Banana Split: Velvet Underground and Warhol Foundation Settle

The Velvet Underground’s first album cover, which featured a drawing of a large yellow banana, has been the subject of recent litigation.  Why? In a collaborative effort with the band in the 1960′s, Andy Warhol designed the banana that was featured on the album cover.  A recent spat arose between the Velvet Underground and the  Warhol Foundation’s over the Foundation’s proposed licensing of the banana for use on case  for Apple products.  The suit recently settled out of court for an undisclosed amount.

The suit was first filed by The Velvet Underground in January of 2013 alleging that Warhol Foundation violated its rights to the album design by licensing the design for commercial purposes.  The banana graces the cover of the band’s album The Velvet Underground and Nico, which was rated by Rolling Stone as the 13th best album of all time.  However, the band never sought or received trademark registration for the image from the U.S. Patent and Trademark Office.  Nevertheless, they claim instead that they earned trademark rights by virtue of years of association with it. Without the trademark registration, the band was certainly facing an uphill battle.  It would have had to prove that the design has come to be associated by the public with the band itself.  While that may be true with regard to certain segment of the population that is really into music, most of the general public would recognize the drawing as nothing more that a typical piece from Warhol’s collection.  Especially given that the album cover also prominently featured Warhol’s signature.

Probably best for both parties that they just went ahead and split this banana (pun intended).

McDonald’s Chicken Sandwich Allegedly Causes Voice Change

Well, McDonald’s once again finds itself on the wrong end of a case caption.  According to the New York Post, a gospel singer in Brooklyn, New York has sued the fast food chain claiming that her voice was ruined after biting into a piece of glass found in a chicken sandwich.  The incident, which happened way back in 2010, has allegedly caused the former alto to lose her soprano-status.  In addition, her now raspy voice has others confusing her for a man while on the phone. We suspect they may take this deposition by video.

As with any new lawsuit in its baby stages, we here at Abnormal Use have no idea whether the plaintiff’s claims are valid.  Nonetheless, we know how to defend the case from a damages perspective.  First, how is a voice ruined simply by biting into glass?  At least according to the report, it appears the singer’s allegations suggest she swallowed the glass, thereby damaging her vocal chords.  After knowingly biting into a piece of glass, wouldn’t the next step have been to spit out the food?  It seems some of these damages could have been avoided.

Second, how does one value the difference between an alto and a soprano, assuming the allegation is true?  Does an alto gospel singer find better singing gigs than sopranos?  We recognize that the change may have been unwanted, but it seems like the singer could make the most of the situation and turn this into a positive.

Unfortunately for McDonald’s, unlike the post-verdict, anti-tort reform rhetoric regarding the Stella Liebeck case, this matter won’t be tried on damages alone.  If glass was in the woman’s chicken sandwich, then it certainly should not have been there.  Once that presumed liability hurdle is surpassed, then – and only then – will her damages become an issue.

Vijay Singh’s Emotional Distress Claim Against the PGA

They say that golf is the ultimate sport of honor.  That may still be true on the course, but as we have seen over the past few years, it doesn’t hold up with golfers off the course (see, e.g., Tiger Woods).  This time, according to Golf Magazine, Vijahy Sing is getting into the mix by taking questionable performance enhancing substances and bringing a frivolous intentional infliction of emotional distress claim against the PGA tour.

Vijahy was privately suspended by the PGA a few months back after he admitted using a performance enhancing drug known as “deer antler spray.”  Deer antler spray allegedly contains substances banned by the PGA tour.  However, after some legal maneuvering, Vijahy was able to avoid serving any suspension. Now Vijahy claims that there never was any reason to suspend him in the first place. So, naturally, he has filed a lawsuit  alleging that the PGA tour negligently and intentional inflicted emotional distress upon him.

Emotional distress claims are notoriously difficult to prove.  Negligent infliction of emotional distress requires, at minimum, that a Plaintiff prove that he was in a zone of impact and suffered physical manifestation.  Intentional infliction of emotional distress claims require proving that the defendant intentional or reckless acted in a manner so heinous and beyond the standards of civilized decency or utterly intolerable in a civilized society.  Very very doubtful that Vijahy can prove either.

