Tuesday, July 27, 2021
Tuesday Top Ten - Contracts & Commercial Law Downloads for July 27, 2021
Though our fearless leader Jeremy Telman is on a well-earned blogging break, we know that the wheels of scholarship grind on--with some pretty good stuff, even. Here are this week's hottest SSRN downloads in our favorite fields.
Top Downloads For:
Contracts & Commercial Law eJournalRecent Top Papers (60 days)
As of: 28 May 2021 - 27 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 553 | |
| 2. | 401 | |
| 3. | 228 | |
| 4. | 167 | |
| 5. | 83 | |
| 6. | 69 | |
| 7. | 58 | |
| 8. | 54 | |
| 9. | 40 | |
| 10. | 39 |
Top Downloads For:
Law & Society: Private Law - Contracts eJournalRecent Top Papers (60 days)
As of: 28 May 2021 - 27 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 553 | |
| 2. | 401 | |
| 3. | 167 | |
| 4. | 104 | |
| 5. | 83 | |
| 6. | 58 | |
| 7. | 39 | |
| 8. | 22 | |
| 9. | 22 | |
| 10. | 20 |
July 27, 2021 in Recent Scholarship | Permalink | Comments (0)
Friday, July 23, 2021
A Bit of a Break
Since we re-launched the blog last year, I have posted over 320 times on the blog (including the times I have just put up other people's guest posts), and I have also posted over 1200 tweets somehow. Now, as the new semester approaches, and I consider how little time I have devoted to other forms of scholarship, I need a few weeks away from the blog.
So things will be a bit quieter around here for the next month.
Feel free to talk among yourselves.
July 23, 2021 in About this Blog | Permalink | Comments (1)
Feminist Judgments: Reece v. Elliott
As noted in yesterday's post, my colleague Carla Spivack (left) is one of the editors of Feminist Judgments: Rewritten Trusts and Estates Opinions. The volume includes some opinions that touch on contracts issues, that may be of interest, even to people like me, who run from trusts and estates issues whenever they crop up in the first year contracts course.
The format of the book follows that of the others in the Feminist Judgments series. One scholar provides an overview of the case; another, playing the role of judge, delivers an opinion. It's a fun way to present critical perspectives on canonical cases. In today's case, Reece v. Elliott (Tenn. Ct. App. 2006), Dean Browne C. Lewis (below right) provides the commentary on which sets up her alternative opinion, in which she is joined by Elizabeth V. Sparks.
Bonnie and Eugene Reece signed an antenuptial agreement in which they agreed that their pre-marital property would be treated as separate. Both had children from prior marriages for whom they wanted to provide. After Eugene died, Bonnie sued to declare the agreement invalid because, she claimed, although Eugene had disclosed that he owned Routh Packing stock, he had not disclosed the value of the stock. Under Tennessee law, antenuptial agreements are enforced so long as they are entered into "voluntarily and knowledgeably." The trial court found that this one was, because Bonnie knew that Eugene was a wealthy man, and he had truthfully disclosed his assets. The appellate court affirmed.
Justices Sparks and Lewis would reverse and remand for a determination of whether Eugene had disclosed to Bonnie, the "nature, value, and extent" of his assets. Their opinion urges the legislature to reconsider its blanket support for antenuptial agreements, given that such agreements often disadvantage women. They rely on scholarship from Debra Threedy, suggesting that traditional contracts doctrine disadvantages women in the antenuptial context. Modern contract law developed in a period when women were excluded from the market place. While that is no longer true, it is still the case that "neutral" contracts notions about arms-length transactions do not hold out much promise of equitable application in the antenuptial context. They bolster this argument with Gail Brod's work, which argues that women are often less well-resourced than their male partners, feel pressure to enter agreements so as not to look like they are marrying just for economic security, and then are not well-positioned to fend for themselves economically once they are widowed.
It is possible that none of these concerns apply to Bonnie, but it makes sense to remand the case to the trial court for a re-evaluation in light of them.
This post is part of a continuing series on introducing critical perspectives, including critical race theory, into the teaching of first-year contracts. Other posts in the series include:
- Feminist Judgments: Via v. Putman
- Guest Blogger Marissa Jackson Sow on Whiteness as Contract and the Police, Part II
- Guest Blogger Marissa Jackson Sow on Whiteness as Contract and the Police, Part I
- Teaching Assistants: Marissa Jackson Sow, "Whiteness as Contract"
- Teaching Assistants: Threedy, Dancing Around Gender
- Guest Post by Alan White, Systemic Racism and Teaching Contracts
- Guest Post by Deborah Post on Williams v. Walker-Thomas
- Guest Post by Chaumtoli Huq, Part III: Counter-Hegemonic Narratives
- Guest Post by Chaumtoli Huq, Part II: Freedom to Contract and the Reasonable ManGuest Post by Chaumtoli Huq, Part I: The Decolonial Framework
- Guest Post by Deborah Zalesne, The (In)Visibility of Race in Contracts: Thoughts for Teachers
- What Should a Court Do in Response to Racist Contractual Threats? Wolf v. Marlton Corp.
- Guest Post by Charles Calleros: Raising Issues of Race, Ethnicity, and Culture in 1L Contracts: Language Barriers
- Guest Post by Charles Calleros, Talking about Race in the Contracts Course: Interface with Civil Rights Laws, Part II – Consideration
- Guest Post by Charles Calleros, Talking about Race in the Contracts Course: Interface with Civil Rights Laws, Part I – Mutual Assent
- Teaching Assistants, Emily Houh's Redemptive Theory of Contract Law
July 23, 2021 in Recent Scholarship | Permalink | Comments (0)
Thursday, July 22, 2021
Feminist Judgments: Via v. Putman
My colleague Carla Spivack (left) is one of the editors of Feminist Judgments: Rewritten Trusts and Estates Opinions. The volume includes some opinions that touch on contracts issues that may be of interest, even to people like me, who run from trusts and estates issues whenever they crop up in the first year contracts course.
