Friday, August 30, 2024
George Santos Sues Jimmy Kimmel Over Use of Cameo Video
Not a great week for George Santos (left). First, he had to plead guilty to wire fraud and identity theft. Now, he has lost his case against Jimmy Kimmel.
What do you do when you have been expelled from the House of Representatives and your campaign for re-election as an Independent has failed? One option is to capitalize on your notoriety by posting personalized videos through Cameo. Rudy Giuliani does it. Rod Blagojevich does it. Why shouldn't George Santos do it? According to The Guardian, the money is good, and Mr. Santos has bills to pay. As part of his plea agreement, he has to pay $375,000.
There is one down-side, of course. Some mean-spirited people might use the videos to make fun of Mr. Santos. According to the allegations of the complaint, that is what Jimmy Kimmel and his co-defendants did. Under the "guise of fandom," the defendants intentionally deceived Mr. Santos, broadcast his videos on television in order to demean and humiliate him, and then bragged about how it would be a "dream come true" if Mr. Santos were to sue, alleging fraud. Well, Mr. Santos knows a lot about fraud, and he did not hesitate to make Mr. Kimmel's dreams come true.
Mr. Santos filed suit in Santos v. Kimmel in February, alleging copyright infringement, fraudulent inducement, breach of contract, and unjust enrichment. The Complaint concedes that Cameo users can request videos licensed for personal or business purposes. However, Mr. Santos claims, neither license permits the national broadcast of the videos. Using pseudonyms, Mr. Kimmel allegedly created fourteen fake Cameo user accounts and solicited different personal videos from Mr. Santos for those fake accounts. Mr. Santos claims to have provided videos for these accounts, subject to licenses for personal use. Mr. Kimmel then broadcast five videos on his show, Jimmy Kimmel Live, and on various social media accounts in a segment he called "Will Santos Say It?." The answer, in every case is yes. Some examples are below, starting at around 6:50 in. Kinda lame actually. Not great comedy. Whatever.
Mr. Kimmel moved to dismiss the complaint, and Mr. Santos then amended the complaint. I have not been able to find a link to the amended complaint online. Mr. Kimmel then renewed his motion to dismiss. On August 19, the District Court dismissed the complaint based on the fair use doctrine. Mr. Santos's claims for breach of an express or implied contract were duplicative of his copyright claims and thus were also subject to dismissal.
August 30, 2024 in Celebrity Contracts, In the News, Recent Cases, Television | Permalink | Comments (0)
Thursday, August 29, 2024
Reviewing Larry DiMatteo and Irma Russell and Barbara K. Bucholtz, Part III
This is the third post in my series on Larry Di Matteo's Principles of Contract Law and Theory (Principles) and Irma Russell and Barbara K. Bucholtz's Mastering Contract Law (Mastering). The aim is to all some attention to these two books while using them to stimulate my thinking as I once again consider how to teach contracts law to first-year students. The two books are very different. Principles is a scholarly textbook addressing advanced topics at a very high level of sophistication. Mastering is a study-guide for first-year students. They both have their charms, but they are very different. Each entry in this series will cover a chapter in each book, with some splitting of chapters because the books don't have the same number of chapters. Most weeks, the chapters will not cover corresponding subject-matters. So be it.
The third chapter of Principles begins with a discussion of freedom of contract, which it splits into negative and positive freedom. Positive freedom is the freedom of individuals to contract without state interference in the form of required terms; negative freedom is freedom from state interference in the form of prohibited terms. And yet Principles notes that, at least in the context of asymmetrical bargaining, which is ubiquitous, some limitations on freedom of contract are unavoidable. (58)
Editorializing here, this is a highly libertarian presentation of positive and negative freedom. The tradition of positive freedom rooted in continental liberalism acknowledges the role of states in creating spheres in which individuals can exercise their freedom. That is, from the perspective of central Europeans prior to German and Italian unifications and the collapse of the Habsburg Empire, it was hard to imagine freedom without a strong state to create a realm in which freedom could develop and nourish.
From this perspective, the two freedoms that Principles describes are simply two sides of the same negative conception of freedom. What is left out is the, in my view, necessary intervention of the state, through, to give just one obvious example, the provision of a court system facilitating the enforcement of contractual obligations. We will soon be posting reviews of recent works by Hanoch Dagan (above left) and Rebecca Stone (right) on freedom of contract, and suffice to say that both of them articulate theories of freedom of contract capacious enough to accommodate much more forceful interventions than contemplated in Principles. That said, the difference may come down to Principles regarding freedom of contract as a relatively narrow principle subject to external limitations, while Professors Dagan and Stone, especially the former, see freedom of contract itself as the source of the limitations.
The next section of the chapter explores five tensions that contracts law seeks to balance. First, Principles acknowledges that while contract law needs to project stability in order to promote confidence in the enforceability of binding promises, the law evolves, usually slowly but sometimes jarringly, in response to exogenous impulses like the arrive of the New Deal or electronic contracting. (58-59) In the next section, Principles veers away from the libertarian perspective discussed above and acknowledges the role of default terms and gap fillers in facilitating contract formation. Regulation might seem in tension with facilitation. In fact, they are symbiotic. (60-61) Third, Principles identifies a tension in theories of enforcement. Classical doctrine enforces based on promises; modern doctrine also enforces based on estoppel. (62-63) Principles next explores a tension between formal and substantive rules. The former may at times prevent the effectuation of the latter, as when a statute of limitation lapses or a contract cannot be enforced for wont of a wax seal. The abandonment of the writ system and a more capacious concept of consideration have eased some of these tensions, but they persist. (64-65) Finally, Principles notes that the seeming tension between the civil law tradition, which favors specific performance and the common law preference for expectancy damages is not as pronounced as it seems. The common law embraces specific performance when unique goods or property are involved, and Article 2 provides for an expansion of the availability of the remedy. Civil courts encourage settlement in lieu of specific performance, because the latter requires potentially costly monitoring (65-66)
In the final section of the chapter, Principles explores tensions in contracts theory as opposed to contracts doctrine. Freedom of contract is tempered by concerns over justice in asymmetrical contracts of adhesion. One-sided terms can be enforced only if reasonable (68-69) or meaningful consent can be guaranteed through disclosure requirements. (70) There follows a discussion of how relational contract theory and the doctrine of good faith result in shifts in contracts doctrine. (71-73) I would add that relational contract theory is especially important in understanding a tension mentioned earlier in the chapter (59) between the law on the books and the law in action. Non-breaching parties may forgive the breach in order to preserve the relationship, or the parties might renegotiate the present deal to adjust for changed circumstances.
Chapter 3 of Mastering is about interpretation. This strikes me as a surprising choice and not the only organizational idiosyncrasy of the book. I would treat formation before getting to interpretation. I suppose the justification for starting with interpretation is that it permits the Authors to foreground the principle that what courts ought to enforce is the intentions of the parties. So even before we learn about formation, we are thinking ahead to the end game of expectation damages.
An additional benefit of foregrounding rules of interpretation is that many of them have applications beyond the realm of contracts law. (20) They begin with Williston's distinction between interpretation and construction (21), on which see Gregory Klass's work, reviewed here. They then proceed to a discussion of interpretation in the statutory context, beginning with the "no vehicles in the park problem" and discussing the role of statutory definitions, legislative history, explication through case law, and public policy as a tool of interpretation. (22-24)
The Authors next discuss canons of construction, mostly focusing on contractual construction, but occasionally referencing statutory construction as well. (24-28) This is valuable material and it is well presented. I just think about how a first-year student would use this book. I have never seen a casebook or treatise that discusses interpretation before formation. The Restatement begins with formation. And so, if I were assigning or recommending Mastering to my students as a supplement, I would tell then to skip chapter 3 and return to it after we have completed formation. By that time, they will have read enough case law so that we could draw from that material to give examples of how the cannons might be deployed.
After a very short section on treatment of extrinsic evidence under the common law (29), the chapter next covers extrinsic evidence under Article 2, which they say is similar to common law rules on extrinsic evidence. (29-31) The chapter concludes with a brief section on the parol evidence rule (32), which certainly makes sense in connection with the discussion of extrinsic evidence, but is a bit odd, given that the authors say the parol evidence rule is not a rule of interpretation (19) and is covered separately in Chapter 9. I teach the parol evidence rule in the section of my course devoted to interpretation, but I agree that it is not a rule of interpretation. However, I would say the same about rules relating to the admissibility of extrinsic evidence.
