Saturday, July 9, 2016
In this case, the plaintiffs had purchased Gogo's in-flight Internet access multiple times. They claimed that the Internet access didn't work as advertised, with allegations that it was incredibly slow, crashed frequently, or sometimes didn't work at all. (Anecdotally, I have heard people around me on flights complain about this, although I don't know if Gogo was at issue there or if in-flight Wi-Fi is simply fraught with complications.) Despite these alleged ongoing issues, the plaintiffs kept buying Gogo's Wi-Fi, perhaps in eternal hope that it would someday work properly? At any rate, this all culminated in plaintiffs' lawsuit here.
How to click on a hyperlink, yes, most Internet users know how to do; whether or not the average Internet user necessarily understands all of the legalese found at that hyperlink is another question entirely, of course, but not one addressed in this case. Possibly because the court assumes that all laypersons understand the difference between litigation and arbitration, although in my experience I am not entirely sure that's true. At any rate, the court here held this arbitration clause to be binding.
Friday, July 8, 2016
While this topic is much discussed on the blogosphere, Professor Mitchell H. Rubinstein over at Adjunct Law Profs Blog has an excellent discussion, which can be found here. In it he discusses an article in the New York Times titled "An Expensive Law Degree, and No Place to Use It," which can be found here.
I would add to the discussion that those who wish to pursue a law degree must first be passionate about the law. Given not only the post-graduate challenges in the legal job market, a legal education is a rigorous discipline. You have to be ready to turn down 50 yard line Dallas Cowboys tickets on Thanksgiving to study for your Property final (true story). I have met both students cavalier about entering law school, and those whose dream is to become a lawyer. I think, whether elite law school or not, the latter will ultimately succeed.
I may not be a music critic, but this is noteworthy for contract scholars. The Pittsburgh Steelers star running back LeVeon Bell presented his initial offer of $15 million per year in contract negotiations. The interesting part is that it is embedded in a rap song called "Focus." The full story with a link to the song can be found at Pro Football Talk.
Thursday, July 7, 2016
|1||593||What We Buy When We 'Buy Now'
Aaron Perzanowski and Chris Jay Hoofnagle
Case Western Reserve University School of Law and University of California, Berkeley - School of Information
University of Central Florida
|3||129||Is Rule of Law an Equilibrium Without Private Ordering?
Gillian K. Hadfield and Barry R. Weingast
USC Law School and Department of Economics and Stanford University, Department of Political Science
|4||109||Current Trends in Consumer Junk Debt Buyer Litigation
Peter A. Holland
University of Maryland Francis King Carey School of Law
|5||91||Assessment of Damages: Three Specific Problems – The Draft Common European Sales Law in Context
Max Planck Institute for Comparative and International Private Law
|6||89||Once Upon a Transaction: Narrative Techniques and Drafting
Susan Chesler and Karen J. Sneddon
Arizona State University (ASU) - Sandra Day O'Connor College of Law and Mercer Law School
|7||87||Reining in the Big Promise of Big Data: Transparency, Inequality, and New Regulatory Frontiers
Philipp Hacker and Bilyana Petkova
Humboldt University of Berlin and European University Institute
|8||86||Optimal Defaults in Consumer Markets
Oren Bar-Gill and Omri Ben-Shahar
Harvard Law School and University of Chicago Law School
|9||85||Nudging and Autonomy. A Philosophical and Legal Appraisal
Humboldt University of Berlin
|10||82||The Moral Impermissibility of Efficient Breach
Arizona State University (ASU) - Barrett, the Honors College
Wednesday, July 6, 2016
Yesterday, I blogged here about ticketscalping “ticketbots” outperforming people trying to buy tickets with the result of vastly increased ticket prices.
Now Ashley Madison – dating website for married people – has announced that some of the “women” featured on its website were actually “fembots;” virtual computer programs. In other words, men who paid to use the website in the hope of talking to real women were actually spending cash to communicate with computers (men have to pay to use the website, women don’t).
