ContractsProf Blog

Happy Anniversary

The Rock & Roll Era turns 50 today.  On this day in 1955, Bill Haley and the Comets' Rock Around the Clock became the first rock tune to hit the top of the Billboard charts.  The genre was still so undefined that the record company, Decca, billed it as a "fox trot."

(Photo: Wikipedia)

Quotable

From Ambrose Bierce's The Devil's Dictionary:

TARIFF, n.  A scale of taxes on imports, designed to protect the domestic producer against the greed of his consumer.

Cyberspace update

The new issue of the ABA's Cyberspace/I.P. Law Newsletter, CIPerati, is out.  As usual, there are a couple of good articles and a roundup of recent cyberspace cases, the latter by Eric Goldman of Marquette.

Today in history: June 29

69: St. Peter is crucified upside-down at Rome.

1613: Richard and Cuthbert Burbage's Globe Theater burns to the ground during a performance of Shakespeare's Henry VIII, as wind whips fire up into the thatched roof.

1858: George Washington Goethels, the Army engineer who will supervise construction of the Panama Canal, is born at Brooklyn, New York.

1880: France forces the abdication of King Pomare V and annexes Tahiti.

1925: Marvin Pipkin files a patent application for the frosted glass light bulb -- the frosting reduces glare.

1943: Eva Narcissus Boyd is born at Bellhaven, North Carolina.  While working as a part-time babysitter for songwriters Carole King and Gerry Goffin, her frenetic dancing style will inspire them to write "The Loco-Motion" -- which she'll then record under the name "Little Eva."

1988: At an auction in London, Vincent Van Gogh’s Le Pont de Trinquetaille nets $20.6 million.

Ban on arbitral class action is unconscionable

An arbitration provision that prohibits class action arbitrations may be unconscionable under California law, according to a new 4-3 decision by the California Supreme Court.  Ross Runkel of LawMemo.com has commentary on the decision and a link to the opinion.

Court rejects WTC owner's damages theory

World Trade Center owner Larry Silverstein has lost another round in his battle with insurance companies over the claims that arose out of the September 11 terrorist attacks.  Judge Michael Mukasey of the U.S. District Court for the Southern District of New York has held that insurers will be required to pay the "actual cash value" of the destroyed property, but only the "replacement cost" of the structure.  It is estimated that the cost to rebuild is less than the value of the buildings before their destruction.

Unlike many insurance contracts, which give the insured the right to choose which measure to accept, SR International Insurance used a form that specified that cost of replacement was the "default" measure of damages.

When a lease is not a lease

Sometimes a lease is just a lease.  And sometimes it's cover for something else -- like a financing transaction.  That's one of the issues that's percolating in the United Airlines bankruptcy proceeding, and there's a goodly chunk of change hanging on the legal arguments.  At issue is some $500 million in municipal bonds used at four airports.  So far the bankruptcy court and the district court have split over whether the transactions at issue are leases or not.  Via the ABA's eSource electronic newsletter, Todd Gale of Kirkland & Ellis LLP outlines the issues.

Pitt mourns Heidt

The University of Pittsburgh has announced the death of commercial law teacher Kathryn Heidt , who died May 24 from complications surrounding heart surgery.  She was only 51.

"We have lost a valued colleague and friend," said Amy Boss (Temple), who worked with Heidt on a variety of projects over the years. Heidt, who earned her J.D. at Cleveland State and an LL.M. at Yale, was probably best known as the author of Environmental Obligations in Bankruptcy, the standard work on the subject.

Today in history: June 28

1243: One of the world's most highly regarded commercial lawyers, the Genoese Sinibaldo de Fieschi, becomes Pope Innocent IV.  He is often regarded as the creator of the modern "fictitious person" view of corporations.

1519: Charles V is elected Holy Roman Emperor.  Born and raised in the Netherlands, he said, "I speak Spanish to God, Italian to women, French to men, and German to my horse."

1635: France takes possession of Guadeloupe.

