Monthly Archives: June 2012

The Uniques II: Judicial Trusts and Minors

We’re returning to our discussion of The Uniques (one, two), and this time we’re looking at a set of topics sort of implicit in the premise of the series but raised directly in a few places. Specifically, we’re looking at the way the series treats minors, both in general and in terms of inheritance. Continue reading

Daredevil and International Law

Our latest monthly column at Subculture for the Cultured has just been published.  We’re covering the latest issue of Daredevil, so check it out!

Cerebro and Privacy Laws

The X-Men movies feature Professor X’s Cerebro device, which amplifies the power of telepathic mutants, allowing them to find other mutants anywhere in the world.  In X-Men: First Class, Professor X and Magneto collaborate with the US government to assemble a team of mutants.  Although the movie is set in the early 1960s, Cerebro (nowadays called Cerebra) is also used in stories set in the modern day.  What’s more, it’s used to collect information on mutants around the world.  This caught the attention of Law and the Multiverse reader Mathias Ullrich, who wrote a great guest post on the subject using First Class as an example:

A data-protection consideration of Prof. Xavier’s recruiting methods according to German law

When reading the article about the responsibility of Prof. Xavier as the principal of a full time school some weeks ago, I started wondering about Prof. Xavier’s way of recruiting. As a data protection officer in Germany, my attention turns to data protection concerns.

As I’m not so familiar with the X-Men, I’ll stick to the movie X-Men: First Class. To analyze the whole process, I divide it into the different relevant steps:

1) data acquisition by telepathy

2) merging the data with another database (e.g. the CIA database) in order to get real addresses

3) offering specific services

4) deletion / blocking of the personal data

Some basics about the German data protection law: The German implementation of the European Data Protection Directive (“Directive 95/46/EC”) is one of the strictest implementations in Europe and is probably the strictest data protection law in the world. It’s called the “Bundesdatenschutzgesetz” or BDSG in short. In general it says that data processing of personal data is forbidden, unless there is an authorization of it in either the BDSG or other laws. So every data acquisition and processing needs an authorization.

Is German law applicable?

The first question we need to answer is if German law applies, when somebody in the world is acquiring customer data. The answer is quite simple: if there is an acquisition of personal data from German citizens, then German law can be used. This is similar to the discussions regarding Google Analytics or Facebook.

What kind of organization are the X-Men?

As stated in a recent blog post, Xavier’s School is a private school.

Step 1: the acquisition

When Professor Xavier searches for mutants, he is gathering data about the health status and some other information about potential students. Health status is one of the so-called “special kinds” or sensitive kinds of personal data according to §3 Abs. 9 BDSG, alongside racial and ethnic origin, political or religious belief and some more.

Acquiring and processing these kinds of personal data has some special rules. As said before, the German data protection law forbids unauthorized data processing, so we need to find permission.

From the reaction of the mutants visited by Magneto and Professor X, I assume none of them gave permission for acquiring the data. So I would also say that Professor X did not inform the people concerned about the concrete use of the data. This is mandatory. It is illegal to acquire data without the knowledge of the person concerned (§33 Abs. 1 BDSG).

Let’s go back to the acquisition. In §28 Abs. 6f and 9 BDSG we find the exceptions.

It’s possible to acquire these data without an explicit permission, if

– it is vital to the person concerned and he / she is not able to give the permission (§28 Abs 6, Nr. 1 BDSG)

– the data is has been made public by the person concerned (§28 Abs 6, Nr. 2 BDSG)

– the data is necessary for a legal transaction (§28 Abs 6, Nr. 3 BDSG)

– the data is necessary for medical research, if this research cannot be done without (§28 Abs 6, Nr. 4 BDSG)

– the data is necessary for medical care, if the acquisition is made by a doctor or somebody else with an obligationtoconfidentiality (§28 Abs 7 BDSG)

– the acquisition is made by a political, philosophic or religious organization without financial interest, but only for their members or associated people.

I do not think any of these exceptions apply. That means that the acquisition of the health status of the possible new students is illegal according to German law.

