Author Archives: James Daily

Who Owns Wolverine’s Bones?

Posted on May 18, 2012 | 58 comments

Today’s post was inspired by an email from Frank, who asks:

Does Wolverine own his bones? Does Captain America own his shield?

Both of these characters are military agents granted  items by employers. Since I didn’t get to keep my rifle when I left the military, I presume that Cap would have to turn in his shield should he ever leave military service (or, in the case of the Civil War storyline, be prosecuted and presumably discharged).

Wolverine’s a more interesting case. Let’s presume that since adamantium is unbreakable, it will always have value of some kind. Can a body part be repossessed? Can you “own” an artificial organ installed in another person? Would it matter that Wolverine doesn’t need the adamantium to live, because of his healing power?

These are interesting questions!  We’ve previously (and very theoretically) addressed treating superpowers as personal property, but in this case we’re dealing with special equipment rather than intrinsic abilities.  I’m going to address Captain America first, since it’s the easier one to answer.

I. Who Owns Captain America’s Shield?

The answer seems to be “the US military.”  This is true of other military-issue equipment, including weapons and body armor.  And sure enough, the comics treat it that way, with Captain America giving up his shield on the few occasions in which he left service (e.g., Captain America #332).

So that’s that.  On to the much trickier case of Wolverine.

II. Who Owns Wolverine’s Bones?

Of course, what we mean here is the adamantium bonded to Wolverine’s skeleton, not the bones themselves.  In some ways it’s similar to having a plate or screws put in place by an orthopedic surgeon, or a device like a pacemaker implanted by a cardiologist.  The patient still has all of his or her parts, there are just some new bits added.

Normally the patient owns those bits, however, and they are just like any other piece of personal property.  In the UK, for example, “on implantation, an implant becomes the property of the person in whom it has been implanted and it remains his or her property even if it is subsequently removed. Following the patient’s death, it forms part of his or her estate unless there is any specific provision to the contrary.”  Department of Health and Social Security Health Notice HN(83)6 (1983).  The situations appears to be the same in the US, although I was unable to find such a specific statement.  I assume it is likewise the same in Canada, which is really the relevant jurisdiction here.

(Note that the situation with implanted devices is distinct from naturally-occurring organs and tissues.  The courts have pretty universally held that people do not have a property right in their own bodies or the parts thereof.  See, e.g., Moore v. Regents of Univ. of Cal., 51 Cal.3d 120 (1990).)

So under normal circumstances, Wolverine would appear to own the adamantium in his body.  But these are not normal circumstances.  Wolverine was a soldier, but he was also brainwashed by the Weapon X project.  So while he may have technically signed some sort of agreement giving the Canadian government ownership of the adamantium, the circumstances under which the agreement was made mean that it is probably not binding, either because of fraud or Wolverine’s mental incompetence.

But what if there had been no brainwashing and the Weapon X project had been completely forthright with Wolverine?  Is it even possible for someone to own a part of another person’s body?  What if it can be removed without (permanently) harming them?

These are interesting questions with no clear answer.  At least one commentator, writing in the context of microchip implantation, has argued that it is both possible and desirable to extend existing law to reach the conclusion that “anything within an individual’s body [is] the property of that individual.”  Elaine M. Ramesh, Time Enough? Consequences of Human Microchip Implantation, 8 Risk: Health Safety & Env’t 373, 403 (1997).  I agree with that conclusion, even if it is difficult to point to a particular legal principle that supports it.

Another approach is to consider not the property right but the remedy.  Supposing that the Canadian government did own the adamantium, how could it enforce that right?  It’s true that Wolverine could probably survive the removal of the adamantium, but it would be extremely intrusive even if the pain could be minimized through anesthesia.  It seems doubtful that a court would order such an operation.  Involuntary medical operations are generally limited to prisoners and people who have been involuntarily committed and even then there are significant due process safeguards.  Washington v. Harper, 494 US 210 (1990).  I suspect the law is similar in Canada, though Wolverine seems to spend most of his time in the US these days.

