Friday, May 30, 2014
SDNY Enforces Hyperlinked Arbitration Clause and Class Action Waiver
Last month, the District Court for the Southern District of New York granted a motion to dismiss brought by defendant Gilt Groupe, Inc. (Gilt) in Starke v. Gilt Groupe, Inc. Adam Starke (Starke) sought to bring a class action claim against Gilt for allegedly misrepresenting on its website that its textiles were made from bamboo fibers when they are in fact made from bamboo derivatives (rayon).
Gilt is an online shopping website that specializes in "flash sales" of short duration. In order to purchase items on the website, one must become a Gilt member. One does so by clicking on a "sign-up" box that states that the consumer agrees to be bound by Gilt's Terms of Membership. Once click on the mouse brings the consumer to Gilt's "Terms and Conditions," which are governed by Gilt's Terms of Use. A second click brings one to those terms which include, in paragraph 16, an arbitration agreement and a class action waiver.
Starke claimed both that he never effectively agreed to the arbitration agreement and class action waiver and that they are unconscionable. Relying on a 2012 case invovling similar challenges to Facebooks click-through terms and conditions, the District Court quickly concluded:
Regardless of whether he actually read the contract's terms, Starke was directed exactly where to click in order to review those terms, and his decision to click the "Shop Now" button represents his assent to them.
Yes, this is indeed how mass-market boilerplate rights-deletion scheme works. Clicking twice, and carefully reading both documents would have increased the time involved in Starke's transaction substantially. Neither Starke nor Gilt, which specializes in "flash sales," wants that. The terms are not intended to be read. Nor do we know that Starke could have understood the significance of the arbitration clause and class action waiver had he read them. In addition, what is Starke's alternative? The District Court blithely directs Starke to Amazon.com. What do you know? Amazon also has an arbitration clause and a class-action waiver! [In fairness, I've always found Amazon's customer service to be excellent -- they take returns and cover shipping on returns, so Starke probably would have been better off with them -- Amazon also accurately described the product at issue in Starke's case.] SDNY, you're part of the problem.
Starke did not seem to raise any serious grounds for finding the arbitration agreement unconscionable.
[This post has been edited to fix errors that a reader called to the author's attention.]
May 30, 2014 in Commentary, Recent Cases | Permalink | Comments (1) | TrackBack (0)
Wednesday, May 28, 2014
Is Economics Dangerous?
Although the case is a bit old at this point, it is still one I assign to my law and economics students when we cover contracts. The case, Specialty Tires of American, Inc. v. The CIT Group/Equipment Financing, Inc., 82 F. Supp. 2d 434 (2000), involves the sale of tire presses which the seller is unable to deliver. The defense is based on a theory of impracticability. So far, so good and the outcome may be the appropriate one. Nevertheless, it appears that the judge may had a course in economics at some point, hopefully not my own. In justifying the decision he reasons:
"[J]udicial discharge of CIT's [the seller] promise under these circumstances leaves Specialty [the buyer] in no worse a position than it would have occupied without the contract; either way, it would not have these presses, and it has only been able to locate and purchase three similar used presses on the open market since CIT's failure to deliver. On the other hand, CIT is relieved of the obligation to pay damages. Accordingly, excuse for impracticability would appear to be a Pareto-optimal move . . .increasing CIT's welfare while not harming Specialty. This too is a valid policy reason for imposing the risk of loss on Specialty. SeeCalamari & Perillo, supra § 13.1, at 496. Thus, economic analysis confirms as sound policy the result suggested by the caselaw. . . . "
Putting aside that there are no Pareto Optimal moves -- optimality is a state, "superior" and "inferior" are "moves" -- how is it that a contracting party in possession of the promise of another party is not worse off if that promise is excused? I am not sure how the logic of the decision could be contained. Every time one party wants out of a contract, there is the potential for that party to be better off and for the other party to be in the position he or she was in before making the contract. But that is hardly the question.
More to come on the dangers of Paretian standards in contract law.
May 28, 2014 | Permalink | TrackBack (0)
New in Print: Books, Part II
Two New Books from Hart Publishing
Contractual Indemnities
By Wayne Courtney
Promises of indemnity are found in many kinds of commercial contracts, not just contracts of insurance. This book examines the nature and effect of contractual indemnities outside the insurance context. It is the first work to provide a detailed account of the subject in English law.
The book presents a coherent theory of the promise of indemnity while also addressing important practical issues, such as the construction of contractual indemnities. The subject is approached from two perspectives. The foundations are laid by examining general principles applicable to indemnities in various forms. This covers the nature of indemnity promises; general principles of construction; the determination of scope; and the enforcement of indemnities. The approach then moves from the general to the specific, by examining separately particular forms of indemnity. Included among these are indemnities against liability to third parties, and indemnities against default or non-performance by third parties.
The book states English law but it draws upon a considerable amount of material from other common law jurisdictions, including Australia, Canada, New Zealand and Singapore. It will appeal to readers from those countries.
Wayne Courtney is a Senior Lecturer in the Faculty of Law at the University of Sydney.
Please click here to view the table of contents for this book
April 2014 362pp Hbk 9781849462907 RSP: £75 / US $150
Discount Price: £60 / US $120
Order Online in the US
If you would like to place an order you can do so through the Hart Publishing website (link below). To receive the discount please mention ref: ‘CONTRACTSPROFBLOG’ in the special instructions field. Please note that the discount will not be shown on your order but will be applied when your order is processed.
