ContractsProf Blog

Groundhog Day Moment: Trump Loses a Case Involving a Non-Disclosure Agreement

Neither of these creatures is Bill Murray

You know that moment in the film Groundhog Day when Bill Murray's character wakes up to "I Got You Babe" and thinks the DJs have screwed up and played yesterday's tape by accident?  If I just went with the headline "Trump NDA Ruled Unenforceable," you would have shaken your head and yelled at your computer, "Dude, refresh your feed!"  After all, we've already run stories about unenforceable Trump nondisclosure agreements (NDAs) here and here and here and here.  

And now comes the case of Omarosa  Manigault Newman (Omarosa) who wrote a book about her time in the Trump White House.  In 2018, the Trump Campaign sought arbitration to enforce an NDA into which Omarosa alleged entered in 2016.  According to NBC News, Omarosa alleges in her book, Unhinged: An Insider's Account of the Trump White House that Trump was a racist and also that he was in severe mental decline during his Presidency.  Not having read the book, I can only wonder whether Omarosa cited as evidence of that decline her own hiring to work in the White House based on her appearance in three separate season of Mr. Trump's reality television show, The Apprentice.

According to The New York Times, the arbitrator deemed the Trump NDA too vague to be enforced.  It apparently prohibited Omarosa from revealing confidential information, but that term was defined so broadly as to capture just about anything, including mere opinions critical of Mr. Trump.  In addition to ruling in Omarosa's favor, the arbitrator also granted her attorneys' fees.  Gracious as always, Trump issued a statement, reprinted in Rolling Stone, in which he acknowledged defeat and praised Omarosa for besting him on the law and the facts.  

Just kidding. 

He said: “I gave Omarosa three attempts at The Apprentice and she failed. At her desperate request I gave her an attempt at the White House and she failed there too, people truly hated her.”

Stephanie Grisham's tell-all about Melania Trump is due out next week.  Stay tuned.

Tuesday Top Ten - Contracts & Commercial Law Downloads for September 28, 2021

As September draws to a close and Fall has fallen upon us, what better time is there to catch up on the latest in contract law scholarship and its commercial law cousin. Grab some downloads below!

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 30 Jul 2021 - 28 Sep 2021

Rank	Paper	Downloads
1.	The New Formalism in Private Law Paul B. Miller Notre Dame Law School	243
2.	Herbert Hovenkamp as Antitrust Oracle: Appreciating the Overlooked Contributions of the New Harvard School Christopher S. Yoo University of Pennsylvania Law School	191
3.	Smart Contracts, Real-Virtual World Convergence and Economic Implications William Lehr Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)	141
4.	Arthur Linton Corbin Gregory Klass Georgetown University Law Center	122
5.	The Odious Haitian Independence Debt Kim Oosterlinck, Ugo Panizza, Mark C. Weidemaier and Mitu Gulati Université Libre de Bruxelles - SBS-EM, CEB, Graduate Institute of International and Development Studies (IHEID) - Department of Economics, University of North Carolina School of Law and Duke University	120
6.	Dark Contracts Samuel Becher and Uri Benoliel Victoria University of Wellington and College of Law and Business - Ramat Gan Law School	98
7.	An Economic Analysis of Restitution for Mistaken Payments Dhammika Dharmapala and Nuno Garoupa University of Chicago Law School and George Mason University - Antonin Scalia Law School, Faculty	76
8.	Narrative Capacity James Toomey Harvard University - Harvard Law School	74
9.	Between Rights and Rites: The Ironies of Crisis and Contract Jeffrey M. Lipshaw Suffolk University Law School	70
10.	Liberal Property and Just Markets Hanoch Dagan Tel Aviv University - Buchmann Faculty of Law	65

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 30 Jul 2021 - 28 Sep 2021

Rank	Paper	Downloads
1.	Arthur Linton Corbin Gregory Klass Georgetown University Law Center	122
2.	Dark Contracts Samuel Becher and Uri Benoliel Victoria University of Wellington and College of Law and Business - Ramat Gan Law School	98
3.	The Mysterious Market for Post-Settlement Litigant Finance Lynn A. Baker, Ronen Avraham and Anthony J. Sebok University of Texas School of Law, Tel Aviv University - Buchmann Faculty of Law and Yeshiva University - Benjamin N. Cardozo School of Law	76
4.	Narrative Capacity James Toomey Harvard University - Harvard Law School	74
5.	Between Rights and Rites: The Ironies of Crisis and Contract Jeffrey M. Lipshaw Suffolk University Law School	70
6.	Too Long; Didn't Read: Finding Meaning in Platforms’ Terms of Service Agreements Michael Karanicolas UCLA Institute for Technology, Law & Policy	61
7.	Data Protection in the Big Data Era: The Broken Informed Consent Regime and the Way Forward Alex Yueh-Ping Yang National Taiwan University - College of Law	35
8.	Indian Law on Standard Form Contracts M. P. Ram Mohan, Promode Murugavelu, Gaurav Ray and Anmol Jain Indian Institute of Management Ahmedabad, Shardul Amarchand Mangaldas & Co, Advocates & Solicitors, Supreme Court of India and National Law University, Jodhpur	24
9.	An Impending 'Avalanche': Debt Collection and Consumer Harm after COVID-19 Lucinda O'Brien, Vivien Chen, Ian Ramsay and Paul Ali Melbourne Law School, Monash University - Department of Business Law & Taxation, Melbourne Law School - University of Melbourne and University of Melbourne - Law School	24
10.	Stagflation in American Jurisprudence Chad G. Marzen and Michael Conklin Florida State University and Angelo State University - Business Law	17

Teaching Assistants: Gregory Klass on Arthur Linton Corbin

Georgetown Law's Gregory Klass (left) has posted a chapter on Corbin that will appear in a forthcoming collection of Scholars of Contract Law. 