The format of the book follows that of the others in the Feminist Judgments series. One scholar provides an overview of the case; another, playing the role of judge, delivers an opinion. It's a fun way to present critical perspectives on canonical cases. In today's case, Eloisa C. Rodriguez-Dod (below right) provides the commentary on Via v. Putnam (FL 1995), which sets up the alternative opinion by Elena Maria Marty-Nelson (below left).
Joann Putnam had five children with her husband, Edgar Putnam. She also had a son Robert Blackburn. She died in 1985, having executed mutual wills with Edgar that provided for all six children. Edgar remarried in 1988, without getting his new wife, Rachel, to agree to a waiver regarding the assets covered by his contract with Joann. When he passed in 1992, his will was admitted to probate, and it provided that his estate was to be divided among the six children. However, Rachel challenged Edgar's will, seeking a family allowance exempt property, homestead, and both the pretermitted and spousal elective share.
Dean Rodriguez-Dod takes us through the procedural history. The probate court, while recognizing Rachel's claims, seems to have subordinated them the the children's rights as third-party beneficiaries to the mutual wills, which the court treated as a binding contractual agreement between Joann and Edgar. Florida's Second District Court of Appeal reversed, largely relying on a public policy argument: the Florida legislature, according to the intermediate appellate court, intended to favor the claims of surviving spouses. This reading of the statutory scheme conflicted with a prior decision of Florida's Third District Court of Appeal. Florida's Supreme Court sided with the Second District Court of Appeal, noting that the "institution of marriage has been a cornerstone of western civilization for thousands of years and is the most important type of contract ever formed."
In her dissenting opinion, Dean Marty-Nelson argues that the majority's opinion "undermines marriage and undervalues women." The legislative scheme generally provides that a surviving spouse's share is net of all creditors claims. The majority creates an exception where the creditors are surviving children, as third-party beneficiaries under a will agreement. There is no justification for a court-made exception to a legislative scheme, nor is there any good reason to treat surviving children differently, let alone worse, than other creditors.
The majority was concerned that, absent the exception that it created, Rachel, the surviving spouse, would take nothing from Edgar's estate. Dean Marty-Nelson does not see that as the only possible outcome. Once Joann died, Edgar's estate was impressed with an equitable trust in favor of the children to the extent that his assets could be traced to his first marriage. However, assets that arose during Edgar's second marriage would not be. Dean Marty-Nelson's dissenting opinion does not undermine either marriage or undervalue either of Edgar's wives.
Tomorrow's post will cover the chapter on Reece v. Elliott
This post is part of a continuing series on introducing critical perspectives, including critical race theory, into the teaching of first-year contracts. Other posts in the series include:
- Guest Blogger Marissa Jackson Sow on Whiteness as Contract and the Police, Part II
- Guest Blogger Marissa Jackson Sow on Whiteness as Contract and the Police, Part I
- Teaching Assistants: Marissa Jackson Sow, "Whiteness as Contract"
- Teaching Assistants: Threedy, Dancing Around Gender
- Guest Post by Alan White, Systemic Racism and Teaching Contracts
- Guest Post by Deborah Post on Williams v. Walker-Thomas
- Guest Post by Chaumtoli Huq, Part III: Counter-Hegemonic Narratives
- Guest Post by Chaumtoli Huq, Part II: Freedom to Contract and the Reasonable ManGuest Post by Chaumtoli Huq, Part I: The Decolonial Framework
- Guest Post by Deborah Zalesne, The (In)Visibility of Race in Contracts: Thoughts for Teachers
- What Should a Court Do in Response to Racist Contractual Threats? Wolf v. Marlton Corp.
- Guest Post by Charles Calleros: Raising Issues of Race, Ethnicity, and Culture in 1L Contracts: Language Barriers
- Guest Post by Charles Calleros, Talking about Race in the Contracts Course: Interface with Civil Rights Laws, Part II – Consideration
- Guest Post by Charles Calleros, Talking about Race in the Contracts Course: Interface with Civil Rights Laws, Part I – Mutual Assent
- Teaching Assistants, Emily Houh's Redemptive Theory of Contract Law
July 22, 2021 in Recent Scholarship | Permalink | Comments (0)
Wednesday, July 21, 2021
Contract in Crisis: A Two-Day Virtual Symposium
Today is the second day of the Contract in Crisis Symposium hosted by Jonathan Lipson and Rachel Rebouché of the Temple University Beasley School of Law. The conference features many of the themes and some of the people who participated in our virtual symposium and contracts and COVID last Fall.
The papers presented in this week's conference will appear as an issue of Law & Contemporary Problems.
Congratulations to the organizers and participants in this timely and stimulating event!
July 21, 2021 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (0)
Guest Post #2 from Jonathan Harris, Income Share Agreements
Income Share Agreements Attracting Attention—and Litigation—as New Form of Potentially Abusive Education Debt
Last month, a group of 47 students sued Make School, Inc., a for-profit computer coding school, and Vemo Education, the largest provider of a new kind of contractual training scheme called the income share agreement (ISA). The students claim that the companies encouraged students to enter into contracts for coding training that could end up costing over $250,000. The arrangement sounded enticing: no up-front cost for training for quality jobs with a repayment obligation limited to a percentage of the trainee’s future monthly salary (25% in the case of the Vemo/Make School lawsuit). But, according to the suit, these repayment amounts could result in owing 2.5 to 3 times more than the original funding amount of the loan, $30,000 in the case of one of the plaintiffs.
ISAs are expanding rapidly and I explore them in my recently published article, Unconscionability in Contracting for Worker Training, 72 Ala. L. Rev. 723 (2021) (reviewed in JOTWELL by Miriam Cherry). The article also exposes the dangers of training repayment agreements (TRAs), which I blogged about earlier this week.
