ContractsProf Blog

Purposefully Plumper Pesci Professes Promissory Estoppel in Pursuit of Producer

For anyone in need of a current case/hypo to help illustrate promissory estoppel (and perhaps the statute of frauds along with unjust enrichment), consider the latest suit filed by famous actor, Joe Pesci.  In his breach of oral contract complaint,* Pesci claims that he was promised the role of round-faced Angelo Ruggiero in a new film about famed gangster, John Gotti, to be played by John Travolta.  In reliance on that promised role, Pesci abandoned his usual diet and exercise routine and gained thirty pounds to look more like Ruggiero.  After the weight gain, producers advised Pesci that he no longer would be playing Ruggiero in exchange for the initially-promised $3 million; instead, he would be offered a lesser role (playing the man who allegedly killed Gotti) for $1 million.  Pesci alleges that the film producers were enriched because they used his established mobster-playing cache to help promote the movie and obtain funding.  The film's current producer claims that Pesci was the one who backed out of the deal after Pesci's preferred director, Nick Cassavetes, quit.  Pesci acknowledges that there was no written contract but a signed writing likely would not be required in this case.   If Pesci can't show an otherwise valid oral contract, promissory estoppel issues to ponder include...Was there an actual promise?  (Pesci points to a press conference and a website announcement as possible sources of the promise.)  Was Pesci's reliance reasonable?  Is there injustice absent enforcement of the promise?  And what exactly are his damages? 

[H.R. Anderson]

* Pages missing

Are We Missing (Some of ) Our Target Audience(s)?

As many have noted, e.g., here and here, Chief Justice Roberts doesn't have much use for law reviews.  Here is the money quote, as provided by the Volokh Conspiracy:

Pick up a copy of any law review that you see, Roberts said, and the first article is likely to be, you know, the influence of Immanuel Kant on evidentiary approaches in 18th-century Bulgaria, or something, which I’m sure was of great interest to the academic that wrote it, but isn’t of much help to the bar.

We will assume that the Chief Justice is exaggerating for effect, as he must have rubbed shoulders with enough academics to know that very few law professors are very much interested in Kant's views, the 18th century or Bulgaria.  Still, it is true that most academics do not write with courts or even practitioners in mind.  While we might hope to have some sort of long-term effect on policy, I think most of us write in conversation with each other and with our students.  Scholarship is often inspired by Supreme Court decisions that, in the opinion of the author, have strayed from wise policy, precedent or both.  It is no surprise that the author of such opinions would find such scholarship tiresome.  

While perusing the blog of one of this blog's readers, Kenneth A. Adams, I came across the following:

Every so often I glance at ContractsProf Blog’s regular “New in Print” posts (e.g., here) and “Weekly Top Tens from the Social Science Research Network” posts (e.g., here). So far, I haven’t been tempted to read any of the law review articles listed, because I haven’t seen anything that seems as if it treats, in a compelling way, what you should say in a contract, or how you should say whatever you want to say.

I think I would have to agree with everything after "because", but I also find it hard to imagine why anybody would write a law review article about this topic, given that there are practical books on contracts drafting (including one by Kenneth A. Adams).  I have a hard time trying to articulate why this subject is not an attractive topic for a law review article but an eminently sensible book project.  I have occasionally heard colleagues disparage law review articles as "mere practitioners' notes."  Heaven forfend that my work ever be so labeled, but it is a real danger, as I'm not sure how one makes the determination.  

It also occurs to me that I read law reviews occasionally when clerking for my judge and when researching constitutional issues for my firm's Supreme Court appellate practice but never (that I recall) while litigating contracts disputes.  Should we academics be making more of an effort in this area?

[JT]

Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal  
May 26, 2011 to July 25, 2011

Rank	Downloads	Paper Title
1	112	The Rise and Possible Fall of Investor-State Arbitration in Asia: A Skeptic’s View of Australia’s ‘Gillard Government Trade Policy Statement’  Luke R. Nottage
2	111	Contracts and Markets: A Very Short Essay Without Footnotes  Nathan B. Oman
3	97	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossoff
4	74	Pluralism and Perfectionism in Private Law  Hanoch Dagan
5	73	Contract as Meaning: An Introduction to 'Contract as Promise at 30'  Jeffrey M. Lipshaw
6	64	On Regulatory Arbitrage  Jordan M. Barry
7	61	Unconscionability Wars  David Horton
8	61	Law, Economics, and Morality: Response to Critiques  Eyal Zamir, Barak Medina Last Revised: July 19, 2011
9	58	Unfair Terms in Contracts between Businesses  Martijn W. Hesselink
10	53	Measurement of Restitution: Coordinating Restitution with Compensatory Damages and Punitive Damages  Doug Rendleman

