“Check Your Answer” to the End-of-Chapter Case Questions
Chapter 1: Today’s Business Environment: Law and Ethics
Answers to Select Case Questions
2. The general rule that exists now is that since the government has ordered the posting of warning labels on cigarettes, and since the dangers of smoking are well known, consumers have been warned and are not due compensation if they kill themselves by smoking. The Cippoline case, since reviewed by the Supreme Court, appears to be of limited impact since the victim was adjudged to have become addicted to cigarettes before the warning label was ordered in 1964. If cigarette makers were held responsible for all health problems associated with cigarettes, then, like alcohol and other dangerous products, the damages would likely be so high it would effectively ban the products. Presumably, in a free society if adults are clearly informed of the risks of products that cannot be made safe, they accept the risk. Tobacco and alcohol producers cannot take the dangers out of the products except at the margin by encouraging responsible drinking and the like. Are drugs like cocaine different?
4. The Court held it a form of sex discrimination to prevent women of child-bearing age from holding the more dangerous jobs. The company argued that it did this to protect itself from possible liability in case of damage to babies and that the decision was ethical. The replacements for these workers were often men or more senior women, who tended to be higher income workers, so this was not a current cost-saving move. Note that a later ruling related to the ADA restricted the results of this case.
Chapter 2: The Court Systems
Answers to Select Case Questions
2. The traditional rule-apply the law where the injury occurred-would call for the application of Missouri law. Here, the court, like many jurisdictions, rejected the traditional rule and adopted the significant interests test. "The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in [the Restatement (2d)]."
"South Dakota has all of the important contacts. First, the principal conduct which allegedly caused the injury was the distribution of the candy in the bus on the first leg of the trip. Missouri had no contact with that conduct. Even if Missouri could claim some limited contact with Dakota Charter's alleged failure to maintain a safe premises after the candy was distributed, Missouri's contact was relatively unimportant to the issue of comparative negligence because comparative negligence law is not a rule of the road nor does it regulate the conduct of bus companies using Missouri's highways. ...
Second, South Dakota was the domicile, residence, place of incorporation and place of business of the parties, as well as the place where the relationship of the parties was centered. These contacts are important to the issue of comparative negligence because the economic impact of the law applied will be felt where the parties reside."
Applying the tests from the Restatement:
- the needs of the interstate and international systems,
"First, neither Missouri nor South Dakota's laws significantly affect the needs of interstate systems because neither interstate relations nor automobile movement would be influenced by either law." - the relevant policies of the forum,
"This state's policy has been clearly expressed by the legislature in our comparative negligence statute." - the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
"Although Missouri also has a comparative negligence policy, South Dakota has the only significant interest in a determination of the comparative negligence issue because all of the contacts are in South Dakota, and Missouri's policy would not be furthered by its application to South Dakota domiciliaries who have no important contact with Missouri. Where the forums interests are the "most deeply affected" under these factors, it is generally fitting that forum's law should be applied." - the protection of justified expectations,
"The protection of justified expectancy, although important in consensual relationships, has no importance in this negligence action. Generally, people do not consider the legal consequences of their conduct or how law may be applied prior to becoming involved in an accident." - the basic policies underlying the particular field of law,
"The policy of ameliorating the harsh consequences of common law contributory negligence rules is furthered by both states' comparative negligence laws. Although Chambers argue that Missouri's policy is better, that contention is debatable. Furthermore, even if Missouri's policy could be considered 'better,' conflicts analysis should not be used to apply the law of a state that has no interest in having its rule applied. The proper solution in such cases is to change the forum's inferior law." - certainty, predictability and uniformity of result,
"Little significance can be attached to the ease of determining and applying comparative negligence law or to the certainty, predictability and uniformity of result. Both states' laws are easy to determine and apply. Furthermore, because the differences in the law are so minor, there will be few differences in result." - ease in the determination and application of the law to be applied.
"Both states' laws are easy to determine and apply. Furthermore, because the differences in the law are so minor, there will be few differences in result."
4.Vacated and remanded. The district court lacked jurisdiction, so the judgment is void. Parrot Bay, a foreign corporation, is not responsible for the actions of the fishing boat operator, another foreign entity. The relationship between Parrot Bay and the fishing boat operator did not arise out of, or relate to, Parrot Bay’s contacts with the United States. It was not foreseeable by Parrot Bay that Oldfield might suffer an injury on a boat that it did not own or operate while he stayed at Parrot Bay as a result of his having visited the resort’s website and made a reservation for a room there. Therefore Parrot Bay cannot be subject to U.S. court jurisdiction in this matter. Oldfield can pursue his claim against the fishing boat operator in court in Costa Rica.