Again, I have reservations about organization and scope of treatment. Chapter 9 provides a thorough treatment of the parol evidence rule but no further discussion of extrinsic evidence. Again, thinking about this book as something for first-year students, I think the discussion of extrinsic evidence is misplaced here and too cursory, given the importance of the subject matter and its conceptual difficulty. The Authors lay out the relevant UCC rules relating to extrinsic evidence clearly enough, but they provide only one concrete example, and even there they do not cite to a case but just describe it. Absent an opportunity to see how these rules play out in the case law, I don't think students can appreciate the dramatic effects of the UCC's rules on extrinsic evidence in cases like Nanakuli and Columbia Nitrogen. But those are pretty complex cases, best introduced after students have gained some familiarity with the material.
The first post in this series can be found here
Part II is here.
August 29, 2024 in Books, Commentary, Contract Profs, Recent Scholarship, Teaching | Permalink | Comments (0)
A Passover Night Different From All Other Passover Nights . . .
Since 2008, Greenwald Caterers had been hosting a Passover seder for the Orthodox Jewish community at a hotel in Lancaster, Pennsylvania (the Hotel). The contract gave community members the right to exclusive use of the entire hotel, with the exception of some common areas and represented that the hotel would maintain certain standards of cleanliness, including making sure that the facilities were maintained in accordance with Jewish regulations regarding kashrut -- all dining facilities had to be kosher and kosher for Passover.
In 2018, the Hotel was acquired by Wyndham and was undergoing re-branding and renovations. Notwithstanding these developments, the parties entered into a five-year agreement that the Hotel would continue to host the seder through 2023. However, according to the plaintiffs, they arrived for the 2019 seder to discover the Hotel in a state of disarray.
One of the centerpieces of a Passover seder is the "Four Questions" usually read/chanted by the youngest participant in the seder. The four questions begin by asking why this night is different from all other nights and then each verse of the four questions specifies ways in which the seder is different from other evening meals.
In what ways was the 2019 seder in Lancaster different from all other seders? As the U.S. District Court for Eastern Pennsylvania recounts in Greenwald Caterers LLC v. Lancaster Host LLC, attendees encountered in their rooms:
[C]at crates, cat litter, a “deeply inundating” smell of cat waste, plumbing issues, lack of water, sewage backups, mouse droppings, cockroaches, vermin, exposed nails, uncovered electrical outlets, mold, exposed lead paint, construction dust, non-functioning air conditioning, unmade beds, misplaced or missing furniture and beds, missing cots, missing doors, non-Kosher cooking utensils and cooking equipment, and inoperable telephones.
And of course, the kitchen facilities did not meet the Kosher standards specified in the contract. It's hardly the ten plagues, but it sounds pretty bad. The herbs must have been especially bitter that evening. Even after downing all four obligatory glasses of wine, nobody is going to be saying "Dayenu!"
And what's up with all the cats? Were the cats brought in to address the mouse and other vermin problems or did this rebranding and renovation crew consist of childless cat ladies? So many questions . . . .
Greenwald Caterers scrambled to accommodate its clients. It hired extra staff, found lodging for some attendees at neighboring hotels, provided free food and linens to guests, secured generators and fuel, and set up a temporary cooking facility. The court ruled on competing motions for summary judgment, denying plaintiffs' motion, granting defendants' motions in part, and moving the case a step closer to trial.
As to plaintiffs' motion, the court found that defendants had created disputes as to issues of fact with respect to each of plaintiffs claims for breach of contract. A jury must makes credibility determinations after hearing from fact witnesses. As a result, the court denied plaintiffs motion for summary judgment as to their breach of contract and declaratory judgment claims
In the next part of the opinion, the court granted the Hotel's motion to preclude testimony from two of the plaintiffs' three expert witnesses. A jury could hear from a third expert only as to certain issues. The court then granted some portions of the defendants' motions for summary judgment, excluding certain categories of damages from the case going forward. Five years after the incident, with the court having cleared away so many issues, I would be surprised if the case did not quickly proceed to settlement.
August 29, 2024 in Food and Drink, Recent Cases, Religion | Permalink | Comments (1)
Wednesday, August 28, 2024
Sidney DeLong on Contracts in Moby Dick -- Warning: Thar Be Spoilers!
Ahab’s Doubloon: A Contracts Analysis
Sidney W. DeLong
As he showed in Billy Budd, Herman Melville (right) knew his way around the law of the sea. Moby Dick is not generally thought of as a text on the common law but upon whales and whaling. Yet one of its central episodes invites a contract analysis.
Whaling Wage Contracts. Early in the novel Moby Dick, the narrator, Ishmael, describes the contract (“articles”) that a crew member of a whaling vessel signed with the owners of the vessel before beginning the voyage,
I was already aware that in the whaling business they paid no wages; but all hands, including the captain, received certain shares of the profits called lays, and that these lays were proportioned to the degree of importance pertaining to the respective duties of the ship’s company. I was also aware that being a green hand at whaling, my own lay would not be very large; but considering that I was used to the sea, could steer a ship, splice a rope, and all that, I made no doubt that from all I had heard I should be offered at least the 275th lay—that is, the 275th part of the clear net proceeds of the voyage, whatever that might eventually amount to.
The lay of a crewmember was often so little that after two or three years voyage, it might not cover the cost of liquor and other articles purchased on credit from the ship.
Shortly after the Pequod had set sail, Captain Ahab appeared on deck and addressed the assembled crew, beginning with a sort of catechism:
“What do ye do when ye see a whale, men?”
“Sing out for him!” was the impulsive rejoinder from a score of clubbed voices. . . .
“And what do ye next, men?”
“Lower away, and after him!”
“And what tune is it ye pull to, men?”
“A dead whale or a stove boat!” . . . .
These answers faithfully recited the duties undertaken by all the crew, in return for which they were to be paid their modest lays.
Ahab then made his offer:
“All ye mast-headers have before now heard me give orders about a white whale. Look ye! d’ye see this Spanish ounce of gold?”- holding up a broad bright coin to the sun- “it is a sixteen-dollar piece, men. D’ye see it? Mr. Starbuck, hand me yon top-maul.”
. . . Receiving the top-maul from Starbuck, he advanced towards the main-mast with the hammer uplifted in one hand, exhibiting the gold with the other, and with a high raised voice exclaiming: “Whosoever of ye raises me a white-headed whale with a wrinkled brow and a crooked jaw; whosoever of ye raises me that white-headed whale, with three holes punctured in his starboard fluke- look ye, whosoever of ye raises me that same white whale, he shall have this gold ounce, my boys!”
“Huzza! huzza!” cried the seamen, as with swinging tarpaulins they hailed the act of nailing the gold to the mast . . . .
As things turned out, it was Ahab himself who first sighted Moby Dick. But then, to keep the crew motivated, he enlarged his offer:
“[A]dvancing toward the doubloon in the main mast – ‘Men, this gold is mine, for I earned it; but I shall let it abide here till the white whale is dead; and then, whosoever of ye first raises him, upon the day he shall be killed, this gold is that man's; and if on that day I shall again raise him, then, ten times its sum shall be divided among all of ye! Away now!’”
Suppose it was not Ahab but a crew member who first raised Moby Dick: Could he have enforced the promise of the doubloon upon returning safely to port? Or suppose the conditions of the second promise had been fulfilled: Could the crew enforce the second promise of ten times the sum?
Alas, Melville made sure that we will never know whether the promises Ahab made to the crew of the Pequod would have stood up in a Nantucket courtroom at the end of the voyage. Moby Dick was “raised” but never killed. Ahab’s doubloon went to the bottom nailed to the main mast of the Pequod , while Ahab’s fate was to die affixed to the curse´d whale, entangled in his harpoon line, leaving the contracts questions unanswered.
Until now.
The Pre-Existing Duty Rule, Then and Now. There is a good reason that older contracts casebooks illustrate the law of contract modification with cases drawn from the 19th century history of seafaring. After the crew members signed their employment contracts (“articles”), they embarked on a journey that could, in the case of whaling vessels, last for years. Once at sea, the parties were locked in a bilateral monopoly: the crew could not quit their jobs and the shipowner could not hire replacements. Under these conditions, a sea captain’s promise to raise the crew’s wages became especially suspect when they returned to port.
In The Death of Contract, Grant Gilmore discussed the law of contract modification, duress, and the pre-existing duty rule citing Harris v Watson 170 Eng. Rep. 94 (1791) and Stilk v Myrick 170 Eng. Rep. 851 (1809). Each decision refused to enforce a captain’s unsolicited offer to pay extra wages to crew members who were unexpectedly forced to work short-handed or in dangerous circumstances. The English courts cited both the pre-existing duty rule and grounds of public policy: The crew had a contractual duty to work under all conditions and so gave no additional consideration for the promised wage increase. More importantly, permitting crews to enforce promises for extra wages would tempt the crew, once at sea, to make extortionate demands or even threaten mutiny. For an empire built on control of the sea, public policy demanded that their claims receive no judicial support.
