Category Archives: contracts

Superhero Corporations II: Piercing the Corporate Veil

Posted on October 14, 2011 by | 13 comments

So a couple of days ago we talked about superhero corporations and respondeat superior. This time we’re taking a look at the opposite situation, where corporate actions can result in personal liability for the owners of a corporation.

I. Basic Doctrine

This is significantly less common than respondeat superior liability, as the whole point of corporate entities is limited liability. Corporations were invented to permit investors in trade missions to limit their liability to the money they had actually invested—ships were lost pretty frequently, so this was a big deal. Without the joint stock company, the Age of Exploration just wouldn’t have happened. These let the risk of investment be spread not only among multiple investors, but across multiple voyages. So while a particular ship may go down with all hands, but not only can the creditors not proceed directly against the investors for anything owed, but the debtors can use the profits of another voyage they’ve funded to make good the debt. Everybody’s happy.

The basic point here is that while it’s pretty easy for a company to be liable for the actions of its employees, it’s very difficult for an executive or owner to be personally liable for the actions of the corporation. When that happens, it’s called “piercing the corporate veil”. In US law, there are a series of factors that courts look at to determine whether the veil should be pierced. This isn’t a checklist, and it’s not the kind of thing where if you have more than half of the factors you win. Even a single factor can result in piercing if it’s bad enough, particularly when we’re talking about undercapitalization, i.e. when the investor hasn’t actually put enough money into the corporate entity to cover its debts. The courts do recognize that the point of corporations is to limit liability, but they aren’t very happy with people who create corporations solely for that purpose, particularly when the risk to be avoided is less just the ups and downs of business than avoidance of a known debt. The law lets you limit your liability for business purposes, but it won’t let you play games.

II. Superheroes and Piercing the Corporate Veil

So then, might it be that actions of various superhero corporations could result in personal liability for the superheroes that own them? Again, this is a fact-intensive analysis. But going with the examples above, we can again see something of a spectrum.

Remember, now we’re talking about something the corporation does, not something that the superheroes do as a result of their connection to the corporation. Products liability is perhaps the most obvious example, but it can come up with contracts, too. Basically, we’re now thinking about a situation in which the corporation, as a corporation, has gotten itself into trouble, completely independent of any superhero activities.

First, Batman. Here it seems very unlikely that the actions of Wayne Industries could result in personal liability for Wayne himself. Again, we’re talking about a multinational conglomerate with legitimate business operations in multiple continents, most of which have absolutely nothing to do with Wayne personally. The corporation is certainly well capitalized, and Wayne doesn’t appear to be doing much in the way of co-mingling of funds, though he may be guilty of siphoning away corporate assets for personal purposes as part of his Batman sideline. Still, the facts would probably have to be related to Batman in particular for that last one to matter, in which case Wayne would be personally liable anyway.

Tony Stark seems to be in almost the same position. Here we’ve got a major corporation, and though his identity as Iron Man is well-known, Stark Industries appears to be a healthy, well-run defense contractor with little in the way of corporate irregularities. Piercing again seems unlikely.

But just as with respondeat superior, the Fantastic Four seem a lot more susceptible to this. Fantastic Four, Inc. exists almost solely to let them operate as superheroes, and it doesn’t do all that much aside from licensing Reed’s patents and manufacturing goods based on them. There’s also a sense that personal and corporate assets may not be kept very distinct, in that while both Wayne and Stark are said to be independently wealthy apart from their role in the corporation, the FF’s money seems to be entirely based on the corporation. Wayne and Stark both own mansions, boats, sports cars, etc., and frequently show off their personal wealth. The FF live a lot more modestly and while they really don’t seem to worry about money, a lot of their material comfort really does seem to be linked directly to their corporate activities. So if FF Inc. is sued for products liability, this isn’t going to look good. It’s entirely possible that Reed and potentially the rest of the family could be on the hook personally.

III. Conclusion

Piercing the corporate veil is strongly disfavored by the courts, and plaintiffs really need to show that the corporate investors/owners are trying to pull off some kind of manifest injustice before the courts are going to put the investors/owners on the hook personally. But it can happen, particularly in situations like the Fantastic Four where the corporation is basically just a front for personal activities.  With Wayne and Stark, by contrast, it’s unlikely to happen unless Wayne or Stark personally ordered or oversaw something seriously illegal.

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Posted in Batman, contracts, corporations, Fantastic Four, Iron Man, torts

Castle: “Head Case”

Posted on October 9, 2011 by | 26 comments

This week’s Castle introduces the issue of cryonics, i.e. the practice of “preserving” human remains in liquid nitrogen under the theory that identity and personality are simply a product of cellular structures. The thinking is that a person who is “dead” by standard definitions may someday be revivable under the right circumstances.  Although this episode didn’t have much to do with superheroes, we got some questions from readers about it. Spoilers inside. Continue reading →

26 Comments

Posted in constitutional law, contracts, corporations, television

Cybernetics, Contracts, and Specific Performance

Posted on September 19, 2011 by | 37 comments

Brett asks a question inspired by Deus Ex: Human Revolution, the recently-released prequel to the fantastic Deus Ex. The question is whether an employment contract can include a requirement that the employee be enhanced with cybernetic implants should they be necessary to perform the functions of one’s job. This question has implications beyond Deus Ex, such as the classic 1970s show The Six Million Dollar Man, and the RoboCop series, so rather than a mailbag entry, this one’s going to get a proper post of its own.

