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Valparaiso Univ. Law School

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Monday, January 12, 2015

Weekly News Roundup

A misplaced comma (or something) cost an Oregon Ducks fan his premium seats to the college football championship game.  According to this report from The Oregonian, a University of Oregon alumnus found premium tickets to the game (which he knew were selling for $4000) for $400 on StubHub.  When, he placed his order, StubHub indicated that he would be charged $16,59.36, but his credit card was charged $16,059.36.  He protested, and StubHub refused to honor the purchase, removing the charge and offering $1600 in StubHub vouchers, which the angry Duck says he will not use.  He blows off some steam in a blog post, with observations about obnoxious terms and conditions.

In a sign of the times, MasterCard has filed suit in the Southern Distroct of New York against Nike, according to this report from Bloomberg.and Oregon Live (you have to go through a short survey to read it), for having poached a few of its cyber-security experts.  MasterCard is suing the employees for breach of contract and Nike for tortious interference.  Nike denies all wrongdoing.

We could not have made this up: The St. Louis Post-Dispatch reports that the Devin James Group (DLG), a public relations firm, is suing another public relations firm, Elasticity.  Apparently, Elasticity hired DLG to help represent the City of Ferguson in the aftermath of the shooting of Michael Brown.  Elasticity fired DLG when it discovered that DLG's owner had a criminal record.  Mr. James was convicted in 2006 for having shot an unarmed man.  He claims he did $50,000 of work for which he has not been paid. 

In another chapter in the dangers of state governments hiring private companies to handle public services, NJ.com reports that Hewlett Packard will refund New Jersey $7.5 million to get out of its contract to deliver a unifed system to administers the state's public assistance program.  The Christie administration and HP agreed last year to suspend work on the project and they entered into a separation agreement in which each side agreed not to sue the other for breach of contract.  The state is now looking for a new partner.  In the meantime, it "continues to hobble along on its 1980s-era mainframe system," according to NJ.com.

Finally, an interesting conflict between a franchise and a large franchisee.  Wendy's is requiring its franchisees to make technology upgrades and renovate stotes.  DavCo, which operates 152 Wendy's restaurants is refusing to do so, claiming that Wendy's lacks the authority to require the changes.  According to the Baltimore Sun, Wendy's has filed suit to terminate DavCo's franchises.

January 12, 2015 in Food and Drink, Government Contracting, In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, January 8, 2015

A Bad Taste in One’s Mouth

On January 7th, a federal judge struck down a ban on foie gras that had been in effect since 2012.  The judge was of the opinion that the federal Poultry Products Inspection Act preempts the California ban.  This Act gives the U.S. Department of Agriculture the sole jurisdiction over the “ingredients requirements” of poultry products. 

The judge seems to have forgotten about the federal Animal Welfare Act’s requirements for the humane treatment of farm animals as well as states’ ability to ban the sale of the products of animal cruelty.  The California Attorney General’s office is reviewing the decision for a possible appeal of the law, which was upheld in previous litigation.

Foie gras is, without a doubt, cruel to animals.  To produce the alleged delicacy, geese and ducks are “force-fed a corn mash through a metal tube several times a day so that they gain weight and their livers become 10 times their natural size. Force-feeding sometime injures the esophagus of the bird, which may lead to death. Additionally, the fattened ducks and geese may have difficulty walking, vomit undigested food, and/or suffer in extreme confinement."  Do we as consumers still have a right to buy such a product even if it tastes very good?  No, according to at least California state law.

How anyone could make themselves eat this product is beyond my comprehension.  I confess that I am an animal lover and environmentalist.  I do personally believe in those core values.  However, I am quite far from an extremist and respect, to a very, very far extent, the opinions of the vast majority of other people.  Heck, I am not even a vegetarian (I try to at least buy free-range products).  But under notions of both positive law – state and/or federal – and natural law, this is where the buck must stop.  There must be limits to what we can do in the name of obtaining a gourmet experience, especially when it comes at such a high price of extreme suffering by our living, sentient creatures. And if consumers cannot draw such lines themselves, courts and legislatures must.  In the words of Mahatma Gandhi, “the greatness of a nation and its moral progress can be judged by the way its animals are treated.”  More than a dozen countries around the world have outlawed the production of foie gras.  In this respect, the United States is not great.  This case leaves a bad taste in my mouth and, I hope, in yours as well.

