LA245 Quiz 2 Cases

Metsch v. Heinowitz 3

A bargain may be illegal because the performance that is bargained for is illegal; and the performance may be illegal because governmental authority has declared it to be a crime. This is true whether the performance bar- gained for is one that is merely promised, to be rendered in the future, or is one that is rendered as the executed consideration for a return promise. Since the doctrine of illegality of contracts is grounded in public policy, the focus is on whether the object of the contract is illegal, not on the extent of either party's participation in the illegality. In applying the illegality doctrine, courts must consider a higher interest—that of the public, whose welfare demands that certain transactions be discouraged.

Gabriel v. Albany College of Pharmacy and Health Services 3

Argument for Gabriel: A syllabus is a contract. On the first day of class, the professor presents the syllabus as an offer and students agree by staying in the course. Who has not chosen a class because of its particular workload or assignments? The terms in the syllabus are promises upon which students rely. Professor Pumo unilaterally changed the written "rules of the game." Once she broke her prom- ise, there was no longer a "deal." Students should not be held to her arbitrary rules.

Gabriel v. Albany College of Pharmacy and Health Services 4

Argument for Professor: Professors do not intend to make an offer when they hand out a syllabus—much less be legally bound! The syllabus is merely an announcement that pro- vides general information about course requirements, grad- ing policies, and behavior guidelines. Reasonable people do not expect a syllabus to be enforceable in court. It was not a contract—Professor Pumo had the right to change the class rules, make additional assignments, or even kick Gabriel out at any time. Even if the syllabus were a contract, the phrase "plagiarism will not be tolerated" is too indefinite to be a valid offer. Gabriel is not immune from the plagiarism rules.

Johnny Doe v. Epic Games 5

As to defendant's second argument that plaintiff cannot disaffirm the contract because he continues to play Fortnite, this contention is directly contradicted by a notice filed by plaintiff's counsel, which stated that plaintiff "has not played the Fortnite game after filing of the lawsuit" and "has no intention of playing Fortnite in the future." Thus, this is not a case in which a minor seeks to adopt that part of an entire transaction which is beneficial, and reject its burdens. Instead, plaintiff has disaffirmed the EULAs in their entirety, including by not playing Fortnite. Because plaintiff validly disaffirmed the EULAs, plaintiff cannot be compelled to arbitrate this dispute. Defendant's motion to compel arbitration is therefore DENIED.

Hamer v. Sidway 4

Courts will not ask whether the thing which forms the consideration does in fact benefit the promisee, or a third party, or is of any substantial value to anyone. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as consideration for the promise made to him. Now applying this rule to the facts before us, the promisee used tobacco, occasionally drank liquor, and he had a legal right to do so. That right he abandoned for a period of years upon the strength of the promise of the testator [that is, the uncle] that for such forbearance he would give him $5,000. We need not speculate on the effort which may have been required to give up the use of those stimulants.

King v. Head Start Family Hair Salons, Inc. 2

Excerpts from Justice Lyons's Decision: King's most persuasive argument is that the geographic restriction contained in the non-competition agreement imposes an undue hardship on her. King has been in the hair-care industry for 25 years, and it is the only industry in which she is skilled and the only industry in which she can find employment. Head Start has 30 locations throughout the Jefferson County and Shelby County area, making it vir- tually impossible for her to find employment in the hair- care industry at a facility that does not violate the terms of the non-competition agreement. According to King, the geographic restriction constitutes a blanket prohibition on practicing her trade.

Hamer v. Sidway 3

Excerpts from Justice Parker's Decision: The defendant contends that the contract was without consideration to support it, and therefore invalid. He asserts that the promisee, by refraining from the use of liquor and tobacco, was not harmed, but benefited; that which he did was best for him to do, independently of his uncle's promise, and insists that it follows that, unless the promisor was benefited, the contract was without consideration, a contention which, if well founded, would seem to leave open for controversy in many cases whether that which the promisee did or omitted to do was in fact of such benefit to him as to leave no consideration to support the enforcement of the promisor's agreement. Such a rule could not be tolerated, and is without foundation in the law.