The concept of the ISA is not new—Milton Friedman and Simon Kuznets first proposed them 75 years ago as a way to sell “stock” in one’s human capital, which would allow “investors [to] ‘diversify’ their holdings and balance capital appreciations against capital losses.” Gary Becker, Friedman’s protégé, later lamented that the 13th Amendment limited speculation in another’s human capital “because such capital cannot be offered as collateral, and courts have frowned on contracts that even indirectly suggest involuntary servitude.” But Silicon Valley has turned the concept into a reality for unaccredited computer coding “bootcamps,” with one ISA lender’s executive boasting that his company could be worth $100 billion.
ISAs are often targeted at low income communities of color, with one lender claiming to turn “blue-collar worker[s] [in]to software engineer[s].” Some ISA lenders, however, have received scrutiny for adding to the list of predatory lending products that have devastated those communities for decades. The bulk of trainees bound by ISAs are already saddled with traditional student debt, turning many ISAs into time bombs of personal debt.
Moreover, some ISA lenders have reportedly sold outstanding ISAs to hedge funds, thus eliminating the lender’s financial incentive to ensure that the student obtains a quality job in the industry for which the student trained (most ISAs do not require repayment for periods in which the trainee fails to earn a set minimum income).
On top of all this, some ISAs, especially those connected to degree programs at higher education institutions, have been found to offer preferential terms to students at predominantly white schools over similarly situated students at Historically Black Colleges and Universities. Indeed, students of color are already more dependent on education loans than white students, so abusive terms in an ISA could be particularly harmful to them.
In my article, I propose a set of factors that courts should consider when assessing these nascent challenges to ISAs: whether the repayment amount is a relatively low percentage of the trainee’s future salary; whether the income threshold to trigger repayment is relatively high (i.e. no obligation to repay until the trainee earns $__/year); whether the lender places relatively low caps on the absolute repayment amount (not to exceed the cost of the training to the lender) and on the time period in which a trainee remains bound by the ISA; whether the lender adjusts the terms of repayment to favor higher income projected training programs; whether the lender sells the ISA debt prior to repayment; whether the debt is dischargeable in bankruptcy; and whether provisions exist for disability or other emergent situations the trainee may face.
Consumer protection laws also could be useful in reining in predatory ISAs: the complaint against Vemo and Make School includes a number of California state consumer law causes of action, like unfair competition, false advertising, and unfair debt collection practices.
With employers decrying a shortage of trained job applicants and many workers unable to obtain free or affordable training for quality jobs, reinventing job training as a public good through training partnerships would provide a more coordinated and long term response to the current workforce training dilemma. At a minimum, training partnerships would often prove better for employers and workers than one-off contractual arrangements like ISAs and TRAs. I’ll be writing more about this in the future.
July 21, 2021 in Contract Profs, Recent Scholarship, True Contracts, Web/Tech | Permalink | Comments (0)
Tuesday, July 20, 2021
Tuesday Top Ten - Contracts & Commercial Law Downloads for July 20, 2021
The Tuesday Top Ten returns to its proper place in the time-space continuum today with the hottest scholarship on SSRN in our favorite fields. Share and enjoy!
Top Downloads For:
Contracts & Commercial Law eJournalRecent Top Papers (60 days)
As of: 21 May 2021 - 20 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 552 | |
| 2. | 365 | |
| 3. | 200 | |
| 4. | 118 | |
| 5. | 111 | |
| 6. | 79 | |
| 7. | 62 | |
| 8. | 53 | |
| 9. | 49 | |
| 10. | 47 |
Top Downloads For:
Law & Society: Private Law - Contracts eJournalRecent Top Papers (60 days)
As of: 21 May 2021 - 20 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 552 | |
| 2. | 118 | |
| 3. | 111 | |
| 4. | 97 | |
| 5. | 79 | |
| 6. | 62 | |
| 7. | 53 | |
| 8. | 47 | |
| 9. | 37 | |
| 10. | 36 |
July 20, 2021 in Recent Scholarship | Permalink
New York Case Law Round-up: Puffery and Account-Stated
In Coppelson v. Serhant, Coppelson and other plaintiffs bought an investment property from Serhant, a real estate broker in Manhattan. Serhant misleadingly told Coppelson that the property was “a gold mine” and would be worth well over five million dollars shortly. The Coppelson plaintiffs claim that they chose to buy this property for $4.375 million over another based on these statements. After the purchase, the Coppelson plaintiffs learned that Serhant also represented the seller of the property and had received an undisclosed referral fee for selling the house. This prompted them to hastily resell the property at a $700,000 loss.
After the District Court for the Southern District of New York dismissed the First Amended Complaint without prejudice, plaintiffs amended their complaint, alleging fraud, promissory estoppel, breach of the implied duty of good faith and fair dealing, and unjust enrichment. Last month, the court dismissed all claims, and it all turned on puffery.
Plaintiffs' fraudulent inducement and concealment claims were subject to the doctrine of caveat emptor. The Coppelson plaintiffs were responsible for checking the value of the property before making their purchase. Serhant’s statements were mere puffery. Actions against licensed brokers serving as dual agents are limited to regulatory actions, so Serhant's conduct here was not actionable fraud.
The Coppelson plaintiffs' claim for promissory estoppel failed because Serhant failed to disclose important information. That's not enough. He made no promises. Nor could there be a breach of the implied duty of good faith and fair dealing, because that requires a contract, and there was no contract here between Serhant and the Coppleston plaintiffs. Finally, the unjust enrichment claim failed because it was duplicative of their fraud claims. Plaintiffs made no allegation that Serhant benefitted or was enriched in a way he was not entitled to. Again, he made no promise that he was not also representing the sellers of the house, and his misleading statements were simply matters of opinion and sales puffery.
In 2017, Plaintiff Federal Corporation (Federal), a Taiwanese a tire supplier, and Defendant Future Tire (Future), a New York tire distributor, established a contractual relationship through an exchange of emails and texts. Future thought the contract provided for it to be the exclusive distributor of National's tires. But National contends that it never intended for the relationship to be exclusive.
