ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Thursday, July 7, 2022

About that Chagall Most Recently Appraised at $100,000 . . .

ChagallAs The New York Times reports here, Stephanie Clegg paid $90,000 for a watercolor that she bought at Sotheby's in 1994.  More recently, in 2008, the painting was appraised at $100,000.  It was sold in 1994 as a Marc Chagall (left), and that attribution was affirmed in 2008.  In 2020, Sotheby's suggested to Ms. Clegg that it was time to put her Chagall up for auction, and she agreed, as she had downsized, and the painting was in storage.  But first, the painting had to be sent to France where it was to be authenticated by a panel of Chagall experts.  

The experts said "Non! Ceci n'est-ce pas un Chagall."  Or words to that effect.  These things happen.  But there's more!  Under French law, the experts can order the destruction of counterfeit paintings.  The Times story says nothing more about this odd law.  It's as though the French have never heard of the Takings Clause!

Sotheby's pulled an American Airlines, offering Ms. Clegg $18,500 in credit towards its fee on any future sales it handles for her.  She responded with a demand for $175,000, perhaps representing what the painting would sell for if it were authentic.  Sotheby's denies that Ms. Clegg has any claim against it.  After all, the French are disposing of her property for free!  She should take further advantage of this service and send all her old technology to France just in case Chagall designed her old PC and dot-matrix printer.  No more anxiety about how to recycle that stuff!

Unlike those amateurs who tried to sell Tom Brady's "Final Touchdown Football," Sotheby's has protected itself against warranty claims, putting buyers on notice that its appraisals of authenticity are only good for five years.  And look at you, New York Times, citing the UCC's four-year statute-of limitations on warranty claims!  It would indeed take some doing for a court to find that the statute on Ms. Clegg's claim had not already run.  Ms. Clegg is also alleging fraudulent misrepresentation, negligence, and breach of fiduciary duty.  

Ms. Clegg is claiming that Sotheby's gave her false assurances that the committee very rarely ordered the destruction of artworks.  Enter the parol evidence rule.  Sotheby's now characterizes those statements as expressing only "expectations."  In any case, Ms. Clegg "signed a release indemnifying Sotheby’s from any claims connected to that submission."

The French law calling for the destruction of counterfeit paintings seems a bit extreme.  As an art price skeptic, I think if you like a painting, you should hang it on your wall.  If you don't like a painting, you should sell it someone who wants to hang it on their wall.  Okay, you experts say it's not a Chagall, but it's something that Ms. Clegg thought beautiful and hung on her wall for quite a few years.  Why destroy something that someone finds beautiful?  

Dogs Playing PokerIn addition, as the Times article points out.  Experts make mistakes.  The death sentence is irreversible. 

Ms. Clegg retained a copy of the original Sotheby's catalogue for the auction at which she purchased the putative Chagall, which included a number of specific representations about the painting's provenance.  My advice, since this is the 21st century, is that Ms. Clegg should create an NFT of the image of the painting in the catalogue.  Once the actual painting is destroyed, that NFT ought to fetch at least $175,000.

H/T to our former co-blogger Meredith Miller, who now delights in giving me stuff to write about while she gets to spend her summer days reading James Baldwin.

July 7, 2022 in In the News, True Contracts | Permalink | Comments (0)

Tuesday, July 5, 2022

Tuesday Top Ten - Contracts & Commercial Law Downloads for July 5, 2022

Top10-Granite

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 06 May 2022 - 05 Jul 2022
Rank Paper Downloads
1.

Not Your Keys, Not Your Coins: Unpriced Credit Risk in Cryptocurrency

Georgetown University Law Center
891
2.

The Limits of Regulation by Insurance

University of Virginia School of Law and University of Minnesota Law School
200
3.

COVID-19 and Business Income Insurance: The History of 'Physical Loss' and what Insurers Intended it to Mean

affiliation not provided to SSRN, Reed Smith LLP and Michigan State University - Michigan State Law ReviewPlews Shadley Racher & Braun
179
4.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
129
5.

The Dystopian Right of Publicity

University of Massachusetts School of Law
113
6.

Transcending the Public Law-Private Law Divide

University of Melbourne Law School
108
7.

Contracting for Debt: The Relationship Between Debt Capitalism, Higher Education, and the Black-white Wealth Gap

University of Pennsylvania Carey Law School
79
8.

Non-Compliance with contract terms: a comparative view on (non)regulation and remedies

University of St. Gallen and Copenhagen Business School - CBS Law
75
9.

Cognition, Automation and the Future of Contract Law

University of Queensland
74
10.

Contract Logic

New York University School of Law
70

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 06 May 2022 - 05 Jul 2022
Rank Paper Downloads
1.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
129
2.

Cognition, Automation and the Future of Contract Law

University of Queensland
74
3.

Contract Logic

New York University School of Law
70
4.

Reviewing Choice of Law in International Contracts (Oxford University Press, 2021)

The University of Western Australia
50
5.

Conflict, Consistency and the Role of Conventional Morality in Judicial Decision-Making

Fordham University School of Law
50
6.

The Role of Democracy in Private Law

University of Auckland Faculty of Law
49
7.

The Potential Legal Value of Relational Contracts in a Time of Crisis or Uncertainty

University of Tennessee College of Law
46
8.

The Misrepresentation Act 1967: Its Historical Origins and Socio-Political Context

University College London - Faculty of Laws
36
9.

Humanizing Transactional Documents: Why and How Transactional Drafters Should Use Narrative Techniques

Arizona State University (ASU) - Sandra Day O'Connor College of Law and Mercer Law School
35
10.

Giants of Contract Law - Some Personal Reflections

Independent
35

July 5, 2022 in Recent Scholarship | Permalink | Comments (0)

Should Contracts Profs Cheer for a Return to the Lochner Era?

Justice Peckham
Justice Peckham
Author of the majority opinion in Lochner

On the one hand, of course we should.  Law reviews will beg us for submissions.  All of their symposium issues will be dedicated to the fundamental right to freedom of contract, and we will stroke our beards our twirl our locks and consider whether intermediate or strict scrutiny is the best way to safeguard those rights.  All of those fancy public law people will have to listen to us talk about offer, acceptance, consideration, and assent, and they will feel as inadequate as we do when they drone on about, e.g. the differences among original expected application, original public meaning, original methods, and original law.  We will host the Con Law Podcast, and when people ask, "By 'Con Law,' do you mean constitutional law or contracts law?" we will smile roguishly and answer, "Yes!"  

Why do I mention this?  James B. Stewart, the grizzled veteran of The New York Times business pages (his 2005 Disney War was an important source for my article on the business judgment rule), warned on Saturday that we might be returning to the Lochner era.  As I've been writing about the interaction of contracts and constitutional law for the past year (most recently here, with links to the other posts), this caught my eye.  I feel compelled to write a separate opinion concurring in part.

Let me start with areas of agreement between me and Mr. Stewart.  While Lochner itself invalidated a New York state labor regulation, the Lochner era was about the Court invalidating economic regulation generally.  Lochner upheld freedom of contract over state attempts at implementing health and safety regulations, and a separate but related line of cases struck down federal attempts at similar regulation by reading the Commerce Clause narrowly.  I agree with Mr. Stewart, and others cited in his article, that this is an anti-regulatory Court.  However, in my view, the Court is unlikely to revisit Lochner itself, because it can achieve the same effect through other doctrinal routes for which it has already laid the groundwork.  

Mr. Stewart's evidence that a return to Lochner flows from this paragraph:

The case for Lochner is plainly embedded in the Dobbs decision. Writing for the majority, Justice Samuel Alito said that rights not explicitly mentioned in the Constitution had to be “deeply rooted in this Nation’s history and tradition” and “implicit in the concept of ordered liberty.” Unlike a right to abortion, freedom of contract is widely believed to meet that definition.