In America, judicial hostility to mid-course modifications of seamen’s wages continued into the 20th Century and applied even when the crew was not at sea but only at a remote land location. In the familiar case of Alaska Packers Ass’n v Domenico, 117 F. 99 (9th Cir. 1902) the court refused to enforce a contract modification raising the crew’s rate of compensation for salmon fishing after the crew complained of bad nets. Law and economics scholars later justified Alaska Packers by its tendency to forestall the “hold-up game” otherwise made possible in locations remote from labor markets. As an added bonus, the mechanical pre-existing duty rule was far less costly to administer than a rule requiring a finding of duress or bad faith as a condition to non-enforcement.
Alaska Packers also found seamen’s wage claims under modified contracts to be unenforceable under agency law. The captain or master of the ship did not have actual or apparent authority to make promises binding on the owners. The captain himself was only a higher-paid employee of the owners.
Thus, under the common law in effect when the Pequod sailed, Ahab’s promise of the doubloon was unenforceable because it was not supported by consideration: the Q&A that preceded the offer showed that the crew were already committed to raise and hunt any whale to the death. Ahab offered them a gift, a bonus for doing what they were legally obliged to do.
The crew might argue that their duty was owed to the Pequod’s owners, but the offer came from Ahab, to whom the crew owed no pre-existing duties. The doubloon represented a side deal. But this argument might have outraged the court even more than the modification argument and for stronger public policy reasons. McDevitt v Stokes 192 S.W. 681 (Ky. 1917) refused to enforce a bettor’s promise of extra pay to a jockey if his horse won a race. Kentucky judges didn’t fancy enforcing bribes of jockeys by racing touts. Likewise, a Nantucket court concerned with protecting the whaling industry would have refused enforcement of a captain’s promise of extra wages to achieve a personal vendetta as tending to divert the crew from their primary mission, as it disastrously did in the case of the Pequod.
The Pre-Existing Duty Rule Today.
The strong public policies associated with marine commerce that led courts to refuse enforcement of promises of extra pay made on the high seas did not persist into land-based commercial contracts in the 20th Century. Employers’ fears of employee duress have been replaced by employers’ need for flexibility in the rapid modification of ongoing employee contracts. Employers now value the ability to make binding promises of extra compensation in circumstances in which they have a need to increase employee incentives.
The application of the pre-existing duty rule to modifications was modified in Restatement (Second) of the Law: Contracts. Retrospectively applying modern law to Moby Dick, if the bonus offers had been made by the owners, they might well have passed muster as modifications of the crew’s articles.
Section 89 Modification of executory contract.
A promise modifying a duty under a contract not fully performed on either side is binding
- a) If the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made; or
- b) to the extent provided by statute; or
- c) to the extent that justice requires enforcement and view of material change of position in reliance on the promise.
The crew might have argued that, even though killing Moby Dick was within the literal definition of their duties, nevertheless the additional reward for raising Moby Dick was fair and equitable in light of the extraordinary risk involved, a risk that was not anticipated when they signed on. Indeed, Ahab’s mad quest for the whale destroyed the Pequod and cost the crew their lives. Moreover, once the Pequod had given chase to the deadly whale, the men had indeed incurred a “material change” in their safety in reliance on the promise of the doubloon.
Their reliance might also make Ahab’s later promise of ten times the original bonus enforceable as a gift promise under the modern principle of promissory estoppel, Their reliance was both foreseeable and detrimental. Refusal of enforcement would have been unjust in light of the risks the crew incurred in reliance on the promise.
The crew would still face the agency argument, however. But the claim for the doubloon against its owner, Ahab, should have been enforceable both as a unilateral contract and under the promissory estoppel principle. The crew foreseeably endangered themselves, as they were intended to do, in reliance on the promise and justice surely requires that their reliance made the promise enforceable.
But even if by some rationale the crew (or their survivors) should be deemed to have earned the doubloon, the problem would remain of collecting their bounty. In the literary undersea world, the doubloon remains forever affixed the mast of the Pequod.
August 28, 2024 in Books, Commentary, Labor Contracts | Permalink | Comments (0)
Tuesday, August 27, 2024
Tuesday Top Ten - Contracts & Commercial Law Top SSRN Downloads for August 27, 2024
Top Downloads For:
Contracts & Commercial Law eJournalRecent Top Papers (60 days)
As of: 28 Jun 2024 - 27 Aug 2024| Rank | Paper | Downloads |
|---|---|---|
| 1. | 2,201 | |
| 2. | 199 | |
| 3. | 194 | |
| 4. | 173 | |
| 5. | 154 | |
| 6. | 149 | |
| 7. | 137 | |
| 8. | 131 | |
| 9. | 131 | |
| 10. | 119 |
Top Downloads For:
Law & Society: Private Law - Contracts eJournalRecent Top Papers (60 days)
As of: 28 Jun 2024 - 27 Aug 2024| Rank | Paper | Downloads |
|---|---|---|
| 1. | 194 | |
| 2. | 173 | |
| 3. | 154 | |
| 4. | 53 | |
| 5. | 47 | |
| 6. | 47 | |
| 7. | 46 | |
| 8. | 42 | |
| 9. | 34 | |
| 10. | 28 |
August 27, 2024 in Recent Scholarship | Permalink
Texas Court Follows Illinois on Binding Minors to Parents' Arbitration Agreements, Case #2
In this morning's post, we covered an Illinois case in which a child, injured at an amusement park, had to arbitrate her claim against the venue because her mother had signed an arbitration agreement on her behalf. That case was brought against Chicago Urban Air. This second case is totally different. The defendant here is Pearland Urban Air LLC (Pearland).
The issue in Pearland Urban Air, LLC v. Cerna was slightly different from Headlee. Ms. Cerna took her child, R.W., to Pearland in August 2020. On that occasion, she signed a arbitration agreement with no set duration. She returned to Pearland with R.W. in November 2020, and on this second occasion, she signed no arbitration agreement. R.W. was injured on the second visit. Ms. Cerna sued for negligence, and Parkland moved to compel arbitration. The trial court denied the motion, without stating its grounds for doing so.
The Texas Fourteenth Court of Appeals found that the arbitration agreement that Ms. Cerna signed in August 2020 unquestionably governed. Her only argument was that R.W. never signed the agreement. Unlike Illinois, the Texas court did not rely on the third-party beneficiary doctrine, or at least it doesn't call it that. Rather, under Texas law, parents can sign arbitration agreements on behalf of their children and bind those children through what Texas law calls an equitable principle of direct-benefits estoppel. Having accepted the benefits of the agreement by enjoying Pearland's offerings, R.W. bound himself to the agreement's terms.
As to Ms. Cerna's arguments that the August agreement did not cover the November visit, that relates to the scope of the agreement between the parties. Questions of scope can be determined buy the arbiter. Similarly, Ms. Cerna argued that Texas's Arbitration Act prohibits arbitration of personal injury claims absent an agreement signed by each party and their attorneys. That argument constitutes a challenge to the arbitration provision itself . Ordinarily, a court could decide such an issue, but here the arbitration agreement delegates such questions to the arbiter.
Chief Justice Christopher (left) dissented on this last issue. She viewed the issue as one of contract formation. Absent an agreement signed by the parties and their attorneys, there is no agreement to arbitrate this personal injury claim as a matter of Texas law. However, Chief Justice Christopher believed the case to be governed by the Federal Arbitration Act, which has no signature requirement, and so she concurred on that basis.
I note that this is a less alarming version of what I have called arbitration-clause bootstrapping and David Horton has discussed as Accidental Arbitration and as Infinite Arbitration Clauses. It's just not reasonable to think that just because a person signs a form for one visit a venue that they agree to that form's terms for eternity. Why is it a problem to require that the venue provide the form with each visit? They change their terms regularly. Why not get consent regularly?
For more alarming examples, see our recent post on the Airbnb case in which Airbnb claimed that a guest injured at a rental was bound by its arbitration clause because, years earlier, he had registered on its site. More notoriously, Disney tried to compel arbitration in the case of a husband of a woman who died after eating in a Disney-affiliated restaurant on the ground that he had once had a trial subscription to Disney +. That wasn't Disney's only argument, but it is noteworthy that the company even tried it.
August 27, 2024 in Recent Cases | Permalink | Comments (0)
Child Bound By Parents' Arbitration Agreement with Amusement Park, Case #1
Today, we have two separate posts on two very similar cases.
The Headlees took their daughter, K.H. to an amusement part. This is the torts equivalent to "A guy walks into a bar." To reduce any suspense about what I am about to narrate, I add that K.H. was played on "Wipeout" an attraction at the park involving a trampoline and bars that one has to leap over or duck under. What could possibly to wrong?