Why the announcement? The new leadership apparently wanted to air the company’s dirty laundry, so to speak.
Ashley Madison was hacked last year, revealing who was using the website to cheat on their husband, wife or partner. It was a devastating hack, ruining lives and even leading a pastor to commit suicide.
This seems to be a clear breach of contract: if you pay to communicate with real women, the contract must be considered breached if all or most of the contact attempts went to and/or from computers only. Perhaps even worse for Ashley Madison is the fact that the company is under investigation by the U.S. Federal Trade Commission. The FTC does not comment on ongoing cases, but “it could be investigating whether Ashley Madison properly attempted to protect the identity of its discreet customers -- which it promised to keep secret. Or it could be investigating Ashley Madison for duping customers into paying to talk to fake women. On Monday, the company also acknowledged that it hired a team of independent forensic accounting investigators to review past business practices around bots and the ratio of male and female U.S. members who were active on the site."
Tuesday, July 5, 2016
Have you ever tried buying concert tickets right when they were made available for sale on the Internet, only to find out mere minutes later that they were all sold out? Or, for that matter, highly coveted camping reservations in national or some state parks?
Where once, we all competed against the speed of each other’s fingertips and internet connections, nowadays, “ticket bots” quickly snatch up tickets and reservations making it virtually impossible for human beings to compete online. Ticket bots are, you guessed it, automatic computer programs that buy tickets at lighting speed. They can even read “Captcha boxes;” those little squiggly letters that you have to retype to prove that you are not a computer. Yah, that didn’t work too well for very long.
“A single ticket bot scooped up 520 seats to a Beyonce concert in Brooklyn in three minutes. Another snagged up to more than 1,000 U2 tickets to one show in a single minute, soon after the Irish band announced its 2015 world tour.”
Ticket bots scoop up tickets for scalpers who then resell them on other websites, marking the tickets up many times the original price. (I’m actually not saying that state and national parks are cheated that way, maybe camping reservations in those locations are just incredibly popular as hotel prices have increased and incomes are staggering. I personally used to be able to, with t he help of a husband and several computers, make campground reservations for national holidays, but those days are long gone…”we are now full.”).
Ticket bots are already illegal in more than a dozen states. New York is considering cracking down on this system as well. However, the most severe penalty under New York law is currently fines in the order of a few thousand dollars where ticket scalpers make millions of dollars. A new law proposes jail time for offenders. This is thought to better deter this type of white-collar crime in the ticket contract market.
Everyone else is talking about Donald Trump, so I guess why shouldn't we hop in, right?
This recent New Yorker Talk of the Town piece introduced me to an ongoing contract dispute involving Trump that I hadn't been paying attention to, even though now I see it's been widely reported by various news outlets, including food blogs, because it involves restaurants. So if you don't normally like to read political stuff but you consider yourself a foodie, this blog entry is also for you!
It turns out that Trump is embroiled in breach of contract lawsuits with a couple of famous chefs who pulled out of commitments to put restaurants into one of Trump's new developments. According to the reports, the impetus for pulling out of the business deal was Trump's anti-immigrant rhetoric during his presidential campaign. Jose Andres, himself an immigrant, was not too happy about Trump's statements. As seems to be the case with Trump, his business concerns don't necessarily track his political rhetoric when the bottom line is at issue. Faced with an immigrant refusing him rather than the other way around, Trump sued Andres for breach of contract. Andres counter-sued, alleging that Trump's many derogatory remarks about Hispanics rendered Andres's proposed Spanish restaurant "extraordinarily risky."
The chefs sought partial summary judgment, which a court recently denied, finding that material facts were still in dispute.
The crux of this lawsuit revolves around the covenant of good faith and fair dealing: Did Trump breach that covenant when he made his remarks, which would make him the one in breach of contract? Or were Trump's remarks not a breach of the covenant, either because they're not relevant to the contract or because they did not harm the prospects for success of Andres's restaurant? I don't know if the parties will continue to litigate this question but I'm curious what the result would be. In the current climate where rhetoric is frequently extremely inflammatory, could there be contract implications to such statements? How far, policy-wise, do we want the covenant of good faith and fair dealing to extend?