Step 2: the merging

After acquiring the data, I assume Professor X needs to get information about the new students, he wants to visit. Therefore, he merges the data with some database, according to the movie, it might be a CIA database. Here we have the exact same circumstance as in step 1. With just one exception more.

§28 Abs. 8 BDSG says, that the proceeding or transmitting sensitive data is allowed, if it is needed for defense of public safety.

Of course, thinking about maniacs who try to take over the world, the merging sounds legit, but the merging did not fight a concrete danger. It is more a “long term” investment. Unfortunately the acquisition of the data is still illegal and where did the CIA get data about European citizens? But that is another question, which will not be answered here ;-)

So, the merging might be legal, because of the exception for defense of public safety.

Quick note: §28 Abs. 8 BDSG only allows the processing or transmitting of data, not its acquisition.

Step 3: the offering

The last step is the personal visit to the possible new student in order to offer a personal service, in this case a place in Professor X’s private school.

As this is just again data processing, the same legislation applies as in step 2. So, maybe it’s legal because of the defense exception, but that need be discussed.

Step 4: blocking and / or deletion of data?

 In German data protection law, no data should be stored forever. As soon as the purpose of the data has expired, the data needs to be deleted (§35 Abs. 2 BDSG) or at least blocked.

When looking at the reaction by Wolverine, visited by Magneto and Professor X, one can assume that the purpose is expired, as Wolverine seems not to be interested in the offer. As we know, since Wolverine joins the X-Men later, the data may be blocked and not deleted.

Let’s check the terms for blocking instead of deleting, which are stated in §35 Abs 3 BDSG. Blocking data is allowed,

– if there are any laws or other legal issues that prohibit the deletion

– if it can be assumed that a deletion would affect the interests of the person concerned

– if the deletion is not possible or only possible with high effort because of the special way of storing the data

Again I do not think any of the exceptions apply. The data must be deleted, not blocked, at least as far as we are talking about a real database (e.g. the CIA one). If Professor X keeps the information in his mind, this is not affected by German data protection law.

Conclusion

Of course, there are a lot of unanswered questions, which make a final analysis quite difficult. Is telepathy acquisition of personal data and does German law apply here at all? Where is the data stored and how?

Besides that, the conclusion is quite simple. The acquisition was not legal, so every step beyond the first one, such as the uses the data from step 1, was illegal as well. According to §43, Abs. 2 Nr. 1 this is an administrative offense, with a penalty of up to 300,000 Euro in each case.

Translation guide

 Using §1 BDSG as an example:

– ‘§’ or Paragraf means paragraph in English, in this context it is translated to ‘section’.

– ‘Abs.’ is the abbreviation for ‘Absatz’. In this context it is ‘subsection’. In the example an ‘Absatz’ is marked by the brackets.

– The next one is Nr. (‘Nummer’), which means number. It is the next subsection, and in the example it is marked by the normal ‘1.’

– ‘Satz’ means sentence, if referring to a concrete sentence of the text, one uses ‘Satz’.

 

The Avengers and Illegal Orders

We have one more Avengers post for you.  Be warned: there are spoilers!  Today’s post was inspired by a question from John, who writes:

I was interested in the bit near the end where Fury first disobeys a direct order (to nuke Manhattan) and then shoots down one of his own planes (his team building skills must be great because nobody seems all that upset) to prevent someone else from carrying out orders.

1) under what circumstances is an order illegal?
2) when are you expected to simply refuse to co-operate and when do you take active steps to attack your own side?
3) what are those around him supposed to do about this?

And there is an additional question of whether or not military law (i.e. the UCMJ) applies at all.

Here at Law and the Multiverse we often deal with subjects that we aren’t experts in.  In fact, given that our day jobs involve insurance and intellectual property, that’s usually the case.  So in order to write posts we first do research, usually beginning with higher-level secondary sources (e.g. legal encyclopedias, treatises, law review articles) and then moving on to primary sources (e.g. cases, statutes).  With a military law question like this, however, we were a bit stuck, so we turned to our readers for help, and you came through in spades.  We received offers of assistance from multiple current or former military lawyers, and we’re excited to put them together here.

