Friday, March 14, 2025
Friday Frivolity: How Much Would You Pay to Attend a Wedding?
I learned recently via Wait Wait Don’t Tell Me about a new trend. As Sadiba Hasan reports in The New York Times, weddings have gotten so expensive that people are asking their guests to pay to attend. Ms. Hasan’s reporting begins with the story of Houston man who has already shelled out $100,000 for his wedding, including deposits, and is asking his 125 invited guests to contribute $450 each to attend. His friends pay more for concert tickets, he reasons, but the RSVPs have been slow to arrive.
Wedding costs are up generally, and the cost increase has been rapid. The average wedding cost $30,000 in 2022 and $35,000 in 2023. The cost of attendance is also increasing, up to $580 in 2023, up from $460 in 2021. Your guests are already shelling out money for gifts, clothes, travel and accommodations. If they have to choose between your wedding and that Beyoncé concert, you may be a few hands short when it comes time to play Texas Hold ‘Em.
On Wait Wait, guest Dulce Sloan (right) suggests that if you charge your guests to attend your wedding, that constitutes an implied contract. If the couple then gets divorced, the guests are entitled to a refund. Host Peter Sagal suggests a more formal contract would be appropriate, perhaps a marital warranty. I think the warranty should not be of unlimited duration. After five years, I think the couple should be free to divorce without incurring the costs of refunds. We wouldn’t want people staying together simply to avoid penury.
The New York Times story also provides a different way of looking at this. Some people do not charge their guests because they need help covering the costs of the wedding. They charge their guests as a mechanism for limiting the wedding guests to those who really want to attend, kinda like asking people to donate $1 million to pay for a Presidential inauguration, which you then hold indoors, so that only power brokers and members of the broligarchy can attend. One couple had a list of 350 invitees, but they wanted to incorporate a bus tour of Manhattan into their celebrations, and the bus only held 60 people. But once they charged their guests $333 each, they whittled down their list pretty quicky to those who love them so much they could forgive them for being, as Peter Sagal put it, tackier than a cash bar with a three-drink minimum.
March 14, 2025 in Commentary, Current Affairs, In the News | Permalink | Comments (0)
Thursday, March 13, 2025
Sid DeLong on Congress’s Declaration that Every Day Is Today, March 11th
The Longest Day: The Best Legal Fiction Writer in Congress
Sidney W. DeLong
(March 11, 2025). Some of you may not yet have noticed that on March 11, the Senate declared that March 11 would not end: “Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day. . . .” In other words, tomorrow never comes: it will forever remain today, March 11, until the end of the 119th Congress.
So can you forget that filing deadline on April 15? Well, not exactly. The actual language of the rider the Senate enacted is as follows: “Sec. 4. Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day for purposes of section 202 of the National Emergencies Act (50 U.S.C. 1622) with respect to a joint resolution terminating a national emergency declared by the President on February 1, 2025.”
The NEA provides the legal authority under which the President can impose tariffs, but only if he first declares a “national emergency,” which he did on February 1. But the Act also provides that Congress may reverse his finding and declare that no emergency exists, which would have the effect of terminating the tariffs. The GOP senators find this power oppressive: they do not want to have to openly choose between validating tariffs that are unpopular with their constituents (on the one hand) and risking the wrath of the President by ending them (on the other). Democrats naturally want to force Republicans to make this choice and have introduced a resolution to force a vote.
According to Congress.gov: “Upon introduction and referral of a termination resolution, the NEA directs committees to report the measure within 15 calendar days. A privileged motion to discharge becomes available in the House if a committee has not reported within this period of time. In the Senate, the committee of referral is automatically discharged after the expiration of the 15-calendar-day consideration period.” By introducing a motion for a joint resolution terminating the emergency, Democrats triggered this 15-day deadline for considering their motion and the clock started ticking.
But what if time suddenly stopped, so that the 15 days would never elapse? Can Congress stop time by fiat? They did exactly that when they said “Each day for the remainder of the first session of the 119th Congress shall not constitute a calendar day for purposes of section 202 of the National Emergencies Act.” Those mounting days just ceased to exist. “Each day . . . shall not constitute a . . . day.”
Who would believe such a thing? Lawyers, that’s who. Unlike ordinary mortals but like the White Queen (below right) in Through the Looking Glass, lawyers steeped in legal fictions can believe six impossible things before breakfast. As Lon Fuller stated, a legal fiction is a statement that is known by everyone to be false but that is treated legally as if it were true.
Unlike ordinary lies, legal fictions have an honorable lineage. For example, in the nineteenth century in order for parties to adjudicate international claims before the English court of common pleas, the court adopted the fiction that all events complained of, wherever they occurred in the world, also occurred in the City of London. Thus, a plaintiff who complained about a tort that occurred on the Mediterranean island of Minorca, went on to allege that Minorca was “in London in the parish of St. Mary-le-Bow in the Ward of Cheap."
Although this was a blatant falsehood, the allegation could not be denied and so was true as a matter of law. This particular legal fiction was also very useful. It enabled London to become the center of international maritime law. Parties litigating a collision between two ships in the Caribbean got the benefit of British maritime law by pretending that the collision happened in the shadow of Big Ben.
Such geographical fictions today are rare. But today’s lawyers are comfortable with all sorts of legally fictional time. Statutes of limitations are “tolled” or held in suspense for various periods of time. Filings of financing statements are deemed to “relate back” to a time before they were filed and then are deemed to have given “constructive notice” to people who had purchased the collateral before the notice was filed.
But as these examples illustrate, in the twenty-first century legal fiction writing is a dying art, which makes Section 4’s abolition of time even more impressive. Think of the problem the drafter faced. What can be done about the 15-day deadline for voting on the motion filed by those Democrat rascals? The number is right there in the statute and we cannot amend the statute. The solution called for a magnificent move, thinking so far outside the box. Perhaps the drafter was a sci-fi fan. Or a megalomaniac. Who else would suggest: “Let’s just declare that the days will stop running on March 11.”
Where do you learn to do things like that? Not in my law school, for sure. This kind of genius comes from the gods.
All I know is that for the rest of the year, just like Bill Murray in Groundhog Day, every day I wake up will be March 11.
(March 11, 2025)
March 13, 2025 in Commentary, Current Affairs, In the News, Legislation | Permalink | Comments (2)
Friday, March 7, 2025
Friday Frivolity: An Employee’s Right to a Farewell Card
I don’t know how we missed this when the news broke back in October.
According to Jacob Phillips, writing in The Standard, Karen Conaghan worked for IAG, the parent company of British Airways, for two years prior to her dismissal in a restructuring. During that time, she filed forty complaints relating to allegations of sexual harassment, victimization, and unfair dismissal, all of which an Employment Tribunal had rejected. Make that forty-one.
Ms. Conaghan alleged that the company had failed to acknowledge her existence by not giving her a card to commemorate the end of her employment. The Tribunal rejected her claim. First, she was not the only departing employee who did not receive a card, and some of those cardless former employees were men, so Ms. Conaghan could not maintain her claim of gender-based discrimination.