The case is Trump Old Post Office LLC v. Topo Atrio LLC, 2015 CA 006624 B (behind paywall), in District of Columbia Superior Court.
Scholarship Spotlight: An Empirical Study of Unenforceable Contract Terms (Meirav Furth-Matzkin - Harvard)
While the enforceability of many contract terms discussed in this space can be a matter of good faith dispute, other terms are clearly beyond the pale of enforcement. What is the impact of potentially in terrorem use of invalid contract clauses on the general non-lawyer population? Meirav Furth-Mazkin (Harvard S.J.D. Program, John M. Olin Fellow) has conducted a fascinating empirical study on point entitled On the Surprising Use of Unenforceable Contract Terms: Evidence from the Residential Rental Market. Here is her abstract:
This paper explores the prevalence of unenforceable terms in consumer contracts. Taking the residential rental market in the Greater Boston Area as a test case, the study analyzes a sample of 70 leases in terms of Massachusetts Landlord and Tenant Law. The paper’s findings reveal that landlords frequently use legally dubious — as well as clearly invalid — provisions in their contracts. Building on psychological insights and on a survey-based study of 279 tenants, the paper suggests that such clauses may significantly affect tenants’ decisions and behavior. In particular, when a problem or a dispute with the landlord arises, tenants are likely to perceive the terms in the lease contract as enforceable and forgo valid legal rights and claims. In light of this evidence, the paper discusses preliminary policy prescriptions.
The article's introduction further describes the study and its findings:
The study draws a distinction between clauses that are unenforceable and clauses that are enforceable but misleading. While not unenforceable per se, misleading clauses are nonetheless as likely to misinform tenants about their mandatory rights and remedies by misrepresenting the legal state of affairs. Additionally, the paper reports not only the inclusion of provisions that misrepresent the legal state of affairs, but also the exclusion of some of the tenant’s rights and remedies from the lease altogether.
The study’s findings demonstrate that residential leases not only frequently omit various rights and remedies that the law bestows upon tenants, but also include unenforceable clauses that conflict with the law and misleading clauses that misrepresent it. As shown below, 99% of the leases in the sample (69 out of 70) include at least one unenforceable or misleading clause. Such clauses shift responsibilities and liabilities from landlords to tenants, restrict or abolish tenants’ mandatory rights and remedies, and so on. When tenants’ rights and remedies are finally mentioned in these contracts, they are often inaccurately described to the detriment of tenants.
These findings may suggest that landlords are not sufficiently deterred from using unenforceable and misleading clauses in their leases. Such clauses might be included either intentionally—to exert profit— or by mistake, out of landlords’ ignorance of the law or their expectation that it will change. Even if landlords do not knowingly insert UMCs into their contracts, if the costs of including unenforceable terms are low, landlords may have little incentive to ensure that their contracts comply with the mandatory regulation governing them.
On the Surprising Use of Unenforceable Contract Terms: Evidence from the Residential Rental Market is available for download from SSRN here.
Monday, July 4, 2016
On June 23, 2016, by a slim margin, the United Kingdom voted by referendum (popularly referred to as "Brexit") to leave the European Union 52 to 48 percent. Since the result, the exchange rate for the British pound sterling has fallen to a 30-year low at $1.33. Professor Michael Dougan criticized the campaign to leave the EU as irresponsible. And 30,000 anti-Brexit protesters took to the streets of London. However, the FTSE, which dropped initially after the vote, has since rebounded.
It is time to tap the brakes a little. The UK has not yet left the EU. In fact, it may never. The Brexit vote is non-binding.
Emory University Law School is proud to announce the creation of the Tina L. Stark Award for Excellence in the Teaching of Transactional Law and Skills. The award will be presented at Emory’s sixth biennial conference on the teaching of transactional law and skills in June of 2018.