220px-Clarence_Thomas_official_SCOTUS_portraitThe problem with that paragraph, in my view, is that the cited test relates to substantive due process protections for unenumerated rights.  Freedom of contract is not an expressly-protected federal right.  Under our jurisprudence, Justice Alito contends, abortion does not meet the test for substantive due process.  Some version of freedom of contract might meet the test.  However, this Court is not in the business of expanding substantive due process rights.  It has to tread cautiously, because of the Second Amendment, which it also protected under substantive due process in McDonald.  It will be very hard for the Court to whittle away, as it will no doubt continue to do, at the right to privacy in the context of its bedroom politics while expanding economic substantive due process protections in other areas.  This is especially true because Justice Thomas (and perhaps Justice Gorsuch based on his concurrence in Timbs), and most originalists now writing on the topic, think that the Fourteenth Amendment's Privileges or Immunities clause, rather than substantive due process, should provide the basis for protections of individual rights vis a vis the states.  Justice Thomas had to do some very fancy tap-dancing to write for the majority this term in Bruen, which applied McDonald, given that he wrote separately in McDonald rejecting the majority's substantive due process justification for making the  Second Amendment applicable as to the states.  So, I only count, at most, four votes for a new embrace of economic substantive due process rights.  Could they get there through Privileges or Immunities?  Anybody's guess, which is why the move to Privileges or Immunities is so unsettling.

As for the Court's animus towards federal regulation, it does not need to rely on Lochner to achieve its goals there.  The anti-regulatory GOP has enough power in the Senate to prevent any significant new regulatory legislation.  In any case, regulation almost always comes from the administrative state, not from the legislature, which lacks the expertise and the ability to respond fluidly to an evolving regulatory context.  For that reason, Congress has traditionally delegated regulatory power to the agencies. 

Associate_Justice_Neil_Gorsuch_Official_Portrait_(cropped_2)A few years back, in Gundy, Justice Gorsuch, writing for himself, the Chief, and Justice Thomas, was all for reviving the non-delegation doctrine and reducing Congress's power to delegate.  Justice Alito wrote separately but called for the Court to re-visit the non-delegation doctrine with equal force.  By the logic of the current Court, there could have been six votes to return us to the world of Schechter Poultry. Enter Julian Mortsenson and Nicholas Bagley, who have made extremely compelling originalist arguments that boil down to the following: there was no non-delegation doctrine at the Founding.  And it's not even close.  Using originalism to beat back the administrative state is not as easy as it seemed.  Rather than fighting that battle, Justice Gorsuch, in his concurring opinion in this term's West Virginia v. EPA, declares it a tie because he can cite a bunch of law review articles in a footnote that have different perspectives on the non-delegation doctrine (never mind that half of them pre-date Mortenson & Bagley's sea-changing scholarship and so are unresponsive to their arguments).  Ah for the days of judicial humility, when courts deferred to the political branches on close questions.  

Disarmed of the non-delegation doctrine, the Court's majority has embraced the "major questions doctrine" like Hopper picking up that sword in the final episode of Season 4 of Stranger Things. 

As West Virginia v. EPA and other cases this term illustrate, that's a potent enough weapon if you are looking to dismantle the federal regulatory state.  And so, I concur, in part with Mr. Stewart, that the Court will embrace freedom of contract when it comes to pairing back federal regulation, but it hardly needs to rely on Lochner for that.

But I don't see a full-throated embrace of Lochner, because doing so would force the conservative majority to walk back a great deal of the federalism talk of the Rehnquist Court, and I don't see how they can do so while also singing the praises of the laboratories of democracy in Dobbs.  You may think they just did so with respect to gun regulation in Bruen.  Touché.  But then there are other impediments to prioritizing contracts rights that were not at issue in 1905 (which should be telling if you think this is really an originalist Court).  As my previous posts on this subject indicate, the Court has very little interest in contracts rights when they come up against rights that it cares about more, sometimes free expression rights, but mostly Free Exercise rights, both of which are entirely a product of 20th-century jurisprudence.  

Mr. Stewart gives the last word to Yale's Akhil Amar, who doesn't see a return to Lochner on the horizon.  Professor Amar cautions that, even though this last term was an earthquake, it was an originalist earthquake, not a libertarian earthquake.  I'm more inclined to reverse that, but for me the main takeaways from this term are that this is a Court that has a legislative agenda, and the members of the conservative majority are ticking things off their to-do list.  And as Bruen, West Virginia, Dobbs, and other cases illustrate, they are going to decide the issues they want to decide whether or not those issues arrive at the Court in the appropriate procedural posture.  Abortion, guns, the administrative state, voting rights, Free Exercise, and the Establishment Clause all got their check marks this term.  Protections for LGBTQ+, affirmative action, and the independent state legislature theory are already cued up for next term.  If you are a litigant who wants to pare back the Commerce Clause, this is your moment!

Here's to the Court that can't pass the marshmallow test!

Thanks to the Strict Scrutiny podcast for the perfect analogy. 

July 5, 2022 in Commentary, Famous Cases, In the News, Recent Cases | Permalink | Comments (1)

Thursday, June 30, 2022

That Other SCOTUS Arbitration Case: Viking River Cruises

AlitoWe were ever so happy to report on the first two Supreme Court cases this term interpreting the Federal Arbitration Act (FAA), Morgan v. Sundance, Inc., and Southwest Airlines v. Saxon.  They were short; they were unanimous; and they rejected motions by corporations to compel arbitration of their employees' claims.  The third, Viking River Cruises, Inc. v. Moriana, is more involved, generating a majority opinion from Justice Alito (left), a confusing flurry of concurrences, including one for the ages from Justice Barrett, and a quick dissent from Justice Thomas.  

The challenge in Moriana is the interaction between the FAA and California's Private Attorneys General Act (PAGA).  California's legislature determined that its Labor and Workforce Development Agency (LWDA) lacked resources necessary to enforce California's labor laws.  PAGA permits "aggrieved employees" to initiate  actions against former employers on behalf of themselves and other current or former employees.  They must first exhaust administrative remedies and give the LWDA an opportunity to act.  If it does not do so, they may bring their claims.  LWDA gets 75% of any award, and the employees split the remaining 25%.  PAGA operates like a qui tam action.  A PAGA suit is not a class action because the aggrieved employee is suing as an agent the state.

When Viking Cruises hired Moriana, you'll never guess what happened!  She signed an arbitration agreement that included a class action waiver.  After she left Viking, she sued under PAGA alleging that she had not received her final wages in a timely way but she also brought numerous PAGA claims on behalf of other current and former employees.  Viking moved to compel arbitration of Moriana's claim brought on her own behalf and to dismiss her PAGA claims.  The California courts refused to do so, relying on Iskanian v. CLS Transp. Los Angeles, LLC, in which California Supreme Court held that waivers of the right to bring "representative" PAGA claims violate public policy and are invalid.  The specific issue in Moriana is which of her claims count as "representative."  

As we have covered in earlier posts, the Supreme Court issued a number of pro-arbitration decisions, starting with Rent-A-Center and Stolt-Nielsen in 2010.  The upshot of those and other cases was that courts must enforce class action waivers in arbitration agreements on the ground that "a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.”  Viking, citing those cases, argued that California courts cannot rely on Iskanian to force them into class litigation to which they have not consented.  The Court rejected that argument, because a PAGA claim is not a class claim.  It is a claim brought on behalf of one party, the state, via a proxy.

