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1. Medtronic, Inc., is a medical technol- ogy company that competes for customers with St. Jude Medical S.C., Inc. James Hughes worked for Medtronic as a sales manager. His contract prohibited him from work- ing for a competitor for one year after leaving Medtronic. Hughes sought a position as a sales director for St. Jude. St. Jude told Hughes that his contract with Medtronic was unenforceable and offered him a job. Hughes accepted. Medtronic filed a suit, alleging wrongful interference. Which type of interference was most likely the basis for this suit? Did it occur here? Explain. 2. While living in her home country of Tanzania, Sophia Kiwanuka signed an employment contract with Anne Margareth Bakilana, a Tanzanian living in Washington, D.C. Kiwanuka traveled to the United States to work as a babysitter and maid in Bakilana's house. When Kiwanuka arrived, Bakilana con- fiscated her passport, held her in isolation, and forced her to work long hours under threat of having her deported. Kiwanuka worked seven days a week without breaks and was subjected to regular verbal and psychological abuse by Bakilana. Kiwanuka filed a complaint against Bakilana for intentional infliction of emotional distress, among other claims. Bakilana argued that Kiwanuka's complaint should be dismissed because the allegations were insufficient to show outrageous intentional conduct that resulted in severe emotional distress. If you were the judge, in whose favor would you rule? Why? 3. At the Weatherford Hotel in Flagstaff, Arizona, in Room 59, a balcony extends across thirty inches of the room's only window, leaving a twelve-inch gap with a three-story drop to the concrete below. A sign prohibits smoking in the room but invites guests to "step out onto the balcony" to smoke. Toni Lucario was a guest in Room 59 when she climbed out of the window and fell to her death. Patrick McMurtry, her estate's personal representative, filed a suit against the Weatherford. Did the hotel breach a duty of care to Locario? What might the Weatherford assert in its defense? Explain. 4. Danny and Marion Klein were injured when part of a fireworks display went astray and exploded near them. They sued Pyrodyne Corp., the pyrotechnic company that was hired to set up and discharge the fire- works. The Kleins alleged, among other things, that the company should be strictly liable for damages caused by the fireworks display. Will the court agree with the Kleins? What factors will the court consider in making its deci- sion? Discuss 5. Jason Clark, an experienced hunter, bought a paintball gun. Clark practiced with the gun and knew how to screw in the carbon dioxide cartridge, pump the gun, and use its safety and trigger. Although Clark was aware that he could purchase protective eyewear, he chose not to buy it. Clark had taken gun safety courses and understood that it was "common sense" not to shoot any- one in the face. Clark's friend, Chris Wright, also owned a paintball gun and was similarly familiar with the gun's use and its risks. Clark, Wright, and their friends played a game that involved shooting paintballs at cars whose occupants also had the guns. One night, while Clark and Wright were cruising with their guns, Wright shot at Clark's car, but hit Clark in the eye. Clark filed a product liability lawsuit against the manufacturer of Wright's paintball gun to re- cover for the injury. Clark claimed that the gun was de-fectively designed. During the trial, Wright testified that his gun "never malfunctioned." In whose favor should the court rule? Why? 6. Yun Tung Chow tried to unclog a floor drain in the kitchen of the restaurant where he worked. He used a drain cleaner called Lewis Red Devil Lye that contained crystalline sodium hydroxide. The product label said to wear eye protection, to put one tablespoon of lye directly into the drain, and to keep one's face away from the drain because there could be dangerous backsplash. Without eye protection, Chow mixed three tablespoons of lye in a can and poured that mixture down the drain while bending over it. Liquid splashed back into his face, causing injury. He brought a product liability suit based on inad- equate warnings and design defect. The trial court granted summary judgment to the manufacturer, and Chow appealed. An expert for Chow stated that the product was defective because it had a tendency to backsplash. Is that a convincing argument? Why or why not? 7. Professor Wise is teaching a summer semi- nar in business torts at State University. Several times dur- ing the course, he makes copies of relevant sections from business law texts and distributes them to his students. Wise does not realize that the daughter of one of the text- book authors is a member of his seminar. She tells her father about Wise's copying activities, which have taken place without her father's or his publisher's permission. Her father sues Wise for copyright infringement. Wise claims protection under the fair use doctrine. Who will prevail? Explain. 