Tina L. Stark, the founding director of Emory Law’s Center for Transactional Law and Practice and the author of the groundbreaking textbook “Drafting Contracts: How and Why Lawyers Do What They Do,” has worked tirelessly to assure that law students have the opportunity to graduate as practice-ready transactional attorneys. Through her enthusiasm and perseverance, and with considerable grace and vision, she has nurtured the efforts of transactional law and skills educators the world over.
In honor of Tina’s considerable achievements, and in further recognition of her continued service as a beloved teacher and a cherished mentor, the Tina L. Stark Award for Excellence in the Teaching of Transactional Law and Skills will be awarded to an educator who is:
- committed to training students to be practice-ready transactional attorneys
- dedicated to engaging, inspiring, motivating and nurturing students
- devoted to teaching with passion, using creative and innovative methods
- known for achievement in curriculum or program development and pedagogy
- pledged to advance the cause of transactional law and skills education
Nominations for the 2018 Tina L. Stark Award for Excellence in the Teaching of Transactional Law and Skills will be accepted beginning in June of 2017. Please see the Center for Transactional Law and Practice website for further details about the nomination and selection process in 2017 when the nomination window opens.
If you have any questions about the award, please contact Sue Payne at email@example.com.
H/T: D.C. Toedt, On Contracts
I want to thank Professor Dellenger for allowing me to join the Contract Law Profs community. I also wish to say salutations. One of my favorite books is Charlotte's Web. When Charlotte greets Wilbur for the first time, she says "salutations" explaining that "[s]alutations are greetings; it's my fancy way of saying hello." So this is my fancy way of introducing myself.
As Professor Dellenger mentioned in her post, I am an Administrative Judge at the Federal Aviation Administration with a focus on government contract law and alternative dispute resolution. I am a member of the American Law Institute, and, among other projects, am a member of the Members Consultive Group on the Restatement (Fourth) of Contracts: Consumer Contracts. In essence, I love contract law.
I have an academic perspective on the law. I enjoy writing law review articles, and you can find my woefully out of date SSRN page here. I've been on the AALS market previously, but ended up choosing my current position. I am not new to law blogging having been a guest over at PrawfsBlawg last December.
Among other topics, I plan to take a comparative approach and blog about some recent decisions in contract law by the UK Supreme Court. I also will weigh in on the Brexit vote and its aftermath from the perspective of the Lisbon Treaty.
Sunday, July 3, 2016
Thursday, June 30, 2016
In Walker v. Trailer Transit, Judge Easterbrook finds that in addition to “recover costs,” the word “reimburse” could just as easily mean to broadly “compensate” (at a profit) or “pay” even given a seemingly contradictory context.
In the case, one thousand truck drivers filed a class action lawsuit against their “gig” employer, Trailer Transit. The drivers contracted to earn 71% of Trailer Transit’s contracts with its end clients. Trailer Transit owned the trucks; the drivers drove them. Among other things, the contract between the drivers and Trailer Transit stated that
[t]he parties mutually agree that [Trailer Transit] shall pay to [Driver] … a sum equal to seventy one percent (71%) of the gross revenues derived from use of the equipment leased herein (less any insurance related surcharge and all items intended to reimburse [Trailer Transit] for special services, such as permits, escort service and other special administrative costs including, but not limited to, Item 889).
The drivers (perhaps inartfully) claimed that Trailer Transit cheated them out of earnings by labeling income “special services” whereby Trailer Transit could claim it was simply getting “reimbursed” and thus deduct certain amounts from the equation before compensating its drivers. Trailer Transit claimed that the drivers were only entitled to 71% of whatever was listed as the “gross charges” for the driving services, end of story.
How would you interpret the provision in question?
The most obvious and reasonable reading of the contract seems to me to be as follows: If, for example, Trailer Transit enters into a contract with an end client for $1,000 plus $100 for also arranging for special services in the form of, for example, an escort vehicle (e.g. a “Wide Load” car), its drivers would earn $710, Trailer transit $290 in profits ($1,000 – 71% to the drivers), but bill the end client $1,100.