January 8, 2015 in Commentary, Current Affairs, Famous Cases, Food and Drink, In the News, Recent Cases | Permalink | Comments (1) | TrackBack (0)

Monday, January 5, 2015

Weekly News Roundup

Thanks to the Hattiesburg Patriot, we have a pdf of a decision from the Mississippi Chancery Court striking down a public contract as unconstitutional.  In January 2014, the City of Hattiesburg (the City) entered into a $137 million contract with Groundworx, LLC (Groundworx) for a wastewater treatment system.  In August, the City terminated the contract due to Groundworx's alleged failure to secure financing for the project.  Thomas Blanton intervened, alleging that the contract violates Article VII, Section 183 of Mississippi's constitution, which prohibits the government from lending credit in aid of a private business, and the Due Process clauses of both the Mississippi constitution and the U.S. Constitution's 14th Amendment.  The Chancellor held that the contract was tantamont to the City

Alex_Rodriguez
Flickr photo by Keith Allison 

lending its credit to Groundworx for a public project over which it had no effective control.  It thus violated the Section 183 and both due process clauses and was void ab initio.

As if Alex Rodriguez (pictured at right) did not have enough troubles already, the New York Daily News is wishing him a "Happy Sue Year" and reporting that A-Rod's ex-wife's brother is suing A-Rod for breach of a partnership agreement relating to the sale of Miami real estate.  

Our Uber-lawsuit coverage continues this week with this story from the St. Louis Post Dispatch.  The story reports on a planned class action alleging that Uber breached a contract with consumers by advertising that it shares 20% of fares with drivers as tips when in fact Uber keeps far more than that for itself.  The latest development is just a discovery battle that Uber lost.  It will have to provide relevant e-mails from Uber's CEO, Travis Kalanick.

January 5, 2015 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Friday, January 2, 2015

Airlines and Calling the Kettle Black

A few days ago, I blogged on the recent lawsuit by United Airlines and Orbitz against the developer of Skiplagged.  One of the causes of action alleged is breach of contract for encouraging the purchase of a ticket to certain destinations only to get off at an interim point to save money.

The airlines themselves may be breaching their contracts with flyers.  For example, when we buy tickets to be flown from point A to point B, that arguably implies being done so without undue delays and, in particular, possibly having to spend the night at your own cost and without your personal belongings in random cities around the world if connections are missed because of flight delays (unless, of course, you choose to spend the night sitting upright in the airport).  Needless to say, if you seek to change your ticket, airlines will either charge extreme high fees and the “difference in price” for doing so or outright prohibit this practice.  I’ve had to change tickets many times in the past, and it has typically only taken an agent about five minutes to do so.  Unconscionabiliy, anyone? 

Here’s what happened to me one cold winter night a few years back: On my way to Denmark from St. Croix, the airline was late taking off and got even more delayed when it “had to” make an unplanned “quick landing” for gas, which was cheaper at the interim airport than at the end destination, and… ice cubes for people’s drinks!  I wish I was kidding, but I’m not.  I missed the once-daily connection out of Atlanta to Copenhagen and had to spend the night in Atlanta in December.  As I was living in tropical St. Croix at the time, I had some warm clothes with me on board the airplane to stay warm there, but had packed my winter gear in my suitcase.  The airline paid for my hotel, but would, in spite of my desperate pleas, not let me have my suitcase back for the night.  Result: I had to travel to and from the hotel, etc., in indoor clothes on what turned out to be an unseasonably cold winter day in Atlanta (yes, I should have brought a warmer jacket on board the plane, but planes to and from the Caribbean are often very small and I always try not to bring too much carry-on items).

Before 1978, U.S. airlines were required under “Rule 240” to offer seats on a competitor’s next flight if that would be the fastest way of getting the traveler to his or her destination.  Airlines created after deregulation were never required to follow that rule, but older airlines such as Delta, United and Continental apparently still adhere to the rule.  Funny that they never seem to mention that when they delay you significantly.  Next time you fly, it may pay to scrutinize your contract of carriage more carefully to ascertain your rights in case of a delay. 

It may be time for Congress to reintroduce a Rule 240-type requirement on airlines, especially as these have become extremely good at flying full – even at overcapacity - and thus often do not have extra space for passengers that have missed their flights.  Good customer service often seems to have given way to airlines’ “me first” attitude in the name of hearing the highest profits possible by nickel-and-diming most aspects of airline travel on, at least, economy class.

Feeling empathetic towards the airlines?  Don’t.  Full or nearly full flights in conjunction with declining gas prices have enabled U.S.-based airlines to earn the highest profit margins in decades.  One trade group estimates that airline made 6% profit margins in 2014, higher than the highest rates in the 1990s.  Of course, the task of businesses is to make as much money as they can.  But at least they should live up to their own contracts of carriage and other contracts principles just as they claim passengers and website developers should.

Here’s a hat tip to Professor Miriam Cherry and other contracts professors on a well-known industry list serve for news about this story.  All opinion and thoughts above are my own.

