Category Archives: Superman

Law and the Multiverse Retcon #10

Time for another installment of the Law and the Multiverse Retcons series, in which I discuss changes in the law (or corrections in my analysis) that affect older posts.  Alert readers will notice that there was no Retcon #9.  This is because there are actually two Retcon #6s, and I have decided to retcon the Retcon numbering system as though I had not lost the ability to count to 10 at some point between kindergarten and last year.

This Retcon addresses some of my shortcomings on a recent episode of the Geek’s Guide to the Galaxy podcast, specifically my discussion of Man of Steel and Superman’s possible civil and criminal liability for the destruction of Metropolis.  I saw the movie when it was released and had forgotten several key plot points that affect the legal analysis.  Thanks to Damon for pointing out these issues!  Some spoilers for Man of Steel follow.

Continue reading

Judging Batman and Superman

Today I have something a little different, a draft of a paper by Jeremy Greenberg titled Batman v. Superman: Let the Courts Decide, 33 Quinnipiac L. Rev. ___ (forthcoming 2014).  Mr. Greenberg analyzed 1449 mentions of Superman, Batman, Bruce Wayne, and Clark Kent in US state and federal court cases to determine how judges used references to these characters to explain their decisions.  After weeding out false positives such as actual people named Bruce Wayne, intellectual property decisions about the character of Superman, and statements made by witnesses, Greenberg was left with 55 references in the judicial opinions themselves.

Mr. Greenberg’s analysis of the common themes in the references is interesting, as is the underlying data.  I won’t reveal any more than that, lest I spoil some of the surprises.  Go check it out!

The Man of Steel Confesses

I know I said the post on Lois Lane’s employment contract would probably be our last post on Man of Steel, but we got a great question from Neal that I couldn’t resist writing up.  Neal—who is a rabbi in New York—writes:

You may remember that Clark Kent goes into a church and confesses to the priest (let’s assume he’s a Catholic priest, for the sake of argument, though to be clear different religions handle “confession” and counseling relationships differently) that he’s the guy everybody is looking for. Now, in NY, that priest can’t be compelled to testify or reveal information obtained while performing the duties of a clergy- penitent or clergy-congregant relationship (as I broadly understand it) but there ARE mandated reporting laws, e.g. regarding child and elder abuse.

So could the Feds or the state government have compelled the priest to testify given that:

1) An alien might not be presumed to be a member of the church, especially if he just showed up and had no prior relationship to this denomination or its clergy,


2) the stakes are just so damn high, like planetary destruction. If there is a mandated reporting law for child abuse- and to be clear I am not 100 percent sure even that overrides the legal protection of the clergy relationship in all instances- wouldn’t it apply on a vastly larger scale with something like this?

These questions raise several issues related to the confessional privilege.

I. The Confessional Privilege in Kansas

At common law there was little or no legal protection for statements made to a member of the clergy in confession or otherwise while seeking religious advice or counsel.  Instead, the privilege is largely derived from statutes.  Generally speaking it is weaker than, for example, the attorney-client privilege, but in some states the confessional privilege can be pretty broad.

I believe that the confessional scene takes place in Smallville, which is located in Kansas.  In Kansas the privilege is defined in the Kansas Rules of Evidence, specifically K.S.A. 60-429(b):

A person, whether or not a party, has a privilege to refuse to disclose, and to prevent a witness from disclosing a communication if he or she claims the privilege and the judge finds that (1) the communication was a penitential communication and (2) the witness is the penitent or the minister, and (3) the claimant is the penitent, or the minister making the claim on behalf of an absent penitent.

So in other words, Clark (if he’s present) or the priest (if Clark is absent) could claim the privilege (become the claimant) in order to prevent the priest from disclosing what Clark told the priest, or in order to prevent Clark from disclosing the same.