Before we get to that, though, first a disclaimer:  These lawyers are speaking only for themselves; they are not speaking for the military or the Department of Defense.  This is not legal advice, nor does it constitute the formation of an attorney-client relationship.  With that out of the way, on to the show!

I. The Military Law Approach

Nick, a military lawyer, responds:

“So, obviously UCMJ jurisdiction (as you pointed out) is questionable, but perusing the wikipedia article on SHIELD, it appears it might be military (Nick Fury was once identified as a Colonel, plus they have that flying aircraft carrier, so we’ll go with that).

(1) I pulled the Military Judge’s benchbook, which says: “A command is lawful if reasonably necessary to safeguard and protect the morale, discipline, and usefulness of the members of a command and is directly connected with the maintenance of good order in the service” (which is interestingly enough a question of law, not of fact). It’s an accepted proposition that a order to commit a war crime would be illegal.

Now the question is was Fury ordered to commit a war crime? This isn’t clear. The basic Law of Armed Conflict rules are proportionality, discrimination, and military necessity. Now, the law of armed conflict hasn’t really been tested by alien armies, but I think we can easily dispatch with military necessity and discrimination. But proportionality? Fury gets a little closer here, but I still think he fails. Proportionality looks at whether the military objective is proportional to the civilian damage caused. Here we’re looking at the destruction of New York (by seemingly two nuclear bombs, unless Fury blew up the guy taking their mail to shore), with a huge loss of civilian life. However, even when you balance this against the alien army that is setting out to conquer the earth, you probably get there on that point (and I’m not just saying that because I’m a Red Sox fan).

The other piece of analysis would be whether there is a less destructive way to accomplish the military goals. This is probably where Fury could get to “war crime.” His argument would be that the Avengers were the less destructive way to end the threat, and could probably get there.

(2) What is Fury’s duty? This is interesting. He seems to believe that the order is illegal. There isn’t a lot of case law on this that I’m aware of, but some secondary sources (the Medina court martial, primarily) suggest that a commander who has knowledge of one of his own people committing a war crime has a duty to act to stop it. Current regulations that I pulled today only reference a duty to report war crimes, so I think we would call this a customary duty. Under this idea, and under a ‘defense of others’ type defense, it seems like Fury would both have a duty and a legal defense to shooting down his guys.

(3) What should everyone else do? THIS is an interesting question. To a certain point, I guess it depends on how they see this. If they’re in agreement that he is trying to prevent a war crime, I suppose they don’t have to do anything. If they think he is committing murder and/or violating a lawful order, they obviously have a duty to report the crimes, and they most likely would have a duty to try to prevent him from killing people and stopping the mission, though my knowledge for this portion is admittedly a bit thin.”

Jason, Former Captain, U.S. Army JAG Corps, responded:

“Assuming that the S.H.I.E.L.D. members are subject to the UCMJ, the bottom line analysis revolves around [UCMJ] Article 92 – “Failure to obey a lawful order or regulation.”  The central question there revolves around the “lawful” nature of the order itself.  Here is an interesting short essay regarding Article 92 that I found online, while not credited to any one source, it appears to have been written from a military perspective.  There is a difference between a simple illegal order and a patently illegal order. An illegal order can be in violation of general legality, such as orders to commit hazing on troops, orders to abuse trainees, an order to go beyond the speed limit in a military vehicle. A patently or manifestly illegal order applies generally, but not exclusively to the protection of persons (civilians, prisoners, medical personnel and clergy), medical facilities, places of prayer, monuments, etc. The US distinguishes a patently illegal order as one which orders someone to commit a crime.

Some of the most famous cases dealing with someone who should have disobeyed an order because it was illegal are that of Lieutenant William Calley at the My Lai massacre in Vietnam (dramatically interpreted by the movie Platoon) and the case of United States v. Keenan, where the accused (Keenan) was found guilty of murder after he obeyed in order to shoot and kill an elderly Vietnamese citizen. The Court of Military Appeals held that “the justification for acts done pursuant to orders does not exist if the order was of such a nature that a man of ordinary sense and understanding would know it to be illegal.” (Interestingly, the soldier who gave Keenan the order, Corporal Luczko, was acquitted by reason of insanity).

