Category: Contract Law & Beyond

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Trump v. Mahr: Another Donald Contract Folly

(Credit: Ethan Miller/Getty Images)

(Credit: Ethan Miller/Getty Images)

In 2012, Donald Trump, flirting with a run for the presidency of the United States and criticizing its incumbent, Barak Obama, pressured the President to confirm his U.S. citizenship by publicly disclosing his birth certificate.

Despite Obama having done so, Trump sustained the pressure, posting a video on the internet on October 24, 2012—the last week of the election campaign—in which he offered to pay $5 million to Obama as consideration for the President publishing his college and passport applications and records.

Trump was serious, even suggesting charities, clarifying his goal of producing the information, and committing to pay within one hour. The offer also had a deadline: October 31, 20012 at 5:00 p.m. That hour having come and gone without Obama accepting, the offer terminated Obama’s power of acceptance.

On January 7, 2013, the comedian and political talk show host, Bill Maher, appeared on the Tonight Show with Jay Leno. After calling Trump a liar and racist, he characterized some of Trump’s public ramblings as “syphilitic monkey.” Then came what Trump portrayed as an offer: “suppose that perhaps Donald Trump had been the spawn of his mother having sex with an orangutan. . . . I hope it’s not true . . . , but, unless, he comes up with proof, I’m willing to offer 5 million dollars to Donald Trump . . . that he can donate to a charity of his choice. . . .”

Trump formally submitted his “acceptance” of this “offer” the next day, sending a copy of Trump’s birth certificate attesting that he is “the son of Fred Trump,” and naming the charities designated as beneficiaries of the $5 million. In Trump’s view, a contract was formed “the moment the Acceptance Letter was sent,” a reference to the usual rule of acceptances, which makes them effective on dispatch (affectionately referred to as the “mailbox rule”).

On February 4, 2013, Trump sued Maher. The lawsuit, of course, was an inherent loser, and Trump soon withdrew it. But in their filings, Trump’s lawyers got much of contract doctrine right, in both the Obama background and Maher interactions.

In relation to Obama, the lawyers correctly noted that (1) an offer creates the power of acceptance, (2) an unrevoked offer may be accepted by following the route to acceptance stated in the offer and a binding contract results, and (3) that the power of acceptance terminates upon any expiration stated (or upon the offer’s revocation of it, the offeree’s rejection of it, or the offeror’s death).

So why did Trump file such a patently frivolous lawsuit?  For a hint and another example of how Trump is a prolific frivolous litigator in American courts, see this companion post.

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Donald Trump, Prolific Frivolous Litigator, Part I

Donald Trump (credit: Business Insider)

Donald Trump (credit: Business Insider)

For about two years, Chicago’s skyline has had the letters T R U M P adorning a showy luxury building the presumptive Republican presidential nominee put up during the financial crisis.   While locals led by Mayor Rahm Emanuel recoiled at the Donald’s bad taste in design, lawyers and citizens alike should recall some of the poor judgment, tone deafness, and ignorance of the law he displayed during the long construction process.

As told in my book aimed at new or aspiring law students, Contracts in the Real World: Stories of Popular Contracts and Why They Matter, Donald Trump thought the so-called “Great Recession” of 2008-09 so calamitous to count as an “Act of God.” He was in the midst of building what would be one of Chicago’s tallest skyscrapers, rivaling the old Sears (now Willis) Tower, a combination luxury hotel and condominiums.

To finance the project, Trump borrowed $640 million from lenders led by Deutsche Bank in February 2005. By the end of 2008, Trump had only sold condos netting him $204 million along with others under contract that would yield another $353 million. That left him facing a shortfall of nearly $100 million when he was obligated to repay his lenders $40 million per month. Trump cited the Great Recession as an excuse to delay making monthly payments. The banks refused to accept the excuse from timely payment, so Trump, a prolific litigant, went to court. Read More

7

Please Pay Me My Blackmail

I’m fascinated by the lawsuit filed against Dennis Hastert by one of his alleged sexual abuse victims for breach of contract. In essence, the suit says that Hastert agreed to pay him around $3 million in compensation but only paid 1/2 of that (due to the feds catching on to the former Speaker’s attempt to structure his payments to avoid detection.)  Now the plaintiff wants the other half.

