ContractsProf Blog

The Billionaire’s Weapon of Choice in Getting to Legion Level: The Non-Disclosure Agreement

Earlier this month, we wrote of a lowly multi-millionaire who uses non-disclosure agreements (NDAs) in connection his longevity business, which involves experimentation with drugs, and his personal life, which involves experimentation with drugs. Also this month, Dana Mattioli reported in The Wall Street Journal (WSJ) on an equally bizarre web of NDAs that Elon Musk uses to keep the mothers of his children (who may or may not be his sexual partners) from revealing that they are the mother of his children or perhaps that his children are his children. The rather bizarre result is that we do not know how many children the world’s richest man has. All we know is that his goal is to achieve “legion levels” before the apocalypse. 

Image by DALL-E

According to the WSJ, Mr. Musk offered conservative influencer Ashley St. Clair $15 million plus $100,000/month until her baby turned 21 in exchange for her silence about her child with Musk, whom the couple named Romulus. Perhaps in an effort to re-assure Ms. St. Clair, Mr. Musk’s “fixer” informed Ms. St. Clare that this was the standard deal. Of course, the original Romulus was a twin, so when you give a child that name, you must be anticipating at least one more on the way, and that it will eventually be raised by wolves. According to the WSJ, Mr. Musk informed Ms. St. Clair that they would need to use surrogates in order to reproduce at the desired rate.

The article does not spell out the logic, but apparently Mr. Musk believes that declining population puts the world under threat. He is doing his part to reverse that decline, but he also thinks that the human race needs to become “multiplanetary” in order to survive. 

However, once a woman has helped Musk conceive his children, he seeks to control them through NDAs, and he punishes them financially if they get out of line. So the musician Grimes reportedly complained on X, Mr. Musk’s social media platform, about Mr. Musk’s use of X, their son, as a prop during a press conference in the Oval Office. That displeased Mr. Musk, and so he stopped communicating with Grimes. She then took to X, the website, to seek Mr. Musk’s help when one of their children (X? Not X?) was having a medical crisis. Bit of a Streisand effect there, I’d say.

The WSJ reporting also suggests that Mr. Musk initiates relationships with his followers on Twitter/X, in the interests of finding new women with whom he can reproduce, perhaps through sperm donation. The transactions can be lucrative. Twitter/X enables people to quickly monetize attention, and one cryptocurrency influencer boasted of earning $21,000 in two weeks because Mr. Musk drew attention to her feed. However, as Stuart A. Thompson reported this with in The New York Times, what Mr. Musk giveth, he can also take away. Influencers who criticize Mr. Musk can quickly lose followers if he decides to turn off the attention spigot. 

According to Mr. Musk’s fixer, NDAs are necessary to protect Mr. Musk’s personal information. After all, said the fixer, according to the WSJ, “He is the biggest lightning rod on the planet.” Did I mention the Streisand effect? The fixer adds, “[W]e have dealt with some very unstable, mentally unstable, people that all of a sudden misremember things.” Perhaps Mr. Musk should spend more time vetting the people with whom he chooses the reproduce. Clearly, intelligence is something he values, but if that were the only value, why not populate the earth with robots rather than people? 

Ms. St. Clair has not been a compliant partner. She insisted on a vaginal birth, which Mr. Musk believes limits the brain-size of the fetus. She also wanted the boy circumcised, as she is Jewish. She wanted a paternity test and some guarantees in case of Mr. Musk’s demise before the child turned 21. She retained an attorney. All of these are forbidden, and Mr. Musk has responded by withdrawing the $15 million offer and reducing her monthly stipend, first to $40,000 and then to $20,000. Ms. St. Clair’s legal fees have exceeded $240,000. One of her attorneys says that Mr. Musk is “weaponizing” money, as if that is something surprising rather than the name of the game.

