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?
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."
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.
Monday, July 13, 2015
We have some news from the world of hockey, that is, the sport of the 2015 Stanley Cup Champion Chicago Blackhawks (logo pictured). While elite teams (like the Blackhawks) struggle to keep their rosters under the salary camp (Goodbye Patrick Sharp; Goodbye Brandon Saad -- thanks for the memories and the Cups!), as reported on ESPN.com, the L.A. Kings used an alleged "material" breach of contract to terminate center Mike Richards rather than buying him out to evade the cap. The alleged material breach was at first mysterious, but it has now bee reported, e.g., here on Forbes.com, that Richards was detained at the Canadian border in illegal possession of OxyContin. But the Forbes report also indicates that Richards' mere arrest is not grounds for termination, and even if he is convicted, the NHL's drug policy does not call for termination. It calls for substance abuse treatment. Go Blackhawks!
The Bangor Daily News reports that author Tess Gerritsen has dropped her $10 million law suit against Warner Bros. for breach of contract in connection with the film "Gravity." As we reported previously, a District Court in California dismissed her complaint but allowed her twenty days to amend and refile. The complaint is based on a $1 million contract Gerritsen signed in 1999 to sell the book’s feature film rights to a company that was eventually purchased by Warner Bros. Gerritsen has admitted that the film "is not based on" her book, but she asserts that the book clearly inspired the film.
Monday, June 15, 2015
Two years ago, the National Hockey League's Phoenix (Arizona) Coyotes signed a 15-year lease on a facility in Glendale, Arizona. Now, the city is claiming a right to terminate the lease because of an alleged conflict of interest that has arisen affecting the team's former legal counsel. ESPN has the story here. According to ESPN, the city does not really want the team to leave; it just wants to negotiate a more favorable deal.
Eric Wemple of The Washington Post reports here on the latest troubles experienced by Al Jazeera American (AJAM). Shannon High-Bassalik, who served as AJAM's Senior Vice President of Programming and Documentaries, is suing for breach of contract, discrimination and retaliation. She alleges that the network promotes proclaims neutrality but actually pushes a pro-Arab, anti-Israel perspective. High-Bassalik claims that she was terminated for objecting to AJAM's racist and misogynist practices.
We reported a couple of months ago about suits brought by students, parents and alumni challenging the closing of Sweet Briar College. Today, we note that according to this report in the Lynchburg, VA News & Advance, faculty are challenging the propriety of the closing as well. Plaintiff faculty members are seeking a declaratory judgment that there is no financial emergency justifying the closing of the college. They allege the the college would breach faculty contracts by closing. The seek monetary damages and orders requiring the reinstatement of the faculty plaintiffs.
Monday, May 11, 2015
According to Philadelphia Magazine, two men who paid to watch the Mayweather-Paaquiano fight on pay-per-view are suing on behalf of a class of viewers who did not get their money's worth because Paquino had an undisclosed shoulder injury. The suit claims damages for breach of contract, fraud conspiracy and violation of consumer protection laws. Viewers paid between $89 and $100 to watch the fight. The suit alleges that the fight should have been cancelled or postponed.
The LA Times reports that a group of students who contracted Leishmaniasis, a parasitic disease that causes painful skin ulcers, while on a trip to Israel are suing the trip's organizers for failing to take adequate precautions to protect the students. The illness is allegedly caused by sand fly bites. The suit names the North American Federation of Temple Youth and the Union for Reform Judaism as defendants. It alleges that the organizations failed to take precautions such as providing the students with insecticides or insect netting and that the organizations provided the students with bug-infested bedding.
The LA Times also reports on a new trend on the hot, new social media: suing your co-founder. The report suggests that combining handshake deals undertaken in college dormitories, coupled with youthful hasted makes for a dangerous mix. We are all familiar with the strife among the founders of Facebook, but it turns out that Snapchat, Tinder, Maker Studios and Beats Electronics have all also experienced co-founder difficulties sounding in allegations of breaches of founders' agreements.
Monday, April 27, 2015
April is the finest month for a Chicago Cubs fan, because even the Cubs are within a few games of first place in April.