In addition, it emerged from testimony that the managers had circulated a card for Ms. Conaghan, but only two or three people had signed it. The managers concluded that it would have been more hurtful to deliver a mostly-blank card than to deliver nothing at all. After she departed, more people signed the card, but because some of the people who signed had been people named in some of Ms. Conaghan’s complaints, the company decided not to send it. In 2023, an Employment Tribunal had determined, according to Mr. Phillips’ reporting, that "sending an employee an unwanted birthday card could amount to 'unwanted conduct' and harassment."
March 7, 2025 in Current Affairs | Permalink | Comments (0)
Saturday, March 1, 2025
Contract Rights Are Human Rights
Never before has the importance of protecting contractual rights against abuse by government officials in this country been more urgent. Judge Alsup gets it.
March 1, 2025 in Commentary, Current Affairs, Government Contracting, In the News, Recent Cases | Permalink | Comments (0)
Thursday, February 27, 2025
Can Tesla Turbo-Charge Cybertruck Orders with Contractual Threats?
Thanks to Professor Benjamin Davis of the University of Toledo for sharing Tinsae Aregay’s reporting for Torque News on the latest developments in the world of Cybertruck sales. According to the account, as we entered the holiday season, 2024, Tesla gave potential buyers a deadline: buy your $100,000 vehicle by year’s end or lose your $2500 deposit.
The protagonist of the story is one Brok Butcher, identified as a a Cybertruck buyer from Rancho Palos Verdes, California. Aside, I love the name. That man deserves a Cybertruck. However, Brok miscalculated his means. He’s had some “unforeseen financial difficulties.” But the Cybertruck is not for people who make excuses. Its for tough, rugged, financially independent, and environmentally conscious people who need, for some reason, to drive around in a bulletproof (or at least bullet-resistant) vehicle. Tough luck, says Tesla. We told you your deposit was non-refundable.
Brok wants to know why Tesla can’t just hold onto his deposit and apply it to some later purchase. Tesla is polite but firm: "Please let us know if you intend on taking delivery by 12/30. If we do not hear from you, we will assume you are no longer interested, and your order will be automatically canceled.” An enterprising ContractsProf dug up the Tesla contract itself, although we cannot say whether Brok entered into this particular contract. It provides:
Order Process; Cancellation; Changes. After you submit your completed order, we will begin the process of preparing and coordinating your Vehicle delivery. At this point, you agree that any paid Order Fee, Order Deposit and Transportation fee have been earned. If you cancel your order or breach this Agreement and we cancel your order, you agree that we may retain as liquidated damages the Order Fee, Order Deposit and Transportaion Fee, to the extent not otherwise prohibited by law. You acknowledge that the Order Fee, Order Deposit and Transportation Fee are a fair and reasonable estimate of the actual damages we have incurred or may incur in transporting, remarketing, and reselling the Vehicle, costs which are otherwise impracticable or extremely difficult to determine.
Seems like a rather harsh way to handle customers, especially early adopters like Brok who helped Tesla build hype for its new product. As Tinsae Aregay also reported here, while Tesla boasted that one million people had reserved Cybertrucks, apparently only 2.5% of the people on the waiting list actually bought the vehicle. People like Brok paid to wait in line for their trucks, but now buyers are boasting that they are ordering their trucks and getting them within weeks, suggesting that Tesla’s ability to manufacture the trucks is far outstripping demand.
Back in October, Jameson Dow reported on Electrek that Tesla’s backlog was depleted, and one could now order a Cybertruck without paying a deposit. I remain puzzled by the $2500 figure. I’ve seen reporting about required non-refundable deposits as high as $1000. I’ve also seen reporting that Tesla lowered the deposit to $100 and made it refundable. Tesla may have done so in order to be able to boast about the long line to get the vehicle. But then the price went up, the roll-out was not entirely smooth, and some people were turned off by the company’s CEO’s antics.
In short, Tesla seems like it has a strong legal right to hold onto the $2500, but it also seems a poor strategy for building brand loyalty. The Cybertruck is sui generis, so perhaps Tesla has a captive audience. Car and Driver rates four electric trucks higher than the Cybertruck, and all are less costly, but the heart wants what it wants.
February 27, 2025 in Commentary, Current Affairs, In the News | Permalink | Comments (1)
Wednesday, February 26, 2025
Professors: Interested in joining a professor letter supporting the CFPB?
Over at the Consumer Law and Policy Blog, Jeff Sovern has posted a link to a letter in support of the Consumer Financial Protection Bureau (CFPB). We have posted recently about the current administration’s attempts to dismantle the CFPB. We encourage profs to follow the link and sign if so inclined.
To read and join the letter, go to Sign-on Letter – Law Professors re: CFPB
Having not looked at the Consumer Law and Policy Blog for a while, I now notice that there are a number of recent posts on the CFPB.This can be a good opportunity to get caught up on recent developments, including this thirteen-minute report on the CFPB from 60 Minutes
February 26, 2025 in Current Affairs, In the News, Weblogs | Permalink | Comments (0)
Monday, February 24, 2025
Sid DeLong on Challenges to Bar Admission Based on Political Activities
Challenges to Bar Admission
Based Upon Protests of the War in Gaza
Sidney W. DeLong
My first semester of law school was in the Fall of 1969, right after Woodstock when, as Dylan intoned “there was Revolution in the air.” One of the many issues sparking a year of non-stop student protest was the Vietnam War. The prospect of being drafted stirred a lot of students’ social consciences. Or, as Dr. Johnson observed: “Depend upon it sir, when a man knows he is to hanged in a fortnight, it concentrates his mind wonderfully.” My deferment from the draft was to expire the following summer when my lottery number came up and I think it did tend to give me focus on the law relevant to draft avoidance and evasion.
Meanwhile, the first legal research and writing assignment I received from my Torts professor, Richard Abel, was to analyze the plight of our hypothetical client, Morris Minor, who had avoided the draft by fleeing Canada after graduating from an American law school. Morris had become a Canadian citizen and been admitted to the Canadian bar, which apparently required a pledge of fealty to the Queen. Morris now wanted to return to the U.S. to practice law but feared that he would not be admitted to practice because of his expatriation. We were to research the issues and advise him about whether he could be admitted to practice law in any of three possible states.
My performance on my first research project was decidedly not praiseworthy. Although I distinguished myself by using the correct Blue Book form for citing to state court rules, I missed the controlling Supreme Court authority on whether Morris had forfeited his citizenship, Afroyim v. Rusk, 387 U.S. 253 (1967). I suspect that I should to have found out whether, under the Immigration and Nationality Act, Morris effectively renounced his U.S. citizenship when he took the Canadian Oath of Allegiance to the Queen. Hindsight is my strong point.