I. Employment and Employment Contracts

Let’s start with the first question here: what is the nature of the employment relationship? In general, in the US anyway, employment is “at will“. The basic idea here is that there is no contractual relationship between employer and employee beyond the employee’s obligation to do the work required of him or her and the employer to pay the agreed-upon wages for said work. So, for example, while an employer may not retroactively reduce an employee’s salary, there is generally no reason salaries may not be cut or employees fired at the employer’s sole discretion. This most frequently comes up in the wrongful termination context. A lot of people think that there are laws preventing them from getting fired under unfair circumstances. This is usually not the case. Unless the employer is violating a specific statute or constitutional provision, e.g. discriminating on the basis of race, gender, religion, or national origin, employees can, for the most part, be fired for any reason or no reason at all.

But all of that changes where there is an employment contract. Employers tend to avoid entering into employment contracts where at all possible, as this gives them the freedom to rapidly lay off or replace people if they need to. Union workers are the most numerous example of contractual employees, and most of their rights are really found in the provisions of the contracts they secure through collective bargaining rather than any law. But the fact remains that employers and employees can and sometimes do enter into employment contracts, and like in almost all other cases, there is very little limit to what terms can go in there (non-compete agreements are a notable exception). The courts are very, very reluctant to restrict the ability of private parties to structure agreements between themselves.

II. Employment Contracts and Cybernetics

The question then becomes whether employers can include the requirement that an employee receive cybernetic implants as a condition of employment. This will probably depend on the nature of the requirement. The significant feature here is less the kind of implants (though anything which is likely to expose the employee to unreasonable danger is going to be problematic) than the circumstances of the implants.

A. Implants Required Before Employment

On one hand, say there’s an employer that needs someone to do a very specific job, and that job requires the use of cybernetic implants. Right now there aren’t a lot of implants that augment typical human abilities, but the situation gets a lot more plausible if we remove the mind/machine interface part of it. We’ve already got prototypes of electronic tattoos which can monitor vital signs. How long will it be before someone adds GPS functionality or communications hardware? In any case, if the details of the implant are made clear before the employment begins, it seems likely that such a thing would be permissible, given certain restrictions.

First of all, the employer would probably be required to pay for everything related to the implant, even if that wasn’t a provision of the contract. Current workers compensation laws require employers to pay for workplace injuries and diseases regardless of fault, and characterizing the medical care needed to implant, monitor, and remove cybernetics would certainly seem to count, not to mention the expense of treating infections and other complications. Basically, if anything goes remotely wrong with an implant, the employer is going to have to pay for it. This is actually probably a pretty compelling reason implants aren’t likely to be commonly required of employees for quite some time.

Second, employment-related implants are bound to generate a rather frenetic round of litigation about whether having an implant means you are effectively on company time round the clock. The plaintiff bar would certainly like this, as it would expose employers to liability in far more cases than they are now, and this means bigger pockets in more cases. But courts aren’t that dumb, and the likely outcome is that unless the employee is actively engaged in the work of the employer, simply passively carrying an implant does not make one’s activities employment-related any more than carrying a key to the office on one’s key chain.

But that probably means that employers won’t be able to use implants to control the activities of their employees when they’re off the clock. Employers would probably like to be able to do this more than they can now, but they rightly don’t try to most of the time, because the ability to control implies the duty to exercise reasonable care, and employers don’t really want to be liable for the actions of their employees any more than they already are. All that by way of saying that employers that require implants will probably not be able to use the presence of those implants to exert all that much more control over their employees, by contract or otherwise, than they do already with things like cell phones and pagers.

B. Implants Required After Employment

Then there’s a slightly different situation. What if an employer decides that a current employee has to get implanted? This is a bit different, because rather than defining the terms of a relationship before it starts, now we’re changing horses in midstream, as it were.

Whether or not an employer can do this is going to depend very heavily on whether or not the employee has a contract. If they do, the employer isn’t likely to be able to add this as an additional term until it’s time to renew that contract. Terms cannot be added to contracts without the consent of both parties, and additional terms require additional consideration, e.g. additional wages or other benefits. But if there isn’t a contract, the employer might well be able to say that anyone who wants a job tomorrow had better sign up for the procedure. This is, of course, assuming that legislatures don’t enact laws restricting employers’ ability to do just that, and this actually seems like a sensational enough issue to provoke something like that.

C. Implants Implied Before But Installed After Employment

Now we get to the actual situation in the stories mentioned in the intro: an employment contract that does not require implants before employment begins, but permits the employer to add them in at a later date. This gets a little tricky, especially when, as in all of the stories in this list, the employee does not give consent at the time of the surgery. Now we run into a little issue called “specific performance.”  There are generally two possible remedies for a breach of contract: money, and specific performance. Money is just that: money. The injured side calculates the damages they have suffered, and the other side pays, under the terms of the contract. But the court can also order specific performance, i.e. requiring the breaching side to do what the contract said they were supposed to do. For example, if the contract was for the sale of a unique item such as a painting, then the painting would need to be delivered.