Influencers Allege Paypal Uses Honey Extension to Steal Commissions

In January, an influencer filed a purported class-action complaint against PayPal, alleging that Honey, an extension that PayPal bought in 2020 for $4 billion, is a scam. The complaint alleges tortious interference, conversion, statutory claims sounding in deceptive business practices and unfair competition, and unjust enrichment. Honey purports to help people find online coupons for purchases. Here’s a video that summarizes the allegations against Honey. I think the twenty-three minutes are well-spent.

In order to understand the alleged scam, I have to explain, as best I can, affiliate marketing, how Honey works, and how Gen Z shops. I have a Boomer-level understanding of all of these things, so please bear with me, and make use of the comments to supplement my understanding. 

First, it seems that some influencers promote products without affiliating with the goods they market. Others seek sponsorships by vendors in exchange for affiliate status. One way to affiliate is to provide followers with discount codes, and when a consumer uses those codes, the affiliate gets a commission. Some influencers were promoting Honey, which purports to be a free service. Consumers either don’t understand and don’t care or neither understand nor care that when you sign up for free Internet services, your data is the currency in which you pay. However, while Honey actually makes its money by selling your data and by taking commissions from the affiliates who refer consumers to the vendors. 

That is the first set of allegations in the complaint. Honey steals commissions from influencers. It does so whether or not it actually finds discounts for consumers. Once you sign up for the Honey extension, it will always pop up when you make a purchase, sometimes reporting on a discount, sometimes not (right). Either way, when you click to use the coupon or click to close the box, Honey replaces the cookie that sends a commission to the affiliate with a cookie that sends the commission to Honey and thus takes the commission that otherwise would have gone to the influencer who directed you to the site. The same thing occurs if you click on the box (below left) that Honey provides reminding you that you can pay using PayPal, even though that option is already available on the vendor’s webpage.

Second, the complaint also alleges that Honey does not provide value to its users. Operating through its PayPal Rewards system, Honey takes the vast majority of that discount for itself, leaving the consumer with paltry savings which come in the form of Honey points, worth much less than the discount.

Finally, the video (above) but not the Complaint alleges that Honey does not serve its customers the way it purports to do. It claims that it finds the best discounts, so that you do not have to manually search for discounts, something I guess Gen Z knows how to do, but I sure don’t. In fact, however, Honey does not find the best discounts; it finds the discounts that the vendor wants you to see. Honey helps vendors make sales; it does not help consumers find the best deal. I assume that this is not part of the complaint because consumers, rather than influencers, would be the proper plaintiffs to bring that claim.

This is all a bit bewildering. The alleged scam has been going on for years. The complaint calls affiliate cookies “the Affiliate Marketer’s lifeblood.”  Why haven’t influencers noticed that they weren’t getting commissions or that their income from commissions delined rapidly with the advent of Honey?

From a consumer’s perspective, does this mean that you should stop using Honey? My answer is yes, because Honey does not give you very much of value, and it steals from the people you are trying to support. Moreover, PayPal bought Honey because it wanted access to your data. Now it is has it, and so long as you use Honey, especially if you have the app, PayPal is tracking your every physical and online move. I don’t know anything about the alternatives to Honey, but they exist, and Honey doesn’t even rank among the top cash-back apps, at least according to this website.

One of the reviewers who praises Honey claims to have saved $400 over two years using the App and referring readers. That’s not very impressive. It turns out $300 is from referrals. Actual savings form Honey are about $4 a month. And how much shopping is this guy doing to earn one Starbuck’s coffee a month? Moreover, the authority for these savings? The app. I am skeptical. Stores are always telling you how much you saved by shopping there, but that only proves that you may not need an app to pay less than the listed retail price, which nobody pays. In any case, it seems that the real benefits from Honey derive from being part of a Ponzi scheme. Hard pass.

Thanks to my student Brady Robison (right) who told me about the case.

The Blueprint For a Long-Life Start-up: Confidentiality Agreements

I took an introduction to philosophy course when I was in college. We read various proofs of God’s existence, including Descartes' ontological proof, which I found summarized here as follows:

• If there is a God, it is a perfect being.
• A perfect being possesses all possible perfections.
• Existence is a perfection.
• Therefore, God necessarily possesses the quality of existence.