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
May 26, 2011 to July 25, 2011

Rank	Downloads	Paper Title
1	136	The Public Speaks: An Empirical Study of Legal Communication  Christopher R. Trudeau,
2	97	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossof
3	94	Too Big to Exist  Barak Orbach, Grace E. Campbell
4	74	Pluralism and Perfectionism in Private Law  Hanoch Dagan
5	57	Unfair Terms in Contracts between Businesses  Martijn W. Hesselink
6	34	Relational Formalism and the Construction of Financial Instruments: A Bottom-Up Jurisprudence for Commercial Law  Jonathan Yovel
7	32	The Possible Irony of AT&T versus Concepcion  Colin P. Marks
8	32	Law as a ByProduct: Theories of Private Law Production  Bruce H. Kobayashi, Larry E. Ribstein
9	24	How Markets Work: The Lawyer's Version  Mark C. Weidemaier, G. Mitu Gulati
10	19	Deberes De Protección, ‘Aun Frente a Terceros’, En La Dogmática Alemana (Duties of Care, 'Even Towards Third Parties,' In the German Dogmatic)  Javier Mauricio Rodriguez Olmos

[JT]

Indiana Court of Appeals: LinkedIn Job Ad Not a Solicitation or Inducement

Hypersonic Technologies Corporation (Hypersonic), an advanced software engineering firm based in Fort Wayne, Indiana, entered into a sub contractor agreement (Agreement) in October 2009 with Enhanced Network Solutions (ENS) a firm  that modifies existing software. 

The Agreement stated that if ENS and Hypersonic successfully bid on a joint project, ENS would authorize Hypersonic to act as a subcontractor for ENS clients.  Also in the Agreement was the following clause:

11.5 Employee Protection. During the term of this Agreement and for a period of twelve (12) months from the date of effective date of its termination, unless mutually agreed to in writing otherwise the Parties (including any successor-in-interest or related company) shall refrain from soliciting or inducing, or attempting to solicit or induce, any employee of the other Party in any manner that may reasonably be expected to bring about the termination of said employee toward that end and, in the event of a breach of this clause, that party in breach shall pay to the party not in breach the sum equivalent to twelve (12) months salary of the employee in question.

Hypersonic terminated the Agreement on June 12, 2010 after the parties never successfully bid on a project together.

The dispute arose because during the Agreement period, Hypersonic posted a listing for an outside sales representative on LinkIn.  Robert Dobson, an ENS sales representative, saw the posting and informed the President of Hypersonic he was interested in the position.  After meeting with Hypersonic’s owner and president, Dobson was offered and accepted the position of Executive Director of Sales at Hypersonic. 

Hypersonic filed a complaint seeking a declaratory judgment that the Agreement was unenforceable.  ENS counterclaimed.  The trial court ruled for Hypersonic, finding that it did not “solicit, induce, or attempt to solicit or induce Dobson to terminate his employment with ENS.”  On Appeal by ENS, in Enhanced Network Solutions v. Hypersonic Technologies Corp., the Indiana Court of Appeals found that the trial court was correct in finding Hypersonic did not act to solicit any of ENS’s employees.  

In interpreting the Agreement, the Court noted that the terms “solicit” and “induce” were not defined.  The Court therefore utilized the dictionary definitions of both words, treating “inducing” as “enticing or persuading” and “soliciting” as “requesting or seeking.”  Based on these definitions, the Court found that Hypersonic did not solicit or induce Dobson because he had initiated the first contact about the position.  Further, during the second meeting Dobson laid out his compensation requirements before Hypersonic made any offer of employment. 

The Court of Appeals concluded that Hypersonic did not breach the Agreement.

We note that, while the decision might be correct, it seems a stretch to claim that a job posting is not a solicitation or inducement.  Rather, the key here is that the LinkedIn post was directed at the public at large and was not an attempt to solicit or induce any particular person and does not appear to have been directed at Dobson or any other ENS employee.

[JT & Katherine Freeman]

Designer Leaves NASCAR for Formula One, Brings Contract Dispute Along for the Ride

Michael Waltrip of NASCAR fame (fame earned both as a driver and now as a team owner) has filed a complaint against auto designer Mike Coughlan.  The suit claims that Coughlan breached the contract by leaving his position with Waltrip's race team prior to the end of his employment contract term.  And, to make it worse, Coughlan reportedly left Waltrip's team to design cars for the Formula One team, Williams.  Given NASCAR’s reported inferiority complex with respect to the older and allegedly more complex F1 racing (i.e., a kind of racing that requires one to do more than just turn left), this departure "across the pond" was especially vexing to Waltrip.  The particular contractual terms cited include a “loyalty clause” and the duty of good faith and fair dealing.  If the contractual fight takes any dramatic turns, perhaps Sascha Baron-Cohen will reprise his role as a Formula One turned NASCAR driver in the movie version of this dispute. 