I may not have distinguished myself in researching the issue, but I think I got the message Professor Abel was hoping I would find, a typical one for Yale Law School. The Realist lesson of that first assignment was that bar admission is a matter of politics, not law. “Character and fitness to practice” are whatever a bar association committee says they are, only vaguely limited by the Supreme Court’s vacillating discretion to exercise its First and Fourteenth Amendment jurisprudence. At the height of McCarthyism, SCOTUS went both ways on whether being a member of the Communist Party justified denial. During the Civil Rights Era, an applicant’s civil disobedience involving violations of laws enforcing segregation was disqualifying for some bar associations. Violent protests against the war in Vietnam were disqualifying in some states, as was draft evasion.
Character and fitness to practice law are classic questions of subjective judgment that will reflect the political commitments of the membership of state bar associations. Reported judicial decisions reviewing such cases are almost worthless as precedent because they are so fact-intensive. Changes in national political winds often presage new forms of disqualification.
Contemporary character and fitness committees continue to apply their views on whether expressions and activities that do not violate the law and are protected under the First Amendment may nevertheless disqualify one from practicing law. Thus, in some states outspoken white supremacists have been denied admission. In Re Hale, 723 N.E.2d 206 (Ill. 1999).
Which leads us to the prediction of this post: Students and others protesting Israel’s conduct of the war in Gaza have been declared to be antisemitic, even absent expressions of hatred of Jewish people and even though the people engaging in them deny any antisemitic intention. Depending on the political composition of the state bar associations, before some character and fitness committees, antisemitism defined in this way will be deemed to render an applicant unfit to practice law.
In other states, students protesting Hamas may be declared to be anti-Muslim or racist depending on the forms their protests take. Depending on the political composition of the state bar association, this may be sufficient to render the protestors unfit to practice law in those states.
When state bar associations construe their power to control admission to the practice of law to prevent not only law breakers but also those who express views with which the memberships disagree, such as communism in the 1950’s or desegregation in the 1960’s, they have as much discretion as the United States Supreme Court will give them. The reader’s guess about that is better than mine, but I think the issue is looming.
Law students who have been actively engaged in protesting the war in Gaza should anticipate that they may not be able to be admitted in all states and should research this question upon graduating.
February 24, 2025 in Commentary, Current Affairs | Permalink | Comments (0)
Friday, February 21, 2025
Reflections on Poker, The Melian Dialogue, and the Transactional Presidency
When I lived in Valparaiso, Indiana, a friend invited me to a neighborhood poker game. I did not know very many of my neighbors, so I thought this would be a good way to get to know people. I was told that it was a “friendly game” with a $20 max. I pretty quickly learned that I really had nothing in common with my neighbors, who were all white, male, conservative Republicans, and the rule was that women weren't allowed to play. Wives absented themselves form the home of the host or retreated to kitchens and kept out of sight. I can be friends with white, male, conservative Republicans, but not when they, sensing my tendencies, start in with the Obama jokes, with their prominent racist undertones. I went a few times, determined to find some common ground.
The penultimate time I was played, I was in a game with someone reputed to be a “serious poker player.” I am a novice. He and I were the last ones in a hand, and it was the biggest pot of the night, which may have been ten or fifteen dollars total. People from the other table came to watch. The serious poker player raised by putting in $20, and there were appreciative grunts. “Nice bet,” men said in hushed tones. I was astonished. I had come for a friendly game; now I was in a pissing match. I folded, disgusted that I had been forced to succumb to a compelled surrender. The alternative was to participate in a game that I had no interest in playing. That was my last hand. Afterwards, I asked my friend who had invited me how a $20 bet was consistent with the spirit of the “friendly game.” He shrugged, suggesting a grasp of situational ethics that eluded me.
He lured me back one last time. I got very lucky early and soon had stacks of chips in front of me while the other players struggled. I quickly realized that I could win any hand I wanted by bluffing, raising the pot beyond what they could match, and forcing them to fold. I did it once, found the experience soul-deadening, and took my leave at the first opportunity. I came out even. I made no friends; I lost none. The friend who had invited me was a Lutheran Pastor. He accepts people warts and all, and I remain happy that he was willing to be my friend on those terms.
One of the most eloquent illustrations of such compelled surrender is Thucydides' “Melian Dialogue.” The Melians, though a Spartan colony, had pursued a path of neutrality in the Peloponnesian War. However, Thucydides (right) informs us that the Athenians nonetheless laid waste to Melian land, thereby securing their enmity. The Athenians, having brought a large force to threaten the Melians, begin the dialogue by pointing out that the strong do what they have the power to do, and the weak accept what they must. The Melians offer neutrality, but the Athenians reject the proffer on the ground that accepting it would look like weakness. The powerful refuse to concede anything; they will not even part with their fear.
The Melians refuse to surrender on the Athenians’ terms, which would have involved an obligation to pay tribute to Athens, something the Melians equated to enslavement. The Athenians besieged Melos and, after “some treachery” which presumably allowed some Athenian forces to enter the city, the Melians surrendered. Melian men of military age were put to death. All others were sold into slavery, and 500 Athenians settled in Melos. All was justified under a logic of self-interest. Such is the logic of warfare.
Our current President thinks himself a master negotiator, but his successes have the structure of a compelled surrender. The Athenians demanded surrender from parties that desired to remain neutral; the President seeks to compel surrender from U.S. allies. He threatens our trading partners with harmful tariffs, knowing that for all his denigration of the previous administration, it handed over to him an economy that is the envy of the world. Resting on that strength, the President seeks to compel our partners, whose economies are more vulnerable, into concessions, which so far seem to be entirely symbolic. He thus projects strength and proclaims victory. Our trading partners will not risk 25% tariffs by pointing out that the President’s bluster and brinkmanship have created economic uncertainty but no real substantive change.
The President has been more successful in extracting concessions from the media. As Maggie Haberman and Kate Conger report in The New York Times, media companies have settled the President’s extraordinarily weak claims against them. ABC paid $15 million; Twitter paid $10 million; Meta paid $25 million. As Ariel Zilber reports in The New York Post, Amazon paid $40 million for the rights to a “documentary” involving Melania Trump. The next highest bid was $14 million, as Apple and Netflix declined to participate. Even assuming that $14 million is a reasonable price for this material, the extra $26 million seems like a very generous tip. However, it is not clear how the United States benefits from these transactions. Nor is it clear how the country or New York City benefit from the President’s crass bargain with New York’s mayor.
Thucydides’ masterpiece leaves us wondering whether the Melian dialogue can be squared with the vision of Athens he presents in Pericles’ Funeral Oration. The war did not end well for Athens. Besieged by a Spartan navy and facing starvation and disease, Athens lost its city walls, its fleet, and its empire, which was now assimilated into the Spartan empire. Soon, both Athens and Sparta would be overrun by the Macedonians.
It is possible to read Thucydides as suggesting that the war itself, not the Spartans, defeated Athens, as the Athenians' conduct of the war rendered them indistinguishable from the Spartans. Athens adopted the Spartan approach to negotiation. Early in the war, the Spartans promised to judge the Plataeans fairly upon their surrender. Instead, the Spartans asked the survivors only what services they had provided to the Spartans and their allies during the conflict. Having truthfully answered that they had performed no services for their enemies, two hundred Plataeans were put to the sword. The Athenians were more windy at Melos, but the result was the same.