I don’t how this suit can succeed (though the point of this is probably just to make clear what Hastert allegedly did).  If this is understood as a payment of blackmail, then the contract cannot be enforced as a matter of public policy.  How can it not be construed that way?  If Hastert had refused to pay, what would the plaintiff have done?  Nothing?

Granted, if the allegations against Hastert are true, then he’s an awful, awful human being.  And perhaps blackmail should not be unlawful in circumstances such as this.  But it is, and thus I don’t think that a failure to pay can be converted into a contract action.

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Rather v. CBS Contracts Story Omitted from Redford’s “Truth”

Robert Redford’s latest film, Truth, dramatizes the last stand of newsman Dan Rather, longtime face of CBS News until fired for a controversial 2004 broadcast about President George W. Bush. The film, which debuted this week at the Hamptons Film Festival in Long Island, New York and opens October 16, is based on the book by Rather’s producer, Mary Mapes, and is therefore biased.  It is nevertheless a rich story, with Redford playing Rather and Cate Blanchett portraying Mapes (all pictured nearby).  The true story culminated, moreover, in a fight between Rather and CBS about contract interpretation, although neither the book nor the film delves into this important topic.

Amid a heated 2004 presidential election, on a CBS 60 Minutes broadcast of September 8, 2004, Rather questioned President Bush’s service in the Texas Air National Guard during the Vietnam era. Rather implied that Bush exerted political influence to avoid that era’s military draft by entering the Guard, and then receiving special treatment to skip military duties. A media melee followed Rather’s show. Bush supporters challenged its accuracy, the authenticity of documents used, and Rather’s journalistic integrity, which many believed was compromised by bias against President Bush.

After investigation, CBS disavowed the broadcast and, two weeks later, an emotional Rather apologized for it on national television. But CBS and Rather disagreed on the overall journalistic quality of the broadcast and what to do about it. Rather identified important accurate facts in the broadcast, obscured by the firestorm, and urged a defense of those whose reputations, including his and Mapes, the broadcast imperiled.

For its part, CBS emphasized the journalistic lapses and wanted to let it go at that. Believing CBS was most interested in the politics of good relations with the White House, as Bush was running for reelection in a heated contest against Senator John Kerry, Rather retracted his apology and claimed CBS fraudulently induced it. The day after President Bush won reelection, CBS told Rather it planned to remove him from his coveted spot as anchor of the CBS Evening News—a stinging rebuke. Rather’s last broadcast as anchor was March 9, 2005.

During the next 15 months, through May 2006, CBS kept Rather on its payroll, paying his salary of about $125,000 per week ($6 million annually). CBS gave him irregular appearances on CBS programs covering less significant stories, and his former television profile diminished. He rarely appeared on the network’s big-time shows such as 60 Minutes. Worse, CBS prevented him from pursuing jobs with competing networks or other media. Rather claimed that CBS marginalized him by giving him limited staff and editorial support; rejected most of his story proposals and aired those it accepted at off-peak times; denied him the chance to appear as a guest on other programs; and generally prevented him from refurbishing his reputation. Read More

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Howard Stern’s Audience: One Group or Two?

11111Howard Stern is a wealthy man, but he sought to be some $300 million richer after his radio employer, Sirius, doubled his audience by acquiring rival XM. Stern thought his contract said as much but a court disagreed.  Businesspeople and lawyers alike can take a lesson from the deal, presented here in one of my three-part series this week on the unruliness of words–and numbers.  Following on my accounts of whether the attack 14 years ago today on the WTC was one occurrence or two and whether The Hobbit film trilogy released by New Line Cinema was one film or three, here’s the Stern story. 