Here is the abstract from SSRN:

This chapter on Arthur Linton Corbin will appear in the forthcoming collection, Scholars of Contract Law. The chapter provides a brief summary of Corbin’s life, then discusses five topics: Corbin’s Socratic approach to the classroom and his introduction of the caselaw method at Yale; Corbin’s analytic approach, which was inspired by Hohfeld and is illustrated by Corbin’s definitions of “contract” and “consideration”; Corbin’s evolutionary theory of the common law, his understanding of the relationship between law and social mores, and his insistence that legal rules always be treated as mere “working rules”; Corbin’s occasional appeal, despite his general aversion to high theory, to the reliance theory of contract; and Corbin’s account of contract interpretation, where one sees the reliance theory at work, together with a surprisingly narrow conception of meaning.

Corbin plays an important role in most first-year contracts law courses, or at least he does in mine.  Together with Karl Llewellyn, he represents the transition from the formalism of the First Restatement of the Law of Contracts to the legal realism of the Second.  But I've never been able to put much flesh on the bones.  Llewellyn lived an interesting life.  I hadn't come across much information about Corbin to help me understand what made him tick.

Of course, the tension between Willistonian formalism and Corbinian legal realism can be overdrawn.  Corbin collaborated on the First Restatement; he died long before the Second Restatement was completed.  As Klass's piece makes clear, Corbin came by his realism, if one can give his approach that name, slowly and incrementally, as he struggled to make sense, in Benjamin Cardozo's phrase, of the "trackless ocean" of the common law.

Part of the difficulty of identifying Corbinian methodology is that he seems not to have been interested in theorizing divorced from practical applications.  Legal realists might have used Frege or Russell or Wittgenstein or American pragmatism to inform their understanding of law.  Corbin was more interested in finding a language adequate to describe commercial relations in practice.  To the extent one can associate Corbin with a school of thought, according to Klass, he was indebted to Hohfeld's analytic approach.  His academic achievement is a tribute to his unique combination of analytic rigor, building on Hohfeldian categories, and Sitzfleisch.  Well into his 80s, he could be found in Yale's ill-lit library pouring over the latest caselaw.  Into his 90s, index cards containing his notes on the latest cases could be found by his armchair.

Take heart, fellow academic underachievers!  Corbin was the Kant of contracts.  He was 75 when he published the first edition of his monumental casebook, seven years after his retirement from teaching.  By the time he published the second edition, he was 88.

Ohio State Linebacker, Inspired by Cheerleader, Tests the Limits of the First Amendment

Last month, I posted about Mahanoy Area School District v. B.L., a case in which the Supreme Court held 8-1 that a school could not punish a cheerleader for a profane Snap expressing frustration with, among other things, school, softball, and cheerleading.  The Court held that, while schools can regulate some off-campus speech, it could not punish B.L. for exercising her First-Amendment rights in ways that did not threaten significant disruption of school activities.

The case is of interest to this blog (at least arguably), because B.L. had signed a form as a condition of her participation in team activities, in which she promised not to say negative things on the Internet about her school or cheerleading.  None of the courts that heard the case gave any weight to B.L.'s promise, and while I don't think the promise should be given dispositive weight, I, following Jamal Greene's How Rights Went Wrong, think courts should weigh all the interests implicated in the case before them and that the school's interest in holding B.L. to her promise is one such interest.

Over the weekend, a similar situation arose.  K'Vaughn Pope, a linebacker for the Ohio State Buckeyes, apparently was upset about his lack of playing time.  According to ESPN, after conversation with several members of the coaching staff, Mr. Pope was escorted from the field.  He then took to Twitter and, while the game was still in progress, in a since-removed post, wrote "f--- Ohio State."  He also wrote "good lucc to my teammates" and that one is still up.

Reporters inquired of Ohio State coach Ryan Day whether Mr. Pope was still on the team.  Coach Day wisely equivocated, but the question assumes that disciplining a student at a state university for comments critical of that university is permissible under the First Amendment.  Or perhaps the reporters thought it appropriate to discipline a student-athlete for misspelling "luck" in a comment viewable by the public.  

As reported here, Coach Day then spoke a bit about commitments, which may or may not be contractual, and about other things:

[W]hen you make a commitment to a team at the beginning of the year, when you make a commitment to the Ohio State Buckeyes, that’s what you do. One of the hard things is that you have to play certain guys, and you have to make some decisions on who’s playing in those games and you just really count on guys to be great teammates if they’re not getting on the field … What it really is, is that guys want to play and you can’t play everyone. And then frustration kicks in.

I'm guessing that few will think that the First Amendment prohibits Coach Day from disciplining Mr. Pope for his conduct and speech.  If so, why can he be disciplined when B.L. could not?  

Coach Day's remarks are sensible.  I'm not a fan of college sports, but if they are to exist, if public high schools are to field sports teams, it seems obvious to me that coaches ought to be empowered to discipline athletes for conduct that they deem detrimental to their teams, subject to internal due process protections permitting students with means of appeal.  The notion that the First Amendment would have anything to say about students' non-political speech critical of their coaches' decisions strikes me as not just wrong but ludicrous.  And the notion that federal judges are better situated than school administrators to determine where to draw the line between permissible and impermissible disciplinary measures strikes me as more evidence of the bizarre sacralization of a few privileged "rights." We infantilize ourselves when we act as though the Constitution has to sort out all our problems.

Weekend Frivolity: Deadheading Mums

Sorry all!  It's been a slow week on the blog because teaching, believe it or not, is hard work!  Also, I overcommitted on the writing front.

In the meantime, don't forget to deadhead your mums!  This video delights me.