I can easily imagine a not-too-distant future in which a fifth head is added to Mount Rushmore, accompanied by Ozymandius’s motto.
February 21, 2025 in Books, Commentary, Current Affairs | Permalink | Comments (2)
Friday, February 14, 2025
Valentine’s Day Question: Are Contestants on Reality Television Shows Employees?
I live a sheltered life. I recently learned from Julia Jacobs’ reporting in The New York Times of a Netflix show called “Love Is Blind.” If you had told me that there was a reality television show in which people “date” one another in separate rooms, called pods, I would have bought that concept as a possible reality television show. If you added that the couples communicate exclusively through speakers and do not get to see each other unless they agree to become engaged, I would have become more skeptical. Why would people in the 21st century get engaged in such circumstances? Also, I guess I thought these reality dating shows were successful based on lowest-common-denominator calculations. I thought they were about people flaunting their sexuality. That’s hard to do when the person you are trying to attract can’t see you. There is then a staged wedding, at which the contestants either say “I do” or walk away. I guess that part can appeal to people who like wedding dresses. Who knew that witty rapport could still be regarded as sexy? It’s The Dating Game updated. That show aired while I was experiencing puberty. I was very interested in sex, but even then I found the show alternately cloying and creepy. It did not hold my interest.
The recent treatment of the show in Woman of the Hour reminded me that the show is, in my view, irredeemable. Clearly, I am not, and never have been, the target audience. I’m still not entirely sure how the new show works. I have a Netflix subscription, but it is a cheapy subscription with commercials, and I couldn’t stomach having to sit through unbearable commercials to watch an unbearable show. I saw enough to convince me that watching more would not enhance my respect for the show or its participants.
In any case, issues have arisen. According to The Times’ reporting, one contestant made public statements, complaining that the show permitted her to marry an unemployed man with a negative bank account. Such public statements violated a non-disclosure agreement (NDA) which prohibits contestants from discussing the show in public for one year after it airs. One of the entities behind the show initiated an arbitration against the contestant, seeking $4 million in damages for violation of the NDA. She and another contestant filed a complaint with the National Labor Relations Board (NLRB).
The NLRB investigated their complaints, and as part of that process, the NLRB had to determine whether theirs was an employment contract, which would give the agency jurisdiction. The agency concluded that the contestants were employees of the show, and it filed a complaint against the production companies, alleging illegal provisions in the show’s standard agreements, including a noncompete provision prohibiting cast members from giving interviews or making news media appearances on their “own behalf or for any third party” for one year after their last episode airs, and a $50,000 fine for leaving the show on grounds that the production company finds are not “legitimate.” An attorney for one of the complainants also denounces the “ever-present threat of ruinous liquidated damages,” by which I assume he means “unlawful penalties.”
If I understand anything about how reality television attracts viewers, (and it’s possible that I don’t), a claim of $4 million for violation of a NDA seems like a penalty. The show is certain to benefit from any publicity, especially publicity that would heighten the whiff of scandal and salaciousness that gives such shows their unique allure.
The show recently paid $1.4 million to settle a class action on behalf of contestants who claimed that they were paid less than half of minimum wage for their work on the show. That settlement did not entail an admission that the contestants were employees.
The decision of the NLRB to bring the complaint could have widespread effects on the reality television industry. But also, it could not. There is now a new administration, and the current President has fired a Democratic Board member, leaving the NLRB without a quorum. He may prefer in that way. The President happens to have some experience in reality television and with NDAs, and there may be reason to think that his appointees will side with management.
I have not been able to find a tally of how many of the happy couples are still together. Readers, please let me know if you turn up any statistics. It would be nice to know if made-for-television romance is as reliable as meeting people on the Internet, or, if you are old school, in real life.
In the meantime, Happy Valentine’s Day. Isn’t love grand?
February 14, 2025 in Current Affairs, In the News, Television | Permalink | Comments (0)
Wednesday, February 12, 2025
Oligarchs Dismantle the Consumer Financial Protection Bureau
I lack the expertise to explain the importance of the Consumer Financial Protection Bureau (CFPB). Suffice it to say that the attacks on it from the banking interests, and members of Congress swayed by their lobbyists, have been unrelenting since it was created in response to the Great Recession. As you may recall, that Recession was brought on by financial entities deemed “too big to fail.” The resulting lax regulatory regime created an environment in which financial institutions were encouraged to take on huge financial risks, to reap the rewards while those bets paid off, but to expect government bailouts when those risks turned out to be calamitous losers. We all paid, first when our investments evaporated and then when we the taxpayers had to foot the bill to bail out the banks.
Fearing a President more inclined to protect bankers than bank customers, the people who designed the CFPB sought to insulate it from executive whim. SCOTUS took a cleaver in the form of the highly questionable unitary executive theory to such schemes in a series of decisions culminating in Seila Law v. CFPB. Ever since then, the banking interests have tried to use the supposed constitutional infirmities of the CFPB to detract attention from its vital work, returning money that financial institutions bilked from unwary consumers of financial services.
I would direct you to CFPB’s website to learn more, but this is what it currently looks like:
Instead, I direct you to Erin Witte’s recent post on the Consumer Federation of America’s site, and I note the irony that the banking interests have now effectively thanked American taxpayers for the bailout by backing an administration that will eliminate the regulations working to prevent the next Great Recession.
It will come.
February 12, 2025 in Commentary, Current Affairs, In the News, Legislation, Weblogs | Permalink | Comments (0)
Tuesday, February 11, 2025
As Go Twitter Employees, So Go Federal Employees?
It is now clear that Elon Musk used the template that he employed to purge Twitter to engineer whatever it is the Department of Government Efficiency (DOGE) is doing to the federal bureaucracy. As Kate Conger and Ryan Mac report in The New York Times, he didn’t even bother coming up with a new slogan. Employees at Twitter and the federal government were informed that they had come to a “fork in the road."
Federal employees were given until February 6th to decide whether to resign, currently extended until February 10th and likely to be further extended, given all the legal challenges, some of which we summarized in yesterday’s post. In exchange, such workers were offered full pay and benefits through September 30th, although it seems possible that some employees who choose to leave federal service might be required to stay on for some time to facilitate a transition. So far, The New York Times reports, 65,000 federal workers have taken the offer. Nearly 150,000 federal worker retire voluntarily each year, So far, 3% of the workforce has accepted the offer; Mr. Musk said that the target was 10-15%.
Other employees were offered the opportunity to stay at their jobs without any guarantee that their jobs would continue to exist. Such employees were promised that they would "be treated with dignity and will be afforded the protections in place for such positions.” I would not find it motivating if my boss informed me that my job security was gone but that I would be treated with dignity. Why should I need assurances that I will be treated with dignity? Perhaps because one of the people giving me my termination notice goes by the Internet handle of “Bigballs”. Another stepped down from is position with DOGE after a Wall Street Journal reporter revealed his history of outlandish racist Tweets. But never fear! Vice President Vance, whose wife is Indian American, spoke for the young man who posted the slogan “Normalize Indian hate," and Musk himself called for his return to DOGE, while also demanding that the Wall Street Journal reporter be fired. Yay free speech?
