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Wednesday, December 11, 2013

Congressional Study Finds that Violation of Federal Labor Laws Is No Bar to the Award of Federal Contracts

As reported here in The New York Times, a new congressional study found that the U.S. government continues to enter into contracts with firms that have been assessed heavy penalties for violating fundamental labor laws.  According to the report (unfortunately the Times provides no link and I could not find one through a quick Google search), 18 companies that received federal contracts were among the recipients of the 100 largest fines issued by the Occupational Safety and Health Administration.  Thirty-two federal contractors were among the leading companies in the amount of back pay owed to employees for wage violations.  

OSHA
There were about 50 companies that, among them, totalled nearly 1800 violations.  These companies were awarded $81 billion in contracts and paid nearly $200 million in fines and other assessments.  

The congressional committee that produced the report called for higher standards but did not go so far as to recommend that companies with major violations of labor law be considered ineligible for the award of government contracts.

[JT]

UPDATE:

Thanks to our anonymous tipster (see comments below), we have been able to find the full study.  Below is the Executive Summary:

Executive Summary

Each year, the United States pays out over $500 billion in taxpayer dollars to private companies for goods and services, much of which is used to pay the salaries of millions of workers. Taken together, companies that receive government contracts employ an estimated 22 percent of the American workforce, approximately 26 million workers.

Some of the nation’s largest federal contractors fail to pay their workers the wages they have earned or provide their employees with safe and healthy working conditions. The analysis found that almost 30 percent of the top violators of federal wage and safety laws are also current federal contractors.

Specifically:

  • Eighteen federal contractors were recipients of one of the largest 100 penalties issued by the Occupational Safety and Health Administration (OSHA) of the Department of Labor between 2007 and 2012. Almost half of the total initial penalty dollars assessed for OSHA violations were against companies holding federal contracts in 2012.
  • Forty-two American workers died during this period as a result of OSHA violations by companies holding federal contracts in 2012.
  •  Thirty-two federal contractors received back wage assessments among the largest 100 issued by the Wage and Hour Division of the Department of Labor between 2007 and 2012.
  • Thirty-five of these companies violated both wage and safety laws.
  • Overall, the 49 federal contractors responsible for large violations of federal labor laws were cited for 1,776 separate violations of these laws and paid $196 million in penalties and assessments. In fiscal year 2012, these same companies were awarded $81 billion in taxpayer dollars.

Federal law is intended to prevent taxpayer dollars from increasing the profits of companies with a record of violating federal law in two ways: by requiring contracting officers to assess a prospective contractor’s responsible compliance with federal law prior to awarding a contract, and by allowing agencies to suspend or debar contractors for certain behavior, including violations of federal law, in order to protect the integrity of taxpayer dollars.

In recent years, the federal government has increasingly used the contracting process to procure employee-based service work such as cleaning, security, and construction. However, a new analysis shows that taxpayer dollars are routinely being paid to companies that are putting the livelihoods and the lives of workers at risk. Many of the most flagrant violators of federal workplace safety and wage laws are also recipients of large federal contracts.

Almost half of the total initial penalty dollars assessed for OSHA violations were against companies holding current federal contracts.Unfortunately, this report demonstrates that the officials responsible for determining if a prospective contractor is a responsible entity prior to awarding a contract lack access to information on labor violations and lack the tools to evaluate the severity or repeated nature of these types of violations.

This is true even though the Clean Contracting Act of 2008 specifically required that a database be established to help agencies evaluate violations of federal law in making a responsibility determination. Some of the many incidents of misconduct that are not currently available to contracting officers in this database include:

  • The death of a 46-year-old father of four, who was working as a washroom operator at a Cintas Corporation facility in Tulsa, Oklahoma. He was killed after being swept into an industrial dryer when he attempted to dislodge a clothes jam. The dryer continued to spin with him inside for 20 minutes at over 300 degrees. Cintas received $3.4 million in federal contracts in fiscal year 2012.
  • The death of two employees of a Mississippi shipbuilding and ship repair company owned by ST Engineering Limited, who were killed when highly flammable materials being used to prepare a tugboat for painting ignited, leading to an explosion and fire. Findings of the investigation included failure to properly ventilate a confined space and lack of a rescue service available for a confined space. ST Engineering received $1.9 million in federal contracts in fiscal year 2012.
  • The deaths of seven workers at an Anacortes, Washington refinery owned by Texas based Tesoro Corporation, who were killed when a heat exchanger ruptured and spewed vapor and liquid that exploded. The workers who died were standing near the area of the rupture specifically to attempt to stop leaks of the volatile, flammable gases in the facility which had not been inspected for 12 years prior to the rupture. Tesoro received $463 million in federal contracts in fiscal year 2012.

The federal government is not required to contract with the private sector. Indeed, many of the functions that private contractors carry out for the government could be done equally well or better by government employees. But, when the government does solicit work from the private sector, it should use taxpayer dollars in a way that promotes compliance with federal law and improves the quality of life for working Americans.

Ensuring that the government contracts with actors who do not engage in serious or repeated violations of federal labor law is one important step to further that goal. Recommendations that will better protect taxpayer dollars and promote compliance with laws that protect the lives and livelihoods of American workers by those who receive taxpayer money include:

  • Improvements in the quality and transparency of Department of Labor information regarding violations of federal law.
  • Publication of an annual list of federal contractors that were assessed penalties or other sanctions, and as well as additional information concerning contractor compliance with labor law by the Department of Labor.
  • Improvement of contracting databases administered by the General Services Administration including increasing public transparency and expanding the amount of misconduct information included in those databases.
  • Issuance of an Executive Order requiring contracting officers to consult with, and obtain recommendations from, a designated official at the Department of Labor about violations of federal labor law when making responsibility determinations.
  • Issueance of an Executive Order to establish additional tools – beyond the existing responsibility determination and suspension and debarment process – that contracting officers, in consultation with the Department of Labor, can use to ensure that contractors comply with federal labor law.