 

 

Tuesday Top Ten - Contracts & Commercial Law Downloads for September 21, 2021

So, who wants to know what's trending in contract and commercial law scholarship? You do, of course! That, we presume, is why you're here, so let's dive rightin:

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 23 Jul 2021 - 21 Sep 2021

Rank	Paper	Downloads
1.	The New Formalism in Private Law Paul B. Miller Notre Dame Law School	195
2.	Herbert Hovenkamp as Antitrust Oracle: Appreciating the Overlooked Contributions of the New Harvard School Christopher S. Yoo University of Pennsylvania Law School	186
3.	Arthur Linton Corbin Gregory Klass Georgetown University Law Center	83
4.	Introduction to Civil Wrongs and Justice in Private Law Paul B. Miller and John Oberdiek Notre Dame Law School and Rutgers, The State University of New Jersey - Rutgers Law School	82
5.	Dark Contracts Samuel Becher and Uri Benoliel Victoria University of Wellington and College of Law and Business - Ramat Gan Law School	79
6.	An Economic Analysis of Restitution for Mistaken Payments Dhammika Dharmapala and Nuno Garoupa University of Chicago Law School and George Mason University - Antonin Scalia Law School, Faculty	74
7.	Between Rights and Rites: The Ironies of Crisis and Contract Jeffrey M. Lipshaw Suffolk University Law School	70
8.	End-User Flexibilities in Digital Copyright Law – An Empirical Analysis of End-user License Agreements Péter Mezei and István Harkai University of Szeged, Institute of Comparative Law and Legal Theory and University of Szeged Faculty of Law and Political Sciences - Institute of Comparative Law and Legal Theory	69
9.	Narrative Capacity James Toomey Harvard University - Harvard Law School	67
10.	Liberal Property and Just Markets Hanoch Dagan Tel Aviv University - Buchmann Faculty of Law	59

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 23 Jul 2021 - 21 Sep 2021

Rank	Paper	Downloads
1.	Arthur Linton Corbin Gregory Klass Georgetown University Law Center	83
2.	Dark Contracts Samuel Becher and Uri Benoliel Victoria University of Wellington and College of Law and Business - Ramat Gan Law School	79
3.	The Mysterious Market for Post-Settlement Litigant Finance Lynn A. Baker, Ronen Avraham and Anthony J. Sebok University of Texas School of Law, Tel Aviv University - Buchmann Faculty of Law and Yeshiva University - Benjamin N. Cardozo School of Law	72
4.	Between Rights and Rites: The Ironies of Crisis and Contract Jeffrey M. Lipshaw Suffolk University Law School	70
5.	Narrative Capacity James Toomey Harvard University - Harvard Law School	67
6.	Too Long; Didn't Read: Finding Meaning in Platforms’ Terms of Service Agreements Michael Karanicolas UCLA Institute for Technology, Law & Policy	52
7.	Data Protection in the Big Data Era: The Broken Informed Consent Regime and the Way Forward Alex Yueh-Ping Yang National Taiwan University - College of Law	33
8.	Indian Law on Standard Form Contracts M. P. Ram Mohan, Promode Murugavelu, Gaurav Ray and Anmol Jain Indian Institute of Management Ahmedabad, Shardul Amarchand Mangaldas & Co, Advocates & Solicitors, Supreme Court of India and National Law University, Jodhpur	21
9.	Tribes and Temperament: Two Underappreciated Determinants of Market Actor Behavior, Motivations and Beliefs Claire A. Hill University of Minnesota Law School	20
10.	An Impending 'Avalanche': Debt Collection and Consumer Harm after COVID-19 Lucinda O'Brien, Vivien Chen, Ian Ramsay and Paul Ali Melbourne Law School, Monash University - Department of Business Law & Taxation, Melbourne Law School - University of Melbourne and University of Melbourne - Law School	19

Some Colorful Facts Relating to Duress in an Employment Discrimination Case

It is difficult to assert an affirmative defense of economic duress under New York law.  The party alleging economic duress has to show a wrongful threat and not merely point to his own financial hardship.  The wrongful threat must be some threatening conduct that is not within the other party's legal rights. But in Herrnson v. Hoffman, Judge Oetkin of the District Court for the Southern District of New York found that plaintiff had alleged sufficient facts to survive a motion that the court treated as one for summary judgment.

Pro se plaintiff Samuel Herrnson alleges that defendant Mark Hoffman gave Herrnson a check for $16,000.  Hoffman boasted of his wealth and allegedly gave Herrnson the money to assist the latter in a rent dispute he was having with his landlord.  Hoffman allegedly told Herrnson  that he wanted him to "view Hoffman Management as the place to be for the remainder of his career."  Herrnson alleges that Hoffman wrote "loved" on the memo line of the check (he may have written "loan").  Herrnson deposited the money in an escrow account, anticipating litigation with his landlord.

Two months later, Hofmann and his co-defendants terminated Herrnson.  Kinda gives Hoffman's statement "the place to be for the remainder of [your] career" a different cast.  It's reminiscent of the Delphic Oracle's reply to Croesus: "If Croesus goes to war, he will destroy a great empire."  In any case, Hoffman called Herrnson's escrow manager and had the funds frozen, telling the escrow manager that the $16,000 check was a loan, conditional on Herrnson's continued employment.  As that employment had terminated, the loan was being called in.  

Herrnson's narrative, accepted as true at this stage in the proceedings, was that Hofmann knew that Herrnson was contemplating an ADEA claim against Hofmann and his co-defendants, or similar claims arising under state law.  Hofmann mischaracterized a gift as a loan in an attempt to strong-arm Herrnson into dropping his claim.  Hofmann made Herrnson sign a general release in order to have the funds released.  

Judge Oetkin was having none of it at the summary judgement stage.  If Herrnson's narrative is accurate, he received nothing from the release, other than funds that had already been given to him.  Defendants' motion to dismiss, converted into a motion for summary judgment was denied.

H/T @NY_Contracts.

GE Employees' Class Action for Harms Related to a Data Breach Survives Motion to Dismiss

Steven Fowler was a GE employee.  GE requires its employees to share personally identifiable information (PII) about themselves and their family members.  GE made various pledges that it would protect employees' PII and notify employees of any data breaches.  GE contracted with Canon Business Protection Services (Canon) to protect employees' PII against data breaches.  Nonetheless, in March 2020, GE disclosed that a breach had occurred in February 2020.  

Fowler alleges that he was subject to multiple phishing attacks after the data breach.  Other members of the proposed class claim that they suffer from an increased risk of identify theft, all the attendant fraud that might accompany such theft, and the hassle and inconvenience of having to mitigate that risk, including changing passwords, getting new credit and debit cards, etc.  GE offered free credit monitoring and identity theft protection for two years but no damages beyond that.  

Fowler brought claims against GE and CBPS (collectively "defendants") sounding in negligence, breach of contract, violation of statutory protections against deceptive business practices, and breach of fiduciary duty.  Defendants moved to compel arbitration and to dismiss on various grounds.  Last month, in In re GE/CBPS Data Breach, the District Court for the Southern District of New York granted that motion in part, denied it in part, and gave Defendants about three weeks to file a responsive pleading.