US website: http://www.hartpublishingusa.com/books/details.asp?ISBN=9781849462907
Order Online in the UK, EU and ROW
If you would like to place an order you can do so through the Hart Publishing website (link below). To receive the discount please type the reference ‘CONTRACTSPROFBLOG’ in the voucher code field and click ‘apply’.
UK, EU and ROW website: http://www.hartpub.co.uk/BookDetails.aspx?ISBN=9781849462907
Contract Law in Russia
By Maria Yefremova, Svetlana Yakovleva and Jane Henderson
The book explains Russian contract law in a form understandable to lawyers qualified in other countries, especially common law countries. The introduction gives a concise overview of the Russian legal system in general and contract law in particular as well as a brief insight into the history of contract law in Russia. Then the main concepts of Russian contract law are explained, using the conceptual framework of English contract law to make them accessible to someone not familiar with the codified Russian system.
The book not only considers the legislation regulating Russian contractual relations but also includes appropriate case law to show how the legislation is interpreted. The focus is on contract law in Russia as it actually operates, rather than merely the legislative texts, so that it will be directly relevant to legal practitioners and others who wish to acquire knowledge of the practical application of an important element of the Russian legal system, as well as those seeking an insight into the realities of codified law in action.
The target readership therefore includes legal practitioners who have to deal with Russian law, academics and students with an interest in Russian law, the law of contract and comparative civil law, as well as scholars of comparative legal systems and Russian area studies.
Maria Yefremova graduated cum laude from the Faculty of Law at the State University - Higher School of Economics in Moscow and is qualified to practise law in the Russian Federation. She also holds an LLM degree in Public International and European Union Law from the University of Amsterdam. Prior to establishing a legal practice with Svetlana Yakovleva, Maria worked for the Moscow office of White & Case LLC. Maria is currently Corporate Legal Counsel at Level 3 Communications.
Svetlana Yakovleva graduated cum laude from the Faculty of Law at the State University - Higher School of Economics in Moscow and is qualified to practise law in the Russian Federation. She holds an LLM degree in Law and Economics from the Erasmus University, Rotterdam and the University of Hamburg (EMLE). Svetlana worked for the Moscow office of Debevoise & Plimpton LLP, then established and ran a legal practice with Maria Yefremova. She now holds the position of Legal and Compliance Officer at Allianz Global Assistance Russia.
Jane Henderson is Senior Lecturer in Law at the Dickson Poon School of Law, King's College London, a member of King's Russia Institute and an Adjunct Professor at the University of Notre Dame (USA) in England.
Please click here to view the table of contents for this book
May 2014 326pp Pbk 9781849462990 RSP: £25 / US $50
Discount Price: £20 / US $40
Order Online in the US
If you would like to place an order you can do so through the Hart Publishing website (link below). To receive the discount please mention ref: ‘CONTRACTSPROFBLOG’ in the special instructions field. Please note that the discount will not be shown on your order but will be applied when your order is processed.
US website: http://www.hartpublishingusa.com/books/details.asp?ISBN=9781849462990
Order Online in the UK, EU and ROW
If you would like to place an order you can do so through the Hart Publishing website (link below). To receive the discount please type the reference ‘CONTRACTSPROFBLOG’ in the voucher code field and click ‘apply’.
UK, EU and ROW website: http://www.hartpub.co.uk/BookDetails.aspx?ISBN=9781849462990
If you have any questions please contact Hart Publishing
Hart Publishing Ltd, 16C Worcester Place, Oxford, OX1 2JW
Telephone Number: 01865 517 530 Fax Number: 01865 510 710
Website: www.hartpub.co.uk Hart Publishing Ltd. is registered in England No. 3307205
May 28, 2014 in Books, Recent Scholarship | Permalink | TrackBack (0)
New in Print: Books, Part I
This week on New in Print, we are highlighting recent book-length publications on contracts law, and we have a bit of a backlog, so it may take several posts.
We want to start with a book that will be the subject of an online symposium in the Fall:
Perhaps no kind of regulation is more common or less useful than mandated disclosure--requiring one party to a transaction to give the other information. It is the iTunes terms you assent to, the doctor's consent form you sign, the pile of papers you get with your mortgage. Reading the terms, the form, and the papers is supposed to equip you to choose your purchase, your treatment, and your loan well. More Than You Wanted to Know surveys the evidence and finds that mandated disclosure rarely works. But how could it? Who reads these disclosures? Who understands them? Who uses them to make better choices?
Omri Ben-Shahar and Carl Schneider put the regulatory problem in human terms. Most people find disclosures complex, obscure, and dull. Most people make choices by stripping information away, not layering it on. Most people find they can safely ignore most disclosures and that they lack the literacy to analyze them anyway. And so many disclosures are mandated that nobody could heed them all. Nor can all this be changed by simpler forms in plainer English, since complex things cannot be made simple by better writing. Furthermore, disclosure is a lawmakers' panacea, so they keep issuing new mandates and expanding old ones, often instead of taking on the hard work of writing regulations with bite.
Timely and provocative, More Than You Wanted to Know takes on the form of regulation we encounter daily and asks why we must encounter it at all.
Omri Ben-Shahar is the Leo and Eileen Herzel Professor of Law at the University of Chicago. His books includeBoilerplate: The Foundation of Market Contracts. Carl E. Schneider is the Chauncey Stillman Professor of Law and professor of medicine at the University of Michigan. His books include The Practice of Autonomy: Patients, Doctors, and Medical Decisions.