 

 

December 11, 2013 in Government Contracting, In the News | Permalink | Comments (1) | TrackBack (0)

Monday, December 9, 2013

Breach of a Promise to Marry

RingEvery once in a while, a student will send me a story about contracts, but when multiple students send me the same story, you know they must be desparate for a study break -- and that there is some rather comical contracts story in the news.

And so it is with this story about a woman who won a $50,000 judgment on her claim that her fiance had breached his promise to marry her.  A Georgia appellate court upheld the judgment, which included an award of attorney's fees, on appeal.   The court more or less treated the couple as married and upheld an award of roughly half the property acquired during the relationship, which was a house valued at $86,000.   The couple had co-habited for ten years and had a child together.  The woman had looked after the child, as well as one she had from a previous relationship.  

The man had had sexual relationships with other women both before and after he led his live-in partner to believe that he would marry her and gave her a ring worth $10,000.  For what it's worth, the woman also had other sexual relationships. 

According to media reports, the defendant's argument on appeal was that his alleged promise arose in the context of a meretricious relationship and was therefore unenforceable. Moreover, he denied any intention to marry.  He claims he never said "will you marry me" or words to that effect. He just gave her a ring.

The meretriciousness argument is rather confusing, as a defense to the claim that he broke a promise, since the promise was to cleanse the relationship of its meretriciousness.  As the appellate court noted, according to FoxNews, “the object of the contract is not illegal or against public policy.”  If we still live in a world in which courts think they can pass judgment on people's long-term relationships (and we seem to), then a court is likely to uphold an agreement that will "make an honest woman" of the plaintiff.  

The award of damages is also confusing.  the effect of the ruling seems to be to treat the couple as married even though they weren't.  In effect, the court is recognizing a common law marriage where such marriages do not seem to be recognized.  I suppose the court could do so as a mechanism of giving the woman her expectation for the broken promise.  The California Supreme Court endorsed such an approach in Marvin v. Marvin, but other courts have rejected marriage by judicial decree where the legislature has expressed its disapproval of recognition of common law marriages.

[JT]

December 9, 2013 in Commentary, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Saturday, December 7, 2013

Will Tough Mudder's Liability Waiver Hold Up?

Tough Mudder hosts extreme 10-mile obstacle course challenges.  If you are unfamiliar with the company, this video should give you a sense of the challenges Tough Mudder creates: 

Before a participant may enroll in an event and run the course, he/she must agree to an assumption of risk, waiver of liability and indemnity agreement.

Outdoor magazine has a story this month about the tragic death of Avishek Sengupta at a Tough Mudder event in Maryland.  He jumped into the deep, muddy pool at the "Walk the Plank" obstacle and did not emerge.  His tragic death is recounted in harrowing detail in the Outdoor magazine article, which mentions that Avishek's family has sued Tough Mudder and Amphibious Medics, a subcontractor that was onsite to provide rescue services.  

Central in the case will be the enforceability of the waiver of liability.  The parties weren't too fortchoming with litigation strategy but the article does provide:

Tough Mudder won't discuss its strategy for the Senguptas' legal action—nor will anyone from Amphibious Medics—but if the suit goes forward, its lawyers will likely stress the fact that Avi signed what Tough Mudder calls a Death Waiver, exculpating the company of liability for certain acts of "ordinary negligence" and "inherent risks," such as "inadequate or negligent first aid and/or emergency measures" and "errors in judgment by personnel working the event."

But the Boston-area firm Gilbert and Renton, representing Avi's estate, will likely argue that such waivers do not relieve Tough Mudder of the legal "duty of care" that exists whenever a business knowingly creates predictable hazards for the public. In the case of Walk the Plank, the predictable hazard—drowning—is clear enough. Hence the presence of a rescue diver and lifeguards at the obstacle on the day Avi drowned.

This will be an important and interesting case for liability waivers.  Worth following.

[Meredith R. Miller]

 

  

December 7, 2013 in Games, In the News, Sports | Permalink | Comments (0) | TrackBack (0)

Monday, December 2, 2013

California Controller Sues SAP for Failed Payroll System

CA State SealAccording to this report from the Courthouse News Service, California Controller John Chiang is suing SAP Public Services (SAP), a company with which the state of California had contracted for payroll services software (MyCalPAYS) that would assist California in managing payments to its 240,000 employees.  After three years of development and eight months of trials, California alleges that SAP still has not managed to get the system to work.

The system was projected to cost California taxpayers just over $100 million, but by the time it was cancelled, it had cost $260 million and never worked right, according to the state.  The state claims that MyCalPAYS was tried out on a test goup, and the results were disastrous: overpayments, underpayments, failures to report deposits in retirement accounts, childcare payments and medical contributions.  Although the state complained before declaring SAP to be in default, SAP contended that the system was working as designed.  

As Courthouse News Service reports, California encounered similar problems when it contracted with software developer Deloitte to manage its statewide judicial case management system.  

California, Kathleen Sebelius feels your pain.  

[JT]

December 2, 2013 in Government Contracting, In the News | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 26, 2013

Starbucks Managers Get to Share in Tip Pool, Says District Court

TipOn November 21, 2013, the U.S. Court of Appeals for the Second Circuit decided  Barenboim v. Starbucks Corp., a case brought by a class consisting of Starbucks baristas who challenged a company rule that forces them to share tips with shift supervisors.  
 