[H.R. Anderson]

Alan White on JP Morgan's Attempt to Evade State Law

Friend of the blog, Alan White, reports here on a case currently before the 4th Circuit.  The case is Epps v. JP Morgan Chase, which was decided last November in the Maryland District Court.

Here is Alan's commentary:

In a case now before the 4^th Circuit Court of Appeals, Chase Bank asserts that it may repossess an auto loan borrower’s car without complying with consumer protections in state commercial law.   The Maryland District Court found for Chase Bank, concluding that 1) the National Bank Act preempts state repossession notice law and 2) Chase was not bound by the mandatory loan contract term specifically incorporating Maryland repossession law, because as an assignee of the contract, Chase had not voluntarily agreed (!) to the choice of law provision. 

The logic of the lower court opinion is remarkable.  It seems to suggest that even the repossession rules of Article 9 of the Uniform Commercial Code could be preempted by the National Bank Act and OCC regulations.  What is truly extraordinary, however, is the idea that a national bank could on the one hand invoke the privilege, created by the UCC and other state law, to repossess collateral without judicial process, while on the other hand disregarding the restrictions and consumer protections that accompany that privilege.  If the entirety of state commercial and debt collection law conflicts with the National Bank Act, then there was no state law basis for Chase to seize Ms. Epps' car, and the purported repossession was nothing more than grand theft.

Thanks for the tip, Alan!

[JT]

Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal  
May 19, 2011 to July 18, 2011

Rank	Downloads	Paper Title
1	835	Economic Analysis of Claims in Support of the ‘Durbin Amendment’ to Regulate Debit Card Interchange Fees  Howard H. Chang, Margaret Morgan Weichert
2	226	Res Judicata in International Arbitral Awards  Luca G. Radicati di Brozolo
3	157	Two Culture Problems in Law and Economics  Alan Schwartz
4	105	The Rise and Possible Fall of Investor-State Arbitration in Asia: A Skeptic’s View of Australia’s ‘Gillard Government Trade Policy Statement’  Luke R. Nottage
5	94	Contracts and Markets: A Very Short Essay Without Footnotes  Nathan B. Oman
6	93	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossoff
7	63	On Regulatory Arbitrage  Jordan M. Barry
8	61	Pluralism and Perfectionism in Private Law  Hanoch Dagan
9	58	Unconscionability Wars  David Horton
10	52	Law, Economics, and Morality: Response to Critiques  Eyal Zamir, Barak Medina

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
May 19, 2011 to July 18, 2011

Rank	Downloads	Paper Title
1	148	Property Law as the Infrastructure of Democracy  Joseph William Singer
2	94	The Public Speaks: An Empirical Study of Legal Communication  Christopher R. Trudeau,
3	93	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossof
4	92	Too Big to Exist  Barak Orbach, Grace E. Campbell
5	61	Pluralism and Perfectionism in Private Law  Hanoch Dagan
6	39	Unfair Terms in Contracts between Businesses  Martijn W. Hesselink
7	33	Relational Formalism and the Construction of Financial Instruments: A Bottom-Up Jurisprudence for Commercial Law  Jonathan Yovel
8	14	Outlaw Contract Terms in Consumer Contracting: Mispricing, Market Inefficiency and the Overconsumption of Risk  Larry R. Pounders
9	13	From the Mouths of Babes: Protecting Child Authors from Themselves  Julie D. Cromer Young
10	12	Whither Arbitration?  Peter B. Rutledge

[JT]

A Contractual Protest: A Thread to A Can of Worms.

 It is rare that a day passes without some headline or other about the affairs of the major players in the fields of information technology (IT), Internet Business (IB) or Social Networking (SN).   The cast of players - a revolving door of usual suspects – includes Microsoft, Apple, Google, Facebook etc.  The relative harmony that once derived from their clearly differentiated activities – e.g. personal computing, online searching or social networking – is now a thing of the past.  Brittle harmony has given way to -  shades of the 1990s  - blow by blow accounts of smear tactics, strategic protests, general blogfare, and of course, court actions .  Why?  Because the players are slugging it out in the mush pit which the converging IT/IB/SN  arena has become – all for a (bigger) piece of the pie. 