The thing is, specific performance is disfavored as a remedy in US jurisdictions. The judiciary has pretty much taken as gospel the idea that it’s more efficient to just pay the money and be done with it than to force two parties who probably don’t like each other all that much to finish whatever transaction they had in mind. So it’s only in rare situations, particularly in real estate contracts or contracts for the sale of one-of-a-kind items, that specific performance will be awarded.

But more to the point, specific performance is unconstitutional in employment contracts. The Thirteenth Amendment abolished “involuntary servitude,” and the Supreme Court interpreted that to include forcing people to perform under the terms of an employment contract in Clyatt v. United States, 197 U.S. 207 (1905). So if an employment contract had, as one of its terms, that the employer might require that the employee receive implants at some point down the road, they cannot actually make the employee do it. They can fire an employee that refuses, and they’d be entitled to whatever other remedies are included in the contract, but the courts would not require that the employee submit to implantation.

So the situations where the employee is injured (or killed) and then implanted while unconscious are tricky. First of all, there’s the unrelated issue of whether or not an employer can act to give consent to medical treatment when an employee is unconscious. Forms for this kind of thing already exist, and while it would certainly be highly unusual for an employer to be given this authority, there’s no law that says it couldn’t happen. But consent to life saving surgery is one thing, and consent to life altering surgery is something else entirely. Medical providers might well balk at going ahead with something like bionic enhancement without the express permission of the patient. So the employee would probably need to sign a contract to the effect that he gives the employer permission to authorize the implantation of specific bionic augments before surgery could proceed.

D. Termination of the Employment Relationship

What if an employee who has been implanted decides to quit? Does the employer get the implants back? If this can be done without endangering the life of the employee or seriously injuring them, it’s entirely possible, especially if there was an agreement stipulating that the implants were company property. A court will not force an employee to continue working for an employer if they do not want to, but a court will probably also permit the employer to recover its property in the employee, provided said property can be retrieved without seriously harming the employee, as that would also look a lot like “indentured servitude” as well. “You can quit, but you can’t walk afterwards” isn’t really something a court is going to go for. Of course, given that surgery is pretty expensive, the implants would probably need to be both reusable and fairly expensive for the employer to want to bother. That or highly classified, highly dangerous, or some other factor which would motivate an employer to recover them regardless of cost. But the fact remains that if a particular implant is so integrated into an employee’s body that removing it would kill them or permanently disable them, the employee can probably just quit, and the employer would need to rely on whatever penalties are in the contract, remembering that if the penalties are too severe, a court might decide that they amount to indentured servitude and invalidate them.

III. Conclusion

In short, it’s possible that an employer could make implants a condition of employment, but they’d have to be careful about how that was structured and would really need to ensure that they get the right permissions before hand. But the employee would always have the option to quit, because as a result of the Supreme Court’s Thirteenth Amendment jurisprudence, the courts will not force anyone to work for anyone else.

That’s only focusing on the employment and contract implications of cybernetics. The devices themselves are also a fertile ground of inquiry, but we’ll take a look at that another time.

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Posted in constitutional law, contracts, labor law, video games

Batman: No Man’s Land, Part 1

Posted on August 10, 2011 by | 9 comments

Our first post on the No Man’s Land story arc is a short one dealing with an issue of contract law.  Spoilers will be part and parcel of our discussion of this series, but it came out in 1999, so we feel the statute of limitations has run.

I. The Setup

After an earthquake destroys much of Gotham, Batman is feeling understandably overwhelmed.  In order to prevent some of the looting and recruit some assistance, he appeals to Oswald Cobblepot’s self-interest: help me out because the sooner the city is up and running the sooner you can get back to being a crime boss.  The alternative is to get on Batman’s bad side, so the Penguin joins up.  We later learn (in Batman Chronicles #12) that this arrangement was enforced via a contract signed by the various thugs and mobsters.  That contract is the subject of this post.

II. The Contract

Unfortunately, we only get a good look at two of the contract’s nine clauses, and parts of them are obscured (our guesses are given in brackets):

ITEM EIGHT: In addition to the clause against looting (above) the undersigned hereby agrees to rob no one of faith.  Actions will be grounded in logic, but during the course of this mission, nothing will be stated nor implied to any person or persons with the express intent of crushing spirit or will.  The injuries encountered in an undertaking of this magnitude will not be limited to those of the body.  This [shall] be kept in mind at all times.

ITEM NINE: No guns or firearms of any kind shall be utilized [or] displayed.  The undersigned hereby acknowledges [that if he or she is] caught bringing firearms into Gotham City in the [course] of this mission, the undersigned will be prosecuted [to the] full extent of the law.

The meaning of “rob no one of faith” is apparently not to refrain from stealing from priests and nuns but rather not to steal someone’s sense of hope or faith that things will improve.  The clause comes up when a thug feels compelled to lie to a kid who asks “Were you guys sent by Batman?” (the thug says yes, though he does not know this to be the case).

This a well-intentioned clause, but unfortunately it’s pretty poorly drafted.  The principle faults are that it is vague, unnecessarily restrictive in parts, and yet also not restrictive enough in other parts.  (Item Nine is basically fine except that we would add “while carrying out the Mission” to the end of the first sentence.)