"Ben-Shahar and Schneider have written what for a long time will be the definitive work on regulations that require sellers of goods and services to provide information about their products that sellers will not voluntarily provide but that the regulators believe will help the consumers to make intelligent choices. Apparently these 'mandated disclosures' are ignored by the vast majority of consumers. The authors are unrelievedly negative about the efficacy of mandated disclosures. They are right to be. Their analysis is clear, comprehensive, and convincing."--Judge Richard A. Posner, United States Court of Appeals for the Seventh Circuit
"I read this book with rapt attention. It is magnificent. Ben-Shahar and Schneider have done a masterful job of setting out their case clearly, plainly, and persuasively."--Tom Baker, University of Pennsylvania
"Ben-Shahar and Schneider present a compelling argument. They contend that mandated disclosure is a policy failure that is not easily remedied."--Zev J. Eigen, Northwestern University
"Significant and original. The research is prodigious. I am not aware of another treatment of disclosure that crosses disciplinary lines to this extent, and the analysis is all the more worthwhile for it. Ben-Shahar and Schneider show how disclosures have become pervasive in our society yet are largely ignored and misunderstood."--Clayton Gillette, New York University
Preface ix
Part I - The Ubiquity of Mandated Disclosure 1
Chapter 1 Introduction 3
Chapter 2 Complex Decisions, Complex Disclosures 14
Chapter 3 The Failure of Mandated Disclosure 33
Part I - Why Disclosures Fail 55
Chapter 4 "Whatever": The Psychology of Mandated Disclosure 59
Chapter 5 Reading Disclosures 79
Chapter 6 The Quantity Question 94
Chapter 7 From Disclosure to Decision 107
Part III - Can Mandated Disclosure Be Saved? 119
Chapter 8 Make It Simple? 121
Chapter 9 The Politics of Disclosure 138
Chapter 10 Producing Disclosures 151
Chapter 11 At Worst, Harmless? 169
Chapter 12 Conclusion: Beyond Disclosurism 183
Notes 197
Index 225
May 28, 2014 in Books, Recent Scholarship | Permalink | TrackBack (0)
REFinBlog Joins the Law Professor Blogs Network
As announced here on the TaxProf Blog, the Law Professor Blogs Network has added another member to its roster. The REFinBlog began in November 2012 and it is edited by Brad Borden (Brooklyn) and David Reiss (Brooklyn). The blog tracks developments in the real estate finance industry.
We welcome REFinBlog to the LPBN family and as always wish the contributors to our new sibling happy blogging.
May 28, 2014 in About this Blog, Weblogs | Permalink | Comments (0) | TrackBack (0)
Tuesday, May 27, 2014
Author Meets Reader Salon on Wrap Contracts
Law and Society Association's Annual Meeting is only a few days away. There will be an Author Meets Reader Salon on my book, WRAP CONTRACTS on Friday, 5/30, 8:15am-10:00am in the Duluth Room. Shubha Ghosh (Wisconsin), Danielle Kie Hart (Southwestern) and Juliet Moringiello (Widener) will be joining me in what promises to be a lively discussion about those pesky clickboxes and pop-ups on your screens. If you are attending the meeting, please stop by and join us!
May 27, 2014 in Books, Conferences, Contract Profs, Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)
Weekly Top Tens from the Social Science Research Network
SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS
| Rank | Downloads | Paper Title |
|---|---|---|
| 1 | 783 | Aftermarketfailure: Windows XP's End of Support Andrew Tutt Yale University - Information Society Project |
| 2 | 212 | The Futility of Cost Benefit Analysis in Financial Disclosure Regulation Omri Ben-Shahar and Carl E. Schneider University of Chicago Law School and University of Michigan Law School |
| 3 | 151 | The FTC and Privacy and Security Duties for the Cloud Daniel J. Solove and Woodrow Hartzog George Washington University Law School and Samford University - Cumberland School of Law |
| 4 | 129 | Public-Private Contracting and the Reciprocity Norm Wendy Netter Epstein DePaul University - College of Law |
| 5 | 120 | Payment after Actavis Michael A. Carrier Rutgers University School of Law - Camden |
| 6 | 97 | From Status to Contract: The Unhappy Case of Johann Sebastian Bach Yale Law School; NYU School of Law - Straus Institute for the Advanced Study of Law and Justice; University of Haifa - Faculty of Law |
| 7 | 79 | Good Faith in Contract: Why Australian Law is Incoherent John Carter University of Sydney - Faculty of Law |
| 8 | 70 | The Incoherent Role of Bargaining Power in Contract Law Max N. Helveston and Michael S. Jacobs DePaul University - College of Law and DePaul University - College of Law |
| 9 | 68 | The Expectation Measure and Its Discontents Shawn J. Bayern and Melvin A. Eisenberg Florida State University - College of Law and University of California, Berkeley - School of Law |
| 10 | 68 | The Europeanisation of Contract Law and the Proposed Common European Sales Law Hector Lewis MacQueen University of Edinburgh - School of Law |
SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS
May 27, 2014 in Recent Scholarship | Permalink | TrackBack (0)
Third Circuit Rejects Insurer's Motion to Compel Arbitration of Medical Device Suppliers' Claims
Plaintiffs in Cardionet, Inc. v. CIGNA Health Corp supply medical devices that permit patients to monitor heart function while away form a hospital. CIGNA insured these businesses beginning in 2007, but in 2012, CIGNA announced that it would no longer do so because the services the plaintiffs provide are "considered experimental, investigational or unproven." CIGNA sent out a "Physician Update" informing them that it would no longer insure the plaintiffs' businesses. The plaintiffs allege that CIGNA was in possession of no information relating to their services in 2012 that CIGNA did not already possess in 2007. Tehy were miffed that services that were insureable in 2007 had become uninsureable in 2012. They sued on their own behalf and on behalf of their patients, seeking damages and injunctive relief and alleging causes of action sounding in breach of contract, tortious interference and trade libel.