Plaintiffs contended that the District Court had erred in refusing to construe New York Labor Law § 196-d to prohibit Starbucks from distributing pooled tips to shift supervisors becasue such Starbucks employees are "agents" as that word is used in the statute. Section 196-d provides that  “[n]o employer or his agent or an officer or agent of anycorporation, or any other person shall demand or accept, directly or indirectly, any part of thegratuities, received by an employee, or retain any part of a gratuity or of any charge purported to be a gratuity for an employee.”  The Second Circuit affirmed the District Court's grant of summary judgment in favor Starbucks.  
 
The case had previously been certified to the New York Court of Appeals, which rejected plaintiffs' argument that § 196-d bars any employeee with supervisory responsibility from sharing in pooled tips. So long as personal service to patrons is a principle or regular part of the employees' duties, they may share in tips.  Supervisory employees may not share in tips when they have the authority to make employment decisions relating to the baristas.
 
The Second Circuit ruled that, given the limited nature of the supervisory duties performed by shift supervisors, coupled with their principal responsbilities for providing personal servcie to patrons, the shift supervisors' principal responsibilities to provide personal service to patrons, they did not exercise  ‘meaningful or significant authority or control over subordinates.  As a result, the Court ruled that Starbucks does not violate § 196-d by permitting shift supervisors to share in pooled tips.
 
[JT]

November 26, 2013 in Food and Drink, In the News, Labor Contracts, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 20, 2013

NY Appellate Court Reinstates Claim Based on Couple's Oral Cohabitation Agreement

2ddeptLaura Dee (plaintiff) and Dena Rakower (defendant) lived together in a committed, same-sex relationship for nearly 18 years and are the parents of two children.  In her complaint, Dee alleges that they had an oral “joint venture/partnership agreement” whereby Dee would share in Rakower's assets, including Rakower’s retirement contributions and earnings, in exchange for Dee leaving her full-time job to care for their children.  The couple’s entire relationship pre-dated the passage of New York’s Marriage Equality Act.  Upon termination of the couple’s relationship, Dee sued Rakower for, among other claims, breach of contract.  The trial court dismissed the cause of action for breach of contract; in a divided opinion, the Appellate Division  (Second Department) reinstated that claim.

The majority of the appellate court reasoned that the allegations in the complaint sufficiently plead a cause of action for breach of contract:

The alleged contractual agreement between the parties was supported by consideration. "Consideration consists of either a benefit to the promisor or a detriment to the promisee. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as consideration for the promise made to him [or her]" * * * The consideration here for the alleged contract is the forbearance of the [Dee’s] career, the inability to continue to save toward her retirement during that forbearance, and her maintenance of the household in return for a share in [Rakower’s] retirement benefits and other assets earned during the period of forbearance. * * * Since [Dee] also alleged that [Rakower] breached the alleged agreement and that she has sustained damages as a result of that breach, at this pleading stage, the eighth cause of action [to recover damages for breach of contract] must survive dismissal * * *.


The fact that the alleged agreement was made by an unmarried couple living together does not render it unenforceable. "New York courts have long accepted the concept that an express agreement between unmarried persons living together is as enforceable as though they were not living together, provided only that illicit sexual relations were not part of the consideration of the contract'" (Morone v Morone, 50 NY2d 481, 486, quoting Rhodes v Stone, 63 Hun 624, 624 [citations omitted]). "[W]hile cohabitation without marriage does not give rise to the property and financial rights which normally attend the marital relation, neither does cohabitation disable the parties from making an agreement within the normal rules of contract law" (Morone v Morone, 50 NY2d at 486; see Matter of Gorden, 8 NY2d 71, 75).

The case at bar is similar to Morone v Morone (50 NY2d 481). In Morone, the parties cohabited as husband and wife although they were not married. The plaintiff claimed that the parties had entered into an oral partnership agreement whereby, among other things, they agreed that the net profits of their partnership would be used and applied for their equal benefit **. The plaintiff devoted herself exclusively to their relationship and this endeavor. The Court of Appeals concluded that the plaintiff sufficiently stated a breach of contract cause of action.
There is no reason, on this record, at this early stage of the litigation to conclude, as the Supreme Court did, that the oral agreement between the parties cannot serve as the basis for a breach of contract cause of action. ***

Contrary to the Supreme Court's determination and the opinion of our dissenting colleague, [Dee’s] failure to specifically allege that there was a "meeting of the minds" as to how the assets would be distributed upon the termination of the parties' relationship does not compel the conclusion that the complaint fails to state a cause of action to recover damages for breach of contract.  * * * The complaint specifically alleges that the parties agreed to share equally the defendant's retirement account accrued during that period of time that the plaintiff did not work at a job that provided a retirement plan without consideration of the direct and indirect contributions of the parties or when such contributions were made. Thus, as alleged, there is sufficient definiteness to the material terms of the alleged agreement between the parties to establish an enforceable contract (see Joseph Martin, Jr., Delicatessen v Schumacher, 52 NY2d 105, 109). The failure to include the mechanism for the implementation of the parties' alleged agreement does not negate the allegations in the complaint that they entered into an agreement with regard to the rights to their assets.