Now, there are a lot of specialized terms in that definition, including “penitent” and “penitential communication” (we’ll assume the priest is a regular or duly ordained minister).  Those terms are defined in 60-429(a):

“penitent” means a person who recognizes the existence and the authority of God and who seeks or receives from a regular or duly ordained minister of religion advice or assistance in determining or discharging his or her moral obligations, or in obtaining God’s mercy or forgiveness for past culpable conduct

“penitential communication” means any communication between a penitent and a regular or duly ordained minister of religion which the penitent intends shall be kept secret and confidential and which pertains to advice or assistance in determining or discharging the penitent’s moral obligations, or to obtaining God’s mercy or forgiveness for past culpable conduct.

So right off the bat we can see the answer to one of the issues: there’s no requirement that Clark have been a member of the church in question or otherwise have had a pre-existing confessional relationship with the priest.  As long as he “recognizes the existence and the authority of God and … seeks or receives from a regular or duly ordained minister of religion advice or assistance in determining or discharging [his] moral obligations”, that’s sufficient.  And honestly I’m not too sure about the “recognizes the existence and the authority of God” part, but it doesn’t appear to have been put to the First Amendment test, at least in Kansas.

In this case, Clark is at least seeking advice or assistance in determining his moral obligations (i.e. whether to reveal himself as Superman and try to do good in the world with his powers).  And it appears that he intended the communication to be confidential.  He and the priest were alone in the church, and I don’t recall him telling the priest it was okay to tell anyone else.  There was a strong implication that it was a confidential conversation, and that Clark told the priest what he did precisely because he believed it was confidential.

II. Any Exceptions?

The Kansas statute, like many such statutes, does not contain much in the way of exceptions.  It sets a relatively high bar to accessing the privilege in the first place, but once it’s reached, that’s pretty much it.  Many states do provide an exception for child abuse reporting, particularly if members of the clergy are mandatory reporters, but the issue does not appear to have come up in Kansas.  Certainly there is no broad exception for the public good or public safety.  And that makes a certain amount of policy sense.  The confessional privilege would be largely pointless if those confessing the possibility of endangering themselves or others (e.g. by committing a violent crime) were not protected by it.

III. But Wait, What About the Feds?

It’s all well and good that the privilege would apply in state court in Kansas, but what about federal court?  After all, it’s not exactly the local sheriff that’s looking for Clark.  Would the priest still be able to keep quiet if there was some kind of federal proceeding?

Maybe, maybe not.  There is no federal confessional privilege statute.  One was proposed as part of the Federal Rules of Evidence, but it was not approved by Congress.  Over the years a federal common law privilege has developed, and it appears to be recognized in Kansas. U.S. v. Dillard, 2013 WL 875230 (D.Kan. Mar. 7, 2013) (“Plaintiff does not take issue in this case with the general existence of the [confessional] privilege. Neither does this Court.”).

I have yet to see a federal case that describes the contours of the privilege clearly, so I will take this summary from a treatise on the subject:

The communication by a spiritual communicant is privileged if it is made to an ordained or otherwise duly accredited functionary of a religious organization in his capacity as such. … The communication must have been made for the purpose of obtaining spiritual aid or religious or other counsel, advice, solace, absolution, or ministration. It must also have been made in confidence.

Paul F. Rothstein & Susan W. Crump, Federal Testimonial Privileges § 10:3.

In this case, the federal privilege would also appear to apply.

IV. Conclusion

The state law confessional privilege probably applied in this case and there probably wasn’t an exception.  The same is likely true of the federal privilege, bearing in mind that it exists on somewhat shaky ground, having never been formally approved by the Supreme Court or even (as far as I can tell) the 10th Circuit, in which Kansas is located.


Superman and the Duty to Rescue on Bloomberg Law

Bloomberg Law has produced a short video about my piece on about Superman and the duty to rescue in Man of Steel.  Check it out!

Lois Lane’s Employment Contract

This will probably be our last post on Man of Steel.  No spoiler warning on this one, as I can set up the issue without giving anything of consequence away.