However, soldiers have to be careful what orders they choose to disobey, lest they suffer the fate of Specialist Michael New – In 1995, Spec-4 Michael New was serving in Schweinfurt, Germany. When assigned as part of a multi-national peacekeeping mission about to be deployed to Macedonia, Specialist New and the other soldiers in his unit were ordered to wear United Nations (U.N.) Helmets and arm bands. New refused the order, contending that it was an illegal order. New’s superiors disagreed. Ultimately, so did the court-martial panel. New was found guilty of disobeying a lawful order and sentenced to a bad conduct discharge. The Army Court of Criminal Appeals upheld the conviction, as did the Court of Appeals of the Armed Forces.

My gut reaction in this situation would be that Nick Fury acted appropriately in disobeying the Council’s directive as his actions were taken to protect the millions of innocent civilians.  I hope this helps!”

So both of our guest authors concluded that, assuming the UCMJ applies, Fury was probably in the right when he acted to prevent the nuclear strike on Manhattan, despite the order being given from higher up.

II. Civilian Law

If the UCMJ didn’t apply, then the situation would probably fall under regular civilian law, and Fury could invoke a defense of others argument.  You might wonder how Fury could justify that, since in theory the Council was likewise acting in defense of others by ordering the strike in the first place.  The problem is the risk to innocent bystanders.  A person acting in self-defense (or defense of others) who accidentally injures or kills a third party is ordinarily not liable.  However, if the person acts recklessly then he or she would be liable.

Of course, the situation may be such that A ought not to shoot at B in self-defense, etc., because of the presence of bystanders like C whom A might hit instead. If there is a high degree of risk to people like C involved in A’s shooting at B, A’s killing of C will amount to manslaughter, Henwood v. People, 54 Colo. 188, 129 P. 1010 (1913); Annot., 18 A.L.R. 917, 928 (1922); if a substantial certainty, to murder.

Wayne R. LaFave & Austin W. Scott, Jr., Substantive Criminal Law § 3.12, at 402 n. 53 (1986); see also Reyes v. State, 783 So.2d 1129 (Fla. App. 2001).  An intentional killing of an innocent third person in order to save oneself (or, presumably, another) may negate the defense completely. State v. Soine, 348 N.W.2d 824 (Minn. App. 1984).

The Council could argue necessity, but necessity is a “lesser of two evils” defense, and letting the Avengers handle the situation was even less of an evil than the nuclear strike.  Although the Avengers were not certain to stop the Chitauri, neither was the nuclear strike (and indeed it would not have worked, as the bulk of the Chitauri forces had not even arrived yet).

Thus, under civilian law, there’s a strong argument that Fury was acting to defend innocent bystanders from the unjustified actions of the Council.

III. Conclusion

No matter how you slice it, Fury’s actions were probably justified.  Thanks again to Nick and Jason for their help with this post!

Spider-Man and Likeness Rights

Today we have a question from Hurley, who writes:

In [Ultimate Spider-Man #109]  Wilson Fisk, A.K.A. the Kingpin, points out to Spider-Man that the costume he wears and his name were given to him by a now-defunct wrestling company. Kingpin bought said company [in issue #106], which he says gives him merchandising rights to all things Spider-Man related. Clothing, toys, etc. Is this legally correct?

(If you’re interested, this storyline is collected in Ultimate Spider-Man vol. 18.)

Here’s the complete history: As usual, Spider-Man tried to make some extra money on the wrestling circuit.  The company that organized the matches was Hercules Wrestling, Inc., and apparently Parker signed away the Spider-Man name and merchandising rights to Hercules.  Later, a Spider-Man movie came out, and the studio managed to prevent Hercules from putting out Spider-Man merch, resulting in Hercules going bankrupt.  Apparently a company called C and C Licensing picked up the rights from Hercules in bankruptcy. C and C is a subsidiary of GG Enterprises, which Fisk purchased.  Thus, through this chain of subsidiaries, Fisk owns the rights to the Spider-Man name as well as the licensing rights for his likeness.  As a result, Fisk actually wants Spider-Man to keep doing his thing because Fisk makes more money from the merchandise sales than he loses from Spider-Man meddling in his affairs.  Pretty villainous, eh?