“Faith,” “spirit,” and “will” are all too vague.  Something like “refrain from inflicting emotional distress” is better defined legally and serves essentially the same purpose.

“The express intent of crushing spirit or will” means that the person would have to actually express their intent (e.g. saying something like “I’m going to go be needlessly cruel to that little kid.”).   That’s much more restrictive than necessary.  We want the thugs to do more than refrain from intentionally distressing people.  They should also take reasonable care not to do so accidentally.

“This shall be kept in mind at all times” is not restrictive enough.  Someone can happily keep in mind the fact that the earthquake survivors may be psychologically injured while negligently or recklessly rubbing salt in the wound.  It would be better if they had an affirmative duty to help, at least to a reasonable extent.

Instead, we might offer something like this:

ITEM EIGHT: In addition to the clause against looting (above) the undersigned hereby agrees not to intentionally, recklessly, or negligently inflict emotional distress upon anyone in the course of carrying out the Mission.  The undersigned shall act rationally while carrying out the Mission except as necessary in order to avoid inflicting emotional distress.  The undersigned shall make reasonable efforts to relieve the physical as well as emotional and psychological injuries of Survivors encountered while carrying out the Mission.

Of course, both Survivors and the Mission should be defined elsewhere in the contract.  Presumably the mission already is, but we can’t say for sure.

Another thing we would do differently: we wouldn’t stamp it with “From the desk of Bruce Wayne.”  Given that it was Batman that talked the Penguin into cooperating, it seems monumentally stupid to then use Bruce Wayne’s letterhead on the contracts.  It beggars belief that no one put two and two together.

A final general contract drafting note: there had better be an indemnification clause in there.  That is, an agreement that if the thugs harm anybody or their property while carrying out the mission, then the thugs will take the heat rather than Bruce Wayne.

III. Conclusion

So far No Man’s Land is off to a good start!  There are some good legal issues here, and although we’d expect a better contract from a Yale Law alumnus, Batman can probably be forgiven the sloppy drafting given the tight schedule and the stress of cleaning up after a massive earthquake and fire.

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Posted in contracts

Ghost Rider, the Devil, and Bearer Paper

Posted on July 20, 2011 by | 39 comments

The 2007 Ghost Rider movie was neither a particularly good movie nor a particularly good source of legal themes, but there was one interesting observation we seized on.  Spoilers ahead, though I doubt many tears will be shed over spoiling Ghost Rider.

I. The Setup

In the movie, Mephisto (one of many devils in the Marvel universe) has a habit of making Faustian bargains.  When it comes time to collect he sends his henchman, the Ghost Rider, with whom he has also made a pact, albeit one he has to enforce himself, of course.  The precise terms of these contracts vary but the practical upshot is always the same: the devil gets your soul, from which he can derive power.  The movie is centered around the fate of a particularly valuable contract for the souls of an entire town, one thousand in all, which Ghost Rider’s predecessor had hidden rather than give up to Mephisto.

So far this is fairly standard stuff.  The twist comes from the fact that there are warring factions with Marvel’s demonic community, and Mephisto’s son Blackheart wants the contract for himself.  In fact, he manages not only to get the contract but to collect the souls bound by it.  And this brings us to the interesting part.  If the contract was with Mephisto, how could just any demon who got ahold of it cash in on the deal?  The inescapable conclusion is that demonic contracts must be redeemable by the bearer.

II. Bearer Paper

For an attorney, the idea that jumps readily to mind is “bearer paper.”  Bearer paper is a kind of negotiable instrument, which you are probably familiar with in the form of checks and money orders.  You’re probably also familiar with bearer paper: you create it any time you make a check out to “cash,” for example.  As the name suggests, bearer paper is payable to the person bearing (i.e. physically holding) the bill, note, check, etc.  This is convenient, but also dangerous, since it becomes much easier for a thief (or an upstart young demon) to cash it.

So could Mephisto’s contract have been bearer paper under US law?  The first thing to consider is whether the contract could have been a negotiable instrument at all.  As defined in the Uniform Commercial Code, Article 3 (which has been adopted by most states):

“negotiable instrument” means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:
(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain (i) an undertaking or power to give, maintain, or protect collateral to secure payment, (ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral, or (iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.

That’s a lot of text, but the basic rule is that a negotiable instrument needs 1) a fixed amount of money, possibly with interest; 2) a payee (i.e. the person getting paid, which can be the bearer); 3) a payable date, which can be “on demand” (i.e. whenever the payee wants) or a specific date; and 4) it generally can’t have any other conditions attached to it (e.g. no fair saying “Pay to the order of Bob if he paints my house.”).

And there’s the rub.  Mephisto’s contract is for souls, not money, and it plainly has some additional conditions on it (e.g. whatever it was Mephisto did for the people of San Venganza in exchange for their souls).  Of course, this is according to modern US law.  The contract was drawn up in the 19th Century.  Can we do better under the law of the time?