In Man of Steel, Lois Lane works as a reporter for the Daily Planet (no surprise there).  At one point in the movie, she has a disagreement with her boss, Perry White, over whether to run a certain story, and she threatens to quit.  White tells her that she can’t do that because she’s under contract, and Lois concedes the argument.

Wait, what?

I. Employment Contracts

How can Lane’s employment contract prevent her from quitting her job?  Surely the Planet can’t literally force her to work.  Doesn’t the Thirteenth Amendment have something to say about that?

And it does.  The Planet can’t force Lane to work, and a court can’t order her to work if she breaches her employment contract.  But that doesn’t mean an employment contract is completely toothless from the employer’s point of view.  There are two major techniques that the Planet might have used when drafting the contract to make it in Lane’s best interest to keep working for the Planet rather than quit: damages and a non-compete agreement.

II. Damages

Ordinarily in a breach of employment contract case it’s the employee who seeks damages from the employer, typically arguing that the employer owes them whatever they were due under the contract in the form of salary or other compensation.  Of course, that only works if it’s the employer that broke the contract.  If it’s the employee that reneged on the deal, then things could go the other way.

In cases where the employee is the breaching party, employers don’t often sue for damages because a) employees usually don’t have a lot of money and b) it’s difficult to say how much the employee’s work would have been worth.  This is different from the reverse situation, where the employer typically has deep pockets and it’s very clear what the employee was owed in terms of salary.

One possible solution to this problem is a liquidated damages clause, which says something like “if Lane breaches the contract then she must pay the Planet $X.”  Basically it’s an upfront agreement regarding the damages in the event of a breach of contract.  There are some limits and restrictions on such clauses, but they are, in principle, allowed in employment contracts as long as they are reasonable and not punitive.  See, e.g., Kozlik v. Emelco, Inc., 240 Neb. 525 (1992).

Faced with the prospect of having to pay the Planet the approximate value of her services to them, Lane would probably conclude that it was better to keep working.

III. Non-Compete Agreements

As the name suggests, these clauses bar the employee from competing with the employer after they quit working for the employer.  Usually this means that the employee can’t work for a competitor or in the same industry for a certain period of time, typically no more than a few years.  The agreement may also be limited geographically (e.g. only apply to the city where the employee was working).

Some states strongly disfavor non-compete agreements, whereas others are generally okay with them as long as they are reasonably narrow in scope.  We don’t know where Metropolis is, but it’s likely that it’s in a state that accepts non-compete agreements.  If Lois Lane was subject to a non-compete, then quitting the Planet would mean quitting being a journalist, at least in the Metropolis area.  That’s a powerful incentive not to quit.

IV. Conclusion

Although the Planet might not have literally been able to force Lane to keep working, her employment contract may have effectively done so anyway.

Man of Steel

I just got out of Man of Steel, and there’s something of a doozy of a legal question pretty early on. There are some very mild spoilers inside, but no real plot points, so proceed at your discretion. Continue reading

Truth, Justice, and the American Rule

I have a piece over at on Man of Steel and the duty to rescue.  There are some moderate spoilers in the article.  All in all it was a pretty good movie, though not without its flaws (<- serious spoiler alert!).  I recommend checking it out.  We’ll have more on Man of Steel here at Law and the Multiverse later this week.

Superman’s Diamonds Revisited

Just over two years ago I discussed Superman’s (lack of) tax liability for crushing coal into diamonds and (actual) gift tax liability if he gave those diamonds to another person.  In the comments to that post I mentioned that Superman could theoretically avoid gift tax liability by performing the gratuitous service of crushing coal into diamonds rather than giving a finished diamond.  In this post I’d like to expand on that topic briefly.

I. Form Over Substance

Although it is true that gratuitous services are not taxed, it is also true that the IRS and the courts frown on tax avoidance schemes that attempt to exalt form over substance.  Gregory v. Helvering, 293 U.S. 465 (1935).  So a scheme by which Superman handed someone a piece of coal, fully intending to turn it into a diamond, then did so, would be tantamount to simply giving them a diamond.  The IRS would focus on the substance of the transaction, not the form, and consider it a taxable gift of property.

