Monday, August 17, 2015
I often begin my course by telling students that contracts facilitate mutually beneficial transactions. So, if they want to be the kind of attorneys who make the world a better place, transactional work is the place to be. But sometimes one-sided contracts drawn up in a context of vastly unequal bargaining power can prevent mutually beneficial transactions from taking place. This seems to be occurring in the case of Nick Symmonds, a six-time U.S. outdoor champion at 800 meters who won a silver medal at the 2013 World Championships. According to this story in the New York Times, Symmonds has been left off the U.S. team for the 2015 Worlds taking place later this month because he refused to sign a contract.
Symmonds refused to sign a vaguely-worded document that seemed to require that athletes wear Nike gear exclusively, even in their free time. Nike, according to the Times, has committed to sponsoring U.S. Track & Field to the tune of $20 million per year through 2040. But that contract might interfere with Symmonds' contractual obligations with his own sponsor, the running-shoe company, Brooks. According to the Times, athletes were instructed to pack only Nike-branded or non-branded apparel for the World Championships. Symmonds points out that Brooks is paying for him to wear its brand at important events. If he is prohibited from doing so, why would Brooks continue to sponsor him. Symmonds is all for the Stars and Stripes, but he also has to worry about dollars and cents. He estimates that 75% of his income comes through sponsorships.
Symmonds does not object to wearing Nike apparel at official events. He objects to the vague language that seems to preclude him from supporting his sponsor when he is not at official events. Some are saying that Symmonds is taking this position because he has no chance to medal at the Worlds anyway, so he has nothing to lose. The photo above shows him winning the US championships in 2010. He won again in 2015. If that guy has no chance, what does it say about the rest of the team?
Friday, August 14, 2015
Contractual Issues and the Resignation/Termination of University of Illinois' Chancellor Phyllis Wise
According to this Chicago Tribune report, the University of Illinois' Chancellor, Phyllis Wise (pictured), and its Board of Trustees are fighting over whether she can resign or whether it is too late for her to resign because she has been terminated. The exchange reminds me of a scene from the old Dick Van Dyke Show. Laura (Mary Tyler Moore) has been helping out her husband, Rob (Dick van Dyke), by working as a typist, but Laura keeps making jokes that the other writers think are funny, which gets under Rob's skin. She storms out saying:
The only reason I came here was to help you, and if I have annoyed you, I sincerely apologize, and to keep from causing you any further annoyance, I want you to know that I'm fired!
To which Rob responds, "You can't fire! I quit ya!"
That fight was a product of marital discord, but the current dispute is about contracts and money. Wise apparently tendered her resignation first, which would have triggered a $400,000 payment. The Board rejected that resignation and has chose instead to initiate dismissal proceedings. Wise has responded by tendering a second resignation. Wise characterizes the $400,000 payment as a pro-rated portion of a retention bonus to which she was entitled under her 2011 contract. But U of I's President was also offering to keep Wise on in an administrative capacity, which seems like a nice way to justify the payment. Wise claims entitlement to the payment even though she is now refusing the administrative post.
Wise stands accused of having used personal e-mail accounts to conduct official business, allegedly in order to escape rules requiring disclosure of official correspondence. Sound familiar?
Thursday, August 13, 2015
According to this report in the Chicago Sun Times, The Chicago Teachers' Union (CTU) is calling "strikeworthy" a proposal by Chicago Public Schools (CPS) CEO Forrest Claypool that teachers pay their full pension contributions. The proposal would result in a seven percent pay cut according to CTU PresidentKaren Lewis. The CTU had previously agreed to a seven percent "pension pick-up" in lieu of a pay raise. Claypool now claims that there is no solution to CPS's $9.5 billion pension crisis that does not involve an end to the pick-up. Chicago teachers will likely return to work without a contract and could strike at any time. Mayor Rahm Emanuel (pictured) has proposed phasing out the pick-up over a period of years in an attempt to ease the blow.
