September 04, 2007
The Shirley MacLaine Case
Posted by Gordon Smith

In my Contracts class, we just finished our discussion of the Shirley MacLaine case, the first case in the casebook. If you studied contracts in a law school, you probably encountered the case, which involves a contract between MacLaine and Twentieth Century Fox (TCF). Under that contract, MacLaine agreed to star in the movie version of the popular Broadway musical Bloomer Girl. The movie was never made, but TCF offered to place MacLaine in the lead role of another movie entitled "Big Country, Big Man." She refused, and that film was never made, either. (By the way, MacLaine turned down the opportunity to appear in Casino Royale because she was under contract for Bloomer Girl.)

MacLaine sued for payment under the contract. According to the California Supreme Court, "the sole issue is whether [MacLaine's] refusal of [TCF's] substitute offer of 'Big Country' may be used in mitigation." So conceived, the case turned on whether "Big Country" was "inferior employment" to "Bloomer Girl." The majority felt that "no expertise or judicial notice is required" to see that "Big Country" was inferior, but the dissent observed, "It is not intuitively obvious … that the leading female role in a dramatic motion picture is a radically different endeavor from the leading female role in a musical comedy film." And off we go, discussing the rationales for the "duty to mitigate."

Victor Goldberg's new book, Framing Contract Law, has a chapter devoted to the case, in which he discusses the following "pay-to-play" provision from MacLaine's contract:

We shall not be obligated to utilize your services in or in connection with the Photoplay hereunder, our sole obligation, subject to the terms and conditions of this Agreement, being to pay you the guaranteed compensation herein provided for.

Goldberg observes:

By posing the problem in terms of the "different or inferior" question, the California Supreme Court deflected attention from the essence of the contract. The contract had a "pay-or-play" provision, common in the motion picture industry. The studio had, in effect, purchased an option on her time; they would pay her to be ready to make a particular film, but they made no promise to actually use her in making the film. When Fox canceled the project, they did not breach; they merely chose not to exercise their option. There was no breach and, therefore, there was no need to mitigate.

Interestingly, this theory was presented in the lower courts in the MacLaine case. The Superior Court held that TCF waived the right to have damages mitigated. (Though any actual earnings by MacLaine during the contract period would have to be deducted from the contract price.) At the Court of Appeal, however, a unanimous court found an "implied condition that [MacLaine] mitigate [TCF's] obligation by accepting other suitable employment," but concluded, "It is obvious that the two plays differed widely."

This set the stage for the opinion that appears in my Contracts book, which focuses exclusively on mitigation. Of course, the existence of the pay-to-play provision doesn't do much to deflate the value of that opinion to our discussion of mitigation, but Goldberg's insight reinforces the notion that [appellate] opinions are fables. It also raises more troubling issues about the relationship between transactional work and litigation: "Why did the California Supreme Court ignore the purpose of the relevant contract language in determining whether Shirley MacLaine had to mitigate? Does the disjunction between contract law's analytic boxes and transactional lawyers' practical concerns lead to systematic error in contract litigation?"

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Comments (3)

1. Posted by a 3L on September 4, 2007 @ 17:12 | Permalink

I went back and read your old post about appellate opinions being fables. I see the point of your characterization of opinions as "fables", but I'm not sure how your "new case method" would work in practice. My main question is this: How would students learn the law? Reading a long case study would teach students about the details of a particular case, and might perhaps give them a better insight to the particular dispute. But case studies are long. You refer to the "legal stories" line of publications; most of the stories, which usually deal with one case, are 30--50 pages. If you wanted students to read the "legal stories" books exclusively, you'd have to assign fewer cases, meaning that students wouldn't be able to cover as much of the law as is the case now. I don't think this would be a good thing.

Of course, you could retool the "legal stories" so that they're shorter. Perhaps you would make new casebooks that have excerpts from the cases themselves, but which also contain the kind of background info that the "legal stories" books have. Since you'd have to cut something to put this material in, you'd probably be taking doctrinal material out.

And I just don't think that replacing doctrinal material with background info will be that useful. Why does it matter that the appellate court in McFarlane misread the facts? That case will get cited for the legal propositions that it elaborates, not its accurateness in reading the facts before it. The background info just isn't useful for someone who is trying to learn the law (perhaps it would be useful for someone who is trying to have the fullest understanding possible of a particular case or doctrinal point, or to someone who wants to evaluate how courts actually come to decisions ... but students aren't looking for this info; they're looking for a general, broad understanding of a particular area of the law). I would make a similar argument regarding many of the "legal stories" essays that I've read; most of the background info isn't that useful ... it's just the kind of stuff that makes you say "hmm, interesting".

I think you are motivated by the belief, often repeated by practitioners, that law schools should do better to prepare students for real legal practice. For taking this into account, I applaud you. But I just don't think this would be a positive change.

2. Posted by a 3L on September 4, 2007 @ 17:17 | Permalink

More, sorry.

I think the kind of thing that you are proposing would fit well in another context: a class that focuses on teaching the legal skills necessary for litigation. Practicing lawyers commonly tell recent grads that they are undervaluing the role that courts' view of the facts plays in litigation. I think your approach of really getting down into the details of certain cases would help students appreciate that. So as part of a general class---taught, probably, by practitioners (at least in part)---I think this would work quite well.

3. Posted by Jake on September 4, 2007 @ 20:15 | Permalink

Poor example to illustrate the hypothesis of appellate opinions being "fables." It was the California Supreme Court, for crying out loud.

While transporting precedents from one era to another is a hazardous game (for law profs make it so), one wishes the NY Court of Appeals, led by Cardozo, could have taken a crack at Ms. MacLaine's case.

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