For an exam, perhaps it was the midterm, my professor presented us with the following joke from Freud:

Life is so terrible, it would have been better not to have been born.

Who is so lucky?

Not one in a hundred thousand!

Oh how we laughed! He asked us to consider why the joke was an argument against the existence of God. I’ve been thinking about this joke recently, wishing I had not lived so long to see what has become of my country.

Recently, the New York Times’ Kirsten Grind had a big story about Bryan Johnson, subject of a recent Netflix documentary. If he knows the joke, Mr. Johnson clearly rejects its premise because Mr. Johnson’s goal is to live forever, and Mr. Johnson is — you guessed it — a tech-stock millionaire, so he can invest heavily in his own longevity. He also pushes a scheme, called Blueprint, through which others can purchase various supplements, kits and regimens that Mr. Johnson claims will reverse the aging process.

You may think this is a joke or a scam, but if so, and if you have had any dealings with him or his companies, Mr. Johnson has something for you: a non-disclosure agreement (NDA).  According to The Times, 

For nearly a decade, Mr. Johnson has wielded confidentiality agreements to control his image and the companies he built atop that image. His employees, sexual partners, vendors and contract workers have all had to sign the documents, sometimes in exchange for settlements, severance or continued employment at his firms . . . .

The Times reports that Mr. Johnson has long favored NDAs, even requiring them of friends or dates with whom he takes drugs. One such agreement can be viewed here. But the Blueprint NDA is reported to be twenty pages long. One NDA was characterized as an “opt-in” agreement which seems designed to protect Mr. Johnson in advance from, at the very least, claims alleging hostile work environment sexual harassment. 

Now, some key people, including a doctor featured in the documentary and a former fiancee/employee are challenging the NDAs, which an attorney representing the former employees characterized as holding up a house of cards, before the National Labor Relations Board (NLRB). It’s not clear that the NLRB will be able to do anything for these plaintiffs, however, as two of its five members have been terminated, and the DC Circuit refused to uphold a stay of those terminations imposed by a Distrct Court. They were removed for opinions disfavoring employers. I think the message is pretty clear for the fate of this case, because the remover-in-chief is quite fond of NDAs, as we have explored previously, most recently here.

The problem? According to The Times, at least some of the products that Blueprint peddles provide no proven benefits and are said to induce nausea, heartburn, reduced testosterone, and the onset of diabetes. While the Netflix documentary includes a finding that Mr. Johnson’s biological age has been reduced by 5.1 years, other results suggest that he has actually aged ten years, according to The Times. Unlike Benjamin Button, it appears that Mr. Johnson has not figured out how to reduce the aging process. The Times also reports that Mr. Johnson has founded a new religion, called “Don’t Die.”

I suppose acts of heresy would constitute their own punishment, even without an NDA. But who could be so lucky? In the long run, all of us.

Doing It Wrong (Columbia) and Doing It Right (Georgetown)

On Monday, we contrasted Paul, Weiss's Neville Chamberlain-esque capitulation to the government with the bravery of a third-year associate who called upon her firm and others like it to stand up to the government. Today, we contrast Columbia University’s capitulation to Georgetown’s resounding articulation of principle in the face of threats from the government that aimed to chill constitutionally protected rights to free exercise and free expression. Columbia needs to get some religion.

On March 7, various governmental agencies announced that they were pulling $400 million in funding to Columbia University, "due to the school’s continued inaction in the face of persistent harassment of Jewish students.” On March 13, the administration sent Columbia a list of its demands. Some of those demands were not unreasonable. The administration demanded that  Columbia enforce its disciplinary procedures. Others were quite outrageous. The administration demanded that the university abolish its university judicial board and centralize disciplinary proceedings within the office of the university president. It also demanded that the Middle East, South Asia, and African Studies Department be placed under “academic receivership” for at least five years.  