III. The Uniform Negotiable Instruments Law of 1896

The Uniform Negotiable Instruments Law was the predecessor to the Uniform Commercial Code, and like the UCC it was broadly adopted.  The UNIL or something like it was probably the law of the land at the time the contract was formed.  As luck would have it, its definition of a negotiable instrument is a bit looser than the UCC’s:

An instrument to be negotiable must conform to the following requirements:
1. It must be in writing and signed by the maker or drawer.
2. Must contain an unconditional promise or order to pay a sum certain in money.
3. Must be payable on demand, or at a fixed or determinable future time.
4. Must be payable to order or to bearer.
5. Where the instrument is addressed to a drawee he must be named or otherwise indicated therein with reasonable certainty.

This gets us closer.  The UNIL allows a negotiable instrument to be made for a promise rather than only money.  But that promise has to be unconditional, which means it can’t be something like “I promise to give the bearer of this contract my soul if Mephisto grants me three wishes.”  That pretty well spells the end of the bearer paper idea.  Presumably the infernal legal system is more flexible in this regard, although one wonders why Mephisto would be so foolish as to draw up such a contract in the first place.  Somebody ought to get that guy a lawyer.  One presumes he has ready access to plenty of them.

IV. Sidenote: The 13th Amendment

The 13th Amendment prohibits slavery and involuntary servitude.  However, it’s questionable whether Mephisto’s contract could be voided on that basis, since the damned are dead and have no rights.  Further, US courts have been reluctant to exert jurisdiction over the Devil.  See United States ex rel. Gerald Mayo v. Satan and His Staff, 54 F.R.D. 282 (W.D.Pa. 1971).  Anyone considering entering into a pact with the Devil should definitely bear in mind that it may be difficult to obtain relief in court should the Devil prove less than trustworthy.

39 Comments

Posted in contracts, movies

Thor

Posted on May 6, 2011 by | 26 comments

So Thor is out. And it’s pretty good. I mean, it’s no Dark Knight, or even Iron Man, but neither is it The Fantastic Four (which, let’s face it, just sucked).

But you aren’t here for a review of the movie as a movie. You’re here for a review of the movie as it pertains to the legal system! At first glance, one might wonder exactly how a movie about an Asgardian major deity might have anything whatsoever to do with the American legal system. You’d be surprised! Spoilers, as always, follow after the break.

Continue reading →

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Posted in constitutional law, contracts, insurance, mailbag, movies

Smallville II: “Dawson Casting” and Minors

Posted on March 28, 2011 by | 12 comments

The first season of Smallville is set during Clark Kent’s freshman year in high school. It premiered in October 2001, when Tom Welling (Clark) was 24, Kristen Kreuk (Lana) was 18, and Allison Mack was 19, making them between four and ten years older than the characters they were portraying. Casting adults as high school kids is not that uncommon and has become known as “Dawson Casting” after one of the more egregious examples, though it’s been going on almost as long as film has existed.

There are a variety of reasons for this, and the previous link discusses a lot of them, but in short, young adults are just a lot more suitable for the actual acting job than teenagers, partly for logistical and partly for legal reasons. As to the former, young adults tend to be better able to memorize, recall, and deliver lines believably than teenagers. Some of this is intellectual development, some of this is a broader depth of experience, and some of it is just getting past the emotional whirlwind that is adolescence. There are real world legal issues too: teenagers have limited work hours, and it’s frequently illegal to show them doing things that kids actually do (e.g. make out).

But this blog is about real world legal issues in comic book stories, not the legalities of Hollywood. Suffice it to say that this sort of thing is actually an issue within the series. As always, spoilers follow.

I. The Talon

Perhaps the most glaring example of a teenage character doing things that would be problematic for someone their age is Lana coming to be a partner and manager at the Talon. This implicates both minors’ capacity to contract and child labor laws.

A. Capacity

Children are not adults, and their ability to perceive the consequences of their actions are less than an adult’s would be. This is why the law generally recognizes that minors’ capacity to contract is different than adults. In general, a minor who agrees to a contract for something other than “necessaries,” i.e. food, clothing, goods necessary for the maintenance of a household, can “disaffirm” that contract at any time before they reach majority age. So a minor who walks into a restaurant and orders dinner would be required to pay, but a minor who enters into a business contract could theoretically get out of that contract simply by asking. They are then required to give back whatever it is they got, but this is why most businesses and organizations require that a minor’s parent sign relevant contracts and will generally refuse to deal directly with minors: they do not want to go through the hassle of having to take back whatever it is the minor contracted for.

So Lex Luthor offering Lana partial ownership in the Talon, aside from being incredibly generous, would definitely be something his lawyers would have had an absolute cow over. When this happened, Lana was either 14 or 15 (time is kind of… squishy, and her birthday is never stated), and Kan. Rev. Stat. § 38-101 provides that majority age for contracts is 16. Unless her legal guardian signed off on the deal, and there’s no evidence in the show that this happened, Lex would have almost certainly been acting against all legal advice. Granted, this probably wouldn’t be the first time, but it’s still a problem.

There is a way around this though: emancipation. Kan. Rev. Stat. § 38-108 grants district courts the ability to declare a minor to have all the rights of majority, including capacity to contract and to sue and be sued. This was mentioned in passing during the first season, before Lana’s guardian moved to Metropolis, and though it was never actually established that this happened, given both her involvement in the Talon and rather conspicuous independence thereafter, it seems likely that it did.