CIGNA moved to compel arbitration pursuant to the original 2007 agreement which included a clause requiring arbitration of all disputes "regarding the performance or interpretation of the Agreement." The District Court found that the arbitration provision applied and granted CIGNA's motion to compel arbitration. The Third Circuit reversed.
As to the plaintiffs' claims brought on their own behalf, the court noted that they all arose out of the following common set of factual allegations:
CIGNA made false and misleading statements in the Physician Update about the nature and quality of OCT; CIGNA conveyed the false impression that OCT would never be covered under any health plans CIGNA administers; and the Physician Update injured them by decreasing the number of physicians willing to use OCT services.
The Third Circuit determined that the plaintiffs' claims related to the Physician Update and not to the plaintiffs' agreements with CIGNA. If the Physician Update indeed contained material misstatements as plaintiffs allege, it would harm them whether or not they were insured by CIGNA because it informs doctors that, in CIGNA's view, the services plaintiffs provide are unproven.
The Third Circuit also determined that the claims brought on behalf of patients were not subject to arbitration, even if they would have been arbitrable if brought by the plaintiffs on their own behalf. First, the patients were not signatories to the arbitration agreement and thus could not be brought within its ambit. Second, the fact that plaintiffs took on their patients' claims as assignees did not bring the assigned claims within the scope of the arbitration provision, because that provision does not require arbitration of assigned claims.
May 27, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)
Saturday, May 24, 2014
Mutuality and Wrap Contracts
As I've noted in a prior post, there is a lawsuit pending against Google for email scanning which was recently denied class status. Something that's puzzled me about wrap contracts generally, including Google's, is that many of them don't seem to be contracts at all - and not simply because of the (lack of) consent issue. They typically contain modification at will clauses and termination at will clauses. In contracts class, I teach students that generally (with the exception of employment contracts) these clauses lack mutuality unless constrained in other ways, such as a notice period. While there may be consideration (use of service in exchange for...data? eyeballs? not clear), there is no consideration if the promises are illusory and don't actually bind a party. Google's terms of use, for example, state:
"You can stop using our Services at any time, although we’ll be sorry to see you go. Google may also stop providing Services to you, or add or create new limits to our Services at any time."
and this unilateral modification clause:
"We may modify these terms or any additional terms that apply to a Service to, for example, reflect changes to the law or changes to our Services. You should look at the terms regularly. We’ll post notice of modifications to these terms on this page. We’ll post notice of modified additional terms in the applicable Service. Changes will not apply retroactively and will become effective no sooner than fourteen days after they are posted. However, changes addressing new functions for a Service or changes made for legal reasons will be effective immediately. If you do not agree to the modified terms for a Service, you should discontinue your use of that Service."
Google then isn't bound to actually provide anything according to its Terms of Use.
In the email scanning case, Google is making the argument that consent to email scanning was obtained in the context of "consenting" to the Terms of Use. But if these "contracts" are not really contracts because they lack mutuality, then can Google really claim that their users "consented" to the email scanning? Is there blanket assent to terms outside of the context of a contract?
May 24, 2014 in Commentary, E-commerce, Miscellaneous, Web/Tech | Permalink | Comments (2) | TrackBack (0)
Friday, May 23, 2014
A Small Fish in a Big Game
By Myanna Dellinger
In California, the Bureau of Reclamation is in charge of divvying up water contracts in the California River Delta between the general public and senior local water rights owners. Years ago, it signed off on long-term contracts that determined “the quantities of water and the allocation thereof” between the parties. About a decade ago, it renewed these contracts without undertaking a consultation with the Fish and Wildlife Service (“FWS”) to find out whether the contract renewals negatively affected the delta smelt, a small, but threatened, fish species. The thinking behind not doing so was that since the water contracts “substantially constrained” the Bureau’s discretion to negotiate new terms, no consultation was required.
Not correct, concluded an en banc Ninth Circuit Court of Appeals panel Ninth Circuit Court of Appeals panel recently. By way of brief background, Section 7 of the Endangered Species Act (“ESA”) requires federal agencies to ensure that none of their actions jeopardizes threatened or endangered species or their habitat. 16 U.S.C. § 1536(a). Among other things, federal agencies must consult with the FWS if they have “some discretion”"some discretion" to take action on behalf of a protected species. In this case, since the contractual provision did not strip the Bureau of all discretion to benefit the species, consultation should have taken place. For example, the Bureau could have renegotiated the pricing or timing terms and thus benefitted the species, said the court.
In 1993, the delta smelt had declined by 90% over the previous 20 years and was thus listed as a threatened species under the ESA. Of course, fish is not the only species vying for increasingly scarce California water. Man is another. The current and ongoing drought in California – one of the worst in history – raises questions about future allocations of water. Who should be prioritized? Private water right holders? People in Southern California continually thirsty and eager to water their often overly water-demanding garden plants? Industry? Farmers? Not to mention the wild animals and plants depending on sufficient levels of water? There are no easy answers here.
The California drought is estimated to cost Central Valley farmers $1.7 billion and 14,500 jobs. While that seems drastic, the drought is still not expected to have any significant effect on the state economy as California is no longer an agricultural state. In fact, agriculture only accounts for 5% of jobs in California. Still, that is no consolation to people losing their jobs in California agriculture or consumers having to pay higher prices for produce in an increasingly warming and drying California climate.