So how did things work out at Twitter? Well, if Mr. Musk was investing in Twitter in order to make it profitable, he clearly has not done well, although it is hard to get reliable information about a privately-held company. According to Kate Conger and Ryan Mac (see link above), Fidelity estimates that the company has lost 72% of its pre-acquisition valuation. Mr. Musk did cut staff by 80%, but some reports suggest he had to hire a lot of new people and the staff is now inching towards 40% of its pre-Musk total. That’s not indicative of failure, however. Mr. Musk’s strategy is to cut to the bone and then replace as needed. If he doesn’t have to increase staff, it just means he didn’t cut enough in the first place. But there is some evidence that the cuts harmed the company. Use of the site is stagnant, new ideas that were supposed to generate revenue do not seem to have panned out. The company’s forays into live streaming have been plagued with glitches.
Increasingly, it seems that Musk’s goal in acquiring Twitter was not to make it profitable, nor was it to champion unfettered freedom of expression. Rather, Mr. Musk may have wanted to control a social media platform to expand his ability to connect to the public and to help promote views to which he is sympathetic. It may be giving Mr. Musk too much credit to suggest that the Twitter acquisition was itself a dress rehearsal for DOGE, but clearly at some point it dawned on him that it could become a model.
So what can we learn from what happened at Twitter? Clare Duffy and Hadas Gold report on CNN that the road for former Twitter employees has been long and rocky. In the case of the Twitter refugees, many claim that Twitter has not made severance payments to which they are contractually entitled. In the case of department government employees, the problem may be that the Office of Personnel Management, which issued the Fork in the Road memo, doesn’t actually have authority to make deals with federal employees, nor does it have congressional authorization to pay out seven months of severance.
Twitter has been able to keep its dispute resolution with former employees under wraps, as most employees were bound to arbitrate their claims. That option will not be available to the federal government, and the law suits have already begun, as we noted in yesterday’s post. Those suits might lead to injunctions, preventing DOGE or OPM from enacting the lay-offs it proposes. In the meantime, there will be very public wrangling over the legality of the administration's actions. Some federal employees resigned after “clashing” with DOGE employees over access to public information.
My prediction, for whatever that is worth, is that it will not be so easy for the administration to rid itself of federal workers. The protections are too well-established. That said, the cases will eventually find their way to the Supreme Court, which has been willing to hear high-profile political cases on an expedited basis. We will than find out how deeply the Court has imbibed the unitary executive theory cool-aid. I can imagine a world in which the Court rules unconstitutional all Congressional limitations on the President’s power to hire and fire employees of the executive branch. At that point, we will really find out what happens when DOGE gets to treat federal employees the way Mr. Musk treated Twitter employees. Perhaps it will be great, and our dollars will be as valuable as Bitcoin. Or perhaps we will come to regret the association of our government with Doge.
February 11, 2025 in Commentary, Current Affairs, Government Contracting, In the News, Labor Contracts, Web/Tech | Permalink | Comments (0)
Monday, February 10, 2025
Federal Workers, Unions, and Government Accountability Watchdogs Sue the Government
Hats off to the JustSecurity Blog, where its editors have created a litigation tracker covering all current cases filed against the Trump Administration, complete with docket links. It’s a wonderful resources, so thanks to all who contributed!
For our purposes, the important cases are those relating to the treatment of federal employees. Just Security provides short summaries of those cases. Here, we add just a quick summary of the legal issues in the cases. Links are to the complaints in each action
In National Treasury Employees Union v. Donald J. Trump et al., the National Treasury Employees Union (NTEU), a labor union representing employees in 37 federal agencies and departments in grievances and litigation and in negotiating collective bargaining agreements, filed suit in the D.C. District Court. NTEU challenges a January 20, 2025 Executive Order, which the complaint characterizes as depriving federal employees of civil service and due process protections, permitting the President to fire them at will. NTEU contends that the Executive Order exceeds executive authority and frustrates congressional intent. Congress granted the President limited authority to prescribe rule for federal workers, but only as necessary and as conditions of good administration warrant. Because the Executive Order was neither necessary nor in service of good administration, it was ultra vires. The Executive Order is also impermissibly overbroad in that it applies to career employees not subject to regulation by the President. It also deprives federal authorities of their procedural due process rights under the Fifth and Fourteenth Amendments. The procedures authorized under the Executive Order are inconsistent with the regulations that govern the Office of Personnel Management (OPM). NTEU seeks an order enjoining the President and other named defendants from implementing the Executive Order.
In Government Accountability Project v. Office of Personnel Management, the Government Accountability Project (GAP), along with the National Active and Retired Federal Employees Association, sued in the D.C. District Court to enjoin the same Executive Order at issue in the NTEU case, designed to strip career civil servants of employment protections created by Congress. OPM Director Charles Ezell, a named defendant in this and the NTEU case, issued a Guidance that reclassifies federal employees so that they can be terminated at will. This complaint is written with more flair, providing choice hyperbolic quotes from administration officials in which they characterize federal employees as a cancer and calling for mass dismissals. The complaint characterizes the Executive Order as reversing 150 years of progress against the spoils system and returning the United States to an era when all civil servants were hired based on political patronage and personal loyalty. The complaint provides a history of civil service regulation going back to the 1883 Pendleton Act. It alleges that the Executive Order and OPM Guidance violate the Administrative Procedures Act (APA), The Civil Service Reform Act (CSRA), and the Fifth Amendment’s Due Process protections. The OPM Guidance violates the APA because they were not promulgated in compliance with "notice and comment" requirements. The Executive Order is invalid because it is inconsistent with Congressional enactments protecting civil servants. The court has equitable powers, the complaint alleges, to enjoin unlawful executive actions. The plaintiffs seek declaratory judgment and ask the court to vacate the Executive Order and OPM Guidance.
Public Employees for Environmental Responsibility v. Donald Trump et al. was filed in the District Court of Maryland. This one is brought by Public Employees for Environmental Responsibility (PEER), working with Democracy Forward and Citizens for Responsibility and Ethics in Washington (CREW). The basis for the complaint is the same as in the first two cases discussed above. The complaint here provides an even deeper dive into the civil service reform movement to combat the spoils system, from the 1883 Pendleton Act through the 1978 CSRA. The Complaint then details regulations that implement those reforms in the service of a simple goal: career civil servants are to be selected on the basis of merit and are not removed simply on account of their political views or those of the president. It then reviews the history of Donald Trump’s attempts to gut the civil service, going back to a 2020 Executive Order that was never implemented and citing his repeated statements that he would destroy what he calls the “deep state.” There follow specific allegations of how the new Executive Order harms PEER and impedes its work. The complaint alleges three counts of ultra vires executive actions in violation of the CSRA, regulations of the OPM, and procedural due process, and one violation of the APA. The complaint seeks declaratory and injunctive relief.