The Howard Stern Show is a popular off-color program long aired on traditional radio. But in 2004, one of the leading satellite radio companies, Sirius Satellite Radio Inc., persuaded Stern to move his program to its service. Performance compensation under the resulting licensing agreement called for Sirius to pay Stern’s production company up to five separate awards of common stock in Sirius—each worth $75 million—if a series of ever-rising subscriber thresholds was met.

To implement this deal, the parties included in their formal written contract an exhibit setting out the company’s estimated number of subscribers as of year-end for each of the ensuing five years. The agreement then provided that the company would pay a stock bonus if at any year-end the actual number of subscribers exceeded the target by a specified amount: a first bonus for exceeding the target by two million; a second for exceeding it by four million; a third for exceeding by six million; a fourth for exceeding by eight million; and a fifth by ten million.

There was no dispute about what happened the first two years: at 2006, actual subscribers exceeded estimated subscribers by more than two million and Sirius promptly delivered $75 million worth of its stock to Stern; at 2007, actual subscribers did not exceed the target by more than four million, and therefore no bonus was due. A complication arose in 2008, however, because in that year Sirius acquired a rival, XM Radio, which had nearly ten million subscribers. So the parties disputed whether those subscribers counted as Sirius subscribers under the bonus provisions of the licensing agreement.

Resolution depended on determining the intended meaning of their contract in light of the specific terms of Sirius’s acquisition of XM. Before the acquisition, Sirius and XM were separate rivals of about equal size (Sirius had more than nine million subscribers)—and both had been wooing Stern to join them. After the acquisition, Sirius changed its name to Sirius XM, but the two continued to operate separately with their own subscribers, although subscribers could buy a premium package to add the other company’s offerings. About one million XM subscribers signed up for the Sirius package.

Counting only original Sirius subscribers, at year-end 2008, actual subscribers did not exceed target subscribers by more than four million contemplated for a second bonus award. Even adding the one million XM subscribers who bought access to Sirius, the target was not so surpassed. But if also counting the nearly ten million XM subscribers that Sirius acquired in the acquisition, then the target was exceeded by more than ten million, triggering all the bonuses and meaning Sirius owed Stern another $300 million worth of stock. Read More

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Greatest Error: Was The Hobbit One Film or Three?

11111One of the greatest errors in contract history arose when Miramax sold the movie rights for “The Hobbit” to New Line Cinema.  Here’s the story which, in honor  of the trilogy fashioned from Tolkien’s fantasy work, is in an installment of three posts on lessons from such debacles (others consider whether the 9/11 attacks on the World Trade Center were one occurrence or two for applicable insurance contracts (see here for the answer) and  whether, when Sirius radio acquired another satellite radio service, it was obliged to pay Howard Stern $300 million because the deal doubled its subscriber base).   Each story has inherent interest, a bit of drama, and useful lessons for contract drafting.  These three stories will be in the upcoming second edition of my book, Contracts in the Real World: Stories of Popular Contracts and Why They Matter.

The Hobbit: One Film or Three?

In 1998, the film company Miramax sold New Line Cinema the film rights to J.R.R. Tolkien’s four books: The Hobbit: Or There and Back Again (“The Hobbit”) and The Lord of the Rings Trilogy: The Fellowship of the Ring, The Two Towers, and The Return of the King. Miramax had spent $10 million developing screen adaptations of Tolkien’s classic fantasy works, which required considerable technological dexterity to produce. In exchange for the film rights, New Line paid $11.7 million and promised to pay royalties equal to five percent of the gross receipts of the “first motion picture” based on each book, excluding any “remakes.”