And hope springs anew with each Spring Training This year Cubs fans have extra reason to hope because of young prospect, Kris Bryant. There was only one catch. Bryant did not start the year playing for the Cubs. As reported here in Business Journalism, despite hitting nine home runs in 40 at bats and earning a .425 batting average, Bryant was demoted to the Cubs' Triple-A affiliate for the start of the season. Cubs GM, Theo Epstein, gave Bryant's need to develop his defensive skills as the reason for the demotion, but many believe that the purpose is to delay Bryant's eligibility for arbitration and free-agency. Bryant's ability to avail himself of these mechanisms would kick in 2017 and 2020 respectively if Bryant was on the Cubs' roster to start the season, but they will kick in a year later if Bryant misses the season's first ten games.
Thirteen days into the season, the Cubs brought Bryant up from the minors. Mike Olt and his lifetime .158 batting average kept third base occupied while Bryant was improving his defensive skills.
Monday, March 23, 2015
As reported here in Onward State, Former Penn State University President Graham Spanier (left) is now suing his former employer for breach of contract, while also naming the University and former FBI Director Louis Freeh in a defamation claim. The allegations stem from the Freeh Report, which Mr. Freeh undertook as a private consultant hired to look into allegations of sexual misconduct within the Penn State athletics program. The complaint alleges that the University breached its separation agreement with him by publicizing the Freeh Report and through other statements. Mr. Spanier has set up a website purporting to refute the findings of the Freeh Report.
In a potentially very interesting, bizarre and short(!) opinion, the Delaware Supreme Court weighed in on a hypothetical case not before it in Friedman v. Khosrowshahi, No. 442,2014 (March 6, 2015). The Court said that if a stockholder brings suit alleging breach of a stockholder approved plan as a contract, and she seeks recovery under contract law, such a plaintiff would not have to make demand on the board before proceeding in a derivative action because "directors arguably have no discretion to violate the terms of a stockholder adopted compensation plan whose terms cannot be amended without the stockholders’ approval."
MarketWired.com reports that Canadian purchasers of Lenovo computers are seeking $10 million in breach of contract damages for Lenovo's violation of their privacy rights by installing Superfish on their personal computers. Superfish allegedly makes it possible for third parties to use wireless networks to steal private information off of Lenovo computers. The Statement of Claim (Canadian, we assume for Complaint) can be found here.
And, as Spring training is underway and Opening Day is only a fortnight away, we should mention the ongoing contract dispute between the Chicago Cubs and the parties with whom the team entered into a revenue-sharing agreement relating to rooftop seating across the street from Wrigley Field. The Cubs want to put up a video board that the Sheffield Avenue property owners claim will block views in violation of the terms of the revenue-sharing agreement. The latest news on the subject matter can be found on Crain's Chicago Business here. The Cubs' opposition to plaintiffs' motion for an injunction is here. As a life-long Cubs fan, I stand by my view that not having to watch the Cubs play actually enhances the value of the seats, but hope springs eternal.
As reported here in the Cranston Patch, a teachers' union is suing a school district for breach of contract and violations of civil and religious rights. The school district decided to hold classes on religious holidays, including Good Friday, but to permit teachers two days of religious leave each year. The school district then denied leave to teachers who sought to use their leave on Good Friday. The community is predominantly Catholic, and it is likely that the school district had not plan for replacing the 200 teachers who applied for leave on Good Friday. Heavy snows and the large number of snow days this year might also have played a role.
Monday, February 2, 2015
In Benz-Elliott v. Barrett Enterp., LP, the Tennessee Supreme Court clarified the method for determining the statute of limitations when a case raises multiple claims. In such cases, the court must determine the gravamen of each claim and the nature of damages sought. In this case, which involved a sale of property, plaintiff alleged breach of contract and sought contractual damages. The Supreme Court reversed the Court of Appeals, which had dismissed plaintiff's claim based on a three-year statute of limitations relating to property claims. The six-year statute of limitations for breach of contracts should apply to plaintiff's claims, which were reinstated.