In light of the Supreme Court's decision this summer in TransUnion v. Ramirez, one might have thought plaintiff would have serious standing problems.  The court accepted supplemental letter briefs on TransUnion but ruled that the plaintiff had standing without referencing TransUnion.  Those of you who want an account of the court's reasoning on that subject can read about it on the CivProProfs Blog or the StandingProfs Blog.  If you can't find a discussion of it there, I guess you'll just have to read the case.

How to Get Away with Identity Theft

The court granted the defendants' motion to dismiss with regard to the negligence per se claim but denied it as to Fowler's negligence claim.  We'll leave that part of the opinion for the TortsProf Blog to cover.  The court granted defendants' motion with respect to Fowler's statutory and breach of fiduciary duty claims.  And now on to the main event.

Fowler alleged a breach of contract based on a GE guidance document with the inviting name "The Spirit and the Letter."  The document contains GE's code of conduct and includes its data protection policy.  In the alternative, Fowler alleged a breach of an implied contract arising out of GE's representations that it would safeguard their PII and provide timely notice of data breaches.  

The court quickly concluded that "The Spirit and the Letter," like most employee manuals, "lacks the trappings of" and therefore does not constitute an express contract.  Nonetheless, the representations of the manual, coupled with GE's other representations that it would protect employees' PII suffice to establish an implied contract.  The court found that Fowler had adequately alleged all elements of breach of an implied contract claim, and so it granted defendants' motion with respect to Fowler's breach of contract claim but denied it with respect to his breach of an implied contract claim.  

H/T @NY_Contracts

Campbell University's Norman A. Wiggins School of Law Seeks New Faculty to Teach Business and Commercial Law

I recently learned that it's always hump day at Campbell University

Here is the ad in brief:

Position Summary:

Campbell University School of Law invites individuals to apply for up to two open faculty positions. These tenured or tenure-track faculty positions are nine-month appointments that will begin in August 2022 at the rank of Assistant, Associate, or full Professor. We are seeking candidates to teach required courses in (1) business organizations as well as (2) commercial law (including sales law), and/or contracts. We prefer candidates who are also able to teach upper-level elective courses in business/transactional/planning. We are also interested in candidates who, in addition to teaching one or more of the required courses, are able to teach family law, health-care law, or professional responsibility. Candidates should exhibit strong teaching skills and be committed to maintaining an ongoing research effort. A commitment to academic excellence and the ability to work effectively and collegially with faculty, students, and colleagues is expected. Successful candidates should expect their annual course packages to include one or more required, large-enrollment courses.  All applicants should have excellent academic credentials and outstanding teaching reviews. We welcome applications from candidates whose background will contribute to excellence through institutional diversity. Cover letters must explain how the candidate is able and willing and able to support each of the five distinctives set forth below.  Salary and rank will be commensurate with experience.

Campbell University is informed and inspired by its Baptist heritage and three basic theological and biblical presuppositions: learning is appointed and conserved by God as essential to the fulfillment of human destiny; in Christ all things consist and find ultimate unity; and the Kingdom of God in this world is rooted and grounded in Christian community. Campbell University embraces the conviction that there is no conflict between the life of faith and the life of inquiry.

Located in downtown Raleigh, North Carolina, Campbell University School of Law is a highly demanding, purposely small community of faculty and students whose aim, guided by transcendent values, is to develop lawyers who possess moral conviction, social compassion and professional competence, and who view the practice of law as a calling to serve others and to create a more just society.  To that end, the law school has adopted the following distinctives: (1) we offer an academic program that is highly demanding; (2) we bring together the theoretical and practical to produce thoughtful and talented lawyers; (3) we utilize the talents of a faculty that is profoundly committed to students and teaching; (4) we view the practice of law as a calling to serve others; and (5) we offer a Christian perspective on law and justice.

Full ad is here.

Tuesday Top Ten - Contracts & Commercial Law Downloads for September 14, 2021

The fall semester is well underway everywhere, so today, we find both of our Top Ten SSRN download lists operating at full capacity again. Enjoy!

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 16 Jul 2021 - 14 Sep 2021

Rank	Paper	Downloads
1.	A State of Statelessness: The Indeterminate Domesticity of Federally Chartered Corporations Christina J. Lesko and Amir Shachmurove Independent and Harvard Law School	424
2.	The Output-Welfare Fallacy: A Modern Antitrust Paradox John M. Newman University of Miami - School of Law	219
3.	Herbert Hovenkamp as Antitrust Oracle: Appreciating the Overlooked Contributions of the New Harvard School Christopher S. Yoo University of Pennsylvania Law School	185
4.	Smart Contracts on Algorand Archie Chaudhury and Brian Haney Independent and Independent	153
5.	Systemic Risk of Contract Tal Kastner Touro College, Jacob D. Fuchsberg Law Center	119
6.	Steering Loan Modifications Post-Pandemic Pamela Foohey, Dalié Jiménez and Christopher K. Odinet Yeshiva University - Benjamin N. Cardozo School of Law, University of California, Irvine School of Law and University of Iowa - College of Law	88
7.	AI in Negotiating and Entering into Contracts Dr Eliza Mik The Chinese University of Hong Kong (CUHK) - Faculty of Law	84
8.	Introduction to Civil Wrongs and Justice in Private Law Paul B. Miller and John Oberdiek Notre Dame Law School and Rutgers, The State University of New Jersey - Rutgers Law School	82
9.	A Philosophy of Contract Law for Artificial Intelligence: Shared Intentionality John Linarelli Touro College Jacob D. Fuchsberg Law Center	78
10.	Digital Dispute Resolution Gerhard Wagner and Horst Eidenmueller Humboldt University School of Law and University of Oxford - Faculty of Law	71