Finally (for this post), in American Federation of Government Employees, AFL-CIO and American Federation of State, County And Municipal Employees, AFL-CIO v. Donald Trump et al., plaintiff, The American Federation of Government Employees, AFL-CIO (“AFGE”), is the largest representing federal employees. It has been in existence since 1932 and now has about 800,000 members. This complaint is shorter, but it adds new details on the history of Donald Trump’s efforts, beginning with his 2020 Executive Order to reclassify federal employees under “Schedule F,” empowering him to fire them at will. Count 1 names OPM and Ezell and alleges violations of the APA. Count 2 alleges ultra vires actions by all defendants in violation of the APA’s notice and comment requirements. The complaint seeks declaratory and injunctive relief.
With the help of Just Security’s litigation tracker, we hope to post periodic updates on these suits and to provide summaries of others that are relevant to the government’s contractual relations with federal employees. Watch this space.
February 10, 2025 in Current Affairs, Government Contracting, In the News, Weblogs | Permalink
Wednesday, February 5, 2025
Major League Baseball Players Association Wants Bad Bunny’s Company Held in Contempt!
My students introduced me to Bad Bunny in my first year teaching at Oklahoma City University. I loved the Bad Bunny mask they gave me. I can’t say that I’ve become a fan, but only because I’m not a fan of any contemporary musicians, other than the incomparable Sarah Dooley. But Bad Bunny’s music and his success make my students happy, so I root for him.
And so, it gives me no pleasure to report that Bad Bunny’s sports agency outfit, Rimas Sports (Rimas), has been held in contempt by a federal District Court in Puerto Rico. I mean, I know “bad” is his brand, but he never struck me as contemptuous. The cases have been a bit hard to locate, so here’s what I’ve been able to piece together from press reports.
According to the Associated Press, a dispute arose when the Major League Baseball Players Association (the Association) issued a notice of discipline and a $400,000 fine against two Rimas agents for allegedly providing improper inducements to players to try to get them to choose Rimas as their agency, allowing uncertified people to act as agents and various other misdeeds. The next chapters in the story are provided in the Association’s motions for sanctions in Diamond Sports, LLC v. Major League Baseball Players Association.
In May, Rimas sued the Association in federal court. The Association moved to compel arbitration through a specialized arbitral body designated as appropriate in the regulations governing authorized agents. Rimas claimed that the regulations applied to individuals and not to agencies, but the district court disagreed and granted the Association’s motion in August. Rimas responded by seeking arbitration through a different arbitral body, under different rules, in a different venue from what the court ordered. Worse, Rimas represented in its arbitral finding that the arbitration was ordered by the court. The Association responded with a motion for sanctions.
In September, as reported in the Associated Press, the court granted the Association’s motion and sanctioned Rimas. I note that none of the material I looked through mentioned Bad Bunny, except as a founder of Rimas. Unless I hear otherwise, I will continue to believe that the bunny in question did nothing bad, or at least nothing contemptuous.
February 5, 2025 in Celebrity Contracts, Current Affairs, In the News, Recent Cases, Sports | Permalink | Comments (0)
Tuesday, January 28, 2025
Law Dork on Revocation of Executive Order 11246
Chris Geidner, also known as Law Dork, reports on a Jan. 21, 2025 Executive Order that reversed an executive order from President Lyndon Johnson, designed to implement the 1964 Civil Right Act. LBJ’s Executive Order 11246 built on 25 years of prior enactments going back to FDR. FDR issued Executive Order 8802 to prevent military contractors from discriminating against black people seeking employment.
Combined with legislative enactments, Execuive Order 11246 provided the foundation underlying a sixty-year legacy of federal initiatives designed to combat racial discrimination and promote diversity, equity, inclusion, and accessibility in both governmental and private workplaces. LBJ expanded on FDR’s Executive Order to make it applicable "to every aspect of Federal employment policy and practice.“ President Obama expanded it to protect against discrimination based on sexual orientation or gender identify. As Chris Geider points out:
There should be nothing controversial about any of this. If certain policies or programs go too far, review them and fix them, but the fundamental basis for and nature of these policies began with the Civil War Amendments and were forged into modern America’s laws in the Civil Rights Era and the time since.
It had come to be generally accepted that one should not discriminate against people on the basis of immutable characteristics. Over time, we came to recognize new categories of immutable characteristics.
And then came a backlash. Clearly, we are not, as a nation, united in our conceptions of which characteristics count as immutable. In addition, according to the new Executive Order, the need to combat discrimination of all kinds must be informed by the need "to promote individual initiative, excellence, and hard work.”
Okay. I understand that language. That is, I am familiar with the rhetoric of white grievance, according to which different standards apply to so-called “diversity hires.” However, I was surprised to see that new Executive Order targets not only affirmative action and DEI initiatives but also accessibility. It seems that in 2025 we have entered into a world in which people in government think that having a disability is a lifestyle choice.
January 28, 2025 in Commentary, Current Affairs, Government Contracting, In the News, Weblogs | Permalink | Comments (1)
Friday, January 17, 2025
More Allegations from College Football Players of Unfulfilled Pledges of NIL Deals
Last year, we reported on a college football quarterback who left his team after three games, preserving his eligibility, after alleged oral promises of name, image, and likeness (NIL) payments went unfulfilled. Last month, my former student Chad Smith (right) sent me this article by Margaret Fleming in Front Office Sports alleging a similar bait and switch involving multiple players on the University of Tulsa football team.
It is hard to know what to make of Ms. Fleming’s report. Two Tulsa football players have come forward alleging an oral promise that they would receive NIL money. But there are problems with the allegations as reported. They claim that the alleged promises came from “their coaches,” but the (newly-fired) head coach is quoted in the story as having been very open, very public, and very clear that the only money available to student athletes would be capped at $8000 annually based on academic achievement.
On the subject of NIL money, the coach said in a February news conference, “Typical first question says, ‘What’ll you get?’ I go, ‘You’ll get nothing and like it.’” So who were these coaches and did they have actual or apparent authority to bind the university (or the “Collective,” on which more below) to a promise to provide the players with NIL payments?
And then there is a vagueness problem. The players allege that they were promised “tens of thousands of dollars in NIL money.” Well, how many tens of thousands? Was this for a season? Over the course of their careers as Tulsa athletes?
Finally, as discussed in our previous post on NILs referenced above, it seems that universities do not pay NIL contracts; “collectives' do. A collective is an independent non-profit entity. If this is widely known among recruits, they should know that a coach can’t make a promise on behalf of an independent entity. We are dealing with teenagers, but we are and we aren’t. These young athletes have parents who are very involved in the decision-making process. It is hard to believe that they did not educate themselves about how NILs work, but who knows?
In any case, Tulsa’s Collective does not impress. It is called "Hurricane Impact,” and the university’s athletic department announced its partnership with Hurricane Impact on October 1st. The collective has subsequently said that “Hurricane Impact has had no contact with any TU football student-athlete, coach Wilson, or any members of his staff regarding partnering with our organization. We will have no further comment.” The collective has been true to its word.