In Federal Corporation v. Future Tire Company, decided last month, Judge Denis Hurley of the U.S. District Court for the Eastern District of New York granted plaintiff's motion for summary judgment. Federal delivered and Future accepted but later failed to pay for deliveries of tires invoiced for over $1 million. Future's only defenses were that Federal breached first by selling to some of Future's competitors and the statute of frauds.
The District Court had no difficulty finding that Federal had made out its claim for account stated. We don't spend much time on the blog, or in the first-year course, talking about account stated. The elements of the claim under New York law are: "(1) an account was presented; (2) it was accepted as correct; and (3) Defendant promised to pay the amount stated." In this case, there were 26 invoices proving that the account was presented. Future never disputed the invoices and also never paid. Future's statute of frauds defense failed because "receipt and acceptance either of goods or of the price constitutes an unambiguous overt admission by both parties that a contract actually exists."
Future's motion for summary judgment on its account stated claim was granted, with pre-judgment interest, and the court saw no need to address its breach of contract claim, as that was duplicative of the account stated claim.
H/T The New York Contracts Law Twitter Feed. Thanks to ContractsProf Blog Intern, Alyssa Cross, for her research assistance!
July 20, 2021 in Recent Cases | Permalink | Comments (0)
Monday, July 19, 2021
Guest Post from Jonathan Harris on Non-Competes
Keeping Workers Stuck in Jobs—Training Repayment Agreements as Workarounds to Noncompetes
President Biden’s recent executive order encouraging the Federal Trade Commission to rein in noncompete agreements is an encouraging sign for workers who cannot afford to leave their jobs because of such agreements. But with the possibility of federal intervention and more states and municipalities banning noncompetes, together with higher levels of workers quitting their (often bad) jobs, companies are promoting other ways for employers to keep workers in their jobs.
In my recently published article, Unconscionability in Contracting for Worker Training, 72 Ala. L. Rev. 723 (2021), I expose the rapid growth of one of these retention mechanisms: the training repayment agreement (TRA). TRAs require an employee to pay the employer a fixed or pro rata sum if the employee received on-the-job training and quits work or is fired within a set period of time.
Often, TRAs are even worse than noncompete agreements for low-wage workers because, as I note in my article, “preventing workers from working for a competitor may be less onerous to workers than requiring them to pay the employer a substantial sum to quit.” TRAs can be especially bad for high-turnover sectors, where the average worker would not otherwise stay for the 2-3 year TRA repayment period. Some TRAs have even been described as bordering on indentured servitude (see, e.g., Heartland Sec. Corp. v. Gerstenblatt, No. 99 CIV. 3694 WHP, 2000 WL 303274, at *7 (S.D.N.Y. Mar. 22, 2000)), and have brought to mind comparisons to Bailey v. State of Alabama, 219 U.S. 219 (1911), in which the Supreme Court used the 13th Amendment to strike down a Jim Crow era Alabama law criminalizing quitting one’s job without repaying a cash advance.
TRAs have begun to face a bit of scrutiny, with a rise in litigation challenging the arrangements and a new California law taking effect this year banning TRAs for health care workers in hospitals, as well as for applicants for those jobs. And just last week, the Uniform Law Commission approved a Uniform Restrictive Employment Agreement Act which would permit TRAs only for “special training” and that last up to 2 years and are prorated based on one’s continued employment. But, for now, the arrangements mostly fly under the radar, and it is difficult to get a grasp of the ubiquity of TRAs. Anecdotally, they are more common among civil servants, truckers, nurses, mechanics, electricians, salespeople, paramedics, flight attendants, bank workers, repairpeople, and social workers.
In my article, I propose a set of unique factors for courts to use in evaluating TRAs: whether the TRA repayment obligation takes effect even if the employer fires the worker without just cause; the repayment amount required by the TRA relative to salary; whether the debt is amortized; the duration of the repayment window; and the nexus between the repayment amount and the training’s cost to the employer and benefit to the employee. One may thus view these sets of proposed factors as an analogue to the collection of reasonableness factors applied under the law of noncompetes and courts should undertake a similar reasonableness inquiry into TRAs.
But until that happens, or until more legislatures address head-on the challenges of providing training for quality jobs, lawyers and courts can triage the fast growth of mobility-restricting TRAs by developing a law of unconscionable training contracts. Courts have rarely applied the law of unconscionability in these contexts because plaintiffs often frame legal challenges to TRAs as violations of wage-and-hour statutes or the common law governing noncompete covenants. But the law of unconscionability has quietly found success in striking different types of overly one-sided contracts while upholding reasonable ones. Consumer law causes of action could also be effective, including state unfair and deceptive acts and practices laws, false advertising (many so-called training programs provide no meaningful skills), and unfair competition laws.
July 19, 2021 in Commentary, Contract Profs, In the News, Recent Scholarship | Permalink | Comments (0)
Guest Blogger: Jonathan Harris on Non-Competes
Jonathan Harris joined the Loyola Law School faculty in June 2021. Professor Harris writes and speaks on contracting in employment and equity in workforce development. His publications have appeared or are forthcoming in the Alabama Law Review, California Law Review Online, Comparative Labor Law and Policy Journal, and New York City Law Review. He previously taught in the Lawyering Program at NYU School of Law and came to academia after practicing employment and labor law in government and in firm and in-house counsel settings. He also clerked for Judge James E. Graves, Jr. of the U.S. Court of Appeals for the Fifth Circuit while teaching at Mississippi College School of Law. Professor Harris began his legal career as a Skadden Fellow, providing direct legal services, legislative advocacy, and community outreach at the intersections of employment and consumer law. Prior to that, he worked as a labor and community organizer, focusing on the rights of immigrant workers.
We look forward to some stimulating posts this week!
July 19, 2021 in About this Blog, Contract Profs | Permalink | Comments (0)
Wednesday, July 14, 2021
Quasi-Tuesday Top Ten - Contracts & Commercial Law Downloads for July 14, 2021
As our string of "actual" Tuesday challenges persist, we are pleased to present the Quasi-Tuesday Top Ten this week, a concept that seems appropriate here in the land of quasi-contract and other such concepts. That's our story and we're sticking to it.