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 16 Jul 2021 - 14 Sep 2021

Rank	Paper	Downloads
1.	A State of Statelessness: The Indeterminate Domesticity of Federally Chartered Corporations Christina J. Lesko and Amir Shachmurove Independent and Harvard Law School	424
2.	Smart Contracts on Algorand Archie Chaudhury and Brian Haney Independent and Independent	153
3.	A Philosophy of Contract Law for Artificial Intelligence: Shared Intentionality John Linarelli Touro College Jacob D. Fuchsberg Law Center	78
4.	Between Rights and Rites: The Ironies of Crisis and Contract Jeffrey M. Lipshaw Suffolk University Law School	70
5.	Dark Contracts Samuel Becher and Uri Benoliel Victoria University of Wellington and College of Law and Business - Ramat Gan Law School	69
6.	The Mysterious Market for Post-Settlement Litigant Finance Lynn A. Baker, Ronen Avraham and Anthony J. Sebok University of Texas School of Law, Tel Aviv University - Buchmann Faculty of Law and Yeshiva University - Benjamin N. Cardozo School of Law	66
7.	Narrative Capacity James Toomey Harvard University - Harvard Law School	59
8.	Data Protection in the Big Data Era: The Broken Informed Consent Regime and the Way Forward Alex Yueh-Ping Yang National Taiwan University - College of Law	33
9.	Petrowest v. Peace River Hydro: The Revocability and Separability of Commercial ‎Arbitration Agreements ‎ Tamar Meshel University of Alberta Faculty of Law	21
10.	Indian Law on Standard Form Contracts M. P. Ram Mohan, Promode Murugavelu, Gaurav Ray and Anmol Jain Indian Institute of Management Ahmedabad, Shardul Amarchand Mangaldas & Co, Advocates & Solicitors, Supreme Court of India and National Law University, Jodhpur	19

No Incorporation of Israeli Law by Reference in SPIRA v. Aeroflot

In SPIRA v. Aeroflot-Russian Airlines, the District Court for the Eastern District of  New York granted Defendant Aeroflot’s motion to dismiss and denied the request of Plaintiffs SPIRA and 58 others for leave to amend their complaint.

Image by Petar Milošević
CC BY-SA 4.0 via Wikimedia Commons

Plaintiffs were on a school trip to Israel and scheduled to depart on an Aeroflot flight from JFK International Airport. But the flight was delayed for over three and a half hours. During this delay, Plaintiffs were not given adequate food, water, or ventilation.  The flight attendants (left) undoubtedly were not to blame.  

Plaintiffs’ complaint alleged that Aeroflot violated Israel’s Aviation Services Law (ASL). Plaintiffs argued that because they were traveling to Israel, and the ASL was mentioned in the passenger tickets’ liability provisions, the ASL was a part of the contract and therefore both parties were contractually bound by its terms.

The court construed the complaint as making two arguments.  First, the court treated the complaint as seeking to bring a claim directly pursuant to the ASL.  Any such claim was clearly barred, as the ASL is not enforceable in U.S. courts, as the District Court for the Northern District of Illinois held in Bernfield v. U.S. Airways.

Plaintiffs tried to challenge Bernfield by alluding that the ASL provision stating “the court may award compensation to a passenger who has been issued a Flight Ticket indent of damages. . .” implies that the ASL may create a cause of action in any court. But the Seventh Circuit had rejected that very claim with respect to a similar foreign statute in Volodarskiy v. Delta Airlines.  Moreover, the ASL could not possibl contemplate action in a U.S. court, because it required action by Israel’s Ministry of Tourism and approval by a committee of the Israeli parliament.

Second, the court construed the complaint as alleging that the contract incorporated the ASL by reference. Under the Restatement Second §187, parties “may incorporate into the contract by reference extrinsic material which may, among other things, be the provisions of some foreign law.” This rule, as articulated in In re Lehman Bros, creates a two part test: the written instrument must (1) refer to a foreign statute and (2) describe it with sufficient specificity.

Image by Dmitry Zherdin, via Wikimedia Commons

There is no debate that the contract signed by Plaintiffs references the ASL. The question becomes whether it was sufficiently described, so as to incorporate it into the parties’ contract.  The court found that the contract in question failed this second prong of the Lehman Bros. test.

Following Kogan v. Scandinavian Airlines Systems. the court found that the contract “reflected no intent” to incorporate the ASL by merely acknowledging that passengers may have rights under the ASL.  In Dochark v. Polskie Linie LOT S.A,  the District Court for the Northern District of Illinois similarly granted defendant’s motion to dismiss because, although the airfare contract advised passengers that they may have rights under an EU regulation, it merely gave them notice and did not plausibly constitute incorporation.

Accordingly, the court granted Aeroflot’s motion to dismiss and denied Plaintiffs’ request to amend their complaint because allowing them leave, would be futile.

H/T to Alyssa Cross and the ever-reliable @NY_Contracts

Thoughts on the 20th Anniversary of 9/11

I worked in the World Trade Center up until 9/11.  We lived on Eastern Parkway in Brooklyn, and I was on my way to work when the planes hit.  I was never in any danger.  My brain had such a hard time processing what I saw that day that I wasn't traumatized by any of it.

I was in the subway when the planes hit.  The subway stalled and eventually let us out at Wall Street, a few stops from my usual station.  The station was full of people, and I asked someone what was going on.  He said "Two planes crashed into the World Trade Center."  "That's my building!"  I said.  I assumed that the planes were small.  I was still thinking about the work I had hoped to accomplish that day, and I cursed the MTA for delaying my arrival.  I comprehended nothing.

I made it to the street, disoriented, because it wasn't my usual stop.  The street was littered with debris.  I had worked for a human rights organization that happened to have its offices on Wall Street after my first year of law school.  I remember thinking it peculiar that there was so much garbage in the street.  I didn't remember it looking that way on a typical workday morning.  This was debris from the World Trade Center, but I comprehended nothing.  

I asked someone how to get to the World Trade Center from where I was.  He pointed to the sky and said "Follow the smoke."  I comprehended nothing.

I followed the smoke and made it to my building.  With thousands of others, I gawked at the spectacle.  My building was on fire.  There was a huge hole in it and in the tower next to it.  I kid you not.  I contemplated still trying to get in to work.  In my expert opinion, the situation seemed under control.  Somebody had to tell me that they weren't letting people into the building.  I decided to go home.  I guess I get the day off, I thought.  I comprehended nothing.