The average observer might be daunted by the copious data and convoluted interrelationships typically involved.    Close contemplation of contractual details, particularly those undergirding the relentless strategizing, negotiating, and (guarded) cooperation of such parties, is clearly something the average observer does not relish.  Yet the nitty gritty of who is doing what to whom, and where, to get to the bottom of what is really going on in a dispute may not be that hard to find.  Help is found in unexpected places – even in very contracts that are dauntingly associated with such transactions.  Or more precisely, even from the angst  created by such contracts.    

There is a struggle, you see, between an industry giant, Microsoft, who is determined not to be past its prime, and an equally determined giant slayer, Google, a relative upstart that is notoriously hungry for power.   Microsoft is determined to reinvent itself.  It is trying to build on its dominant market position to expand beyond the  dated server based computing approach.  The aim is to become the leader of the emerging ‘cloud based enterprise solution revolution’.  All very well.  The thing is, however, that Google is eagerly developing competing products in the same field.  And Google is striving, mightily, to market those products.  So,  here is the rub – Google has been having a hard time persuading potential customers, a significant percentage of whom are loyal customers of Microsoft’s email and other office offerings, to make the switch.

This is why  Google cried foul, and loudly, when the U.S. govt., through the agency of the Department of the Interior (DoI), issued a request for quotations – an invitation for offers as we know – but allegedly indicated that it would not entertain offers from Google.  The DoI subsequently awarded the contract to Microsoft. 

 Google objected to not being invited to the party by filing a bid protest in the U.S. Court of Federal Claims.  In the filing, Google asserted infringements of the Competition in Contracting Act’s policy requirements  which mandated that “technology vendor neutrality as far feasibly possible” must be maintained.  Google has asked the court to enjoin the DoI from awarding the contract to Microsoft until competitive bidding has taken place.

This dispute between the parties has been anything but straightforward.  The DoI has asserted that Google was ineligible for consideration because Google’s products were not certified under the Federal Information Security Management Act (FISMA)  at the time.  But here’s the thing  - it now seems that Google had this certification – or at least for a related product, while Microsoft at the time of the award of the contract, allegedly did not.  Microsoft reportedly received the certification after the award, but this disparity is a fierce point of contention.

Google clearly understands that it has a huge task to unseat the Microsoft behemoth.  Its hopes of entering into what must be an accelerating volume of contracts required for market viability, if not market dominance, depends on a spreading domino effect.  An increasing number of smaller users will need to take their cue (to contractually adopt Google products) from the bigger fish who adopt Google’s applications.

The bigger war for market dominance is not limited to Microsoft and Google, of course.  When this slender threat of a bid protest is traced, it leads to a whole other can of worms: cut throat rivalry not only for cloud computing, but voice over IP, mobile tasking, and mobile payment also (to name a few).  But that can of worms is for another day……

 

EOA

Dances with Ambiguity

It's hard to believe that Kevin Costner never has appeared on this esteeemed blog...until now.  The contract that brings him here was between Costner and an artist involving the sale of...you can't make this stuff up...bison sculpture replicas.  Several years ago, Costner planned to build a luxury resort in South Dakota, the entrance to which would feature a field of dreams bronze bison being hunted by Native Americans (inspired, of course, by his experiences in the film Dances with Wolves).  Although the resort,The Dunbar, never materialized, the sculptures were completed and later featured by Costner as a standalone tourist site aptly named Tatanka. 

In the original agreement between Costner and the artist, Peggy Detmers, Costner was to pay Detmers $250,000 for the sculptures plus a share of the proceeds from future sales of sculpture replicas to wealthy resort visitors.  Detmers claims that she charged Costner far less than the sculptures' actual value, which she estimated to be $4 to $6 million, in anticipation of a significant number of replica sales (because, as any wealthy resort visitor knows, who wants a snow globe when you can have bison...14 of them...you know, for your yard).  Years later, when resort construction was delayed, Costner agreed to pay Detmers an additional $60,000.  The amended letter contract also stated as follows: "[I]f The Dunbar is not built within ten (10) years or the sculptures are not agreeably displayed elsewhere, I will give you 50% of the profits from the sale of the [sculputures] after I have recouped my costs...."  

In 2009, Detmers filed suit to enforce that quoted provision, i.e., to make Costner sell the sculptures and split the proceeds 50/50 with her.  Costner claimed that no sale was required because displaying the sculptures at Tatanka qualified as them being "agreeably displayed elsewhere."  Detmers claimed that she never agreed to that display location.  The court thus had to decide how to interpret the arguably ambiguous term of "agreeably displayed elsewhere."  Earlier this summer, Circuit Judge Randall Macy decided that the forced sale provision had not been triggered because Detmers had agreed, albeit passively, to have the sculptures displayed at Tatanka.  Specifically, Judge Macy stated: "[Detmers's] significant involvement in the Tatanka project and her failure to tell Costner or anyone else that she did not agree with placement at Tatanka indicate she was agreeable to the sculptures' placement at Tatanka for the long term." 