There are three major questions here.  First, what rights are involved, exactly?  Second, could Fisk have purchased them that way?  Third, is Spider-Man really powerless to do anything about it?

I. Name and Likeness Rights

Name and likeness rights generally fall under the right of publicity, which is something that we (and guest author Brad Desnoyer) have talked about before.  As Brad noted, the right of publicity “protects an individual’s ability ‘to control the commercial use of his or her identity.'” (quoting 31 Causes of Action 2d 121).  In Spider-Man’s case, the rights of publicity at issue would likely cover his “stage name” and his likeness.

Since this all happens in New York, we can use the New York right of publicity statute.  The statute covers a person’s “name, portrait or picture.” N.Y. Civil Rights Law § 51.  A “name” can include a stage name, if it “has become known to the public and identifies its bearer virtually to the exclusion of his true name.”  See, e.g., DeClemente v. Columbia Pictures Indus. Inc., 860 F.Supp. 30, 53 (E.D.N.Y. 1994).  Under this standard, Spider-Man would qualify, as he is nationally known as Spider-Man and is essentially unknown as Peter Parker.  And of course his image would qualify as a “portrait or picture.”

So the rights at issue are pretty much as described in the comics (at least at the beginning; later on Spider-Man refers to Fisk owning “his copyright,” which is not accurate, unless Spider-Man was engaging in a little fourth wall-breaking.).

II. The Chain of Title and IP Holding Companies

From what I can tell from the comic, this all seems believable enough.  It’s not 100% clear to me how the movie studio drove the wrestling company into bankruptcy, but admittedly I haven’t read those earlier issues yet, so maybe that’s explained in more detail.  In any event, the maze of holding companies and subsidiaries is par for the course.  Many media companies have separate holding and licensing companies for characters, trademarks, and other IP.  For example, Marvel Entertainment, LLC (itself now a subsidiary of The Walt Disney Company) has three IP holding companies, including Marvel Characters, Inc.

You might be wondering why businesses bother creating IP holding companies.  The answer, as is so often the case with strange corporate behavior, is tax reduction:

Specifically, if a holding company is created to own the trademarks of the operating company, it can license those marks back to the operating company. In some states, tax income from royalties from license agreements owned by the holding company is exempt. Further, the state from which the income is paid, cannot tax that payment either. Finally, the operating company may deduct the royalty payments as operating expenses.

Allan J. Sternstein et al., Designing an Effective Intellectual Property Compliance Program, in Corp. Compl. Series: Intell. Prop. § 3:7 (2011).  Pretty sweet setup, huh?

III. So is Spider-Man Out of Luck?

Probably, unless his original contract with the wrestling company is invalid or unenforceable.  The New York statute allows a person to sign away (in writing) their right of publicity.  Interestingly, if the person is a minor, then their parent or guardian must give their written consent.  N.Y. Civil Rights Law § 50.  Ultimate Spider-Man is apparently a minor at the time, and I doubt Aunt May or Uncle Ben (who was still alive at the time) signed off on the wrestling contract, so that might be a way out.

Another issue might be whether the contract made the right of publicity assignable or available for sublicense.  If the contract was solely with Hercules Wrestling, then it might not have been properly assigned to C and C, leaving Fisk with nothing.  Unfortunately, Fisk’s storyline gets wrapped up before we find out whether Spider-Man had any legal way out.  Too bad, since he was already teamed up with Daredevil, and I’d think Murdock would like to not only see Fisk behind bars but also a piece of his business empire taken away from him.