The dissent, however, took the view of the oral agreement, stating that “the complaint is devoid of any allegation as to whether and how their assets and pension benefits would be divided in the event the parties were to no longer be together.”  The dissent opined that “read[ing] such a provision into the parties’ agreement, where none is expressed in the complaint, would result in the invention of an implied contractual provisions which, as noted, is prohibited by our law for agreements between unmarried persons living together.”   Then the dissent expressed concern that Dee seeks “equitable distribution” without alleging that the parties had expressly agreed to such a distribution:

Distilled to its essence, the plaintiff in this action seeks "equitable distribution" of the defendant's assets and future pension benefits without alleging in the complaint that the defendant had promised to share them if the parties did not stay together. Indeed, there is no allegation that the parties had any meeting of the minds as to the distribution of property or assets upon a termination of their relationship. Absent such an allegation, and absent an affidavit from the plaintiff clarifying or expanding her description of the parties' agreement to cover such an eventuality, the complaint fails to state a cause of action. The plaintiff's theory of recovery is dependent upon implying terms for the distribution of retirement benefits to circumstances involving the dissolution of the parties' familial relationship. The Supreme Court properly refrained from implying such provisions into the oral contract in determining that, under the circumstances alleged, the "complaint lacks a contract for the court to enforce."

No aspect of this partial dissent speaks to the merits of the New York's more recent enactment of the Marriage Equality Act. This Court is sensitive to the complications occasioned by various forms of familial relationships that necessarily result in financial agreements or entanglements. The judiciary, however, is limited in addressing and determining the ownership and/or distribution of familial assets, absent either the existence of a lawfully recognized marriage or an enforceable expressed contract between persons in a cohabitational relationship.

 According to an article in the NYLJ about the case:

The court agreed to resolve the appeal though the parties settled, apparently  accepting the position of Dee's pro bono attorney, Michele Kahn of Kahn &  Goldberg, that the case involved important issues for both gay and heterosexual  couples.

Kahn noted in a letter to the court that there were "tens of thousands of  unmarried, mostly gay, couples in the State." Although those couples can now  marry, she said "questions will remain" about the application of equitable  distribution laws to "specific and identifiable promises and agreements" prior  to their marriages.

Kahn also argued that, according to the Census Bureau,"an increasing number  of couples are rejecting the institution of marriage."

"The manner in which this couple conducted their lives—relying and acting  upon each others' specific promises, without formal writings, is the way that  most unmarried couples live their lives," she wrote. "Inevitably, many of these  couples will break up, and inevitably many of these couples will be involved in  litigation over property and assets that were acquired during the relationship,"  Kahn wrote.

Dee v. Rakower, 2013 NY Slip Op 07443 (2d Dep't Nov. 13, 2013).

[Meredith R. Miller]

November 20, 2013 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 13, 2013

A Bitter Cup

Starbucks lost an arbitration fight with Kraft Foods and is being fined nearly $2.8 billion.  Yes, you read that right - that's billion with a B.  At the center of a dispute was a 1998 contract that required Kraft to distribute and market Starbucks brand coffee to U.S. retailers.  The agreement was supposed to terminate in 2014 but Starbucks didn't want to wait that long.  It complained that Kraft wasn't doing a good job promoting its coffee and offered Kraft $750 million to terminate the contract.  Kraft rejected but Starbucks ended it in 2011 anyway (and entered into a deal with Green Mountain Coffee Roasters) which led Kraft to commence arbitration proceedings. 

Another reminder to think carefully about those long durations in contracts - you can never predict how things will go and it's a good idea to really think about those termination provisions.

 

[Nancy Kim]

November 13, 2013 in Current Affairs, Food and Drink, In the News, Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Obligation to Return the Cash?

A New Haven rabbi purchased a desk on Craigslist for under $200.  When the desk couldn't fit through the doorway, he and his wife took it apart.  There was $98k in cash in a bag behind one of the drawers.  As one article explains:

"Right away my wife and I sort of looked at each other and said we can't keep this money."

They picked up the phone and called the original owner. They recorded the call on cellphone video.

"I saw there was a bag back there and through the bag I saw one 100 dollar bill and I', like, Oh my gosh there's money in there'. And i picked it up and this is pretty heavy. And I brought it over to the table and sort of counted it up and was like 'oh my gosh'."

The original owner was speechless. "Oh my gosh, because I... oh my God," she said.

The former owner had stuffed her inheritance in the desk and forgot where she put the money.

My sense is that the good rabbi did the right thing.  But was he legally obligated to return the cash?  He certainly received more than he bargained for, but seller beware?  Or, would the seller be able to claim mutual mistake to rescind the contract?

[Meredith R. Miller]

November 13, 2013 in In the News | Permalink | Comments (0) | TrackBack (0)

A Slam Dunk of a Deal

In a situation that underscores the importance of thinking twice about very long term contracts, the NBA wants to end a contract which requires it to pay two brothers a percentage of its broadcast revenues.  Back in 1976, the Silna brothers owned an ABA franchise, the Spirits of St. Louis.  When the ABA merged with the NBA, the Silnas agreed to this bargain - they would dissolve their team in exchange for 1/7 of the television revenues for the four ABA teams that were merged.  The four teams were the Indiana Pacers, the San Antonio Spurs, the Brooklyn Nets and the Denver Nuggets. 

Sure, back in 1976, the Silnas might have looked silly for giving up a huge buyout for something that seemed pretty worthless (the NBA wasn't even televised prime time) but now the deal is being called "the greatest sports deal of all time."  

Not kidding about that "all time" either - the Silvas reportedly received $19 million under the contract last season and the contract term is "in perpetuity."  Fat chance the NBA will be able to scream foul on the basis of lack of mutuality...