But what if, hypothetically speaking, the company was to seek to maximize its profits out of the total sum of $1,100 to be billed to the end client? It could then, for example, label $600 as “special services” to be “reimbursed” to it, thus reducing the amount to be paid to the drivers to $355 (71% of ($1,100-600)). That would increase its profits from the above $290 to $645 (($500-355) plus $500 (with the escort service at $100). Do you think that the contract was meant to be interpreted that way? Judge Easterbook (yes, of “bubble wrap fame”) does. Among other things, he found that
[d]rivers are entitled to 71% of the gross charge for “use of the equipment” (that is, the Drivers’ rigs), but the contract does not provide for a share of Trailer Transit’s net profit on any other part of the bill. It would be possible to write such a contract, but the parties didn’t … [T]he Drivers do not invoke any principle of  law that turns “71% of gross on X and nothing on Y” into “71% of gross on X plus 71% of net on Y.”
Judge Easterbook also makes the unpersuasive and, in my opionion, ill-thought out example that if
Trailer Transit paid someone $1,000 to accompany an over-wide shipment and display a “WIDE LOAD” banner, and billed the shipper $1,250, then the Driver would be entitled to $887.50 for that escort service—and Trailer Transit would lose $637.50 ($1,250 less $1,000 less $887.50 equals $637.50).
This is unpersuasive as Trailer Transit would presumably not be as large and profitable as it is if it were so incompetent as to systematically incur the losses that Judge Easterbrook concocts here. Further, in his example, if the charge of $1,000 truly was for a cost of that amount, Trailer Transit would, per its own contract and intent, get to deduct that cost in full first. Nothing in the case indicates otherwise.
The meaning seems to hinge on two things: the meaning of “reimburse” and whether or not this was an example of the company taking opportunistic advantage of its contractual commitments, which the drivers had, for some reason, not argued (Easterbrook recognizes that such an argument might have changed the outcome of the case – note to our students: always consider that). As regards the meaning of “reimburse, Judge Easterbook argues
True enough, one standard meaning of “reimburse” is to recover costs. Someone who submits a voucher for expenses incurred on a business trip seeks reimbursement of actual outlays rather than a profit. But this is not the only possible meaning of “reimburse.” The word also is used to mean “compensate” or “pay.” If the contract had said “reimburse the expense of special services,” that would limit the word’s meaning to recovery of actual costs. But those italicized words aren’t in the contract.
No, but that intent seems to be clear here. Contracts are usually interpreted in accordance with both the plain meaning of the contract and the intent of the parties (not after-the-fact intent of one party).
What do you think the word “reimburse” means here? The word is defined by various sources as follows (my emphasis):
Black’s Law Dictionary:
- to pay someone an amount of money equal to an amount that person has spent;
- to pay someone back;
- to make restoration or payment of an equivalent to an amount that person has spent
- to make repayment to for expense or loss incurred;
- to pay back; refund; repay.
- pay someone back for some expense incurred;
- reimburse or compensate (someone) as for a loss
Third Circuit Court of Appeals:
"To pay back, to make restoration, to repay that expended; to indemnify, or make whole." United States v. Konrad, 730 F.3d 343, 353 ( 3d Cir. 2013).
To me, all these sources indicate that the word means what we probably all think it means: money back for an outlay. But apparently, that is not the case in the Seventh Circuit.
Wednesday, June 29, 2016
This seems like it should be obvious but a recent case out of Indiana, Pinnacle Properties Development Group, LLC v. Gales, Court of Appeals Case No. 10A01-1512-SC-2271, was still being fought at the appellate court phase.
Gales rented an apartment from Pinnacle. She was told that she could not view the apartment until the day of her move-in. On the date of the move-in, Gales signed the lease and was then shown the apartment. At that point, Gales realized that the apartment had a shattered sliding door, a toilet that flooded and soaked the carpet, and no electricity (and apparently could not be made to get electricity because the meter had been removed). Gales told the leasing agent that the apartment was unacceptable and, as there was no other apartment of that floor plan available and as there was going to be a delay of at least several days before the apartment could be inhabited, she wanted the lease canceled and her money back.