Still there is a problem, from the perspective of the Court's decisions interpreting the FAA as requiring enforcement of class-action waivers in employment agreements.  Iskanian does not permit the division of PAGA claims into individual actions (e.g., Moriana's claim brought on her own behalf) and non-individual claims (e.g., her claims brought on behalf of other current and former Viking employees).  Justice Alito resolves the tension between the FAA and Iskanian using the severability provision in Viking's arbitration agreement.  That agreement is invalid under Iskanian to the extent that it seeks to preclude Moriana's non-individual PAGA claims.  However, she must arbitrate her individual PAGA claim.

Divided ArgumentAs they did with their SMUGLER episode a few weeks backWill Baude and Dan EppsDivided Argument has again provided some helpful insights about the toughest aspects of the Moriana case in their COBRA episode.  Justice Alito cannot cut through the Gordian knot that the case presents.  PAGA claims must be brought by an "aggrieved employee."  Once Moriana's individual claims are severed from her non-individual claims, she has no statutory standing to bring  her non-individual claims, because she is not "aggrieved" by Viking's alleged misconduct that did not affect her.  Not sure where to go from there, Justice Alito remands the case for "further proceedings not inconsistent with this opinion."  Sucks to be that court.

Justice Sotomayor offers a little help in her concurrence.  One option is that the California courts can offer a different interpretation of PAGA, perhaps somehow allowing non-individual PAGA claims to be brought after they have been severed from individual claims subject to arbitration.  I'm not sure how they get there.  The other option is that the state legislature can permit people other than "aggrieved workers" to bring PAGA claims.  That seems like the more workable solution, if the California legislature has the will to actually fix a faulty statute.

And then comes the fun stuff.  Justice Barrett wrote a concurrence, joined in full by Justice Kavanaugh.  She joined only in Part III of Justice Alito's majority opinion.  In her view, PAGA is just another means of aggregating claims, and those are all barred under the FAA if there is an arbitration agreement with a class action waiver.  Stolt-Nielsen is right so let's compel arbitration.  That's all the Court really needed to say.  As to Parts II and IV, she wrote the following: "The discussion in Parts II and IV of the Court’s opinion is unnecessary to the result, and much of it addresses disputed state-law questions as well as arguments not pressed or passed upon in this case."  Chief Justice Roberts joined up to there.  Then, she dropped a footnote, saying that the same was true of Part I.  That was too much for the Chief apparently, and it's quite comical, because Part I lays out the facts of the case.  Visions of the Marx brothers.

It seems like a snide dissent, but it might not be as bad as it looks.  If she were writing for herself, she could have just said that she signs on to Part III and nothing more.  But it's late in the term, and CJ Roberts didn't want to have to write a separate concurrence about how I and III are fine, so we get what looks like the ultimate mean girl footnote.  Justice Alito?  He doesn't even go here!

And finally, we get a lone dissent from Justice Thomas, who, as he has explained before, does not think the FAA applies in state courts.

On the whole, this strikes me as progress.  I would have predicted a 6-3 court reasoning along Justice Barrett's lines.  At best, even if this case came through a federal court, she only has four votes.  The Court seems willing to allow the people of California to rein in limitations on representative actions, and that seems to me a very good thing given the ubiquity of contracts of adhesion and gross disparities of bargaining power in the world of employment law.

June 30, 2022 in Recent Cases, Travel | Permalink | Comments (0)

Tuesday, June 28, 2022

Tuesday Top Ten - Contracts & Commercial Law Downloads for June 28, 2022

Top-10 Scrolling

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 29 Apr 2022 - 28 Jun 2022
Rank Paper Downloads
1.

Not Your Keys, Not Your Coins: Unpriced Credit Risk in Cryptocurrency

Georgetown University Law Center
848
2.

The Limits of Regulation by Insurance

University of Virginia School of Law and University of Minnesota Law School
187
3.

COVID-19 and Business Income Insurance: The History of 'Physical Loss' and what Insurers Intended it to Mean

affiliation not provided to SSRN, Reed Smith LLP and Michigan State University - Michigan State Law ReviewPlews Shadley Racher & Braun
167
4.

The Failure of Market Efficiency

Texas A&M University School of Law
120
5.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
119
6.

The Dystopian Right of Publicity

University of Massachusetts School of Law
111
7.

Transcending the Public Law-Private Law Divide

University of Melbourne Law School
83
8.

Contracting for Debt: The Relationship Between Debt Capitalism, Higher Education, and the Black-white Wealth Gap

University of Pennsylvania Carey Law School
73
9.

Non-Compliance with contract terms: a comparative view on (non)regulation and remedies

University of St. Gallen and Copenhagen Business School - CBS Law
72
10.

Cognition, Automation and the Future of Contract Law

University of Queensland
70

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 29 Apr 2022 - 28 Jun 2022
Rank Paper Downloads
1.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
119
2.

Cognition, Automation and the Future of Contract Law

University of Queensland
70
3.

Contract Logic

New York University School of Law
65
4.

Conflict, Consistency and the Role of Conventional Morality in Judicial Decision-Making

Fordham University School of Law
48
5.

Reviewing Choice of Law in International Contracts (Oxford University Press, 2021)

The University of Western Australia
46
6.

The Potential Legal Value of Relational Contracts in a Time of Crisis or Uncertainty

University of Tennessee College of Law
45
7.

The Role of Democracy in Private Law

University of Auckland Faculty of Law
44
8.

Humanizing Transactional Documents: Why and How Transactional Drafters Should Use Narrative Techniques

Arizona State University (ASU) - Sandra Day O'Connor College of Law and Mercer Law School
32
9.

Giants of Contract Law - Some Personal Reflections

Independent
29
10.

Post Section 90: Promissory Estoppel in the Courts that Use It Most

South Texas College of Law Houston
27

June 28, 2022 in Recent Scholarship | Permalink | Comments (0)

Monday, June 27, 2022

At It Again: The First Amendment and Contracts

How RightsThis week, I am putting the finishing touches on a law review article that grew out of this blog post.  The article is the first in a planned series of articles in which I attempt to channel  Jamal Greene's How Rights Went Wrong and argue that First Amendment rights are not absolute and that contractual rights and interests should also play a role in adjudication of constitutional disputes.  I think our current First Amendment jurisprudence provides too much protection for dumb speech and thus renders insipid the values that the Constitution is supposed to protect.  In short, I'm a jerk who doesn't support free speech.

But not really.  I favor full-throated protection of political speech, and the Eighth Circuit has provided me a chance to prove it!  The case is Arkansas Times, LP v. WaldripThe Court, sitting en banc, upheld Arkansas Act 710 (Act 710), which requires that contractors seeking to work with the state provide a certification that they will not participate in a boycott of Israel.  All parties seeking contracts with the state in excess of $1000 must provide a certification. If contractors refuse to file a certification, they can only be awarded a contract if their bid is 20% lower than the lowest certifying business.  The Arkansas Times challenged the certification on First Amendment grounds, and I would have sided with the Arkansas Times, as did lone dissenter, Judge Jane Kelly.  

In N.A.A.C.P. v. Claiborne Hardware Co., 458 U.S. 886 (1982), the Supreme Court found that the state violated the First Amendment when it prohibited peaceful political activity, such as that involved in the NAACP's boycott of businesses owned by whites.  The Arkansas Times argued that Claiborne governed its case. 

Arkansas instead relied on Rumsfeld v. Forum for Academic & Institutional Rights, Inc. (FAIR), 547 U.S. 47 (2006), in which the Court held that First Amendment protection does not extend to non-expressive conduct.  In FAIR, law schools denied military recruiters access to their campuses to protest the "don't ask, don't tell" policy.  Congress responded with the Solomon Act, denying federal funds to schools that closed their campuses to military recruiters.  In a baffling bit a sophistry, the unanimous court found that the First Amendment was not implicated in the law schools' challenge to the Solomon Amendment because the law schools' message was too unclear.  Conduct that needs to be explained to a neutral observer in order for its political content to be understood gets no First Amendment protection.  