Eric Macramalla reports in Forbes that a Jets fan attempted to sue Bill Belichick, the New England Patriots and the NFL on behalf of a class of season ticket holders for having secretly recorded and then destroyed videotapes revealing signals given by New York Jets coaches (which players variously interpreted as "fumble," "drop the pass" and "miss your defensive assignment," inter alia). The suit was dismissed because the their seasons' tickets only permitted them to watch the game, which they did. Macramalla predicts similar suits may follow the great under-inflated ball scandal, which, lets face it, is a great distraction from all the other scandals facing the NFL these days.
Sunday, January 25, 2015
An Ohio appellate court upheld a $1.2 million breach of contract judgment against Kent State's men's basketball coach, Geno Ford. The judgment enforced a liquidated damages clause entitling Kent State to damages equal to Ford's annual salary ($300,000) multipled by the number of years remaining on his contract at the point of breach. In Kent State University v. Ford, Coach Ford tried to characterize the liquidated damages clause as a penalty. The court applied Ohio law to determine whether at the time the contract was entered into: 1) damages were uncertain; 2) the damages provided for in the contract were not unconscionable; and 3) the parties intended for damages to follow a breach. The court upheld the trial court's determination that the standard was satisfied in this case. Coach Ford can take consolation in the fact that his salary is short of Jim Harbaugh's by an order of magnitude.
PetaPixel.com reports on a wedding photographer who, after charging a couple $6000 to shoot a wedding album, sought an additional $150 for the album cover. The couple balked, so the photographer is refusing to hand over the photographs and is threatening to charge them an additional $250 "archive fee" if they do not pay up in a month. PetaPixel draws the following lesson from the story:
This all goes to show that as a photographer, you should never rely on verbal agreements when it comes to conditions and charges. Always get everything in writing.
Maybe. The photographer herself has an extremely lengthy blog post about the entire affair in which she claims that everything should have been clear from the written contract. PetaPixel's story makes it seem like an additional charge was added after the contract had been entered into, and if that's the case, the couple might well have balked whether or not the new terms were in writing.
Contracts Prof/Con Law Prof Randy Barnett, writing at the Volokh Conspiracy picked up by the Washington Post, muses interestingly on the applicability of the contractual duty of good faith to the President's duty to faithfully execute the laws in the Constitution's Take Care clause. This helps Barnett reconcile his empathy for the President's refusal to enforce federal drug laws in the face of permissive state laws permitting use of marijuana with his opposition to the President's new initiative on immigration. I've never been persuaded that the contractual analogy is particularly useful in Constitutional interpretation. Suggesting that the contracts doctrine of "good faith" provides a useful gloss on the Take Care clause strikes me as a stretch, but Professor Barnett is always stimulating.
Monday, January 12, 2015
A misplaced comma (or something) cost an Oregon Ducks fan his premium seats to the college football championship game. According to this report from The Oregonian, a University of Oregon alumnus found premium tickets to the game (which he knew were selling for $4000) for $400 on StubHub. When, he placed his order, StubHub indicated that he would be charged $16,59.36, but his credit card was charged $16,059.36. He protested, and StubHub refused to honor the purchase, removing the charge and offering $1600 in StubHub vouchers, which the angry Duck says he will not use. He blows off some steam in a blog post, with observations about obnoxious terms and conditions.
In a sign of the times, MasterCard has filed suit in the Southern Distroct of New York against Nike, according to this report from Bloomberg.and Oregon Live (you have to go through a short survey to read it), for having poached a few of its cyber-security experts. MasterCard is suing the employees for breach of contract and Nike for tortious interference. Nike denies all wrongdoing.
We could not have made this up: The St. Louis Post-Dispatch reports that the Devin James Group (DLG), a public relations firm, is suing another public relations firm, Elasticity. Apparently, Elasticity hired DLG to help represent the City of Ferguson in the aftermath of the shooting of Michael Brown. Elasticity fired DLG when it discovered that DLG's owner had a criminal record. Mr. James was convicted in 2006 for having shot an unarmed man. He claims he did $50,000 of work for which he has not been paid.