January 2, 2015 in Commentary, Contract Profs, Contracts Profs Weekly Spotlight, Current Affairs, Famous Cases, In the News, Recent Cases, Travel | Permalink | Comments (0) | TrackBack (0)

Monday, December 29, 2014

Weekly News Roundup

TargetOn December 18th, the District Court for the District of Minnesota ruled on defendant's motion to dismiss in In re: Target Corporation Customer Data Security Breach Litigation.  The case relates to the hacking of 110 million Target customers last December.  Plaintiffs allege violations of state consumer protection laws, negligence and breach of contracts, both express and implied, among other things.  The court dismissed most claims with prejudice.  The breach of an implied contract claim survived, as a jury will have to determine whether plaintiffs can establish the terms of an implied contract.   The court dismissed the breach  of an express contract claim without prejudice.   Plaintiffs will be given an opportunity to specify what federal laws Target allegedly breach through its allegedly inadquate measures for safeguarding its customers' data.


And if you are looking for evidence that airlines really don't care what we think of them, look no further than United's motion to dismiss in Mamakos v. United Airlines, Inc.  In the case, plaintiff alleges the following:

  • United Airlines
    Photo by Luis Argerich
    She saw an empty seat on one of three legs of her trip from New York to Alaska;
  • She moved into that seat;
  • Stewardesses informed her that she would have to pay a $109 premium for the seat;
  • She did not want to pay and so moved back to her original seat;
  • United then removed her from the aircraft and, when she resisted had her arrested; and
  • United then cancelled her ticket and her return ticket.

United accepts the truth of these allegations for the purposes of its motion but maintains that it still did not breach its contract with plaintiff because of Rule 5(B) of United's Contract of Carriage (incorporated by reference into plaintiff's ticket), which permits United to cancel a reservation if the passenger refuses to pay for the applicable Ticket.  Apparently, once plaintiff's behind made contact with a premium seat, she was bound to pay or be forcibly ejected form the aircraft.  Sheesh.  

Really United?  Worth litigating?

December 29, 2014 in In the News, Recent Cases, Travel | Permalink | Comments (0) | TrackBack (0)

Thursday, December 18, 2014

Eleventh Circuit Rejects Claim for a Million Dollar Unilateral Contract

This case arises out of a fact pattern with which many contracts profs may already be familiar.  It's a new twist on Leonard v. PepsiCo., alas with the same result.

James Cheney Mason (Mason) represented defendant Nelson Serrano in a capital murder trial.  Mason gave an interview on NBC news in which he pointed out that his client could not have committed murders in Bartow, Florida on the same day that he was on a business trip in Atlanta Georgia.  Surveillance cameras from the La Quinta Inn in Atlanta established Serrano's presence at the hotel both before and after the murders.  The prosecution claimed that Serrano flew to Orlando, drove to Bartow, committed the murders, drove to Tampa, and flew back to Atlanta in time to show up on the surveillance tapes once again.  Serrano was convicted and sentenced to death.

Dunce_cap_fLaw student Dustin Kolodziej (Kolodziej) watched Mason's interview with NBC after it was edited for broadcast.  In the edited version that Kolodziej saw, Mason seemed to be offering a million dollars to anyone who could get off a plane in Atlanta and make it back to the La Quinta Inn in 28 minutes.  Kolodziej took this as a challenge and as a unilateral offer that he could accept by making the trip in 28 minutes or less.  Kolodziej recorded himself making the trip and sent the recording to Mason with a demand for payment.  Mason refused.

In Kolodziej v. Mason, the Eleventh Circuit upheld the grant of summary judgment to Mason.  In the unedited version of Mason's interview, it is clear that his challenge was directed at the prosecution and not erga omnes.  Moreover, the Eleventh Circuit found, no reasonable person could construe any statement that Mason made in either the edited or the unedited version of the interview as a serious offer to pay a million dollars to anybody who could travel from the airport to the hotel in 28 minutes.  According to the Court, the context in which the words were uttered (an attempt to poke holes in the prosecution's theory) and the hyperbolic nature of the alleged offer, with its familiar overtones of schoolyard braggadocio, were insufficient to establish Mason's willingness to enter into a contract.

The Court distinguished this case from the classics, Lucy v. Zehmer and Carbolic Smoke Ball and other, equally entertaining cases.  The Court was no more inclined to entertain Kolodziej's claim than it would be to declare Mason a monkey's uncle, if he had chosen that turn of phrase when attempting to illustrate the implausibility of the prosecution's timeline.  

The Court suggested that the entire suit was a result of Kolodziej's inadequate understanding of contracts doctrine (hence the duncecap image above, which by the way, does not represent Kolodziej).  The Court paraphrased Pope and suggested that a little legal knowledge is a very dangerous thing indeed.  As the Court explained,

Kolodziej may have learned in his contracts class that acceptance by performance results in an immediate, binding contract and that notice may not be necessary, but he apparently did not consider the absolute necessity of first having a specific, definite offer and the basic requirement of mutual assent.

