MGMT 520 Legal, Political and Ethical Dimensions of Business
Final Exam 3 Sets
Page 1
TCO D. Questions: A well known pharmaceutical company, Robins & Robins, is working through a public scandal. Three popular medications that they sell over the counter have been determined to be tainted with small particles of plastic explosive. The plastic explosives came from a Robins & Robins supplier named Casings, Inc., that supplies the capsule casings for the medication pills. Casings, Inc. also sells shell casings for ammunition. Over $8 million in inventory is impacted. The inventory is located throughout the Western United States, and it is possible that it has also made its way into parts of Canada………
…….Robins & Robins sues Casings, Inc., for indemnification from suits by injured victims from the medication, for the cost of the capsule shells, for attorneys fees, and for punitive damages. List any defences Casings, Inc., would have under contract theory ONLY for the damages caused by the explosives in their drugs, over and above the cost of the capsule shells. (Points:15). (Short answer question)
List any bases Robins & Robins could sue Casings, Inc., under contract theory ONLY for the damages caused by the explosives in their drugs, overand above the cost of the capsule shells. (short answer question) (Points:15)
2. TCO B. The FDA decides to require all pharmaceutical companies to immediately implement the tracking bars (UPC) as a result of the disaster with Robins & Robins. Robins & Robins decides not to challenge this and begins the process of adding them to all of their products. However, McFadden, Inc., a NewYork pharmaceutical company, realizes that this new requirement is going to bankrupt them immediately. McFadden did not participate in the original public comment period. However, this rule is different from the rule that went through that public comment period in that it specifically names four companies as being impacted: Robins & Robins, McFadden, Inc., Bayer, and Johnson & Johnson. On what bases can McFadden challenge this requirement imposed by the FDA, and can they be successful? Provide at least two bases under the Administrative Procedures Act and justify your answer. (Points: 30)
3. TCO C. Robins & Robins immediately issued a massive recall for the tainted medication upon learning of the situation. Despite the recall, 1,400 children and350 adults have been hospitalized after becoming very ill upon taking the taintedmedication. Each of them had failed to note the recall after having already purchased the medication……………List the causes of action (if any) you would file against Robins & Robins, the FDA, and the bribed FDA member. List the elements of the causes of action, and set forth the facts that you have that would support a lawsuit against each of the three named defendants. State any defences any of the three would have. Analyze the success of the defences.
TCO A.
It is discovered that Robins & Robins knew about the tainted medication 2 months earlier than they announced the recall. They hid it and, in fact, sent out contract buyers to try to buy up all of the medication off the shelves. Their fake recall failed. Using the Laura Nash method of analyzing ethical dilemmas, analyze the ethical dilemma faced by the CEO of Robins & Robins for the fact that they saved 35 cents/package and are now in the middle of a major, life-threatening recall. Analyze their fake recall as well. Show all of the steps of the model and give a recommendation to the CEO of what to do now that the deaths are escalating. What is the right thing for the CEO to do in this case? Did the model help you come to this conclusion, or did you use some other method? Explain.
Page 2
Question 2 – 2 essays, 30 points each.
TCO E and H. A private high school hires a new Superintendent, George Forester. The school is owned by a local Lutheran Church and is run by a board of directors chosen by church members. Supt. Forester shows up for his first day of work, and sends a memo via intercompany mail to all teachers:
Write a brief memo as to whether Pastor Forester committed illegal or discriminatory practices in his brief tenure described in this situation. Then, analyze the potential liability of the school. Discuss agency liability, as well as any employment law aspects. Explain whether you feel that the two injured teachers have cases for recovery against the school. Discuss whether the school being a religious, private school has any bearing on or protection from liability. Include all defences available to the school.
TCO H and E.
In the discovery portion of the case, it is determined that Pastor Forester is really not a Pastor. His real name is Jerry Birches, who is a parolee with convictions for child molestation…………..He claims her knowledge should be imputed to the entire board of directors. He then sues the school for firing him for being convicted felon. He claims that is illegal, and he publicly attacks the church for their “less than Christian” behaviour in firing him.