I suppose that the lesson for contract drafters is to specify what "agreeably" means or to avoid that kind of ambiguity altogether.  Drafters at least should specify how the "agreeableness" is to be recorded in order to be effective, such as "upon written consent," with or without the typical "not to be unreasonably withheld" modifier.  The other lesson is to never trust a man who thought that this movie and this movie were 'sure things."

[H.R. Anderson]

Off to the Hague

As frequent readers of the blog may have noticed, I have been in Cambridge since late June.  This weekend, I am taking my students to the Hague, so that we can visit the ICC, the ICJ and meet with one of Radovan Karadzic's attorneys.  We are flying Easyjet, which only permits passengers to take along a deck of cards, unless they are willing to pay to check bags.  As a result, I will be without my computer and out of commission for the rest of the week.

There might not be a whole lot going on in this space for the next few days, but you can look at these pictures and contemplate the wonders of . . . contracts.

[JT]

Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal  
May 11, 2011 to July 10, 2011

Rank	Downloads	Paper Title
1	831	Economic Analysis of Claims in Support of the ‘Durbin Amendment’ to Regulate Debit Card Interchange Fees  Howard H. Chang, Margaret Morgan Weichert
2	426	What Lessons for Economic Development Can We Draw from the Champagne Fairs?  Jeremy Edwards, Sheilagh Ogilvie
3	217	Res Judicata in International Arbitral Awards  Luca G. Radicati di Brozolo
4	149	Two Culture Problems in Law and Economics  Alan Schwartz
5	106	Innovative Transactional Pedagogies  Joan MacLeod Heminway, Lyman Johnson, Michael Woronoff
6	102	Fixing Unfair Contracts  Omri Ben-Shahar
7	96	The Impact of Human Rights Law on Contract Law in Europe  Hugh Collins
8	92	The Rise and Possible Fall of Investor-State Arbitration in Asia: A Skeptic’s View of Australia’s ‘Gillard Government Trade Policy Statement’  Luke R. Nottage
9	91	Contracts and Markets: A Very Short Essay Without Footnotes  Nathan B. Oman
10	85	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossoff

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
May 11, 2011 to July 10, 2011

Rank	Downloads	Paper Title
1	146	Property Law as the Infrastructure of Democracy  Joseph William Singer
2	102	Fixing Unfair Contracts  Omri Ben-Shahar
3	85	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossoff
4	71	The Promise Principle and Contract Interpretation  Juliet P. Kostritsky
5	61	The Public Speaks: An Empirical Study of Legal Communication  Christopher R. Trudeau
6	60	Pluralism and Perfectionism in Private Law  Hanoch Dagan
7	57	Too Big to Exist  Barak Orbach, Grace E. Campbell
8	32	Relational Formalism and the Construction of Financial Instruments: A Bottom-Up Jurisprudence for Commercial Law  Jonathan Yovel
9	29	Unfair Terms in Contracts between Businesses  Martijn W. Hesselink
10	13	From the Mouths of Babes: Protecting Child Authors from Themselves  Julie D. Cromer Young,

[JT]

Uninsured Motorist Coverage Construed in Alabama

Lou Ann and Delbert Downey were on their motorcycle in April 2007 at a stoplight when they were hit from behind by Wyndell Thompson. At left we have an image of a motorcycle helmet, evidencing how it protects you from having your face scraped off by asphalt if you happen to have an accident like the Downeys had.  So PLEASE!  Wear helmets!!!

Anyway, Thompson had a liability policy of $10,000 through First Acceptance Insurance Company. The Downeys had uninsured/underinsured motorist insurance through Travelers Casualty Insurance on three vehicles but the policy did not mention the motorcycle.  Downeys’ policy included the following provisions:

EXCLUSIONS

A. We do not provide Uninsured Motorists Coverage for ‘bodily injury’ sustained by any ‘insured’:

1. If that ‘insured’ or the legal representative settles the ‘bodily injury’ claim without our consent.

In July 2008, the Downeys, represented by counsel, settled with Thompson and his insurance company for $10,000 without notifying Travelers of the accident or the settlement.  The following year, the Downeys, represented by different counsel, notified Travelers of the accident and made a claim for underinsured motorist benefits. Travelers denied this claim because of the settlement exclusion to the policy.

In Downey v. Travelers Casualty Insurance Company, the Downeys sued Travelers for breach of contract in Alabama State Court.   Travelers had the case transferred to the Federal District Court which certified the following question:

Under Alabama law does the failure of an insured to give prior notice to his or her insurer of a proposed settlement and release of an alleged tortfeasor cause the insured to forfeit underinsured motorist coverage regardless of the insured’s actual knowledge of said coverage and regardless of prejudice to the insurer if the insured has possession of the policy which provides coverage?