In another chapter in the dangers of state governments hiring private companies to handle public services, NJ.com reports that Hewlett Packard will refund New Jersey $7.5 million to get out of its contract to deliver a unifed system to administers the state's public assistance program. The Christie administration and HP agreed last year to suspend work on the project and they entered into a separation agreement in which each side agreed not to sue the other for breach of contract. The state is now looking for a new partner. In the meantime, it "continues to hobble along on its 1980s-era mainframe system," according to NJ.com.
Finally, an interesting conflict between a franchise and a large franchisee. Wendy's is requiring its franchisees to make technology upgrades and renovate stotes. DavCo, which operates 152 Wendy's restaurants is refusing to do so, claiming that Wendy's lacks the authority to require the changes. According to the Baltimore Sun, Wendy's has filed suit to terminate DavCo's franchises.
Monday, December 8, 2014
Yet another non-disparagement case, this time for WTOC.com. This time, it was a woman who cancelled an agreement with a wedding photographer within the contractually created cancellation period, and then went online to explain why she had done so. The photographer threatened legal action claiming that she had violated a non-disparagement clause in the now-cancelled contract.
There was an interesting story last week on the International Business Times about Yo-Yo car sales. Apparently, there are many variations to the practice, but the basic scheme runs as follows: car dealer sells a car to person with bad credit, who is happy to be able to buy a car on any terms. Then, the dealer tries to sell the loan to a third party. If it cannot do so, it calls the buyer back in and demands either a change in the loan terms or the return of the car. The IBT story focuses on a buyer whom the dealer claimed committed felony auto theft and fraud. The buyer filed a civil suit against the dealer, with claims ranging from violations of the Truth in Lending Act to defamation and deceptive trade practices. The dealer has counterclaimed for fraud and breach of contract.
According to an AP story posted here in the UK's Daily Mail, California is wrangling with investors in a $2.3 billion deal for the sale and lease back of state properties. The deal was conceived in the Schwarzenegger administration, but Governor Brown has determined that the deal will cost the state $1.5 billion. California alleges that the investors failed to make an initial $50 million payment, triggering the State's rights to terminate the contract. The investors are seeking a forced sale of the properties. My students have their exam this week, so they might want to think about what we have here: partial breach? material breach? total breach? failure of a condition? did California seek adequate written assurances? The AP story does not clarify these highly testable issues.
Finally, we are happy to report that the law has saved hockey! At least in Erie, Pennsylvania, according to this story on GoErie.com (Warning! This site has lots of annoying popups!). Apparently, the Edmonton Oilers sought to enforce a judgment against the Otters' General Manager Sherry Bassin through a forced sale of the team. The Oilers' scheme then involved buying the Otters through a subsidiary and moving them to Hamilton, Ontario. But U.S. District Court Judge David Cercone blew the whistle and checked the Oilers when he set aside a judgment against Bassin The Oilers would have to proceed through a breach of contract claim if they want to penalize Bassin for misconduct. In the meantime, the good people of Erie can enjoy their Otters.
Monday, November 10, 2014
According to this report on the International Business Times website, two children, through their mother, are suing Malaysia Airlines for breach of contract and negligence in connection with their father's death on Flight MH370. Plaintiffs allege that the airline breached a safety agreement that it entered into with their father and the other passengers on the flight.
As reported here in the Bellingham Herald, the Indiana Supreme Court heard arguments on October 30th about the state's contract with IBM to privatize its welfare services. The state was so disappointed with IBM's performance that it cancelled the contract three years into a $1.3 billion, ten-year deal. Friend of the blog, Wendy Netter Epstein (pictured), has written about this case in the Cardozo Law Review.
Sunday's New York Times Magazine has a cover story pondering whether lawyers are going to do to football what they did to tobacco. As an example of what this might look like we have this case filed on October 27, 2014 on behalf of Julius Whittier and a class of plaintiffs who played NCAA football from 1960-2014, never played in the NFL, and have been diagnosed with latent brain injury or disease. Mr. Whittier suffers from early-onset Alzheimer's. The complaint alleges, among other things, breach of contract, based on NCAA documents requiring each member instittuion to look after the physical well-being of student athletes.
