Comments on Recent Cases: July 2021
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Part of my work involves reading court decisions to keep abreast of how judges decide the types of cases I handle. Below, I share some thoughts on recent decisions.
New York High Court Broadly Applies Consumer Protection Statute
Many states have consumer protection statutes that allow plaintiffs to recover attorney’s fees and extra damages when they sue companies that engage in deceptive sales practices. These statutes are often limited to in-state misconduct directed at consumers, but courts may read these statutes broadly.
For example, the highest court in New York recently held that the state's version of the statute applied to the seller of a legal textbook, even though its primary readership is lawyers and not the general public, because the a product need not be directed to “all members” of the public to be a consumer product. Instead, what is necessary is that the transaction is not unique for the parties, who may regularly buy or sell the same goods. It also reasoned that lawyers are just a subset of consumers generally, and so a sale to lawyers qualifies as a consumer sale.
Cases like this may help plaintiffs who want to invoke consumer protection statutes, but are concerned about whether they apply.
New York Court Expands Treatment of Emails as Binding Contracts
Many people are surprised to discover that emails may count as legally binding contracts. New York courts recently distinguished between emails that people signed by typing their name at the bottom and emails that automatically put the author’s name at the bottom.
A recent Manhattan appeals court case changed that rule. In litigation involving a settlement agreement, the court held that “if an attorney hits ‘send’ with the intent of relaying a settlement offer or acceptance, and their email account is identified in some way as their own, then it is unnecessary for them to type their own signature.”
This doesn’t mean that all emails are binding contracts, but the case provides a framework for parties to understand the legal effect of emails.
Court Allows Plaintiff in Employment Dispute to Enforce Promise for Severance Pay
Contracts require adverse parties to give something to each other (called “consideration”) in order to be enforceable. A promise by one party to gratuitously do something for another is, generally, unenforceable.
But many lawsuits debate whether there really was consideration. A recent Manhattan appellate court case decided whether an employee who stayed working for an employer who promised severance pay had given consideration so that her right to the severance pay was enforceable. The employer said she was only doing her job, for which she was already paid. But the court rejected the argument, ostensibly since her decision not to quit counts as consideration.
Cases like these illustrate how employers should recognize that incentives to convince an employees not to quit may become legal liabilities.
Appeals Court Upholds Sanction on Party that Disobeyed Court Order, Despite Covid-19 Excuse
One way in which courts have the power to enforce their orders is by holding disobedient parties in contempt. When a party is in contempt, they could be forced to pay fines or even put in jail. Although I have never personally seen a party in a commercial case put in jail for contempt, I have read a few cases where courts have awarded fines.
For example, a Manhattan appeals court recently upheld a $500 per day fine for a party that disobeyed an order to respond to a discovery subpoena. The defendant not only missed his deadline to respond, but when he did respond late, his response was “demonstrably incomplete and untruthful.” The trial court imposed sanctions and the appellate court refused to reverse them. Specifically, it rejected his defense that covid-19 prevented him from responding to the subpoena since he received the subpoena in June 2019.
Cases like this illustrate the court’s sanction power to enforce its orders.