1712: Philosopher Jean Jacques Rousseau is born at Geneva, Switzerland.  He'll later have five children, and will put each in an orphanage, explaining that he'd be a poor father.

1880: Australia's most famous outlaw, bushranger Ned Kelly, is critically injured and captured after a siege at the Glenrowan Inn at Glenrowan, Victoria.

1914: The heir to the Austrian Empire, Archduke Franz Ferdinand of Austria-Este, is assassinated at Sarajevo by a Bosnian Serb, touching off what will come to be known as the First World War.

1960: President Castro seizes all U.S. oil operations in Cuba, triggering an economic boycott that will last for 45 years.

1978: In an attempt to clear up the issues involved in college admissions decisions that take race into account, the U.S. Supreme Court decides Regents of the University of California v. Bakke.

Contract and EC doctrine

From a new book, Rule of Reason: Rethinking Another Classic of EC Legal Doctrine (Annette Schrauwen, ed.  2005), an interesting piece by J.W.  Rutgers (University of Amsterdam), The Rule of Reason and Private Law or the Limits to Harmonization:

In its Communications on contract law the European Commission proposes to provide for an optional instrument which entails a comprehensive body of contract law that may apply in cross-border transactions.  One of the legal grounds for such an optional instrument, mentioned by the Commission, is Article 95 EC.  In this paper it is argued that Article 95 EC does not allow for an all-embracing instrument concerning contract law as for instance an optional instrument, since, considering the case law of the European Court of Justice, it only allows for approximation measures insofar as there is an impediment of the free movements of goods or services or a distortion of competition.

In addition, an optional instrument based on Article 95 EC will include less mandatory rules than the present national legal systems, since the number of interests recognized under European law is not as many as those included in national contract law.  It implies that an optional instrument probably includes less rules in the general interest than national contract law generally does.  This seems to include a conflict with respect to the values and aims proclaimed in the European Constitution, such as a social market economy and solidarity.  If concerns such as the protection of weaker parties cannot be included in an optional instrument because of a lack of competence, it seems contradictory to those aims and values expressed in the Constitution and the present Treaty.

Weekly Top 10

Following are the top ten most-downloaded papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending June 26, 2005.

1 (1) Commentary on the Acquisition Workforce, Steven L. Schooner & Christopher R. Yukins (Geo. Washington)

2 (2) Toward a Better Understanding of Anti-dilution Provisions in Convertible Securities, Michael (Proskauer Rose LLP) & Jonathan Rosen (Shelter Capital Partners)

• 3 (-) A Transactional View of Property Right, Robert P. Merges (UC-Berkeley)

4 (5) Contracts, Holdup, and Legal Intervention, Steven Shavell (Harvard)

5 (4) Free Markets Under Siege, Richard A. Epstein (Chicago)

6 (6) The Role of Groups in Norm Transformation: A Dramatic Sketch, in Three Parts, Robert B. Ahdieh (Emory)

7 (3) The Political Economy of International Sales Law, Clayton P. Gillette (NYU) & Robert E. Scott (Virginia)

8 (9) Whither Commodification?, Carol M. Rose (Yale Law School)

9 (7) Contracts and the Division of Labor, Daron Acemoglu (MIT, Econ), Pol Antras (Harvard, Econ) & Elhanan Helpman (Tel Aviv, Econ)

10 (8)  The Societas Europaea - A Step Towards Convergence of Corporate Governance Systems?, Udo C. Braendle & Juergen Noll (Vienna, Business Studies)

Last week's position in parentheses; • indicates fast-rising paper

Today in history: June 27

1542: Juan Rodriguez Cabrillo sets sail from Navidad, New Spain (now Acapulco, Mexico) to explore the coast of California.

1829: James Smithson, a wealthy English minerologist with no connection to America, dies and leaves his fortune (some $500,000) to the United States government "to found at Washington, under the name of the Smithsonian Institution, an establishment for the increase and diffusion of knowledge among men."

1844: Mormon prophet Joseph Smith, Jr., and his brother Hyrum are murdered by a mob that storms the jail at Carthage, Illinois.