This seems more than a bit unfair.  Kolodziej was wrong, but he may have thought it worth the gamble.  He lost his case, but he had quite an experience.  In any case, Judge Cardozo's remark in Allegheny College about how half-truths are sometimes mistaken for the whole truth seems more apposite.  

A classic form of statement identifies consideration with detriment to the promisee sustained by virtue of the promise. Hamer v. Sidway, 124 N. Y. 538, 27 N. E. 256, . . . . So compendious a formula is little more than a half truth. There is need of many a supplementary gloss before the outline can be so filled in as to depict the classic doctrine.

Mistakes of law such as Kolodziej's are common, and learned judges (and even law professors) as well as law students can make them.

 

December 18, 2014 in Commentary, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Saturday, December 13, 2014

Out with the Old… the Really Old

In the UK, two sections of the Statute of Marlborough are facing repeal after being in force for 747 years.  That’s right: the Statute was passed in 1267 and is thus older than the Magna Carta, which – although having been drafted in 1215 – was not copied into the statute rolls to officially become law until 1297.  Two sections, however, still remain good law.

Why the suggested repeal?  The two potentially obsolete sections address the ancient British power of “distress,” which allowed landlords to enter a debtor’s property and seize his/her goods.  However, distress was abolished by new legislation this past March.

But don’t worry, our British colleagues are not about to do anything rash or unpopular.  Although the Law Commission has proposed the repeal, a public consultation has been initiated to make sure that no one actually uses the two sections anymore.

Other newer, but nonetheless obsolete, laws are also being earmarked for removal.  One is from the 1990s and was drafted to regulate the “increasing popularity of acid house parties.”   Apparently, acid house parties are not in anymore and thus, the law is no longer needed.

In spite of the above, two sections of the Statute of Marlborough still remain in effect.  One forbids individuals from seeking revenge for debt non-payment without being sanctioned to do so by the court (you gotta love the fact that in the UK, one can apparently get courts to approve one seeking revenge against one’s debtors).  Another prevents tenants from ruining or selling off the landlord’s land.  Fair enough…

December 13, 2014 in Current Affairs, In the News, Legislation | Permalink | Comments (0) | TrackBack (0)

Friday, December 12, 2014

Still More on Ride Shares

Sick of reading our posts (and other news reports) about Uber and Lyft?

Try Schlep!

 

I am compelled to add that while the concept is brilliant and the execution quite fine, the script missed some low-hanging fruit suggested by the "Jewish geography navigation system" at the opening.  I humbly offer the following potential dialogues:

Driver: Where are you going in such a hurry?
Passenger: Elm and 17th.
D: Elm and 17th?  The Weinsteins live right around the corner! Do you know them?
P: I don't think so . . .
D: Such a nice couple.  Are you sure you don't know them?  I think they had a daughter around your age.  How old are you?  Where did you go to school?  And the Goldbergs live near there too -- surely you know them!
P: I'm just going to a dental appointment.  I don't live around there.
D: Well, you should, it's a lovely neighborhood.  Where do you live?  I know a realtor who could find you a nice apartment. . . 

-cut-

Passenger: Excuse me, I was actually heading in the other direction . . .
Driver: Oh, I know, hon, but I can only find my way there from the JCC, so I thought we'd go there first.  It's not far.
P: Umm
D: Or Solomon Schechter, is that closer?  I know how to get places from there or from the Temple . . .
P: I can direct you if you want.
D: Relax!  Enjoy the ride!  You young people are always in such a hurry these days.  Do you ever take the time to talk with your parents, I wonder?  We can just chat and catch up -- the time will pass quickly
P: Catch up?  But I don't even know you. 
D: You're about my son's age.  He just gave me my third grandchild. [Passing pictures back] Here, aren't they a lovely family?

-cut-

I'm just sayin . . .

December 12, 2014 in Commentary, E-commerce, In the News | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 10, 2014

More in Our Continuing Coverage of Uber/Lyft Lawsuits

Myanna posted yesterday about an L.A. Times story about Uber.  Today's New York Times has more news about attempts to regulate companies like Uber and Lyft.  The issue is the quality of the companies' background checks on their drivers.  In a sidebar, the Times notes that three states and seven foreign jursdictions have taken legal action against Uber.  But the ride sharing companies are energetic lobbyists and often have been successful in blocking regulation.

In a related story, the Times reports that an Uber driver in India is facing allegations that he raped a passanger.  Today's Times reports that the driver was wanted on other crimes as well.

December 10, 2014 in E-commerce, In the News | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 9, 2014

California Goes after Shared Ride Companies

Jeremy Telman and I both recently blogged on the intense criticism of and focus on “shared economy” companies such as Uber, Lyft and airbnb.