Dalton School, Inc. and David Brune 4

Excerpts from the NLRB's Decision: [The NLRA] provides that, "employees shall have the right to engage in concerted activities for the purpose of collective bargain- ing or other mutual aid or protection." [T]he activities of a single employee in enlisting the support of fellow employ- ees in mutual aid and protection is concerted activity. Brune's discharge would not be rendered lawful even if he lied to Stein. The "lie" was elicited by Stein during an investigation that was motivated by Stein's animus towards Brune's protected email. Brune was under no obligation to respond truthfully. The discussion amongst employees in the theater department as to how to address their concerns regarding the manner in which Thoroughly Modern Millie was handled was clearly protected concerted activity. Brune's email was clearly intended to induce group action.

Nicosia v. Amazon.com, Inc. 8

Exquisitely applicable and responsive to the stubborn problems presented by this case is the observation by Oli- ver Wendell Holmes, Jr.: "The life of the law has not been logic: it has been experience. The felt necessities of the time ... have had a good deal more to do than the syllogism in determining the rules by which men should be gov- erned."5 Experience, not logic, has taught that a purchase on the internet is determined by rules different from a purchase of milk at the corner grocery. For the reasons set forth, Amazon's motion to compel arbitration is GRANTED.

Willoughby v. Conn. Container Corp.

Facts: Anthony Willoughby, an employee at Connecticut Container Corp. (CCC), had diabetes, which caused significant health issues aggravated by heat. Despite informing his supervisor, he was assigned strenuous work. He later experienced severe symptoms, either passing out or sleeping on the job, and was fired. He sued CCC for failing to provide reasonable accommodation under the ADA. Issues: 1. Was Willoughby considered disabled under the ADA? 2. Did CCC provide reasonable accommodation? Decision: The court found Willoughby was disabled due to diabetes, and CCC had knowledge of his condition. However, CCC did not engage in an interactive process to assess accommodation needs, leading the court to believe that CCC failed to provide reasonable accommodation under the ADA.

Hamer v. Sidway 1

Facts: This is a story with two Stories. William Story wanted his nephew to grow up healthy and prosperous. In 1869, he promised the 15-year-old boy (who was also named William Story) $5,000 if the lad would refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until his twenty-first birthday. (In that wild era—can you believe it?—the nephew had a legal right to do all those things.) The nephew agreed and, what is more, he kept his word. When he reached his twenty-first birthday, the nephew notified his uncle that he had honored the agreement. The uncle congratulated the young man and promised to give him the money, but said he would wait a few more years before handing over the cash, until the nephew was mature enough to handle such a large sum.

Metsch v. Heinowitz 4

For purposes of determining whether the transactions, and thus the contracts, were legal, the court is required to apply the law in effect at the time the parties entered into the contracts at issue (2014). Laws enacted subsequent to the execution of an agreement are not ordinarily deemed to become part of the agreement unless its language clearly indicates this to have been the intention of the parties. A contract must be lawful when made; and because there is no indication that the parties intended later legisla- tion to be incorporated into the contracts, illegality must be determined at the time of the formation of the alleged contracts in January 2014. In January 2014, marijuana was a Schedule I controlled substance; and in January 2014, California law prohibited its possession, its planting, harvesting, drying, and processing, its possession for sale, and its transporta- tion, importation, sale, or gift. The judgment is affirmed.

Johnny Doe v. Epic Games 3

Excerpts from Judge Gonzalez Rogers's Decision: A contract of a minor may be disaffirmed by the minor before majority or within a reasonable time afterwards. Disaffir- mance may be made by any act or declaration indicating an intent to disaffirm. In other words, express notice to the other party is unnecessary, and no specific language is required to communicate an intent to disaffirm. Whatever the method, disaffirmance by a minor rescinds the entire contract, rendering it a nullity. The disaffirmance statute reflects a policy of shielding minors from their lack of judgment and experience and conferring upon them the right to avoid their contracts in order that they may be protected against their own improvidence and the designs and machinations of other people. The statute also discourages adults from contracting with minors.

Metsch v. Heinowitz 2

Excerpts from Judge Irion's Decision: The California Civil Code provides that "no one can take advantage of his own wrong." Plaintiffs' claims are based on agreements to perform, or to assist in the performance of, illegal marijuana transactions. The courts will not assist in providing relief to Plaintiffs, regardless of the merits of the claims. A contract found to be illegal may not serve as the foundation of any action, and when the illegality of the contract renders the bargain unenforceable, a court will leave the parties where they were prior to the lawsuit.