Monday, November 3, 2014
As reported on JDSupra here, the Florida District Court of Appeal for the Fourth District, sitting en banc, held that while an insurer’s liability for coverage and the extent of damages must be determined before a bad faith claim becomes ripe, the insured need not also show that the insurer is liable for breach of contract before proceeding on the bad faith claim.
We have also learned from JD Supra of Piedmont Office Realty Trust v. XL Specialty Ins. Co., 2014 U.S. App. LEXIS 20141 (11th Cir. Oct. 21, 2014), in which the United States Court of Appeals for the Eleventh Circuit, elected to certify to the Supreme Court of Georgia the question of whether an insured’s payment obligations under a judicially approved settlement agreement qualify as amounts that the insured is “legally obligated to pay,” and if so, whether the insured’s failure to have obtained the insurer’s consent to settle resulted in a forfeiture of coverage.
According this this report on Yahoo! Sports, Oklahoma State is suing the former Offensive Coordinator of its football team, Joe Wickline (who now is a coach for the University of Texas), and Wickline has countersued. According to the report, Wickline's contract with Oklahoma State require that he pay the balance of his contract ($593,478) if he left for another position and was not his new team's play-caller. Wickline claims that he is calling plays at Texas. What a bizarre thing to put in a contract. It's a reserve non-compete! In effect, Oklahoma State is saying that it would pay Wickline to call plays for a rival.
According to this report from the Courthouse New Service, Ted Marchibroda Jr., the son of NFL Football coach Ted Marchibroda, filed a $1 million malpractice lawsuit against Sullivan, Workman & Dee and trial lawyer Charles Cummings , alleging breach of contract, professional negligence and breach of fiduciary duty. In a 2011 lawsuit, Marchibroda accused sports agent Marvin Demoff of breaching an agreement to share the proceeds of NFL contracts for linebacker Chad Greenway. He claims that he is also owed money for recruiting center Alex Mack.
And continuing our sports report, Golf.com notes that golfer Rory McIlroy is taking a break from the "sport" to pursue his legal claims against his former management company, Horizon Sports Management. McIlroy claims that Horizon took advantage of his youth to extract an unconscionable 20% fee for McIlroy's off-the-course income. Horizon is claiming $3 million in breach-of-contract damages.
In a simpler companion case to the Sharpe v. AmeriPlan Corp. case about which we blogged earlier today, the Eighth Circuit affirmed the District Court's denial of a motion to compel arbitration in Quam Construction Co., Inc. v. City of Redfield. As reported here on Law.com, the case was relatively easy, since the contract at issue contained permissive language: "the parties may submit the controversy or claim to arbtiration." Given such language, the Eighth Circuit agreed with the Distrcit Court that arbitration could not be compelled.
Tuesday, August 19, 2014
Plaintiff sued the YMCA for injuries sustained when he slipped and fell on stairs that he alleged were negligently maintained. First, let’s get this out of the way:
The YMCA argued that plaintiff was contractually barred from seeking damages against the YMCA because plaintiff had voluntarily signed an exculpatory clause in his membership agreement. That clause provided:
I AGREE THAT THE YMWCA WILL NOT BE RESPONSIBLE FOR ANY PERSONAL INJURIES OR LOSSES SUSTAINED BY ME WHILE ON ANY YMWCA PREMISES OR AS A RESULT OF A YMWCA SPONSORED ACTIVITIES [SIC]. I FURTHER AGREE TO INDEMNIFY AND SAVE HARMLESS THE YMWCA FROM ANY CLAIMS OR DEMANDS ARISING OUT OF ANY SUCH INJURIES OR LOSSES.
A New Jersey trial court granted summary judgment dismissing the complaint. An appellate court reversed. The appellate court framed the issue as “whether a fitness center or health club can insulate itself through an exculpatory clause from the ordinary common law duty of care owed by all businesses to … invitees[.]” The court held that it could not.