Top Downloads For:
Contracts & Commercial Law eJournalRecent Top Papers (60 days)
As of: 15 May 2021 - 14 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 1,431 | |
| 2. | 551 | |
| 3. | 353 | |
| 4. | 202 | |
| 5. | 168 | |
| 6. | 135 | |
| 7. | 107 | |
| 8. | 104 | |
| 9. | 69 | |
| 10. | 60 |
Top Downloads For:
Law & Society: Private Law - Contracts eJournalRecent Top Papers (60 days)
As of: 15 May 2021 - 14 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 551 | |
| 2. | 540 | |
| 3. | 447 | |
| 4. | 203 | |
| 5. | 107 | |
| 6. | 104 | |
| 7. | 95 | |
| 8. | 69 | |
| 9. | 60 | |
| 10. | 54 |
July 14, 2021 in Recent Scholarship | Permalink
Tuesday, July 13, 2021
Roy Moore's Claims Against Sacha Baron Cohen Dismissed
In 2018, Roy Moore, former Chief Justice of the Alabama Supreme Court, former U.S. Senate candidate agreed to be interviewed by Sacha Baron Cohen. As is his wont, Cohen misrepresented the purposes of the interview. It did not go well, as you can see below, and the problems go well beyond Cohen's mock unibrow:
Moore and his wife sued Cohen for intentional infliction of emotional distress and fraud. Moore added an additional cause of action for defamation.
In a ruling issued today, Judge John P. Cronan of the S.D.N.Y. dismissed Moore claims, as barred by a contractual waiver, and dismissed Mrs. Moore's claims as barred by the First Amendment. We have covered Mr. Cohen's encounters with the law of waivers before (linking to five other posts!). The outcomes have been pretty uniform. The only twist here is that Mrs. Moore didn't sign a waiver, but that's where the First Amendment comes in. Read all about it on some other blawg.
As to the contracts issues, Mr. Moore signed a consent agreement that expressly waived each of the claims that he attempted to bring. One might be concerned that the law should not protect those who knowingly commit fraud but get away with it because they made you sign a consent agreement in which you waived any fraud claim. New York law refuses to enforce "general releases." But this agreement was not a general release, and even if it were, even a general releases is enforceable where, as here, the release language clearly, unambiguously, and specifically encompasses the claims brought.
July 13, 2021 in Celebrity Contracts, Recent Cases, Television | Permalink | Comments (0)
Monday, July 12, 2021
Contracts and Promissory Estoppel Issues in the Bill Cosby Case
Well-known actor and comedian William (Bill) Cosby, who was sentenced to 3-10 years in prison for sexual assault, was recently released. The grounds for release? Breach of a promise not to prosecute.
Back in 2005, District Attorney Bruce L. Castor, Jr. who investigated allegations of sexual assault brought by Andrea Costand, determined that a criminal trial against Mr. Cosby could not be won. He issued a signed press release in which he announced that "insufficient, credible, and admissible evidence exists upon which any charge against Mr. Cosby could be sustained beyond a reasonable doubt." D.A. Castor issued the press release in order to prevent Mr. Cosby from invoking his Fifth Amendment not to testify in any civil suit that Ms. Costand might bring. Ms. Costand brought that suit, which resulted in a $3.38 million settlement, but not until after Mr. Cosby had been deposed and had admitted to some of the acts that Ms. Costand alleged. He admitted that he had given her Benadryl tablets, but claimed that the ensuing sexual encounter was consensual. He also admitted that he had provided quaaludes to other women with whom he wanted to have sex.
Fast forward ten years, and we have a new D.A., Risa Ferman, who decided to reopen the case against Mr. Cosby and use the deposition testimony. When Mr. Cosby objected, the trial court found that a press release announcing an exercise of prosecutorial discretion is not a contract. What D.A. Castor was offering was transactional immunity, but the trial court found that he had not done so in accordance with the relevant Pennsylvania statute. Immunity comes from a court, not from the exercise of a prosecutor's discretion. Even a prosecutor's promise not to prosecute could be withdrawn. They don't even have to cross their fingers. Moreover, no promissory estoppel claim could be made out, because reliance on any alleged promise from the prosecutor would have been unreasonable.
In Mr. Cosby's appeal to the Supreme Court of Pennsylvania, Middle District, the relevant issue was:
Where: (a) [District Attorney Castor] agreed that [Cosby] would not be prosecuted in order to force [Cosby’s] testimony at a deposition in [Constand’s] civil action; (b) [the district attorney] issued a formal public statement reflecting that agreement; and (c) [Cosby] reasonably relied upon those oral and written statements by providing deposition testimony in the civil action, thus forfeiting his constitutional right against self-incrimination, did the Panel err in affirming the trial court’s decision to allow not only the prosecution of [Cosby] but the admission of [Cosby’s] civil deposition testimony?
The Supreme Court affirmed the trial court's finding that prosecutor Castor had not granted Mr. Cosby immunity from prosecution. However, the Supreme Court overturned the trial court's determination with respect to Mr. Cosby's reliance claim, holding that:
[W]hen a prosecutor makes an unconditional promise of non-prosecution, and when the defendant relies upon that guarantee to the detriment of his constitutional right not to testify, the principle of fundamental fairness that undergirds due process of law in our criminal justice system demands that the promise be enforced.
In explaining its decision, the Supreme Court says lots of nice things about how prosecutors have vast powers and ought to be subject to principles of fundamental fairness. I don't have the expertise in criminal law to know whether fundamental fairness dictated that Mr. Cosby must be released. I suspect that very few criminal defendants, lacking Mr. Cosby's resources, would be able to win their releases based on claims that the prosecutor had treated them unfairly.