Guess what!  The Eight Circuit, sitting en banc, found that contractors that refuse to sign Act 710 certifications engaged in non-expressive conduct.  The boycotts at issue in Act 710 are nothing like the boycotts at issue in Claiborne! It somehow reaches that conclusion not by looking into the possible messages business send by joining in boycotts of Israel but at the language and legislative history of Act 710.

Under Arkansas’s canons of statutory interpretation, we think the Arkansas Supreme Court would read Act 710 as prohibiting purely commercial, nonexpressive conduct. It does not ban Arkansas Times from publicly criticizing Israel, or even protesting the statute itself. It only prohibits economic decisions that discriminate against Israel. Because those commercial decisions are invisible to observers unless explained, they are not inherently expressive and do not implicate the First Amendment.

Draft_card_burning_NYC_1967This makes sense only in a world in which one could look at Mr. Cohen's "Fuck the Draft" jacket or at other protestors from that era burning their draft cards (or bras) and think, "How odd!  I wonder what these gestures are supposed to convey!  Oh well, unless they explain them to me, I guess I'll never know."  And really, what boycott sends a clear message?  When I see a protest, the first thing I do is walk up to someone with a sign (the slogans are often opaque) and ask, "What's going on here?  Why are you protesting."  The FAIR test is not just unfair.  It's absurd.

In any case, Judge Kelly's dissent makes mincemeat of the majority's selective account of the legislative intent, which was clearly directed at expressive conduct. "[T]he Act implicates the First Amendment rights of speech, assembly, association, and petition recognized to be constitutionally protected boycott activity."

But wait, what of the compelled speech that the certification entails?  Well, that's just incidental to the permissible regulation of non-expressive conduct.  Nobody is holding a gun to the would-be contractors' heads.  They don't have to sign anything.  It's just that if they don't certify their love for Israel, they can't compete for a state contract.  Even I, who thinks our First Amendment jurisprudence is dumb, can see that Arkansas main goal is not commercial regulation but to use its economic power (the power of contracts!) to chill free expression.

An aside.  Act 710, like its counterparts in other states, defines “boycott of Israel” to include any actions "intended to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories . . . ” (emphasis added).  The "Israeli-controlled territories" are not Israel.  If they were, then there would be 5.3 million Palestinians entitled to Israeli citizenship.  That ain't happening.  The "Israeli-controlled territories" are occupied territories.  Boycotting the occupation is not a boycott of Israel.  These state acts punish entities not for boycotting Israel but for boycotting the occupation.  There's a huge difference.  Ask Ben & Jerry's, which is subject to divestment actions by Arkansas and other states for its refusal to sell its products in the occupied territories.  But Ben & Jerry's has remained committed to selling its products in Israel.  

The inclusion of the language about the "Israeli-controlled territories" is, in my view, conclusive proof that Act 710 is not an economic measure.  It is a political measure and compelled compliance with the state's political stance on the Israeli occupation violates the First Amendment.  Even if I did not think Act 710 violated the First Amendment, I would still find it preposterous that any U.S. state would blur the lines between support for Israel and support of the occupation.

June 27, 2022 in Commentary, Current Affairs, Government Contracting, In the News, Recent Cases, Recent Scholarship | Permalink | Comments (0)

Wednesday, June 22, 2022

This Is How We Will Get to Mars

ShotwellAccording to The New York Times, SpaceX has confirmed that it has fired employees who circulated an open letter critical of SpaceX's Dear Leader, Elon Musk.  The letter complained that Mr. Musk was a "frequent source of distraction and embarrassment."  It is not entirely clear what action the company was being asked to take in response.  A time out?  No screens?

Apparently, no earnest but perhaps not-thought-through strategy goes unpunished in a company run by the leading proponent of unbridled free speech and chaining workers to their desks.  The president and chief operating officer of SpaceX, Gwynne Shotwell (left), explained the decision to terminate the employees as follows:

The letter, solicitations and general process made employees feel uncomfortable, intimidated and bullied, and/or angry because the letter pressured them to sign onto something that did not reflect their views. . . .  We have too much critical work to accomplish and no need for this kind of overreaching activism.

She went on to encourage SpaceX's remaining employees to focus on their mission.  "This is how we will get to Mars," she implored them.  What a fantastic sentence!  It didn't even have an exclamation mark after it.  It's just an ordinary thing you say, like "That's how you get to the nearest Starbucks."  Exclamation points are for doubters.  For people who acknowledge that doubts are a thing.  I am going to incorporate that line into every pep talk I deliver to my students, and I'm not going to exclaim it; I'm just going to say it and walk away.

Ms. Shotwell has stated that SpaceX anticipates sending a manned crew to Mars by the end of the decade.  You might think that a bit ambitious, but that is not the sort of thinking that will get us to Mars.  Once SpaceX has sent a crew to Mars, she continued, "within five or six years, people will see that that will be a real place to go."  Yes, Mars.  A real place to go.  That is exactly what I will be thinking in 2035 or so.  Why should we have to wait that long, you might think?  Well, I assume, that after we get to Mars, we also have to be able to get back from Mars.  But frankly, come to think of it, Ms. Shotwell never said, "This is how we will get back from Mars."  And she's right to leave that part out.  If I ended my pep talks for my students with "This is how we will get back from Mars," that might confuse them and then they wouldn't be focused on our mission.

June 22, 2022 in Commentary, In the News, Web/Tech | Permalink | Comments (0)

Tuesday, June 21, 2022

Tuesday Top Ten - Contracts & Commercial Law Downloads for June 21, 2022

Top-10 Block Letters

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 22 Apr 2022 - 21 Jun 2022
Rank Paper Downloads
1.

Not Your Keys, Not Your Coins: Unpriced Credit Risk in Cryptocurrency

Georgetown University Law Center
776
2.

The Limits of Regulation by Insurance

University of Virginia School of Law and University of Minnesota Law School
142
3.

The Failure of Market Efficiency

Texas A&M University School of Law
110
4.

The Dystopian Right of Publicity

University of Massachusetts School of Law
108
5.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
105
6.

Proprietary Restitution

National University of Singapore (NUS) - Faculty of Law and National University of Singapore (NUS) - Faculty of Law
89
7.

COVID-19 and Business Income Insurance: The History of 'Physical Loss' and what Insurers Intended it to Mean

affiliation not provided to SSRN, Reed Smith LLP and Michigan State University - Michigan State Law ReviewPlews Shadley Racher & Braun
81
8.

Contracting for Debt: The Relationship Between Debt Capitalism, Higher Education, and the Black-white Wealth Gap

University of Pennsylvania Carey Law School
71
9.

Transcending the Public Law-Private Law Divide

University of Melbourne Law School
68
10.

Non-Compliance with contract terms: a comparative view on (non)regulation and remedies

University of St. Gallen and Copenhagen Business School - CBS Law
68

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 22 Apr 2022 - 21 Jun 2022
Rank Paper Downloads
1.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
105
2.

Proprietary Restitution

National University of Singapore (NUS) - Faculty of Law and National University of Singapore (NUS) - Faculty of Law
89
3.

Cognition, Automation and the Future of Contract Law

University of Queensland
68
4.

Contract Logic

New York University School of Law
63
5.

Pepsi’s Harrier Jet Commercial: A Class Activity Covering Contract Formation and More

Angelo State University - Business Law
50
6.

The Approach of Nigerian Courts to International Commercial Arbitration: The Need for a Paradigm Shift in Judicial Thinking

NAU
48
7.