Well, I'm sure nothing. But, just in case, the venue had K.H.'s mother sign the following release:
I, the Parent/Guardian, on behalf of myself and that of the minor(s) identified above, as applicable, have read the above Assumption of Risk, Waiver of Liability, and Indemnification Agreement and fully understand and agree to its terms. I understand that I am giving up substantial rights, including my right to sue, by executing this Agreement. I further acknowledge that I am agreeing to indemnify Urban Air, as provided above, for all claims the referenced minor may have against Urban Air. Lastly, I acknowledge that I am signing this Agreement freely and voluntarily, and intend my signature to constitute a complete and unconditional release of Urban Air for all liability due to (1) ordinary negligence of Urban Air and those parties named herein and (2) to the inherent risks of the activity, to the greatest extent permitted by the laws of the state in which the Urban Air is located. By signing below, the Parent or Court-Appointed Legal Guardian agrees that they are also subject to all the terms of this document, as set forth above.
Kristin Headlee also signed an arbitration agreement.
You will be shocked to learn that K.H. was severely injured when she was hit by one of Wipeouts rotating bars. Her parents sued for negligence in state court. The venue, Chicago Urban Air (Urban Air), had the case transferred to federal court based on diversity and then filed a motion to compel arbitration in the U.S. District Court for the Northern District of Illinois. The issue in Headlee v. Chicago Urban Air, LLC was whether the arbitration agreement was binding as against K.H., a non-signatory and a minor. Surprisingly, this issue has never been addressed under Illinois law, and caselaw from other jurisdictions is sparse, everywhere other than this blog, it appears.
The Headlees first argued that the arbitration agreement was procured through procedurally unconscionable means. The court rejected that argument. Yes, it was offered on a take-it-or-leave-it-basis, but there was really nothing underhanded about the arbitration provision, other than the general insanity that our law allows the proprietors of venues that put people at risk to insulate themselves from liability for their own negligence. Urban Air had no duty to explain the provision to the Headlees. The duty to read applies.
The Headlees' next argument was meatier. It argued that Kristin Headlee's agreement to arbitrate does not bind her daughter, and it would violate public policy to deprive a minor of her right to a jury trial. A Pennsylvania court refused to enforce an arbitration agreement against a minor in similar circumstance in 1998, but New Jersey went the other way in 2006. The court found no need to wade into unsettled waters. K.H. was bound as a third-party beneficiary to her mother's agreement to arbitrate. Because the issue was simply arbitration rather than a waiver of K.H.'s substantive rights, the court viewed the public policy considerations as less weighty in this context. The right to a jury trial is not a substantive right?
Finally, the Headlees claimed that K.H. disaffirmed the arbitration agreement. She may well have done so, but an infant's right to disaffirm an agreement is a defense to contractual liability, not an argument against the formation of an arbitration agreement. The Headlees are free to raise the argument that K.H. disaffirmed the arbitration agreement with the arbiter.
The court granted Urban Air's motion to compel. A second post on a similar case will follow later today.
August 27, 2024 in Recent Cases | Permalink | Comments (0)
Monday, August 26, 2024
Hiring at Boston University School of Law
Professor of Law /Associate Professor of Law
Boston University School of Law
BOSTON UNIVERSITY SCHOOL OF LAW, a top-tier law school with an international reputation, is a community of leading legal scholars, teachers, students, and alumni, who are dedicated to providing one of the finest legal educations in the world. Since our doors opened in 1872, we have admitted and enrolled accomplished students to our program regardless of their race, sex, and religion. The breadth and depth of our curriculum and scholarship as well as our innovative spirit are distinctive in U.S. legal education.
Boston University School of Law invites applications from both entry-level and experienced candidates for a number of positions with a projected start date of July 1, 2025. The search is broad and not limited to particular subjects, but we have especially strong teaching needs in Civil Procedure, Contracts, Criminal Procedure, Property, Trust and Estates, American Indian Law, AI Regulation, Professional Responsibility, Alternative Dispute Resolution, and Private International Development Law, International Law, Bankruptcy, Housing Law, Sexuality/Gender/Gender Identity and the Law, and Land Use Law. Experienced candidates should have a distinguished record of scholarly achievement, effective teaching, active service, and a distinguished record of inclusion. Junior lateral and entry-level, tenure-track candidates should have demonstrated potential for high scholarly achievement, teaching excellence, service, and a record of inclusion. We are additionally seeking candidates for the Director of our Student Innovations Law Clinic (Clinical). Please see that individual posting for a full description.
At Boston University School of Law, we are dedicated to building a just, inclusive, and engaged community of faculty, staff, and students. We recognize we have more work to do to achieve this vision. Boston University School of Law is committed not only to the ideals of faculty diversity and inclusion but also to the work of creating and implementing practices that combat exclusion and inequity by race, ethnicity, gender, gender identity, sexual orientation, disability status, religion, and other identities subject to historical subordination. We also strive to foster a more inclusive intellectual culture that represents and encourages a broad range of intellectual traditions and approaches to the law. We welcome expressions of interest from applicants of all identities, intellectual traditions, and perspectives.
BU conducts a background check on all final candidates for certain faculty and staff positions. The background check includes contacting the final candidate’s current and previous employer(s) to ask whether, in the last seven years, there has been a substantiated finding of misconduct violating that employer’s applicable sexual misconduct policies. To implement this process, the University requires a final candidate to complete and sign the form entitled “Authorization to Release Information” after execution of an offer letter.
We are an equal opportunity employer, and all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, age, national origin, physical or mental disability, sexual orientation, gender identity, genetic information, military service, pregnancy or pregnancy-related condition, or because of marital, parental, or veteran status, or any other characteristic protected by law. We are a VEVRAA Federal Contractor.
How to Apply:
Applicants should send a letter of interest and a C.V. as soon as they are able to the Faculty Appointments Committee at [email protected]. Applications are being reviewed immediately and on a continuing basis, with priority given to those who submit early in the fall semester and are submitted prior to October 1, 2024. All open faculty positions are pending budgetary approval.
To learn more about the law school, visit our website at www.bu.edu/law.
August 26, 2024 in Help Wanted, Law Schools, Teaching | Permalink | Comments (0)
Florida Court Sends Patient's Protests Over Nude Photos to Arbitration
The plaintiff in M.P. v. Guiribitey Cosmetic & Beauty Inst. sough elective, cosmetic surgery from the defendant (Guiribitey). When she paid her deposit, the invoice included a choice-of-law provision providing for arbitration. On the eve of surgery, she received a 49-page packet, which included provisions for the use of photographs of the plaintiff:
The photographs may be used (anonymously) included and not limited to television, interviews, programs produced for cable TV, on the Internet, social media Facebook, Instagram, Snapchat or other media, for marketing, educational or promotional materials.
Although the plaintiff could have refused or qualified the scope of her consent, she did not do so. This packet also included a broad arbitration agreement that the plaintiff signed.
Upon discovering nude images of her body on Instagram, plaintiff sued, and Guiribitey moved to compel arbitration. Plaintiff alleged that the last-minute presentation of the arbitration agreement, the nonrefundable nature of her deposit, and judicial carve-out for fee collection claims rendered the agreement unconscionable and the product of duress. The trial court granted the motion to compel, and plaintiff appealed.
Much of the intermediate appellate court's opinion is taken up with plaintiff's argument on unconscionability. As to procedural unconscionability, plaintiff did not offer much beyond the argument that the contract was adhesive and offered on a take-it-or-leave-it basis. No other indicia of procedural unconscionability were present. The font was not unusual; the provisions were clearly delineated.
On substance, plaintiff had even less. She argued that the carve-out from arbitration for fee disputes rendered the arbitration provision substantively unconscionable. The court, however, found that such provisions are common and accord with common sense, as fee disputes are routine matters that would be unnecessarily complicated by subjecting them to arbitration.
Plaintiff's duress claim was equally unsuccessful. She argued that her agreement was coerced because the main arbitration agreement came only after she had already paid a non-refundable deposit. However, she was given notice that her relationship with Guiribitey would be governed by an arbitration agreement when she paid her deposit.
Finally, the dispute was clearly within the scope of the arbitration agreement, and so the court granted Guiribitey's motion to compel.
August 26, 2024 in Recent Cases, Web/Tech | Permalink | Comments (0)
Friday, August 23, 2024
South Texas College of Law Is Looking to Fill Tenure Track and VAP Positions
While all candidates for tenure-track and VAP positions will be considered, we particularly seek candidates interested in teaching: Legal Research and Writing; Contracts; Criminal Law; Constitutional Law; Property; and Wills, Trusts, and Estates. We seek candidates with outstanding academic records who are committed to both excellence in teaching and sustained scholarly achievement.