6.There was a sufficient basis for specific jurisdiction. This exists when: 1) the non-resident defendant purposefully availed himself of the privilege of conducting activities in the forum by some affirmative act or conduct; 2) plaintiff’s claim just arise out of or result from defendant’s forum-related activities; and 3) the exercise of jurisdiction must be reasonable. Williams and Ritzman purposely availed themselves of the privilege of conducting activities in California as required to establish specific jurisdiction in California for medical malpractice proceedings. They knew that Jones would have felt benefit or harm in California from their therapy. Hence, defendants will have to defend themselves in California from the claims made by Jones.
Chapter 3: The Trial Process
Answers to Select Case Questions
1. Affirmed. An appellate court may direct the entry of judgment as a matter of law when it determines that the evidence was erroneously admitted at trial and that the remaining evidence, properly admitted, is insufficient to continue a submissible case. The court rejected the argument that the plaintiffs would have provided a stronger case had they known that their key expert testimony would be dismissed. It is not sensible to argue that a part will present less than their best evidence at trial in the expectation of another trial.
2. Reversed and remanded. Trial courts have wide judicial discretion in partition actions to use equity to make a fair and just division of property among the parties. Great flexibility may be used in such cases. However, the equitable powers do not include requiring a party to buy out the other party’s share of jointly owned property. Curtis could not be required by the court to buy the estate’s share of the equipment, although it could review the value of the equipment, the value of its use, and the appropriateness of the costs incurred in maintaining the equipment. If the parties cannot agree on how to deal with the division of the machinery, the court can order them to be sold.
4. The NLRB was correct. Public policy encourages mediation of labor disagreements. The mediation process must be in confidence and not subject to re-litigation; what goes on in mediation is in confidence. Once the mediation process is entered, there is no obligation to finish but there is an obligation to uphold the integrity of the process.
6. The bank requested the court do dismiss Paranzino’s case. The court found that she “willfully and deliberately disregarded the confidentiality agreement by exposing confidential information, namely the settlement offer, to the media.” The case was dismissed with prejudice and that decision was upheld on appeal. So she got nothing except attorney fees.
Chapter 4: The Constitution: Focus on Application to Business
Answers to Select Case Questions
3. The tax was upheld. Referring to that case in a later (1922) decision, the court said "the discretion of Congress in the exercise of its constitutional powers to levy excise taxes could not be controlled or limited by the courts because the latter might deem the incidence of the tax oppressive or even destructive." That is, Congress could punish margarine for the purpose of helping the dairy industry and could punish margarine in a discriminatory way by charging different tax rates for different forms of margarine, in this case yellow versus white. Note: White margarine was then sold with yellow coloring packets so consumers could whip the color into the white margarine so it looked more appetizing.
5. The tax (actually called a milk pricing order) was unconstitutional. The law was designed to benefit local producers of milk by creating a tariff-like barrier that was imposed on out-of-state competitors. Although the Massachusetts dairies also paid the tax, they got their money, and more, back. If Massachusetts wants to tax its citizens to subsidize its dairies, that may be allowed, but it cannot finance such a scheme by taxing out-of-state competitors to pay the bill. The argument that only Massachusetts consumers are injured by this pricing scheme is not valid because the milk market is interstate. The argument that the scheme was needed to protect Massachusetts' dairy industry from possibly going out of business is irrelevant. They cannot be protected from "the rigors of interstate competition." (Note that it probably would be legal just to have the state set high internal milk prices, as some states do, which happens to also benefit local dairies. The effect of the scheme is "neutral" in that anyone can offer milk at the listed price.)
7. The Supreme Court struck down the city's discriminatory treatment of publications. There must be a "reasonable fit" between its interests in safety and esthetics and the means used to serve those interests. Since the newsracks ordered removed were only about three percent of all on the streets, their removal would have little impact overall on the problems supposedly caused by newsracks. The city cannot claim that regular newspapers get differential treatment because they are engaged in noncommercial speech while the free circulars are purely commercial; both forms of publications have commercial interests and the free circulars have non-commercial information in them of interest to some people, so there is no reason to treat them differently. Any regulation must be neutral with respect to all types of publications. The court keeps moving closer to the notion that commercial and non-commercial speech should be subject to similar standards.