But if, for example, Superman were at someone’s house for a barbecue and decided to thank them for dinner by crushing a lump of their own charcoal into a diamond, that would be different.  In that case Superman really would be performing a gratuitous service.

This may seem like a fine distinction, but think of it in terms of a famous baseball player.  If the baseball player hands someone a baseball (retail value $3) and then signs it (market value $500), that’s not really a gratuitous service.  They’re really just giving the person a signed baseball.  But if the baseball player signs a baseball that the recipient already owns, then that is more clearly a service rather than a gift of property.

II. Engagement Rings

Superman has crushed coal into diamonds for various reasons, but one of the best known was his gift of a ring to Lana Lang in Superman III.  This raises an interesting question: is an engagement ring subject to gift tax?  There is, subject to certain qualifications, an unlimited marital deduction for gifts between spouses, but what about an engagement ring, which is given in anticipation of marriage?

The law surrounding engagement rings and other pre-nuptial gifts has a long and complex history, dating back to at least the Romans.  Most of the law has to do with who owns such gifts, particularly if the marriage is called off.  But it turns out that none of that matters for tax purposes.  If the donor and donee aren’t married at the time of the gift, then the marital deduction doesn’t apply.  26 U.S.C. § 2523(a).  So an engagement ring is subject to gift tax, even if the donor and donee get married later that same year.  In practice I suspect that few people actually report such gifts, even in the rare case where it would make a difference in their ultimate tax liability, but maybe Superman would actually be moral enough to do so.

III. Conclusion

Crushing coal into diamonds still doesn’t create tax liability for Superman, and he still has some ways to avoid liability if he crushes coal into diamonds for other people, but he has to be careful about it.  And strictly speaking he probably should have reported that ring he gave to Lana.

Guest Post: Clark Kent’s Taxes

Today we have a guest post from Martha L. Voelz, an associate with S.H. Jacobs & Associates LLC in New York that we met at New York Comic Con.  As we mentioned in a recent post, Clark Kent has quit his job with the Daily Planet to become a blogger.  Martha, who practices tax law, has written a post about some of the tax consequences of Kent’s newfound self-employment.  As with all of our posts, this post is not legal advice, does not create an attorney-client relationship, and does not necessarily reflect the opinions or views of the author’s employer.

Being Your Own Boss — Tax Consequences

With Clark Kent preparing to strike it out on his own in Superman #13, there are several  legal issues he faces as his own boss. As James Daily pointed out in his post, as an independent blogger and reporter Kent will have new intellectual property and liability issues. He also will have some tax differences as well.  For this post, I am sticking to Federal tax issues, but Kent will likely have state and local tax issues too.

As an employee, Kent’s share of income, Social Security and Medicare taxes were calculated and paid to the Internal Revenue Service (“IRS”) by his employer.  As his own employer, Kent now has to calculate and make these tax payments himself. Let’s start with the Social Security and Medicare tax differences, known as FICA and Self-Employment tax.

I. FICA v. Self Employment tax

When Kent received his pay stub from the Daily Planet, he would have seen withholding for his Federal income taxes and another  line notation called FICA. FICA stands for Federal Insurance Contribution Act, and this covers Kent’s tax contribution to Social Security and Medicare. FICA is found in §§ 3101-3128 of the Internal Revenue Code, which is part of the United States Code.

The total FICA tax rate is 15.3%, which is normally paid equally between the employer and employee.  Kent’s portion of FICA would normally be 7.65% and is broken down like this:

  • Social Security – Kent would pay 6.2% tax on his wages (including certain benefits) capped for the year at $110,100 in 2012 and will be capped at $113,700 in 2013. Anything Kent earns over the cap is not subject to the Social Security tax.
  • Medicare – Kent would pay 1.45% on his wages (including certain benefits). There is no yearly cap on this portion of the tax.