As a general matter, the reliance claim would seem weak in other, comparable contexts. Here, immunity could only be granted through a particular process, and that process was not followed. In an ordinary contractual context, a court would likely find unreasonable reliance on a vague promise when that promise could only be effected through following some well-established procedure that was not followed in this instance. It would be one thing if Mr. Cosby were on his own, but he was a sophisticated party represented by able counsel. But the Supreme Court held that sophistication is not part of the inquiry here and concluded that it was reasonable for Mr. Cosby to rely on the conclusions and advice of counsel. Whether or not their reliance was reasonable seems not to matter.
There was also some question of actual reliance here. Mr. Cosby's testimony in depositions was consistent with what he had already told investigators in the criminal proceedings. He admitted to providing Ms. Costand with Benadryl; he admitted to sex acts with her afterwards. He claimed that the sex was consensual. How can he claim reliance on a promise of non-prosecution when he had already admitted to facts to which he testified in deposition? True, he also admitted to other acts, but to the extent that those acts subjected him to criminal prosecution, it is hard to see how a promise not to prosecute him with respect to his relationship with Ms. Constand is relevant to his choice to testify as to prior acts. But the Supreme Court found that Mr. Cosby is entitled to a presumption that he only testified in reliance on D.A. Castor's promise that he would not be criminally prosecuted. Fruits of the poison tree, I suppose.
The Supreme Court rejected the option, favored by the concurring and dissenting Justices, to simply suppress the evidence obtained through Mr. Cosby's depositions and grant a new trial. Instead, the Court characterized its remedy as a grant of specific performance of D.A. Castor's promise not to prosecute. That strikes me as an odd formulation. Specific performance is not a remedy for promissory estoppel; it is a remedy for breach of contract. And if we say that, but for his reliance on D.A. Castor's promise, Mr. Cosby would have invoked his Fifth Amendment rights in his depositions, that might have led to a remedy akin to what the concurring and dissenting Justices proposed. But the majority could have reached its conclusions without speaking of specific performance. As a result of the broken promise, Mr. Cosby was denied his due process rights, and the appropriate remedy is to vacate his conviction and enjoin any future prosecution relating to the subject matter of D.A. Castor's promise.
Thanks to Sydney Scott, for her research assistance!
July 12, 2021 in Celebrity Contracts, Current Affairs, Recent Cases | Permalink | Comments (5)
Wednesday, July 7, 2021
(Constructive) Tuesday Top Ten - Contracts & Commercial Law Downloads for July 7, 2021
With circumstances prevented our meeting the literal Tuesday for this week's list, we have taken the time-honored legal approach of declaring today to be "Constructive Tuesday." So with that slippery deeming and defining out of the way, let's check out what's trending on SSRN:
Top Downloads For:
Contracts & Commercial Law eJournalRecent Top Papers (60 days)
As of: 08 May 2021 - 07 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 1,382 | |
| 2. | 549 | |
| 3. | 337 | |
| 4. | 189 | |
| 5. | 144 | |
| 6. | 134 | |
| 7. | 130 | |
| 8. | 129 | |
| 9. | 125 | |
| 10. | 101 |
Top Downloads For:
Law & Society: Private Law - Contracts eJournalRecent Top Papers (60 days)
As of: 08 May 2021 - 07 Jul 2021| Rank | Paper | Downloads |
|---|---|---|
| 1. | 549 | |
| 2. | 539 | |
| 3. | 446 | |
| 4. | 189 | |
| 5. | 130 | |
| 6. | 125 | |
| 7. | 101 | |
| 8. | 97 | |
| 9. | 93 | |
| 10. | 67 |
July 7, 2021 in Recent Scholarship | Permalink | Comments (0)
Teaching Assistants: Brian Bix on The Moral Obligation to Perform Contracts
When I teach contracts, I often push back against students' instinct that a breach of a promise is a moral wrong. When I do so, I always have in mind George M. Cohen's insight that the difference between those who think here is fault in contract law and those who think there isn't may just be a matter of emphasis. It is also true that breaches of contract occur in a variety of settings and thus call forth different moral responses.
Brian Bix (pictured) provides a great introduction to the literature and the problem of the moral obligation to perform contracts in a new paper available on SSRN.
Bix briskly takes us through some useful background. One has a general moral obligation to obey just laws, but not all laws are just. Even if there were not a moral obligation to obey laws because they are law, legal normative systems generally overlap with moral normative systems, and so in many cases, complying with legal obligations is also the right moral choice. There are counterarguments, and Bix ably lays them out before turning to the more difficult question of how moral obligation applies to contracts law.
Contracts law is different from other types of law, e.g. criminal law or torts, for at least two reasons. First, as Holmes (below, right) put it, the obligation of contracts is to perform or to pay damages. Once one has made the other party whole, one way or the other, one has performed one's legal duty and perhaps that satisfies the moral obligation as well. Contracts damages are compensatory, not punitive, at least at common law. Second, the breaching party is liable regardless of fault. The fact that one took all possible precautions does not excuse breach as it would, say, a cause of action sounding in negligence.
If one is of the view that contracts law is about enforcing promises, or if one is of the view that contracts law protects a reliance interest, one is likely inclined to view breaches as presumptive breaches of a moral obligation. If, on the other hand, one sees contracts as primarily a vehicle for facilitating mutually beneficial transactions, breach can be beneficial, when, for example, they are "efficient;" that is, when breach better promotes social utility than does performance.
Even if one finds the promise theory of contracts appealing, contracts law must confront, in the world of form contracting, the problem of consent. In asymmetrical contracting, consumers, employees, and others are subjected to form contracts, the terms of which are fixed and non-negotiable. It is something of a legal fiction to contend that they have promised to comply with all of the terms of a contract that they do not -- and are not expected to -- read.
Bix points out that one might have a moral obligation to abide by reasonable contract terms, even if one has not meaningfully consented to them. Following Karl Llewellyn, Bix notes that one might not be morally bound to abide by unreasonable and inconspicuous terms that one would not have agreed to had one been made aware of them and had a reasonable opportunity to "dicker" over them. But reasonable minds, such as those of Judge Skelly-Wright and Richard Epstein, might differ on what counts as an unreasonable term.