The Los Angeles Times reports that UC San Diego and the University of Southern California (USC) have filed competing lawsuits in a battle over control of a long term research project that seeks to develop treatments for Alzheimer's. A researcher at UC San Diego switched his affiliation to USC and has sought to take some of the project's funding with him. In early rounds, a San Diego judge has sided with UC San Diego on ownership of the project, including databases relevant to the project's ongoing research. Eli Lilly & Co. had pledged up to $76 million to UC San Diego to test a new Alzheimer's medication that the company is developing. Lilly now plans to move those fund to USC's new institute. The future of this research project seems caught in the cross-hairs of competing claims to contractual entitlement to both funding sources and intellectual property.
The Business Insider reported last week that Fox Sports analyst Craig James is suing the network, alleging that he was fired for voicing his opposition to gay marriage. James alleges breach of contract and discrimination. His termination, days after he was hired, allegedly relates to a statement he made in 2012 when he was running for U.S. Senate that gays and lesbians would have "to answer to the Lord for their actions."
Tuesday, August 11, 2015
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One of our readers asked for a follow-up on our post on the suit by Charleston Law School professors seeking to enjoin the Law School from eliminating their tenured positions. We have good news to report, at least provisionally:
Charleston's Post & Courier reports that a judge last week blocked the termination of two tenured law professors until their suit against the law school is either settled or adjudicated.
Monday, August 10, 2015
We shared with our readers Professor Robin Kar's views on the case a while back.
You can find Professor Kar's latest here.
Friday, August 7, 2015
In a case we have been following for a year (here, here, and here, for example), Stephen Salaita is suing the University of Illinois for withdrawing its offer to hire him to teach in its American Indian Studies Program after discovering some intemperate anti-Zionist tweets Mr. Salaita had posted. This week, a Federal District Court ruled on the University's motion to dismiss the claim. While the Court dismissed some of Salaita's claims, his breach of contract and first amendment claims were allowed to proceed. The case is Salaita v. Kennedy, and the opinion is here.
The claim that we care about is, of course, the breach of contract claim. Mr. Salaita signed an employment letter and so claimed that he had a contract with the University. The University claimed that there was no contract because the offer of employment was subject to approval of the University's Board, which never occurred. The Court carefully parsed the language of the offer letter and found that the offer was not conditional on board approval. Rather, board approval was a condition of performance of the contract; it was not a condition of the offer.
Although the Court conceded that the language of the offer letter might be ambiguous, the University's conduct resolved such ambiguities in favor of a finding of a contract. The University paid Mr. Salaita's moving expenses, gave him office space and an e-mail address, and referred to him as "our employee."
If the Court accepted the University’s argument, the entire American academic hiring process as it now operates would cease to exist, because no professor would resign a tenure position, move states, and start teaching at a new college based on an “offer” that was absolutely meaningless until after the semester already started. In sum, the most reasonable interpretation of the “subject to” term in the University’s offer letter is that the condition was on the University’s performance, not contract formation.
The Court then quickly rejected the University's argument that the Dean had no authority to make the offer to Mr. Salaita.
Thursday, August 6, 2015
Stephen T. Black, Psst! Wanna Buy a Bridge? IP Transfers of Non-Existent Property, 31 Ga. St. U. L. Rev. 523 (2015)
Jennifer Camero, Mission Impracticable: The Impossibility of Commercial Impracticablity, 13 U.N.H. L. Rev. 1 (2015)
Myriam Gilles, Individualized Injunctions and No-Modification Terms: Challenging "Anti-Reform" Provisions in Arbitration Clauses, 69 U. Miami L. Rev. 469 (2015)
William Alan Nelson, II, Take It or Leave It: Unconscionability of Mandatory Pre-Dispute Arbitration Agreements in the Securities Industry, 17 U. Pa. J. Bus. L. 573 (2015)
Wednesday, August 5, 2015
Yesterday's New York Times included a report on the odd case of Jason Pierre-Paul (pictured), a New York Giants lineman who injured himself in a fireworks accident last month. The injury came while Pierre-Paul and the Giants were negotiating his contract, and right now the player is in a contractual limbo. The Giants named Pierre-Paul as a "franchise player" and offered him a one-year $14.8 million contract. Pierre-Paul refused that offer, holding out for a multi-year deal.