In what seemed an inevitable turn of events, the Los Angeles and San Francisco district attorneys filed a consumer protection lawsuit on 12/9/2010 against Uber for making false and misleading statements about Uber’s background checks of its drivers.  George Gascon, the district attorney for San Francisco, calls these checks “completely worthless” because Uber does not fingerprint its drivers.  Uber successfully fought state legislation that would have subjected the company’s drivers to the same rules as those required of taxi drivers.  Allegedly, Uber has also defrauded its customers for charging its passengers an “airport fee toll” even though no tolls were paid for rides to and from SFO, and charging a “$1 safe ride fee” for Uber’s background check process.  California laws up to $2,500 per violation.  There are “tens of thousands” of alleged violations by Uber.  However, even that will likely put only a small dent in Uber’s economy as it is now valued at $40 billion (yes, with a “b”). 

Lyft has settled in relation to similar charges and has agreed to submit information to the state to verify the accuracy of its fares (although not its background checks).  It has also agreed to stop picking up passengers at airports until it has obtained necessary permits.  Prosecutors are continuing talks with Sidecar.

Time will tell what prosecutors around the nation decide to do against these and similar start-ups such as airbnb and vrbo.com, which are also said to bend or outright ignore existing rules.

The Los Angeles Times comments that the so-called “sharing economy” companies face growing pains that “start-ups in the past didn’t – dealing with municipalities around the world, each with their own local, regional and countrywide laws.”  It is hard to feel too sorry for the start-ups on this account.  First, all companies obviously have to observe the law, whether a start-up or not.  Today’s regulations may or may not be more complex than what start-ups have had to deal with before.  However, these companies should not be unfamiliar with complex modern-day challenges as that is precisely what they benefit from themselves, albeit in a more technological way.  Finally, there is something these companies can do about the legal complexity they face: hire savvy attorneys!  There are enough of them out there who can help out.  But perhaps these companies don’t care to “share” their profits all that much?  One has to wonder.  Sometimes, it seems that technological innovation and building up companies as fast as possible takes priority over observing the law. 

December 9, 2014 in Commentary, Current Affairs, E-commerce, Famous Cases, In the News, True Contracts, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Morten Storm and the Totten Case

DroneAs indicated in this story,* CNN.com is greatly invested in the story of Morten Storm, who claims that he is a Danish double-agent who infiltrated Al Qaeda in the Arabian Penninsula (AQAP) and thus helped the U.S. target and kill AQAP operative and U.S. citizen Anwar al-Awlaki.

Storm (and his CNN co-authors) have quite a story to tell.  Among other things, he claims that the United States promised him $5 million for helping the U.S. in its al-Awlaki operation.  Although Storm is clearly an international man of mystery, there is little mystery on the question of whether he would have any luck on a claim against the U.S. for breach of a promise to pay $5 million.  The U.S. would undoubtdedly point to the Totten case, as updated in Tenet v. Doe, and courts will find the claim non-justiciable.

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Hat tip to my student, Brandon Carter.

December 9, 2014 in Commentary, Current Affairs, Government Contracting, In the News | Permalink | Comments (0) | TrackBack (0)

Monday, December 8, 2014

Weekly New Roundup

Wedding PhotoYet another non-disparagement case, this time for WTOC.com.  This time, it was a woman who cancelled an agreement with a wedding photographer within the contractually created cancellation period, and then went online to explain why she had done so.  The photographer threatened legal action claiming that she had violated a non-disparagement clause in the now-cancelled contract.

There was an interesting story last week on the International Business Times about Yo-Yo car sales.  Apparently, there are many variations to the practice, but the basic scheme runs as follows: car dealer sells a car to person with bad credit, who is happy to be able to buy a car on any terms.  Then, the dealer tries to sell the loan to a third party.  If it cannot do so, it calls the buyer back in and demands either a change in the loan terms or the return of the car.  The IBT story focuses on a buyer whom the dealer claimed committed felony auto theft and fraud.  The buyer filed a civil suit against the dealer, with claims ranging from violations of the Truth in Lending Act to defamation and deceptive trade practices.  The dealer has counterclaimed for fraud and breach of contract.

According to an AP story posted here in the UK's Daily Mail, California is wrangling with investors in a $2.3 billion deal for the sale and lease back of state properties.  The deal was conceived in the Schwarzenegger administration, but Governor Brown has determined that the deal will cost the state $1.5 billion.  California alleges that the investors failed to make an initial $50 million payment, triggering the State's rights to terminate the contract.  The investors are seeking a forced sale of the properties.  My students have their exam this week, so they might want to think about what we have here: partial breach? material breach? total breach? failure of a condition?  did California seek adequate written assurances? The AP story does not clarify these highly testable issues.

