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The Supreme Court vs. Contract Law — Greg Klass

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Post by Greg Klass

My last two posts on DIRECTV v. Imburgia [post one, post two] were on relevant rules of construction: (1) the FAA presumption in favor of arbitration and (2) the common law tradition of reading against the drafter. But those rules should come into play only if the Supreme Court agrees with the California Court of Appeal that the phrase “the laws of your state” is, as it appears in the contract, ambiguous. At oral argument several justices explored an alternative holding: finding that “the laws of your state” had only one contractual meaning, and that the California Court of Appeal’s conclusion that it was ambiguous was so unreasonable as to be (presumptively?) hostile to arbitration. This post discusses what it would take to reach such a conclusion, and a few of the weirder things the Justices said at oral argument.

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Reinvigorating the Public-Private Law Divide: A Hohfeldian Construction of the State — Ted Sichelman

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Post by Ted Sichelman

In a previous NPL post, I drew upon the work of Wesley Hohfeld to counter two major arguments often levied against the public-private law distinction. To do so, I implicitly assumed that a third major criticism—namely, that “the State” is a vague and ambiguous concept—was wanting. Here, I squarely address this assumption.

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DIRECTV v. Imburgia and Interpretation vs. Construction — Greg Klass

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Post by Greg Klass

I don’t know whether anyone else has noticed, but many of the Supreme Court’s recent arbitration cases raise the distinction between interpretation and construction. I do not think that the Court, which is not especially strong on contract doctrine, has noticed. But it’s lurking in the background. The distinction is especially relevant to understanding what is going on in DIRECTV v. Imburgia, which I blogged about last week.

If you’re not familiar with the interpretation-construction distinction, here’s Corbin’s summary, from the first edition of his treatise:

By “interpretation of language” we determine what ideas that language induces in other persons. By “construction of the contract,” as the term will be used here, we determine its legal operation—its effect upon the action of courts and administrative officials. If we make this distinction, then the construction of a contract starts with the interpretation of its language but does not end with it; while the process of interpretation stops wholly short of a determination of the legal relations of the parties.

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The Supreme Court, Discrimination and Torts — Sandra Sperino

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Post by Sandra Sperino, Associate Dean of Faculty and Professor of Law, University of Cincinnati College of Law.

Three fairly recent Supreme Court cases illustrate a change in the way that tort law is invoked in discrimination cases:  Gross v. FBL Fin. Servs., Inc., Staub v. Proctor Hosp., and University of Texas Southwestern Medical Center v. Nassar. In these three cases, the use of tort law commands a majority of the Court.  The use of tort law is also tied to textual claims, where certain words or concepts in discrimination law are directly interpreted through the lens of tort law.

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SCOTUS, Arbitration and Contra Proferentem — Greg Klass

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Post by Greg Klass

The Supreme Court heard oral argument yesterday (October 6th) in DIRECTV v. Imburgia (full transcript here). The case involves the meaning of “the law of your state” in an arbitration clause. DIRECTV argues that it means “the law of your state as limited by preempting federal law,” whereas the plaintiffs argue that it means “the law of your state without regard to any preempting federal law.” Because the phrase does not appear in a choice of law clause, the plaintiff’s have a decent argument for their reading—or that the words read in light of the contract as a whole are at least ambiguous. The reasons are complicated, but if the phrase means what DIRECTV says, then the arbitration clause kicks in and the plaintiffs lose their class action. If it means what the plaintiffs say, their class action remains in state court.

DIRECTV has argued that if the words “the law of your state” are ambiguous, the presumption in favor of arbitration means that they win. That would be a very weird result.

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What Does It Mean for Something to Be a Tort? — Sandra Sperino

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Post by Sandra Sperino, Associate Dean of Faculty and Professor of Law, University of Cincinnati College of Law.

Whenever I say Title VII is not a tort, I get quite a bit of pushback about this claim.  It makes sense to start this post by explaining what I mean.

There is not one fixed definition of what a tort is.  Tort law can be defined as being “about the wrongs that a private litigant must establish to entitle her to a court’s assistance in obtaining a remedy and the remedies that will be made available to her.” John C.P. Goldberg & Benjamin C. Zipursky, Torts as Wrongs, 88 Tex. L. Rev. 917, 919 (2010). Another common definition of a tort is a “civil wrong, other than breach of contract, for which the court will provide a remedy.” W. Page Keeton, et al. Prosser and Keeton on The Law of Torts 1, 2 (5th ed. 1984).