III. Conclusion

Not all superhero equipment is created equal, even equipment that came from the military.  Captain America will have to give up his shield if he retires, but Wolverine probably owns his adamantium bones, or can at least retain possession of them as long as he lives, which should be a very long time!

58 Comments

Posted in constitutional law, contracts, mailbag, property law, X-Men

Daredevil: Yellow

Posted on May 16, 2012 | 20 comments

Daredevil: Yellow is a fantastic retelling of Daredevil’s origin story by Jeph Loeb and Tim Sale, whose watercolor illustrations are a great match for the setting and mood of the story.  The subtitle is a reference to the color of Daredevil’s original costume.  It’s part of a related series by Loeb and Sale that includes Spider-Man: Blue, Hulk: Gray, and the (hopefully forthcoming) Captain America: White.  The story is framed as a retrospective by Murdock, relating how he came to start a law practice with Foggy Nelson, become Daredevil, and fall in love with Karen Page.

Nelson and Murdock’s first big break comes when the Fantastic Four approach the firm for representation.  We don’t get a lot of detail regarding the work, but Reed Richards describes it as “the lease on the Baxter Building, patents, that sort of thing.”  Foggy eagerly replies “We’d be happy to.  And anything else you might want to bring us, Mr. Richards.”  This is all incidental to the main storyline, but it raises an issue near and dear to my heart: the practice of patent law.

I. The Peculiarities of Patent Law

The practice of patent law can be divided into two broad categories: practicing before the Patent and Trademark Office and “everything else.”  Practicing before the PTO includes:

preparing and prosecuting any patent  application, consulting with or giving advice to a client in contemplation of  filing a patent application or other document with the Office, drafting the specification or claims of a patent application; drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention; and drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to the Board of Patent Appeals and Interferences, or other proceeding.

37 C.F.R. § 11.5.  That’s quite the laundry list, but basically, this means drafting and applying for patents, which can involve a lot of communication with the Patent Office, including some adversarial procedures in which a patent is opposed by another party.  It also includes giving advice and counsel regarding alternatives to patents, including those available under state law.  Note that it doesn’t include anything to do with trademarks; with one very narrow exception, only attorneys can do that, and any attorney can.  37 C.F.R. § 11.14.

“Everything else” includes other transactional matters (e.g. negotiating patent licenses) and litigation (e.g. suing for patent infringement).

Why does this distinction matter?  Because not just anyone—or any attorney—can represent someone before the Patent and Trademark Office, whereas any attorney can handle “everything else.”  Admission to practice before the PTO requires a technical background (broadly speaking: a bachelor’s degree in science or engineering or the equivalent, see here for the complicated details) and passing the registration examination, which is sometimes called “the patent bar exam.”  The examination consists of 100 multiple choice questions, mainly derived from the Manual of Patent Examining Procedure, the rulebook for patent examiners.  The pass rate for the exam is considerably lower than most state bar exams.

Notably, admission to practice before the PTO does not require a law degree or a license to practice law.  Non-lawyers who pass the registration exam become patent agents and lawyers who do so become patent attorneys.  Both have the same abilities to practice before the PTO, but only a patent attorney can handle “everything else.”  If a patent agent later becomes an attorney, he or she can pay a fee to have their registration changed to say “patent attorney,” but there is no functional difference.

II. So What’s the Problem?

Actually, there isn’t necessarily a problem.  Reed did say “patents,” not “patent applications,” so it could be that he’s talking about something like negotiating licenses or handling an infringement suit.  While patent attorneys often deal with the full spectrum of patent law, it is not uncommon for patent litigators or patent license specialists not to be patent attorneys.  So Reed could have a separate firm handle the work of obtaining patents (aka “patent prosecution”) and leave licensing and litigation to Nelson and Murdock.  Or Reed could even represent himself before the PTO, which is always an option even for someone who is not a patent attorney or agent, albeit not one that I would recommend, even for someone as smart as Reed.