Pinnacle's main argument was that Gales signed the lease, it was binding, and so Gales shouldn't be let out of it. The court, however, disagreed. Gales signed the lease, it found, with the understanding that she would received a habitable apartment. Since she didn't receive that habitable apartment, the lease was unenforceable, and she was entitled to her money back.
This seems like it should be a straightforward case. I can't imagine why it would be worth the money to continue fighting this.
Monday, June 27, 2016
As technology continues to evolve, so does the law, and a recent case out of Massachusetts, St. John's Holdings, LLC v. Two Electronics, LLC, MISC 16-000090, proves it. Addressing what the court termed a "novel" question in the Commonwealth of Massachusetts, the court concluded that the text messages at issue in the case constituted writings for statutes of frauds purposes.
I have often thought that we communicate much more in writing these days than people did, say, twenty years ago. I know that it is now much more common for me to text the people I want to speak with than actually call them to speak orally. It will be interesting to see how the statute of frauds continues to develop.
(Thanks to Ben Cooper for sending this case my way!)
Thursday, June 23, 2016
Looking for an interesting new case on the statute of frauds, breach of contract, promissory estoppel, and constructive trust by a son against his father? Here’s one for you:
It is California. The year is 1994. Father Sardul allegedly promises son Paul that if he if he “stayed in school, was a good son, continued to work on the [family] ranches, and married an Indian girl, i.e., a Sikh girl, Sardul and [mother] Jitendra would take care of him financially.”
According to the court, this happened next: “In 1996, Sardul and Jitendra were looking for a wife for Paul. The family traveled to India for this purpose. While in India they conducted numerous interviews of the parents of potential brides. In the Sikh culture, the boy’s parents take responsibility for finding a suitable wife. If both sets of parents think a match looks promising, the boy and girl spend some time alone together. Thereafter, if the boy and girl are interested, the match will be pursued. Paul’s family and Rajneet’s family first met on February 21, 1996 and Paul and Rajneet were married on March 16, 1996.”
The couple lived in one of the family’s ranch houses without ever paying rent, never making a mortgage, and with father Sardul making certain other payments for the young couple. Paul did, however, work on the family grape ranches until 1999. At that time, he got a full-time job for other employers.
In 2002, grape growers in California encountered hard times financially. Sardul tells Paul that he (Sardul) needed to sell the ranch on which Paul and his wife lived as they risked otherwise being foreclosed on both on the ranch in question as well as others. One of the family’s properties had a “little bit of equity” on it. Paul and his wife sign a deed for that property. The couple later stated that the father had promised “to give them” the ranch on which they previously lived when “things got better financially.” The father never did so, but instead offered the couple a 99-year lease on the property in 2012. Paul subsequently filed suit, claiming breach of three separate contracts: 1) To be a good son and stay in school, work on the ranches, and marry an Indian girl, 2) to take care of his father, and 3) the transfer of the above-mentioned ranch.
The court concluded that it did not matter how many contracts were alleged because it was questionable whether “any contract was formed at any time.” The alleged promises to “be a good son and stay in school” were vague, the promise “to continue to work on the ranches” was unsupported by the evidence, and the “marry an Indian girl” term was illegal as a restraint on marriage. The alleged oral promise to transfer a ranch violated the statute of frauds.
Paul and his wife also argued equitable estoppel and that, accordingly, the contract was not barred by the statute of frauds. The appellate court upheld the trial court’s finding that neither Paul nor his wife Rajneet detrimentally relied on the alleged contract to transfer the ranch to them or suffered unconscionable injury. The court concluded that Paul did not forbear all other employment opportunities to work on the ranches. Rather, Paul began working full time for other employers in 1999 and was permitted to live rent free on the Elkhorn Ranch until 2012. The court noted that in 2012, Paul and wife Rajneet were able to purchase a $650,000 house and had saved enough money to make a $200,000 down payment.