The board immediately convenes to discuss damage control. They know you took a Law and Ethics course recently and ask you to write a news release to the local newspaper, explaining the situation. Using ethical and legal considerations(including the fact you are in the middle of multiple lawsuits), write the brief news release. Then, explain why you wrote it the way you did. (Points: 30)
Page 3 Page 3 – Two essays at 30 points each. (TCOs F & G)
Laura Etheridge and Rita ODonnell, the CEO and Creative Director of Clean Clothes (a Texas based lesbian womens clothing line) brainstormed together and came up with a tagline for their new slacks line: Masculine Attitude, Feminine Fit. They market the product on YouTube, Twitter, and Face Book showcasing their Funky Femme slacks collection, made from a material which resembles alpaca wool, but is actually organic cotton……………
Ellen DeGeneres learns that her likeness is being used to advertise for Clean Clothes. She watches the ad and is incensed. She spends the next week on her show bashing the Clean Clothes company, and states that she would never endorse the use of Alpaca wool for clothing, as she feels shearing them is cruel.(She doesnt catch that the pants are really made from cotton.) Further, she says she feels that lesbian women should not need to shop at special stores, although she admits she often shops in the mens department at Joseph A. Bank (JOSB). Her comments cause a precipitous drop in sales at both Joseph A. Bank (JOSB) and Clean Clothes. Using the above fact pattern, analyze fully, the following questions:
TCO F.
Ellen DeGeneres sues Clean Clothes for the use of a look-alike model forth slacks advertisement. She includes Lanham Act, misappropriation, and Right of Publicity” claims in her complaint. Clean Clothes countersues for product disparagement. Joseph A. Bank (JOSB) sues Ellen for impacting their mens clothing sales with her unsolicited comment. What facts will Ellen use to support her cases and why will those support her cases? What defenses will Ellen have against Clean Clothes and JOSBs countersuits? Do you think any of the 3 will win their cases? (Why or why not.) Analyze the case for all three parties – who will win and why; what elements will they need to prove, and what defenses can they show?
2. TCO G.
It is discovered that two weeks before the Ellen show, she had sold $2million in JOSB stock (at a gain of about $2,200). The morning after her show, Ellen sold JOSB short (which means she was betting the stock price would go down), and she made another $210,000 in the next week on that trade…………Do you think the SEC will file anything against Ellen for her sales of JOSB? Is there any cause to do so? Analyze her transactions with respect to insider trading activity (based on what you know) and whether she should be concerned. Is her prior trading activity a defence? Should Ellen have avoided discussing JOSB publicly on her show since she typically trades their stock? (Points: 30)
MGMT 520 Legal, Political and Ethical Dimensions of Business
Final Exam
1. TCO D Short Answer Question and Facts for Page 1
Questions: A well known pharmaceutical company, Robins & Robins, is working through a public scandal. Three popular medications that they sell over the counter have been determined to be tainted with small particles of plastic explosive. The plastic explosives came from a Robins & Robins supplier named Casings, Inc., that supplies the capsule casings for the medication pills. Casings, Inc., also sells shell casings for ammunition. Over $8 million in inventory is impacted……………….This clause was buried on page 285 of the contract in small, 9-point type. List any defenses Casings, Inc., may have in trying to avoid the results of this clause of their contract. (short answer question)(Points: 15)
2. TCO B. The FDA discovers that, during the public comment process, Robins & Robins bribed one of the members of the administrative panel that decided to pull the rule from consideration. The member of the panel was removed and is being charged criminally. As a result, the FDA immediately implements an emergency order that puts into effect the tracking bar requirement and makes the rule retroactive, but only to Robins & Robins.
Provide two arguments Robins & Robins can make to have the rule determined to be invalid under the Administrative Procedures Act. Explain your answer. (Points: 30)
Name one argument that Robins & Robins could have used to fight against the imposition of a tracking bar (UPC) requirement in the event their lobbying efforts during public comments had failed. Explain the argument and the procedural method Robins would use to fight it. If Robins had not gotten involved in the public comments period, would your answer change? Why?
3. TCO C. Robins & Robins immediately issued a massive recall for the tainted medication upon learning of the situation. Despite the recall, 1,400 children and 350 adults have been hospitalized after becoming very ill upon taking the tainted medication. Each of them had failed to note the recall after having already purchased the medication…………..Draft the memo utilizing the elements of 402A and negligence. Include (and fully explain) any defenses you feel that Robins & Robins may have. Recall that your boss needs all pertinent information for him to write an announcement to the public after reading your memo.(Points: 30)
Set 3 Questions:
The attorneys stated that but for the lobbying efforts, the recall process would have been automated and the people would not have gotten sick or died. You are an employee with the FDA. You are drafting a memo to your boss analyzing the FDAs liability and explaining why the FDA did the right thing in deciding not to pass the original tracking bar (UPC) rule. You are specifically being told to respond to the issue of the deaths and illnesses. What would you write? Include (and fully explain) any defenses you feel that the FDA could use against any negligence or public relation cases. Explain what liability (if any) the FDA could have to the victims and their families. (Points: 30)
4. TCO A. It is discovered that Robins & Robins knew about the tainted medication 2 months earlier than they announced the recall. They hid it and, in fact, sent out contract buyers to try to buy up all of the medication off the shelves. Their fake recall failed. Using the Blanchard and Peale method of analyzing ethical dilemmas, analyze the ethical dilemma faced by the CEO of Robins & Robins for the fact that they saved 35 cents/package and are now in the middle of a major, life-threatening recall. Analyze their fake recall as well. Show all of the steps of the model and give a recommendation to the CEO of what to do now that the deaths are escalating. What is the right thing for the CEO to do in this case?(Points: 30)
5. TCO I. A Canadian citizen whose son (resident of Ontario) died from the medication sues Robins & Robins in a California court. The court there is well known for being victim friendly and providing huge payouts to victim families. In Canada, the cap on nonpecuniary damages is around $300,000. Punitive damages in Canada are rarely allowed. Robins & Robins moves to dismiss the case under the theory of sovereign immunity. Will Robins & Robins win this motion using this theory? Why or why not? (short answer question) (Points: 15)
Question 2 2 essays, 30 points each.