It should go without saying that the federal government has no business meddling in the internal affairs of a private university. It’s a free country. Anybody can criticize university leadership. No doubt, Columbia, like many campuses, in light of last year’s protests, has undertaken significant soul searching about how to balance the rights of free expression, academic freedom, and public safety on campus. Tying research funding to its agreement to adopt the administration’s preferred approach to such matters, at the very least, raises questions at the intersection of private and public law. Columbia could have challenged the government’s authority to tie funding to compliance with the administration’s demands. It is hard to imagine that any court would have upheld the government’s power to withhold funding for scientific research because it likes the smell of pepper spray first thing in the morning on campus visits.

Troy Clossen reported in The New York Times on Friday that Columbia chose capitulation in the form of a four-page, unsigned letter. As a graduate of Columbia University, this turns my stomach. Fell0w graduate, Alexander Hamilton, would not have thrown away his shot so easily. A chill wind is now sweeping university campuses across the country. The odious Chris Rufo crows, “This is only the beginning.” 

It is not like Columbia had no models for how a university might respond. Interim U.S. Attorney for the District of Columbia Ed Martin sent a threatening letter to the Dean of Georgetown Law School. Here is how Dean Treanor responded in part:

Your letter challenges Georgetown’s ability to define our mission as an educational institution. It inquires about Georgetown Law’s curriculum and classroom teaching, asks whether diversity, equity, and inclusion is part of the curriculum, and asserts that your office will not hire individuals from schools where you find the curriculum “unacceptable.” The First Amendment, however, guarantees that the government cannot direct what Georgetown and its faculty teach and how to teach it. The Supreme Court has continually affirmed that among the freedoms central to a university’s First Amendment rights are its abilities to determine, on academic grounds, who may teach, what to teach, and how to teach it. . . .

Your letter informs me that your office will deny our students and graduates government employment opportunities until you, as Interim United States Attorney for the District of Columbia, approve of our curriculum. Given the First Amendment’s protection of a university’s freedom to determine its own curriculum and how to deliver it, the constitutional violation behind this threat is clear, as is the attack on the University’s mission as a Jesuit and Catholic institution.

Bravo, Dean Treanor.

That DOGE Won’t Hunt

I am fairly confident that the federal government wastes money. It's a very large organization, with access to very large amounts to money. There is inevitably going to be waste. Many politicians have been elected claiming that they will reduce such waste. It’s not an easy task. The Department of Government Efficiency (DOGE) has taken a Ready! Fire! Aim! approach to the problem. Early on, The New York Times reported, DOGE boasted that it had “canceled” $55 billion in contracts, but days later The Times also reported that those numbers were wildly inflated. It’s next move, as Jacob Sullum noted on Reason, was to make new claims of savings but to make its reporting system less transparent. The new numbers were nonetheless also challenged, e.g. by David A. Fahrenthold and Jeremy Singer-Vine, here. So, according to the same duo of New York Times journalists, DOGE reverted to more transparency.

Meanwhile, courts have already stayed some DOGE actions. The list is long and ever-expanding, so I once again recommend the JustSecurity blog’s litigation tracker. It seems unlikely that the government saves money by firing people, getting sued, and then having those people reinstated. To make matters worse, according to Eileen Sullivan and Isabelle Taft, reporting in The New York Times here, the administration does not seem to want the reinstated employees to work, so it is placing them on administrative leave, literally paying them to do nothing. Unless you value the work of federal employees below zero, this approach seems unlikely to increase government efficiency. 

Currently, DOGE claims to have saved the government $130 billion. I don’t believe it, but I have no idea what, if anything DOGE has really accomplished. Frankly, it is exhausting trying to follow their claims, the revelations of their incompetence or misstatements, their new claims, retractions, renewed claims. But I have been wondering what it means when a government agency claims to have “canceled” a contract. As we’ve discussed before, when private parties claim to have canceled a contract, they are in breach and will have to pay provable damages if there any.