The reason for noting how FICA is normally paid is because in 2012 FICA is not working “normally”. In order to stimulate the economy, Congress reduced an employee’s portion of the Social Security part of FICA to 4.2% in 2011 and kept that reduction for 2012. This reduction is not set to continue in 2013. If Kent was working at the Daily Planet, when he received his first pay check of 2013 he might have been shocked by the reduction in his take-home pay and the sudden “increase” in the FICA line.

What makes this different for Kent as a self-employed taxpayer is that FICA does not apply. Instead self-employed taxpayers contribute to Social Security and Medicare under the Self-Employment Contributions Act of 1954, known as the Self-Employment Tax. This tax is found under §§1401-1403 of the Internal Revenue Code.

On its face, the Self-Employment Tax seems harsher because the taxpayer normally pays all 15.3% of the tax, which under FICA is split between the employer and employee.  However, the same 2012 reduction to the employee portion of the Social Security tax applies to the Self-Employment Tax. This means in 2012 the Self-Employment Tax rate is 13.3% and the breakdown would be as follows:

  • Social Security – Kent would pay 10.4% tax on his net earnings with the same income caps in 2012 and 2013 as FICA.
  • Medicare – Kent would pay 2.9% on his net earnings.

There are some additional differences in how the Self-Employment Tax is calculated to even out the differences between this tax and FICA.

First, the Self-Employment Tax is calculated on net earnings of the business and not the gross income. Net earnings are the amount Kent earns reduced by certain business expenses he may have during the year. Second, a portion of the Self-Employment Tax Kent paid may be deductible on his federal income tax return. This in turn may put Kent in a lower tax bracket and reduce his federal income tax.

II. Estimated Tax Payments

By becoming self-employed, Kent will have to calculate and pay income tax and Self-Employment Tax on his own. He will have to do this by making estimated payments to the IRS using Form 1040-ES. This form will help Kent calculate both his Federal income and Self-Employment Taxes.

He will need to file and make payments for each quarter to avoid an underpayment penalty. Quarterly estimated payments are due April 15 (for January, February and March), July 15 for (April, May and June), October 15 (for July, August and September) and January 15 of the following year (for October, November and December). If the due date falls on a Saturday, Sunday or Holiday, then the due date is typically the following business day.

Filing and payment is considered completed on the mailing date, and it is a good idea for Kent to send anything to the IRS via Certified Mail Return Receipt. This is his insurance should the IRS allege he missed a payment or filing deadline. Alternatively, he can make his quarterly estimated payments using the Electronic Federal Tax Payment System.

III. Happy New Year! – 2013 Tax Surprises

There are a few tax surprises in store for Kent and the rest of us taxpayers between the 2012 and 2013, in addition to watching our Social Security tax payment revert back to its normal amount.

First, some taxpayers may have to make an Additional Medicare Tax payment. If Kent makes over $200,000, then an Additional Medicare Tax will kick in. For every dollar over $200,000, he will pay Medicare Tax at 2.35%. (I assume for the rest of this post that Kent is not getting married in 2013 and has a taxpayer filing status of “Single”.)

Second, the Federal income tax brackets are set to revert to tax rates we last saw under President Clinton. The bottom income tax rate goes from 10% to 15% up to a maximum tax rate of 39.6%. Assuming Kent has an adjusted gross income between $35,351 and $85,650, his tax rate will go from 25% to 28% in 2013. This assumes that Congress does not make tax code adjustments connected to the “Fiscal Cliff” situation, which is still up in the air as of this writing. [Ed. note: the fiscal cliff has apparently been avoided, but if Kent makes more than $400,000 per year then he would pay 39.6% on income above that level.]

One of the best things Kent can do is read up on his obligations as a self-employed taxpayer and check out  the following IRS publications: Publication 334 –Tax Guide for Small Business and Publication 505 – Tax Witholding and Estimated Tax. If he doesn’t want to tackle this himself, hiring a certified public accountant is the best thing he can do. (Plus, the expense is a tax deduction in his new life as a self-employed reporter!)