The 1974 movie Chinatown focused on the Los Angeles water supply system. 40 years later, the problem is just as bad, if not worse. The game as to who gets water contracts and for how much water is still on.
May 23, 2014 in Commentary, Current Affairs, Food and Drink, Government Contracting, Recent Cases, True Contracts | Permalink | Comments (0) | TrackBack (0)
Fargo: A TV Series About an Implied Contract
The event that fuels the first-season plot of the new F/X television series Fargo is a conversation in an emergency room waiting room. Lester Nygaard (Martin Freeman, left) has just been assaulted by Sam Hess, who used to bully him mercilessly in high school. Hess intimidates and humiliates Lester in front of Hess's comically neanderthal sons. Although Hess never actually hits Lester, the result is still a broken nose.
While waiting for someone to attend to his injury, Lester has a conversation with Lorne Malvo (Billy Bob Thornton, Right), who was injured when his car hit a deer and careened off the highway. Once the car came to rest in a snow-covered field, a man wearing only boxer shorts, who for some reason had been in the trunk of Malvo's car, jumped out and ran for the cover of the nearby woods. That's pretty much all we know about Malvo when he and Lester have their conversation.
Malvo manages to learn from Lester what had happened to him and that the man responsible for his injuries is named Hess. Malvo suggests that Lester ought to kill Hess, but Lester is not that kind of person (or at least not yet), so he dismisses the idea. Malvo offers to kill Hess for Lester. Lester just gives him that look of incredulity that has been a staple of Martin Freeman's wonderful career. Malvo insists that Lester say either yes or no, but a nurse interrupts the conversation to take Lester in for treatment, and Lester says nothing.
Spoiler alert: you may not want to read below the jump if you have not watched the show (and intend to do so) as a few plot details are revealed:
May 23, 2014 in Commentary, Television | Permalink | Comments (0) | TrackBack (0)
Thursday, May 22, 2014
Fourth Circuit: Dodd-Frank Does Not Invalidate Arbitration Agreement
Dr. Armand Santoro (Dr. Santoro) was employed as a Senior Manager by Accenture Federal Services (Accenture) from 1999-2011. He was dismissed at age 66 and replaced by a younger man. In 2005, he signed an employment agreement that was subsequently renewed annually. The agreement included a broad arbitration provision. He filed a claim alleging age discrimination in violation of the District of Columbia Human Rights Act. He later added claims alleging violations of the Age Discrimination in Employment Act (ADEA), the Family and Medical Leave Act (FMLA), and the Employee Retirement Income Security Act (ERISA).
Accenture moved to compel arbitration. Dr. Santoro opposed this motion, arguing that three whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 preempted the arbitration agreement. The District Court granted Accenture's motion to compel arbitration, finding that Dr. Santoro's claims were not whistleblower claims. In Santoro v. Accenture Federal Services, LLC, the Fourth Circuit affirmed.
On appeal, Dr. Santoro contended that the Dodd-Frank provisions at issue were intended to invalidate all pre-dispute arbitration agreements that did not include a carve-out for Dodd-Frank whistleblower claims. Dr. Santoro claimed that such arbitration agreements were invalid whether or not the particular claim at issue was a whistleblower claim. Echoing in the U.S. Supreme Court, the Fourth Circuit noted that Dodd-Frank's language is a model a statutory clarity and it clearly prohibits only the arbitration of whistleblower claims.
May 22, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)
Wednesday, May 21, 2014
Conference on the Future of Legal Education
Join us & help shape
the future of legal education
June 13-15, 2014
in Greensboro, N.C.
FEATURED SPEAKERS
• William C. Hubbard, President Elect, American Bar Association; Chair, Board of Directors, World Justice Project; Partner, Nelson Mullins Riley & Scarborough
• Bill Henderson, Professor of Law, Indiana University Maurer School of Law; named the second most influential person in legal education by National Jurist (2012 & 2013)
• Experiential learning leaders from other disciplines including: architecture, business, engineering and medicine
• Change and innovation experts from: Casa Myrna Vazquez, Inc., ExperiencePoint and Legal OnRamp
• Law scholars and teachers from: CUNY School of Law; Elon University School of Law; Hamline School of Law; Indiana University Mauer School of Law; New York Law School; Northeastern University School of Law; Notre Dame Law School; NOVA Southeastern University Shepard Broad Law Center; University of Denver Sturm College of Law; University of Minnesota School of Law; Vermont Law School; Washington College of Law
ABOUT THE SYMPOSIUM: The symposium will focus innovations to improve legal education and enhance the relevance of lawyers in the rapidly changing 21st century. Presentations and discussions will emphasize effective and integrated experiential education to accommodate financial and structural challenges in law and legal education, addressing the following questions:
• What do we mean by experiential learning?
• What are the → Innovations → Barriers → Successes in producing integrated and effective curricula?
• What ideas have the Alliance Working Groups developed since the Inaugural Symposium?
• What perspective can other disciplines provide regarding our efforts?
The symposium is being hosted by the Alliance for Experiential Learning in Law and Elon University School of Law. Visit law.elon.edu/aell to register and to learn more about the symposium. The registration fee is $100. Contact Jane Law at Elon University School of Law with any questions related to registration: [email protected] or (336) 279-9325.