The Alabama Supreme Court looked to Lambert v. State Farm Automobile Insurance Co., 576 So.2d 160 (Ala. 1991) which set out a framework for consent-to-settle cases including:

1. Insured needs to immediately notify the insurance company of a proposed settlement with an uninsured/underinsured tortfeasor.
2. At the time the insured notifies the insurance company, the insured needs to tell the company whether they intend to file a claim for uninsured motorist benefits. The company must investigate the claim within a reasonable time following.
3. The insured should not settle without first allowing the company a reasonable time to investigate.

It is well settled under Alabama law that uninsured motorist coverage attaches to a person and not a vehicle.  In addition, as the Downeys were represented by counsel at all stages of the settlement and litigation process, their failure to read their policy is no excuse for their lack of awareness of its coverage. 

The Court determined that by settling the case with Thompson, the Downeys had forfeited their right to seek further recovery.

[JT & Katherine Freeman]

Second Circuit Issues Summary Order on Remand from SCOTUS in U.S. ex rel. Kirk

We have covered this case, United States ex rel. Kirk v. Schindler Elevator Corp., before, most recently here.  Here's our recitation of the facts and history up to the Supreme Court's decision in May:

Daniel Kirk, a Vietnam War veteran, worked at Millar Elevator Industries beginning in the late 70s.  In 2002, Millar's operations were integrated into those of the Schindler Elevator Company.  In 2003, Millar was demoted and resigned.  Eight months later, Kirk sued, alleging that he had been fired in violation of VEVRAA, the VIetnam Era Veterans Readjustment Assistance Act.  That claim was dismissed and the dismissal was affirmed last year.  

Meanwhile, Kirk brought suit under the False Claim Act in the name of the U.S. government.   In 2007, the government elected not to intervene and Kirk pursued his claim as a relator.  His suit alleged that Schindler had entered into hundreds of contracts subject to VEVRAA requirements but that Schindler had failed to comply with those requirements.  Among other claims, Kirk alleged that Schindler failed to submit required VETS-100 reports in some years and had filed false VETS-100 forms in others.   The district court dismissed the action finding, among other things, that the claim was bared under the FCA, 31 U.S.C. s. 3730(e)(4), which provides that information that has been publicly disclosed cannot be a basis for a FCA claim.  The information at issue here related to the allegedly missing and/or falsified VETS-100 forms that Mr. Kirk had discovered through FOIA requests.  

The relevant section of the FCA provides:

No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information. 

The Second Circuit vacated and remanded. There was no question that Mr. Kirk was not the original source of the information, so the only question whether a FOIA request counts as "public disclosure" for the purposes of the statute.  The Third Circuit answered that question in the affirmative.  The Ninth Circuit concluded that only a FOIA request that results in the production of an "enumerated source;" that is, one of the types of sources expressly named in the statute, creates a jurisdictional bar to an FCA claim.  The Second CIrcuit followed the Ninth.  It was supported in its position by the U.S. government as amicus curiae.

In the U.S. Supreme Court, the 5-3 majority (opinion by Justice Thomas) held that a government agency's response to a FOIA request constitutes a "report" and thus falls within the FCA's jurisdictional bar.  Justice Ginsburg wrote a short dissent, basically endorsing the Second Circuit's approach.  The opinion can be found here.  

Last week, the Second Circuit Revisited the case.  On its first pass on the case, the Second Circuit had left unresolved the following issues: 

(1) whether the Department of Labor's  FOIA responses indicating that reports were not found for certain years disclosed “allegations or transactions,” (2) whether Kirk’s failure-to-file claims were “based upon” any such disclosed “allegations or transactions,” or (3) whether Kirk qualifies as an “original source” of the relevant information underlying the failure-to-file claims.

The Second Circuit concluded that "Kirk’s failure-to-file claims were 'based upon' the 'allegations or transactions' disclosed in the FOIA responses and that Kirk does not qualify as an 'original source.'"  The Second Circuit thus affirmed the District Court's dismissal of Kirk's failure-to-file claims.  However, the Second Circuit left unchanged its earlier decision to vacate the District Court's dismissal of Kirks false reports claims, which were premised on Kirk's personal knowledge and thus did not run afoul of the FCA's jurisdictional bar.  

The most recent Second Circuit order can be found here.

[JT]

Class Action Waiver Prevents Students from Proceeding Against For-Profit Westwood College

A group of students sued for-profit Westwood College in federal district court in Colorado for allegedly engaging in "systemic[] deceptive trade practices by misrepresenting key facts about their operations, including the total cost of education at the schools, the prospect of job placement and salary expectations after graduation, the schools' accreditation status, and the transferability of credits obtained at the schools."  