More technically, under a “Quitclaim Agreement,” New Line agreed to pay Miramax “Contingent Consideration,” defined as five percent of gross receipts, for “Original Pictures.” The Quitclaim Agreement defined “Original Pictures” to mean “the first motion picture . . .  based in whole or in part” upon The Hobbit Book and each of the three books in The Lord of the Rings Trilogy and “excluding remakes.” The Quitclaim Agreement further provided that a motion picture constituted a film based on The Hobbit book if “the main story line of the book is substantially the same as the main story line of the movie, certain of the book’s events and characters are featured in the movie, or the title or subtitle of the movie contains the words ‘The Hobbit’ or ‘Hobbit’.”

Between 2001 and 2003, New Line released three Original Pictures based in whole or in part on each of the three books in The Lord of the Rings Trilogy. Pursuant to the Quitclaim Agreement, New Line paid Miramax total Contingent Consideration exceeding $90 million in connection with those three movies.  In 2012, New Line released a new film based on The Hobbit book, called The Hobbit: An Unexpected Journey, as the first of another trilogy. It acknowledged an obligation to pay Miramax royalties on that film—and had paid $25 million—but not on the second or third in the planned series. Miramax objected, saying it was entitled to royalties on all three Hobbit-based movies. Read More

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Contracting with Unruly Words—and Numbers

11111Lawyers learn drafting lessons from previous cases involving disputes over the meaning of language. The result is often contracts with denser detail, attempting greater specificity to delineate intention using language. Yet words can be unruly and open to interpretation—well illustrated by a series of contemporary examples that also happened to involve numbers:

  • were the 9/11 attacks on the World Trade Center one occurrence or two for purposes of applicable insurance contracts? (Spoiler alert: both!)
  • was the blockbuster film trilogy The Hobbit three separate films or merely one film in three installments?
  • when Sirius radio acquired another satellite radio service, was it obliged to pay Howard Stern $300 million because it doubled its subscriber base–or not?

Each story has inherent interest, a bit of drama, and useful lessons for contract drafting.  These three stories will be in the upcoming second edition of my book, Contracts in the Real World: Stories of Popular Contracts and Why They Matter.  So, what about that attack or attacks?

WTC and 9/11: One Occurrence or Two?

On September 11, 2001, terrorists hijacked commercial aircraft and flew two of them into the World Trade Center in New York—another hit the Pentagon in Washington and a fourth was overtaken by passengers, forcing it to nosedive into a Pennsylvania field. Beyond the loss of 3,000 lives and many personal injuries, the assaults in New York destroyed or damaged twenty buildings, including the total collapse of five of the buildings that comprised the World Trade Center (WTC).

The insurance industry incurred an unprecedented $40 billion in claims, all pursuant to thousands of contracts, including aviation, life insurance, workers’ compensation, and liability policies. While many claims were filed and paid without incident, some generated significant litigation. One issue was particularly vexing: how many occurrences were there on 9/11 at the WTC: one, encompassing the destruction of the entire unitary complex, or two, given that two planes struck separate towers?

Commercial property insurance policies typically address claims on a per occurrence basis, including in terms of overall policy limits (the maximum payable) and the applicable deductible (in effect, the minimum loss before any coverage applies). When losses are within limits, the question of occurrences relates only to the deductibles and insurers tend to classify events into multiple occurrences to generate multiple deductibles; but when losses exceed policy limits, the number of occurrences defines that cap and insurers generally prefer to classify events as involving a single occurrence to cap liability. In the case of the destruction of the WTC on 9/11, losses vastly exceeded policy limits, turning what may seem like a semantic question into a $3.5 billion disagreement.

The WTC was owned by the Port Authority of New York and New Jersey, which had recently leased it to Silverstein Properties, Inc. The lease agreement required Silverstein to insure the WTC, and on September 11 it was in the process of putting insurance in place. Given the WTC’s size and scope, the insurance was large and complex, involving more than thirty insurers, each offering varying layers of coverage that aggregated $3.5 billion—“per occurrence.” Silverstein claimed there had been two occurrences, meaning $7 billion in total coverage; the insurers said there had been but one occurrence, meaning $3.5 billion in total coverage.