Conflict, Consistency and the Role of Conventional Morality in Judicial Decision-Making

Fordham University School of Law
46
8.

Reviewing Choice of Law in International Contracts (Oxford University Press, 2021)

The University of Western Australia
43
9.

The Potential Legal Value of Relational Contracts in a Time of Crisis or Uncertainty

University of Tennessee College of Law
38
10.

Humanizing Transactional Documents: Why and How Transactional Drafters Should Use Narrative Techniques

Arizona State University (ASU) - Sandra Day O'Connor College of Law and Mercer Law School
32

June 21, 2022 in Recent Scholarship | Permalink

The Future of Unions

SBUXAlthough this blog has a category called "Labor Contracts," we rarely use it.  Labor unions have long been in decline, and there just haven't been many labor contracts to discuss outside of the context of collective bargaining in professional sports.  Perhaps the tide has turned.

Over the weekend, The New York Times featured a story about Jaz Brisack, a Rhodes Scholar who decided that the best use of her time and talents was to become a union organizer and so she took a job as a Starbuck's barista.  Hers was the first Starbucks-owned store to unionize; 150 others have since followed suit, and 275 have filed paperwork to hold elections.   The are two unionized Starbucks shops in my fair city, Oklahoma City!  I don't always drink Starbuck's Coffee, but when I do, I will henceforth prefer to purchase it at 36th & May or 23rd and Robinson!

It is such a great story, and it is an exciting moment in the history of the labor movement. The long slide in the percentage of the work force in labor unions seems to have stalled.  There are even some signs of growth, such as this story about the first Apple Store to unionize.  

Let us hope for a future when Americans are outraged that there are billionaires and not by a mandatory living wage for hourly workers.

June 21, 2022 in About this Blog, Current Affairs, In the News, Labor Contracts | Permalink | Comments (0)

Wednesday, June 15, 2022

Contracts Issues and the January 6th Hearings

LofgrenThe House Committee investigating the events of January 6th is pushing a breach of contract or fraud claim.  We are surprised, because we thought we already covered these issues, but apparently, we merely broke the story, and there is more digging to be done. 

Already in December, we reported in this post about Fred Eshelman's suit seeking to recover $2.5 million from the Trump-affiliated True the Vote.  Then in April, Nancy Kim reported on the Trump campaign's recurring charges strategy here.  But there's more.

According to this report in The New York Times, committee member Rep. Zoe Lofgren, Democrat of California (right), is seeking to establish that Mr. Trump’s campaign and its allies used claims of election fraud to raise $250 million, purportedly for the purpose of pursing litigation to challenge the election.  At the time they raised the money, however, the campaign and its allies knew that there was no evidence of actionable voter fraud.  What allegations of fraud existed were either, in the considered opinion of Attorney General Bill Barr (left), "bullshit," or they were trivial instances that would not have come close to affecting the outcome of the election in any of the crucial five states where the election was close(ish) and Mr. Trump lost.  Ms. Lofgren thus alleges a "big rip-off" that was the partner to the "big lie."  Or who knows?  Perhaps the theory is that the big lie was just a stratagem to fuel the big rip-off.

Bill BarrThe House Committee has apparently determined that the Trump campaign and its allies raised nearly $250 million through representations that those funds would go to an "election defense fund."  The fund did not exist, and the funds went to other purposes, including "a $1 million donation to the personal foundation of Mr. Trump’s chief of staff, Mark Meadows, and $204,857 to Trump hotels." 

The Times suggests that Ms. Lofgren and the Committee are pursuing a dual strategy.  First, they hope that even Mr. Trump's most loyal supporters will jump off the Trump train when they learn that their donations have been misappropriated.  That seems unlikely.  It's almost as if Ms. Lofgren were unaware that she is engaged in a partisan witch-hunt animated by her resentment of American greatness and her insatiable ambition to govern on behalf of woke capitalism, critical race theory and the LGBTQ+ agenda.  She must also not know that Bill Barr is a RINO loser who was a terrible Attorney General and has had no credibility with Trump supporters since the day he said he could find no evidence of systemic voter fraud.  In the alternative, the Committee may hope to excite some DoJ interest in pursuing criminal charges against Mr. Trump and his allies for the fraudulent fundraising schemes.  That also seems pretty unlikely.

Mother Jones provides an excellent update on Mr. Eshelman's law suit against True the Vote here.  A trial court dismissed the claim, saying it was in the purview of Texas Attorney General Ken Paxton.  Gulp.  Mr. Eshelman has appealed.  As to the recurring charges scam that the Trump campaign was running, the New York Times reported that the Trump campaign refunded nearly 11% of what it raised.  Apparently, people who felt they were defrauded by the campaign had a ready remedy.  As to those who did not seek a refund despite ample evidence that the election was lost and that donations would not be used to pursue litigation, do they want a remedy?

June 15, 2022 in Commentary, Current Affairs, In the News | Permalink | Comments (3)

Tuesday, June 14, 2022

Tuesday Top Ten - Contracts & Commercial Law Downloads for June 14, 2022

Top-10-tuesday-fireworks

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 15 Apr 2022 - 14 Jun 2022
Rank Paper Downloads
1.

The Limitations of Privacy Rights

George Washington University Law School
1,174
2.

An Overview of Privacy Law in 2022

George Washington University Law School and University of California, Berkeley - School of Law
596
3.

Not Your Keys, Not Your Coins: Unpriced Credit Risk in Cryptocurrency

Georgetown University Law Center
574
4.

The Limits of Regulation by Insurance

University of Virginia School of Law and University of Minnesota Law School
118
5.

The Dystopian Right of Publicity

University of Massachusetts School of Law
107
6.

The Failure of Market Efficiency

Texas A&M University School of Law
106
7.

Proprietary Restitution

National University of Singapore (NUS) - Faculty of Law and National University of Singapore (NUS) - Faculty of Law
80
8.

AN APPRAISAL OF THE CONCEPT OF ANTI-SUIT INJUNCTION IN INTERNATIONAL ARBITRATION

G.Elias & Co
78
9.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
76
10.

Culpability and Compensation

University of Oxford
73

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 15 Apr 2022 - 14 Jun 2022
Rank Paper Downloads
1.

Proprietary Restitution

National University of Singapore (NUS) - Faculty of Law and National University of Singapore (NUS) - Faculty of Law
80
2.

What Do Good Lawyers Know that the Rest of Us Don't? Introducing First-Year Law Students to 'Legal Realism'

Southern Methodist University - Dedman School of Law
76
3.

Cognition, Automation and the Future of Contract Law

University of Queensland
62
4.

Unjust Enrichment in Australia 2018-2019

TC Beirne School of Law and University of Queensland - TC Beirne School of Law
58
5.

Contract Logic

New York University School of Law
53
6.

Pepsi’s Harrier Jet Commercial: A Class Activity Covering Contract Formation and More

Angelo State University - Business Law
48
7.

The Approach of Nigerian Courts to International Commercial Arbitration: The Need for a Paradigm Shift in Judicial Thinking

NAU
45
8.

Conflict, Consistency and the Role of Conventional Morality in Judicial Decision-Making

Fordham University School of Law
39
9.

Reviewing Choice of Law in International Contracts (Oxford University Press, 2021)

The University of Western Australia
39
10.

The Potential Legal Value of Relational Contracts in a Time of Crisis or Uncertainty

University of Tennessee College of Law
35

June 14, 2022 in Recent Scholarship | Permalink

SCOTUS Misses Another Opportunity to Address Contracts Issues

Divided ArgumentA mild case of COVID has given me even more opportunity than usual to indulge my taste for podcasts.  I was catching up with Will Baude and Dan Epps' Divided Argument episode, SMUGLER, when a contracts issue unexpectedly arose.