 

[Nancy Kim]

November 13, 2013 in Current Affairs, Games, In the News, Miscellaneous, Sports, True Contracts | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 6, 2013

Eric Goldman on Getting from "Dope" to "Nope"

GoldmanOn Monday, the Distrct Court for the  Southern of New York issued its opinion in  Beastie Boys v. Monster Energy Company, 12 Civ. 6065 (PAE) (S.D.N.Y. November 4, 2013).  The issue in the case was whether DJ Z-Trip had authorized Monster Energy to use a remix and video Z-Trip (Mr. Z-Trip?) had made of Beastie Boys songs.   Z-Trip wrote to Monster Energy saying, "Dope!" in the context of series of exchanges with Monster Energy over use of of the remix, and Monster Energy construed that word as consent.

Santa Clara Law Professor Eric Goldman (pictured) has a thorough anlysis here.

[JT]

November 6, 2013 in Celebrity Contracts, Contract Profs, In the News, Music, Recent Cases, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 5, 2013

What's the Cost of Entrance to the Met?

Free?  Suggested donation of $25?  Free on some days?  There are two lawsuits currently seeking to clarify.  According to the NYT:

MetUnder a clause in its original 1876 lease for the space, and according to an 1893 state law, the suits contend, the museum is required to allow visitors to be admitted free on most days of the week.       

“This is a case about democracy in New York,” said Andrew G. Celli Jr., a lawyer for the plaintiffs. “We had a partnership between the government and the arts communities, and it is clear that the bargain has broken down.”       

Many visitors make a different sort of bargain when they visit the museum, an internal one involving rapid and conflicting questions of guilt, moral obligation, personal financial prudence and not wanting to look cheap.       

Meanwhile, the Met said that free admission went the way of free love back in 1970, when a new deal struck between the city and the museum effectively superseded all the old arrangements. Though controversy raged around the introduction of the new “Pay What You Wish” policy back then, those were simpler times, with simpler sums: many visitors paid less than 25 cents to receive the famous Met buttons (which were briefly tickets and are now stickers).       

“The agreement with the city specifies that there has to be some minimal contribution,” said Harold Holzer, the Met’s senior vice president for public affairs. “There are people who express their own interpretation of the policy by paying very little. But something is required.”       

There is no question that except for the most alert visitor, a murkiness surrounds the matter of how to gain entry to the museum correctly. First, there are the signs that set out admissions prices in bold type — $25 for adults; $17 for those over 65 — and also contain the smaller, unbolded word “recommended.” Then there are the printed materials noting that a perk of annual membership (cost: $60 and up) is free admission, the implication being that members get huge savings — which, in fact, they do not, since technically they are not required to pay very much to begin with.       

There are Internet deals, including a recent offer from Groupon, that offer discounted tickets but fail to point out that visitors already have the right to unilaterally discount their own tickets.       

“I know lifetime New Yorkers who don’t quite know what it all means,” Mr. Celli said. “And it’s much harder if you’re not a New Yorker.”       

In its defense, the Met points out that it charges nothing for special exhibitions and that even $25 does not cover the cost of a museum visit.       

If the Met loses in court, it stands to forfeit some $40 million in annual revenue, or about 16 percent of its $250 million operating budget. An adverse decision could also affect other museums in the city, like the American Museum of Natural History, which has a similar suggested admissions policy.       

To understand the plaintiffs’ arguments, it is necessary to go back to the 1870s, when the state authorized the Parks Department to set aside land for a grand new art museum of which the city could be proud. Whether the museum should charge admission was one of the most hotly contested issues surrounding its inception. In the end, its lease with the city specified that on four days a week it “be kept open and accessible to the public free of charge.” In 1893, the state legislature enacted a law changing that to five days and two nights a week. That left the museum able to charge for admission on non-free days.       

And that was where the matter stood, more or less, until the early 1970s, when the museum was running at a deficit, and its director, Thomas Hoving, asked the city for permission to charge general admission daily. The City Council balked. “A penny today may be a dollar tomorrow,” warned Councilman Carter Burden, according to court papers.       

But a deal was hatched between Hoving and August Heckscher, the redoubtable New York City Parks Commissioner and Administrator of Recreation and Cultural Affairs. Heckscher said he would allow the museum to charge a fee as long as its amount was “left entirely to the individual’s discretion.”

Heckscher promised to direct the city’s Corporation Counsel office to amend the museum’s lease, but it never did. (The museum says no amendment was needed because, as the museum’s landlord, the city can set whatever rules it wants.)       

According to the two lawsuits — one that says the museum deceives its visitors and is guilty of fraud, and the other a class-action suit seeking recompense for people who claim that they were duped by the policy — the Heckscher-Hoving agreement violates the lease and the law. The plaintiffs in the suits comprise five museumgoers, including a persistent critic of, and past litigant against, the museum on other matters, and two Czech citizens who responded to an Internet appeal for people who said they had been misled into paying the full suggested admissions price.

More here.

[Meredith R. Miller]

November 5, 2013 in In the News, Recent Cases | Permalink | Comments (1) | TrackBack (0)

Grateful Dead Bassist Grateful for Steady Work at Age 73

Phil LeshContracts law is about facilitating mutually beneficial transactions.  Where would we be in a world without contracts lawyers?

A case in point is this story in the New York Times: Long-time Grateful Dead bassist, Phil Lesh (pictured), has entered into a contract with Peter Shapiro, a promotor, venue owner and life-long Deadhead to make it possible for Lesh to do 45 concerts a year without having to drive around the country in a tour bus.

