Wednesday, December 14, 2011
Tuesday, December 6, 2011
Tuesday, November 29, 2011
Sunday, November 27, 2011
Wednesday, October 5, 2011
Recently, Sony changed the Terms of Service for users of its Play Station Network (PSN). The new terms of service require that users of PSN agree to pre-dispute mandatory arbitration specifically excluding the right to class action. This type of arbitration clause violates California case law established in Discovery Bank which held that any waiver of the right to class action lawsuit would be unconscionable if three criteria were met: (1) it is in a contract of adhesion; (2) it governs disputes over small amounts of money; and (3) it is alleged to be part of a scheme to deliberately cheat consumers out of individually small amounts of money. The law is not a wholesale prohibition of class action waivers in consumer contracts such as Sony’s. Rather, the law sets a general unconscionability standard under contract law.
The California law is basically a state-court interpretation of provisions in the California Civil code. The first provision of the code prevents parties to a contract from escaping responsibility for their own violation of the law. (see Cal. Civ. Code Ann. § 1668) The second code provision gives courts the power to limit unconscionable clauses in a contract in order to avoid any unconscionable result. (see §1670.5(a)) California has been very progressive in protecting the rights of less powerful consumers forced to waive their ability to litigate through pre-dispute mandatory arbitration clauses such as the one Sony has designed.
From a business perspective, one can see that Sony desires to put distance between itself and the loss of integrity of its protection of customer data due to breach of its system by hackers. The resulting class actions will cost the Company billions of dollars. Interestingly enough, Sony has relocated to the US following the recent Tsunami in Japan. One can only speculate whether Sony acquired US legal advice regarding the new Terms of Service. The question remains: Is the arbitration clause in Sony’s new Terms of Service valid or does it violate California law??
The answer comes in the form of a recent Supreme Court decision, AT&T Mobility. In that case, the Court held in a 5-4 decision that the California law is pre-empted by the Federal Arbitration Act. The majority written by Justice Scalia found that the California law “stands as an obstacle to the accomplishment and execution of the full purposes and obj4ectives of Congress.” According to the dissent, written by Justice Breyer along with Justices Ginsburg, Sotomoyor and Kagan joining finds little support for the majority opinion. The dissent argues that California is free to define unconscionability and that should be of no concern to the Feds as long as the rule does not disfavor arbitration. Justice Breyer reduces this case to the doctrine of federalism at its core. The state is free to pass laws and Congress cannot pre-empt them cavalierly. In AT&T Mobility, according to the dissent, tat same principle of federalism requires the Court to uphold California law and not strike it down.
I am no Supreme Court scholar but I believe that Scalia is woefully out of touch with the realities and practicalities of arbitration clauses in general. This case, as the dissent points out, was not about class actions and arbitration but about contract law application to arbitration clauses. The holding was too pro-business and not enough protection for the consumer. It was a knee-jerk negative reaction to a Ninth circuit decision-more left coast discrimination!
NB-I would like to thank my student Wilber Han for bringing this issue to my attention and discussions in my Management 12A class (Business Law) for clarifying the issues.
Tuesday, October 4, 2011
Wednesday, September 14, 2011
Tuesday, September 13, 2011
Friday, September 2, 2011
Sunday, August 21, 2011
Thursday, June 30, 2011
An excellent and more detailed discussion of the events and implications for the region are available from this Legal commentator blog.
This is a significant public denouncement of the failure to follow rules that countries themselves obliged themselves to in the name of political expediency. Being accountable for ones actions and responsible for obligations is what mature adults do and mature nations as well.
This is the achilles heel of Southern Africa.
Saturday, June 18, 2011
I recently caught Newsnight on the BBC. The discussion surrounded vaccines promoted in Africa by the Bill and Melinda Gates Foundation. The round table included the CEO of GlaxoSmithkline, Andrew Witty, with Mr. Gates, himself!!, along with the Secretary General of the East African Community, Dr. Richard Sezibera.
There were several critics of vaccines in Africa who provided food for thought to the panelists. Big Pharma and Mr. Gates agreed on everything...saving African Children is important and bad governance is not their concern. Also, the pricing structure seemed to be of some concern. Rich countries pay more, poor countries pay less.
The gentleman from the EAC made me think of the quote that is the title of this blog.