The story references other NIL contracts that have not been honored. It links to a story about Michigan State NIL agreements that were “voided,” and says that even written NIL agreements are not enforceable. I don’t know the basis for that conclusion. I don’t know if the Michigan State collective had a legal justification for voiding the agreements. Perhaps they contained a condition precedent that was not met.
In any case, I hope that these broken NIL promises are outliers. If not, there is a great need out there for attorneys to advise young athletes. Agents should know basic things, should insist on reducing NIL offers to writing and should refer those contracts to attorneys if they do not understand all of the terms.
Since drafting this post, I attended a session at the AALS meeting on Law and Sports, entitled “Intercollegiate Athletics: The Only Constant is Change.” Whenever I write about college sports my fuel is preconceptions and prejudices. It is comforting to have the experts acknowledge that the field is in flux. Most of the panelists were concerned with protecting the interests of student athletes. One, very compelling panelist is the director of a sports program who could address the costs to athletic programs, including the cutting of entire teams, in this new environment in which the scholarship money and resources chase the college-sports revenues. It is no knock on the panelists to point out that the educational mission of colleges and universities played no role in the discussion.
January 17, 2025 in Current Affairs, In the News, Sports | Permalink
Tuesday, January 14, 2025
Contracts and the First Amendment: Union Edition
I was today years old (writing in December 2024) when I learned of the 2020 National Labor Relations Board (NLRB) decision finding that it had no jurisdiction over faculty at religious institutions. Overruling its own 2014 decision (Pacific Lutheran), the NLRB in 2020 adopted the D.C. Circuit’s approach in a case involving Duquesne University as more consistent with SCOTUS’s 1979 precedent in NLRB v. Catholic Bishop of Chicago. In that case, SCOTUS rejected NLRB jurisdiction over employment decisions at religious institutions that might reflect protected First Amendment values.
In Pacific Lutheran, the NLRB thought it could exercise jurisdiction over faculty unionization efforts without violating constitutional protections for religious freedom. In that case, the NLRB found that nothing in the University’s “governing documents, faculty handbook, website pages, or other material” suggested that the faculty members at issue “perform any religious function.” That standard, the NLRB held in 2020, was inconsistent with Catholic Bishop. Instead, the NLRB adopted the D.C. Circuit’s Great Falls test, according to which, the NLRB has no jurisdiction over any institution that
(a) “holds itself out to students, faculty, and community as providing a religious educational environment”; (b) is “organized as a nonprofit”; and (c) is “affiliated with, or owned, operated, or controlled, directly or indirectly, by a recognized religious organization, or with an entity, membership of which is determined, at least in part, with reference to religion.”
Religious institutions may choose to recognize unions, but the NLRB cannot force them to do so.
I bring all this up today because I just read Heidi Schlumpf’s reporting from November 25, 2024 in The National Catholic Reporter on the situation at Marquette University. Ms. Schlumpf writes of full-time, non tenure-track Marquette professors who have to supplement their incomes as Uber drivers or working for food delivery services. Some have given up on teaching altogether, because they could not support their families on the salary they received from Marquette. Unionization might help, but Marquette has availed itself of the religious exemption to refuse to recognize the union. In so doing, Marquette follows the examples set by Boston College, Seattle University and St. Leo University, all of which have refused to recognize unions. There is a longer list of Catholic universities that have allowed unions.
Marquette University cites financial difficulties as the reason why it will not recognize the union. Employees note that they are underpaid compared to their peers at other universities and that Marquette has chosen to send resources towards upper administration rather than instruction.
In any case, how are financial difficulties grounds for a religious exemption? Isn’t the fact that some Catholic universities voluntarily recognize unions evidence that there is no religious ground for excluding them? At the very least, shouldn’t the NLRB ask Marquette to explain how the a union burdens its free exercise of religion while not burdening the religious exercise of other universities that claim adherence to that same religion?
I have staked out my position on contracts and the First Amendment in a series of posts and law review articles, including this one and that one. I won’t go on at length here. Following Jamal Greene, I call oppose rights absolutism and advocate for rights mediation. You are a religious institution. Fine. Courts should protect your Free Exercise rights. But you still have to make a showing that those rights are meaningfully burdened by the existence of union on your campus. There may well be a connection, but the person claiming a burden on their rights has to make that showing in each case. The result might well be that the private parties work out their own accommodations of contractual and constitutional rights, and whatever they come up with is likely to be a lot better than an absolute bar on worker representation at religious educational institutions.
January 14, 2025 in Commentary, Current Affairs, In the News, Labor Contracts, Religion, Teaching | Permalink | Comments (0)
Tuesday, December 3, 2024
Netflix Sued Over Glitchy Paul v. Tyson Fight
Before the first class meeting of the week, I often ask my students if anybody did anything exciting over the weekend. They usually roll their eyes or just keep looking down to avoid eye contact. But recently I followed up. Exploiting my uncanny ability to gauge the Zeitgeist, I asked if any of them had watched the Paul v. Tyson fight. They erupted. They were not impressed, but they could not look away. The majority seemed persuaded that the fight was rigged — that Mike Tyson pocketed his payday and didn’t really put up the fight of which he was capable. Mike Tyson is my age. I don’t think my student appreciate what it feels like to inhabit a sixty-year old body, but I am not inclined to conjure conspiracies based on motive alone. Then again, I didn’t see the fight.
But neither did some who attempted to view it, or at least, their viewing experience was not 100% satisfactory. As Ariel Zilber reports in The New York Post, Florida man has filed a purported class action complaint against Netflix, alleging $50 million in damages. Oh, sorry, the plaintiff is not “Florida man,” but a Florida man named Ronald “Blue” Denton. The complaint is here (behind a firewall), and it is full of quotable quotes.
For example, it contrasts Mike Tyson’s reputation as “The Baddest Man on the Planet” with Netflix’s viewers experience of “The Baddest Streaming on the Planet.” Um, have you tried X? The complaint calls this bout the “most hyped fight in boxing history.” Perhaps, but why do I still remember the slogan “The Thrilla in Manilla” when this fight doesn’t even have a clever name? The Has Been v. The Never Was perhaps?
The complaint alleges that 60 million people attempted to watch the fight. The complaint is brought on behalf of a class of (potentially) 50 million members. Is this a concession that 1/6 of the viewers were happy with the experience?
In any case, the first cause of action is for breach of contract. The plaintiff class is entitled to damages, the complaint alleges to recover charges for undelivered services, as well as for “inconvenience and frustration.” That’s confusing language in a claim for breach of contract. More confusingly still, the breach claim also seeks restitution damages and an order requiring Netflix to provide promised streaming services. I really don’t understand what that means at all. I see the fight still featured on Netflix. A subscriber can view it to their hearts’ content, and presumably without glitches, as very few of the 60 million people who tried to watch it live want to repeat the experience under any circumstances. There are additional claims under Florida statutes covering unfair trade practices and consumer protection.