Dalton School, Inc. and David Brune 2

Brune and his colleagues felt that the school leadership had ignored their concerns, put additional burdens on them without recognizing the extra effort required, and mishan- dled communication throughout the school community. To communicate their distress, Robert Sloan, the chair of the theater department, circulated to his faculty a draft let- ter that he proposed sending to Ellen Stein, the Head of School. Brune replied with a lengthy, ranting email to the group, proposing that the administration should be told: We have been grievously wronged and we would like an apology. You lied. Apologize for lying, for not being honest, forthright, upstanding, moral, considerate, much less intelligent or wise.

Peterson v. Exide Technologies 3

Defendant asserts it dismissed Plaintiff for the legiti- mate reason that he violated company safety policies. According to Defendant's Plant Manager: Based on my own review of the photographs and the dam- age they depicted, Plaintiff was driving too fast at the time of the crash and was not operating his forklift in a safe man- ner. Such conduct on Plaintiff's part was a flagrant violation of company health and safety policy and posed a threat to the safety of Plaintiff and other Exide employees. The Plant Manager also based his decision to fire Plaintiff on the "history of careless and unsafe conduct" reflected in Plaintiff s personnel file. Defendant has ade- quately demonstrated a nonretaliatory reason for Plaintiff's termination: his repeated safety violations. Thus, the bur- den shifts back to Plaintiff to show pretext.

Peterson v. Exide Technologies 2

Excerpts from Judge Baldock's Decision: The FMLA makes it unlawful for any employer to interfere with, restrain, or deny the exercise of the rights provided by the FMLA, or to discriminate against any individual for oppos- ing any practice prohibited by the FMLA. [I]f Plaintiff makes out a prima facie retaliation case, the burden shifts to Defendant to demonstrate a legiti- mate, nonretaliatory reason for its termination decision. If Defendant meets this burden, the burden shifts back to Plaintiff to show that there is a genuine dispute of material fact as to whether Defendant's explanations are pretextual.

Nicosia v. Amazon.com, Inc. 4

Excerpts from Judge Glasser's Decision: While new commerce on the Internet has not fundamentally changed the principles of contract, it has exposed courts to novel applications of those principles. The rule that the "existence" of contract terms must be made "reasonably conspicuous" is, this Court sub- mits, largely a superfluity. The cases specify that such terms must be reasonably conspicuous from the point of view of a "reasonably prudent" user. But is there any question that reasonably prudent internet users know that there are terms and conditions attached when they log onto Facebook, order merchandise on Amazon, or hail a ride on Uber? They know this, not because a loud, brightly-colored notice on the screen tells them so, but because it would be difficult to exist in our technologi- cal society without some generalized awareness of the fact.

Rizo v. Yovino

Facts: Aileen Rizo, with extensive education and experience, was hired by Fresno County Office of Education as a math consultant. She discovered she was paid significantly less than a newly hired male colleague. Rizo sued the County for Equal Pay Act (EPA) violation, and the district court denied the County's motion for summary judgment. The County appealed.Issue: The main issue was whether prior earnings can be considered a legitimate reason to pay women less than men under the EPA.Decision: Justice Christen's decision clarified that prior pay for a different job is not a valid defense under the EPA. The Act's exceptions all relate to job-related factors, and the EPA was enacted to eliminate gender-based wage disparities. Employers must demonstrate that any wage differential is justified by job-related factors other than sex when defending against an EPA claim. Relying solely on prior pay is not a valid defense.

Nicosia v. Amazon.com, Inc. 1

Facts: Dean Nicosia bought 1 Day Diet, a weight-loss supplement, on Amazon.com. When he later learned that 1 Day Diet contained a known dangerous chemical, Nicosia brought a class action against Amazon, asserting that its sale of 1 Day Diet was illegal. Amazon's Conditions of Use (COU) contained an arbi- tration clause providing that all disputes had to be resolved by binding, individual arbitration (no class actions allowed). Nicosia sued Amazon to invalidate the arbitration provision. He claimed that he did not know about the COU—and these terms did not apply to him—because Amazon did not clearly and conspicuously post them on the checkout page.