8. John and Andrew Doney invented a hard-bearing device for balancing rotors. Although they obtained a patent for their invention from the U.S. Patent and Trademark Office, it was never used as an automobile wheel balancer. Some time later, Exetron Corp. produced an automobile wheel balancer that used a hard-bearing device with a support plate similar to that of the Doneys' device. Given that the Doneys had not used their device for automobile wheel balancing, does Exetron's use of a similar device infringe on the Doneys' patent? Why or why not? 9. Briefing.com offers Internet-based analyses of investment opportunities to investors. Richard Green is the company's president. One of Briefing.com's competitors is StreetAccount, LLC (lim- ited liability company), whose owners include Gregory Jones and Cynthia Dietzmann. Jones worked for Briefing. com for six years until he quit in March 2003 and was a member of its board of directors until April 2003. Dietzmann worked for Briefing.com for seven years until she quit in March 2003. As Briefing.com employ- ees, Jones and Dietzmann had access to confidential business data. For instance, Dietzmann developed a list of contacts through which Briefing.com obtained mar- ket information to display online. When Dietzmann quit, she did not return all of the contact information to the company. Briefing.com and Green filed a suit in a federal district court against Jones, Dietzmann, and StreetAccount, alleging that they had appropriated these data and other "trade secrets" to form a competing busi- ness. What are trade secrets? Why are they protected? Under what circumstances is a party liable at common law for their appropriation? How should these principles apply in this case? 10. SilverEdge Systems Software hired Catherine Conrad to perform a singing telegram. SilverEdge arranged for James Bendewald to record Conrad's performance of her copyrighted song to post on its Web site. Conrad agreed to wear a microphone to assist in the recording, told Bendewald what to film, and asked for an additional fee only if SilverEdge used the video for a commercial purpose. Later, the company chose to post a video of a different performer's singing telegram instead. Conrad filed a suit in a federal district court against SilverEdge and Bendewald for copyright infringement. Are the defendants liable? Explain. 1. This chapter discussed a number of sources of American law. Which source of law takes priority in the following situations, and why? (a) A federal statute conflicts with the U.S. Constitution. (b) A federal statute conflicts with a state constitutional provision. (c) A state statute conflicts with the common law of that state. (d) A state constitutional amendment conflicts with the U.S. Constitution. 2. In the text of this chapter, we stated that the doctrine of stare decisis "became a cornerstone of the English and American judicial systems." What does stare decisis mean, and why has this doctrine been so fundamental to the development of our legal tradition? 3. Jack and Maggie Turton bought a house in Jefferson County, Idaho, located directly across the street from a gravel pit. A few years later, the county converted the pit to a landfill. The landfill accepted many kinds of trash that cause harm to the environment, including major appli- ances, animal carcasses, containers with hazardous content warnings, leaking car batteries, and waste oil. The Turtons complained to the county, but the county did nothing. The Turtons then filed a lawsuit against the county alleging viola- tions of federal environmental laws pertaining to groundwa- ter contamination and other pollution. Do the Turtons have standing to sue? Why or why not? 4. Michelle Fleshner worked for Pepose Vision Institute (PVI), a surgical practice. She was fired after she provided information to the U.S. Department of Labor about PVI's overtime pay policy. She sued for wrong- ful termination, and the jury awarded her $125,000. After the trial, a juror told PVI's attorneys that another juror had made anti-Semitic statements during jury deliberations. The comments concerned a witness who testified on PVI's behalf. According to the juror, the other juror said, about the witness: "She is a Jewish witch." "She is a penny-pinching Jew." "She was such a cheap Jew that she did not want to pay Plaintiff unemployment compensation." Another juror confirmed the remarks. PVI filed a motion for a new trial on the basis of juror misconduct. The trial judge held that the comments did not prevent a fair trial from occurring. PVI appealed. Do you think such comments are sufficient to require a new trial, or must a juror's bias be discovered during voir dire for it to matter? Explain. 5. Horton Automatics and the Industrial Division of the Communications Workers of America, the union that represented Horton's workers, negotiated a collective bargaining agreement. If an employee's dis- charge for a workplace-rule violation was submitted to arbitration, the agreement limited the arbitrator to deter- mining whether the rule was reasonable and whether the employee violated it. When Horton discharged employee Ruben de la Garza, the union appealed to arbitration. The arbitrator found that de la Garza had violated a reasonable safety rule, but "was not totally convinced" that Horton should have treated the violation more seri- ously than other rule violations. The arbitrator ordered de la Garza reinstated. Can a court set aside this order? Explain. 