August 23, 2024 in Help Wanted, Law Schools | Permalink | Comments (0)
What's All the Fuss About? The Great Scrape
Occasionally, new private law scholarship posted on SSRN gets downloaded by thousands of people. When it does, inquiring minds want to know what all the fuss is about. This feature of the blog gives you the tl;dr on what you really ought to be reading for yourself. Today's subject is the most recent paper by Daniel Solove (below left) and Woodrow Hartzog (below right), The Great Scrape: The Clash Between Scraping and Privacy, which is pushing 2000 downloads on SSRN.
Scraping, the Authors tell us is. the automated extraction of large amounts of data from the internet. Through scraping, actors gather enormous amounts of data and personal information (worrisome) without notice or consent (troubling), and then this information provides fodder for AI tools such as facial recognition, deep fakes, and large language models (panic-inducing). (4 - parentheticals added). The Authors concede that scraping has its socially beneficial uses, but scraping of personal data "violates nearly every key privacy principle embodied in privacy laws, frameworks, and codes" and is, in short, "antithetical to privacy." (4) While scrapers contend that they make use of publicly available data, courts have recognized a privacy interest in publicly-available but practically obscure personal information. (4)
We need scraping to have a useable Internet, but scraping is in fundamental tension with basic privacy law. The Authors call for responding to the Great Scrape with the Great Reconciliation of scraping and privacy norms. (5)
Part I of the Article provides a history and explanation of scraping. We first learn that scraping, that is, online data harvesting, has been around as long as the Internet (7-9), but the power of scraping tools has grown vastly in the age of AI. (9-10) If you are on this site, statistically, it's more likely that you are a bot scraping the blog than a human reading the blog. Now, if you happen to be a bot, I'm not judging you. The Authors say I can't because the scraping of personal data occurs in the murk of an ethical twilight zone. (11-13) Which brings us to the current conundrum of "scraping wars." Some of the very websites that hire scrapers to enhance their functionality now object to being scraped for other purposes. (13-14) They are fighting back against the scraper through legal challenges with theories ranging from trespass and fraud to business torts and violations of privacy protections, (14-20) and by trying to use technology so that they can fight fire with firewall. (20-21) While scrapers are trying to buy out the resistance (23), regulatory intervention might change the market conditions for doing so. (23-27) The Authors highlight EU regulatory actions against Clearview AI. (25-26) While the FTC may have the legal means to regulate scrapers, it is not clear that it has the political clout to do so. (26-27)
In Part II, the Authors detail the fundamental tension between scraping and privacy. Privacy law is governed by bedrock principles known as the Fair Information Practice Principles (FIPP). FIPP comes down to three rules: only collect data when necessary, keep the data safe, and be transparent. According to the Authors, scraping violates all of these principles. (29). The overarching goad of FIPP is fairness, but the Authors also list seven other fundamental principles. (30-38). Their conclusion is not optimistic: "It is not clear that scraping can be performed in a privacy-friendly way." This is so because both the fundamental principles of privacy and the building blocks of privacy laws are "in dramatic conflict with scraping." (38)
Scrapers defend themselves by claiming that they only access publicly available information. In the next section of their paper, the Authors set out to show that the claim "that there is no privacy interest in publicly-available information is normatively and legally wrong." (39) First, it is simplistic to think that we can categorize information as "public" or private. People may still have an expectation of privacy in information that has been denoted "public" for certain purposes. (39-41) Some regulatory scheme and some caselaw recognize that privacy laws need to shield at least some publicly available information from scraping. There is safety in obscurity; SCOTUS implicitly recognized this in Carpenter when it noted that "A person does not surrender all Fourth Amendment protections by venturing into the public sphere." (44) One used to be able to make information about oneself available to the public without worrying about its dissemination, because the effort it would take to gather that information greatly exceeded its value. But with the aid of AI, scrapers can hoover up everyone's information with great efficiency. Privacy law has not fully reckoned with this environmental shift.
In Part III, the Authors introduce their proposed Great Reconciliation. They propose that we re-conceive scraping as a form of surveillance and as a data-security violation. (45) Defenders of scraping maintain that is just like human web browsing, which is true in the sense that a grain of sand is like a beach, or as the Authors put it, "But this ignores scraping's incredible affordances of scale." (47) The Authors propose that the data protection authorities, like the FTC, could impose obligations on entities entrusted with people's data to protect that data from scraping, just as they have an obligation to take measures to prevent other data-security violations. (49-50)
The Authors note that privacy law alone cannot effectuate the desired Great Reconciliation. Some privacy approaches might lead to a total ban on scraping, which would be undesirable (52-54), but other privacy laws are too loose and too easily evaded. (51) The solution involves a broader inquiry into whether particular forms of scraping are in the public interest. (52) One helpful first step would be to require individual consent for data scraping, but as anyone who has bought anything online this century knows, there are problems with the way courts have construed consent in this country. (54-55) Moreover, powerful websites may negotiate deals to sell scraping rights and further monetize their control of data, exacerbating the yawning gap between the haves and the have-nots. (55-56)
The Authors propose a legal system that regards scraping as a privilege. In order to exercise the privilege, the scraper must (1) have a valid justification; (2) provide substantive protections to ensure safety and avoid exploitation; and (3) provide procedural safeguards to ensure fairness and preserve the agency of the people whose information is to be scraped. (56) Their model draws on Lawrence Gostin's model for public health. (57-58) The remainder of the paper is a detailed proposal for assuring that scraping is conducted in a manner consistent with the public interest. It defies easy summary and demands careful reading, so I encourage you to undertake that task. (58-64)
If you missed our previous columns in the series and still don't know what the fuss was about, here's what you missed:
- Generative Interpretation by Yonathan Arbel and David Hoffman
- Lawyering in the Age of AI, by Jonathan Choi, Amy Monahan, and Dan Schwarcz
- Debt Tokens, by Diane Lourdes Dick, Chris Odinet, and Andrea Tosato.
- Governing AI Agents by Noam Kolt
August 23, 2024 in Contract Profs, E-commerce, Recent Scholarship, Web/Tech | Permalink | Comments (0)
Thursday, August 22, 2024
Mercer University School of Law Is Hiring
Hiring Announcement: Mercer University School of Law
The Mercer University School of Law invites applications for up to two entry-level or pre-tenured lateral faculty positions and one tenured faculty position, with appointments beginning in Fall 2025. We welcome applicants from all subject areas, with a particular focus on legal writing, commercial law, contracts, real property, civil procedure, business law, and remedies. We also encourage applications from truly entry-level candidates, including those without prior law teaching experience, who demonstrate significant potential for excellence in both teaching and scholarship.
Founded in 1873, Mercer University School of Law has a long tradition of producing practice-ready lawyers who are committed to service. The school has earned a reputation for providing excellent legal education with an intense focus on student and faculty interaction. With an enrollment of approximately 375 students, Mercer Law School is one of 12 schools and colleges of Mercer University, which is consistently listed among the top institutions of higher education in the nation. The School of Law is nationally recognized for its exceptional programs in legal writing, advocacy (moot court and mock trial), public service, and professionalism and ethics.
The School of Law is located in Macon, Georgia, a city of approximately 156,000 residents. Macon is known for its rich musical heritage (e.g., Otis Redding, Little Richard, the Allman Brothers), vibrant arts community, recreational offerings (e.g., the Ocmulgee Mounds National Historic Park), and affordable cost of living. Located 85 miles from Atlanta, Macon offers the livability of a smaller city with convenient access to big-city amenities.
Mercer University recognizes the power of a diverse community and encourages applications from individuals with varied experiences, perspectives, and backgrounds. Mercer University is an AA/EEO/ADA employer.
Applicants should hold a J.D. degree from an accredited institution, demonstrate a commitment to excellence in teaching, and show potential for excellence in research and scholarship. Interested applicants should complete the brief online application at http://hr.mercer.edu/jobs/ and attach a current CV with the names and contact information of three references. For more information, contact Professor Ishaq Kundawala, Chair, Appointments Committee, Mercer University School of Law, at [email protected].
August 22, 2024 in Help Wanted, Law Schools | Permalink | Comments (0)
Guest Injured at Airbnb Not Bound by Airbnb's Arbitration Clause
Last week, we were all exercised over Disney's attempt to compel arbitration based on an agreement with a pretty attenuated relationship to the cause of action. Obviously Disney's officers and directors are avid readers of the blog, because, as Claire Fahy reports in The New York Times, the company reversed course and has abandoned its motion to compel arbitration. Well, Disney is not the only entity trying to engage in this form of arbitration-clause bootsrapping.
Andrew Peterson was injured when a railing on an elevated porch gave way at an Airbnb venue rented by a friend. His injuries were serious enough to necessitate the amputation of one of his legs below the knee. Peterson sued Airbnb and others, but Airbnb moved to compel arbitration. Airbnb claimed that Peterson had agreed to Airbnb's terms of service years earlier when he created an Airbnb account, even though he never used the site. The trial court denied Airbnb's motion and it took an interlocutory appeal.