When you are pro golf and you admit to using suspect performance enhancing drugs, you run the risk of ticking off your employer and getting suspended.   Unless Vijahy’s got some really good hidden evidence in his golf bag, it is unlikely that this case is going anywhere.

Billionaire Wins Suit Over Fake Wine

Apparently, billionaire William Koch picked the wrong hobby when he started collecting wine.  He’s seems to buy a lot of expensive fake wine.  Last year, we told you about a suit by Mr. Koch over fake wine that allegedly belonged to Thomas Jefferson.  That suit was ultimately dismissed on the statute of limitations.  Well, he clearly wasn’t deterred from pressing forward with other similar lawsuits.

Earlier this month, according to the New York Daily Newshe went to trial claiming that a wine dealer sold him 24 bottles of a bogus vintage bordeaux.  A New York jury found his claim to be true and felt that this dastardly deed warranted $12 million dollars in punitive damages. Mr. Koch originally spent $300,000 on the 24 bottles of “vintage” bordeaux, which he bought from Eric Greenberg.  The wine turned out to not be the real deal.  Koch blamed Greenberg for intentionally selling him the bogus wine and perpetuating a “code of silence in the [vintage wine] industry.”   Mr. Greenberg claimed that he offered to refund Mr. Koch his money when he learned that the bottles of wine were fake.  But that was not good enough for the billionaire.  Only a lawsuit and millions of dollars in punitive damages could right this wrong.  The jury awarded him $380,000 in actual damages and $12 million in punitive damages.

Lest you think Mr. Koch is just some out of touch billionaire that likes to spend more on wine than you spent on your home, we note that he plans to put $12 million verdict to good use.  Koch said he would use the money to “set up a fund to go after wine fraud and auction fraud.”  He’s bound and determined to put an end to the travesty of really rich people buying expensive fake booze.

It isn’t helping starving kids in Africa, but its something.

NYC Museum Accused Of Duping Visitors Into Giving Donations

The Metropolitan Museum of Art (The Met) in New York City maintains one of the best art collections in the world.  To boot, it offers admission for a donation price of your own choosing.  The minimum donation is a mere penny.  The museum does, however, suggest patrons donate $25.   Apparently, three tourists are not satisfied with their $25 donation because they didn’t read the sign closely enough to realize that it was only a “recommended” donation.  Of course, a lawsuit was necessary to rectify this reprehensible situation. Here we go again.

As you might have guessed, the class-action lawsuit accuses The Met of duping the public into believing that the $25 donation is required for admission.  In so doing, the lawsuit claims that The Met uses misleading marketing and training of cashiers to violate an 1893 New York state law mandating free admission a certain of number of days per week. Apparently, a former museum supervisor will testify on behalf of the Plaintiffs that cashiers were trained to encourage the $25 dollar donation by advising patrons of the museum’s large costs.  Also, in 2010, The Met allegedly changed its signage from “suggested” donation to “recommended” donation.  Outrageous!

The Met has, of course, denied the allegations.  Perhaps the plaintiffs can make an issue of the 1893 law.  Arguably, requiring a one cent donation for admission violates that law.  However, a Met spokesperson claims “[t]he idea that the museum is free to everyone who doesn’t wish to pay has not been in force for nearly 40 years.”  Apparently, in 1970, the New York City Department of Cultural Affairs agreed to allow a required donation for admission so long as patrons could determine what amount they wanted to pay.

Regardless of the outcome of the suit, don’t feel too bad for The Met.  It has $2.58 billion investment portfolio and most of its donations come from non-admissions related donations.

On a related note, if you ever find yourself in New York during the spring or early fall, it is well worth it to shell out your penny for admission and head up to The Met’s Roof Garden Café and Martini Bar.  Unfortunately, the beers ($8.75) aren’t as good of a deal as the admission donation.

For Wine, Old = Good . . . For Legal Claims, Not So Much.

A federal court just taught a valuable and expensive lesson to a wine connoisseur:  Unlike wine, legal claims age poorly.   In the late 1980’s, billionaire William I. Koch bought bottles of wine represented to have belonged to President Thomas Jefferson.  When he discovered that Thomas Jefferson actually had not owned the wine in question, he sued Christie’s Auction House for fraud in New York federal court.  However, the Second Circuit recently upheld the district court’s dismissal based on an expiration of the statute of limitations.  See Koch v. Christie’s Intern. PLC, — F.3d —-, NO. 11-1522-CV (2d Cir. October 04, 2012).