Superhero Journalists Revisited

You may recall our previous post about superhero journalists Clark Kent and Peter Parker, which discussed how copyright affected them differently as an employee and an independent contractor, respectively.  Well the times they are a changin’, and Clark Kent quit his job at the Daily Planet in Superman #13 to become a blogger.  This will have more than a few legal consequences for Kent, some of which we’ll touch on today and some of which will have to wait for a future post.

I. Intellectual Property

As an individual Kent will either be working as a freelancer, selling stories to companies like the Huffington Post, or he may publish stories himself.  Regardless of which business model Kent chooses, he’ll also have to choose a form of business association (corporation, LLC, etc).  Basically, he could either choose some sort of corporation, or he could operate a sole proprietorship.  The latter is easier, but it’s also riskier (more on that later).

With regard to IP, the different kinds of business association give him some options.  For example, he could be an employee of a corporation, in which case the copyright in his works would be automatically owned by the corporation, just as they were owned by the Daily Planet when he worked there.  Or, if he wasn’t an employee then he could assign those copyrights by contract.  And if he chose not to incorporate, then he could retain ownership of the copyrights as an individual.

One practical effect of this choice will come into play when contracts with publishers are signed.  If Kent’s company owns the copyrights (either automatically or by assignment), then the company will be the one selling the stories, which entails either assigning the copyright to the publisher or granting the publisher a license.  If Kent operates as an individual, then it’ll be Kent selling the stories directly.  Either way it’ll probably be Kent signing the contracts, since he’ll be his company’s sole employee/shareholder/member.  The difference will be whether he signs it something like “Clark Kent, Manager, KentCo LLC” or just “Clark Kent.”

So what’s the point of all of this?  Why would Kent bother setting up a company, especially if he’s going to be the only employee or if it won’t even have any employees?  The answers are, as they so often are in the law, liability and taxes.  Taxes will have to wait for a future post, but let’s take a brief look at liability.

II. Liability

As a writer working alone, Kent probably won’t have to worry too much about some of the common sources of liability for companies, such as products liability or workplace injuries.  But he will have to worry about suits for defamation, invasion of privacy, and related torts.  To a certain extent these risks can be insured against, and it’s usually part of commercial general liability insurance, but there are limits to what insurance will cover.  If Kent intentionally defames someone or (more likely) intentionally invades their privacy, then an insurer isn’t going to cover that.  This is where the liability protection of the corporate form comes in to play.

Basically, the way this works is that the plaintiff could sue Kent’s corporation or company but not Kent himself as an individual.  This means that the corporation’s assets would be vulnerable in the suit, but not Kent’s personal assets.  There are some exceptions to this general rule, however.  Sometimes a plaintiff can “pierce the corporate veil” and sue the employees or directors and officers of the corporation as individuals.  There are several reasons why this can happen, but some of the most common are when the corporation is just an “alter ego” of the individual (i.e. they aren’t really distinct entities) or when the corporation is under-capitalized (i.e it doesn’t have nearly the assets it should given the kinds of risks it undertakes).  Both of these are potential issues for a one-person corporation or LLC.  Kent will have to be careful to observe the corporate formalities, avoid commingling personal and corporate assets, and maintain adequate capital in the company.

If Kent decides not to incorporate but instead operate a sole proprietorship or even act as an individual, then he won’t have this benefit.  He could be named in the suit as an individual and his assets would all be up for grabs, subject to the limitations of bankruptcy.  Incorporation has some upfront costs and requires some effort to maintain, but it beats being on the wrong end of a million dollar damage award.

III. Conclusion

So far there haven’t been a lot of details in the comics, but it’ll be interesting to see where this part of the Superman story goes.  Clark Kent’s work at the Daily Planet has been an iconic part of the character for decades.  “Clark Kent, mild-mannered blogger” doesn’t have quite the same ring to it.