1880: Helen Keller, the only Socialist Swedenborgian member of the International Workers of the World to be honored on a U.S. coin (the Alabama state quarter) is born at Tuscumbia, Alabama.

1893: A crash on the New York Stock Exchange triggers the Panic of 1893, the most severe economic downturn in U.S. history before the Great Depression.

1930: Henry Ross Perot is born at Texarkana, Texas.  While working as an employee at IBM, his bosses' refusal to listen to his ideas will lead to to start his own company, Electronic Data Systems (EDS). in 1962.

1954: The Soviet Union puts the world's first nuclear power station into operation at Obninsk, about 70 miles southwest of Moscow.

1967: The first ATM machine (made by National Cash Register) goes into operation.  It's at the Barclays Bank branch at Enfield Town in London.

1972: Twenty-seven year-old Nolan Bushnell founds Atari, Inc., which will launch the video game craze with its Pong.  He'll sell the company to Warner Communications four years later for an estimated $30 million.

1985: After more than fifty years as America's highway of dreams, U.S. Route 66 is officially decommissioned.

Three profs visit Lithuania

Lithuania is quickly becoming a popular spot for U.S. contracts profs to visit.  Marsha Cope Huie (Tulsa) will be heading there this fall to teach International Sales at Vytautas Magnus University (Vytauto Didžiojo universitetas) in Kaunas.  She'll be following Scott Burnham (Montana), who's also teaching there.  Eric Gouvin (Western New England) is just back from his visit there.

Experienced commercial law profs who are interested in a visit to the Baltic (courses can be done in as little as two weeks) should contact Dean Tadas Klimas.

Another "Great Moment in IP Licensing"

The Darth Vader Mr. Potato Head.

Today in history: June 26

1721: At the urging of Rev. Cotton Mather, Dr. Zabdiel Boylston gives the first smallpox inoculations in American history at Boston.  Mather had read of the procedure in a paper by a Turkish physician published in the proceedings of the Royal Society.

1819: William K. Clarkston, Jr., of New York receives the first U.S. patent for a velocipede, the forerunner of the bicycle.

1854: Nova Scotia lawyer Sir Robert Laird Borden, the future prime minister and the man on the Canadian $100 bill, is born at Grand Pre, Nova Scotia.

1894: The first U.S. patent for a gasoline-driven automobile is issued to German Karl Benz.

1909: Andreas Cornelius van Kuijk is born at Breda in the Netherlands.  As "Colonel Tom Parker," the former dogcatcher and circus performer will become singer Hank Snow's manager, and in 1955 will sign Snow's opening act, Elvis Presley, to a contract.

1934: President Roosevelt signs the Federal Credit Union Act, creating a group of tax-exempt institutions to compete with banks.

1959: The St. Lawrence Seaway officially opens, connecting the Great Lakes to the Atlantic.

1963: President Kennedy, speaking in West Berlin, famously announces "Ich bin ein Berliner," or "I am a jelly donut."

1977: At Market Square Arena in Indianapolis, Elvis Presley gives his last live concert performance.

1997: Bloomsbury Publishing issues a new novel by a first-time writer.  Harry Potter and the Philosopher's Stone by J.K. Rowling will launch a series so popular that the New York Times will have to create a separate best-seller list to prevent all of its spots being filled by Potter books.

News in brief

Canada's Telus has rejected a new contract proposal from the Telecommunications Workers Union, saying it reflects outdated notions about the changing industry.

U.S. Unwired is seeking to block the pending Nextel-Sprint merger, claiming it will violate U.S. Unwired's contract with Sprint.

Claiming that the South African Rugby Union is breaching his contract by interfering with his team selection, Springbok coach Jake White says he'll resign if things don't improve.

The Ohio Bureau of Workers Compensation, which lost more than $200 million in the collapse of a hedge fund, says the fund violated its contract by using too much leverage.

A Fluor Corp. subsidiary has been hit with a breach of contract judgment that could total $60 million.