ORGANIZERS
The Alliance for Experiential Learning in Law Steering Committee
• Cindy Adcock, Charlotte School of Law
• Margaret Barry, Vermont Law School
• Luke Bierman, Dean-Designate, Elon University School of Law
• Susan Brooks, Drexel University School of Law
• Christine Cimini, Vermont Law School
• Roberto Corrada, Sturm College of Law, University of Denver
• Bob Dinerstein, Washington College of Law, American University
• Steve Ellmann, New York Law School
• Deborah Epstein, Georgetown Law
• Bob Jones, Notre Dame Law School
• Kate Kruse, Hamline University School of Law
• Susan Reich Paulsen, University of Minnesota Law School
• Ruthane Robbins, Rutgers University School of Law
• Pat Coughlan Voorhies, Northeastern University School of Law
The Second National Symposium on Experiential Learning in Law Planning Committee
• Steve Friedland, Co-Chair, Elon University School of Law
• Margaret Barry, Co-Chair, Vermont Law School
• Bill Henderson, Co-Chair, Indiana University Maurer School of Law
• Christy Benson, Elon School of Business
• Olympia Duhart, Nova University School of Law
• Jim Exum, Elon University School of Law; Former Chief Justice of the North Carolina Supreme Court
• Bill McNichol, Reed Smith; Rutgers University School of Law
• Madeline Obler-Grill, Elon Law Journal
• Gene Pridgen, K&L Gates; Immediate Past President, North Carolina Bar Association
• Vivian Wexler, Bingham McCutchen
• Pat Coughlan Voorhies, Northeastern University School of Law
May 21, 2014 in Conferences, Teaching | Permalink | TrackBack (0)
Weak Language Skills No Bar to Enforcement of Arbtiration Agreement
Nicolas Molina (Molina), a warehouse workder for Sandinavian Designs, Inc. (Scandinavian) sought to sue after his employment was terminated. Scandinavian sought to compel arbiration. Molina opposed the motion, contending that he speaks very little English and thus had no idea that he had signed an arbitration agreement. Last month, in Molina v. Scandinavian Designs, Inc., the Northern District of California rejected the argument.
In part, Mr. Molina's problem is evidentiary. Scandinavian claims that an administrative assistant met with Mr. Molina on the day he was hired and presented him with two forms to sign: a one-page employment agreement and a two-page arbitration agreement. Scandinavian claims that the administrative assistant spoke with Mr. Molina in both English and Spanish, gave him time to read the forms and told him to ask questions is he had any.
Molina tells a very different version of events, but it doesn't matter. As the court explains,
[U]nder established California law, even if Molina could read very little English, Molina's signature on the Arbitration Agreement manifests his assent to its terms, binding him to the contract.
The court then proceeds to explain that contracts are based on mutual consent of the party. But we are not talking about actual subjective assent, the proof of which may be beyond the court's reach. Instead, mutual consent is proved when there is a manifestation of consent such as, in this case, a signature on a document clearly titled "Arbitration Agreement." Molina has a "duty" to learn the contents of the document before he signed.
For good measure, the court also found that there was no problem under California law relating to the authority of the administrative assistant to sign the arbitration agreement on behal of Scandinavian. Nor could Molina persuade the court that the arbitration agreement was unconscionable.
The court granted Scandinavian's motion to compel arbitration and dismissed the case without prejudice.
May 21, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)
Tuesday, May 20, 2014
Weekly Top Tens from the Social Science Research Network
SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS
| Rank | Downloads | Paper Title |
|---|---|---|
| 1 | 781 | Aftermarketfailure: Windows XP's End of Support Andrew Tutt Yale University - Information Society Project |
| 2 | 206 | The Futility of Cost Benefit Analysis in Financial Disclosure Regulation Omri Ben-Shahar and Carl E. Schneider University of Chicago Law School and University of Michigan Law School |
| 3 | 167 | A Draft Australian Law of Contract Ted Wright, M P Ellinghaus and D StL Kelly University of Newcastle (Australia) - Faculty of Business and Law, University of Newcastle (Australia) - Faculty of Business and Law and University of Newcastle (Australia) - Faculty of Business and Law |
| 4 | 145 | The FTC and Privacy and Security Duties for the Cloud Daniel J. Solove and Woodrow Hartzog George Washington University Law School and Samford University - Cumberland School of Law |
| 5 | 128 | Public-Private Contracting and the Reciprocity Norm Wendy Netter Epstein DePaul University - College of Law |
| 6 | 127 | Introduction to Philosophical Foundations of Contract Law Gregory Klass Georgetown University Law Center |
| 7 | 124 | Document Appreciation: Some Characteristics of Legal Documents (and Talking with Students About Them) Jay A. Mitchell Stanford Law School |
| 8 | 117 | Payment after Actavis Michael A. Carrier Rutgers University School of Law - Camden |
| 9 | 99 | Property as the Law of Democracy Joseph William Singer Harvard Law School |
| 10 | 94 | Democratic Contract Law Martijn W. Hesselink University of Amsterdam - Centre for the Study of European Contract Law (CSECL |
SSRN Top Downloads For LSN: Contracts (Topic)
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May 20, 2014 in Recent Scholarship | Permalink | TrackBack (0)
Sunday, May 18, 2014
More on the Structure of Cable Contracts
By Myanna Dellinger
Recently, Jeremy Telman blogged here about the insanity of having to pay for hundreds of TV stations when one really only wants to, or has time to, watch a few.
Luckily, change may finally be on its way. The company Aereo is offering about 30 channels of network programming on, so far, computers or mobile devices using cloud technology. The price? About $10 a month, surely a dream for “cable cutters” in the areas which Aereo currently serves.