In 1971, the Supreme Court recognized an implied right of action to bring a claim against a federal officer for violation of federal constitutional rights in Bivens v. Six Unkown Fed'l Narcotics AgentsThe podcast hosts were discussing Egbert v. Boule, a case in which the Court, once again, refused to extend the Bivens remedy to a new factual situation, even though, as Dan Epps pointed out, this factual situation involved a 4th Amendment violation, precisely the factual situation that gave rise to the original Bivens action.  Will Baude remarked that, while there is a doctrinal test for determining whether Bivens applies, if you apply that test and think the answer is yes, you need to check your work.  Since the 1980s, the answer to the question of whether a Bivens remedy is available has always been no.

The facts of Egbert v. Boule are interesting and bizarre.  Robert Boule, whose Washington State property actually extends five feet into Canada, marketed his home as a bed and breakfast called "The Smuggler's Inn."  True to that name, Mr. Boule's establishment regularly served as a refuge for illegal cross-border traffic, including narcotics trafficking.  He had, at times, acted as a confidential informant, for which the government paid him in excess of $60,000.  Mr. Boule offered a service to people seeking illegal transit across the border.  He would pick them up in Washington State and drive them to the border, charging $100-150/hour for his time.  He would also charge them for one night's stay in The Smuggler's Inn, whether or not they indeed stayed overnight.  The accommodations are reproduced in the opinion (and below).  Justice Thomas includes the image in his majority opinion in order to show why Defendant Agent Egbert had grounds to suspect that Mr. Boule's Turkish client had not traveled from Turkey through New York to Washington State because he had read rave reviews of The Smuggler's Inn on TripAdvisor.
Screen Shot 2022-06-12 at 10.56.39 AM
As he neared the border, Mr. Boule would then contact the authorities, who would arrest Mr. Boule's clients.  As Justice Thomas dryly notes in his majority opinion, "Boule would decline to offer his erstwhile customers a refund. In his view, this practice was 'nothing any different than [the] normal policies of any hotel/motel.'”  Will Baude picks up on this and mentions that the case he would really like to see is the one where one of Boule's clients sues for breach of contract.  Will, you are not alone.

That case would be interesting, I think.  I don't know if this would be a case of an illegal contract.  If so, of course, the court could not intervene on behalf of either party but would leave them as it found them.  It might, however, refer the matter to prosecutors, leaving the parties somewhat worse off than they started.  The court in question would not be the Supreme Court but a state court, and thus Divided Argument does not consider the contracts issue.

Perhaps this would be a case where the illegal components of the contract can be disentangled from the legal components.  Mr. Boule is charging for his time, for transportation services, and for lodgings.  There is nothing illegal about any of that.  Mr. Boule could defend himself on the ground that he had provided precisely the services he contracted for, at least insofar as he provided transportation.  As to the overnight lodging, as the quotation above makes clear, Mr. Boule's view is that hotels and motels routinely charge people whether or not those people actually lodge overnight.  They charge for taking the reservation and, we hope, for holding it.  The tough and interesting part of the case would be the challenge plaintiffs' attorneys would face in attempting to thread the needle so as to argue that their clients were fraudulently induced into accepting Mr. Boule's services without conceding the illegality underlying the entire transaction.

But the Court was not concerned with such quotidian matters.  For whatever reason, when Agent Egbert confronted Mr. Boule and his Turkish client, Mr. Boule refused to cooperate.  Agent Egbert allegedly responded with excessive force.  Later, after Mr. Boule filed a grievance and an administrative claim against Agent Egbert, the latter allegedly retaliated against Mr. Boule in various ways that violated the First Amendment.  In a predictable 6-3 decision, the Supreme Court denied Mr. Boule's Bivens action because the conservative majority denies all Bivens actions.  Only Justice Gorsuch had the intellectual honesty to separately concur.  He  observed that the case was not meaningfully distinguishable from Bivens, and he called upon the Court to stop the charade and overrule Bivens.

June 14, 2022 in Commentary, Recent Cases | Permalink | Comments (0)

Monday, June 13, 2022

GEICO to Pay $5.2 Million to Woman Who Contracted STD in Insured's Car

Last week, a Missouri court of appeals decided M.O. v. GEICO, upholding a $5.2 million arbitral award to M.O. who contracted human papillomavirus (HPV) while having unprotected sex with GEICO's insured (Insured) in Insured's car.  M.O. filed a claim with GEICO, and an arbiter awarded her $5.2 million.  When M.O. tried to have that award enforced, GEICO intervened and challenged the award, alleging collusion fraud and undue means, and arguing that it had been denied a reasonable opportunity to defend its interests. 

GEICOM.O. first offered to settle with GEICO for $1 million, but GEICO rejected that offer and denied coverage.  GEICO then sought declaratory judgment in federal court.  Meanwhile, M.O. proceeded with her arbitration. Prior to their arbitration, Insured and M.O. entered into an agreement pursuant to Missouri Statute Section 537.065, providing that neither party would appeal or seek to modify the arbitral award in any way. 

The arbiter found that Insured knew that his throat cancer was HPV positive and that he therefore could transmit it through unprotected sex.  The arbiter thus concluded that Insured was negligent and that the sex in Insured's car caused or contributed to M.O's infection. 

Under the version Section 537.065 in force at the time, GEICO was entitled to notice that M.O. would be seeking to enforce the arbitral award.  Upon notice, GEICO was entitled to intervene, which it did.  However, that right of intervention entailed no right to review of the arbitral decision.  As the court explained,

[W]hen GEICO intervened, liability and damages had already been determined and judgment had been entered. Rule 52.12 did not bestow upon GEICO the right to relitigate those issues, nor did it provide GEICO with a right to intervene prior to judgment.

GEICO argued that it was being unfairly denied its right to appeal under Missouri Statutes Section 435.405, which gives parties 90 days to seek to vacate an arbitral award.  Unfortunately for GEICO, it was not a party to the arbitration at the time it sought to vacate the award, and so Section 435.405 did not apply.

Finally, GEICO alleged that it was denied its due process rights under the U.S. Constitution and the Missouri constitution because it never had an opportunity to litigate and defend its rights.  The court flatly rejected this argument, as GEICO had passed on the chance to defend its when it denied coverage and refused to defend Insured.  GEICO also filed its federal claim for declaratory judgment, which gives it a second opportunity to vindicate its rights.

Hyundai Genesis
2012, but you get the idea


The Missouri opinion does not address the grounds for finding that this incident was covered under Insured's policy.  The key contractual language was that the damages incurred must arise from the "ordinary use of the vehicle.'  The car in question, according to NPR, was a 2014 Hyundai Genesis.  Ordinary use?  NPR also suggests that a jury may address that question when it hears GEICO's declaratory judgment claim in October.    

June 13, 2022 in Recent Cases | Permalink | Comments (3)

Thursday, June 9, 2022

Weekend Frivolity: Oh, This Is Even Better than "No Vehicles"

What if Wittgenstein had come up with the "No vehicles in the park" hypothetical?

Games in ParkH/t Richard L. Jolly, via Stephen Mouritsen via Twitter.

June 9, 2022 in Miscellaneous | Permalink | Comments (2)

Wednesday, June 8, 2022

Another Unanimous SCOTUS Opinion Limiting Mandatory Arbitration

220px-Clarence_Thomas_official_SCOTUS_portraitStill reeling from Justice Kagan's opinion for the unanimous Supreme Court last month limiting employers' ability to compel arbitration, such employers got hit again by another unanimous opinion (except that Justice Barrett was recused).  This time the author is Justice Thomas, in Southwest Airlines v. Saxon.  The issue was whether Saxon, a ramp supervisor for ❤️Southwest❤️, is exempt from arbitration provisions under § 1 of the Federal Arbitration Act (FAA).  