The subway ride home was long.  I ran into a friend from law school whose building, near the WTC, had been evacuated.  He had been there when the planes had hit.  He saw people jumping from the upper stories of the building.  I began to comprehend.  It suddenly occurred to me that I needed to get home.  My wife was home with our six-week-old daughter.  Fortunately, I thought, she would not be watching television.  She would be occupied with our daughter.  

When I got to the building, our sweet doorman greeted me with relief.  He knew where I worked.  I ran upstairs to find my anxious wife.  Friends had called, and she was in a panic, but now all was well.  She told me that the first tower had fallen.  All was not entirely well.  A friend called.  I sat on our couch and watched as my building fell live on television and also out our window.

My law firm heroically moved us to new offices in midtown the following week.  We had 1000 employees in that building.  Everyone got out.  The firm had been in the building during the earlier attack on the World Trace Center.  There was an evacuation plan.  They executed it and saved lives.  One person disappeared, perhaps hit by debris outside of the building. 

Associates were packed into offices, but everyone had a chair, a desk, a new computer and a Blackberry.  The firm gathered everyone in a hotel ballroom and told us that the firm's most important resources were all gathered in that room.  There was not a lot of work to do, so we focused on sharing our stories and enjoying our community. 

3000 people died that day as a result of the various terror attacks.  The nation galvanized.  Our government responded, mostly in ways I did not approve of, but I was in a tiny minority. After we invaded Afghanistan, I remember talking with colleagues.  A conservative Persian-American associate was steely in her support for military action.  A progressive associate who wanted to switch offices and avoid tall buildings told me he didn't care about collateral damage in Afghanistan.  "We need to send a message that if you hit us, we will hit you back much harder."  The country united behind a President and a strategy.  I voiced my opposition to the war.  My conservative colleague told me that she respected my right to my opinion.  At the time, I thought that went without saying.

During the peak of the pandemic, more than 3000 Americans died every day of COVID.  Even with vaccines, we are still losing that many Americans every second day.  We made a lot of sacrifices after 9/11.  Today, Americans think it is too much when our government asks us to get a vaccine and put on a mask.  I am teaching in a classroom designed to accommodate 70 students but packed with 80.  Our state legislature passed a law that my university interprets as prohibiting us from requiring our students to wear masks.  The faculty begs students to wear masks.  Some of our students have unvaccinated children at home.  We ask students to wear masks to protect their classmates and their classmates' loved ones from infection.  Some of my students refuse to do so. 

Still, I comprehend nothing.

Early Frivolity: It's Star Trek Day!

I'll drink to that!

 

Bob Dylan Wins Suit Against Co-Creator of "Hurricane" & Remains the Champion of the World

By Peter Greenberg - Own work, CC BY-SA 3.0

Writing as I do from Oklahoma, home state to the Bob Dylan Archive, Levy v. Zimmerman caught my eye.  What's that you say?  How can there be a Bob Dylan archive in Tulsa, Oklahoma?  Why, it makes perfect sense if you think about it.  It's right next to the Woody Guthrie Center (right).  You should come and visit!  And if you're hungry after that, you can come to my home city, OKC, and dine at Nonesuch, America's best new restaurant, according to Bon Appetite!  Just sayin'.

Anyway, back in the early 70s, Bob Dylan collaborated with Jacques Levy to write ten songs, seven of which, including "Hurricane," were included in Dylan's 1975 album Desire (my second favorite Dylan album after Blood on the Tracks).  I'm confused as to why Bob Dylan, America's great minstrel, needs help writing songs, but such are the uncontested facts.  Levy was entitled to royalties on the songs, and he received $1 million.  Levy died in 2004, but his estate and his publishing company seek an additional $1.75 million.   Dylan sold his catalog of 600 songs to Universal Music Group (Universal) for $300 million, and plaintiffs allege that $1.75 million is their fair share of that sale.

Dylan 1966

As in the case that was the subject of yesterday's post, we are dealing here with a creator who contracts away his intellectual property rights in exchange for royalties.  The court found that Dylan was the copyright holder and that Levy had no claim for breach of contract arising under the catalog sale to Universal.

This ruling was largely based on the contracts designation of Levy as an "employee" hired to help with composition and entitled only to limited royalties.  Plaintiffs attempted to counterpunch, arguing that limiting the contract to that characterization elevated form over substance.  They produced detailed expert testimony from Bob Kohn, who characterized the relationship between Dylan and Levy as giving rise to "joint works" and a shared "undivided interest" in the songs.  

Mr. Kohn was fighting above his weight class.  Justice Barry Ostrager of New York's Supreme Court, New York County  cut him to ribbons:

In sum, the "expert" affidavit offered by Bob Kohn purporting to interpret the 1975 Agreement is inadmissible to offer an opinion as to the legal rights and obligations of the parties under the unambiguous contract . . . . Kohn's opinion is, in any event, unpersuasive as it distorts the plain language in the Agreement. Defendants' limited citation in their moving papers to Kohn's treatise does not change that result, as the Court is not relying on any extrinsic evidence to interpret the Agreement.

As Mr. Levy might have put it, Justice Ostrager

could take a man out with just one punch
But he never did like to talk about it all that much
"It’s my work", he’d say, "and I do it for pay
And when it’s over I’d just as soon go on my way"

He ruled based on the unambiguous meaning of the agreement:

[T]he Agreement unambiguously limits plaintiffs' compensation rights to 35% of monies received by Dylan for licensing rights granted to third-parties for the performance and use of the Compositions but not for any portion of the proceeds from Dylan's sale of his complete copyrights related to the Compositions that were explicitly vested in him alone pursuant to the express terms of the 1975 Agreement.

Justice Ostrager also dismissed Plaintiffs' claims against Universal as third-party beneficiaries of the catalog sale.  Plaintiffs could make no claim to the status of third-party beneficiaries to that sale.  He likewise dismissed their tortious interference claim.  Absent a breach of contract, there can be no such claim. 

In a case such as this, it seems inevitable that one of the parties would lament: 

How can the life of such a man
Be in the palm of some fool’s hand?
To see him obviously framed
Couldn’t help but make me feel ashamed
To live in a land
Where justice is a game 

H/T @NY_Contracts

Tuesday Top Ten - Contracts & Commercial Law Downloads for September 7, 2021

Welcome to this week's edition of the Tuesday Top Ten. Let's see what's happening with downloads in the objectively best fields of legal scholarship.