ErieottersFinally, we are happy to report that the law has saved hockey!  At least in Erie, Pennsylvania, according to this story on GoErie.com (Warning! This site has lots of annoying popups!).  Apparently, the Edmonton Oilers sought to enforce a judgment against the Otters' General Manager Sherry Bassin through a forced sale of the team.  The Oilers' scheme then involved buying the Otters through a subsidiary and moving them to Hamilton, Ontario.  But U.S. District Court Judge David Cercone blew the whistle and checked the Oilers when he set aside a judgment against Bassin  The Oilers would have to proceed through a breach of contract claim if they want to penalize Bassin for misconduct. In the meantime, the good people of Erie can enjoy their Otters.

December 8, 2014 in In the News, Sports | Permalink | Comments (0) | TrackBack (0)

New York Times Casts a Gimlet Eye on the New Sharing Economy & Insurance

Following up on Myanna Dellinger's post from last week, we noticed this story about Airbnb and Uber.  Both companies are leaders of the so-called new sharing economy, but what they really love to share (unequally) is risk.  The article  explains how insurance works for both companies, and the clear message is: it isn't clear that it will, at least not for the Uber drivers or people who use Airbnb to rent out their homes or apartments for days or weeks at a time.  Actually, the article has very little to say about Uber, which doesn't really share risk at all -- it tells its drivers to self-insure, and then the drivers run into trouble (if they run into things) because their insurance does not cover commercial activities.

ApartmentsAccording to the Times article, regular homeowners' insureance will not cover Airbnb renters because most standard homeowners' insurance policies do not cover harms caused by commercial activities.  Airbnb thus has taken out a secondary insurance policy that will cover up to $1 million in liability for the renters who use its site, and Airbnb is offering this policy to its users for free.  For reasons that are not really clear in the article, its author Ron Lieber suggests that Airbnb might not really provide insurance to its renters.  He points to Airbnb's checkered history of encouraging renters to ignore local ordinances and not being there for its renters who then ran afoul of the law.  He suggests that Airbnb's secondary insruance scheme might not cover the sorts of liabilities that renters might face, and it is clear that some primary homeowners' policies would also exclude liabilities arising out of commercial activiities.

NYC_Taxi_in_motion
Photo by The Wordsmith

And, as long as we are piling on Uber, Saturday's New York Times also featured an opinion piece by Joe Nocera.  According to Nocera, it is impossible to reach Uber by phone because, according to Nocera, Uber says having a phone center or customer service line is not in Uber's business model.  If you try to call the listing for Uber in New York City, you get another company, über, a New York design firm.  The owner of über claims that she fields between 1 and 10 calls a day from Uber customers seeking assistance.  She has even had to go to court to explain to the judge that the plaintiff sued the wrong Uber, or the wrong über. 

December 8, 2014 in Current Affairs, E-commerce, In the News | Permalink | Comments (0) | TrackBack (0)

Monday, December 1, 2014

Weekly News Roundup

Ghana-flag-2We start this week with international news:  According to a report from Ghanaweb, Ghana is suing Nigeria for breach of a contract to supply natural gas.  Under the West African Pipeline Project, Nigeria is to supply Ghana, Togo and Benin with gas, but it has supplied only about 40% of the gas contracted for.  While the report is a bit vague, it seems that the agreement at issue has a $20 million liquidated damages clause, which Ghana thinks is far too low and does not provide an adequate incentive for Nigeria to perform.  

In music industry news, the Daily Record informs us that songwriter Wendy Starland won a $7.3 million jury verdict against producer Rob Fusari, who had entered into a settlement with Lady Gaga in 2010.  Fusari had claimed entitlement to $30.5 million for helping to launch Lady Gaga's career and contributing to her break-out hit album (are they still called that?).  We reported about that suit here.  Lady Gaga testified at the trial, at which Starland claimed that she and Fusari had a deal for splitting proceeds from Lady Gaga's career. 

And yet another non-disparagement case: this one in the context of realtors.  San Diego's ABC's affiliate, 10news.com reports that a realtor sought to arbitrate its breach of contract claim against a homeowner who posted a negative review on Yelp.  The homeowner claims that the realtor demanded $8000 and the removal of the Yelp review in order to settle the claim.  As Nancy Kim has pointed out, California has a law that will go into effect Jan. 1, 2015, such non-disparagement clauses will be unenforceable.  There can also be fines of up to $10,000 for contractual provisions that violate the new law.  

December 1, 2014 in Celebrity Contracts, In the News, Music | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 25, 2014

More on Non-Disparagement Clauses

According to this story in the Mirror, a couple was charged an extra £100 for posting a review on TripAdvisor describing the Broadway Hotel in Blackpool as a "rotten, stinking hovel."  According to the report, the hotel believes that it is permitted to charge guests up to a maximum of £100 for negative comments, as the hotel's booking document so states.