I have no experience in government contracting. Obviously there are differences. I reached out to colleagues in the field, and what I've learned is below. In short, the government can get out of contracts more easily than private parties, but it is not pain free. Aggrieved parties will have to seek remedies through administrative rather than legal procedures, at least initially. However, as so much of what DOGE has done seems to be clearly ultra vires, I think the actual savings as a result of all of this chaos will be very limited. The costs and human suffering are hard to measure. I have no confidence that this duo knows what it is doing, at least when it comes to achieving government efficiency. At times like this, it is important to remember, with these guys, as Adam Serwer observed, the cruelty is the point.

So some theories as to what is really going on, from the most favorable towards DOGE to the most skeptical:

• At least some canceled contracts are simply contracts that will not be renewed, and canceling them generates real savings to the extent that they are multi-year contracts for which money had already been allocated;
• Some canceled contracts might be either long-term supply contracts or at-will employment agreements that the government can cancel without breach;
• Government contracts generally allow for “termination for convenience” (TFC), explored in more detail below;
• Drawing on their experience as well-financed bullies in the private sector, administration officials know that they are in breach/are acting ultra vires and expect that many contractors or employees will not have the stomach for a fight; and
• This is not about efficiency; it’s about optics.

I am especially dubious about DOGE’s claims that it has canceled leases. Last week, a trio of New York Times reporters, David A. Fahrenthold, Madeleine Ngo, and Jeremy Singer-Vine reported that DOGE had silently dropped 136 of the 700 canceled leases from its website, lowering its estimated savings by 30%. This change seems to be a product of pushback within the Trump administration. The other shoe will drop, I presume, when the property owners sue for back-rent or when administrative agencies have to find new office space. National Public Radio reports that DOGE wants to sell government buildings and lease them back. I understand that such a transaction can be attractive for private businesses. I don’t understand why it would be beneficial for the government to engage in such transactions. Property law folks, please weigh in! 

About a month ago now, David B. Dixon and Michael R. Rizzo published this explainer on the Pillsbury Law website. Parties whose contracts with the government are canceled can bring claims under the Impoundment Control Act (ICA) when funds are appropriated for specific purposes but then not spent. However, such claims have limited efficacy because contracts with the government allow for TFC, and the administration can often rely on such clauses to justify seeming violations of the ICA, so long as the contract terminations are in good faith. If contracting officers do not exercise "independent business judgment" in connection with terminations, aggrieved parties can bring claims under the Contract Disputes Act.

Aron C. Beezley and Nathaniel J. Greeson provide more details in a recent article in The National Law Review. They cite cases illustrating TFC terminations can be challenged when: used to correct the government’s own procurement mistakes; to allow the government to walk away from an unfavorable deal; to steer government business towards preferred vendors; when the government invokes the TFC clause in bad faith or arbitrarily or capriciously. Damages might be limited to costs incurred before termination plus profits on work completed. Lost profits on canceled work may be awarded in cases of bad faith termination. Reinstatement of contracts is rare. Under the Equal Access to Justice Act, some contractors can recover attorneys’ fees and costs. So, in short, much of the claimed savings may be clawed back and it will take years to sort it al out.

There are ways to improve government efficiency. They are not flashy. They are slow and painstaking, but they yield results. Those results will not generate headlines, unless of course DOGE decides to shut down the agencies like 18F that actually do promote government efficiency or inspectors general who can legitimately claim to have saved the government $93 billion in a single year. 

Thanks to the many contractsprofs who shared their expertise with me or tracked down information, including Andrea Boyack, Laura Heymann, Richard Neumann, Heidi Mandanis Schooner, and Frank Snyder.

Doing It Wrong (Paul, Weiss) and Doing It Right (Rachel Cohen)

Paul, Weiss is a renowned law firm associated with the Democratic Party. According to Michael S. Schmidt, Matthew Goldstein, Jessica Silver-Greenberg, and Ben Protess, writing in The New York Times, its chairman Brad Karp had a long history of raising money for Democrats and was known for standing up to the current President and his administration. 