Koch’s argued  that Christie’s promoted as authentic a cache of wine that was supposedly bottled in the late 1700’s and linked to Thomas Jefferson.   Koch alleged that these “Jefferson wines” were, in fact, counterfeit, and that Christie’s knew or recklessly did not know of the wines’ dubious nature.  Koch purchased four bottles of the now discredited Jefferson wines from third-party dealers in November and December 1988, allegedly relying on promotional representations made by Christie’s.  In 2010, he brought suit on the issue alleging fraud and racketeering by Christie’s.

In 2011, a district court judge dismissed the case, finding Koch had missed the statute of limitations on the racketeering claim.  The heart of the issue was the operation and scope of “inquiry notice.”  Attorneys for Christie’s argued that news coverage of the Jefferson wine issue should have put Koch on notice at least ten years prior to his filing suit.  Koch argued that inquiry notice doesn’t trigger the running of the statute of limitations.  Instead, he said the statute doesn’t begin to run until a plaintiff has knowledge of a defendant’s scienter, as well as the alleged injury.

The Second Circuit agreed with the district court, holding that the statute of limitations began to run when there were “storm warnings” that should have prompted Koch to inquire into as to whether he has been injured.   It noted that the “storm warnings” need not spell out every aspect of the alleged fraudulent scheme.   The “warnings” will be sufficient to start the running of the statute of limitations when they would suggest to an investor of ordinary intelligence that he has probably been defrauded. Perhaps the District Court Judge, John Koeltl, put it best: “For wine, timing is critical, the same is true of causes of action.”

Judge dismisses Suit against Cooley Law School

A few months ago, we ran a series about the ongoing debate about higher education, including legal education – ts merits, cost-benefit analysis, and interviews with those in the field.  In those posts, we remarked that several lawsuits had sprung up around the country against law schools for misrepresenting data about their job placement numbers and salaries. One such suit was filed by a dozen graduates of the Thomas M. Cooley Law School, who alleged that they would not have spent the money to attend the school if they had known the truth about job prospects coming out of the school.  The plaintiffs sought $250 million in damages.

On July 20, 2012, the Michigan federal court where the case was pending dismissed it after the law school filed a 12(b)(6) motion.  A full copy of the Court’s decision can be found here [PDF].  As Judge Gordon J. Quist, the author of the opinion, notes, this dismissal follows the same result in a nearly-identical suit against the New York Law School.  A copy of that decision can be found here [PDF], and our friends at Above the Law make some great points about that decision in this post.

So why are these lawsuits failing?  Well, according to these two decisions,  the schools did not make false representations.  As the Michigan court quoted, “[a] plaintiff’s subjective misunderstanding of information that is not objectively false or misleading cannot mean that a defendant has committed the tort of fraudulent misrepresentation.”  Ouch.  Judge Quist apparently does not think much of the prospective students’ reasoning abilities.

Judge Schweitzer, the author of the case out of New York, reached the same conclusion, but for an opposite reason.  He called applicants to law schools “a sophisticated subset of educational consumers, capable of sifting through data and weighing alternatives before making a decision regarding their post college options.”  It appears that Judge Schweitzer believes these students to be very capable of weeding through the data, but too lazy to do so.  Again, not the best depiction of prospective law students.

And yet all is not lost.  The Wall Street Journal’s Law Blog updated its original post on the issue with a quote from Jesse Strauss, an attorney for the plaintiffs in the Cooley Law School case.  Even though Mr. Strauss seems ambivalent about appealing the decision to dismiss the case, he claims a small victory:   “It’s important to know what this litigation has helped to accomplish. Students applying to law school now have more and better information than ever before.”

True, the ABA has changed some of its reporting requirements to add some transparency, and even Cooley is reporting statistics differently.

The crucial question, however, remains:  if the value of higher education (and legal eduction) is potentially lower than expected or reported, can schools continue to charge more and more tuition?  And will the microscope that has been placed squarely on higher education result in lower enrollment down the line?  We’ll have to wait for the statistics, I guess.