More than half of the concerts will be at two venues owned by Mr. Shapiro, the Capitol Theater in Port Chester, New York (just north of Manhattan), and the Brooklyn Bowl, a combination rock club/bowling alley in Williamsburg.  The Capitol is a renovated, 2000-seat 1920s movie palace and is said to be an ideal space for Mr. Lesh's music.

The deal is sweet on both sides, from the way it is described in the Times.  Mr. Shapiro gets all sort of merchandizing rights and the rights to recordings of the concerts -- more non-bootleg bootlegs in the Grateful Dead tradition -- while Lesh gets to perform as much as he wants, where he wants, with reduced travel and hassle.  This is clearly beneficial to both parties and to third-party beneficiaries (aka Deadheads) who will get to see a lot of Phil Lesh in the New York area and can take advantage of special promos like "Bowling with Phil."

What a long strange trip it's been!

[JT]

November 5, 2013 in Celebrity Contracts, In the News | Permalink | Comments (0) | TrackBack (0)

Thursday, October 31, 2013

On the Meaning of "Chicken"


Dear Judges Friendly and Traynor:

Upon reflection, Judge Traynor may have had it right when he wrote:

Words, however, do not have absolute and constant referents. "A word is a symbol of thought but has no arbitrary and fixed meaning like a symbol of algebra or chemistry, ..." * * * The meaning of particular words or groups of words varies with the "... verbal context and surrounding circumstances and purposes in view of the linguistic education and experience of their users and their hearers or readers (not excluding judges). ... A word has no meaning apart from these factors; much less does it have an objective meaning, one true meaning."

I say this because, today, I learned what "chicken" apparently means in one specific context in Suffolk County, New York.  You don't suppose that this is was what Frigaliment and B.N.S. meant by "chicken"?

Truly yours,

[Meredith R. Miller]

October 31, 2013 in Commentary, Famous Cases, In the News | Permalink | Comments (0) | TrackBack (0)

Monday, October 28, 2013

Quincy Jones Sues Michael Jackson Estate and Sony for Breach of Contract

Quincy JonesAs reported here by Reuters, 27-time Grammy-winning producer Quincy Jones (pictured) is suing the estate of Micahel Jackson and Sony Music Entertainment (Sony) for $20 million for breach of two contracts relating to music that Mr. Jones produced on some of Michael Jackson's most successful albums.  Mr. Jones alleges that the music was re-mixed for used in a Michael Jackson concert movie, "This Is It," and in to Cirque du Soleil shows that use Mr. Jackson's music.  Mr. Jones claims that he is being denied proceeds in violation of his agreements with Sony and Mr. Jackson based on secret agreements between Sony and the administrators of Mr. Jackson's estate.

[JT]

October 28, 2013 in Celebrity Contracts, In the News, Recent Cases | Permalink | TrackBack (0)

Wednesday, October 23, 2013

Disco Star Sues Contractor for Allegedly Faulty Work

"I Will Survive" singer Gloria Gaynor has filed breach of contract and warranty claims against a contractor.  According to MyCentralJersey.com:

Gaynor has filed suit in state Superior Court in Somerville against a Piscataway contractor who replaced a second-floor concrete deck at her home that she says later caused leaks into the house and has to be replaced at a cost of $120,000.

According to the lawsuit filed earlier this month, Gaynor contracted with Diaz Landscape Design and Tree Service of Piscataway in November 2007 to remove an existing second-floor concrete deck and replace it with a new deck at a cost of $38,060.

After the new deck was installed, the lawsuit alleges, water began to leak into Gaynor’s home because of “faulty construction.”

There was also water ponding on the deck, water damage to wood sills and supports and the formation of mold, according to the suit.

Gaynor told the contractor about the problems and asked that the conditions be corrected. The contractor attempted to fix the problems, but the attempts failed and the problems persisted, causing more damage to the property, according to the lawsuit.

Gaynor then had another contractor examine the work performed by Diaz.

The new contractor determined that the work done by Diaz was “so faulty and defective” that the only appropriate remedy is removing the deck and constructing a new one at a cost of $120,000, the suit says.

Besides breach of contract and breach of warranty, Gaynor’s suit also charges Diaz with consumer fraud by not being registered in New Jersey as a home improvement contract and failing to obtain the required building permits, resulting in the work not being inspected.

Is Gaynor entitled to the cost of replacement of the deck?  Time for a music break:

 

[Meredith R. Miller]

October 23, 2013 in Celebrity Contracts, In the News, Music, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 22, 2013

In Defense of Student-Edited Journals

Meredith Miller's post from yesterday touched on a topic that most law professors have considered at some point or other.  For years, there has been a movement to replace student-edited law reviews with a more professional model.  Judge Posner threw his support behind an operation called PRSM -- the Peer Reviewed Scholarship Marketplace.  But the idea has not caught on (judging by the stagnating PRSM membership).  In my view, it is a fine thing to have different models out there, so it is fine with me that some student-edited journals are experimenting with peer review (and I hear anecdotally that many student-edited journals have been doing so informally all along).  But my main point here is to stress how we all benefit from student-edited journals, and law professors should stop griping and realize how lucky they are to have the current arrangement.  

I have written on this subject before here, emphasizing the benefits students derive from their work on law journals.  Here is the heart of my argument from that previous post:

 Some of the best training that happens at law schools happens at law reviews.  I came to law school with ten years of scholarly experience under my belt, because I had written a doctoral dissertation, published historical scholarship and taught before making the jump to law school.  Still, my skills as a researcher skyrocketed in my third year as a law student when I was responsible for overseeing a team of cite and substance editors on a number of review essays that we published in our Review of Law and Social Change.  The evidentiary standards for legal scholarship are far more exacting than they are in the humanities and the non-quantitative social sciences.  No claim can be made without authority.  As a result, I became a far more intrepid researcher, and I unlearned intellectual habits acceptable to my former field of study and adopted intellectual habits essential to successful lawyering.  