IV. Conclusion

This was a nice application of what should be a significant issue in comics: within the fictional comic book world, superheroes and supervillains are real people and so have rights of publicity and privacy that would be worth a lot of money.  Shady licensing deals would likely abound, but some superheroes could become rich from merchandise sales and endorsements (or they could donate it to charity, as it is sometimes suggested that Superman does).  At the same time, a lot of the copyright issues that surround comic books in the real world wouldn’t exist.  Thus, instead of comic book authors getting raw deals, the superheroes themselves would.  Progress!

World War Hulk: Front Line I

World War Hulk is a five-issue limited series from 2007 telling the story of the Hulk’s return to Earth after the events of Planet Hulk in 2006. The basic story is that in Planet Hulk, a majority of the Illuminati, consisting of Iron Man, Mr. Fantastic, Black Bolt, and Dr. Strange, decide to deal with the “Hulk problem” by sending him into space. The Hulk is tricked onto a starship set for another planet, but the Hulk winds up on the planet Sakaar instead of the peaceful world he was intended for. He winds up fighting a bunch of people, getting married to the local princess, only to have the better part of the city—and princess—blown up when the starship he arrived on explodes.

Hulk is pissed. About the trickery, about the exile, and now about the death of his wife. He plots revenge and returns to Earth. World War Hulk picks up there.

World War Hulk: Frontline is a parallel story about Ben Urich and Sally Floyd, as they continue reporting for Front Line, the newspaper they started back in the Marvel Civil War.. Like in the Civil War, the writers use the Front Line story to talk about the effects of the super-powered conflict on everyday people. So, for instance, we see the effects of the evacuation of Manhattan on the poor and indigent. As the more mundane side of the story, this is where some of the more interesting legal questions arise, and we’ll take a look at those here. Continue reading

Damage Control: Leveraged Buyouts and Hostile Takeovers

A couple of weeks ago we talked about the first Damage Control series and suits against foreign governments. The second Damage Control series begins with the news that Damage Control’s joint owners (Wilson Fisk and Tony Stark) have sold the company to Carlton Co.  This leads to a somewhat complicated series of corporate financial maneuverings that deserve a closer look.

I. The Leveraged Buyout

Later, in issue 4 we learn the details of the buyout.  It turns out that Carlton Co. didn’t buy Damage Control outright.  Instead, it paid two-thirds of the price in cash and the other third via a loan from Wilson Fisk himself.  Partially debt-financing the purchase of a company is called a leveraged buyout.  Although the leveraged buyout originated in the 1950s, they became very popular among the ‘corporate raiders‘ of the 1980s, which probably inspired this storyline.

You may have noticed that it’s a little weird that Fisk would loan the money needed to buy out his own company.  And sure enough, Fisk was up to no good.  The loan was apparently at a high interest rate, and simply maintaining the payments was killing Carlton.  It’s likely that Fisk’s plan was to reap profitable interest payments until Carlton defaulted, then take the rest of Carlton’s interest in Damage Control, which was likely used as collateral on the loan.  Thus, Fisk would make a tidy sum and ends up with complete control of the company.

Luckily, the former Chief of Operations, Ms. Hoag, has hatched a plan with agents of SHIELD to save the company: a ‘hostile takeover.’

II. The ‘Hostile Takeover’

I put the term in quotes because it’s not really a hostile takeover, although that’s what the characters call it.  A hostile takeover can really only happen to a publicly traded company, which can’t directly control whom its shares are sold to.  In this case, Carlton Co. agreed to the sale of Damage Control to Hoag.  So how did that work?

Basically it was a mirror of the original acquisition.  Hoag apparently received a sum of money from the original sale, though news of the sale was a surprise to her, suggesting she may have been a non-voting shareholder.  Anyway, Hoag uses the money as collateral for a loan from SHIELD for the entire buyout price, which SHIELD will hide in its helicarrier appropriation budget.  So Hoag offered to buy Damage Control ‘at cost’ with SHIELD’s money, allowing Carlton Co. to pay off its debt to Fisk.  Admittedly, that means effectively wasting $438 million in interest payments, but it’s better than facing the wrath of the Kingpin.