6. Business ethics. Jason Trevor owns a commercial bak- ery in Blakely, Georgia, that produces a variety of goods sold in grocery stores. Trevor is required by law to per- form internal tests on food produced at his plant to check for contamination. On three occasions, the tests of food products containing peanut butter were positive for sal- monella contamination. Trevor was not required to report the results to U.S. Food and Drug Administration officials, however, so he did not. Instead, Trevor instructed his employees to simply repeat the tests until the results were negative. Meanwhile, the products that had originally tested positive for salmonella were eventually shipped out to retailers. Five people who ate Trevor's baked goods that year became seriously ill, and one person died from a salmo- nella infection. Even though Trevor's conduct was legal, was it unethical for him to sell goods that had once tested positive for salmonella? Why or why not? 7. Facebook, Inc., launched a program called "Bea- con" that automatically updated the profiles of us- ers on Facebook's social networking site when those users had any activity on Beacon "partner" sites. For example, one partner site was Blockbuster.com. When a user rented or purchased a movie through Blockbuster.com, the user's Facebook profile would be updated to share the pur- chase. The Beacon program was set up as a default setting, so users never consented to the program, but they could opt out. What are the ethical implications of an opt-in program versus an opt-out program in social media? 8. Best Buy, a national electronics retailer, offered a credit card that allowed users to earn "reward points" that could be redeemed for discounts on Best Buy goods. After reading a newspaper advertisement for the card, Gary Davis applied for, and was given, a credit card. As part of the application process, he visited a Web page contain- ing Frequently Asked Questions as well as terms and conditions for the card. He clicked on a button affirming that he understood the terms and conditions. When Davis received his card, it came with seven brochures about the card and the reward point pro- gram. As he read the brochures, he discovered that a $59 annual fee would be charged for the card. Davis went back to the Web pages he had visited and found a statement that the card "may" have an annual fee. Davis sued, claiming that the company did not adequately disclose the fee. [Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152 (9th Cir. 2012)] (See page 79.) Answer the following: (a) Online applications frequently have click-on buttons or check boxes for consumers to acknowledge that they have read and understand the terms and conditions of applications or purchases. Often, the terms and conditions are so long that they cannot all be seen on one screen and users must scroll to view the entire document. Is it unethical for companies to put terms and conditions, especially terms that may cost the consumer, in an electronic document that is too long to read on one screen? Why or why not? Does this differ from having a consumer sign a hard-copy document with terms and conditions printed on it? Why or why not? (b) The Truth-in-Lending Act requires that credit terms be clearly and conspicuously disclosed in application materials. Assuming that the Best Buy credit-card materials had sufficient legal disclosures, discuss the ethical aspects of businesses strictly following the language of the law as compared to following the intent of the law. 9. A Georgia state law requires the use of contoured rear-fender mudguards on trucks and trailers operating within Georgia state lines. The statute further makes it illegal for trucks and trailers to use straight mud- guards. In approximately thirty-five other states, straight mudguards are legal. Moreover, in Florida, straight mud- guards are explicitly required by law. There is some evidence suggesting that contoured mudguards might be a little safer than straight mudguards. Discuss whether this Georgia stat- ute violates any constitutional provisions. 10. Mark Wooden sent an e-mail to an alderwoman for the city of St. Louis. Attached was a nineteen-minute audio file that compared her to the bibli- cal character Jezebel. The audio said she was a "bitch in the Sixth Ward," spending too much time with the rich and powerful and too little time with the poor. In a men- acing, maniacal tone, Wooden said that he was "dusting off a sawed-off shotgun," called himself a "domestic terrorist," and referred to the assassination of President John Kennedy, the murder of federal judge John Roll, and the shooting of Representative Gabrielle Giffords. Feeling threatened, the alderwoman called the police. Wooden was convicted of harassment under a state criminal stat- ute. Was this conviction unconstitutional under the First Amendment? Discuss.
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