B. Labor Laws

And the reason is that even if it is technically legal to transfer ownership to Lana, establishing a partnership, it was probably illegal for her to run the place. We talked about child labor a little while ago, and Kan. Rev. Stat. § 38-603 prohibits anyone under the age of 16 from working before 7AM or after 10 PM on a school night, for more than 8 hours at a time, or for more than 40 hours in a week. Anyone who’s run a coffee shop that was open late can tell you that you basically have to do all three of those things. The place would have had to close no later than 8PM for Lana to be finished closing up before she turned into a pumpkin. But the show pretty clearly indicates that she was responsible for all of those things, including showing up to accept pastry deliveries at 5AM. Lana is, to all appearances, a remarkably mature and responsible girl (though perhaps not the best judge of character), who might actually have been capable of handling that kind of responsibility. But it isn’t clear that the law would have let her.

Emancipation wouldn’t work here either. The emancipation statute permits minors to contract and dispose of their own property, but it does not grant any exceptions to the child labor statutes. So there’s a problem there.

Now if Lana had been as old as Kreuk was when the season was shot, there wouldn’t have been any problems, which is probably why this is a little less noticeable in the show. It’s unusual, but not unheard of, for someone in their late teens or early twenties to be running a business like the Talon, particularly if they’ve got a benefactor (read “parent”) in the background somewhere. So seeing Lana run the Talon doesn’t look wrong. Just like Clark and Lana walking into a bar at the beginning of season three and not getting carded doesn’t look wrong either: Welling was 26 and Kreuk 21. But in-universe, this really is a problem.

II. Various Relationships

Then there’s the issue of Lana’s relationship with Jason. They met during the summer of Lana’s junior year, when she is presumably 17. Jason, on the other hand, is in college, making him probably 19. This looks kind of like a statutory rape situation waiting to happen, doesn’t it? Which is probably why Jason gets fired when the school learns about their relationship. So why doesn’t he go to jail?

Because the relationship, while arguably sketchy, is not actually illegal, at least not in Kansas (and certainly not in France, where it started). Kansas defines “indecent liberties with a child” as sexual contact with a person who is under 16 but more than 14 (Kan. Rev. Stat. § 21-3503). Other statutes for more serious crimes have similar definitions. Basically, Lana was legal. This is something a lot of people don’t understand, and it’s a common feature of television for talk of statutory rape to emerge whenever a girl is under 18. A character actually attempts to justify the relationship by pointing out that both of them are 18. Which, while true, is not strictly relevant, as the relationship was legal even before Lana’s birthday. The fact of the matter is less than a dozen jurisdictions still have the age of consent pegged at 18, though the fact that California is one of them may explain some of this.

Either way, the age of consent in Kansas is 16, so starting in season three, the entire class is basically fair game. This is actually not that uncommon. It’s that way in at least half of the US, and many states even have “Romeo and Juliet” laws which create an exception for couples who are no more than two years apart, so a pair of high school sweethearts don’t get carted off to jail as soon as one of them turns 16. Most of Europe has this limit set at 14 or 15, though it’s as high as 17 in Ireland and 18 in Malta, of all places.

III. Conclusion

Casting actors older than the characters they portray is fairly common, especially where teenage characters are involved. This can make certain things legally possible on screen, but it also increases the audience’s willingness to suspend our disbelief when high school kids are shown doing stuff that there’s no way they would be able to do in real life. I don’t care if you are Superman, most bouncers aren’t letting you in the door and most bartenders aren’t serving you booze unless you can produce some sort of ID, fake or otherwise. There’s more to talk about in this show, so stick with us.

12 Comments

Posted in contracts, criminal law

Mercenaries and Bounty Hunters

Posted on March 14, 2011 by | 17 comments

Today’s post is inspired by David, who wondered about mercenary characters like Deadpool and Deathstroke, and a comment by John, who wanted to know about bounty hunters (in the “wanted poster” sense).  We touched on some of the legal issues surrounding bounty hunters, particularly the bail bondsman type, in the comments to our post on Superheroes and Citizen’s Arrest, but there are some more topics to discuss.  We’ll address mercenaries first, then bounty hunters.

I. Mercenaries

The term mercenary doesn’t really have a particular legal meaning outside the international law context (i.e. “a professional soldier hired by someone other than his or her own government to fight in a foreign country,” Black’s Law Dictionary (9th ed. 2009)).  Mercenary is also used to describe military security contractors like Blackwater/Xe.  But in comics the term is usually used to describe a “gun for hire” or private security typically employed by private individuals or companies rather than governments.  Frequently comic book mercenaries are hired to steal things or kill people, which leads us to two criminal law concepts: solicitation and conspiracy.