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New Contributions to the Law of Property by Henry Smith: Realism, Numerus Clausus, and Custom– Yonathan Arbel

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Post by Yonathan Arbel

Professor Henry Smith has recently published two new engaging and interesting papers in the area of property law, both part of different symposia. For the symposia lists of papers, see here and here, and for the papers, see here and here (citations at the bottom of the post).

The first is part of a symposium where the main question was the enduring appeal of doctrinal analysis in private law, despite the “we-are-all-realists-now” dominant point of view. There are many great contributions there, and Smith takes this question to the area of property. He makes a simple but strong argument: the most basic of property doctrinal categories (or modules)—property as a law of things, the centrality of possessory rights, and property law as a partly formal system—stands tall in the face of the realist onslaught because, far from being transcendental nonsense, they serve important social functions, namely, they serve as information heuristics for complex social situations.  Smith surveys changes to property law since the times of the realists and shows that wherever changes occur, they were around the edges of property, and that the basic categories were left largely untouched despite the impression one might get from reading purely academic works.

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Title VII Is Not a Tort — Sandra Sperino

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Post by Sandra Sperino, Associate Dean of Faculty and Professor of Law, University of Cincinnati College of Law.

Thank you to John and Henry for inviting me to blog here.

In several posts, I will be blogging about how federal courts are pushing federal discrimination law out of a public law model and into a more private law frame.  There are three major federal discrimination statutes: Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA).  Taken together, these three statutes prohibit employment discrimination based on factors such as race, sex, religion, age and disability.

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Charles Fried, Contract as Promise, 2.0 — Yonathan Arbel

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Post by Yonathan Arbel

The second edition of Charles Fried’s foundational book ‘Contract as Promise’ is now out in print, and to celebrate the event, Harvard Law School held a special panel comprising of Charles Fried himself as well as other HLS professors.

The event itself was filmed and the YouTube link is appended at the bottom of this post. The panel discussion was great and Charles Fried untied many of the hard knots in the earlier edition of his book. His approach is neatly summarized in a new concluding chapter to his book, aptly titled ‘Contract as Promise in the Light of Subsequent Scholarship—Especially Law and Economics’, which clearly and fairly describes many of the critiques launched at his book, and presents his version of things.

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Conference Announcement — Contract, Status, and Fiduciary Law (McGill, 11/6-7)

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The McGill University Faculty of Law is pleased to announce the forthcoming conference – Contract, Status, and Fiduciary Law – to be held at McGill on 6-7 November 2015. The conference will feature papers by leading legal theorists exploring philosophical questions concerning relationships between contract law, moral and legal conceptions of status, and fiduciary law. … Read more

Private and Public Law Fundamentalisms — Daniel Markovitz

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Post by Daniel Markovitz

I’d like to begin by thanking John and Henry for inviting me to post here and for permitting me to join up a little late.

I intend to devote my posts to reportage as well as to opinion—among other things by advertising new scholarship in private law, especially by writers in the early stages of their careers, that I regard as excellent.  So please send manuscripts for me to relate.

Nevertheless, I’d like to devote this initial post to explaining why I am delighted that this blog — and other similar projects, including Yale’s newly inaugurated Center for the Study of Private Law — has been got going and why I’m glad to participate.

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The New Private Law – the View from Germany — Henry Smith

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Post by Henry Smith

The Alster

This summer I spent a month visiting the Max Planck Institute for Foreign and International Private Law, in the group headed by Prof. Reinhard Zimmermann.  It was an enjoyable and productive visit, and it prompts me to raise a comparative issue on this blog.  In addition to the similarities and differences between common and civil law, which are sometimes overstated, there is a big difference between American and German private law scholarship, which is reflected in the law itself.  

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A School’s Duty of Care to its Students: Munn v. Hotchkiss School — Goldberg & Zipursky

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Post by John C. P. Goldberg & Benjamin C. Zipursky

Having participated in intensive debates among tort scholars over the place of duty in negligence law, we were especially interested to see the Second Circuit’s recent decision in Munn v. Hotchkiss School, No. 14–2410–cv., 2015 WL 4604288 (2nd Cir. Aug. 3, 2015).  (Thanks to the Volokh Conspiracy and How Appealing for bringing the case to our attention.)  