According to the Mirror, this policy may violate unfair trade practices regulations.

For those of you curious about the hotel, you can find it TripAdvisor site here.

November 25, 2014 in In the News, Travel | Permalink | Comments (1) | TrackBack (0)

Monday, November 24, 2014

Weekly News Roundup

EbolaFile this under "Nice!"  According to this report in the Durham Herald Sun, the parents of a child who has been prohibited from attending his private school, the Mount Zion Christian Academy, are suing the school for breach of contract.  The allegations of breach are based on the fact that the child's parents are paying tuition, but their son is forbidden to attend his school.  

And what has the child done to earn this suspension?  Nothing!  His parents were informed that the child would not be permitted to attend school becasue his father had traveled to Nigeria, and the school did not want to risk the spread of ebola.  The school took these precautions despite the fact that:

  • there is no ebola in Nigeria;
  • the father had no contact with anyone with ebola;
  • the father was screened at the airport and cleared.

The superintendent of schools failed to appear at a hearing and a judge ordered the school to allow the child to return

According to this story from the Spokane Spokesman Review, an Idaho judge has thrown out as invalid a $60 million contract that the state entered into with Education Networks of America (ENA) and Qwest to provide a broadband network that would link every Idaho high school.  The plaintiff in the case, Syringa, had partnered with ENA on one of the two bids on the contract, but when the state awarded the contract to ENA, it cut Syringa out of the allocation of work in the contract.  The court found this a violation of state procurement law.

Sandra Troian a physicist at CalTech, has filed a complaint against the school, alleging violations of the California whistleblower protection statute and breach of contract, among other things.  Troian alleges that she had reported that the school had been infiltrated by a spy who was sending classified information to the Israeli government.  Troian alleges that the school ignored her because it did not want to endanger a large contract with Jet Propulsion Laboratories.  She further alleges that the school has retaliated against her for blowing the whistle.  

November 24, 2014 in Government Contracting, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Monday, November 10, 2014

Weekly News Roundup

According to this report on the International Business Times website, two children, through their mother, are suing Malaysia Airlines for breach of contract and negligence in connection with their father's death on Flight MH370.  Plaintiffs allege that the airline breached a safety agreement that it entered into with their father and the other passengers on the flight.  

Epstein-wendy-tAs reported here in the Bellingham Herald, the Indiana Supreme Court heard arguments on October 30th about the state's contract with IBM to privatize its welfare services.  The state was so disappointed with IBM's performance that it cancelled the contract three years into a $1.3 billion, ten-year deal.  Friend of the blog, Wendy Netter Epstein (pictured), has written about this case in the Cardozo Law Review.

Sunday's New York Times Magazine has a cover story pondering whether lawyers are going to do to football what they did to tobacco.  As an example of what this might look like we have this case filed on October 27, 2014 on behalf of Julius Whittier and a class of plaintiffs who played NCAA football from 1960-2014,  never played in the NFL, and have been diagnosed with latent brain injury or disease.  Mr. Whittier suffers from early-onset Alzheimer's.  The complaint alleges, among other things, breach of contract, based on NCAA documents requiring each member instittuion to look after the physical well-being of student athletes.  

November 10, 2014 in Government Contracting, In the News, Recent Cases, Sports, Travel | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 5, 2014

Expensive Wine

Duff's Private ReserveAccording to this story from NJ.com, a customer in an Atlantic City restaurant bought a bottle of wine with dinner.  The server showed him a wine list and suggested a wine.  When he asked how much the wine cost, she said, "Thirty-Seven Fifty," which he understood to mean $37.50.  She meant $3,750, and the wine list so indicated, but the customer did not have his reading glasses with him.  It's an interesting fact pattern.

Fortunately, an episode of The Simpsons provides best practices in this area, as animated television sit-coms do in most areas.  In episode 8F09, Burns Verkaufen der Kraftwerk, Homer's stock in the Springfield nuclear plant went up for the first time in ten years.  He sells and makes a cool $25.  Soon thereafter, the value of Homer's stock rises to $5200, but that's another matter.

Homer conte1mplates his options and decides to buy beer.  The following conversation with Moe (of Moe's Tavern) ensues:

Moe: Want a Duff?

Homer (haughtily): No, I'd like a bottle of Henry K. Duff's Private Reserve.

Moe  (Gasping): Are you sure? 'Cause once I open the bottle, there's no refund.

See?  That's how it's done!

November 5, 2014 in Commentary, Food and Drink, In the News | Permalink | TrackBack (0)

Monday, November 3, 2014

Recent Contracts News

As reported on JDSupra here, the Florida District Court of Appeal for the Fourth District, sitting en banc, held that while an insurer’s liability for coverage and the extent of damages must be determined before a bad faith claim becomes ripe, the insured need not also show that the insurer is liable for breach of contract before proceeding on the bad faith claim.