Alternatively, Nelson or Murdock could be a patent attorney.  I couldn’t find any information on their undergraduate degrees, so it’s possible that one or both of them have the required technical background.  Statistically this is unlikely, since only about 7% of attorneys have a science or engineering degree.  R. Kim Craft and Joe G. Baker, Do Economists Make Better Lawyers? Undergraduate Degree Field and Lawyer Earnings, 34 J. of Econ. Educ. 263, 271 (2003).  Still, it’s possible, and Murdock clearly has an aptitude for mechanical engineering, since his billy club is chock full of clever gadgets of his own design.

III. Conclusion

It’s a pretty minor issue, but I couldn’t pass up an opportunity to talk about this particular quirk of patent law.  I’ll be taking a look at the other books in the Loeb & Sale series in the future, but until then I recommend checking out Daredevil: Yellow for yourself!

20 Comments

Posted in intellectual property, legal ethics

Announcing The Law of Superheroes!

Posted on May 10, 2012 | 6 comments

We are excited to announce The Law of Superheroes, a new book inspired by Law and the Multiverse!  The book features thirteen chapters covering a wide range of legal topics, including new and updated material from the blog as well as dozens of comic book illustrations.  The Law of Superheroes will be published on October 11, 2012 by Gotham Books, a division of Penguin.  You can pre-order copies from any of these booksellers:

Amazon

Barnes & Noble

Books-A-Million

Indiebound

iTunes iBookstore

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Posted in the book

Law and the Multiverse CLE

Posted on May 10, 2012 | 2 comments

For the attorneys in the audience: Thomson West has invited us back to give two new CLE webcasts!  On May 23rd we will be presenting a program on constitutional law issues.  Topics include warrantless GPS tracking, warrantless use of advanced surveillance equipment, mask laws and the First Amendment, civil rights issues, and double jeopardy.  And on May 30th there will be a program on real-world superheroes and criminal law.  Be sure to use promo code MULTIVERSE30 for a 30% discount!

Our programs from last year on ethics and torts are also still available online.

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Posted in conventions and talks

The Avengers: Arc Reactors and NYC Zoning Laws

Posted on May 9, 2012 | 26 comments

For today’s post I’m going to talk about a serious legal issue raised by The Avengers, the issue everyone has been talking about since the movie debuted.  Although it was only hinted at in the movie, I know I can’t wait to see it addressed more fully in Iron Man 3 or even The Avengers 2.  That’s right, I’m talking about how Pepper Potts is going to handle the zoning permits for the buildings powered by arc reactors.

Okay, I may have exaggerated the significance of the issue a wee bit, but it’s still an interesting question.  In fact, Stark Tower raises a host of land use law questions, and the arc reactor is just one of them.  For simplicity, we’re going to assume that Stark Tower was constructed recently (rather than a rehab of a prior building) and had to comply with modern land use laws.

I. Stark Tower’s Zoning District

As it happens, we know exactly where Stark Tower is meant to be located within New York: it’s built on the site of the MetLife building at 200 Park Ave.

(Update: Early on some sources indicated that it was built on the site of the MetLife building and now others indicate that Stark built the tower on top of the preexisting building.  This doesn’t change the analysis.  Whatever the zoning status of the MetLife building, the construction of Stark Tower was likely a “structural alteration” of the building that would disallow a grandfathered nonconforming use. It certainly exceeded the kind of “repair or incidental alteration” that would preserve the nonconforming use.)

Here’s a zoning map of the area.  As you can see, it’s in a C5-3 commercial district in the Special Midtown District, which means Stark Tower has a maximum Floor Area Ratio of 18 (3 of that comes from the special district).  Basically this means that if the building takes up its entire lot then it can only have 18 full-size floors (or the equivalent).  There are various ways to increase the FAR, such as having a public plaza on the lot.  The sloped, tapering structure of Stark Tower means that it can have more floors without exceeding its FAR because the upper floors are much smaller than the lower ones.  Given the size of the 200 Park Ave lot, it’s believable that Stark Tower could be that tall, given its shape and the various means of increasing the FAR.

Stark mentions that the top ten floors (excluding his personal penthouse, presumably) are “all R&D.”  Is that allowed in a C5-3?