Johnny Doe v. Epic Games 1

Facts: Epic Games is the creator of Fortnite, a survival video game. Fortnite is free but allows players to make non-refundable in-app purchases, which include weapons, character enhancements, and virtual currency. When Johnny Doe, a minor, downloaded Fortnite, he accepted the terms of Fortnite's End User License Agree- ment (EULA), which provided that its terms could change at any time, and the user's continued game play consti- tuted acceptance of the new terms. About a year later, Johnny logged on to Fortnite and accepted an amended EULA, which now included an arbi- tration provision. The new EULA also made clear that if the users were minors, a parent or legal guardian had to consent on their behalf. Johnny did not show the amended EULA to his parents, but instead continued playing Fortnite. On several occasions, Johnny made in-app purchases using his own money and gift cards. Not until he later tried to cancel the purchases did Johnny realize they were non-refundable.

Dalton School, Inc. and David Brune 1

Facts: For 12 years, David Brune taught theater and drama at the Dalton School, an elite private school in New York City. Like other Dalton faculty, he worked on a renewable one-year contract. The school chose Thoroughly Modern Millie as the middle school's annual play and made Brune the produc- tion manager. However, a month before the premiere, the school halted the production because some parents were offended by the play's stereotypical depiction of Asians. But then students were upset about not being able to per- form. The school ultimately opted to allow a rewritten, san- itized version of the play to go forward. All these changes required significant time and effort from Brune and other members of the theater department, who had to produce the new version in only three days.

King v. Head Start Family Hair Salons, Inc. 1

Facts: Kathy King was a single mother supporting a college-age daughter. For 25 years, she had worked as a hairstylist. For the most recent 16 years, she had worked at Head Start, which provided haircuts, coloring, and styling for men and women. King was primarily a stylist, though she had also managed one of the Head Start facilities. King quit Head Start and began working as manager of a Sport Clips shop, located in the same mall as the store she just left. Sport Clips offered only haircuts and primarily served men and boys. Head Start filed suit, claiming that King was violating the non-compete agreement that she had signed. The agreement prohibited King from working at a competing business within a two-mile radius of any Head Start facility for 12 months after leaving the company. The trial court issued an injunction enforcing the non-compete. King appealed. Issue: Was the non-compete agreement valid?

Gabriel v. Albany College of Pharmacy and Health Services 1

Facts: Matthew Gabriel was a student in Professor Pumo's immunology class. Professor Pumo's syllabus outlined course requirements and stated that "plagia- rism will not be tolerated." After grading the first assign- ment, Professor Pumo realized that many papers had sentences copied from other sources without citations. Instead of reporting everyone for plagiarism, Professor Pumo said she would give students a "free pass" on one copied sentence. But Gabriel's paper contained many pla- giarized sentences, so he received a failing grade for the assignment. Gabriel sued the professor for breach of contract. He argued that the syllabus was a contract and that the "free pass" policy broke it—because that term was not part of their original agreement. According to Gabriel, since the professor breached the contract, he was no longer obli- gated to refrain from plagiarizing, and so should not be punished.

Peterson v. Exide Technologies 1

Facts: Over time, Exide Technologies had issued repeated warnings to Robert Peterson for driving forklifts too fast and violating other safety rules. After he was injured in a forklift crash, Peterson took FMLA leave for ten days. During the leave period, Exide fired him for "flagrant violations of safety rules." Peterson sued, claiming that the company had terminated him in retaliation for taking FMLA leave. The lower court granted summary judgment to Exide, and Peterson appealed. Issue: Was Peterson f ired in retaliation for claiming FMLA leave?

Metsch v. Heinowitz 1

Facts: See the chapter opener. In 2017, California legal- ized the possession and use of marijuana for recreational use. Prior to that date, the state allowed limited distribu- tion of the drug for medicinal purposes. The Metsches sued Heinowitz and King for breach of their respective contracts. The defendants moved for summary judgment, arguing that their contracts were unenforceable because the sale and use of marijuana was illegal in California when the contract was formed. The trial court agreed. The Metsches appealed, arguing that the contracts were enforce- able because marijuana subsequently became legal. Issue: Were the contracts involving marijuana edibles void for illegality?

