Judge Watt on Contract Enforcement
From Judgepedia
2007
Justice Watt concurred in the majority opinion of Justice James Winchester, which invalidated a clause in a contract between defendant, a cellular phone provider, and defendant, a customer who entered into a contract with defendant.
ISSUES:
In this case, the court considered whether an arbitration clause in contract for cell phone services was unconscionable because the plaintiff/customer was under duress when he entered into the agreement.
HOLDING:
The court found that an arbitration clause in a cellular phone services agreement was unconscionable, and invalid, because the plaintiff/customer had an absence of meaningful choice when he entered into the agreement for cell phone services.
REASONING:
In arriving at that decision, the court reasoned as follows:
- (1) The plaintiff/customer had an absence of meaningful choice because "[h]e needed to replace his cell phone, which had been stolen," and because "clearly [the plaintiff] did not know the implications of * * * the contract."
POTENTIAL FLAWS IN THE COURT'S REASONING:
- (1) It does not necessarily stand to reason that the plaintiff experienced "an absence of meaningful choice," merely because his prior cell phone was stolen. While court's have oftentimes found contracts or clauses in contracts to be unconscionable in cases where patients in need of urgent or necessary medical care assent to them, the services at issue in this case are not as critical. Perhaps plaintiff could have used a land line, or subscribed to a different carrier (there are many). Thus an argument could have been made that the Court should have employed the point of law that a party that signs a contract is deemed to have read and understood it, and is bound by its terms.
2004
Justice Watt concurred in the majority opinion concluding that the state's newly enacted prohibition on cock-fighting did not, amongst other things, constitute and regulatory taking of private property without compensation, or an unlawful interference with the contractual rights of those involved in cockfighting.
ISSUES:
In this case, the court considered whether (1) prohibiting the use of birds for fighting purposes constituted a regulatory taking or damaging of the plaintiffs' property for public use without just compensation; and (2) the act unconstitutionally infringed upon the contractual rights of the plaintiffs by taking immediate effect and nullifying contracts surrounding cockfighting.
HOLDING:
As to regulatory takings challenge, the Court held that the mere outlawing of one use of game-birds, that being fighting, was not sufficient to constitute a regulatory taking of those birds worthy of compensation; (2) the prohibition against using birds for cockfighting is a reasonable and proper use of the police power even though it substantially reduced the value of game-fowl or accompanying property used in cockfighting and had the effect of prohibiting that property's most beneficial use.
As to the impairment of contracts challenge, the Court held that "it is simply not a reasonable expectancy that an existent contract at the time of passage of this Act, which contains terms extending into the future concerning the use or sale of game fowl or gamecocks, would be immune from being overridden by valid police power regulation outlawing or prohibiting cockfighting.
REASONING:
In arriving at that decision, the court reasoned as follows:
- (1) "The prohibition against using birds for fighting purposes is a reasonable and proper exercise of the police power by the electorate acting in its legislative capacity to promote public morals and to ban an activity deemed injurious thereto, rather than a regulatory taking * * *."
- (2) "At a minimum, the Act serves the significant and legitimate public purpose of preventing cruelty to animals and prohibiting human involvement in bird fighting, obviously out of compassion for avian creatures."
- (3) Property interests in game-fowl cannot be said to be entirely legitimate property interests because "[A]bout 40 years ago, our own Court of Criminal Appeals foreshadowed the potential for specifically outlawing cockfighting [because that Court indicated that cockfighting could someday be outlawed]." "[W]e have serious doubts as to whether- given this Oklahoma perspective- the use of birds for fighting, could ever be considered an identifiable property interest subject to protection."
- (4) A second purpose in addition to the prevention of animal cruelty has, thus, seemed to have been recognized for quite some time: to wit, safeguarding the public welfare by protecting our populace against the debasing and brutalizing effects upon those who witness such events.
- (5) "Suffice it so say that government regulation- by definition- involves the adjustment of rights for the public good. Often this adjustment curtails some potential for the use or economic exploitation of private property. To require compensation in all such circumstances would effectively compel the government to regulate by purchase."
- (6) The "denial of one traditional property right does not always amount to a taking. At least where an owner possesses a full bundle of property rights, the destruction of one strand of the bundles is not a taking, because the aggregate must be viewed in its entirety."
- (7) "[L]oss of future profits * * * provides a slender reed upon which to rest a takings claim."
- (8) "[T]he Court has sustained regulations prohibiting the sale of alcoholic beverages despite the fact that individuals were left with previously acquired stocks."
- (9) "[I]t could not reasonably be expected by respondents or anyone else that cockfighting, simply, simply because it was lawful prior to the Act's passage, would always remain so. * * * criminal statutes prohibiting cruelty to animals or instigating fights between animals have been part of Oklahoma since at least the early 20th Century."
- (10) "The Court of Criminal Appeals expressly presaged the potential for future prohibition of [cockfighting] by legislative action."
POTENTIAL FLAWS IN THE COURT'S REASONING:
- (1) Although the court acknowledges that a regulation may amount to a taking of private property when it "goes to far" in destroying the value of the property, it then declines to apply that standard so as to require compensation in this case. The Court acknowledges that the only competent testimony on the diminution in value indicates that (1) the gamecocks have value for only one purpose: fighting each other; (2) they are not fit for consumption; and (3) they would have to be destroyed in order to avoid criminal prosecution under the act. The trial court agreed with this testimony, and actually enjoined the Act from becoming law on that basis. Further, testimony indicated that nearly the entire value of the average gamecock operation, which ranged in value from $75,000 to $100,000, would be destroyed. In aggregate, these factors indicate that, in this case, it could have been appropriate to deem the prohibition on cockfighting a taking, and require that compensation be paid to the owners of the gamecocks and gamecock operations.
- (2) The Court appears to stray, both logically and legally, when it announces that game-fowl should not be considered property because 40 years earlier the Oklahoma Court of Criminal Appeals speculated as to whether cockfighting may, some day, be prohibited. The logical extension of this reasoning would be that if a court today speculated on the topic of whether home ownership may be illegitimate in 40 years, a court 40 years from today would be justified in abstaining from recognizing one's home as property requiring compensation when taken, because homeowners were "on notice." It may be the case that, in an idea-driven society, many propositions can be made regarding the putative prohibition of certain types of properties and activities. The Court's reasoning implies that the mere bantering about of such ideas is sufficient to disgorge property rights. The unpopularity of cockfighting may have contributed to such reasoning, but the popularity of a particular right or ownership interest should probably not determine whether such an interest legally exists.