Apart from residential uses, the permitted commercial uses in a C5 are use groups 5 (hotels), 6, 9 and 10 (retail shops and business services) and 11 (custom manufacturing).  Unfortunately, research and development is not allowed as a permitted or conditional use in this district.  In fact, scientific research and development is specifically allowed in a C6 as a conditional use, which requires a special permit and approval from the City Planning Commission.

So Stark needs some kind of special dispensation.  How can he get it?  There are many possible ways.

II. Getting Around Zoning Laws

He could argue that the zoning regulation is unconstitutional, improperly enacted, or unauthorized by the City’s charter, or he could lobby for an amendment to the regulation.  I don’t know of any reason the regulation in question would be unconstitutional or otherwise invalid, so we won’t go into any more detail there.  If New York is anything like cities that I’m more familiar with, the most likely approach is an amendment to the zoning regulations.

A. Rezoning

Rather than seek a blanket change to the C5-3 district, Stark could propose a zoning amendment to change 200 Park Ave to C6.  Zoning amendments are subject to the Uniform Land Use Review Procedure.  As described by the Department of City Planning, “The ULURP is the public review process, mandated by the City Charter, for all pro­posed zoning map amendments … . ULURP sets forth a time frame and other requirements for public participation at the Community Board, Borough Board and Borough President levels, and for the public hearings and determinations of the Community Boards, Borough Presidents, City Planning Commission (CPC) and City Council.”

So getting a zoning amendment through will require the cooperation of at least five different government entities, plus the public.  Luckily, changing from a C5 to a C6 isn’t too dramatic a shift.  It’s not like Stark wants to build a chemical plant  in the middle of Manhattan.

B. Variance

Another alternative is to seek a variance.  “A variance is an authorization for a landowner to engage in construction or maintenance of a building or structure, or to establish and maintain a use of the land which is  prohibited by a zoning ordinance. It is a right granted by a zoning board of appeals pursuant to power vested in such an administrative body by statute or ordinance, and provides a form of administrative relief from the strict application of zoning regulations.”  Patricia E. Salkin, 2 N.Y. Zoning Law & Prac. § 29:1.  In particular, Stark would be seeking a use variance, since he wants to use the land in a way prohibited by the zoning ordinance.

In New York City, the zoning board of appeals is the New York Board of Standards and Appeals.  The test for use variances is defined by statute in N.Y. General City Law § 81-b:

In order to prove such unnecessary hardship the applicant shall demonstrate to the board of appeals that for each and every permitted use under the zoning regulations for the particular district where the property is located:
(i) the applicant cannot realize a reasonable return, provided that lack of return is substantial as demonstrated by competent financial evidence;
(ii) the alleged hardship relating to the property in question is unique, and does not apply to a substantial portion of the district or neighborhood;
(iii) the requested use variance, if granted, will not alter the essential character of the neighborhood; and
(iv) the alleged hardship has not been self-created.

This is kind of a tall order, especially the first two requirements.  Stark would have to show that none of the permitted uses of the property would allow him to realize a reasonable return and that for some reason only this particular location is problematic in that way.  It’s pretty hard to buy the idea that Stark couldn’t make decent money off of an office tower in Midtown Manhattan unless he can put ten floors of R&D on it.  But I suppose clever attorneys and experts could craft an argument for it.  Further, Stark would need to show that the whatever unique hardship he is relying on as justifying the variance is not shared by a significant amount of the surrounding properties.

And what if the BSA says no?  Well, then Stark could take the issue to court.  “Actions of the zoning board of appeals are subject to review by the courts, to determine whether the board acted within the limits of its jurisdiction, whether the standards imposed by statute and ordinance were respected, whether the procedural rights of the litigants were observed, and whether the board was chargeable with any abuse of its discretion.”  2 N.Y. Zoning Law & Prac. § 28:30.

A court will not lightly disturb a board’s decision not to grant a variance, however.  “Since the zoning board is given discretion in these matters, the court’s function is limited, and a board determination may not be set aside in the absence of illegality, arbitrariness or abuse of discretion. The board’s determination will be sustained if it has a rational basis and is supported by substantial evidence.” Consolidated Edison Co. v. Hoffman, 43 N.Y.2d 598, 608 (1978).  This kind of deference is common with administrative agencies.  After all, what’s the point of an expert agency if a court can easily overturn its decisions?