How does this work? Each customer gets their own tiny Aereo antenna instead of having to either have a large, unsightly antenna on their roofs or buying expensive cable services just to get broadcast stations. In other words, Aereo enables its subscribers to watch broadcast TV on modern, mobile devices at low cost and with relative technological ease. In other words, Aereo records show for its subscribers so that they don’t have to.
That sounds great, right? Not if you are the big broadcast companies in fear of losing millions or billions of dollars (from the revenue they get via cable companies that carry their shows). They claim that this is a loophole in the law that allows private users to record shows for their own private use, but not for companies to do so for commercial gain and copyright infringement.
Of course, the great American tradition of filing suit was followed. Most judges have sided with Aero so far, the networks have filed petition for review with the United States Supreme Court, which granted the petition in January.
Stay tuned for the outcome in this case…
May 18, 2014 in About this Blog, Commentary, Current Affairs, E-commerce, Famous Cases, In the News, Recent Cases, Television, True Contracts, Web/Tech | Permalink | Comments (0) | TrackBack (0)
Thursday, May 15, 2014
The Structure of Cable Contracts
Today's New York Times features an article reporting on a 2012 study that indicates that consumers are better off being forced to buy bundled packages than they would be if they could choose to purchase only the cable channels they actually view. The argument seems to boil down to the fact that it costs the cable companies about the same to bring you four channels as it does for them to bring you 179 channels, so they are going to find a way to charge you the same regardless, and now you will miss out on watching channels that you only watch occasionally. Moreoever, the channels that are most in demand on a per-channel basis will now demand higher fees to make up for lost revenues from their sister stations that fewer people watch and which consequently cannot generate as much advertising revenue as they could under the bundled system.
Given that this story is based on one two-year old study and comes from Times correspondent Josh Barro, who also gives the thumbs up to Frontier Airlines for charging people extra to use overhead storage bins, I'm going to file this story provisionally under, "Wait, that can't be right," and see if any counterarguments turn up. The comments on the story indicate that some of the assumptions underlying the study and Barro's column could be questioned.
May 15, 2014 in In the News, Television | Permalink | Comments (0) | TrackBack (0)
Wednesday, May 14, 2014
The Costs of Cancellation
Yesterday's New York Times features a story about the costs associated with hotel boycotts when an organization has booked a hotel to host a conference or meeting long in advance. This issue ought to be a familiar to anyone who attended the 2011 annual AALS meeting in San Francisco, for which the conference hotel was a Hilton whose workers were on strike.
The article details the costs involved in cancellations. Often the organization is contractually obligated to pay hundreds of thousands of dollars to the hotel even if the conference ulimately takes place at a different venue. According to the Times, if the cancellation is on short notice, the organization is typically obligated to pay 90% of expected room costs and 90% of expected banqueting services. And then there are, of course, the costs of finding an alternative venue in proxity to the original choice on relatively short notice. Major conferences can be booked years in advance.
Sometimes it is possible to mitigate the harm -- by booking at a related hotel or by promising to return to the original hotel if the policy that causes offenese is revoked. The former is unlikely in cases where the problem is with the entity that owns the hotel. But it is more likely in cases like those that arose in connection with anti-immigrant legislation passed in Arizona. Organizations could punish the state by moving to related hotels in states that did not have similar legislation.
May 14, 2014 in Conferences, In the News, Travel, True Contracts | Permalink | Comments (0) | TrackBack (0)
Tuesday, May 13, 2014
Weekly Top Tens from the Social Science Research Network
SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS f
| Rank | Downloads | Paper Title |
|---|---|---|
| 1 | 774 | Aftermarketfailure: Windows XP's End of Support Andrew Tutt Yale University - Information Society Project |
| 2 | 199 | The Futility of Cost Benefit Analysis in Financial Disclosure Regulation Omri Ben-Shahar and Carl E. Schneider University of Chicago Law School and University of Michigan Law School |
| 3 | 165 | Killing Conscience: The Unintended Behavioral Consequences of 'Pay For Performance' Lynn A. Stout Cornell Law School - Jack G. Clarke Business Law Institute |
| 4 | 163 | A Draft Australian Law of Contract Ted Wright, M P Ellinghaus and D StL Kelly University of Newcastle (Australia) - Faculty of Business and Law, University of Newcastle (Australia) - Faculty of Business and Law and University of Newcastle (Australia) - Faculty of Business and Law |
| 5 | 135 | The FTC and Privacy and Security Duties for the Cloud Daniel J. Solove and Woodrow Hartzog George Washington University Law School and Samford University - Cumberland School of Law |
| 6 | 124 | Public-Private Contracting and the Reciprocity Norm Wendy Netter Epstein DePaul University - College of Law |
| 7 | 119 | Document Appreciation: Some Characteristics of Legal Documents (and Talking with Students About Them) Jay A. Mitchell Stanford Law School |
| 8 | 119 | Introduction to Philosophical Foundations of Contract Law Gregory Klass Georgetown University Law Center |
| 9 | 114 | Payment after Actavis Michael A. Carrier Rutgers University School of Law - Camden |
| 10 | 111 | Boilerplate Shock Gregory H. Shill University of Denver Sturm College of Law |
SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS
May 13, 2014 in Recent Scholarship | Permalink | TrackBack (0)
Monday, May 12, 2014
No Frequent Complaining Allowed about Frequent Flyer Programs
By Myanna Dellinger
The United States Supreme Court recently held that airlines are allowed to revoke the membership of those of their frequent flyers who complain “too much” about the airline’s services (see Northwest v. Ginsberg). Contracts ProfBlog first wrote about the case on April 3.