New York Judge to Prospective Law Students: Caveat Emptor

Recently, a New York judge threw out a lawsuit by nine former students of New York Law School (NYLS) who accused the school of engaging in deceptive practices by inflating employment statistics to attract prospective students.  Even though NYLS won the battle, neither the school, the students, nor the legal profession in general came out looking too good.   The judge basically said that the school may be “lackluster” and the employment statistics may have been misleading (although not materially) but the students should have done their homework before plunking down over $100k on tuition.

Just by way of background, NYLS ranked #135 in the latest U.S. News & World Report law school rankings, which is only a few spots ahead of where the magazine stops assigning schools a number.  NYLS charges its students $47,800 per year in tuition and fees alone.  At least they seem to spell that one out in black and white on their website.

The crux of the disgruntled students’ lawsuit was that the school’s website and marketing materials would have led a reasonable consumer to believe that between 90 to 92 percent of the school’s graduates secured full-time jobs as lawyers within nine months of graduation.  However, in reality that percentage included students who only secured part-time legal jobs, as well as students who secured non-legal employment.  According to the complaint, only 40 percent of the school’s graduates had full-time jobs that required a law degree.  Ninety-two  vs 40 percent – minor details right?

Even if that detail was buried somewhere deep within the pretty NYLS brochures, the judge believed it was the students’ duty to dig deeper and find the hidden truth.   He held that “by anyone’s definition, reasonable consumers – college graduates – seriously considering law schools are a sophisticated subset of education consumers, capable of sifting through data and weighing alternatives.”

We particularly liked this tidbit from the judge: “It is difficult for the court to conceive that somehow lost on these plaintiffs is the fact that a godly number of law school graduates toil in the drudgery or have less than hugely successful legal careers.  NYLS applicants, as a reasonable consumer of a legal education, would have to be wearing blinders to not be aware of these well-established facts of life in the world of legal employment.”

Even after all this bad press, NYLS still publishes employment data that appears to be vague at the very least.  If you look at their current numbers, it is unclear how they define whether someone has a legal job.  They claim a job is a “legal position” if a JD is “required or preferred.”  What exactly is “preferred”? More importantly, there’s a number that is glaringly missing from all those stats: only 65 percent of 2010 NYLS graduates were employed as lawyers at the time the data was gathered.  After you remove the 5.7 percent of graduates “employed” as fellows, only 310 out of the 481 NYLS graduates are working in “legal positions” under the curious “JD required or preferred” standard.  Moreover, they don’t disclose how many of those 310 had full-time legal jobs.

We here at Abnormal Use tend to agree that prospective law school students should be smart enough to do some independent investigating and figure out whether a law school is truly a good investment for them.  It really only takes a few minutes of Google searching to reveal that most law school employment data is a somewhat of a sham.  However, we can’t help but wonder whether law students should be expected to dig deeper.  In this noble profession of law, shouldn’t a prospective student expect to be given honest, open, and candid information from the institutions charged with molding young lawyers?

What to do about “All Natural” Chips?

According to the Chicago Tribune, a New York man has sued Frito Lays in a proposed class action claiming that the “all natural ingredient” labels on the company’s Sun Chips and Tostitos products are deceptive. According to the complaint, the chips contain ingredients derived from genetically modified corn and oils. Further, the plaintiff alleged he paid an additional 10 cent “premium” for the chips over their Doritos counterpart. The plaintiff seeks damages in excess of $5 million.

The case is captioned Shake et al. v. Frito Lay North America, Inc., No. 12-408 (E.D.N.Y. Jan. 30, 2012).

These allegations raise a couple of pertinent issues. First, can the plaintiff really claim that he paid a premium for “all natural” chips?  For many, a ten cent premium may seem trivial.   We here at Abnormal Use appreciate the desire to purchase organic or all-natural foods. In doing so, we expect to pay a premium.  However, we would expect these premiums to far, far exceed the 10 cents alleged by the plaintiff.  Ever try purchasing organic milk for 10 cents more than its non-organic counterpart?  When faced with the decision of purchasing two bags of chips, one “all natural” and one not, we doubt a 10 cent differential in price is a deciding factor in the process. In fact, we might not even notice the difference in cost.