Bix then briefly considers Steven Shavell's argument that breach of contract often implies no moral culpability because breach often occurs for reasons that the parties did not contemplate. Bix thinks Shavell's reasoning ought to lead to the conclusion that breach often does imply moral culpability. Because expectation damages do not account for litigation costs, non-breaching parties are rarely made whole. The breaching party has elected to breach rather than perform, leaving the non-breaching party worse off.
Notions of corrective and distributive justice may also inform our instincts regarding the morality of breach in different circumstances. One might think that, given the unequal distribution of wealth and power in our society, and our knowledge that one-sided contracts have a role in creating, maintaining, and exacerbating economic inequality, nothing morally blameworthy happens when an economically disadvantaged party breaches a contract with a powerful corporation. One also might think that an employee's obligation to perform their contractual duties must take into account unfair terms of employment or mistreatment by the employer.
Returning to Holmes's view, most people do not think that performance and paying for breach are moral equivalents. Perhaps that view is justified, in that most breaching parties do not simply pay for breach. They force the non-breaching party to sue, and as noted above, compensatory damages do not fully compensate, once when accounts for the costs of delay and litigation.
Bix's article provides a clear, brief overview of the relationship between breach of contract and breach of a moral obligation. I think one could assign it to students early in the semester in order to enable them to establish a sort of baseline about their moral intuitions regarding breach. Those stability of those intuitions can be put to the test as the course progresses.
July 7, 2021 in Contract Profs, Recent Scholarship, Teaching | Permalink | Comments (0)
Tuesday, July 6, 2021
The Saga of Nikole Hannah-Jones, Inaugural Knight Chair in Race and Reporting at Howard University
Many readers are likely already familiar with the story, but it is one that needs to be retold in as many formats as possible. I provide a very short summary here. Nikole Hannah-Jones (right) provides a very complete version here.
Professor Hannah-Jones is a distinguished alumna of the University North Carolina (UNC). UNC repeatedly honored her: with the Young Alumni Award in 2017, with the Distinguished Alumna Award in 2019, and by inducting her into the N.C. Media Hall of Fame.
Recognizing Professor Hannah-Jones's many contributions to journalism and investigative reporting, Dean King of UNC's journalism school approached Professor Hannah-Jones and asked her to serve as the Knight Chair in Race and Investigative Reporting. Professor Hannah-Jones was willing to serve, but since the Knight Chair is always a tenured position, her appointment had to await approval of UNC's Board.
For reasons that are not entirely clear but seem to have involved lobbying by the James G. Martin Center, a conservative think tank, the Board refused to grant tenure to Professor Hannah-Jones and instead offered her a five-year contract. Professor Hannah-Jones was willing to accept the five-year appointment and avoid expressing her disappointment publicly, but the James G. Martin Center decided to take the matter public, describing the hiring of Professor Hannah-Jones as a "study of [sic] failed corporate governance."
The matter was then public, and UNC's shabby treatment of a distinguished alumna soon triggered considerable backlash. The Board eventually, grudgingly relented, offering Professor Hannah-Jones tenure, but no apology and no explanation. She has chosen to decline that offer; she will instead become the Knight Chair in Race and Reporting at Howard University.
It is a fitting end to a sad saga. Some sadness will no doubt remain remain, for the faculty and student at UNC who had hoped to welcome Professor Hannah-Jones as their colleague, and for Professor Hannah-Jones herself, whose relationship with her alma mater cannot help but be forever tainted by this experience.
July 6, 2021 in Current Affairs, In the News | Permalink | Comments (0)
News from the World of Mixed Martial Arts Contracts
On the right in the photo at left is Jordan Kimball, who was one of my contracts students when she was a wee 1L. She is pictured with her Mixed Martial Arts (MMA) coach Julia Avila. I did my best to teach Jordan contracts law, and she is now doing her best to educate me about the MMA world.
Julia Avila competes under the auspices of the Ultimate Fight Championship (UFC), the largest MMA organization, headed up by Dana White. According to Jordan, its junior-level fighters like Julia get paid very little for their matches. MMA Guru (in an annoyingly repetitious post), reports that while about 1/3 of MMA fighters earned six-figure salaries in 2018, a little over 1/3 earned less than $45,000. The basic structure was (as of 2018) that fighters get paid about $3500 in base pay for their first three fights, which goes up to $5000 per fight thereafter. Fighters also get a "win-bonus" that equals the base pay, so they are highly motivated. Better-known fighters have the ability to draw up their own contracts, and obviously the money gets substantial at the top of the heap. But the UFC is now hugely popular, and the vast majority of its fighters get paid a small fraction of top athletes in other sports.
UPDATE: the good people @TKO Combat Sports & Entertainment sent me a helpful correction. The figures above are the sponsorship fees (uniform pay) per fight. According to TKO, the minimum base pay per fight is $10,000, plus another $10,000 if you win. So, a successful athlete can earn $23,500-$25,000 per match to start, which sounds like a good pay day, but for obvious reasons, one can't fight too frequently. A little Internet research suggests that, barring injury, most athletes can only fight 2-3 times a year.
The base pay is somewhat higher than it was before the UFC entered into exclusive sponsorship agreements. Before such agreements, fighters could earn money by wearing the gear of their individual sponsors. Now, under the UFC contract, fighters are required to wear only the gear of the UFC sponsors in official UFC fights. At least at the start, some athletes objected to the new sponsor system.
However, according to the The Manuel, apparently the big money comes from "fight of the night" and "performance of the night" bonuses within Dana White's sole discretion. In 2020, such bonuses accounted for $4.6 million out of a total of $13 million in bonuses that UFC paid out. As a result, as soon as fighters finish their matches, they hit social media to encourage their followers to deluge Dana White with messages advocating for their favorite fighter. In such a system, athletes who criticize the pay structure are unlikely to earn bonuses from the man they are criticizing. In addition, and not surprisingly, such prizes rarely go to women.