In Peterson v. Devita, a split Illinois appellate court affirmed. The majority found that courts, rather than arbiters, decide threshold issues of arbitrability and that Mr. Peterson's injuries are unrelated to his use of the Airbnb and thus not governed by any arbitration agreement to which he agreed when he registered on the site. Neither agency nor equitable estoppel principles apply.
In 2020, a Peterson's friend booked a house using Airbnb. Peterson, not a listed guest at the house, attended a party at the home and sustained serious injuries. He sued Airbnb for negligence.
Airbnb's arbitration provision provides that issues of arbitrability are to be determined by the arbiter. However, under caselaw interpreting the Federal Arbitration Act (FAA), a court must first establish that the dispute is covered by an arbitration agreement between the parties. The majority then reviewed case law, including a rich trove of Airbnb cases. There is authority from SCOTUS (Henry Schein, Inc. v. Archer & White Sales, Inc.), that where, as here, the arbitration provision delegates questions of arbitrability to arbiter, such questions must go to the arbiter even if the arguments for arbitrability are "wholly groundless." However, the majority concluded that the Henry Schein rule must be harmonized with common sense. Disputes cannot be sent to the arbiter when the dispute between the parties is wholly independent of any agreement between the parties.
The majority also rejected Airbnb's argument that Mr. Peterson was bound because his friend acted as his agent when the latter booked the house through Airbnb. No elements of an agency relationship were established. Nor was the majority convinced by arguments sounding in equitable estoppel.
The dissenting justice would have ruled for Airbnb on two grounds. First, the dissenting Justice found that, by registering with Airbnb, Mr. Peterson bound himself to Airbnb's terms of service, including its arbitration provision. According to the dissent, Mr. Peterson was also bound by Airbnb's terms because when he knowingly entered into an Airbnb rental as a guest, he did so through an agency relationship with his friend who made the booking. The dissenting justice attributes to Mr. Peterson knowledge of Airbnb's terms of service that he agreed to in 2018 when he signed up on a website that he never subsequently used. No doubt, his mind was thinking of nothing else between the time the railing gave way and the moment he hit the ground. The matter should be referred to the arbiter, said the dissent, and the arbiter may then decide (in case it matters) whether Mr. Peterson is bound through his own agreement with Airbnb or derivatively through his agent's agreement with Airbnb.
The majority was concerned that giving effect to Airbnb's terms of service in cases like this "would lead to absurd consequences." The dissent thinks doing so is simply an application of existing caselaw interpreting the FAA. I think both sides are correct.
August 22, 2024 in Recent Cases, Travel | Permalink | Comments (0)
Wednesday, August 21, 2024
Hiring in Business Law at Emory Law
Hiring Announcement: Emory University School of Law
Robert T. Thompson Professorship in Business Law
Emory University School of Law seeks applications from outstanding tenured scholars for the Robert T. Thompson Professorship in Law. This professorship recognizes outstanding achievement in scholarship and teaching in disciplines related to business law, including mergers & acquisitions, securities regulation, corporate finance, and other related business law fields. Candidates should have exceptional records in research, teaching, and service and have attained a J.D., Ph.D., or equivalent degree. Candidates should currently hold a tenured academic appointment and should be eligible for appointment as a full professor at Emory.
Candidates must complete the online application which requires creating an account, uploading a resume or CV, and providing basic demographic information. In addition, applicants should submit a cover letter, a current CV, a published or unpublished academic article, a brief research agenda, and an indication of teaching interests (if not listed on the CV) to the chair of the Appointments Committee: Professor Joanna Shepherd, at [email protected]. Applications will be considered on a rolling basis.
August 21, 2024 in Help Wanted, Law Schools | Permalink | Comments (0)
Samsung's Chutzpah Rewarded in the Seventh Circuit
We blogged about the District Court ruling in this case, in one of our first ventures into the realm of mass arbitration. The relevant facts, which have nothing to do with the merits of plaintiffs' claims, are pretty straightforward. Paula Wallrich and thousands of others filed arbitrations claims against Samsung with the American Arbitration Association (AAA). For what it's worth, they alleged that they had purchased Samsung devices and that those devices unlawfully collected and stored sensitive biometric data in violation of the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. While plaintiffs paid their arbitration fees, Samsung refused to pay its $4,1250,000 arbitration fees. The AAA gave plaintiffs the option of fronting Samsung's fees. When plaintiffs refused, the AAA responded by terminating the arbitration proceedings. In a role reversal, plaintiffs went to the District Court seeking an order compelling arbitration. The District Court granted that motion and then stayed the case pending arbitration.
Having rejected Samsung's challenges to its jurisdiction, the District Court addressed Samsung's remaining claims, as we discussed in the following terms:
Samsung's remaining arguments smack of chutzpah. Having prevented the arbitrations mandated by its terms of service from taking place by refusing to pay fees, Samsung now argues that the federal courts lack the authority to compel it to arbitrate or to pay the fees. No problem, Samsung insists, either because the plaintiffs can now just proceed in court, or better still, plaintiffs cannot proceed either in arbitration or in court because the federal courts lack the power to second-guess the AAA's refusal to reopen the arbitration proceedings.
In Wallrich v. Samsung Electronics America, Inc., the Seventh Circuit agreed with Samsung. The court first found that plaintiffs had not met their burden of proving the existence of an arbitration agreement. Moreover, even if there were an agreement, it would be governed by the AAA, which empowers arbiters, not courts, to determine fee disputes.
The court first addressed some jurisdictional issues. Plaintiffs claimed that the Seventh Circuit could not hear an interlocutory challenge to stay a proceeding pending arbitration under §§ 16(a)(3) and 16(b)(1) of the Federal Arbitration Act (FAA). The court pointed out that the limitation on appellate courts' jurisdiction to review interlocutory orders relates to orders under Section 3 of the FAA, but the challenged order relates to Section 4. This may be a fair reading of the statue and is consistent with the holdings of two other Circuit Courts, or it may be yet another instance of the federal courts' new-found formalism. It's not clear why the FAA would prohibit interlocutory appeals from Section 3 motions to compel but not Section 4.
Turning to the merits, the Seventh Circuit held that plaintiffs had not met their burden to establish an enforceable arbitration agreement. Why?
- Plaintiffs' arbitrations demands, attesting to the fact that they bought Samsung products were signed by plaintiffs' counsel and not by plaintiffs themselves;
- Samsung's terms and conditions, which clearly create an arbitration agreement are not evidence of an arbitration agreement between Samsung and the class members -- anybody could have pulled those terms off the Web; and
- The AAA's determination that plaintiffs had met the AAA's filing requirements also does not prove that they agreed to arbitrate
Okay. Fine. The AAA was satisfied. The District Court was satisfied. Let's remand and give plaintiffs another show to supplement the record. As the court acknowledges, anything will do -- receipts, order numbers, confirmation numbers, declarations signed by the plaintiffs, anything. Nope. Too late. Plaintiffs got their bite at the apple, and they blew it.
Samsung, however, gets multiple bites at the apple. The District Court took a very different approach. Plaintiffs attorneys compiled a list of claimants. Samsung compared that list to its own list of consumers and challenged some of the names. Plaintiffs lawyers removed some names from the list and Samsung made no further challenges. The District Court treated that failure as a concession that the remaining claimants were indeed Samsung customers subject to Samsung's arbitration agreement.
In any case, even if plaintiffs could prove an arbitration agreement, the parties agreed to play by the AAA's rules. Those rules grant the AAA discretion over fee disputes. Plaintiffs had the option to arbitrate by paying millions of dollars in fees up front. Why on earth did they refuse to do so? [sarcasm]
Judge Easterbrook (right) was on the panel. I owe Judge Easterbrook an apology. Reflecting on Judge Easterbrook's decision in Campbell, I accused him of inaugurating a regime of "Arbitration for All," including an employee subject to an arbitration agreement permeated with unconscionability. I concede that I misjudged Judge Easterbrook. He does not favor arbitration for all in situations when Bartleby's defense is available to a well-resourced defendant.
Hat tip to Tamar Meshel for alerting me to the case and for additional engagement.