"Ya, its ok for now, we have vaccines and the children live. And why not take affordable medicine??"
Watch both clips on You Tube.
My only comment is that the critics raised so many good points, such as why not put the money to better use...? Why vaccinate when the people have no way to support themselves? Why support regimes that oppress and provide no support to the people themselves?
Mr Gates replied that what his foundation is doing is a solid 'good' and cannot be discounted by such arguments. He was not concerned about his legacy, only that more children survive in Africa.
Africa has had many lovers before him....and another bus is just around the corner.
Friday, June 17, 2011
Friday, June 10, 2011
To begin with, the victory of the Zim Farmers IS important, but NOT because law is important. If a political outcome had made them victorious that would be important as well. But the law got there first so, OK and law IS important. However, law without the social, economic or historical is vapor, a vacuum and dangerous.
The reason a legal victory in an AFRICAN court is singular, is because it is a voctory in an AFRICAN court. There is scant evidence of Western dominance here. Whatever problems there are between SA and Zim, they are AFRICAN. That is good!
There are fundamental problems with law. Law oppresses and is manipulated by the powerful. Women, the poor, minorities of all kinds are frequently abused by the law in LEGAL ways. A critical assessment of the law is vital in any society.
For example, the U.S. claims some kind of moral superiority in Human Rights which it lectures other countries on. It witholds Aid and asks for rules to be implemented.
Yet, women in the U.S. are underpaid, never compensated for work in the home, which incidentally keeps the economy running, and are bombarded by adverts to undergo platic surgery to remain attractive.
Where I live in Southern California, the newspapers are cluttered with ads for breast implants but I have YET to see one AD, let alone a multitude of ADS, promoting PENILE implants. Why is that and I ask this with a straight face...?! How is this not a Human Rights violation?
A critical assessment of law is vital to an understanding of ourselves and our location in the more universal order of things. The law is a necessary evil. Love and introspection are much more important. The personal and interpersonal are much more vital to our existence.
But that is not the topic of my PhD...I will write the love and introspection paper AFTERWARDS!!
Tuesday, June 7, 2011
Now that judgment can be satisfied because of the recent ruling in SA. The Zimbabwe Government in a last ditch attempt tried to oppose the attachment of Zim assets in SA. I have not read the ruling only the news reports so I cannot state the legal basis for the court's rejection of the Zim application.
The legal basis should be that opposition was late and the SADC ruling that this all is based on was legally valid and cannot actually be opposed on any valid legal ground.
This is a tremendous legal victory. A poignant victory given the recent death of one of the farmer's Mike Campbell. As I have frequently said in the blog, all of this has nothing to do with political or racial matters but with the proper functioning of courts and laws. This is important.
We cannot head to the future together unless we all agree that there will be rules and they must be followed. Sure there is oppression and power imbalances. There are problems and there is exploitation. However, we need to start somewhere and then fight for equality. We NEED to stop complaining and BEGIN.
I am so proud of the lawyers who fought this battle. They had better not take a big fee either!! This social good is all the payment they need. Good on ya!
Saturday, May 14, 2011
Friday, April 22, 2011
If you recall, farmers from Zimbabwe received a judgment from the 2008 South African Development Community (SADC) Tribunal declaring Zimbabwe's land reform programme as unlawful.
The SADC ruling was recorded in the North Gauteng High Court, South Africa in 2010 with an additional order made by the court awarding costs to the farmers. Zimbabwe owned property in SA, free from any diplomatic immunity, was identified and attached in order to be auctioned in settlement of those awards.
The Zimbabwe Government was absent for much of these proceedings until now. The government of Zim has disputed the validity of the SADC Tribunal ruling from the beginning. The recent court proceedings in South Africa are objected to on various grounds such as improper service, lack of jurisdiction, and purported violation of the Foreign States Immunity Act. These arguments are made late and hopefully in vain. The court reserved judgment and should make a decision within the next 3 weeks. This blog has followed the case as best as possible with sometimes imperfect information.
It has always been my opinion that the success of this case, resulting in the defeat of all of the Government of Zimbabwe's arguments, has little to do with politics per se. Success has everything to do with the credibility of the SADC tribunal and the rule of law in Southern Africa. The SADC tribunal is a brilliant creation that makes it possible to resolve disputes without winding up in a local court that might be biased or non-functioning.