Despite posing the same question—what is an occurrence?—the answer differed for different insurers because the insurers were bound by different contract policies using different contract language. One group had bound itself to a policy (called the Willis form) which defined “occurrence” to mean “all losses or damages that are attributable directly or indirectly to one cause or to one series of similar causes.” Other policies either did not define the term occurrence or defined it differently. Court proceedings followed accordingly.

Interpreting policies using the Willis form’s definition of occurrence was relatively easy for the judges, with both the trial and appellate courts finding that the 9/11 attacks amounted to one occurrence. The reasoning was closely tied to the specific definition:  “no finder of fact could reasonably fail to find that the intentional crashes into the WTC of two hijacked airplanes sixteen minutes apart as a result of a single, coordinated plan of attack, was, at the least, a ‘series of similar causes.’” The liability of such insurers was therefore limited to the respective policy cap. The conclusion was reached on summary judgment—meaning as a matter of law without need for any trial.

Such an easy interpretation was impossible under the other policies, however. For those that lacked a definition of occurrence, both courts concluded that the concept is sufficiently ambiguous to require considering extrinsic evidence to determine contractual intention. This requires studying context: meaning is to be interpreted given the specific policy and facts of the case, not broad generalities or legal principles. The issue was therefore a matter for a jury. After listening to competing evidence and views, the jury decided that the 9/11 assault on the WTC amounted to two occurrences for purposes of coverage under the policies.

The jury was apparently persuaded by evidence offered at trial by Silverstein’s expert witness on the insurance business. Concerning policies that did not define occurrence, he explained that insurers generally take occurrence to have a narrow meaning—giving rise to multiple occurrences from given scenarios—principally because that increases the number of deductibles that apply. Insurers only prefer a broad conception of occurrence—one-occurrence interpretations—in total loss situations such as this, which are rarer. For policies that defined occurrence differently than in the Willis form—such as any loss or series of losses arising out of one “event”—the expert explained that the word event should likewise be construed narrowly.

The policy language is the starting point for making a deal and interpreting it. Want a specific definition, then supply it, and courts will enforce it accordingly; absent a specific definition, courts must dig into context, get all the facts, and let the fact finder decide. The latter setting obviously entails greater uncertainty, subjectivity, and contingency. Indeed, while some courts urge juries to contemplate the dictionary definition of occurrence, others adopt a logical perspective, which can vary according to emphasizing the causes of a loss (where all damage from a single, proximate cause is a single occurrence) or the effects (each separate incident of loss is a separate occurrence).

Lawrence Cunningham is a professor at George Washington University whose forthcoming books include the second edition of Contracts in the Real World: Stories of Popular Contracts and Why They Matter, which includes this story and fifty more. 

Sources: Scott G. Johnson, Ten Years After 9/11, 46 Tort Trial & Insurance Practice Law Journal 685 (Spring-Summer 2011); World Trade Center Properties, L.L.C. v. Hartford Fire Insurance Co., 345 F.3d 154, 180 (2d Cir. 2003).

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Handshakes and Smiles: Founder Feuds from Snapchat to Facebook

11111In 2011, Frank Reginald “Reggie” Brown, IV was an English major at Stanford University, living in the Kimball Hall dormitory. There Brown conceived of an idea for a mobile device application that would let people send pictures from one phone to another, but with a novel catch: the picture would self-destruct shortly after viewing, so the recipient could not save or forward it. The idea would become the lucrative Snapchat product, at one point valued at $15 billion (an astounding figure considering that customers do not pay for the service and a way to make profits had not yet been devised). But Brown, having failed to formalize a contract, had to fight for his share of the value.

          As spring blossomed in Palo Alto that year, Brown was hanging out in the dorm room of a friend, Thomas Spiegel, when he explained the app. Spiegel called it a “million-dollar idea.” After Spiegel asked Brown if they could work on it together, Brown said yes, and the two shook hands. That night, they began searching for a computer coder to help. After interviewing several candidates, they chose Robert Cornelius Murphy. Another Stanford student and friend of Spiegel’s, the three were all also Kappa Sigma fraternity brothers.