TCO E and H. A private high school hires a new superintendent, George Forester. The school is owned by a local Lutheran church and is run by a board of directors chosen by church members. Supt. Forester shows up for his first day of work and sends a memo via intercompany mail to all teachers:
TCO E. Pastor Forester claims his firing was illegal because it was based on his being a convicted felon. His contract with the school provides him with defense coverage for any acts he takes while working for the school. Anna and Lisa sue Pastor Forester and the school for sexual harassment and discrimination, and Pastor Forester requests the school pay for his defense. Discuss whether Anna and Lisa will be successful in their claim of sexual harassment and discrimination against the school and Pastor Forester. Discuss whether the school illegally fired Pastor Forester. Will the school have to pay for the pastor’s defense? Analyze and defend your answer.(Points: 30)
2. TCO H, E. It was actually in the discovery portion of the injury lawsuit that Pastor Forester’s true background came to light. The convict, Birches, claims the knowledge of his aunt should be imputed to the entire board of directors. Three parents have alleged that their children are now seeing therapists due to abusive comments Birches made to them at various times during his time in the school.The board immediately convenes and discusses damage control. The board knows you took a law and ethics course recently and asks you to write it a memo of what liability it has in this case. List the elements of any tort you believe the school may be liable for and what defenses you may have. Include in your memo whether Aunt Theresa’s knowledge will be imputed to the entire board. If so, under what statute, rule, case, or federal law do you base your decision?(Points: 30)
Page 3 Two essays at 30 points each.
TCOs F & G. Laura Etheridge and Rita ODonnell, the CEO and Creative Director of Clean Clothes (a Texas-based lesbian womens clothing line) brainstormed together and came up with a tagline for their new slacks line: Masculine Attitude, Feminine Fit. They market the product on YouTube, Twitter, and Facebook showcasing their Funky Femme slacks collection, made from a material that resembles alpaca wool but is actually organic cotton…………she says she feels that lesbian women should not need to shop at special stores, although she admits she often shops in the mens department at Joseph A. Bank (JOSB). Her comments cause a precipitous drop in sales at both Joseph A. Bank (JOSB) and Clean Clothes. Using the above fact pattern, analyze the following questions fully.
TCO F.Men2Wimmin (M2W) sends a cease and desist letter to Clean Clothes (CC) demanding CC stop using M2Ws tagline, which is registered with the Trademark Office. Clean Clothes responds, stating that (a) CCs tagline is different enough as not to violate the trademark, (b) CC didnt know about M2Ws tagline so they couldnt have copied it, and (c) Men2Wimmin has no damages and therefore cant sue Clean Clothes. Analyze the case for Men2Wimmin, including the elements of any case they have, and explaining any defenses that Clean Clothes might raise against them. What damages can they request, and do you think they will get them? Why or why not? (Points: 30)
MGMT 520 Legal, Political and Ethical Dimensions of Business
Final Exam Set 5
1. List any bases Robins & Robins could sue Casings, Inc., under contract theory ONLY for the damages caused by the explosives in their drugs, over and above the cost of the capsule shells. (short answer question)
2. TCO B. The FDA discovers that, during the public comment process, Robins & Robins bribed one of the members of the administrative panel that decided to pull the rule from consideration. The member of the panel was removed and is being charged criminally. As a result, the FDA immediately implements an emergency order that puts into effect the tracking bar requirement and makes the rule retroactive, but only to Robins & Robins. Provide two arguments Robins & Robins can make to have the rule determined to be invalid under the Administrative Procedures Act. Explain your answer. (Points : 30)
3. TCO C. Robins & Robins immediately issued a massive recall for the tainted medication upon learning of the situation. Despite the recall, 1,400 children and 350 adults have been hospitalized after becoming very ill upon taking the tainted medication. Each of them had failed to note the recall after having already purchased the medication. It is quickly determined that they will need liver transplants and many of them are on a waiting list. During the wait, to date, 12 children have died. Their families are considering suing for both 402A and negligence. The attorneys stated that but for the lobbying efforts, the recall process would have been automated and the people would not have gotten sick or died.