III. So About Those Arc Reactors

So far I’ve been talking about the research & development floors.  But what about  the arc reactors?  Well, that’s tricky because it’s not clear just where the reactor is located.  Is the reactor in the building or is it part of the device Stark attaches to the undersea cable?  If the reactor isn’t in the building then that solves quite a few zoning issues.  If it’s not, well….it’s complicated.

Electric power plants aren’t allowed in any kind of commercial district.  Instead, they’re allowed in certain manufacturing districts, New York’s version of industrial zones.  However, just this month the City has adopted new regulations making it much easier for building owners to install solar and wind power generation equipment and even to provide power to adjacent buildings, so long as utility company requirements and other regulations are complied with.  In a world where the arc reactor exists and has been proven safe, it’s entirely believable that the City would allow on-site power generation by arc reactors though it would likely require a text amendment to the current ordinances.

IV. Conclusion

The arc reactors and Stark Tower pose some interesting land use questions, but it’s nothing that couldn’t be resolved with straightforward rezoning or a variance.  Honestly, getting FAA approval for his suit would be a much bigger headache.  So while Pepper Potts may indeed have to do some work to get the next few buildings approved, it’s not far-fetched from a legal perspective.

26 Comments

Posted in administrative law, movies, property law

A Grimm Case of Intestate Succession

Posted on May 4, 2012 | 11 comments

Today’s episode of Grimm (“Happily Ever Aftermath“) involves a murder apparently motivated by money, specifically an inheritance.  But, as any law student who has taken a trusts & estates course can tell you, the devil is in the details.  Spoilers ahead!

Continue reading →

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Posted in estate law, television

Administrative News

Posted on May 4, 2012 | Leave a comment

In this case that means site administration, not administrative law.  We recently switched hosting providers in order to enable some new site features in the future, and that has a couple of side-effects.  First, the site may have been unavailable for a brief period during the switchover.  If you had trouble accessing the site recently, that’s why.  Second, some of the little avatar icons may change.  I know mine did, but rest assured it’s actually me and not some mustachioed evil twin.  Apart from that, everything should work the same as it always has.  If not, please let us know in the comments or by email.

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Posted in Uncategorized

Mayor Jameson’s Eminent Domain Problem

Posted on May 2, 2012 | 30 comments

We’ve picked on Spider-Man a bit recently, so in interests of fairness we’re going to pick on J. Jonah Jameson, who is currently the mayor of New York in the Marvel Universe.  Recently, Jameson has focused his ire on Horizon Labs, a research and development company that happens to employ Peter Parker in his capacity as a scientist.

The particular issue in today’s post comes from a question from Christopher, who writes:

[In Amazing Spider-Man #682] Parker and other Horizon Labs employees witness a confrontation between HL owner Max Modell and Mayor Jameson in which the Mayor says “As Mayor of this city, I am ordering all of you to vacate these premises immediately!” He has arrived to bully HL into shutting down and gives various reasons [, listed below]. Later in issue 683 he comes back with “Chief Pratchett” presumably some ranking officer in the NYPD and shuts off the company’s power supply: “You’re not getting a single amp out of Con Ed!” He then orders “Chief Pratchett, have your men clear the building, after that, no one gets in or out, understood?” Chief Pratchett accedes to the request but we cut away from the confrontation and don’t return this issue.

This is obviously an ongoing storyline which will play out over another 4/5 issues but surely Jameson is overstepping his authority to clear out a private building without any kind of court order. And isn’t Pratchett wrong to comply?

At various points in #682 and #683 Jameson gives some reasons for wanting Horizon Labs shut down, including:

1. “This man has access to spider-jammers that could control Spider-man! Yet he refuses to turn them over to the city!” (see Spider-Island 667-673)
2. “One of your people built a time machine that did destroy the city.” (678-679)
3. “And now I hear you have a monster holed up here?!” (679.1 The “monster” is Dr. Morbius)
4. “Two days ago, you almost got my son killed.” (680-681)

So, is any of this sufficient to justify cutting power and ordering the police to clear the building?