We have also learned from JD Supra of Piedmont Office Realty Trust v. XL Specialty Ins. Co., 2014 U.S. App. LEXIS 20141 (11th Cir. Oct. 21, 2014), in which the United States Court of Appeals for the Eleventh Circuit, elected to certify to the Supreme Court of Georgia the question of whether an insured’s payment obligations under a judicially approved settlement agreement qualify as amounts that the insured is “legally obligated to pay,” and if so, whether the insured’s failure to have obtained the insurer’s consent to settle resulted in a forfeiture of coverage.

FootballAccording this this report on Yahoo! Sports, Oklahoma State is suing the former Offensive Coordinator of its football team, Joe Wickline (who now is a coach for the University of Texas), and Wickline has countersued.  According to the report, Wickline's contract with Oklahoma State require that he pay the balance of his contract ($593,478) if he left for another position and was not his new team's play-caller. Wickline claims that he is calling plays at Texas.  What a bizarre thing to put in a contract.  It's a reserve non-compete!  In effect, Oklahoma State is saying that it would pay Wickline to call plays for a rival.

According to this report from the Courthouse New Service,  Ted Marchibroda Jr., the son of NFL Football coach Ted Marchibroda, filed a $1 million malpractice lawsuit against Sullivan, Workman & Dee and trial lawyer Charles Cummings , alleging breach of contract, professional negligence and breach of fiduciary duty.  In a 2011 lawsuit, Marchibroda accused sports agent Marvin Demoff of breaching an agreement to share the proceeds of NFL contracts for linebacker Chad Greenway. He claims that he is also owed money for recruiting center Alex Mack. 

McIlroy
Uploaded by Mark Schierbecker 

And continuing our sports report, Golf.com notes that golfer Rory McIlroy is taking a break from the "sport" to pursue his legal claims against his former management company, Horizon Sports Management.  McIlroy claims that Horizon took advantage of his youth to extract an unconscionable 20% fee for McIlroy's off-the-course income.  Horizon is claiming $3 million in breach-of-contract damages.

In a simpler companion case to the Sharpe v. AmeriPlan Corp. case about which we blogged earlier today, the Eighth Circuit affirmed the District Court's denial of a motion to compel arbitration in Quam Construction Co., Inc. v. City of Redfield.  As reported here on Law.com, the case was relatively easy, since the contract at issue contained permissive language: "the parties may submit the controversy or claim to arbtiration."  Given such language, the Eighth Circuit agreed with the Distrcit Court that arbitration could not be compelled.

November 3, 2014 in In the News, Recent Cases, Sports | Permalink | TrackBack (0)

Friday, October 24, 2014

The New York Times's "The Upshot" Column on Wrap Contracts

Yesterday's New York Times included a "The Upshot" column by Jeremy B. Merrill.  The print version was entitled Online, It's Easy To Lose Your Right to Sue [by the way, why can't the Times be consistent in its capitaliziation of "to"?], but the online version's title tells us how easy, One-Third of Top Websites Restrict Customers' Right to Sue.   The usual way they restrict the right is through arbitration provisions and class-action waivers.  They do so through various wrap mechanisms so that consumers are bound when they click "I agree" to terms they likely have not read and perhaps have not even glanced at.  

Some websites attempt to bind consumers by stating somewhere on their websites that consumers are bound to the website's and the company's terms simply by using the company's website or its products (I'm looking at you, General Mills).  The only thing surprising about this, given the Supreme Court's warm embrace of binding arbitration and class action waivers, is that two-thirds of websites still do not avail themselves of this mechanism for avoiding adverse publicity and legal accountability.

As I was reading this article, it started to sound very familiar -- a lot like reading this blog.  And just as I was beginning to wonder why the Times was not ' quoting our own Nancy Kim, the article did just that:

Wrap Contracts“Courts have been very reluctant to say that browsewrap is not enforceable,” said Nancy S. Kim, a professor at the California Western School of Law and the author of a book about online contracts.

When courts decide whether a website’s terms can be enforced, they look for two things, Ms. Kim said: First, whether the user had notice of the site’s rules; and second, whether the user signaled his or her agreement to those rules. Courts have ruled that simply continuing to use the site signals agreement. When browsewrap agreements have been thrown out, as in the Zappos case, courts have said that the site’s link to the terms wasn’t displayed prominently enough to assume visitors had noticed it.

Congratulations to Nancy on such prominent notice of her scholarship!

And congratulations to the Times for paying attention!

 

October 24, 2014 in About this Blog, Contract Profs, In the News | Permalink | Comments (1) | TrackBack (0)