Last month, Judge Martinez of the District Court of Colorado dismissed the class action because the school’s enrollment materials contain a class action waiver.  Judge Martinez wrote that "there is no doubt" that the holding in AT&T v. Concepcion "was a serious blow to consumer class actions and likely foreclosed the possibility of any recovery for many wronged individuals."

A website (www.westwoodscammed.me) maintained by the attorney representing the plaintiffs/students, contains videos of the student’s stories of allegedly being scammed by Westwood.  Here is a CBS News clip about some of the allegedly deceptive practices at Westwood:

Also, here’s a clip from a NBC expose of for-profit schools generally (which, by the way, required me to first watch an advertisement for for-profit Capella University –ironic coincidence or a failure of contextual advertising?).

We are a little late to this story, so here are some links that very ably provide coverage of the case:

• A For-Profit School Battles as Class Arbitration is Taken Off the Table (Law.com)
• Class Action Suit v Westwood College By Students Derailed (WashParkProphet)
• Court Compels Arbitration Clauses Against Students (Law Librarian Blog)

Bernal v. Burnett, 2011 WL 2182903 (D.Colo. Jun. 6, 2011).

[Meredith R. Miller]

Lipshaw's Intro to the "Contract as Promise" Symposium

Back in March, Suffolk University Law School hosted a symposium commemorating the 30th Anniversary of Charles Fried's book "Contract as Promise."  (You can download the lectures for free from iTunes).  The papers will be published in the Suffolk Law Review.

It was an enriching day of panels featuring many prominent contract theorists, so it was no small task for Professor Jeffrey Lipshaw to introduce the volume of the Suffolk Law Review containing the essays.  But, as he proves in this intro essay, no feat is too great for Prof. Lipshaw.  Here's the abstract:

This is an introductory essay to the volume of the Suffolk Law Review containing the papers from our symposium centered on Charles Fried’s iconic book, 'Contract as Promise' at 30: The Future of Contract Theory. My theme is the relation of theory to practice, particularly in contract law, and why a theoretical orientation, broadly speaking and whether or not so conceived by the practitioner herself, is fundamental to that practitioner making good judgments. Theorizing - imposing coherent and correspondent conceptual order on events in the real world - is not as unrelated to the ordinary work of lawyers (and others) as some critics of legal academy would suggest. I provide a summary of the papers, presentations, and commentary by the distinguished participating scholars, and consider how their work fits within the framework I describe. Finally, I consider the role of meaning in contract theory; in other words, how both descriptive and normative theory, whether directed to the legal institution of contract or to other phenomena, are all ways of making sense of the human condition, and thus an essential part of what practicing “lawyers-theorists” do every day.

[Meredith R. Miller]

Julian Assange Decides that Some Secrets Are Worth Keeping

According to this story in the Manchester Guardian, Wikileaks founder Julian Assange (pictured) may have to renegotiate his nearly £1 million book contract with Edinburgh-based publishers Canongate and the US publisher Alfred A Knopf.  Apparently, Assange is concerned that revelations in the memoir might give the United States information that it would use to try to extradite him to the United States so that it can prosecute him for aiding and abetting terrorists in connection with his involvement with Wikileaks.

Of course, Assange originally said that he needed the advance that he was paid to write a book that "would become one of the unifying documents of our generation" in order to pay his legal costs.  Those costs mostly relate to his efforts to resist extradition to Sweden, where he is accused of rape and sexual assault.  He may be better off in the United States.  There, he can make a brave stand on principle and defend the ideology that fueled Wikileaks.  

Neither or Assange or his publisher would talk to the Guardian about the rumors that the book deal has gone south.  It remains to be seen whether Assange (and his lawyers) can be cajoled into submitting an unexpurgated manuscript or if the parties will work out a different (perhaps lesser) deal for a different (perhaps lesser) book 

[JT]

All Hail Blog Emperor Paul Caron

On the occasion of his 20,000th post.

That is a truly phenomenal number of posts!  He's done it all since 2004, meaning that he has averaged nearly 3000 posts a year for seven years.  That's over 250 posts a month, nearly 60 a week, over eight a day!!  Every three hours another post.  While you are sleeping, Paul Caron posts at least twice.  Go to a movie?  He posted.  Make dinner, eat, do the dishes?  Post.  Post on your blog?  Several posts, no doubt.  Try to get some scholarship done.  Fuhgetaboutit.  You don't want to know just how much more productive Paul is than you are.

 While we were at work on this post, he's already got four new posts up.  That's right, it's 20,004 and counting.