As Horizon’s lawyer, who was present for the first confrontation with Jameson, argues, probably not.  The spider-jammers have been destroyed, the EPA cleared Horizon regarding the alternate universe incident (who knew that the EPA had jurisdiction over time travel and alternate futures?), and Dr. Morbius isn’t a monster but rather suffers from a poorly-understood medical condition.  Jameson isn’t satisfied and vows to return, which leads to the second confrontation (the one with the power-cutting and the police).

But suppose Jameson’s allegations were correct.  Could the mayor really do that?  And if not, what is the potential liability for Pratchett and the other police officers?

I. Eminent Domain

The most likely source of Jameson’s power to order Horizon shut down is eminent domain, which allows the taking of private property for public use in exchange for just compensation.  New York has a statute, the New York Eminent Domain Procedure Law, that is just what it sounds like.  It sets out “the exclusive procedure by which property shall be acquired by exercise of the power of eminent domain in New York state.”  N.Y. Eminent Domain Proc. Law § 101.  Unfortunately for Jameson, it doesn’t look like he has complied with the procedures.

A. Public Hearing

Ordinarily the eminent domain process begins with a public hearing.  § 201.  However, there are some exemptions, one of which is when “because of an emergency situation the public interest will be endangered by any delay caused by the public hearing requirement in this article.” § 206(D).  I suppose it’s arguable that Horizon presents such an extreme danger to the city that a public hearing can be avoided.

However, Horizon labs could file suit to challenge the City’s determination that it is exempt under § 206(D).  “Where, however, a condemnor proceeds under one of the exemptions provided in EDPL 206, and therefore claims that it is not required to comply with the foregoing notice, hearing, and determination requirements, a condemnee may, unless otherwise provided by statute, challenge the applicability of the claimed exemption in the Supreme Court … .” Steel Los III, LP v. Power Authority of N.Y., 33 A.D.3d 990, 990-91 (2006).  The reviewing court would almost certainly issue a temporary restraining order or preliminary injunction preventing the City from shutting down Horizon until it had reviewed the case.  Given that Horizon appears to be represented by competent legal counsel, I think it’s likely Horizon would go to court once Jameson threatened to take the building.

B. Negotiations

The eminent domain law also requires the condemnor (i.e. the City) to “make every reasonable and expeditious effort to justly compensate persons for such real property by negotiation and agreement” “at all stages prior to or subsequent to an acquisition by eminent domain.” § 301.  This includes making at least one written offer representing the just compensation for the property.  § 303.

In this case, we don’t see any discussion of compensation, much less negotiation or a written offer.  Instead, Jameson seems to think he can simply take the building outright.  There is a lot more to eminent domain, but I think that’s enough to establish that Jameson wasn’t doing it right.

II. Consequences

Assuming the City can’t legally take the building through eminent domain, what are the possible consequences for cutting power and forcibly evacuating the building?  The most likely result is a § 1983 suit alleging a violation of Horizon’s constitutional rights, specifically their rights under the Fourth Amendment.  If successful, this could result in an award of actual damages, punitive damages, and attorney’s fees.  Given the expensive equipment and experiments that may have been lost or damaged by the sudden loss of power, that could be a pretty significant bill for the city.

Importantly, the City and officers could claim qualified immunity under § 1983.  “The doctrine of qualified immunity protects government officials from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.”  Pearson v. Callahan, 555 U.S. 223, 231 (2009).  “The protection of qualified immunity applies regardless of whether the government official’s error is a mistake of law, a mistake of fact, or a mistake based on mixed questions of law and fact.”  Id.

So, for example, if the officers were told that the City had a court order to shut down Horizon, then the officers might not be liable because they were operating under a mistake of fact.  Jameson, however, clearly knew what was up, and I think it would be hard for him to claim qualified immunity, at least if he thought he was exercising the power of eminent domain, since a reasonable person would have known about the proper procedure for doing so.