In this post, I would like to address some of the advantages of student-edited journals from the author's perspective.  The main advantages of student-edited journals is that they are plentiful and rely on free labor.  Since as I explained above, the labor is a valuable component of legal education, I don't feel too badly for the students who are not paid for their editorial work.  But their efforts are responsible for raising the level of legal scholarship well above that of other humanities and social sciences.  

Having more journals to publish in is good.  Allow these adorable kids to explain:

 

You see, it's not complicated.

When I was a historian, I submitted articles for peer review.  I waited 3-6 months for readers' reports.  Sometimes the readers' reports were positive, and my article got published without further editing beyond typesetting.  Other times I was told to revise and re-submit.  In general, I would say that the suggested revisions were recommendations that I recast my own research to satisfy the reviewer, and I was not always convinced that doing so would enhance the quality of the piece.  But I would do my best to revise, and there were times when my attempts to satisfy the reviewer were unsuccessful.  I could move on to the next journal, but I don't think I ever did.  I published in a specialized field, and there were usually only a couple of journals where it made sense for me to publish.  The universe of qualified reviewers was also limited.  Two of my historical writings, to which I devoted months of work were never published, and one of them should have been.  

Without a doubt, legal scholars benefit from being able to submit simultaneously to scores of publications.  If none of those publications bite, we wait six months for the next round and try our luck with a fresh crop of editors who may not have the benefit of a meaningful institutional memory.  At some point, worthwhile scholarship finds its way into print, and as long as the publication is included on a database, and most journals are, students, attorneys, and scholars can find it regardless of the prestige of the publication.  

Okay, so what is the downside?

One potential downside is that a lot of useless nonesense gets published.  I would be very interested to see evidence that peer review prevents the publication of useless nonesense.  People bandy about the statistic that 40% of law review articles are never cited.  Okay, is a higher percentage of peer reviewed material cited?  In any case, as I wrote in another post:

As for scholarship itself, Brian Leiter was here a few weeks ago to deliver our annual Seegers Lecture on Jurisprudence.  In response to a question about the value of scholarship, he said something very close to my view.  Most of what gets published is a dead end.  But a certain percentage of it is very valuable, and there is no way of telling ex ante which scholarship is going to move the ball in a meaningful way.  That's why we need lots of people doing their best to move the ball and why we need to continue to support faculty scholarship. 

The other downside is that students are incompetent as editors not only in selection but also in the way they deal with the text.  This, I say, is nonsense.  Peer review may be more rigorous but peer editing clearly is not.  Whenever I have submitted essays for peer review, the final product is almost identical to the original, except for formatting and the repair of the odd typo.  Student editors work hard to improve the quality and clarity of the writing, and they also find authority where it is lacking.  They make us seem much more lucid, knowledgeable and careful than we really are -- or than we are when we first submit our offerings up for publication.  

The last time I published in a peer-review, peer-edited journal, my piece was: 1) accepted, 2) rejected following a coup on the editorial board, and 3) re-accepted after the coup unraveled.  The re-acceptance was conditional on revisions.  The readers' reports came to me nearly two years after the original submission, but I received many vague missives from the journal suggesting that I had very little time to make the necessary changes or the journal would pass on publication.  I made the requisite changes (which were idiotic and necessitated a new research project) and re-submitted.  For months, I heard nothing.  My inquiries recieved no response until I received the page proofs.  The page proofs corresponded to my original draft.  That's right, the "professional editors" who insisted that I revise my article were then prepared to publish my article without the revisions.  Publication followed some months later, about two years after the article was first accepted for publication.  I know we all have horror stories about student editors, but could they really have done much worse than that?

I have been storing these thoughts up for a while, hoping that I would one day have the time to publish them in a student-edited law journal.  For now, a blog post will have to do.

[JT] 

October 22, 2013 in Conferences, In the News, Law Schools, Recent Scholarship | Permalink | TrackBack (0)

Monday, October 21, 2013

NYT's Adam Liptak on Lackluster Legal Scholarship (or, On Elephants Swatting Flies)

In case you didn't see it, Adam Liptak's Sidebar column in the New York Times takes aim at student-edited law reviews with such zingers as: "Law reviews are such a target-rich environment for ridicule that it is barely sporting to make fun of them."  Liptak gets it mostly right in describing the dismal status quo, incluing the utter lack of relevance of most law review articles to the practicing bar.  (I had a law professor who said the best way to keep a secret is in a law review article and I tend to think he was right). 

I am shocked that this story is newsworthy and I don't necessarily agree with the prescription that "blind screening, peer review and more training for the student editors" would make all the difference.  But I am most grateful that Liptak's column references a 1936 essay by Yale Professor Fred Rodell titled “Goodbye to Law Reviews.”  It made my day.  Check out the abstract:

It is doubtless of no concern to anyone that this is probably my last law review article. As a matter of fact, this makes one more article than I had originally planned to write. It was something in the nature of a New Year's resolution. Yet the request to do a piece about law reviews seemed a golden opportunity to make my future absence from the "Leading Articles, Authors" lists a bit more pointed than would the business of merely sitting in a comer, sucking my thumb, and muttering Boo. Keeping well in line with two traditions—a course which lawyers will readily understand—I decided to break the resolution and not wait for opportunity's second knock. This, then, is by way of explaining why I do not care to contribute further to the qualitatively moribund while quantitatively mushroom-like literature of the law.