And by the way, his blog is about tax law and he't got a bazillion readers.  

[JT]

Call for Papers on the Fringe Economy

Better late than never: here a call for papers from the Washington & Lee Law Review

The symposium Regulation in the Fringe Economy represents the most significant attempt to date by legal scholars to address the vexing legal and social issues created by lenders on the fringes of the economy who offer payday, auto title, for-profit college, and refund anticipation loans. A complete list of confirmed participants and their paper topics is available at the conference website.

The Frances Lewis Law Center and the Washington and Lee Law Review are delighted to sponsor this conference which will take place on November 11, 2011 at the Washington and Lee University School of Law in Lexington, Virginia. The Washington and Lee Law Review will publish a symposium issue featuring the conference papers in 2012.

The sponsors’ goal is to encourage and recognize excellent legal scholarship in this area. To advance their goal, the sponsors invite lawyers, judges, and scholars to submit papers on regulation in the fringe economy. Papers on related high-risk consumer financial products are also encouraged. An author should submit his or her manuscript in an exclusive submission on or before August 15, 2011. A submission should be no longer than 50 pages or 15,000 words. A limited number of submissions will be accepted. Authors will be notified of the acceptance of their paper and participation in the symposium no later than August 20, 2011.

Selected authors will present their papers at the November 11 conference. All participants are asked to provide their own travel expenses. Papers specifying the conference may be mailed to the Washington and Lee Law Review or sent electronically to [email protected]. The Law Review Articles Editors and Washington and Lee University School of Law Professor Margaret Howard will review the papers.

Even if you are not able to submit a paper, the sponsors invite you to attend the conference. There will be no charge for attending. The Frances Lewis Law Center is a licensed Virginia Continuing Legal Education provider which will supply Virginia CLE credit for those attending.

Mallory A. Sullivan
Symposium Editor, Washington and Lee Law Review

Christine M. Shepard
Editor in Chief, Washington and Lee Law Review

We are happy to see that the confirmed participants in the conference include, among others, friends of the blog Jean Braucher and Alan White.

[JT] 

New Blog

The UNCITRAL Model Procurement Blog has arrived here!

According to its home page, its mission is a follows: 

This blog covers developments regarding the UN Commission on International Trade Law (UNCITRAL) Model Procurement Law, the text of which was adopted on July 1, 2011.

Welcome to the Blogosphere!  May your pageviews be plentiful.

[JT]

Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal  
May 5, 2011 to July 4, 2011

Rank	Downloads	Paper Title
1	825	Economic Analysis of Claims in Support of the ‘Durbin Amendment’ to Regulate Debit Card Interchange Fees  Howard H. Chang, Margaret Morgan Weichert
2	423	What Lessons for Economic Development Can We Draw from the Champagne Fairs?  Jeremy Edwards, Sheilagh Ogilvie
3	213	Res Judicata in International Arbitral Awards  Luca G. Radicati di Brozolo
4	135	Two Culture Problems in Law and Economics  Alan Schwartz
5	101	Innovative Transactional Pedagogies  Joan MacLeod Heminway, Lyman Johnson, Michael Woronoff
6	98	Fixing Unfair Contracts  Omri Ben-Shahar
7	87	The Impact of Human Rights Law on Contract Law in Europe  Hugh Collins
8	82	Contracts and Markets: A Very Short Essay Without Footnotes  Nathan B. Oman
9	82	The Rise and Possible Fall of Investor-State Arbitration in Asia: A Skeptic’s View of Australia’s ‘Gillard Government Trade Policy Statement’  Luke R. Nottage,
10	80	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossoff

ECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
May 5, 2011 to July 4, 2011

Rank	Downloads	Paper Title
1	144	Property Law as the Infrastructure of Democracy  Joseph William Singer
2	98	Fixing Unfair Contracts  Omri Ben-Shahar
3	80	Commercializing Property Rights in Inventions: Lessons for Modern Patent Theory from Classic Patent Doctrine  Adam Mossoff
4	69	The Promise Principle and Contract Interpretation  Juliet P. Kostritsky
5	60	The Public Speaks: An Empirical Study of Legal Communication  Christopher R. Trudeau
6	56	Too Big to Exist  Barak Orbach, Grace E. Campbell
7	56	Pluralism and Perfectionism in Private Law  Hanoch Dagan
8	30	Relational Formalism and the Construction of Financial Instruments: A Bottom-Up Jurisprudence for Commercial Law  Jonathan Yovel
9	24	Unfair Terms in Contracts between Businesses  Martijn W. Hesselink
10	12	From the Mouths of Babes: Protecting Child Authors from Themselves  Julie D. Cromer Young

[JT]