Young Skadden associate attempts to console Paul, Weiss chairman

On March 14th, the White House issued an Executive Order titled “Addressing Risks from Paul [sic] Weiss.” Its substantive provisions are similar to an Executive Order titled Addressing Risks from Perkins Coie LLP. After some wild general allegations about the evils of large law firms. The Paul, Weiss Executive Order narrows its focus, identifying a former Paul, Weiss partner as a target because he had the temerity to participate in investigations against the then-former President. The Executive Order threatens to: withhold security clearances from Paul, Weiss attorneys; to preclude the federal government from doing business with the firm and to terminate all current contracts with it; and to limit access of Paul,Weiss attorneys to federal buildings.

Perkins Coie challenged the Executive Order that targeted it and in short order got a temporary restraining order. The administration responded in true imperial toddler fashion, filing a motion to force the judge to recuse herself from the case, and as Carl Hulse reports in The New York Times, by calling for her impeachment. There was another Executive Order targeting Covington & Burling, and the  effect of that order remains unclear.

Faced with losing business and apparently unwilling to follow Perkins Coie’s lead, Paul, Weiss chose to debase itself. The Executive Order directed at the firm was withdrawn because, according to the President, Paul,Weiss agreed to devote $40 million over the next four years to pro bono cause of which the President approves. It has also committed itself to dispense with any efforts at the firm to promote diversity, equity, and inclusion. As Walter Olson writes for the Cato Institute, "This is calculated to chill and deter vigorous courtroom advocacy.” Matthew Goldstein, Jessica Silver-Greenberg, and Ben Protess report in The New York Times that Mr. Karp thinks his actions are consistent with Paul, Weiss’s principles. No, they aren’t. Not even close.

A young, heroic associate at Skadden, Arps has taken a different approach. As Arianna Coghill reports in Mother Jones, Rachel Cohen a third-year associate at Skadden sent a firm-wide e-mail that read in part:

This is not what I saw for my career or for my evening, but Paul Weiss’ decision to cave to the Trump administration on DEI, representation, and staffing has forced my hand. . . .  We do not have time. It is either now or never, and if it’s never, I will not continue to work here.

Hundreds of supporters among the ranks of BigLaw associates have signed on to an open letter that Ms. Cohen published. Is BigLaw scared? Not of Ms. Cohen. Here is what I found when I tried to look for her on the Skadden website.

The appeasement approach will not work. On the heels of Paul, Weiss’s capitulation, the administration has broadened its attack on the rule of law with a new Presidential Memorandum on Preventing Abuses of the Legal System and the Federal Court [sic]. Chris Geidner describes the administration’s broad attack on the legal profession and the rule of law on Law Dork.

Friday Frivolity: 8000 Bitcoins in a Welsh Tip (Garbage Dump)

A quick one.

Bitcoin Mining, Image by DALL-E

Back in 2021, we shared the story of James Howells, an early Bitcoin miner whose then-partner mistook his Bitcoin-laden hard drive for rubbish and put it in the trash. Ever since, Howells has been trying to get he Newport City Council to give him access to the tip so that he could fish out his hard drive. The members of the council would no be budged.

Now, Mr. Howells is in the news again. Steven Morris, writing in The Guardian, reports that the tip is now to be closed and capped. Mr. Howells next move is to attempt to purchase the tip. Presumably he can get investors to back him, as the hard drive, if it indeed contains 8000 Bitcoins, is now worth $800 million or thereabouts. Mr. Howells is quite convinced the drive is there. Is it still readable? Lots of uncertainty, but perhaps a worthwhile risk for an angel investor who doesn’t mind rooting about in mounds of garbate (or paying others to do so). 

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.

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 119^th 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 119^th Congress.  

Congress Commands the Sun to Stand Still Over Washington

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.”