While the New Jersey Supreme Court upheld an exculpatory clause in Stelluti v. Casapenn Enters., Inc., 203 N.J. 286 (2010), that case was characterized as involving allegations of injury based upon risks inherent in the activity (bike riding in a spin class). In Stelluti, the New Jersey Supreme Court did not specifically address or decide whether an exculpatory clause may waive ordinary negligence.
Given the expansive scope of the exculpatory clause here, we hold that if applied literally, it would eviscerate the common law duty of care owed by defendant to its invitees, regardless of the nature of the business activity involved. Such a prospect would be inimical to the public interest because it would transfer the redress of civil wrongs from the responsible tortfeasor to either the innocent injured party or to society at large, in the form of taxpayer-supported institutions.
The appellate court also noted that the agreement was presumably a contract of adhesion.
This is a case worth following if appealed to the New Jersey Supreme Court. And a good teaching case because it lays bare the tension between freedom to contract and overriding concerns about general public welfare.
Walters v. YMCA, DOCKET NO. A-1062-12T3 (Superior Ct. of N.J. App. Div. Aug. 18, 2014).
Tuesday, February 18, 2014
During a basketball game at West Chester University in Pennslyvania, freshman Jack Lavery was randomly picked for the $10,000 halftime challenge. Lavery had 25 seconds to make a lay-up, shot from the free throw line, shot behind the three-point line and a half-court shot. Lavery successfully made a lay-up, a shot from the behind the free throw line, and then a shot behind the three-point line. As the clock was winding down, Lavery attempted the half-court shot, but missed. With one hand, he made the half-court shot on his second attempt just as the buzzer went off. As Lavery explains it:
"I stopped and did that one handed shot and it happened to go in. I ran to the other side of the court just high fiving everyone and then I went and bear hugged my dad," said Lavery.
See for yourself:
As you see, the crowd cheered, but the University refused to award the prize money. Why? The contract.
Intrepid reporting by Action News obtained a copy of a contract signed by Lavery. The rules of the contest provide:
I shall have as many opportunities as necessary at each of the first three (3) locations to make a shot; however, no more than ONE (1) attempt may be made at the HALF COURT shot, provided that there is still time left on the shot clock.
Lavery took more than one attempt at the half court shot and, therefore, the University claims that he is inelgible for the prize. Nevertheless, apparently his father intends to "challenge the wording of the contract."
Additionally, the contract reportedly states that anyone who played basketball in high school would be ineligible to collect the prize money. Lavery played high school ball, another reason for his ineligibility.
Reminds me of this:
Monday, January 27, 2014
Today's New York Times has a long story about college coaches in non-money sports, like soccer and lacrosse, recruiting middle schoolers. Like most intersections between amatuer athletics and money, this phenomenon is bad for everyone. According to the Times, the new trend is an unintended consequence of Title IX. There is lots of scholarship money chasing relatively few talented athletes, especially female athletes, in the non-money sports. As a result, players of promise get snatched up very early, so now schools offer scholarship money to eighth graders in the hope that they will commit to play for them when they go to college.
The result is bad for everyone for obvious reasons. Coaches cannot really predict which 13-14 year olds will be All-American athletes. Even if athletic potential is there, injuries, loss of interest or other factors (e.g., life outside of sports) can intervene. The dynamic hurts young athletes because it forces them to focus on one sport very early, playing that sport year round and increasing the likelihood of injury. Then, many athletes recruited in middle school are not top players in college, so they spend their college years as frustrated bench warmers, has-beens at the age of 18. The coaches hate it as well. They've got better things to do with their time than endless telephone converstions with middle schoolers, and they hate the dynamic of having to commit to student athletes before they are confident of the students' potential.
But it's actually hard to have that much sympathy for the coaches, since this is a world they have created by exploiting loopholes in NCAA rules. They could voluntarily self-regulate or simply work at getting a reputation for being a school that only accepts students who arrive at a particular sports program as a result of more mature deliberation. Perhaps it won't work and then a school might have to suffer the ignominy of not having, for example, a top ten women's soccer team. The horrors. University administrators should focus more an graduation rates, employment rates and student well-being and less on rankings.