(Side note: assuming the story occurred in real time, Carlton owned Damage Control for 4 months in late 1989-early 1990, at which time high yield (aka ‘junk’) bond rates were in the upper teens.  Assuming a rate of 17%, we can deduce that Fisk loaned Carlton about $7.7 billion, which would value Damage Control at $23 billion, or $37.8 billion adjusted for inflation.  That’s not necessarily utterly ridiculous given the size and frequency of their repair projects, but just for comparison, KBR, one of the largest construction companies in the United States, has a market cap of ‘just’ $3.6 billion.)

There’s a couple of mentions of the SEC during all of these plans, but I’m not sure it’s relevant, since Carlton and Damage Control seem to be private companies.  There’s no mention of shareholder meetings, stock prices, etc, throughout all of this.  Furthermore, Damage Control is taken public during Civil War.  It’s possible it was taken private in the interim, but I doubt it.

If the target company in either acquisition had been public, then the buyer would have had to file a Schedule 13D with the SEC within 10 days of a purchase of 5% or more of the target company.  In order to get enough shareholders to sell a controlling stake in the company, the buyer would probably have had to make a tender offer at a significant premium.  I’m not an expert on securities law, but I don’t think anything that went on here would have raised any eyebrows at the SEC.  The biggest issue is probably SHIELD (at the time a US government UN agency) getting into the loan business in a big way.  And just imagine how expensive the SHIELD helicarrier must be if a $23 billion loan could be hidden in the appropriations budget!

III. Conclusion

Although the writers play things a little fast and loose with the terminology, this series has a pretty good take on the leveraged buyout tactics used by private equity companies.  By the way, if you want to pick up the older Damage Control comics, you might skip the third series (the one after this one) unless you like your comics seriously goofy.

NOLHGA Annual Legal Seminar

We’re happy to announce that Ryan and I will be speaking at the National Organization of Life and Health Insurance Guaranty Associations20th Annual Legal Seminar, July 26-27 in Boston.  The program includes many fantastic speakers, and we’re excited to be among them.  We’ll be giving a talk on legal ethics using examples drawn from superhero attorneys such as Daredevil, She-Hulk, and Manhunter.  And on that note, can anyone recommend a good comic book store in the Back Bay area to check out while we’re in town?

Prometheus

Prometheus came out last weekend. It’s… ambitious. Reviews are mixed. But, as always, we’re not here to talk about the merits of the movie as such, but rather about legal issues raised by the movie. The most obvious one here is the issue of private space exploration and travel. The premise of the movie is that in the late 21st century, Weyland Corporation spends $1 trillion on a project to send a research team to a moon orbiting a gas giant in the Gliese 86 system. Can a private corporation decide to just do this? Continue reading

Reaper and Deals with the Devil

We’ve talked about contracts with the devil on Law and the Multiverse before, in the context of the Ghost Rider movie.  Recently I’ve been catching up on the (sadly cancelled) TV show Reaper (available on DVD and via Netflix), which has the benefit of being considerably better than Ghost Rider was, but on the other hand it lacks Sam Elliott.

Anyway, Reaper‘s protagonist, Sam Oliver, is tasked by the Devil with capturing souls who have escaped from hell, most of whom have inexplicably gained supernatural powers related to their earthly sins.  In some cases the souls were people who had sold their souls to the Devil.  Normally this is done with a written contract, which we get glimpses of at various points in the show, but in one episode the Devil foolishly only made a verbal agreement with a mortal, Gary, and Sam is asked to get Gary’s signature on a written contract.  This leads to a couple of interesting legal issues.

(Note: We’re assuming that the Devil follows something close to common law contract law, as is typical in English and American Faustian bargain situations.)

I. Modification of Contracts

But wait, if the Devil already has a verbal agreement with Gary, why does he need a written contract?  If he wants to add new terms to the deal that weren’t covered in the verbal agreement (which seems likely given the size of the written contracts), then the Devil may also have to support that modification with additional consideration (i.e. something of value promised by the Devil).  According to the Restatement (Second) of Contracts:

A promise modifying a duty under a contract not fully performed on either side is binding
(a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made; or
(b) to the extent provided by statute; or
(c) to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

Given the ‘gotcha’ nature of contracts with the Devil, we’d say subsection (a) doesn’t apply, since it’s highly unlikely that the new terms are fair and equitable.  Subsection (c) is basically a reference to promissory estoppel and wouldn’t seem to apply here, either.