There are two things wrong with almost all legal writing. One is its style. The other is its content. That, I think, about covers the ground. And though it is in the law reviews that the most highly regarded legal literature—and I by no means except those fancy rationalizations of legal action called judicial opinions—is regularly embalmed, it is in the law reviews that a pennyworth of content is most frequently concealed beneath a pound of so-called style. The average law review writer is peculiarly able to say nothing with an air of great importance. When I Used to read law reviews, I used constantly to be reminded of an elephant trying to swat a fly.

Just proves that there is nothing new to say.

[Meredith R. Miller]

October 21, 2013 in Commentary, In the News, Law Schools, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Out-of-Network Doctors: Officious Intermeddlers?

Saturday's New York Times featured a story about a family that was nearly ruined by medical bills resulting from their infant daughter's emergency heart surgery.  Although the hospital was in network, not all of the doctors who treated the infant were, and so the insurer passed on "balance payments" to the family for the difference between what out-of-network medical personnel charged and what insurance covered for such out-of-network medical personnel.  

Surgery
According to the story, the family was never informed that some of the people treating the child were out-of-network.  Then they were billed thousands of dollars.  Fortunately, the child's grandmother had the resources to fight the insurers every inch of the way and the story has a relatively happy ending.  They were able to appeal some of the out-of-network charges, and then their insurance company agreed to kick in a bit more of a contribution and the out-of-network provider wrote off the rest.  The family only ended up paying around $10,000.  

That result is likely the result of a compromise that relied on the facts of the particular case, but it also seems like the right result under a theory of restitution.  The family did not agree to have an out-of-network provider provide medical services for their daughter.  When such services were provided, they were provided officiously to the extent that the medical provider sought compensation beyond what the family was willing to pay.  They should not be required to pay in excess of that amount when nobody ever asked them if they would accept services out of network.

However, the facts of this case are relatively easy.  The answer to the question of whether a family would accept out-of-network medical services necessary to save their infant daughter is almost certainly yes.  But what follows from that.  One could argue that whether or not there is actual consent to treatment by out-of-network providers in an emergency situation, recovery should be limited to in-network charges.  Consent is not meaningful when given under conditions of such emotional duress.  Or one could argue that, because a family would always consent if asked, the officious intermeddler argument above is specious.  Families that want better coverage will have to pay for better insurance.

According to the Times, it is not clear that the Afffordable Care Act (ACA) addresses this problem.  One expert says it doesn't and that the ACA could exacerbate the problem because networks may be smaller on many ACA plans.  On the other hand, the Times reports that under the ACA, annual out-of-pocket expenses should not exceed $6,350 for individuals and $12,700 for a family of two or more in 2014.   

The distinction between in-network and out-of-network is likely a historical accident in the United States.  I would guess that it is unknown in many of the 45 countries whose health care systems are regarded as more efficient than that of the United States.  Twenty-three of these countries have higher life expectancies than the U.S.  Overall, in a 2000 study, the World Health Organization ranked the United States 38th overall in the quality of its healthcare system, despite the fact that the U.S. in #1 in per capita expenditures on health care.

[JT]

October 21, 2013 in Commentary, In the News | Permalink | Comments (0) | TrackBack (0)

Monday, October 7, 2013

Carnegie Strike Settled

Grand pianoAfter one year of negotiations and one cancelled Gala, Carnegie Hall and its stagehands' union were able to come to an agreement last Friday, October 4th.  According to The New York Times, both sides have declared victory.  The union will play a role in Carnegie Hall's new $230 million educational facility, but it will not be the same role that it plays in the Hall itself.

Under the new deal, people can move things without calling in union help unless they are heavy.  When asked how heavy something has to be before a stagehand must be called, Carnegie Hall's executive director explained “Heavy enough that a person says, ‘I need some help from the union person.’"  Now that's a clear standard.

[JT]

October 7, 2013 in In the News, Labor Contracts | Permalink | Comments (1) | TrackBack (0)

Thursday, October 3, 2013

Strike at Carnegie Hall

Carnegie_Hall_WikipediaWe don't get to use our Labor Contracts category very often on this blog, so a story in today's New York Times was welcome news, even if it isn't very happy news.   According to the Times, stage hands at Carnegie Hall (right) have gone on strike to protest a decision by Carnegie Hall that the stagehands union will not participate in a new educational wing to be 0pened next year.  

The strike seems to have caught Carnegie Hall off-guard, as it forced the cancellation of this year's opening gala event, which was the feature the Philadelphia Orchestra, Joshua Bell and other liminaries of the classical music world.  The Philadelphia Orchestra, by the way, decided to play for free at its usual home, the Verizon Center, which despite its crass, corporate name, is an absolutely spectacular concert venue.  Last year's opening gala raised $2.7 million for the Hall.  

The problem, of course, is that the stagehands are expensive.  The Times claims that their average compensation comes out to $400,000 a year, but that can't be right -- nobody can live in New York City on only $400,000 a year.  In any case, Carnegie Hall claims that it can rely on far cheaper union workers in its educational wing, because, e.g., moving pianos around for educational purposes is completely different from moving pianos around for theatrical purposes.  

Carnegie employs only five full-time stagehands, but each of them earned more last year than the Hall's finance director.    This same union shut down Broadway for over two weeks in 2007.  Nobody is predicting how long it will be before one hears nothing in Carnegie Hall louder than a pin drop.

[JT]

October 3, 2013 in In the News, Labor Contracts | Permalink | Comments (0) | TrackBack (0)