August 21, 2024 in Commentary, Recent Cases | Permalink | Comments (0)
Tuesday, August 20, 2024
Tuesday Top Ten - Contracts & Commercial Law Top SSRN Downloads for August 20, 2024
Top Downloads For:
Contracts & Commercial Law eJournalRecent Top Papers (60 days)
As of: 21 Jun 2024 - 20 Aug 2024| Rank | Paper | Downloads |
|---|---|---|
| 1. | 1,937 | |
| 2. | 196 | |
| 3. | 181 | |
| 4. | 167 | |
| 5. | 151 | |
| 6. | 150 | |
| 7. | 140 | |
| 8. | 131 | |
| 9. | 127 | |
| 10. | 120 |
Top Downloads For:
Law & Society: Private Law - Contracts eJournalRecent Top Papers (60 days)
As of: 21 Jun 2024 - 20 Aug 2024| Rank | Paper | Downloads |
|---|---|---|
| 1. | 181 | |
| 2. | 167 | |
| 3. | 151 | |
| 4. | 51 | |
| 5. | 44 | |
| 6. | 41 | |
| 7. | 40 | |
| 8. | 40 | |
| 9. | 32 | |
| 10. | 26 |
August 20, 2024 in Recent Scholarship | Permalink | Comments (0)
Tenured Law Professor Seeks Declaratory Judgment that She Was Wrongfully Terminated
Professor Lauren Gilbert (left) has taught at the St. Thomas University School of Law since 2002, with tenure since 2009. On July 18th of this year, she was informed by letter that her employment was terminated, effective July 19th. Here attorney tells the story over at The Faculty Lounge. The termination letter stated grounds for her termination.
Last week, Professor Gilbert filed a complaint seeking a declaratory judgment stating that she was wrongfully terminated. She seeks reinstatement and back pay. According to the complaint, Professor Gilbert was not terminated in accordance with procedures set out in the University's Faculty Handbook. Until such procedures are complied with, according to the complaint, Professor Gilbert is entitled to retain her position and her salary.
The grounds for the termination have a something old, something new, something troubling, something trivial aspect to them. There was a serious incident in 2010 which resulted in her suspension without pay for two weeks. There are serious allegations of a non-chalant response to an active shooter situation in 2022, which resulted in a written reprimand. And then there were a number of incidents in the past academic year that sound to me like what happens when a faculty is factionalized and some faculty think that the administration is taking actions without proper consultation with faculty. I have been on such a faculty, and many of us behaved badly at times. Nobody was fired. And in fact, much as we bickered behind close doors, faculty members continued to do their jobs, and I think we presented a united front for the students for the most part. The last straw for St. Thomas's administration (I'm not making this up) was that Professor Gilbert did not attend graduation. Although she gave one month's notice that she would not attend, she neither sought nor received permission to skip the event. This, the administration characterized as "yet another act of insubordination by you." Cue the gif of a soccer player pretending to writhe on the pitch in pain after tripping over a blade of grass.
The termination letter then goes on to quote something called the St. Thomas University Employee Handbook, which the University claims trumps the Faculty Handbook with respect to matters "outside of the classroom and/or academic pursuits." This case will have faculty members running to check out their own university's employee handbook, of whose existence they are, at most, dimly aware. In any case, it is some sort of a problem, although perhaps not a justiciable one, if there is significant daylight between what the Employee Handbook permits the University to do and tenure guarantees required by the relevant accrediting agencies.
Stay tuned. Let us hope for a happy resolution for all involved.
August 20, 2024 in Current Affairs, Law Schools, Recent Cases | Permalink | Comments (3)
Monday, August 19, 2024
Reviewing Larry DiMatteo and Irma Russell and Barbara K. Bucholtz, Part II
This is the second post in my series on Larry Di Matteo's Principles of Contract Law and Theory (Principles) and Irma Russell and Barbara K. Bucholtz's Mastering Contract Law (Mastering). The aim is to all some attention to these two books while using them to stimulate my thinking as I once again consider how to teach contracts law to first-year students. The two books are very different. Principles is a scholarly textbook addressing advanced topics at a very high level of sophistication. Mastering is a study-guide for first-year students. They both have their charms, but they are very different. Each entry in this series will cover a chapter in each book, with some splitting of chapters because the books don't have the same number of chapters. Most weeks, the chapters will not cover corresponding subject-matters. So be it.
The second chapter of Principles is a foray into comparative contracts law. It covers the differences between civil and common-law approaches, reciprocal influences, the internationalization of contracts law, and hard and soft law.
Principles identifies two virtues of the comparative perspective. First, knowing other traditions leads us to the humbling recognition that our way of doing things is not the only plausible way. Second, we can take some comfort as Professor DiMatteo reminds us of Hugh Beale's insight: despite differing terminologies that seem to divide the traditions, commonalities predominate. (36-37) Some of these commonalities are the product of legal transplants, and Principles highlights some imports into our common-law system that come from surprising sources. (37). Especially in private law, convergence between common law and civil law is the norm, either through revision or transplant. (40) Exceptions are rare. Specific performance is a standard remedy in the civil system and extraordinary in the common law. (45) Civil law enforces penalty clauses; common law does not. (45-46) More fundamentally, civil law is code based, and courts fill gaps through extrapolation and analogy. Common law courts are suspicious of legislation and construe statutes narrowly to avoid sudden jolts to the slow liquidation of legal norms based on precedent. (40)
One area of notable difference that occupied a lot of time at the recent KCON Conference is good faith. The concept is fundamental in civil law, an implied term in contracts in the U.S., and largely avoided in UK law, outside of the context of consumer contracts. (41-43) Unlike in the U.S., civil law imposes a duty to negotiate in good faith, and failure to do so might result in an award of reliance damages to the non-breaching party. (46-47)
The traditions also differ in interpretive matters. Common law courts attempt to get at the intentions of the parties. Civil courts attempt to determine what category of contract the parties intended and then use the statutes relevant to that category to fill in gaps. (48) Civil law also recognizes fault in contract, and thus the breaching party can sometimes allege that the non-breaching party was negligent or contributed to the fault. Fault comes into the common law indirectly through doctrines like good faith, unconscionability, and other defenses to formation. (49-50)
Internationalization came to contracts through the CISG, which was adopted in 1988 and now has been ratified by over 100 states. It illustrates internationalization but also convergence, as it was the product of negotiations among representatives of both the civil and the common law traditions. Principles then provides a summary of some differences between the CISG and the UCC/common law, contrasting the more seller-friendly approach of the former with the latter's more buyer-friendly approach. (50-53) Finally, Principles discusses hard law obligations found in international agreements and the soft law obligations that make up the lex mercatoria, comprised of trade usages, business practices, and commercial customs. (54-55)
Chapter II of Mastering provides a short road map of definitions and guiding principles. The Authors begin with a brief, clear, helpful discussion of what a contract is and how the word "contract" relates to similar terms, such as "bargain" or "agreement." (13-14) An agreement, the Authors explain, entails a bargain, but it may go beyond that, as the agreement of the party may entail implied terms. Not all agreements are contracts, in the sense that courts may not enforce an agreement in certain circumstances, for example if it is a contract to perform some illegal service. (14-15)
Next, the Authors introduce the concept of freedom of contract, but they also note that freedom is tempered by public policy. (15). They illustrate the limitation on freedom on contract with a discussion of illegal contracts. In that section, they also note that freedom of contract entails the freedom not to contract. (15-17) The stage-setting proceeds very rapidly. This was a very short chapter. Some of the chapters to come are far more lengthy and may end up getting split into multiple posts.
The first post in this series can be found here.
August 19, 2024 in Books, Contract Profs, Recent Scholarship, Teaching | Permalink | Comments (0)
Continued Incredulity Over Snyder v. United States
I blogged about this case after oral argument, and SCOTUS produced the predicted 6-3 party-line endorsement of public corruption. The opinion by Justice Kavanaugh amply illustrates just how inept this Court is at recognizing corruption.
James E. Snyder was elected Mayor of Portage, Indiana in 2011. In 2014, Mr. Snyder accepted a $13,000 check from a company, Great Lakes Peterbilt (Peterbilt). Federal prosecutors concluded that this payment was an illegal gratuity, paid to reward Mr. Snyder for steering a $1.1 million garbage truck purchasing contract to the company. Mr. Snyder contended that the payment was for consulting services. A federal jury believed the government's version of events, and a District Court sentenced Mr. Snyder to 21 months in prison. The Supreme Court took the case in order to determine whether the relevant federal statute, 18 U. S. C. §666(a)(1)(B) covers gratuities, paid as a reward, as well as bribes paid in advance of some benefit that the recipient, a government official, provides to the payor.
Justice Kavanaugh (right), writing for the majority, considers "text, statutory history, statutory structure, statutory punishments, federalism, and fair notice," and concludes that the statute applies only to bribes, not to gratuities. Indiana law may very well prohibit Mr. Snyder's conduct, but he was never prosecuted under Indiana law. Nothing to see here, folks.