Iran has let the first contract for exploratory oil drilling in the Caspian Sea.

Ukraine says it will sign a 25-year deal with Turkmenistan for delivery of natural gas, which will cut prices from $58 to $44 per thousand cubic meters.

Costs of the "good life"

Law school professors make very good money by ordinary human standards, but those in the Northeast, at least, have relatively little chance to live the stereotypical American "good life."

An article on Forbes.com (via MSN) calculates the annual income necessary in the northeastern states to enjoy such things as a vacation home, private schools for the kids, new prestige automobiles, and exotic vacations.  The amounts vary widely, from an after-tax low of $212,000 a year in Portland, Maine (where there are relatively few law schools), to $339,000 in New Jersey, $359,000 in Connecticut, $407,000 in Boston, and $484,000 in New York City.  Remember, that's after taxes. 

Contractors in Iraq

There are thousands of contract personnel in Iraq doing work that in World War II or the Korean War, would have been done by uniformed soldiers.  The trend toward a smaller military supplemented more heavily by civilian contractors has been accelerating in recent years.

The PBS Program Frontline has a new series called Private Warriors, which explores the issues involved in mixing private citizens with military personnel.  It looks to be an even-handed exploration of the phenomenon, and features (among others) interviews with Steven Schooner of George Washington.  Among the features at the show's web site is a list of links to good resources on the issues.

Today in history: June 25

1788: Virginia becomes the tenth state to ratify the new United States Constitution.

1867: Lucien B. Smith of Kent, Ohio, receives a patent for barbed wire.  This will soon remake the face of the Western United States by allowing large areas to be cheaply and effectively fenced against cattle for the raising of crops.

1876: Lt. Col. George Armstrong Custer's 210-man command is wiped out by an alliance of Lakota, Arapaho, and Northern Cheyenne at the Battle of Little Big Horn.

1903: Physicist Marie Curie goes before the examination committee for her Ph.D.  Few candidates have ever been as well-prepared, since her work will win her the Nobel Prize in Physics later in the year.

1951: CBS Television broadcasts the first color commercial television broadcast, a show called Premiere, featuring Arthur Godfrey, Faye Emerson, Sam Levenson, Robert Alda, Ed Sullivan, Isabel Bigley, and Garry Moore.  The CBS system, which is incompatible with existing black-and-white televisions, turns out to be a flop and is discontinued after four months.

1993: Avril Phaedra Douglas "Kim" Campbell, a former poli sci lecturer at the University of British Columbia, becomes head of the Progressive Conservative Party and Canada's first female Prime Minister.

1995: Former U.S. Chief Justice Warren Earl Burger (William Mitchell Law 1931) dies at Washington, D.C.

In the news

The dispute between two British periodicals over the rights to photos of the Catherine Zeta-Jones/Michael Douglas wedding looks like it's heading to the House of Lords.

Leaders of the Screen Actors Guild say they'll take the question of a new contract with the game industry to the full national board, after the group's executive committee vetoed the deal.

A woman who didn't kick in her $10 in a lottery pool in advance will still get her $1 million share of the winnings, after a New Jersey appeals court held that as a long-time participant in the pool she had a contractual right to the winnings.

United Parcel Service pilots are demanding a "last, best and final offer" from the firm and may ask to be released from the current mediation process to prepare for a strike.

Two top soccer associations in India are pushing wider use of standard contracts for professional players, both to protect the players and to clear up the confusion that results from teams having non-standard arrangements.

The real character portrayed in the remake of the allegedly fact-based film The Amityville Horror is suing the producers for breach of contract and defamation, saying that he did not, in fact, attack his son with an ax, build coffins for his children, or try to drown his wife, as he does in the film.

Puerto Rico's largest ice cream distributorship is suing Nestlé, claiming that the Swiss food giant engaged in improper practices to lower the price it was to pay for acquiring the smaller firm.

Motorola has won a contract to provide a new 3G telecom system in Taiwain, details of which aren't disclosed.