Facts and Outcome in the Federal Courts. 

Fifteen-year old Cara Munn was bitten by a tick while hiking on a forested mountain in China during a summer trip organized by Hotchkiss, her New England prep school. The tick transmitted encephalitis, which in turn caused Cara serious neurological damage, leaving her permanently unable to speak. Cara and her parents sued Hotchkiss in federal district court, arguing that the school was negligent under Connecticut law for failing to warn them that the trip might bring her into contact with disease-bearing insects, and in failing to take steps to ensure that Cara took protective measures such as using insect repellant, wearing proper clothes while walking in forested areas, and checking for ticks. A jury awarded them $10 million in economic damages and $31.5 million in noneconomic damages.

Hotchkiss appealed. A unanimous decision by a very able Second Circuit panel comprised of Judges Walker, Lynch, and Lohier neither affirmed nor reversed. Instead, in an opinion by Judge Walker, it certified two issues to the Supreme Court of Connecticut:  (1) whether public policy supports the imposition of a duty of care in such circumstances, and (2) whether the damages award was excessive.

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Tort Damages and Discrimination – Keith Hylton

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Post by Keith Hylton

Tony Sebok’s post on tort damages and discrimination presents a fascinating problem that I’ve often used as a basis for discussion in my torts classes.  If race (or some other feature likely to be discriminated against) is taken into account in an attempt to predict the future earnings of a tort victim, then damages awards will reflect the wider discrimination in society, in a sense making the tort plaintiff who falls into a discriminated-against category a victim twice, once at the moment of injury and again at the moment of compensation.

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Causation and Care in Tort Law — Keith Hylton

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Post by Keith Hylton

Causation is a topic that has generated a lot of interest from torts theorists.  Law and economics has been a bit late to the party, but at least they have brought some interesting findings with them.  The innovation offered by law and economics is a set of predictions about the incentive effects of causation rules.  This distinguishes law and economics from traditional moral reasoning because the law and economics approach makes statements about the actual effects of causation rules on tortious conduct.  To law and economics scholars, it is only after clear predictions can be made about incentive effects that we can start to make moral assessments of the law.  From the perspective of economics, it is of little use to offer a moral assessment of some legal doctrine without being able to say anything about its effects on behavior.  A law may seem morally ideal in its expression, but if its effect is to encourage socially destructive behavior, then the law must be considered a moral as well as an operational failure.

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Impairing State Contractual Commitments – How Sacred Should Contracts Be? — Aditi Bagchi

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Post by Aditi Bagchi

In early May, the Illinois Supreme Court unanimously struck down a 2013 state pension reform law.  That statute reduced various public pension benefits in an effort to reduce overwhelming debt in the public pension system.  The Court affirmed a lower court ruling that the bill violated the pension protection clause in the Illinois state constitution, which provides that “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”  The Court read the clause to prevent the legislature from any downward revision of a public employee’s pension benefits after the first day of her employment.

Illinois argued that the clause should be read to subject its public pensions to the same limitations as other contractual relationships, including modification or elimination by the state’s police power.  The Court rejected that argument, holding that, especially where the state is itself a party to the contract in question, the hurdle for a substantial impairment of contract is very high and had not been met in this case.

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Private Law Consortium, Day 2 part a — Yonathan Arbel

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Post by Yonathan A. Arbel

Continuing Janet Freilich‘s post covering the first day of the consortium, here follows my take on the second day, which was also very successful. I will divide my summary to two separate posts, so wait for updates… In this post I cover the contributions of John Goldberg, Stephen Smith, and Robert Caso and Guilia Dore.

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Conference Announcement: Private Law in the 21st Century, Brisbane Australia

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Readers of the blog working on a variety of private law issues might find interest in the following conference, to be held at Brisbane, Australia on December, 14-15th, 2015:

The Australian Centre for Private Law and the TC Beirne School of Law at The University of Queensland, is proud to host the conference Private Law in the 21st Century to be held in Brisbane on 14-15 December 2015.