Joshua Commands the Sun to Stand Still Over Gibeon

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)

Uber Eats Order Leads to Compelled Arbitration After Uber Car Accident

We have been commenting regularly lately on what I have called arbitration clause bootstrapping and David Horton (right — updated but still youthful) has alternatively called Infinite Arbitration Clauses and Accidental Arbitration. There was the case of Disney invoking arbitration with respect to an incident at a Disney-owned restaurant based on a family member’s prior registration for a trial subscription to the Disney + streaming service. Disney eventually abandoned that argument after it generated a lot of negative attention. There was Airbnb’s attempt to compel arbitration in a suit brought by a man injured in a fall at a party at a house that the party’s host had rented on Airbnb. The injured man was a guest, not a party to the rental agreement, but he had once registered on Airbnb’s site, although he never used the site. Airbnb’s motion was denied, but there was a dissent.

Third time’s the charm. In McGinty v. Zheng, a New Jersey appellate court granted Uber’s motion to compel arbitration. The McGintys got in an Uber on March 31, 2022. Their driver ran a red light and hit another car. The McGintys suffered serious injuries. Georgia McGinty was unable to work for one year. John McGinty suffered broken bones and sill suffers from diminished use and sensation in his left wrist. They sued the driver and Uber. Uber filed a motion to compel arbitration.

As Uber users know, when Uber updates its terms of use, you get a warning on the welcome screen. There is no way to use the app unless you agree to the updated terms, and the terms relevant to the McGinty’s use of the app included a conspicuous arbitration clause. So an easy case.

But not so easy. It turns out, there is just one app for both Uber rides and Uber Eats, and the McGintys claimed that it was not them but their twelve-year-old daughter who manifested asset to Uber’s terms when she ordered take-out on her mother’s account with her mother’s consent. In addition, the McGintys pointed out that Uber’s updated terms made no mention of a waiver of the right to a jury trial.

As to the latter issue, New Jersey requires no “magic words” when assessing whether an arbitration clause effects notice that one is waiving the right to a jury trial. Here Uber’s emphatic language that disputes were to be settled in arbitration and not in a court of law sufficed. Cases like this cause me to muse on the cavalier ways in which courts allow for the shedding of some constitutional rights but not others in some contexts but not others. So, would a court be as blasé about the boilerplate click-through and, to borrow David Horton’s language, infinite and accidental relinquishment of 1st or 2nd Amendment rights? And as we know from the Jarkesy case, the right to a civil jury matters when the alternative is proceedings before an administrative tribunal, but for some reason, not here.

Image by DALL-E

As to the child, the Court treated that as an agency issue and left that for the arbiter to resolve. The arbiter should also determine whether John is bound as a third-party beneficiary to the terms of service to which Georgia (or her daughter) agreed.

This all seems right under existing law, but the law is an ass. There is no good reason why a party should be bound to arbitrate claims against Uber for a car accident because one once ordered delivery through Uber Eats. The transactions are unrelated; the businesses are not at all alike. The risks from car accidents are likely much higher than the risks from food delivery services. And there is no reason why courts can’t demand separate agreements for each entity or for each transaction. If people don’t want to be asked whether they want to arbitrate each time they use the app, give them the option to click a box and not be given the menu each time. They can click a box and be bound until the next version of the Terms of Service come out.

I had successfully resisted getting the Uber app until last year. I went to a conference in Tallahassee. I always use cabs to get around when public transportation is unavailable and I don’t have a car. I don’t like ride-share companies because I don’t like having another app on my phone tracking my every move and action. I don’t think such companies are a force for good in the universe, so I prefer alternatives. But in Tallahassee, I learned, there were no alternatives. No public transport from the airport to the city center, no cabs, at least none at the airport.

So I got the app and was confronted with the same screen that the McGinty’s saw. The only way to get to my hotel from the airport involved agreeing, now and forever, that I would not sue Uber in court. That is not freedom of contract. It’s not freedom. We, and our courts, have built cages in which we are confined.

But there are ways out. Other countries don’t do things this way. Because courts have federalized arbitration law, states are powerless to intervene. We need national consumer protection legislation to combat arbitration-clause bootstrapping. I don’t see it happening any time soon, but the party that undertakes this reform will be doing something that is actually popular. They just need to make it seem populist, even as billionaire tech-bros denounce it as an act of the nanny state.