According to § 1 of the FAA, workers who engage in foreign or interstate commerce are exempt from its provisions.  Ms. Saxon's employment "requires her to load and unload baggage, airmail, and commercial cargo on and off airplanes that travel across the country."  For that reason, the Court agreed with Ms. Saxon, and she cannot be compelled to arbitrate her claims. 

The victory is a limited one.  Ms. Saxon argued that because airlines engage in interstate commerce, all airline employees should be covered under § 1.  The Court disagreed.  Whether a worker is covered depends on the conduct in which that worker is required to engage.  The Seventh Circuit had reserved judgment on whether Ms. Saxon, as a ramp supervisor, would be exempt had she been restricted to a supervisory role.  However, the Seventh Circuit ruled that she was exempt from the FAA because she was personally required to load and unload aircraft.  The Supreme Court agreed.  It's a pretty simple case.

Because of the new fashion for textualism, Justice Thomas could not reach that pretty obvious conclusion without consulting a dictionary.  

The word “workers” directs the interpreter’s attention to “the performance of work.” Id., at ___ (slip op., at 10) (emphasis altered); see also Webster’s New International Dictionary 2350 (1922) (Webster’s) (worker: “One that works”); Funk & Wagnall’s New Standard Dictionary 2731 (1913) (worker: “One who or that which performs work”). Further, the word “engaged”—meaning “[o]ccupied,” “employed,” or “[i]nvolved,” Webster’s 725; see also, e.g., Black’s Law Dictionary 661 (3d ed. 1933) (defining “engage”)—similarly emphasizes the actual work that the members of the class, as a whole, typically carry out. Saxon is therefore a member of a “class of workers” based on what she does at Southwest, not what Southwest does generally.

Goodness.

Justice Thomas performed a similar service, resorting to dictionaries in rejecting an argument from ❤️Southwest❤️ that people who load cargo onto airplanes that fly between states are engaged in foreign or interstate commerce.  Yes, we need to look up "engaged" and "commerce," don't we?  Ugh.  

The opinion provides an extended discussion of the ejusdem generis canon of construction, on which both sides relied.  This is perhaps not the best advertisement for the utility of the canons.  The Court rejects both sides' ejusdem generis arguments, and it's generally not great when both sides rely on the same canon, but perhaps Karl Llewellyn would have a good chuckle over it

It was nice to see Justice Thomas picking up on a theme from Justice Kagan's opinion from last month.  In Concepcion and other cases, the Court relied on Congress's pro-arbitration purposes in giving expansive scope to employers' and vendors' abilities to impose mandatory arbitration on workers and consumers.   In Morgan v. Sundance, Justice Kagan stressed that Congress's pro-arbitration purposes extends only far enough to make arbitration provisions every bit as enforceable as other contractual provisions, but no more so.  Justice Thomas will not construe ambiguous language in the FAA to favor arbitration:

[W]e are not “free to pave over bumpy statutory texts in the name of more expeditiously advancing a policy goal.” New Prime, 586 U. S., at ___ (slip op., at 14). Here, §1’s plain text suffices to show that airplane cargo loaders are exempt from the FAA’s scope, and we have no warrant to elevate vague invocations of statutory purpose over the words Congress chose. 

Still confused about how class-action waivers fit into all of this, but that is a matter for another time.

This case could have afforded  the perfect opportunity for a one-paragraph opinion, consisting of Justice Thomas's conclusion:

Latrice Saxon frequently loads and unloads cargo on and off airplanes that travel in interstate commerce. She therefore belongs to a “class of workers engaged in foreign or interstate commerce” to which §1’s exemption applies. Accordingly, we affirm the judgment of the Court of Appeals.

What more is there to say, really?

Well, I'm glad ❤️Southwest❤️ lost, and I'm a bit disappointed in them for even trying to argue that § 1 should not apply to people who load cargo.  But I still ❤️ Southwest.  No fees for bags, no fees for changes, a sense of humor about itself, but most of all, a classless society.

I hope the reader found this blog post persuasive despite the fact that no dictionaries were consulted in its composition.

June 8, 2022 in Labor Contracts, Recent Cases | Permalink | Comments (0)

Tuesday, June 7, 2022

Tuesday Top Ten - Contracts & Commercial Law Downloads for June 7, 2022

This week, we revert to plain meaning for the Top Ten: Tuesday means Tuesday, and we will admit no extrinsic evidence to suggest otherwise! Enjoy this gathering of current top downloads on SSRN:

Top-ten-star-neon

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 08 Apr 2022 - 07 Jun 2022
Rank Paper Downloads
1.

The Limitations of Privacy Rights

George Washington University Law School
1,147
2.

An Overview of Privacy Law in 2022

George Washington University Law School and University of California, Berkeley - School of Law
563
3.

Not Your Keys, Not Your Coins: Unpriced Credit Risk in Cryptocurrency

Georgetown University Law Center
552
4.

A Theory of Frustration and Its Effect

The University of Western Australia and University of Western Australia Law School, Perth, Australia
181
5.

The Failure of Market Efficiency

Texas A&M University School of Law
102
6.

The Dystopian Right of Publicity

University of Massachusetts School of Law
102
7.

The Law and Macroeconomics of Custody and Asset Segregation Rules: Defining the Perimeters of Crypto-Banking

University of Amsterdam, Amsterdam Law School
86
8.

Proprietary Restitution

National University of Singapore (NUS) - Faculty of Law and National University of Singapore (NUS) - Faculty of Law
80
9.

AN APPRAISAL OF THE CONCEPT OF ANTI-SUIT INJUNCTION IN INTERNATIONAL ARBITRATION

G.Elias & Co
74
10.

Culpability and Compensation

University of Oxford
71

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 08 Apr 2022 - 07 Jun 2022
Rank Paper Downloads
1.

A Theory of Frustration and Its Effect

The University of Western Australia and University of Western Australia Law School, Perth, Australia
181
2.

Reconstituting the Code of Capital: Could a Progressive European Code of Private Law Help Us Reduce Inequality and Regain Democratic Control?

European University Institute
85
3.

Proprietary Restitution

National University of Singapore (NUS) - Faculty of Law and National University of Singapore (NUS) - Faculty of Law
80
4.

Unjust Enrichment in Australia 2018-2019

TC Beirne School of Law and University of Queensland - TC Beirne School of Law
57
5.

Contract Maps

Golden Gate University School of Law
57
6.

Smart Legal Contracts: From Theory to Reality

Independent
56
7.

Cognition, Automation and the Future of Contract Law

University of Queensland
56
8.

Contract Logic

New York University School of Law
47
9.

Alternative Dispute Revolution: Technology and ADR in the Middle East Following the COVID-19 Pandemic

Hamad bin Khalifa University and HBKU Law
45
10.

Pepsi’s Harrier Jet Commercial: A Class Activity Covering Contract Formation and More

Angelo State University - Business Law
45

June 7, 2022 in Recent Scholarship | Permalink | Comments (0)

A Dose of Reality about Reality Television

ChysippusEvery time I am in the gym, at least one of the television monitors is showing a show about home remodeling.  This is a disease.  I believe a steady dose of Stoic, or even Epicurean, philosophy might be a cure.  Or perhaps some Eastern philosophy.  Wanting material things is not the way to happiness.  These television shows encourage us to want things that we likely will not get or to want things better than what we currently have.  I prefer the life of the Cynic.  Better to be satisfied with some water and a pot of lentils.  This blog is my pot of lentils, but if I were to be stripped of it, I should make my way through life as an ordinary contracts prof.