Justice Kavanaugh does provide cogent reasons for a narrow reading of the statute. Two of the six Circuit Courts to confront the issue also concluded that § 666 is only about bribery and not about acceptances of gratuities. He could have just gone with text, statutory history, and statutory structure, and the opinion would have been okay. Justice Gorsuch briefly concurred, arguing that the scope of the statute is unclear, and in such cases, the rule of lenity counsels forbearance of prosecution.
Instead Justice Kavanaugh engages in a meandering discussion of what he calls fair notice. He is concerned about the possible overbreadth of the statute and its use to punish innocuous gifts, such as $100 gift cards at Dunkin' or students taking their college professors out for Chipotle or buying them tickets to a sporting event.
Here my incredulity kicks in. First, of course, the problem is not in taking gifts but in accepting them as a gratuity for some wrongful purpose. I'm not sure politicians should be accepting giftcards from businesses if there is any connection between the gift card and public affairs in over which the politician has influence or decision-making power. But if they engaged in such conduct, it would be the government's burden to convince a jury that a politician engaged in an act of official corruption in exchange for a $100 gift card at Dunkin'. All Mr. Snyder had to do was show that he did some actual work in exchange for his $13,000 gratuity. As the dissent points out, he made no such showing.
It would not be a wrongful act if all of the students in a particular course or section bought their professor a meal or some other gift, so long as there were no connection between the gift and the grade.
But I don't accept gifts from individual students. First, I am comfortably situated, and my students are students. I would not want to contribute to a culture in which students think it appropriate to transfer wealth or resources upwards. I wouldn't want students to think that there were some expectation that they buy gifts for their professors. I make an exception when student organizations give me small gifts for participating as a panelist or moderator for their events. I make this exception as a cultural accommodation because they give the same gifts to all faculty members or outside speakers who participate. I wish they wouldn't give me the gifts, but it would be awkward and churlish were I to reject the gifts that the students selected for me and which my colleagues accept. However, I usually re-gift these things because otherwise I will forget about them, and they will collect dust in my office until I re-discover them years later.
Perhaps I would feel differently about these things if, like Justice Kavanaugh, I had attended elite private schools all my life in which many of my peers were far better off financially than their teachers. But I think that says more about the lack of socio-economic diversity on the Court than it does about the ethics of the situation.
This isn't hard. I am well-compensated, and my power relations with my students are asymmetrical. Students can't afford to buy me gifts, and I can't afford the appearance of impropriety that would arise should I accept their gifts.
Not for nothing, on the subject of fair notice, it seems worth pointing out that Justice Kavanaugh joined the majority opinion in Campos-Chaves v. Goya, an immigration case decided less than two weeks before Snyder. The issue in that case was whether immigrants can be ordered removed from the United States in absentia when they were not provided with the statutorily required "notice to appear." That case actually was actually about notice and the stakes were higher than in Snyder. After all, is it even plausible to think that Snyder, whose conduct could have been punished under state law, took a gratuity because he thought the federal statute only covered quid pro quo graft? But in Campos-Chayes, Justice Kavanaugh agreed with the Majority that a later "notice of hearing" sufficed, even though the latter was to be provided only as a supplement to the required "notice to appear" in case of change or postponement in the time or place of removal proceedings. So, forgive me for thinking that Justice Kavaugh's commitment to the principle of notice is selective.
In any case, Justice Jackson, writing for the three dissenting Justices, has the better textualist reading of the statute, which punishes corruption, whether the improper payments involve quid pro quo influencing or post hoc rewards. Her reading of the statutory history and the relationship of the statutory language at issue to other federal statutes covers material in depth where the Majority opinion barely scratches the surface.
Justice Kavanaugh expresses concerns about federalism, but Congress addressed those concerns when it passed the statute. Yes, states are expected to police their own corrupt politicians. However, when state entities accept federal funds, Congress recognized a need (evident from this very case) for a federal supplement to state anti-corruption measures.
Justice Kavanaugh worries about where to draw the line between corrupt and innocent gratuities. That, Justice Jackson responds, is a question for another day, because Mr. Snyder is not arguing that what he did was innocent. He argues that the federal statute does not reach his conduct, even if it was corrupt. Justice Jackson then proceeds to illustrate the statutory guardrails already in place to address the danger about which Justice Kavanaugh worries. Nobody is going to jail for accepting a gift card, unless they do so "corruptly." Prosecutors, courts, and juries do pretty well distinguishing corrupt from innocent gifts.
Finally, Justice Kavanaugh cites to evidence that bribery is a much more serious crime than taking gratuities corruptly. He may be right that courts and statutory schemes make it so, but Justice Jackson points out that the two forms of corruption can be quite similar. In this case, Mr. Snyder apparently shepherded a contract to Peterbilt and then showed up at their offices demanding a $15,000 payment because he needed money. He got $13,000. He characterized that payment as a consulting fee, but he also called it other things. Peterbilt said that he never provided any services to them. A jury likely concluded that Mr. Snyder was lying. How is what he did any better than demanding the payment up front? Should the law care whether I demand that you pay me $13,000 in order to steer a contract your way or demand that you pay me $13,000 once I have successfully steered a contract your way?
So, bottom line; As a matter of federal law, it is not a crime for a state politician to accept after-the-fact gratuities in exchange for political favors. In related news, as a matter of federal law, states and localities can make it is a crime to sleep in public.
August 19, 2024 in Commentary, Government Contracting, Recent Cases | Permalink | Comments (0)
Friday, August 16, 2024
Golden Gate University Law Students Sue Over Law School's Closing
As a member of the Valparaiso University Law School diaspora, I am always intrigued by stories about closing law schools. As Christine Charnosky reported for Law.com in March, the ABA has approved a teach-out plan for Golden Gate University Law School (the Law School), which has shuttered its J.D. program. Financial struggles and low bar passage brought down the law school. My heart goes out to faculty and staff, whose fine qualities often do not translate into financial viability or professional success for students, especially in California, given its notoriously difficult bar exam. I know how it feels to try to keep a law school alive in such circumstances, and I hope that everyone finds a happy new home. If it's any consolation, almost all of my colleagues from Valpo landed great jobs, while others are enjoying their retirements -- a few years ahead of schedule. Golden Gate will continue to offer law courses for its graduate and undergraduate programs. It's not clear how many faculty members it will retain for those purposes.
Students will be able to finish their legal training at the University of San Francisco Law School or at the Mitchell-Hamline Law School. But not all students are accepting the offer. In February, four students and the Golden Gate University Alumni Association filed a suit in state court alleging claims for breach of contract and fiduciary duty, promissory estoppel, fraud, and unlawful business practices. They sought injunctive relief and the appointment of a receiver. They followed up in June with a motion for injunctive relief.
The allegations of the complaint are based on the fact that the Law School's Dean announced the closure of the Law School at a time when the ABA had not yet approved the Law School's teach-out plan. Doing so, the complaint alleges was a breach of a contract, embodied in the Law School's Student Handbook. The complaint further alleges an implied contract under California law that educational institutions will not close prior to students' graduation. As we learned from the COVID cases, whether or not a Student Handbook constitutes a contract, or whether one can be implied usually involves more than blanket allegations that, e.g., the Handbook "undoubtedly" constitutes a contract.
The Promissory Estoppel claim is based on a promise to the student-plaintiffs of a three-year full-tuition scholarship. If, as I expect, Golden Gate plans to pay the tuition for the students so that they can complete their educations at other law schools, it is hard to see how the students suffer monetary harm. In their motion for injunctive relief, the students allege that they will be harmed by being required to move to Minnesota, so maybe that's right. But Mitchell-Hamline offers a blended-learning program, which may have been the reason why it was chosen as a partner for the teach-out. While the Law School has yet to detail its plans for reimbursing students for travel to Minnesota, that does seem to be the plan, as acknowledged in the brief in support of the plaintiffs' request for injunctive relief.
The remaining causes of action seem to me a stretch, but I can't claim sufficient familiarity with the relevant bodies of law to comment beyond that. But the bigger challenge it seems to me is the appropriate remedy even if they do succeed on their claims. The ABA has now approved the Law School's teach-out plan, so the alleged improprieties that were the original basis for the complaint seem to have been remedied, at least in part. They seem to want the court to order Golden Gate University to allow them to complete their degrees. But there are only four of them. I can't see a court ordering a J.D. program to remain open because four students don't want to travel to Minnesota. One plaintiff is foregoing her scholarship and transferring to a different law school because Mitchell-Hamline does not have a robust enough program in her desired field.
According to Julianne Hill reporting for the ABA Journal, the court has set a hearing on the request for injunctive relief for September 13th. By then, students will be well into their first semesters at the partner law schools. That seems like something like a pocket denial of the injunction, and then the only question would be whether students are entitled to damages.
August 16, 2024 in Commentary, Law Schools, Recent Cases | Permalink | Comments (0)