III. Conclusion

There are other possible ways that the City could try to shut down Horizon (e.g. alleging violations of the law and arresting everyone or suing the company), but the way it’s depicted in the comics really suggests eminent domain to me.  I think it’s reasonable to assume that if the City had a good claim to criminal or illegal activity then it would have simply called in the cops or sent in the lawyers.  Jameson’s approach is so vague that eminent domain is the only thing that I can think of that fits the bill.  Alas, his failure to follow proper procedures is likely to get him (and the City) sued.

30 Comments

Posted in civil rights, constitutional law, mailbag, property law, Spider-Man

The Day Superman Broke the Law?

Posted on April 25, 2012 | 10 comments

(Note from May 8, 2020: Subculture for the Cultured is no longer online, so the links in this post have been changed to use the Internet Archive Wayback Machine.)

Fantom Comics has just launched a new site for comics commentary and criticism called Subculture for the Cultured, and we’re proud to announce that we will be contributing a monthly column alongside Ecocomics, The Patron Saint of Superheroes, and many other fantastic blogs.  Our inaugural column discusses a classic Silver Age Superman story, “The Day Superman Broke the Law” (reprinted in Showcase Presents: Superman, Vol. 3)  After the surprisingly strong reader reaction to our recent suggestion that Peter Parker may not have been entirely on the level in his dealings with the Daily Bugle, we think this one will go over a bit better.  So head over to SftC and check it out!

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Posted in criminal law, sftc columns, Superman

Peter Parker, Con Artist?

Posted on April 19, 2012 | 126 comments

The inspiration for today’s post comes from Greg, who asks:

During the Civil War storyline, for a brief time Peter Parker “outed” himself as Spider-Man. … J. Jonah Jameson wanted to sue Peter for fraud because he sold pictures of Spider-Man to the Daily Bugle under  what [Jameson] claimed were false pretenses. My question is, would that hold any water?

The facts for this question come from Amazing Spider-Man #533 (which you can buy reprinted in The Amazing Spider-Man: Civil War).  Specifically, a lawyer for the Bugle tells Parker that the Bugle is suing him for “misrepresentation, fraud, breach of contract and several other related charges” and they are seeking both compensatory and punitive damages of at least five million dollars.  So, how worried should Parker be about this?  Pretty worried, in our estimation.  Let’s take a look at each charge in turn.

(Before we get started, we’ll mention that there would have to have been a contract between Parker and the Bugle for the photographs because, as an independent contractor, Parker owned the copyright in his photos and would need to license or sell the copyright to the Bugle via a contract before they could be printed.  See this post for more on that.)

I. Misrepresentation

Because both breach of contract and fraud are also listed, we think that misrepresentation is being used in the contract law sense rather than the tort law sense.  In the contract law sense, misrepresentation is also known as fraud in the inducement (i.e. a misrepresentation made in order to induce the other party to enter into a contract).  This should not be confused with the tort of fraud, which we’ll get to shortly.

In New York, “To recover under a theory of fraudulent inducement, the plaintiff must prove: (1) misrepresentation of a material fact; (2) falsity of the representation; (3) scienter; (4) reasonable reliance; and (5) damages.” Creative Waste Mgmt., Inc. v. Capitol Env. Servs., Inc., 429 F.Supp.2d 582, 607 (S.D.N.Y. 2006).  “Scienter” is a fancy legal word for “knowledge,” and in this case means the defendant has to make the misrepresentation knowingly.

So, has the Bugle likely got a case for fraud in the inducement here?  Let’s go through the elements.

(1) Misrepresentation of a material fact.

Right off the bat we run into a small snag: did Parker ever explicitly claim that the photos were unstaged photos of a different person?  Maybe, maybe not.  But even if he didn’t, his silence may be enough.

“[W]hen dealing with a claim of fraud based on material omissions, it is settled that a duty to disclose arises only when one party has information that the other party is entitled to know because of a fiduciary or other similar relation of trust and confidence between them.” Creative, 429 F.Supp.2d at 607.  Such a relation can be imputed by the “special facts doctrine,” under which “the courts impose a duty on a party with superior knowledge of essential facts to disclose those facts where nondisclosure would make the transaction inherently unfair. For this doctrine to be applicable, the plaintiff must prove that (1) one party has superior knowledge of certain information; (2) that information is not readily available to the other party; and (3) the first party knows that the second party is acting on the basis of mistaken knowledge.” Id.