King v. Head Start Family Hair Salons, Inc. 4

Head Start is nevertheless entitled to some of the protection it sought in the non-compete agreement. Head Start has a valid concern that King would be able to attract many of her former Head Start customers if she is allowed to provide hair-care services unencumbered by any limita- tions. To prevent an undue burden on King and to afford some protection to Head Start, the trial court should enforce a more reasonable geographic restriction—such as one prohibiting King from providing hair-care services within a two-mile radius of the location of the Head Start facility at which she was formerly employed or imposing some other limitation that does not unreasonably interfere with King's right to gainful employment while, at the same time, protecting Head Start's interest in preventing King from unreasonably competing with it during the one-year period following her resignation. Reversed and remanded.

Johnny Doe v. Epic Games 4

However, the infancy defense may not be used ineq- uitably to retain the benefits of a contract while reneging on the obligations attached to that benefit. Accordingly, if a minor seeks to disaffirm a contract, the minor must disaffirm the entire contract, not just the irksome portions. As to the defendant's first argument, both the letter and the complaint convey plaintiff's intent to repudiate the in-app purchases. Neither, however, conveys disaffirmance of the EULAs more generally. Indeed, the letter asserts that plaintiff can legally disaffirm contracts for in-app pur- chases and purchases plaintiff made using his own money from gift cards. Given that the minor's power to disaffirm a contract is broad and can be invoked through any act or declaration that conveys his intent to repudiate a con- tract, the Court finds this statement sufficient to disclose plaintiff's unequivocal intent to repudiate both EULAs.

King v. Head Start Family Hair Salons, Inc. 3

It cannot reasonably be argued that King, at the age of 40 and having spent more than half of her life as a hair stylist, can learn a new job skill that would allow her to be gainfully employed and meet her needs and the needs of her daughter. Under the circumstances presented here, enforcement of the non-competition agreement works an undue hardship upon King. The non-competition agree- ment cannot so burden King that it would result in her impoverishment.

Nicosia v. Amazon.com, Inc. 5

It could be argued that the purpose of providing "rea- sonably conspicuous" notice of the hyperlinked terms is not merely to notify the user that these terms exist, but to encourage him or her to read them. But most consum- ers will not read the terms and conditions, no matter how prominently the notice is displayed, and those that do will usually not understand them. Among those that both read and understand the terms of use, most will proceed with the transaction anyway, because the terms are presented on a take-it-or-leave-it basis. The "reasonably conspicuous" notice rule is therefore one which is unlikely to have much effect, if any, on overall consumer welfare.

Hamer v. Sidway 5

It is sufficient that he restricted his lawful freedom of action within certain prescribed limits upon the faith of his uncle's agreement, and now, having fully performed the conditions imposed, it is of no moment whether such performance actually proved a benefit to the promisor, and the court will not inquire into it.

Johnny Doe v. Epic Games 2

Johnny sent a letter to Epic Games, stating that as a minor, he could legally disaffirm the in-app purchases. Epic Games did not respond, so Johnny's lawyers filed a class action lawsuit, accusing Epic Games of targeting minors for in-app purchases without requiring prior paren- tal consent. They argued that neither the EULAs nor the in-app purchases bound Johnny. In its motion to compel arbitration, Epic Games made two arguments. First, because Johnny's letter only men- tioned the in-app purchases, he had not disaffirmed the EULAs and was therefore bound to arbitration. Second, Johnny could not disaffirm the contracts because he had continued playing Fortnite. Issue: Did Johnny validly disaff irm the in-app pur- chases and the EULAs?

Peterson v. Exide Technologies 4

Plaintiff argues Defendant's asserted justification is pretextual because the forklift accident was a "minor inci- dent." Whether the accident was "minor" is questionable. But even if it was, we see nothing that prevents Defendant from firing employees for minor safety violations. Particu- larly where, as here, the employee has a record of unsafe work performance, even a minor infraction could be the last straw. Plaintiff has produced no evidence to undermine Defendant's nonretaliatory explanation for the termina- tion. Aside from the fact Plaintiff was on FMLA leave when he was fired, no evidence suggests a causal connec- tion between Plaintiff's firing and his exercise of FMLA rights. Therefore, the district court properly granted sum- mary judgment. AFFIRMED