You are the attorney for one of the dead childrens family. List the causes of action (if any) you would file against Robins & Robins, the FDA, and the bribed FDA member. List the elements of the causes of action, and set forth the facts that you have that would support a lawsuit against each of the three named defendants. State any defences any of the three would have. Analyze the success of the defences.
4. TCO A. It is discovered that Robins & Robins knew about the tainted medication 2 months earlier than they announced the recall. They hid it and, in fact, sent out contract buyers to try to buy up all of the medication off the shelves. Their fake recall failed. Using the Blanchard and Peale method of analyzing ethical dilemmas, analyze the ethical dilemma faced by the CEO of Robins & Robins for the fact that they saved 35 cents/package and are now in the middle of a major, life-threatening recall. Analyze their fake recall as well. Show all of the steps of the model and give a recommendation to the CEO of what to do now that the deaths are escalating. What is the right thing for the CEO to do in this case?
5. TCO I. A Canadian citizen whose son (resident of Ontario) died from the medication sues Robins & Robins in a California court. The court there is well known for being victim friendly and providing huge payouts to victim families. In Canada, the cap on nonpecuniary damages is around $300,000. Punitive damages in Canada are rarely allowed. Robins & Robins moves to dismiss the case under the theory of sovereign immunity. Will Robins & Robins win this motion using this theory? Why or why not? (short answer question) (Points : 15)
Page2:
1. TCO E. Pastor Forester claims his firing was illegal because it was based on his being a convicted felon. His contract with the school provides him with defense coverage for any acts he takes while working for the school. Anna and Lisa sue Pastor Forester and the school for sexual harassment and discrimination, and Pastor Forester requests the school pay for his defense. Discuss whether Anna and Lisa will be successful in their claim of sexual harassment and discrimination against the school and Pastor Forester. Discuss whether the school illegally fired Pastor Forester. Will the school have to pay for the pastor’s defense? Analyze and defend your answer.
2. TCO H and E. In the discovery portion of the case, it is determined that Pastor Forester is really not a pastor. His real name is Jerry Birches, a parolee with convictions for child molestation. His parole agreement prohibits him being closer than 1,000 feet to any school. In order to cut costs, the school had stopped doing background checks on new employees, and this slipped through the cracks. The president of the board of directors immediately fires Pastor Jerry Birches Forester and notifies his parole officer of the violations. Pastor Forester claims the board knew about his background because one member of the board (his aunt Theresa) knew the truth. He claims her knowledge should be imputed to the entire board of directors.
Page 3:
1. TCO F. Men2Wimmin (M2W) sends a cease and desist letter to Clean Clothes (CC) demanding CC stop using M2Ws tagline, which is registered with the Trademark Office. Clean Clothes responds, stating that (a) CCs tagline is different enough as not to violate the trademark, (b) CC didnt know about M2Ws tagline so they couldnt have copied it, and (c) Men2Wimmin has no damages and therefore cant sue Clean Clothes. Analyze the case for Men2Wimmin, including the elements of any case they have, and explaining any defenses that Clean Clothes might raise against them. What damages can they request, and do you think they will get them? Why or why not? (Points : 30)
2. TCO G. It is discovered that 2 weeks before the Ellen show, her partner had sold $2 million in JOSB stock (at a gain of about $2,200). The morning after Ellens show, Ellen’s partner shorted the JOSB stock (which is a bet that the price will go down), and she made another $210,000 from that trade. The swing in the price was not 100% directly tied to Ellens comments, as JOSB had issued a recall of their white, long-sleeved shirts when they were found to have been sewed with brown thread, making them unwearable. Ellens partners previous trading activity shows that she made it a normal practice to vigorously trade the stock of any company with which Ellen did business. A review of her trading activity for the past year showed that she had bought and sold JOSB stock 25 different times. Further, she typically used “short” sales when companies had issues with their products. Do you think the SEC will file anything against Ellen or her partner for these sales of JOSB? Is there any cause to do so? Analyze the transactions with respect to insider trading activity (based on what you know) and whether Ellen or her partner should be concerned. Is the prior trading activity a defense? Analyze and explain fully. (Points : 30)