The UFC is the big dance of MMA. There are feeder leagues in which MMA athletes can complete, but once they sign with the UFC, they cannot fight with any other organization. The other organizations do not restrict private sponsorships, so for fighters coming up in the sport, jumping to the UFC entails risk. The payout in early fights is going to be smaller, and you sacrifice private sponsorships. While the athletes at the top of the sport can make millions of dollars, much like the top athletes in more traditional sports, young MMA athletes do not have the protections of a union, as exist in more traditional sports. A rookie UFC fighter has no guaranteed minimum salary as would a rookie in MLB, the NFL, the NBA, etc. And clearly the risk of injury is at least as great in the UFC as it is in the more traditional sports.
Thus the junior-level fighters, even if they make it to the UFC, have very little bargaining power and cannot publicly criticize Dana White, who literally controls the pursestrings. All they can do is beg him to throw some of his largesse their way. But they are not alone. There are athletes at all levels within the UFC who complain about one-sided UFC contracts.
Thanks, Jordan, for all of the research on this post! I regret that your work for the ContractsProf Blog will be even less remunerative than the UFC, but we place no limitations on your ability to seek sponsorships.
July 6, 2021 in Sports | Permalink | Comments (0)
Monday, July 5, 2021
The Other Shadow Docket: Hidden Contracts Issues in Fulton v. Philly
If you want a readable explanation for why so much of our constitutional jurisprudence makes no sense, I highly recommend Jamal Greene's How Rights Went Wrong. One of Professor Greene's key points is that our jurisprudence elevates certain rights as "fundamental," and courts protect those rights zealously through heightened scrutiny. Other rights, since 1937 or thereabouts, have been left nearly entirely unprotected. Greene illustrates the phenomenon and the damage it has done to our social fabric with myriad examples, but he did not discuss Fulton v. City of Philadelphia, perhaps because it was decided after his book was published.
Philadelphia's Department of Human Services (DHS) takes custody of children who cannot remain in their homes. DHS then contracts with private entities, including Catholic Social Services (CSS) to place those children in foster homes. The first step of placement is certifying the foster family as eligible to receive foster children. Because CSS believes that “marriage is a sacred bond between a man and a woman," it announced in 2018 that it would refuse to certify unmarried couples or same-sex couples as foster parents. DHS responded by announcing that it would no longer contract with CSS, citing a non-discrimination provision in CSS's contract with the City, as well as the non-discrimination requirements of the city's Fair Practices Ordinance. CSS sued, alleging that Philadelphia's refusal to continue to partner with CSS violated its Free Exercise rights.
Fulton is an important Free Exercise case. Because the Court cares deeply about freedom of religious exercise and very little about freedom of contract -- at least as a constitutionally protected right-- there has been very little discussion of the contract at the heart of the controversy. Rather, the issue was whether the contract's non-discrimination provision is a neutral law of general applicability under Employment Division v. Smith, in which case CSS's claim was unlikely to succeed.
This is where Jamal Greene's ideas come into play, and apologies to Professor Greene if I mangle his approach. Our courts engage in rights absolutism. CSS claims that its beliefs require that it not endorse same-sex marriage. It also claims that even certifying same-sex foster couples would be an impermissible endorsement. Somehow, single gays and lesbians can serve as foster parents. Apparently gay people's sex lives are none of CSS's business unless they decide to marry. Well, half right.
Chief Justice Roberts, writing for the Court, holds in Fulton that Smith does not apply, because the contract at issue is not a neutral law of general applicability. Rather, the contract gives DHS's Commissioner "sole discretion" to provide exemptions from its non-discrimination policy. The Court focuses on the Commissioner's refusal to waive that provision to benefit CSS rather than on the fact that it has never waived the policy in any case (and likely never would). The Court treats another provision of the contract, which likewise prohibits discrimination based on sexual orientation and allows for no exceptions, as irrelevant. The Court will not read one contract provision as annulling another.
The Court thus dodges the need to overrule Smith but creates an exception that will be almost as good as eliminating Smith altogether. Even so, three Justices concurred to call for Smith to be overturned but worried about its replacement, and three other Justices concurred separately to lament the missed opportunity to overrule Smith. The result will likely be to require that courts recognize religious exemptions to neutral laws of general application unless the government regulation is necessary to achieve a compelling government interest. Such religious exemptions will be granted whenever a regulation burdens religious practice in any way. It is not for the courts to weigh the centrality of the burdened right to one's religious belief. And “religious beliefs need not be acceptable, logical, consistent, or comprehensible to others in order to merit First Amendment protection.”
Jamal Greene's alternative is to have courts engage in rights mediation rather than rights adjudication. And it may be that if courts did so generally, courts could in far more cases leave it to other parties or institutions to work things out on their own. So instead of treating CSS's Free Exercise rights as trumping all other rights, courts could recognize that right but also recognize DHS's right to choose what entities with which it contracts and allow that to be informed by the city's general policy of preferring not to contract with parties that discriminate.
If the various rights and interests are considered in this case, it seems obvious to me (but perhaps that's just me) that the case comes out differently. After all, DHS is absolutely not asking CSS to endorse same-sex marriage. It is offering CSS a choice. It can refuse to endorse same-sex marriage, but then it cannot contract with the city. That may hamper its ability to engage in the important work it does placing children in foster families, but there are twenty other agencies that do so. And CSS is then free to find other partners for whom it can provide its services while continuing to discriminate against same-sex couples.
Ultimately, rights mediation would force CSS to make a choice between two components of its mission. Helping children find foster homes is one part of that mission; not endorsing same-sex marriage is another. Which is more important to CSS? Courts don't need to decide that for CSS. CSS can decide on its own. Note that the Court does not allow DHS the same freedom of choice. It too wants to help children find foster homes, but it wants to do so on a non-discriminatory basis. One can only understand the Court's decision to indulge CSS's discriminatory policies while paying no mind to contract terms and a city ordinance if one buys in to our uniquely American system of rights absolutism.
July 5, 2021 in Books, Commentary, Recent Cases, Recent Scholarship, Religion | Permalink | Comments (0)
