The Tenth Circuit's decision in Payless Shoesources v. Travelers Cos., issued yesterday, contains a discussion of grammar in the context of contract interpretation that is sure to be quoted many times over in future briefs and opinions.
After settling a class action brought against it for California state wage act violations, Payless sued Travelers to recoup the settlement costs and costs of defending. The district court entered summary judgment for Travelers, holding that Travelers' policy excluded losses for violations of the Fair Labor Standards Act and, as the exclusion states, "other similar provisions of any federal, state, or local statutory or common law."
Payless appealed, arguing that the district court misread the policy and that "good English grammar" mandates that the modifier "other similar provisions" applied only to the immediately preceding clause, which dealt only with workers compensation.
In rejecting Payless's argument, Judge Gorsuch's opinion contains an interesting discourse on how grammatical rules should (and, as in this case, should not) guide a court's contract interpretation:
[W]hile the rules of English grammar often afford a valuable starting point to understanding a speaker’s meaning, they are violated so often by so many of us that they can hardly be safely relied upon as the end point of any analysis of the parties’ plain meaning. So it is that Groucho Marx could joke in Animal Crackers, “One morning I shot an elephant in my pajamas. How he got into my pajamas I’ll never know,” leaving his audience at once amused by the image of a pachyderm stealing into his night clothes and yet certain that Marx meant something very different. In the more mundane task of contract interpretation, we must be no less entitled to acknowledge the parties’ plain meaning without being straight-jacketed by a grammatical rule into reaching a patently unintended result.