The trio then agreed orally to develop the app—which Brown initially called “Picaboo”, after the children’s game—and split profits among them equally. Control and management would likewise be shared, and each would have specific roles: Spiegel, chief executive officer; Brown, chief marketing officer; and Murphy, chief technology officer.

By early summer, the three were deep into the venture. They decamped to work and live together on the start-up at the home of Spiegel’s father, on Toyopa Street in Los Angeles, which Spiegel called the “start-up house.” Brown wrote the terms of use, designed the product logo (a cartoonish smiling ghost), and the promotional pages for social media sites. The three jointly designed the app’s features, including the camera button, screen layout, and colors. Votes were taken on important decisions. When they communicated with friends about the project, each author put all three names in the signature.

In July 2011, they launched the app, which instantly drew strong interest and repeat customers. Through August, the three continued to share the work, even as Brown and Murphy went to their respective family homes for the rest of the summer. That’s when things turned ugly.  Read More

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Making Contracts on Kickstarter

11111In 2013, Chapman Ducote, a professional race car driver, and his wife, Kristin Ducote, had an idea for a new book about the world of professional motor sports, to be called Naked Paddock. Rather than the traditional route through book publishing—hiring an agent, seeking a publisher to pay an advance, and having the house handle the rest—they opted for a new approach of crowd-funding and self-publishing.

Crowd-funding refers to project financing generated from among the general public, usually facilitated by an internet-based service designed to match money to ideas. Creators post project proposals on the site and invite backers to buy the product in advance or stake funds in exchange for bonus mementos or voice in production. Proposals state the total amount sought to be raised and the deadline. If the goal is not reached on time, no funds change hands. But otherwise a deal is made: the facilitating site has enabled backers and creators to form a bargain.

Facilitators, such as Kickstarter, present on their web sites “terms of use” that all creators and backers must agree to in order to access the site. Such terms of use include standards designed to promote the commercial efficacy of the site. Kickstarter is where Chapman and Kristin Ducote hatched their book idea, posting their project and thus manifesting their assent to the terms of use.

The couple launched heavy promotional efforts, which included an appearance on a reality TV show—a spin-off of  But within a week, Kickstarer took it down because it violated its rules. The Ducotes sued for breach of contract, saying Kickstarter had no basis to remove the project. But they soon withdrew the suit acknowledging that they had made a contract with Kickstarter to abide by it rules yet failed to do so.

Kickstarter therefore had the right to remove the project.  While neither side disclosed publicly what rules were broken, they revealed that Kickstarrter acted in response to complaints from other users. Among likely violations were rules restricting what creators can do to promote projects—creators may not spam, use link-bomb forums, or promote on other Kickstarter project pages.

Terms of use flourish on the internet, where web site builders use them to define business models and a sense of community norms. While the means of assent vary from traditional means—clicking at prompts rather than signing a form—they have similar purposes, efficacy and limits.  While the traditional rules of contract formation fit the creator-facilitator relationship well, they require adaptation, at least conceptually, when considering other pairs of relationships in crowd-funding.

Consider that between backers and facilitators. On the surface, it may seem that the facilitator has agreed to provide a service to the backer, such as assuring product delivery and quality. But the sites disclaim such a traditional contractual relation, instead establishing the facilitator as a pure middleman without duties.   The Kicktarter terms of use state, for example: “The creator is solely responsible for fulfilling the promises made in their project.” Kickstarter’s terms of use declare that “Kickstarter doesn’t evaluate a project’s claims, resolve disputes, or offer refunds—backers decide what’s worth funding and what’s not.” The facilitator disclaims any duty to backers concerning product delivery, quality, warranties, or refunds. Read More

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Spelman College, Bill Cosby, and Mutual Intent in Pledges

Spelman College’s decision to terminate a $20 million program supported by Bill Cosby, embroiled in allegations of drug-related seduction, reminds us that donors and recipients mutually depend on good behavior  and shared intentions, which are imperiled about once a decade for most charitable organizations.