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.

 

Can Tesla Turbo-Charge Cybertruck Orders with Contractual Threats?

By u/Kruzat , CC BY-SA 4.0 

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.

Image by DALL-E

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.

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

Brian Leiter Has Cracked the Case of “Citation Rings"

Last week, Brian Leiter reported on his Law School Reports on alleged “citation rings.” Here’s how the caper works: Mid-level scholars cross-commit to citing one another’s work to boost their citation counts. So says a “younger scholar” who reported it to some unnamed person who reported it to Brian Leiter. Professor Leiter finds the practice reprehensible.  

There is no scholarly purpose served by "citation rings."  There are ways to detect such pattersn in citations, although I hope it won't be necessary to use them.  But if they are identified, then Deans should be encouraged to impose disciplinary measures on faculty found guilty of this kind of scholarly malpractice.

In my view, two things are surprising about this. First I am surprised that Professor Leiter dialed the outrage right up to ten and called for investigation, which I think would be harder than he thinks, and sanctions. Second, I’m surprised the junior level reported rather than emulated the behavior of more experienced scholars.

On the first point, I imagine that the citation ring gambit occurs when scholars doing related work meet up at conferences or gatherings or even just on social media. Finding a way to cite a colleague is not hard, so long as there is some hook, and if there is some hook, the crime will go undetected. The student editors would likely question a citation that did not relate to the text of the article. An investigating dean, or the academic mischief forensics expert to whom the task would be delegated, would have to find a citation that slipped through the cracks, find a reciprocal citation that also slipped through the cracks, and then begin the interrogation. I, for example, have cited Brian Leiter. I think I can justify it. If he ever cited me, he’d be toast if he were mid-level. What possible motivation would he have to cite me, absent a quid pro quote?

But I have suggested in an earlier post, that "citation rings" are completely unnecessary. People who are at schools that care about citation counts cite other people at such schools because, almost inevitably, they know each other, share work, see each other at conferences, and think of one another has having made contributions to the field that are worthy of citing, even if only to but see. 

A few years have now passed since that earlier post, so I will say a few words more for those who missed it. In my view, even though I share a job title with people at top schools (“The Legal Academy’) my job is different from theirs. I teach in the Other Legal Academy (OLA), and what that means is that I mostly teach. I do write; I’m doing so right now, and thank you for reading. But you likely never have read (or cited to) my scholarship. I engage in my scholarship earnestly and passionately, but I know that it will have the impact of a feather thrown into the Grand Canyon, if I can even find a publisher, which has gotten significantly harder in the past decade for those of us in the OLA.

Things work differently in The Legal Academy. People there also work earnestly and passionately, and if they are realistic, they may conclude that the impact of their work is akin to lobbing bricks into the Grand Canyon. But when it comes to citation, they have a huge advantage over me. I am much more likely to cite a paper I hear delivered or read in draft than I am to cite something I come across randomly. But I go to a grand total of two conferences a year, and my law school hosts two outside lectures a year. I have not been invited to give a lecture at another U.S. law school in well over a decade. So people don’t read my work in draft and they don’t hear my scintillating presentations.

Moreover, if you are at the top of your field, you don’t come across things randomly. You know your field; that’s your job, and it’s a big job. If you have some confidence that you already know the important voices in your field, you don’t go digging around for the sixty-page law review articles you missed. If your research assistant comes across something, you can add it to a string cite.  You’ve gathered enough material to engage with already from the recent papers from known quantities. You make your name and reputation by responding to them, not to me.

So if citation rings exist, I am surprised, but not scandalized. If they exist, they smack of a desperation induced by the stupidity of paying attention to citation counts. C’mon The Legal Academy. You are better than that. You don’t need a proxy to help you estimate the value of your colleagues’ work, especially as the proxy is flawed.

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?

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.

As Go Twitter Employees, So Go Federal Employees?

Image by DALL-E

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.

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.

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.

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.

President George H.W. Bush signing
The American with Disabilities Act

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.