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Property and Contract at a Legal Acme? Stare Decisis and the Supreme Court — John Golden

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Post by John M. Golden

In Kimble v. Marvel Entertainment, LLC, No. 13-720, slip op. (U.S. S. Ct. June 22, 2015), the U.S. Supreme Court kicked off a momentous week with an opinion highlighting the importance of stare decisis.  More particularly, the justices grappled with whether to overrule a half-century-old holding “that a patent holder cannot charge royalties for the use of his invention after its patent term has expired.”  Id. at 1.  A six-justice majority chose to stick with the prior holding despite what the majority conceded to be a “broad scholarly consensus” criticizing this precedent on economic grounds.  Id. at 13.  In explanation of the decision, Justice Kagan wrote, inter alia, that (1) “[r]especting stare decisis means sticking to some wrong decisions”; (2) precedent involving interpretation of a statute has “enhanced force” compared to, say, precedent involving an interpretation of the U.S. Constitution; and (3) precedent involving property or contract rights, such as the patent law precedent in question, is further “superpowered” “because parties are especially likely to rely on such precedents when ordering their affairs.”  Id. at 7-10.  Indeed, according to the Court, “considerations favoring stare decisis are ‘at their acme’” in “‘cases involving property and contract rights.’”   Id. at 9 (quoting Payne v. Tennessee, 501 U.S. 808, 811 (1991) (Rehnquist, C.J.)).

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We’re all connected! Regulating Contracts for Electricity — Aditi Bagchi

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Post by Aditi Bagchi

The Supreme Court has agreed to review a federal appellate court decision overturning demand response regulation from the Federal Energy Regulatory Commission.  The issue on appeal is not one of private law but of federal jurisdiction.  The federal agency has authority to regulate the wholesale market but states retain authority over retail markets.  The problem is that there is no clear line between those markets.  The FERC regulation is designed to reduce wholesale prices but it does so by way of rebates for reduced retail demand.  The question is whether the regulation technically governs wholesale sales (whose prices are reduced) or retail sales (that don’t happen as a result of its incentives).

The jurisdictional lines in the Federal Power Act force the analytically unfortunate question of whether FERC Rule 745 governs wholesale or retail markets.  But the exercise of jurisdictional line-drawing may offer a lesson for common law regulation of contract as well.

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How Should We Understand Private Law Concepts? — Andrew Gold

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Post by Andrew Gold Given the recent blog debate about the distinctiveness of private law, I would like to raise a separate but related issue.  Often, when we talk about what private law is, we are concerned with what separates private law from other fields – how do we distinguish private law from public law?  … Read more

The Dark Side of Creativity — Janet Freilich

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Post by Janet Freilich

Work-arounds (innovations that arise in the course of designing a technology to avoid another inventor’s patent claim) are a long-standing feature of the patent system. The conventional wisdom is that work-arounds are good:

“We have often noted that one of the benefits of the patent system is the incentive it provides for “designing around” patented inventions, thus creating new innovation.”

Read Corp. v. Porter, Inc., 970 F.2d 816, 823 (Fed. Cir. 1992)

But are they? 

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SIOE (ISNIE) 2015: Institutions, Organizations, Economics — Yonathan Arbel

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Post by: Yonathan Arbel

As Dan Kelly noted in his last post, this weekend the SIOE (previously known as ISNIE) conference was held at Harvard Law School. The conference was, in my slightly biased judgment (I was assisting the president-elect Henry Smith and Janet Freilich with its organization), very successful, with about 200 paper presentations and about 250 participants. It was also very international, with participants hailing from 29 countries worldwide. The program can be found here; as the program shows, there is a great richness in the topics, methodologies, and institutional affiliations of speakers. This is a by-product of the ambitious goal the society set out for itself of studying the “nature, behavior, and governance of organizations and institutions.”

Henry Smith presents Harold Demsetz with the Elinor Ostrom Lifetime Achievement Award

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Let me note a few highlights and themes:

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ISNIE 2015 — Dan Kelly

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Post by Dan Kelly

The International Society for New Institutional Economics (ISNIE), soon to be renamed The Society for Institutional and Organizational Economics (SIOE), is hosting its 19th Annual Conference this weekend, June 18-20, at Harvard Law School.  The conference website includes details on this year’s program and papers.

The conference is sponsored by Harvard Law School through the Project on the Foundations of Private Law.  In addition to keynotes by Martin Nowak (Harvard) on “The Evolution of Cooperation” and Michael Whinston (MIT) on “Property Rights and the Efficiency of Bargaining,” the program includes a number of panels that intersect with private law topics, including agency and fiduciary law, contracts, intellectual property, and property rights.     

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