But wait!! What about the wife? Did she not have any arguments? You bet: Rajneet appeared to claim unconscionable injury or detrimental reliance based on marrying Paul and moving to the United States in part because of Sardul's promise that they would be given a ranch. The court concluded that Rajneet did not prove her claims noting that Rajneet was still married to Paul, they both were employed with good jobs, and they were able to purchase a home after living rent free for many years.
Finally, Paul and Rajneet claimed that they partially performed when they bought the one ranch from the father in reliance on Sardul's promise to transfer another to them in exchange. Part performance of an oral agreement for the transfer of an interest in real property may, under certain circumstances, except the agreement from the statute of frauds. (Sutton v. Warner (1993) 12 Cal.App.4th 415, 422.) However, the trial court found that no Sardul’s testimony that no such promise was ever made to be credible. The appellate court supported this as issues of credibility are for the trial courts to decide.
Talk about a family relationship gone sour, and then only over money. What a shame!
Wednesday, June 22, 2016
The Olympics are almost here, and as we all know, they're big business: lots of television ratings, lots of advertising, lots of endorsements.
Today the District of Oregon is hearing an argument on a preliminary injunction in a contract case with Olympic implications (or an Olympic case with contract implications), Nike USA, Inc. v. Berian, Docket No. 3:16-cv-00743 (behind paywall).
The dispute, which has been widely reported online, is based on Nike's endorsement contract with Boris Berian, a track and field competitor with Olympic hopes. The contract, according to the complaint, gave Nike the right to match any offers made to Berian during a particular period of time. During that time, Berian received an endorsement offer from New Balance. Nike claims in its complaint to have matched the offer, and that Berian breached his contract with Nike when he refused to continue his relationship with Nike.
Berian kept racing. And kept winning. While wearing New Balance gear. So Nike, to keep Berian from furthering his relationship with Nike's competitor New Balance, sued him, serving him with the lawsuit during a big track meet.
Nike's allegations have been countered by Berian, who claims that New Balance's offer to him did not contain a number of restrictions that Nike's offer did contain. However, Nike has countered that by arguing that Berian did not make that clear to Nike and that Nike would have dropped its restrictions if necessary. (Nike seems to have just assumed there had to be restrictions and that any statement otherwise couldn't possibly be true.)
Endorsements are big money, of course. The Nike and New Balance offers are $125,000 for the year. While he's embroiled in the legal dispute, Berian's agent asked for donations to Berian's legal fund.
The judge has already approved a TRO in the case, prohibiting Berian from racing with any equipment other than Nike's. The hearing for the preliminary injunction is today.
In Strumlauf et al. v. Starbucks Corp., No. 16-01306, a federal district court judge based in San Francisco just ruled that a class action lawsuit against Starbucks.The complaint alleges breach of express and implied warranties, unjust enrichment, negligent misrepresentation, fraud and violations of California's Consumer Legal Remedies Act, the California Unfair Competition Law, and the California False Advertising Law.
The company allegedly overcharged its customers by “systematically serving lattes that are 25% too small” in order to save milk. Baristas were allegedly required to use pitchers for heating milk with etched “fill to” lines that are too low. Further, they were told to leave ¼ inch of free space in drink cups. Said U.S. District Judge Thelton Henderson: "This is not a case where the alleged deception is simply implausible as a matter of law. The court finds it probable that a significant portion of the latte-consuming public could believe that a 'Grande' contains 16 ounces of fluid." Starbucks’ cups for “tall,” “grande,” and “venti” lattes are designed to hold exactly 12, 16 and 20 ounces.
Starbucks so far counters that “if a customer is not satisfied with how a beverage is prepared, we will gladly remake it.” Right, but how many customers would really complain that their drink is .25 inch (6 mm) too small?... And does it really matter? Much of what one pays for with a Starbucks drinks is, arguably, the knowledge of what the retail outlets offer, the ambience, convenience, “free” wifi, etc. Having said that, I am certainly not one to promote consumer fraud and recognize that little by little, the alleged milk-saving scheme could, of course, bring even more money into the coffers of already highly profitable Starbucks.