It is not clear where the $50 million figure comes from. I did not see a dollar amount in the complaint, but even so, I’m not sure what the damages would be. If you have a Netflix subscription, this fight was effectively free. If you bought your subscription just to watch this fight, well that’s a much smaller class, and there’s always the defense that the fight was so boring, you were better off using your time for other pursuits. I guess they think the breach was worth $1/class member. I’m not sure why that’s the right figure.
We’ll see how this one fares. Watch this space.
December 3, 2024 in Celebrity Contracts, Current Affairs, In the News, Recent Cases, Sports, Television | Permalink | Comments (0)
Wednesday, November 27, 2024
Twitter's New Liquidated Damages Clause
We recently posted about Twitter's venue clause in its latest Terms of Service (ToS), which went live on November 15th and can be found here. There is another aspect to the new ToS that has gained some notoriety. It is Twitter's new liquidated damages provision, which provides as follows:
Liquidated Damages
Protecting our users’ data and our system resources is important to us. You further agree that, to the extent permitted by applicable law, if you violate the Terms, or you induce or facilitate others to do so, in addition to all other legal remedies available to us, you will be jointly and severally liable to us for liquidated damages as follows for requesting, viewing, or accessing more than 1,000,000 posts (including reply posts, video posts, image posts, and any other posts) in any 24-hour period - $15,000 USD per 1,000,000 posts. You agree that these amounts are (i) a reasonable estimate of our damages; (ii) not a penalty; and (iii) not otherwise limiting of our ability to recover from you or others under any legal or equitable theory or claim, including but not limited to statutory damages and/or equitable relief. You further agree that repeated violations of these Terms will irreparably harm and entitle us to injunctive and/or other equitable relief, in addition to monetary damages.
There is a lot going on here, both legally and in terms of the back-story behind this provision.
Calling something a liquidated damages provision does not mean that it is enforceable. Courts will look at the provision and determine on their own whether it is an unenforceable penalty clause. Stating in more detail that the counterparty agrees that the clause is not a penalty should not really change anything. Even in negotiated agreements, courts undertake their own assessment of whether a provision is a penalty. One thing the court might consider is sub-point iii, which provides that Twitter can recover damages on top of liquidated damages. That undercuts the advantage of a liquidated damages provision -- saving litigation costs by stipulating to damages in advance -- and thus suggests that this clause, notwithstanding its insistence to the contrary, is in fact a penalty.
Mike Masnick, writing on Techdirt, provides the best explanation I have seen of what motivated the new liquidated damages provision. Elon Musk may be trying to set up a suit against AI companies, including his recent nemesis OpenAI, that scrape massive amounts of information from websites like Twitter. Mr. Masnick provides an additional reason why the provision might be unenforceable, at least in part. Section 40.12 of the European Union's Data Security Act requires platforms like Twitter to provide access to their data:
Providers of very large online platforms or of very large online search engines shall give access without undue delay to data, including, where technically possible, to real-time data, provided that the data is publicly accessible in their online interface by researchers, including those affiliated to not for profit bodies, organisations and associations, who comply with the conditions set out in paragraph 8, points (b), (c), (d) and (e), and who use the data solely for performing research that contributes to the detection, identification and understanding of systemic risks in the Union pursuant to Article 34(1).
Mr. Masnick thinks the liquidated damages provision might be an attempt by Musk to poke the EU regulatory bear, but it is also possible that Musk (or his attorneys) understand that there has to be a regulatory carve-out from the rule. In that case, the real target of the provision would be private scrapers.
Thanks to Mitu Gulati for sharing news of this controversy with me and for sharing with me this interesting discussion of developments in liquidated damages law by Glenn West.
November 27, 2024 in Current Affairs, E-commerce, In the News, Web/Tech | Permalink | Comments (0)
Thursday, November 21, 2024
Conspicuous Banana Consumption
The world has real problems. $6.2 million will not solve them, but it certainly could help some people. But people with an extra $6.2 million are more inclined to buy bananas. Well, one banana. One perfectly ordinary banana purchased earlier in the day for 35 cents and attached to a wall with duct tape.
No, I am not typing word salad. I am just passing on reporting that Jaroslav Lukiv published on BBC News. Sotheby's sold what has been described as "Maurizio Cattelan's provocative artwork of a banana duct-taped to a wall" at auction for $6.2 million. The purchaser is Chinese cryptocurrency entrepreneur Justin Sun, who plans to eat the banana. The banana exhibit has gained some attention. The banana at the center of the exhibit has been eaten and stolen on occasion. It is then replaced with . . . another banana.
If this tells us anything about art that we didn't learn from R. Mutt's exhibit over a hundred years ago, I don't know what it is. I have in the past expressed my skepticism about conceptual art on this blog. It is not that I am hostile to the notion that conceptual art can provide profound commentaries on society, jolting us out of our mundane preoccupations and confronting us with the absurdities, the evanescence, the utter vacuity or destructive force, etc. of modern society. I only demand that the conceptual art be interesting and inventive and have some unique point. I think Banksy accomplished that with his delightfully performative shredded painting, although the point was lost when the shredding only enhanced the value of the painting. The "take the money and run" gambit had the performative virtue of breach of contract as art form. I think less of invisible sculptures accompanied by self-indulgent, self-aggrandizing monologues or vapid videos that are supposed to be atmospheric.
Mr. Sun explains that eating the banana will be a "unique artistic experience." Perhaps. Or perhaps he his experience will be less elevated, more akin to eating a banana. After all, the art is not the banana; it is the banana attached to the wall with duct tape and then exhibited and sold at auction. Perhaps Mr. Sun's ultimate consumption of the banana is also part of the exhibit. I would be interested in knowing his views on the matter. The point of the art would seem to be more sociological than aesthetic. Perhaps we need Mr. Sun's input to complete our understanding. Or perhaps his function is not addition but only subtraction.
November 21, 2024 in Commentary, Current Affairs, In the News | Permalink | Comments (0)
Friday, November 15, 2024
Friday Frivolity: The Onion Buy InfoWars
There's not much to say beyond the headline. I was just thrilled to write a headline that you might expect to find in The Onion, except that it is a real headline about The Onion. Benjamin Mullin and Elizabeth Williamson, two actual journalists, bring you the story in The New York Times, here.
Some background: Families of the victims of the mass shooting at the Sandy Hook Elementary School won a $1.4 billion defamation suit against Mr. Jones and his company. His company is called Free Speech Systems, but it turns out, First Amendment protections do not apply to baseless claims that the mass shooting at Sandy Hook was fabricated as a "pretext for confiscating Americans’ firearms." The judgment bankrupted Mr. Jones and his companies. The Onion purchased Infowars in resulting sale required to satisfy Mr. Jones' debts. The families of the victims reportedly support the transaction.
There may be an actual contract issue here, but perhaps it will end up being more frivolity. There is a frustrated bidder, which the Times identifies as "First United American Companies, a business associated with an online supplement store that bears Mr. Jones’s name." The business alleges irregularities in the bidding process. For its part, The Onion has disclosed that it bought InfoWars for a bargain price, "less than one trillion dollars."
November 15, 2024 in Current Affairs, In the News, True Contracts | Permalink | Comments (0)