Clearly, Parker had superior knowledge of Spider-Man’s identity.  Jameson had no clue who Spider-Man was and certainly didn’t suspect Parker.  The information was not readily available, as demonstrated by the fact that quite a few people, Jameson included, had tried and failed to determine Spider-Man’s identity.  And it can reasonably be assumed that Parker knew that Jameson wouldn’t have bought the photos if he knew they were staged and being sold to him by Spider-Man.

So Parker’s misrepresentation by omission will suffice.  It’s also definitely a material misrepresentation (i.e. it would have made a difference in whether a contract was agreed to) because Jameson would not have bought the photos if he knew the truth.

(2) falsity of the representation

This one is pretty easy.  At the very least the photos were falsely presented as genuine news photographs and not a semi-staged photo-op for Spider-Man.

(3) scienter

No question here; Parker definitely knew he wasn’t being honest about the photographs.

(4) reasonable reliance

Another easy one.  It was entirely reasonable for Jameson to believe that Parker was not Spider-Man and that the photos were genuine.  Unlike some superheroes (*cough* Superman *cough*), Spider-Man does a believable job of keeping his identity secret, and there was nothing incredible about the photos.

(5) damages

This one is also straightforward.  The Bugle paid Parker money for the photos, per the contract, and so there are damages.

So that’s misrepresentation established.  What does it get the Bugle?  The likely result is rescission of the contract and restitution of any money paid to Parker for the photographs.  So the Bugle gets its money back and no longer owes Parker anything under the contract.

II. Breach of Contract

This one is a little harder to write about, since we don’t know what the terms of the contract were.  It’s extremely likely, however, that the contract included a representations and warranties section in which Parker affirmatively represented that the photos were genuine, unmodified, unstaged, etc.  By trying to pass off the (effectively) staged photos, Parker would have breached the contract.

The practical upshot of the breach of contract claim is the remedy.  Breach of contract remedies are a little complicated, but the main damages here will be the loss of value due to lost reputation.  What it definitely doesn’t get the Bugle is punitive damages, as damages in contract cases are almost always compensatory. Even in cases of a fraudulent breach of contract, punitive damages are not available unless the fraud was “malicious, vindictive or morally reprehensible [demonstrating the] intent of wanton and reckless behavior.” Reinah Development Corp. v. Kaaterskill Hotel Corp., 59 N.Y.2d 482, 487 (1983).  Parker was not trying to scam the Bugle, so we don’t think his conduct rises to that level.

Because the damage due to lost reputation is so hard to measure, it’s possible that Parker’s contract with the Bugle included a liquidated damages clause.  A liquidated damages clause lets the parties agree to a particular amount of damages in advance.  Parker could thus be on the hook for whatever that amount is times the number of photos the Bugle printed (or, less likely, the number it purchased).

III. Fraud

“Generally, in a claim for fraudulent misrepresentation, a plaintiff must allege a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury.” Mandarin Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 178 (2011).  As you can see, that’s remarkably similar to the elements of fraud in the inducement.  The difference in this case is in the remedy.  Whereas the remedy for fraud in the inducement is to undo the contract, the remedy for tortious fraud covers all of the damages stemming from the Bugle‘s reliance on Parker’s misrepresentations and omissions.

But wait a minute, that sounds a lot like the breach of contract damages.  And that’s right: the damages for fraud would be essentially identical to the damages for breaching the representations clause of the contract.  But you don’t get to recover twice for the same injury, so even if the Bugle proved both claims it wouldn’t get twice as much money.  So why bother suing for both?  First, because it might not be able to prove both claims and second, because the contract might not include a representations section (though this is unlikely)

IV. Conclusion

All told, Parker is looking at a pretty serious lawsuit.  As well he should, since passing off staged or manipulated photographs is a serious journalistic no-no, even if it’s done for the best of reasons.

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Posted in contracts, mailbag, Spider-Man, torts