In addition to all of this nonsense, the SADC tribunal's status as effectively suspended is unclear.
At the SADC Summit in August 2010, the Council of Ministers decided to review how the Tribunal functions allegedly in order to address the Government of Zimbabwe's refusal to honor the tribunal's ruling against it in 2008. This effectively suspended the tribunal with the judges being removed. In response, two of the Zim farmers. Mike Campbell and Luke Tembani filed an application to have the tribunal back in action. Without a functioning tribunal there is no recourse for those who wish to make further claims against the Government of Zim, according to the application.
In January of this year, mining companies in a dispute with Lesotho asked the tribunal to take the case. A docket number was assigned but there is no evidence of the case on the SADC tribunal website.
Finally, Mike Campbell, one of the Zim farmers in the 2008 SADC Tribunal case passed away earlier this month. No matter what the ultimate outcome of all of these cases I hope he will be remembered for using the law to create fairness and equity for everyone. This blog will continue to watch those developments.
Wednesday, March 30, 2011
The conference had may interesting panel discussions that were robust and exceedingly honest. The attendees were from all over the World. I did get to spend some time with a history scholar from Kenya. His research considers land management in rural Kenya in the 1930's--fascinating.
Austin is awesome, of course. The food was authentic African. (except at the banquet). African music and dancing (by us participants) was fun. The attendees were genial and the discourse lively. LOTS of academics from Nigeria prompting LOTS of animated dialogue!
My presentation went well. I sought some input on a PhD chapter that I have concluded needs more historical analysis on the establishment of stock exchanges in East Africa. It was well attended. There was an amazing presentation after mine by Prof Rhonda Gonzales, from UT-San Antonio. Her research area is Ancient History and she makes it seem very relevant for us today.
Finally, the Board for Madonna's charity in Malawi, Raising Malawi has been dismissed. Her organization is being sued from wrongful termination. The charity was meant to start a state of the art girls school but has failed to make much progress. Maybe Sean Penn had the right idea when he moved to Haiti. Madonna has not made much progress throwing money at her school idea.
Saturday, March 19, 2011
It sounds fascinating and perfectly in tune with the changes we are seeing in developing countries populations uprising. In tune in the sense of changes that can potentially force us all into a new way of thinking and dealing with some African countries. I am not, per se, a proponent of Pan-Africanism, whatever that is. It has extreme political connotations of Africa at Independence with new revolutionaries ousting the Empire. That is simply too outdated a concept to be helpful.
The focus of any meeting of minds on developments in Africa must include, and the Oxford on does, the students over here in the UK doing research and then what.....
I sadly missed the opportunity to do a Graduate Seminar on my research topic at the Univ of Warwick this week. That School of law has a historical connection to Africa, and particularly East Africa. There are students doing dissertations on every topic including things such as Private Equity, Rule of law and (of course) corruption. I may try to come back in May and do that presentation and also meet up again (I did a similar presentation last year...or two years ago perhaps) with so many East African students who have definite opinions of what is happening there and what might need to be done. This is a new generation of leaders for Africa. Which is primarily the focus of the Oxford conference.
This is such an interesting way to explore moving forward in the region given the recent upheaval. I love the UK for taking responsibility in this way.
I am headed home to Orange County now. My trip here has been very productive. Next weekend, I present at the Africa in World Politics Conference at the University of Texas in Austin.
Monday, March 14, 2011
I am staying in my old diggs on Bow Rd, across from the Bow Rd tube. There is a nifty Tesco Express nearby so I am enjoying some affordable South African, Shiraz and the sounds of East London. The Mile End library of Queen Mary has been completely modernized and is a joy to sit and work in even when it is swarmed with undergraduates. Maybe secretly I delay finishing my PhD so I can make these little trips......not likely. If and when they start paying attention to me at QM, I will finish and come back and attend the theatre instead of visiting the LIBRARY!!!
This Securities Africa conference has allowed the new ASEA Presdient, Sunil Benimadhu, to announce a new (hopefully realised) direction for ASEA as an organisation to promote African exchanges and also inform investors....and researchers....about member African Exchanges. Sunil is the CEO of the Stock Exchange of Mauritius and seems to have a positive vision about what ASEA can do for exchanges.