But the reason I am posting about this is of course the relevant contacts issues. The Times is silent on how the minors bind themselves to particular universities. Since these middle schoolers cannot bind themselves contractually, there must be parents involved. Still, I wonder what the remedy is if a student athlete decides not to attend the university to which she has pre-committed. Of course, the student will sacrifice her scholarship, but if a recruited soccer player decides that she wants to play at a different school, will it really be impossible for her to find a school that will offer her a scholarship when she is a senior? Given that the coaches know that they will make mistakes in recruiting 14-year-olds, they ought to hold a few scholarships in reserve so that they can make offers to late bloomers.
But students may be unwilling to renege on their commitments. As the closing line of the Times article suggests, students may be happy to simply be done with the process, even though they know that they are pretty poor predictors of what they will want for themselves in four years' time. The disservice we do to student athletes is obvious. But the process also disserves colleges and universities. There are lots of reasons to go to college, but the chief reason for almost all students ought to be educational. By forcing to middle schoolers to pick a school based on a sport which will almost certainly never be anything more than a hobby for them, we present a distorted picture of the purposes of higher education -- or perhaps we simply contribute to a realistic picture of higher education which is in fact a disfigurement of education.
Monday, December 23, 2013
Motion to Compel Arbitration Granted in Part, Denied in Part in Antitrust Case v. Cable Providers and Sports Organizations
On November 25, 2013, Judge Scheindlin of the Southern District of New York issued an opinion in Laumann v. National Hockey League, granting in part and denying in part a motion to compel arbitration brought by defendant Comcast and denying in full a similar motion brought by defendant DIRECTV. Plaintiffs claim that defendants, including the National Hockey League and Major League Baseball, along with the major cable and satellite television service providers entered into "agreements to eliminate competition in the distribution of [baseball and hockey] games over the Internet and television [by] divid[ing] the live-game video presentation market into exclusive territories, which are protected by anticompetitive blackouts," and by "collud[ing] to sell the `out-of-market' packages only through the League [which] exploit[s] [its] illegal monopoly by charging supra-competitive prices." These agreements allegedly violate the Sherman Antiturst Act.
At the heart of plaintiffs' beef, it seems, is that if one wants to view "out-of-market" games -- that is, games that do not feature the team from one's home city or the city where one is located -- one must purchase television packages which inculde all out-of-market games, even if one is only interested in the games of one out-of-market team.
Both Comcast and DIRECTV have customer service agreements that feature arbitration clauses and so both defedants moved to compel arbitration. Judge Scheindlin granted Comcast's motion with respect to one plaintiff who purchased an out-of-market package directly from Comcast and thus was clearly bound by the arbitration provision. The remaining plaintiffs had a more complicated relationship to Comcast and claimed that their claims did not arise directly under their customer service agreements with Comcast.
Judge Scheindlin first ruled that any colorable dispute about the scope or validity of the arbitration clause must be referred to the arbitrator. Plaintiffs colorfully objected that where the relationship between the agreements and the claims are too attenuated, granting Comcast's motion would be like compelling arbitration of a claim by a plaintiff who had been hit by a Comcast bus. Judge Scheindlin agreed with respect to one plaintiff, where "the sole nexus between his claims and his Comcast service is the allegation that his DIRECTV package contained material produced by the Comcast" Regional Sports Networks.
Comcast also sought to compel arbitration of claims brought against it pursuant to arbitration clauses in plaintiffs' agreements with DIRECTV. With respect to these claims, Judge Scheindlin noted that there was no clear intent to have questions of arbitrability between a signatory and a non-signatory decided by the arbitrator. She then ruled that the arbitration clause in the DIRECTV agreements did not encompass plaintiffs' claims against Comcast. She also rejected Comcast's claim that plaintiffs should be estopped from bringing a claim under the DIRECTV agreements through any mechanism other than arbitration.
DIRECTV's motion to compel arbitration against another plaintiff failed because the plaintiff is not a DIRECTV customer bound by its arbitration agreement. The DIRECTV subscription is in the name of plaintiff's wife, and the court rejected any claim that he could be bound by admission or estoppel.
Saturday, December 7, 2013
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]
Wednesday, November 13, 2013
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...