Pierre-Paul is part of the team but he currently has no contract and thus can refuse to allow visits from team doctors. Apparently, he has elected to do so, and so the Giants do not know the extent of his injury or how it will affect his play. The Times reports that Pierre-Paul had to have his right finger amputated and that there was other damage to his hand, but that is all we and presumably all the Giants know for now. There seems to be a lot of brinksmanship involved, but it also seems likely that in the end, Pierre-Paul will accept the one-year deal. The Giants may then invoke their right to dock Pierre-Paul's pay if he misses games due to "non-football injury."
The Times speculates that Pierre-Paul may be holding out so that he has time to recover and avoid a loss of pay. I'm not sure how that works. What if he misses practices (training camp has already begun)? Why would the Giants agree to his return before they have been permitted to thoroughly test his playing ability? One answer is that Pierre-Paul would then become a free agent who could jump to a rival. Perhaps a realistic possibility, but the Times also notes that Pierre-Paul has underperformed in two of the last three seasons. NFL football is a high-risk game.
Tuesday, August 4, 2015
A new Los Angeles Times investigation has revealed that nine out of ten students drop out of unaccredited law schools in California. Of the few students that graduate, only one in five ultimately become a lawyer. In other words, a mere 2% of the people that initially enroll in an unaccredited law school end up being attorneys. Shameful at best. One example of one person who did not make it as an attorney is former Los Angeles mayor Antonio Villaraigosa who went to “People’s College of Law” and took the bar four times, but never passed.
Unaccredited law schools are said to flourish in California. The state is one of only three in the nation that allow students from unaccredited law schools to take the bar test (the others are Alaska and Tennessee). Unaccredited schools in California are held to very few academic standards by regulatory bodies and, by their very nature, none by accrediting agencies.
Most of the unaccredited law schools are owned by small corporations or even private individuals. One, for example, is owned by a“Larry H. Layton, who opened his school in a … strip mall above a now-shuttered Mexican restaurant. He thought the Larry H. Layton School of Law, which charges about $15,000 a year, would grow quickly. But according to the state bar records, he has had six students since 2010.”
Experts again say that action must be taken. For example, Robert Fellmeth, the Price Professor of Public Interest Law at the University of San Diego School of Law, has stated that unaccredited schools “aren't even diploma mills, they are failure factories. They're selling false hope to people who are willing to put everything out there for a chance to be a lawyer."
As before, the problem goes beyond unaccredited law schools. Several ABA accredited law schools also demonstrate both poor employment and bar passage statistics, although the problem seems to be the most severe when it comes to unaccredited schools.
This story is not new to your or many others. However, it serves as a reminder of the continued importance of both insiders and outsiders taking a renewed look at regulations for (and broader expectations of) law schools in California and beyond. As always, purchasers of anything including educational “services” (which, as the above other and many other studies show, can all too easily turn out to be disservices) should be on the lookout for what they buy. A great deal of naivety by new students seems to be contributing to the problem. However, that does not justify the tactics and perhaps even the existence of some of these educational providers. Having said that, I also – again – cannot help ask myself what in the world some of these students are thinking in believing that they can beat such harsh odds. Hope springs eternal, it seems, when it comes to wanting to become a California attorney.
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Monday, August 3, 2015
In the continuing fallout from Donald Trump's Presidential candidacy (photo right by Michael Vadon via Wikimedia Commons), Trump is now suing celebrity chef Jose Andres. According to the Washington Times, Andres was to open a restaurant in Washington, DC's old post office building, which will soon be the Trump International Hotel. He now claims that Trump's anti-immigrant comments make it impossible for him to do so. It seems that Trump's attorneys' response is to claim that his views on immigration were well known and consistent and should not have come as a surprise to Mr. Andres. The lawsuit seeks $10 million in damages.
In other Presidential candidate news, three unions representing New Jersey public employees are suing the state for breach of contract. The suit arises out of Governor Chris Christie's efforts to address a budget shortfall by cutting contributions to the state pension fund. Excellent coverage of this suit and its background can be found in the Winnipeg Free Press here.