The problem can originate on either side, as where a recipient wishes to disaffiliate because a donor’s behavior or reputation becomes objectionable–as in the Spelman-Cosby case–or where a donor objects that a recipient is not using funds as intended–as in the 1995 case of  Yale University returning $20 million after alumnus Lee M. Bass complained that the school had not used the donation to create classes in Western civilization the donation called for.

Litigation does not often result, but when it does, it can be ugly. Negotiations and structured solutions are usually preferred. Take an example of each: Princeton University’s acrimonious litigation with the Robertson family and Lincoln Center’s friendly accord with the Fisher family over renaming Avery Fisher Hall at Lincoln Center.

22222Princeton U. and the Robertson Family: Pyrrhic Victories for Each

In 1961, Charles and Marie Robertson made a $35 million endowment gift to Princeton for the purpose of educating graduate students for government careers. They embraced the spirit of the times, captured in President John F. Kennedy’s call to “Ask not what your country can do for you, but what you can do for your country.” Establishing the Robertson Foundation, Princeton invested the $35 million and used the rising investment income to fund such programs—along with many others outside the Wilson School. Indeed, the Robertsons’ gift—which grew to nearly $1 billion today—become a sizable component of Princeton’s overall endowment—about $15 billion today.

While Princeton administrators loved the large and seemingly flexible funding, the Robertsons’ children, who retained a role in overseeing the use of funds, objected. They insisted that Charles and Marie intended a specific and limited use of the funds, solely for training in government careers at the Wilson School. Unable to resolve the disagreement amicably, the Robertsons sued the University in 2002, seeking to terminate the gift and recover the principal.

In the acrimonious litigation, the Robertson family said the university allocated $250 million of foundation funds to non-foundation pursuits, including a new sociology department facility, international affairs programs, and public policy studies—none of which focused solely on training for careers in public service at the Wilson School. The family contended that the University commingled foundation funds with general university funds with the result of disguising how foundation funds were used.

Princeton countered that the University was a complex institution with multiple interconnected missions that result in overlap between Wilson School government careers and broader programming on public and international affairs. It argued that the narrow literal and historical reading of the donor’s intent should yield to a contextual, flexible and evolving understanding of donor intent in relation to the University’s needs.

After six years of legal wrangling during which the two sides incurred legal fees exceeding $40 million each, they settled. The Robertson Foundation was dissolved, with $50 million going to fund a new “Robertson Foundation for Government” independent of Princeton and under the family’s auspices. The University also agreed to pay the Robertsons’ legal fees.

While both sides claimed victory, informed observers saw mostly mutual defeat, a pair of Pyrrhic victories. After all, while the Robertsons wrested control of a foundation from Princeton rededicated to their perception of their ancestors’ vision, it was far smaller than what the original endowment had become, and the bruising litigation did not entirely promote family unity. While Princeton retained control over most of the funds along with an expanded authority over allocation, the philanthropic community saw a bald assertion of power over donor intent that is likely to make some donors unwilling to trust the school with their beneficence.

11111Lincoln Center and the Fisher Family: Mutual Gains 

In 1973, Avery Fisher, founder of Fisher Electronics Co., donated $10.5 million to support the renovation of New York City’s Philharmonic Hall, the music house built in 1962 on Manhattan’s upper West side.  The pledge agreement provided that the Hall would be renamed Avery Fisher Hall and called for that title to “appear on tickets, brochures, program announcements and the like . . . in perpetuity.” The site has hosted innumerable grand classical musical performances over the decades, and the name is etched in the consciousness of many a New Yorker, and gave Mr. Fisher, who died in 1994, a bid to immortality. Read More