But I could be wrong about much of this (add Skepticism to the mix).  Still, as recounted in The New York Times, there are worse things than unfulfilled fantasies of white oak cabinetry, soapstone counters, a black slate backsplash, and a glass-enclosed shower, or a renovation that makes it possible to flip a house and make some money.  Increasingly, participants in home renovation shows are suing production companies, alleging "fraud, misrepresentation and faulty workmanship," which leave homeowners with properties "riddled with code violations as well as safety and health hazards."  We will never know the true extent of these problems, because all of these transactions are covered by sweeping non-disclosure agreements (NDAs).  If you think NDAs are a good thing, I recommend watching Hulu's The Dropout.  

On television, we see a couple meeting with some construction experts.  They discuss various options, and the couple's excitement increases as they begin to imagine their home re-made.  Then we see early scenes of demolition, usually played for comic effect, as the homeowners struggle to wield a sledgehammer, but sometimes played for dramatic effect, as when the homeowners discover mold behind some boards.  Next comes the transformation, with the homeowners conveniently out of the way.  Finally, there is the reveal, at which the homeowners flip cartwheels or engage in otherwise conspicuous displays of joy and gratitude.  I mean, it's the gym, so the sound is off, but my impression is that these shows are about as formulaic as Dora the Explorer and Blues Clues.  

In reality, the narrative is similarly fixed.  The homeowners now claim that they were dissatisfied with the remodel, but they were contractually obligated to go through with the shoot.  At this point, of course, the production company has them over the barrel.  They were awarded a discount on labor and materials and had the advice of experts, but those baubles can be removed at the first sign of contractual breach.  Then comes the lawsuit brought by the homeowners, alleging fraud and breach of contract, followed by the predictable counter-suit for breach of the NDA.  The homeowners now claim that they were given very little time to review the contract and that its terms contradict things that they were told.

According to the Times, the scope of the NDAs can be extremely broad:

Nearly all contestants are required, when signing onto a program, to agree to a strict waiver that prevents them from speaking to the press or posting on social media, about not just the show itself, but also, according to one waiver reviewed by The New York Times, “any nonpublic information or trade secrets obtained or learned in connection with the program.”

Disputes between contractors and homeowners are not rare.  In one case that is a focus of the Times story, Nevada has a process for resolving them short of litigation.  The reality television shows weight the scales in favor of the contractors, however, because pursuing litigation now comes with the added threat of a countersuit for violation of the NDA.  And in some cases, the homeowners face claims not only for violation of the NDA, but for libel, slander, and product disparagement.  

June 7, 2022 in In the News, Television, True Contracts | Permalink | Comments (0)

Monday, June 6, 2022

Man Angered that He Got $300,000 for a Piece of Hideous Pop Art

OpenseaIn the latest story taking a chink out of the armor of NFTs, the New York Times reports that a hacker exploited a flaw in OpenSea's platform to purchase an NFT of a Bored Ape.  The flaw reset the purchase price to a price from an earlier transaction involving the same NFT.  As a result, Chris Chapman's virtual object sold for $300,000, rather than the $1 million that he was seeking.  This is yet more evidence that this secure mode of exchange is not secure. 

According to the Times, the glitch that allowed a hacker to make off with Mr. Chapman's ape has forced the company to pay out $6 million to NFT traders.  Mr. Chapman is still seeking compensation and reportedly rejected OpenSea's first offer of $30,000.  I'm not sure who holds the cards here.  NFT sales have dropped by 90 percent since September.  Can we hope for a day when Bored Apes are about as valuable as Beanie Babies?  

But there's more.  There is a widespread problem of hackers using phishing scams to swipe NFTs.  You can listen to one such story here.  According to the Times, OpenSea has been slow to freeze the accounts of such hackers, allowing the platform to profit from trafficking in stolen goods, as OpenSea takes a 2.5% cut each time an NFT is sold on its site.  

Still, the crypto enthusiasts howl, there is nothing safer or more secure than the blockchain.  It's an electronic ledger!  Surely a tool as boring as a ledger is too nerdy to become a tool for massive fraud.  And yet, the Times also reports that OpenSea is awash in "plagiarized" "art."  So, not secure, not reliable.  Why does every story about NFTs seem like it is, at best, only a few mouse clicks away from criminality?

I use scare quotes above because an NFT is just code.  Owning an NFT does not convey intellectual property rights, as Juliet Moringiello and Chris Odinet have explained.  Often, the NFT is a digital copy of an original object, and owning the NFT conveys no ownership of the original.  In this context, it is not clear what it means to call something "plagiarized," but I suppose what it means is that people generate fake NFTs of "valuable" NFTs and then sell them as if they were the "valuable" NFTs, and here the only problem is that NFTs should not be valuable.  Or, at least, the NFTs that are valuable, especially the Naked Ape series, are really bad art.  Hence "art."

OpenSea is trying to up its game.  It is freezing listings of stolen NFTs and screening for "plagiarized" content.  C'mon.  It's the Internet.  The NFT pirates will leave the open sea and find smooth sailing in a less regulated cove, inlet, or electronic bay.  And then OpenSea will lose its edge and there will be a new platform that will go through the same cycle and then the next and the next, until we all grow up or just grow tired and move on to the next thing.

June 6, 2022 in Conferences, Current Affairs, In the News, Web/Tech | Permalink | Comments (0)

Friday, June 3, 2022

New Journal of Law Teaching and Learning

We bring you news from the world of law publishing:

The Institute for Law Teaching and Learning is thrilled to be launching a new scholarly journal.  The Journal of Law Teaching and Learning will publish scholarly articles about pedagogy and will provide authors with rigorous peer review. We hope to publish our first issue in Fall 2023. 

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If you have a scholarly article that might fit the needs of The Journal of Law Teaching and Learning, please consider submitting it directly to us via email at mcolatrella@pacific.edu or through the Scholastica platform. 

June 3, 2022 in Law Schools, Recent Scholarship | Permalink | Comments (0)

Thursday, June 2, 2022

Tesla's Motion to Compel Arbitration Denied

Tesla_Motors.svgThis is probably not Elon Musk's top concern these days, but last week a California court denied his company's motion to compel arbitration in a case involving a Tesla worker who alleges in her complaint "nightmarish conditions of rampant sexual harassment" at the company.  Jessica Barazza alleges that she experienced a "pervasive culture of sexual harassment, which includes a daily barrage of sexist language and behavior, including frequent groping on the factory floor." She claims that she complained to managers and the company human resources department about what she described as a "frat house" environment, but the company failed to protect her. 

At this point in the proceedings, Tesla is simply trying to get the case dismissed and sent to arbitration.  Ms. Barazza claims that Tesla's arbitration agreement with her is unenforceable due to procedural and substantive unconscionability.  The alleged ground for substantive unconscionability is the agreement's one-sidedness.  Ms. Barazza must arbitrate its claims against Tesla, but Tesla can sue her.  The procedural unconscionability relates to the take-it-or-leave it nature of Ms. Barazza's employment agreement.  

According to Bloomberg.com, Alameda County Judge Stephen Kaus agreed with Ms. Barazza, finding that Tesla's arbitration agreement was unconscionable and denying Tesla's motion to compel arbitration.  Judge Kaus's key procedural finding was the Telsa did not present Ms. Barazza with the arbitration agreement until she had already quit her previous job in expectation of starting work at Tesla.  

New federal legislation bars employers from requiring arbitration of sexual harassment claims, but that law did not apply to claims that arose prior to its enactment.

June 2, 2022 in Current Affairs, In the News, Labor Contracts, Recent Cases | Permalink | Comments (0)