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 09 Jul 2021 - 07 Sep 2021

Rank	Paper	Downloads
1.	A State of Statelessness: The Indeterminate Domesticity of Federally Chartered Corporations Christina J. Lesko and Amir Shachmurove Independent and Harvard Law School	414
2.
3.	Herbert Hovenkamp as Antitrust Oracle: Appreciating the Overlooked Contributions of the New Harvard School Christopher S. Yoo University of Pennsylvania Law School	178
4.	Smart Contracts on Algorand Archie Chaudhury and Brian Haney Independent and Independent	149
5.	Systemic Risk of Contract Tal Kastner Touro College, Jacob D. Fuchsberg Law Center	116
6.	Introduction to Civil Wrongs and Justice in Private Law Paul B. Miller and John Oberdiek Notre Dame Law School and Rutgers, The State University of New Jersey - Rutgers Law School	82
7.	Steering Loan Modifications Post-Pandemic Pamela Foohey, Dalié Jiménez and Christopher K. Odinet Yeshiva University - Benjamin N. Cardozo School of Law, University of California, Irvine School of Law and University of Iowa - College of Law	78
8.	Between Rights and Rites: The Ironies of Crisis and Contract Jeffrey M. Lipshaw Suffolk University Law School	70
9.	An Economic Analysis of Restitution for Mistaken Payments Dhammika Dharmapala and Nuno Garoupa University of Chicago Law School and George Mason University - Antonin Scalia Law School, Faculty	67
10.	End-User Flexibilities in Digital Copyright Law – An Empirical Analysis of End-user License Agreements Péter Mezei and István Harkai University of Szeged, Institute of Comparative Law and Legal Theory and University of Szeged Faculty of Law and Political Sciences - Institute of Comparative Law and Legal Theory	55

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 09 Jul 2021 - 07 Sep 2021

Rank	Paper	Downloads
1.	A State of Statelessness: The Indeterminate Domesticity of Federally Chartered Corporations Christina J. Lesko and Amir Shachmurove Independent and Harvard Law School	414
2.	Smart Contracts on Algorand Archie Chaudhury and Brian Haney Independent and Independent	149
3.	Between Rights and Rites: The Ironies of Crisis and Contract Jeffrey M. Lipshaw Suffolk University Law School	70
4.	The Mysterious Market for Post-Settlement Litigant Finance Lynn A. Baker, Ronen Avraham and Anthony J. Sebok University of Texas School of Law, Tel Aviv University - Buchmann Faculty of Law and Yeshiva University - Benjamin N. Cardozo School of Law	66
5.	Data Protection in the Big Data Era: The Broken Informed Consent Regime and the Way Forward Alex Yueh-Ping Yang National Taiwan University - College of Law	32
6.	Indian Law on Standard Form Contracts M. P. Ram Mohan, Promode Murugavelu, Gaurav Ray and Anmol Jain Indian Institute of Management Ahmedabad, Shardul Amarchand Mangaldas & Co, Advocates & Solicitors, Supreme Court of India and National Law University, Jodhpur	16

SDNY Rejects Lady Duff Argument, Knee-Capping Plaintiffs

In Sharkey v. Zimmer USA INC, the District Court for the Southern District of New York granted defendants’ motion to dismiss, notwithstanding Plaintiffs’ invocation of the seminal case, Wood v. Lucy, Lady-Duff Gordon.

Plaintiffs Sharkey and Leinberry (Plaintiffs) invented subchondroplasty (SCP), a minimally invasive surgical technique.  In 2008, in exchange for $100,000 and a 3% royalty on sales of products using intellectual property related to SCP, Plaintiff’s transferred their SCP intellectual property rights to Knee Creations.  Knee Creations was obligated under the 2008 Agreement to use its ‘best efforts” to achieve certain milestones relevant to the marketing of SCP.  Knee Creations was also to refrain from engaging in research, development or marketing of any product competitive with the SCP intellectual property except with Plaintiffs’ prior approval.

In 2013, Defendant Zimmer USA INC (Zimmer) bought Knee Creations, incorporated it into its subsidiary, Zimmer Knee Creations (ZKC), and entered into a new contract with Plaintiffs, which amended the original 2008 agreement. This amendment deleted the provisions that had prohibited Knee Creations from engaging in research, development, or marketing of products competing with the SCP technology. It also eliminated the “best efforts” clause, except with respect to meeting the milestones. 

The sale of SCP products went well under Knee Creations.  It went even better during the first three years of the new partnership between Plaintiffs and ZKC, increasing from $5 million in sales in 2013 to $38 million in 2017.  And then, in 2016, Zimmer had a change of heart. 

According to the complaint, the problem with SCP, from Zimmer’s perspective, is that it is too effective in reducing the need for joint-replacement surgery.  Zimmer, Plaintiffs allege, had relationships with surgeons eager to perform such surgeries, and Zimmer succumbed to market pressures and stopped promoting SCP products. 

Plaintiffs filed their suit in 2020 claiming that Zimmer breached the covenant of good faith and fair dealing by not using best efforts to promote SCP products, by winding down its SCP-related operations, and by failing to protect SCP-related intellectual property and trade secrets.. The complaint also alleged that Zimmer tortiously interfered with Plaintiffs’ contractual relationship with ZKC by terminating ZKC’s employees and instructing it to focus on other products. Zimmer moved to dismiss Sharkey’s claims.

The court, applying New York law, held that Zimmer did not owe a duty to Plaintiffs to use its “best efforts” and sell the SCP products because the  agreement as amended required only the use of “best efforts” in reaching the milestones, not in promoting and selling SCP products. For whatever reason, the Plaintiffs bargained away their right to complain that Zimmer was engaged in developing or marketing competitive products.

Plaintiffs largely relied on the implied covenant in Wood v. Lucy, Lady Duff-Gordon—but the court distinguished this case from Wood. In Wood,  a reasonable person would have been justified in inferring that the agreement included a covenant that Wood would use his best reasonable efforts* to market Lady Duff-Gordon’s designs. Here, the agreement as amended entailed no duty on Zimmer’s part to to use its best efforts to promote and sell SCP products.  