The Fay Observer reports that Intersal, a company that discovered the wreck of Blackbeard's ship of the coast of North Carolina, is suing North Carolina. The suit alleges that the state has breached a contract pertaining to the use photos and video relating to the wreck and seeks $8.2 million in damages.
Sunday, August 2, 2015
Remember Aereo, the company trying to provide select TV programs and movies using alternatives to traditional cable TV programming? That company went bankrupt after a U.S. Supreme Court ruling last year.
A federal court in Los Angeles just ruled that online TV provider FilmOn X should be allowed to transmit the programs of the nation’s large broadcasters such as ABC, CBS and Fox online, albeit not on TV screens. See Fox Television Stations, Inc. v. FilmOn X, LLC, in the U.S. District Court for the Central District of California, No. 12-cv-6921. Of course, the traditional broadcasters have been aggressively opposing such services and the litigation so far. Recognizing the huge commercial consequences of his ruling, Judge Wu certified the case for an immediate appeal to the Ninth Circuit Court of Appeals.
Said FilmOn’s lawyer in an interview: “The broadcasters have been trying to keep their foot on the throat of innovation. The court’s decision … is a win for technology and the American public.”
The ultimate outcome will, of course, to a very large extent or perhaps exclusively depend on an interpretation of the Copyright Act and not so much contracts law as such, but the case is still a promising step in the direction of allowing consumers to enter into contracts for only what they actually need or want and not, at bottom, what giant companies want to charge consumers to protect income streams obtained through yesteryear’s business methods. Currently, many companies still “bundle” TV packages instead of allowing customers to select individual stations. In an increasingly busy world, this does not seem to make sense anymore. Time will tell what happens in this area after the appeal to the Ninth Circuit and other developments. Personally, I have no doubt that traditional broadcasting companies will have to give in to new purchasing trends or lose their positions on the market.
Thursday, July 30, 2015
I earlier blogged on an American TV personality's contract to hunt and kill one of the most highly endangered species on earth: a black rhino. That hunt has now been completed at a price tag of $350,000. The asserted reasoning for wanting to undertake the hunt: the money would allegedly help the species conservation overall and the local population. Studies, however, show that only 3-5% of that money goes to the local population. Some experts believe that the money could be much better spent for both the local population and the species via, for example, tourism to see the animals alive. This brings in three to fifteen times of what is created through so-called "trophy hunting."
This past week, the world community was again outraged over yet another American's hunt - this time through a contract with a local rancher and professional assistant hunter - of Cecil the Lion. The price? A mere $50,000 or so. This case has criminal aspects as well since the landowner involved did not have a permit to kill a lion. The hunter previously served a year of probation over false statements made in connection with his hunting methods: bow and arrow.
This is also how the locally famous and collared Cecil - a study subject of Oxford University - was initially hunted down, lured by bait on a car to leave a local national park, shot, but not killed, by Minnesota dentist Walter Palmer, and eventually shot with a gun no less than 40 hours after being wounded by Palmer.
Comments by famous and regular people alike have been posted widely since then. For example, said Sharon Osbourne: ""I hope that #WalterPalmer loses his home, his practice & his money. He has already lost his soul."
I recognize that some people - including some experts - argue for the continued allowance of this kind of hunting. Others believe it is a very bad idea for many biological, criminal, ethical, and other reasons to allow this practice. If you are interested in signing a petition to Zimbabwe Robert Mugabe to stop issuing hunting permits to kill endangered animals, click here. It will take you less than 60 seconds.
Wednesday, July 29, 2015
Tuesday, July 28, 2015
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University of Oxford - Saint Cross College; Middle Temple; Freshfields Bruckhaus Deringer LLP; Minerva Chambers
July 12, 2015
However there was a second question considered in detail by the Supreme Court, namely what was the alternative fair remuneration that should be substituted for the salvors? This led to a complex and sophisticated analysis of the business risks and fair returns for both parties. Although the context was admiralty law and commercial salvage rather than international tax, the Supreme Court's analysis is remarkably close modern transfer pricing analysis and Post v Jones can perhaps also be viewed as a prototype early transfer pricing type case.