Second, to our knowledge, the Food and Drug Administration has no definition for “natural” as it applies to food labels.  Of course, it may be difficult for the FDA to define such a term.  What is “all natural” anyway? Certainly, the phrase can be left to varying interpretations.  Should “all-natural” be restricted to plants grown without the use of pesticides?  Or should the definition go further?  Apparently, the plaintiff’s beef with Frito-Lay is that the company uses organisms genetically modified in a lab by swapping genetic material across species.  It is unclear whether the allegations stem from the “genetic modification” itself or that the modification itself which occurred in a lab.  Genetic swapping occurs naturally all the time.  We can not even begin to count the number of products we enjoy on a daily basis that were created as a result of “natural” genetic swapping.  Are these products considered “all natural”?  Where do we draw the line?

The desire to eat foods the way they were intended is a noble feat.  However, we shouldn’t be so quick to dispose of the advances of modern science.

Let’s not be so quick to pass judgment on new plant species created by the marvels of modern science. Who knows, maybe we are on the brink of the new “natural”?

Hot Coffee: The Drink That Keeps On Giving

Over the past year, we here at Abnormal Use have often written on hot coffee litigation lore.  We have provided you with a comprehensive FAQ file on the famous Stella Liebeck McDonald’s hot coffee case.  We have offered our critique of Susan Saladoff’s recent documentary on the subject.  We have even tried to keep you up-to-date on hot coffee cases around the country.  Why?  With each new case, we can present a new twist on the ridiculousness that is the “unreasonably dangerous” beverage.  Enter exhibits #1,234 and #1,235.

Last week, news broke of litigation in New York and California involving spilled coffee.  In California, a man ordered a Big Mac and two coffees at a McDonald’s drive-thru in Huntington Beach California.  He claimed that a McDonald’s employee dumped “scalding” coffee into his lap, causing him to suffer first- and second-degree burns.  In his lawsuit filed in the Orange County Superior Court, the man now alleges that McDonald’s served coffee at “extremely unsafe” temperatures and used defective cup lids.  He is seeking more than $25,000 in damages.  The report was silent as to any further details.

In New York, a 10-year old girl was awarded $600,000 by a special referee for past and future pain and suffering after she too was burned with hot coffee.  The girl was a guest at a Sweet 16 birthday party when she came into contact with the electrical cord of a 40-cup commercial coffee urn.  Her contact with the cord caused the urn to overturn, spilling coffee onto unspecified parts of her body.  As a result, she suffered second- and third-degree burns and was hospitalized for ten days.  Her mother sued Mastrantonio Catering, Inc. in a New York state court.  After Mastrantonio failed to file a timely answer, the plaintiff moved for a default judgment.  The motion was intially denied, but later reversed and granted by a New York appellate court.

What can we learn here?  Hot coffee litigation spans from coast-to-coast.  Some may argue that the continued expansion of hot coffee cases is evidence that the beverage is unreasonably dangerous.  Others, including the writers here at Abnormal Use, will continue to argue coffee is meant to be served hot and, despite the numerous lawsuits, makers and consumers of coffee share this belief.  McDonald’s, as well as anyone, is familiar with these lawsuits.  Catering companies certainly recognize the need to serve products suitable to their customers.  Despite the threat of litigation, people will continue to demand that their coffee be served hot.

In the California case, the McDonald’s employee allegedly spilled the coffee onto the plaintiff.  It wasn’t that the coffee itself was unreasonably dangerous and defective; rather, the allegation is that an employee negligently spilled hot coffee onto the customer.  In the New York case, the plaintiff was awarded $600,000 after Mastrantonio went into default.  The plaintiff’s motion for default judgment was granted, not because Mastrantonio failed to present a meritorious defense, but rather, because it failed to demonstrate a justifiable excuse for its default.  Once the issue of liability was decided, the special referee was left to determine the extent of the injuries themselves.  Liability was never at issue.  We have never disputed the extent of hot coffee burns in these cases.  Rather, we fail to understand how a maker of coffee can be held liable for preparing and serving a beverage in its expected form.

These cases have one common theme – coffee is hot and can cause burns when spilled.   Some may find these cases ripe for litigation while others feel they have no place in our courtrooms.  Its all a matter of perspective.  You obviously know our perspective.  If you want to read a well-written counter-proposal from a different perspective, check out this piece from Christopher Pascale at Suite 101.