A. Solicitation

Solicitation is one of the inchoate offenses, and at common law consisted of soliciting, requesting, commanding, or importuning another person to commit a felony or serious misdemeanor.  These days solicitation is typically defined by a statute such as 18 USC 373(a):

Whoever, with intent that another person engage in conduct constituting a felony that has as an element the use, attempted use, or threatened use of physical force against property or against the person of another in violation of the laws of the United States, and under circumstances strongly corroborative of that intent, solicits, commands, induces, or otherwise endeavors to persuade such other person to engage in such conduct, shall be imprisoned …

Something to notice here: the solicitor must intend that the other person actually commit the felony, so it’s not solicitation if, for example, an undercover police officer ‘solicits’ the commission of a crime in a sting operation.  Related to the intent requirement, the federal statute (like some state statutes) provides a defense of abandonment in 373(b):

It is an affirmative defense to a prosecution under this section that, under circumstances manifesting a voluntary and complete renunciation of his criminal intent, the defendant prevented the commission of the crime solicited.

So what happens if the mercenary agrees to take the job?  Then the solicitor and the mercenary are guilty of conspiracy (some jurisdictions also require that the solicitor or mercenary take an affirmative step towards completing the crime; more on conspiracy later).

And if the mercenary finishes the job, committing the crime he or she was hired to do?  Then a curious thing happens: the solicitor and mercenary both become guilty of the crime (e.g. theft, murder) but the solicitation charge goes away.  In legal terms, the crime of solicitation merges with the underlying offense.  The solicitor can be charged as a principal (i.e. as though he or she committed the crime himself or herself) because he or she acted as an accessory to the crime.  See, e.g., 18 USC 2.

Fun Fact: In many jurisdictions, contract killings are automatically first degree or capital murder for the solicitor and the killer. See, e.g, N.Y. Penal Law § 125.27(1)(a)(vi).

B. Conspiracy

Like solicitation, conspiracy is generally defined by statute these days.  The general federal conspiracy statute is 18 USC 371:

If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned …

However, unlike solicitation and attempt, conspiracy does not merge with the underlying offense if the underlying offense is completed.  Instead, it’s a separate crime.  The usual rationale for this is that criminal conspiracies are especially dangerous because two or more people can do far more damage than one person acting alone and because people are more likely to go through with a crime if they are in agreement with others.

Like solicitation, some jurisdictions provide for a defense of abandonment or withdrawal in conspiracy cases, but it usually requires more than just ceasing one’s involvement in the conspiracy.  The defendant must also show that he or she tried to stop the commission of the crime, and that can be difficult to prove.

The practical upshot of all of this is that most comic book mercenaries are criminals, as are the folks that hire them.  Although we’ve seen that self-defense, defense of others, and citizen’s arrest are all useful legal tools for superheroes, those looking to stay on the right side of the law should probably look for work as bodyguards rather than mercenaries.

II. Bounty Hunters

First, some nomenclature: Strictly speaking, most bounty hunters are actually seeking a reward rather than a bounty.  A bounty may be claimed by multiple people performing the same service, while a reward may only be claimed by one person performing a unique service.  For example, a bounty may be offered for the destruction of dangerous animals (e.g. coyotes), whereas a reward may be offered for the arrest and return of a particular fugitive.

States generally have the power to post rewards as part of their general police power.  However, political subdivisions of states usually do not have general police powers, and so cannot post rewards without statutory authorization.  See, e.g, Brite v. Board, 21 Cal.App.2d 233 (Cal. Ct. App. 1937).  Courts have generally held that when statutes authorize rewards, the language of the reward has to hew pretty closely to the language of the statute.  See, e.g., Smith v. Vernon County, 188 Mo. 501 (1905).  Many statutes still have reward laws on the books.  See, e.g., Mo. Rev. Stat. 544.150, 145.  And those statutes do get a work out, even today.

Note, though, that the reward statutes generally only allow rewards for the capture or arrest of fugitives or felons, not their killing or the production of their bodies.  So “wanted: dead or alive” won’t work these days.  Frankly, I doubt it would work even with statutory authorization, since it amounts to a reward for an extrajudicial killing that couldn’t possibly survive modern due process analysis.

Private individuals and organizations can also offer rewards so long as the reward doesn’t request or require anything illegal (that would be solicitation, as discussed above).  In that case the reward is simply a unilateral contract (i.e. a contract that is accepted by performing the requested service).

Most states require that someone seeking a reward knew about the reward before they did whatever it is the reward requires.  See, e.g., Smith.  So going around arresting fugitives in hopes that a reward has been or will be posted is a good way not to get a reward.  Professional bounty hunters should wait for a reward to be posted first, then go get the bad guy.

As a final note, most modern “bounty hunters” are actually bail bondsman, i.e. people whose line of business is posting bail for criminal defendants and then rounding them up if they fail to appear in court when required. There isn’t really a public reward posted in these cases. Rather, a defendant contacts a bail bondsman when arrested, and the bondsman agrees to post bail in exchange for a commission, usually 10-15% of the bail amount. If the defendant fails to appear, the bond is forfeit, so the bondsman has an incentive to make sure that he does. But there isn’t any sort of general bounty or reward posted which would incentivize other persons to go after the defendant. Rewards are usually only posted for the most dangerous and notorious criminals. Bail bondsmen deal with mostly lower-end offenses and are thus far more common and far less interesting, story-wise.

III. Conclusion

Under the right circumstances, bounty hunting is a legally sanctioned way for a superhero to make money while fighting crime.  Mercenary work, by contrast, is usually more legally questionable, at least in the comics.