9. The Court of Appeals affirmed a contempt ruling against Wild and ordered him to produce the records of his company. A corporation does not have Fifth Amendment protection against self-incrimination, even though the incrimination will apply to a person. The Braswell case mentioned in the chapter is a Supreme Court ruling on this point.
10. The U.S. Supreme Court reversed the West Virginia Supreme Court of Appeals (where the vote was 3-2 in favor of the coal company). The Court held that it violated due process for the judge who received such a large contribution from a party to participate in the case. The Court held that the Due Process Clause requires recusal when a judge has a direct, personal, substantial, pecuniary interest in a case.
Chapter 5: Criminal Law and Business
Answers to Select Case Questions
2. Reversed. In a case of first impression on this subject, the appeals court held that legal impossibility is not a defense to the charge of conspiracy and attempt to steal trade secrets, rather than a charge of actual theft of trade secrets, under the EEA. So long as the defendants believed they were going to steal trade secrets, it does not have to be proven that there were actually trade secrets at stake. Defense may see documents only after trial court has conducted an in camera review so that confidential information is protected.
3. Affirmed in part, reversed in part. Jolivet’s mail fraud and conspiracy convictions stand. The mails were used to send fraudulent documents that she prepared and signed. She received insurance proceeds. Her participation in the conspiracy was knowing. However, the money laundering conviction is reversed. Her act of depositing into her bank account the proceeds obtained from the insurance fraud was insufficient to prove that she intended to use the proceeds to carry on unlawful activities, which is required to support a conviction for money laundering. The money in her checking account was used to pay for ordinary living expenses.There was no evidence that the illegally obtained funds were used to further other criminal activity.
5.Affirmed. Under Wyoming law (as in general), a person alleging an illegal search must show a legitimate expectation of privacy in the searched property. In considering whether a person has an expectation of privacy, the court considers: 1) the precautions that the person took to maintain privacy, 2) the likely intent of the drafters of the Wyoming Constitution, 3) the property rights the person possessed in the invaded area, and 4) the legitimacy of the person’s possession of the property subject to search or seizure. Barekman has no reasonable expectation of privacy with respect to his trash, as he put bags out on the street for collection by a third party.
9. Yes, Corner is correct. The 7th Circuit noted that recent Supreme Court decisions have stated the Sentencing Guidelines are advisory and that judges may vary from their recommendations as long as they respect all statutory requirements. Since the sentence is particularly harsh (those convicted of crack cocaine possession are treated much more harshly than those convicted of possession of powder cocaine (some allege because crack is more commonly used by blacks and powder by whites), the trial judge is welcome to deviate from the Guidelines.
Chapter 6: Elements of Torts
Answers to Select Case Questions
2. No. "False imprisonment is the intentional restraint or detention of another without just cause." Plaintiff voluntarily went to her manager's office. No force was ever used. She did not attempt to leave although she did not like being there. There was no reason to think force would be used here. Employers have the right to discuss personnel matters with employees. The fact that she was afraid she would be fired or arrested if she left did not make this false imprisonment.
4. The Supreme Court of Nevada upheld a jury award of punitive damages, even though there were no compensatory damages, for the torts of assault, battery, and intentional infliction of emotional distress. It did not find there to be false imprisonment. The jury found that the casino's "employees acted maliciously or oppressively."
6. The Florida high court held: "The tort of "invasion of privacy" includes (1) appropriation-the unauthorized use of a person's name or likeness to obtain some benefit; (2) intrusion-physically or electronically intruding into one's private quarters; (3) public disclosure of private facts-the dissemination of truthful private information which a reasonable person would find objectionable; and (4) false light in the public eye-publication of facts which place a person in a false light even though the facts themselves may not be defamatory. … Invasion of privacy' by intrusion, i.e., physically or electronically intruding into one's private quarters, is not broad enough to include unwelcome conduct including touching in a sexual manner and sexually offensive comments."
8.Yes, the Washington State Supreme Court said (answering a question from the 9th Circuit). The Supreme Court held that damages for emotional distress were recoverable under the Washington Product Liability Act if distress was reasonable and manifested by objective symptomatology.