It’s an interesting question whether subsection (b) applies, however.  It’s a reference to the Uniform Commercial Code’s rule that additional consideration is not required to modify a contract for the sale of goods.  Is the sale of a soul a sale of goods?  According to UCC § 2-103(k), “‘Goods’ means all things that are movable at the time of identification to a contract for sale.”  Is a soul movable at the time of the contract?  Maybe not, since (in the Reaper universe) the soul is attached to the body until death, at which point the soul either goes to heaven or hell.  On the other hand, the term also includes ‘future goods,’ but it isn’t clear to me that a soul would qualify, since it already exists, it just isn’t movable.

But let’s assume the Devil (and Gary) can find some worthwhile bit of new consideration in order to justify the modification, or that the requirement doesn’t apply.  Is there really a need for a written contract in the first place?  Couldn’t they modify the contract verbally? Is the original verbal contract even valid? It depends.

II. Signed Contracts and the Statute of Frauds

In general contracts do not have to be in writing.  The only fundamental requirements are an offer, acceptance of that offer, and consideration.  However, it was long ago recognized that some contracts deal with such important rights (e.g. ownership of land), that they really need to be written down.  And so the Statute of Frauds was created in England way back in 1677, and similar laws exist in most jurisdictions.  The exact terms vary from statute to statute, but two common terms are relevant here.  The first is that contracts involving the sale of goods above a certain value must be in writing.  The second is that contracts that cannot be performed within one year must be in writing.

It’s hard to say how much a soul is worth, and of course there’s the issue of whether it’s a sale of goods in the first place.  But in Gary’s case he sold his soul for material wealth far in excess of the minimum required by the Statute of Frauds, so as long as a soul is a ‘good,’ then the Statute of Frauds might be triggered.

As for the one year exception: it depends on the term.  Someone who made a deal to live for at least one more year might trigger it, or someone who made a deal for a million dollars a year every year for twenty years.  But most deals with the Devil seem to be wrapped up pretty quickly, and Gary’s was no exception.  In fact, the Devil even contemplates having Gary killed in order to cheat him out of an opportunity to repent.

But even if the Statute of Frauds is triggered, Gary might have painted himself into a corner by accepting the Devil’s performance of his end of the bargain (i.e. the delivery of at least some of the material wealth).  Acceptance of partial performance can prevent a party from claiming the Statute of Frauds as a defense.  See, e.g., Railan v. Katyal, 766 A.2d 998, 1007-08 (D.C. Ct. App. 2001).  So in this case at least, the contract did not need to be in writing as long as the Devil was satisfied with the terms of the verbal agreement.  The Devil is correct, however, that proving the existence and terms of the verbal agreement can be difficult.

III. Aliases

At one point Gary signs the contract, but he signs an alias (‘Jim Fartington’).  Gary claims that this is not binding against him, since that’s not his name.  In fact, there is no particular requirement that a signature be one’s legal name, much less written in cursive or the like.  Instead, a signature is just a physical record of the intent to make a contract.  “The signature to a memorandum may be any symbol made or adopted with an intention, actual or apparent, to authenticate the writing as that of the signer.” Restatement (Second) of Contracts § 134 (emphasis added).  So when Gary signed the contract, he did so with the apparent intention of authenticating the signature as his own.  Thus, he may well be bound by the contract.

IV. Conclusion

Reaper is a great show, and it’s a shame it was canceled.  Despite the plot revolving around contracts with the Devil, there aren’t too many legal issues, but this episode raised some great contract law issues that we don’t get to talk about on the blog very often.  In this case, the Devil probably actually had Gary dead to rights.  I guess the Devil should have consulted an attorney, which you’d think would be easy for him to arrange.