Nicosia v. Amazon.com, Inc. 3

The district court dismissed Nicosia's complaint, but he appealed. The appeals court determined that the key question was whether a reasonably prudent user had notice that the applicable COU existed. Analyzing Amazon's Web page design, it noted that the page was cluttered, and that the hybridwrap notice was not promi- nent, nor was it adjacent to the "Place your Order" but- ton. The court concluded that a reasonable consumer may not have known about the existence of terms. How- ever, it remanded the case back to the district court to decide whether Nicosia himself had reasonable notice of the COU. In its defense, Amazon argued that since Nicosia was a repeat online shopper who had made hundreds of pur- chases on Amazon before, during, and after the lawsuit, he must have known of the COU. Issues: Did Nicosia have reasonable notice of the exis- tence of Amazon's COU? Was he bound to Amazon's arbi- tration provision?

Dalton School, Inc. and David Brune 5

The issue in this case is whether the statements made in this email are of such a nature that they forfeit the pro- tection of the Act. His protected activity was not a face- to-face outburst to management. Moreover, his email was accessible only to fellow employees, not students, parents or the general public. In fact, the email was not intended to be seen by management and was not directly accessible to management. [In a prior case], the Board held that an employee engaged in protected activity did not lose the protection of the Act by calling his supervisor a "f-g liar." Otherwise protected activity remains protected unless found to be so violent or of such serious character as to render the employee unfit for further service. Brune did not forfeit the protection of the Act. He did not make any malicious and/or untrue statements of fact. Brune did not use any obscenities. He did not threaten management; he merely demanded an apology.

Nicosia v. Amazon.com, Inc. 6

The puzzle, then, is this. On the one hand, the law cannot countenance an environment where unscrupulous merchants are able to insert any contractual term they wish into the hybridwrap agreement and expect automatic enforcement. On the other hand, a legal rule which merely exalts the form and visual layout of the hybridwrap agree- ment, incentivizing merchants to adopt some judicially- favored website designs while foregoing others, is unlikely to have more than a negligible impact on the way buyers and sellers contract over the internet.

Hamer v. Sidway 2

The uncle died in 1887 without having paid, and his estate refused to honor the promise. Because the nephew had transferred his rights to the money, it was a man named Hamer who eventually sought to collect from the uncle's estate. The estate argued that, since the nephew had given no consideration for the uncle's promise, there was no enforceable contract. The trial court found for the plaintiff, and the uncle's estate appealed. Issue: Did the nephew give consideration for the uncle's promise?

Nicosia v. Amazon.com, Inc. 7

This Court suggests that rather than scrutinizing hybridwrap agreements for contract formation issues, courts should recognize that such agreements, like other adhesive contracts, represent in substance a "blanket assent" to any terms that are not objectively unreasonable. Accepting this framework, such terms should be rigorously scrutinized for substantive unreasonableness, perhaps to a greater degree than they have been subjected thus far.

Nicosia v. Amazon.com, Inc. 2

When Nicosia bought 1 Day Diet, Amazon's order page was a hybridwrap agreement. At the top of the order page, a notice, in small font, read: "By placing your order, you agree to Amazon.com's privacy notice and conditions of use." The underlined words contained hyperlinks to the privacy notice and COU. In contrast, the right side of the page displayed a large " PLACE YOUR ORDER " button. Users were never required to click on the COU hyperlinks, nor in any other way agree to the contract. The order page was visually cluttered with payment information, shipping terms, and advertisements. (Exhibit 10.1 shows Nicosia's actual Amazon order page.)

Dalton School, Inc. and David Brune 3

Without Brune's knowledge, Sloan gave a copy of this email to Stein, who then summoned Brune to a meeting. He denied having called her dishonest or immoral. Five weeks later, Stein met with Brune again. This time, she showed him a copy of his email and he admitted he had written it. She then fired him, effective at the end of the school year. A month later, she told him he had been fired for lying. Issue: Did Stein violate the NLRA by f iring Brune?

Gabriel v. Albany College of Pharmacy and Health Services 2

You Be the Judge: Was the professor's syllabus an offer whose acceptance formed an enforceable contract?

Dalton School, Inc. and David Brune 6

[Dalton], having discriminatorily discharged an employee, must offer him reinstatement and make him whole for any loss of earnings and other benefits.27