He suggests that ASEA do the following:
- provide a pan-African (member) stock exchange index to serve as a benchmark
- revamp the ASEA webiste so it is up to date and actual informs!
- serve as a mouthpiece for African exchanges in cluding African governments and regional bodies such as the AU, World Bank
Let's hope all of the above happens and these guys from Mauritius are the ones to get it done!!
Nairobi Stock Exchange
The NSE has purchased a Broker Back Office system worth $880k (USD) from Chella Software of India, which will allow the CMA and the NSE to offer online trading that can also be monitored. This goes a long way to resolving the Nyaga-like broker problem that plagued the NSE in 2008 and forced the closure of several brokers who had fraudulent back-office dealings. (see this blogs very first post) The back office is the heart of any brokerage firm because it clears trades and ensures that funds pass smoothly from client to broke and vice versa. Without a credible back office no broker and no Exchange has the integrity needed to cultivate investor confidence. The CMA-Kenya also established an anti-fraud unit. I need to look at that and will write a separate blog post on it later.
Additionally, the NSE claims that its online trading will draw funds from the Kenyan diaspora and from tech-savy Kenyan youth with discretionary funds. This is huge and a move in the right direction. Online trading is what facilitated a massive increase in retail share ownership in the US. This is not always a good thing if the technology and trading do not also come with instructions. The NSE will also have to provide loads of EDUCATION for these new investors so that the stream continues and does not wither and die on the vine due to terrible miscalculations all of which are aviodable with a little instruction on investment 101's.
Uganda Securities Exchange
Also in March, the USE announced that trading will be exteded to 5 days a week from 3. This baby step is also huge. Order flow should become more continuous if brokers can place them each day rather than every other day. The USE has only 14 listed companies but cross-lists on the NSE as well. This is a positive move, not as mometous as online trading but significant nonetheless. Much like the USE, this move is friendly and measured.
Me likey!!I am so jazzed to paying attention to this space again. It was wrong to ignore it for so long! I enjoy being back in London. This city is World class and dare-I-say-it, so much nicer than New York. (shocking!!)
Saturday, January 22, 2011
Landmark National Bank v. Kessler* and a recent Supreme Court of Massachusetts case US Bank v. Ibanez**, provide an interesting perspective in to the legal deficiencies of mortgage backed securities. In both of these cases the underlying home owners mortgage had been registered with the Mortgage Electronic registration System (MERS) or assigned to an entity that would allow the mortgage to be part of a pool pf assets sold as a mortgage backed security; all very legal.
What was problematic was the documentation of the transfer or assignments. Under the Statute of Frauds, ay contract concerning an interest in land must be written. Because of the speed with which these mortgages traded hands before they wound up in a Mortgage backed security, the assignment never designated the new assignee. Documents were left blank and unsigned. Due to this, it was unclear who help the mortgage and whom was entitled to foreclose on the property.
These formalities of contract and real estate were overlooked because of the speed with which these mortgages changed hands. Participants in the market were also so enamoured with MERS that they did not question its legal status. All of these activities were driven by market forces and a lack of respect for the rule of law.
The decisions in the Landmark and US Bank case uphold the formalities of contract and the recording of mortgages. These out of date 17th century concepts may be boring and old but they are reliable and create a sense of stability when contracts are challenged and titles need quieting.
The law may be old and outdated but everyone is reassured when it helps them keep their house. Banks should have been more careful. When they weren’t then those homeowners should be able to keep their homes.
*192 P.3d 177 (2008)
Thursday, January 20, 2011
My topic is the Contract implications of the Foreclosure documentation crisis. So many recent cases have prevented Banks from foreclosing because the documentation was missing, blank or falsified. The focus of my presentation is only on the contract law dimension of that documentation mess.
This way I can avoid trying to understand, let alone explain, arcane title theory, real property and securitization law-which we all know NO ONE in the US understands.
Thursday, January 6, 2011
I forgot to post some fotos from a trip to Zim and Zambia. I am so sad and excited when I look at them again. Sad that I am not there but so excited that I was able to see and appreciate this place that seeps under your skin in the most irritating and fabulous way.
Enjoy the next few postings!!