ContractsProf Blog

Teaching Assistants: F. Andrew Hessick on Standing and Contracts

Years ago, when I was new to blogging, I thought I would occasionally write about law review articles that inform the way I think about teaching contracts.  That series, which was short-lived, was called Teaching Assistants.   The competition is fierce, but among the most popular posts in the series are the only posts in the series:

• Holmes on Legal Interpretation;
• Douglas Baird on Hamer v. Sidway;
• Casto and Ricks on Kirksey v. Kirksey; and 
• Geoffrey Watson on Mills v. Wyman

Today, we revive the tradition with a post about F. Andrew Hessick's Standing and Contracts, which is up on SSRN here and is forthcoming in the George Washington Law Review.  Hessick's essay addresses Spokeo v. Robbins, in which the Supreme Court held that, in order for a party to have Article III standing to bring a statutory claim, she must allege not only a violation of a legal right but also actual injury.  Hessick argues that the logic behind this restriction on standing in the statutory context should also apply to contracts claims.  However, if applied to contracts claims, Hessick maintains Spokeo curtails freedom of contracts by rendering some contracts unenforceable through the courts.

Spokeo seems to be part of a broader agenda in which the Court has thrown up barriers to federal jurisdiction.  In civil procedure, we have Twombly and Iqbal.  In the realm of arbitration, we have Stolt-Nielsen, Rent-A-Center, Concepcion, and Italian Colors, which we covered here, and which make it much easier for parties to enforce binding arbitration provisions.  In addition, there is the pull back from Bivens claims in many areas, including the recent and alarming Hernandez v. Mesa, as well as the more general reluctance to imply private rights of action in the statutory context.  Since Medellin v. Texas, the Court has made clear that treaties are not self-executing that thus cannot confer standing absent a clear statement in the treaty or in the ratification process.  Since Sosa v. Alvarez-Machain, the Court has been chipping away at the possibility of private rights of action under the Alien Tort Statute.  In short, Hessick is telling a part of a larger story, but it is a part of the story that had escaped me, and so I am grateful for his contribution!

Spokeo seems to be in tension with constitutional cases like Carey v. Piphus, in which the Court recognized standing to bring a procedural due process claim regardless of the plaintiff's culpability.  That is, Piphus was caught smoking an irregularly-shaped cigarette on the property of his high school.  He was summarily suspended despite his protestations of innocence.  The Court remanded for a proper disciplinary hearing but held that Piphus would only be entitled to nominal damages if it could be shown that his suspension was justified.  So, in the constitutional context, Piphus has standing to vindicate a legal right even if he deserved the punishment meted out to him.  Why should it be different when the plaintiff seeks to vindicate a contractual rather than a constitutional right?

You might think that the answer is that harm is an element of a claim for beach of contract.  You promised to sell me your a truckload of MAGA hats for $50,000, but then you changed your mind.  I was able to buy an identical quantity of identical hats for $40,000.  The question of whether I have standing to sue for -$10,000 should never arise.  However, if, like Nancy Kim, you are concerned about the role of Internet Giants as quasi-governmental actors, then their breaches of contract might seems more like constitutional wrongs, even if we cannot identify the monetary harm arising from the breach. 

Hessick addresses contractual issues that might arise in contemporary contexts.  For example, what is your harm arising from a breach of a promise to destroy confidential information after a fixed time period?  Should you be deprived of standing to bring such a claim because you lacked the savvy or the bargaining power to stipulate to liquidated damages?  I could go on, but this is already a long blog post.  Hopefully, this is enough to spark your curiosity and you can read the entire piece.

Reports of Our Death Have Been Greatly Exaggerated

I am delighted to announce that I and my co-bloggers have decided to revive the blog.  We look forward to sharing new content with you.  Watch this space for contributions form Nancy Kim, Sidney DeLong, and other players to be named later.  You can also follow us on Twitter: @KProfsBlog