In the case, Northwest Airlines claimed that it removed one of its Platinum Elite customers from the program because the customer had complained 24 times over a span of approximately half a year about such alleged problems as luggage arriving “late” at the carousel. The company also stated that the customer had asked for and received compensation “over and above” the company guidelines such as almost $2,000 in travel vouchers, $500 in cash reimbursements, and additional miles. According to the company, this was an “abuse” of the frequent flyer agreement, thus giving the company the sole discretion to exclude the customer. The customer said that the real reason for his removal from the program was that the airline wanted to cut costs ahead of the then-upcoming merger with Delta Airlines. He filed suit claiming breach of the implied covenant of good faith and fair dealing in his contract with Northwest Airlines.
The Court found that state law claims for breaches of the implied duty of good faith and fair dealing are pre-empted by the Airline Deregulation Act of 1978 if the claims seek to enlarge the contractual relations between airlines and their frequent flyers rather than simply seeking to hold parties to their actual agreement. The covenant is thus pre-empted whenever it seeks to implement “community standards of decency, fairness, or reasonableness” which, apparently, go above and beyond what airlines promise to their customers.
Really? Does this mean that airlines can repeatedly behave in indecent ways towards frequent flyer programs members (and others), but if the members repeatedly complain, they – the customers – “abuse” the contractual relationship?!.. The opinion may at first blush read as such and have that somewhat chilling effect. However, the Court also pointed out that passengers may still seek relief from the Department of Transportation, which has the authority to investigate contracts between airlines and passengers.
The unanimous opinion authored by J. Alito also stated that passengers can simply “avoid an airline with a poor reputation and possibly enroll in a more favorable rival program.” These days, that may be hard to do. First, most airlines appear to have more or less similar frequent flyer programs. Second, what airline these days has a truly “good” reputation? Granted, some are better than others, but when picking one’s air carrier, it sometimes seems like choosing between pest and cholera.
One example is the airlines’ highly restrictive change-of-ticket rules in relation to economy airfare, which seem almost unconscionable. I have flown Delta Airlines almost exclusively for almost two decades on numerous trips to Europe for family and business purposes. A few times, I have had the good fortune to fly first or business class, but most times, I fly economy. Until recently, it was possible to change one’s economy fare in return for a relatively hefty “change fee” of around $200 and “the increase, if any, in the fare.” - Guess what, the fares always had increased the times I asked for a change. Recently, I sought to change a ticket that I had bought for my elderly mother, also using KLM (which codeshares with Delta) as my mother is also frequent flyer with Delta. I was told that it was impossible to change the ticket as it was “deeply discounted.” I had shopped extensively online for the ticket, which was within very close range (actually slightly more expensive than that of Delta’s competitors. I asked the company what my mother could do in this situation, but was told that all she could do was to “throw out the ticket (worth around $900) and buy another one.” Remember that these days, airfare often has to be bought months ahead of time to get the best prices. In the meantime, life happens. Unexpected, yet important events come about. Changes to airline tickets should be realistically feasible, but are currently not on these conditions.
What airlines and regulators seem to forget in times of “freedom of contracting and market forces” is that some of us do not have large business budgets or fly only to go on a (rare, in this country) vacation. My mother is elderly and lives in Europe. I need to perform elder care on another continent and need flights for that purpose just as much as others need bus or train services. Such is life in a globalized world for many of us. In some nations, airlines feature at least quasi-governmental aspects and are much more heavily regulated than in the United States. Here, airfare seems to be increasing rapidly while the middle (and lower) incomes are more or less stagnant currently. I understand and appreciate the benefits of a free marketplace, but a few more regulations seem warranted in today’s economy. It should be possible to, for example, do something as simple as to change a date on a ticket (if, of course, seats are still available at the same price and by paying a realistic change fee) without having to buy extravagantly expensive first class or other types of “changeable” tickets.
Other “abuses” also seem to be conducted by airlines towards their passengers and not vice versa. For example, if one faces a death in the family, forget about the “grievance” airfares that you may think exist. Two years ago, my father was passing and I was called to his deathbed. Not having had the exact date at hand months earlier, I had to buy a ticket last minute (that’s usually how it goes in situations like that, I think…). The airline – a large American carrier - charged a very large amount for the ticket, but attempted to justify this with the fact that that ticket was “changeable” when, ironically, I did not need it to be as I needed to leave within a few hours.
In the United States, “market forces” are said to dictate the pricing of airfare. In Europe, some discount airlines fly for much lower prices than in the United States (think round-trip from northern to southern Europe for around $20 plus tax, albeit to smaller airports at off hours). Strange, since both markets are capitalist and offer freedom of contracting. Of course, these discount airlines also feature various fees driving up their prices somewhat, although not nearly as much as in the United States. A few years back, one discount European airline even announced that it planned to charge a few dollars for its passengers to use … the in-flight restrooms. Under heavy criticism, that plan was soon given up. In the United States, some airlines seem to be asking for legal trouble because of their lopsided business strategies. Sure, companies of course have to remain profitable, but when many of them claim in their marketing materials to be “family-oriented” and “focused on the needs of their passengers,” it would be nice if they would more thoroughly consider what that means.
May 12, 2014 in Commentary, Current Affairs, Famous Cases, In the News, Recent Cases, Travel, True Contracts | Permalink | Comments (0) | TrackBack (0)