Number of Pages in PDF File: 12
Monday, July 27, 2015
As Fortune Magazine reported here, Lifelock has sued a bitcoin digital wallet company called Xapo. Xapo's founder and CEO, Wences Casares, formerly owned a company that was purchased by Lifelock, and he became a Lifelock employee at that point. Lifelock alleges that he used a product from his old company to create Xapo. Casares responds that Lifelock had no interest in the product. Casares moved to dismiss the suit in California Superior Court, and that motion was denied. Fortune provides more complete background on the case here. For some reason, Fortune describes the suit as sounding in fraud, but it sounds more like a breach of contract/IP issue to me. Other websites (e.g., Bitcoin News Service here and Bitcoin Magazine here) describe the suit as sounding in breach of contract.
This is not exactly news, but the Daily Telegraph is reporting on sex contracts at U.S. colleges and universities as though it were news. While the report features some discouraging information about the frequency of sexual assault at UK and U.S. universities, it adopts a snide tone regarding sex contracts and concludes that they are "overly simplistic and potentially harmful." Although the report acknowledges that the contracts are "conversation starters" and are not intended to be binding contracts, it proceeds to treat them as contracts and to point out the obvious -- like that people are entitled to change their minds about sex. Ugh. It's not as if this is not something that has occurred to the designers of sex contracts. The models of such contracts that we have discussed here include language requiring consent on an on-going basis to each new sex act. This approach is easy to mock, but, as we've seen before, those who denigrate serious approaches to the problem of sexual assault on college campuses fail to provide alternatives. The Telegraph cites to an organization called the "Good Lad Workshop" that encourages college students to be good guys. It is clear that the spokesman for the organization knows nothing about how actual sex contracts work.
Thursday, July 23, 2015
You cannot say that we are boring you this week. Our blogs have included considerations on advertising on porn sites and having one’s illicit affairs forgotten contractually. Add to that the news that this week, Roman Catholic nuns, the archdiocese of Los Angeles, the formerly Jesuit student turned California Governor Brown and Pope Francis all had something to say about contracting about major and, admittedly, some minor issues.
To start with the important: Pope Francis famously issued his Encyclical Letter Laudato Si’ “On Care for our Common Home.” In it, he critiques “cap and trade agreements,” which by some are considered to be a mere euphemism for contractual permits to pollute and not the required ultimate solution to CO2 emissions. In the Pope’s opinion, “The strategy of buying and selling carbon credits can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors.” Well said.
Governor Brown, however, disagrees: Brown shrugged off Francis' comments. "There's a lot of different ways," he told reporters, "that cap and trade can be part of a very imaginative and aggressive program." Brown, however, does agree with the Pope that we are “dealing with the biggest threat of our time. If you discount nuclear annihilation, this is the next one. If we don’t annihilate ourselves with nuclear bombs then it's climate change. It’s a big deal and he’s on it.”
In less significant contractual news, Roar, Firework, and I Kissed a Girl and I Liked It singer Katy Perry is interested in buying a convent owned by two Sisters of the Most Holy and Immaculate Heart of the Blessed Virgin. Why? Take a look at these pictures. The only problem is who actually has the right to sell the convent to begin with: the Sisters or the archdiocese. When two of the sisters found out the identity of the potential buyer (Perry), they became uninterested in selling to her because of her “public image.” They now prefer selling to a local restaurateur whereas the archdiocese prefers to complete the sale to Perry, although she bid less ($14.5 million) on the property than the restaurateur ($15.5 million). Perry may be about to learn that image is indeed everything in California, even when it comes to the Divine. Perry is no stranger to religion herself as she was, ironically, raised in a Christian home by two pastor parents.
Wednesday, July 22, 2015
Juliet P. Kostritsky, Context Matters -- What Lawyers Say about Choice of Law Decisions in Merger Agreements, 13 DePaul Bus. & Com. L.J. 211 (2015)
Murat Madykov, Step-in Right As a Lender Protection Mechanism in Project Financed Transactions, 13 DePaul Bus. & Com. L.J. 273 (2015)
Genevieve Saumier, The Hague Principles and the Choice of Non-State "Rules of Law" to Govern an International Commercial Contract, 40 Brook. J. Int'l L. 1 (2014)