17 Comments

Posted in civil rights, constitutional law, contracts, criminal law

Superpowered Minors, Part Two

Posted on January 11, 2011 by | 11 comments

In the previous installment of this series we discussed minor superhero and supervillain criminal liability.  Today we’re going to talk about the contract liability of minors.  Unlike crimes (and, as we shall see, torts), minors are often able to escape contract liability.

I. The General Rule

The common law rule is that “minors have the capacity to contract, at least when of sufficient age to understand what they are doing, but in general, they have the right to repudiate their contracts.”  42 Am. Jur. 2d Infants § 39; See, e.g., Hoblyn v. Johnson, 55 P.3d 1219, 1230 (Sup. Ct. Wy. 2002).  In other words, a minor can enter a contract (and sue for breach), but in general he or she can also get out of the contract if he or she wants to.

Now you might think that this is a bit unfair.  For example, what if an upstart supervillain contracts to buy a freeze ray, receives it, stiffs the seller, then repudiates the contract? The answer is that the supervillain has to give the freeze ray back if he or she wants to avoid the contract.  See, e.g., Nelson v. Browning, 391 S.W.2d 873, 877 (Sup. Ct. Mo. 1965)  The law may be stupid sometimes, but it’s not that stupid.

There is, however, a twist.  What if the freeze ray was smashed in an altercation with a superhero?  In that case the seller is out of luck.  “If during infancy he has wasted or squandered the consideration, or has otherwise made away with it so that he is unable to restore it, he may nevertheless repudiate the contract without making a tender.”  Id.

So why not require the kid to pony up the cash equivalent instead of getting away free and clear?  Because “the privilege of repudiating a contract is accorded an infant because of the indiscretion incident to his immaturity, and if he were required to restore the equivalent where he has wasted or squandered the consideration received, the privilege would be of no avail when most needed.”  Id. at 877-78.  In other words, it’s all well and good to demand one’s freeze ray back because in a sense that doesn’t cost the kid anything, but giving back the cash equivalent would essentially be an enforcement of the contract since it would come out of the kid’s own pocket, which kinda defeats the point of the rule.

However, some courts have taken the view that merely selling or exchanging the received goods for something else doesn’t count.  In other words, if our young supervillain exchanges the freeze ray for a heat ray of equal or lesser value, then in some states he might still be liable to return the heat ray (assuming he’s still got it and it hasn’t been smashed up, of course).  See, e.g., Whitman v. Allen, 121 A. 160 (Sup. Jud. Ct. Me. 1923).  And some courts depart from the general rule entirely and take the view that the minor is in fact liable for the value of the consideration received, even if the minor has to pay the cash equivalent out of pocket.  See, e.g., Porter v. Wilson, 209 A.2d 730 (Sup. Ct. N.H. 1965).

The upshot of all of this is that entering into contracts with minors isn’t terribly wise most of the time. This why most contracts involving minors require the signature of a parent or legal guardian.

II. Some Exceptions

The major exception, extending back to the common law, is that a minor can be bound for a contract for “necessaries.”  Necessaries are not precisely defined in most jurisdictions, but as a rule of thumb they are things like food and shelter that the minor actually needs and actually uses.  For example, a hotel room is not a necessary when a minor has access to a perfectly good home, but if the minor would otherwise be stranded outside and does indeed use the hotel room, then that’s a necessary.  As you can imagine, this would mostly apply to the practical requirements of a young superhero or supervillain living on his or her own; the rule wouldn’t apply to something like a freeze ray, since nobody really needs one.

Note, however, that the liability for necessaries is generally limited to the reasonable value of the good or service, not the contracted price. See, e.g., Williams v. Baptist Health Systems, Inc., 857 So.2d 149 (Ct. Civ. App. Ala. 2003).  This is because the liability for necessaries is not based on contract but rather quasi-contract, the distinction between which is beyond the scope of this post.

Of course, the common law can be modified by statute, and in many states it has been.  For example, in California a minor cannot make a contract relating to real property (i.e. real estate) or make a contract relating to personal property not under his or her immediate possession or control.  Cal. Civ. Code § 6701 (2009).

Finally, things get especially complicated when you consider cases where a person makes a contract while a minor but then seeks to repudiate it after turning 18.

III. Conclusion

The rule that minors may be liable for their torts, responsible for their crimes, and yet often not liable for their contracts may seem a bit unfair.  The practical conclusion is for adults to be wary of contracting with minors, and indeed this is why many legal actions require a parent or legal guardian to be involved (NB in such cases it is the adult who is bound, not the minor).  But in the right jurisdiction, a wily young supervillain–especially one able to project the appearance of adulthood–might be able to abuse this defense for fun and profit.

11 Comments

Posted in contracts

Law and the Multiverse Mailbag II

Posted on January 4, 2011 by | 19 comments

In this week’s mailbag we look at three questions from our email that touch on alternate universes, jurisdiction over crimes committed in the Phantom Zone, and contracts.  As always, if you have questions or post suggestions, please send them to james@lawandthemultiverse.com and ryan@lawandthemultiverse.com.

Continue reading →

19 Comments

Posted in contracts, criminal law, criminal procedure, immigration law, mailbag