    
Next, regarding Plaintiffs’ allegations that Zimmer had breached its duty of good faith and fair dealing, the Court found no factual allegations in support of a claim that Zimmer was contractually precluded from phasing out the component of its business dedicated to marketing SCP products. Zimmer also did not violate a duty of good faith and fair dealing by allegedly failing to protect SCP-related intellectual property and trade secrets because it had no contractual obligation to do so.  The court reasoned similarly with respect to Plaintiffs’ claims that Zimmer intentionally suppressed the sales of SCP-related products.  The claim of intentional suppression was conclusory; if sales were suppressed as a result of a change in business strategy, that result was a foreseeable outcome of the parties’ contractual agreement.

The District Court granted Zimmer’s motion to dismiss with prejudice regarding all of Plaintiffs’ claims, including its tortious interference, which was dismissed because Zimmer’s conduct, which was contractually permitted, could not be considered tortious.

H/T to Alyssa Cross and (you guessed it!) @NY_Contracts

* Thanks to Charles Calleros for the helpful correction in the comments!

Syracuse University Needs Help with Contracts and Other Stuff

Syracuse University College of Law invites applications from entry level and recently tenured lateral candidates for a position on the Law Faculty

Candidates should have an excellent academic record and should hold a JD degree from an accredited law school. Preferred post-JD experience and credentials include advanced degrees, judicial clerkships, relevant legal practice or similar experience. A demonstrated commitment to excellent classroom teaching and scholarship are required. A candidate’s ability to contribute to the diversity of the College of Law community is a preferred qualification for all positions.

Autonomous Systems, Artificial Intelligence, and Technology Law, Business and Commercial law, Contracts

The College of Law is seeking candidates with teaching and research interests in the following areas: artificial intelligence (AI), autonomous systems, and technology law; contract law; and all areas of business and commercial law. Emerging technologies, including AI and autonomous systems, drones and driverless cars, wearable medical devices, the blockchain and cryptocurrency, and smart contracts are disrupting settled understandings of contract formation and enforcement, risk allocation, liability, and insurance. This hire will bring expertise at the intersection of these emerging technologies and insurance law, commercial transactions and contracts, and privacy law. Applicants should bring expertise, preferably through graduate training, in one or more of the listed emerging technologies. This hire will support two of the College of Law's signature programs: the Institute for National Security Law and Policy and the Innovation Law Center. The faculty hire will also be affiliated with the Autonomous Systems Policy Institute (ASPI), which centers on interdisciplinary scholarship and teaching related to the design, policy, and social implications of autonomous systems.

This position is part of an ambitious Invest Syracuse Cluster Hire Initiative in Artificial Intelligence, Autonomous Systems, and the Human-Technology Frontier and provides exciting opportunities for collaboration in teaching and research in an organized cluster that includes faculty in the School of Law, the Maxwell School of Citizenship and Public Affairs, the College of Engineering and Computer Science, and the School of Information Studies. Expectations for this appointment will include working collaboratively with faculty members in the cluster, contributing to enhancing student experience through mentoring research, and participation in cluster activities.

This is a tenure-track/tenured position. Candidates are expected to teach in both the residential law program and in our online JD interactive program. Candidates can expect to teach a first- year course or a core upper-division course, along with other courses as needed.

Interested applicants are encouraged to use the AALS submission process to apply but may alternatively send their resume and names of three references, including academic references who are able to assess the candidate’s potential as a legal academic, to Professor Kristen Barnes, Chair, Faculty Appointments Committee, Syracuse University College of Law, Syracuse, New York 13244; email: [email protected]. Syracuse University is committed to diversity and is an equal opportunity employer. Applications will be accepted until the position is filled; however, priority consideration will be given to applications received prior to September 20, 2021.

Weekend Frivolity: Apple's ToS

I'm really pissed off at my sister, a retired nurse, who posted this meme on Facebook.  She's stealing my shtick -- and it's good shtick!

CORRECTION:  It's even worse!  My sister merely posted the meme after it was sent to her by my 90 year-old mother.  Everyone's a comedian!  O tempora, o mores!

Jaffe Transactional Law Invitational

Last year, not everyone who wanted to participate could participate.  There was a wait list. You've been warned!

Announcing a KCON Zoom Panel, Employment 2021: K v. Competition

Post-employment restrictions are in the news. President Biden mentioned them in his July 9 executive order.  In July, the Uniform Law Commission approved a uniform act governing covenants not to compete.  Illinois, Nevada, and D.C. have recently enacted legislation.

Should competition law should play a role in regulating such terms?  This panel will generate wisdom in that regard.

Employment 2021: Contract v. Competition
Which Should Govern Freedom to Work?
A KCON Zoom Panel

Friday, October 1, 2021
2 p.m. to 4 p.m. Central Time

Unconscionability in Contracting for Worker Training
Jonathan F. Harris
Associate Professor of Law
Loyola Law School, Los Angeles
@LawProfJHarris

Bundling Postemployment Restrictive Covenants: When, Why, and How It Matters
Non-Disclosure Agreements and Externalities from Silence
Evan Starr
Associate Professor
Robert H. Smith School of Business, University of Maryland
https://sites.google.com/site/starrevan/home

Boilerplate Collusion: Clause Aggregation, Antitrust Law & Contract Governance
Orly Lobel
Warren Distinguished Professor of Law
University of San Diego School of Law
https://www.orlylobel.com/

Remarks

Eric A. Posner
Kirkland & Ellis Distinguished Service Professor of Law
Arthur and Esther Kane Research Chair
University of Chicago Law School
Author of How Antitrust Failed Workers (and a batch of related articles)

Questions and Comments from the Floor

Please direct questions to Val Ricks, South Texas College of Law Houston, organizer and moderator, at [email protected].

To reserve a spot, please register in advance:

https://stcl.zoom.us/meeting/register/tJElcuGqrjooHtKMInJraeWfyac7cuWsfDdh

After registering, you will receive a confirmation email containing information about joining the meeting.