understands language the way humans do, in volumes and at speeds that humans will never achieve. It provides an immediate and global overview of any company, picking out warning signs without needing any instruction.” Really? When I was working in the language localization things more than a decade ago, I heard the same promises then… but they never come to fruition. We’ll see how this program fares.
The software is said to be “trained by legal experts.” Talk about personification of an almost literary-style. We see the same trend in the United States, though. Just think about phone and internet programs that pretend to be your “assistant” and use phrases such as “Hi, my name is [so-and-so], and I’m going to help you today…”
Meanwhile, if a law firm used software to analyze documents, would it not be subject to legal malpractice if it did not discover contracting or other issues that a human would have, in this country at least? It would seem so… and for that reason alone perhaps also be a breach of contract unless clients were made aware that cost-cutting measures include having computers analyze documents that attorneys normally do.