Mexico Ethical Dilemmas

I. Chapter: Business Ethics and Social Responsibility True or Flase

11. Wever, Inc. is considering relocating a facility to Mexico. The interests of the various stakeholders affected by this decision may conflict.

12. In analyzing ethical dilemmas using the ethics checklist presented in the textbook, it is best to narrow your focus to encompass only one or two major issues.

14. Because of the increasing medical concern over obesity in the United States, federal regulation of advertising has effectively reduced to one-tenth of all advertising during children’s television programs advertisements for foods high in fat, sugar, and salt and low in nutrition.

15. The ethics checklist provided in
the textbook was created by Supreme Court Justice Potter Stewart to aid business managers in finding solutions to difficult ethical problems.

II. Chapter: Common Law, Statutory Law and Administrative Law
TRUE/FALSE

1. The doctrine of stare decisis, though vital to the creation of the common law when this country was settled, is not important to our modern, complex society.

2. While at the park, Tasha saw a small child fall into the lake. Tasha did not know the child. Under the common law of most states, Tasha has a legal duty to take reasonable steps to assist the child if Tasha is able to provide positive assistance and the assistance will not jeopardize Tasha's well being.

3. The largest source of new law is court decisions.

4. The majority of work done by legislative bodies is performed in committees.

5. Even if a statute’s words have ordinary, everyday significance, the court will look at the legislative history of the law and public policy in order to interpret the statute.

6. If the President vetoes a bill and if both the House and Senate repass the bill by a two-thirds margin, the bill becomes law.

7. The Federal Trade Commission promulgated Telemarketing Sales Rules regulating the activities of telemarketers. One of the rules prohibits telemarketers from calling a person's residence at any time other than between 8:00 a.m. and 9:00 p.m. This legislative rule has the effect of a statute.

8. The Civil Rights Act of 1964, a federal statute, forbids discrimination on the basis of national origin in employment. The Equal Employment Opportunity Commission (EEOC) is the administrative agency that oversees the law. The EEOC issued Guidelines on Discrimination because of National Origin. According to one of the guidelines, the EEOC will presume a violation of the law if an employer sets a work requirement that employees must speak only English in the workplace. This is an interpretive rule because it interprets the Civil Rights Act.

9.
The Occupational Safety and Health Administration (OSHA) has proposed rules aimed at reducing repetitive-stress injuries. ATC, Inc. disagrees with the proposed rules. ATC, Inc. should challenge the proposed rules in court to prevent them from becoming final rules.

10. From tax returns, the Internal Revenue Service (IRS) has information concerning Elizabeth Jones. Generally, the IRS may not divulge this information to the Federal Bureau of Investigation unless Elizabeth has given written consent.

11. Administrative agencies exist at the federal, state, and local levels.

12. Because of the concept of stare decisis, the U. S. Supreme Court, in interpreting a statute in 2009, will necessarily interpret certain statutory language in the same way as the U. S. Supreme Court interpreted the same statutory language in 1971.

13. The President has the power to remove the chairperson of the Consumer Product Safety Commission, an independent federal administrative agency, if the President disagrees with the chairperson's
actions.

14. Common law, like statutory law, is prospective.

15. Actual hearings are required in formal administrative agency rulemaking.

MULTIPLE CHOICE

6. Psychologist Holtz is working with a patient, Rebecca, who has expressed the intention to seriously harm two of her acquaintances. If you apply the principle set forth by the Supreme Court of California in the Tarasoff v. Regents of the University of California case, Psychologist Holtz: a. | has, because of the bystander rule, no duty to warn the foreseeable victims about Rebecca’s expressed intention to harm them. | b. | has a duty to exercise reasonable care to protect foreseeable victims of Rebecca’s violence. | c. | is in a special relationship with patients, and this relationship creates a privilege of confidentiality between the communicants. | d. | will be held to a strict duty of care and will be held liable for any victim’s injuries if Holtz failed to warn a them of Rebecca’s potential violence toward them. |

7. The Environmental Protection Agency was investigating whether Exgrow, Inc. violated the Clean Air Act. Exgrow refused to give the EPA its computerized reports concerning pollution. To get the reports, EPA should use: a. | a stare decisis. | b. | a de novo. | c. | an excaliber. | d. | a subpoena duces tecum. |

8. Assume that in December 2006, the Environmental Protection Agency (EPA) filed an administrative complaint against Marlin Firearms Co. alleging that the company exceeded chromium emissions limits. The EPA proposed a $257,162 fine. Which statement is correct concerning the administrative agency adjudication? a. | A jury decides the matter. | b. | The Federal Rules of Criminal Procedure govern the admissibility of evidence. | c. | The losing party has a right to appeal. | d. | The parties are not represented by attorneys. |

9. If in 1900 the Minnesota Supreme Court ruled that a minor can void a contract at any time during minority and in 2008 the courts in Minnesota still follow this ruling, this is an example of: a. | stare decisis. | b. | the bystander rule. | c. | statutory law. | d. | enabling legislation. |

10. The last protected trait added by Congressman Smith of Virginia to the bill which became Title VII of the Civil Rights Act of 1964 was: a. | sex. | b. | sexual orientation. | c. | national origin. | d. | race. |

11. What is the major distinction between executive and independent agencies? a. | Executive agencies govern business issues while independent agencies regulate individual matters. | b. | The President has greater control over executive agencies. | c. | The Administrative Procedure Act regulates independent agencies but not executive agencies. | d. | Subpoenas may be issued by independent agencies; executive agencies do not have subpoena power. |

12. The Administrative Procedure Act: a. | applies to all federal agencies. | b. | applies to executive branch agencies but not to independent agencies. | c. | applies to independent agencies but not to executive branch agencies. | d. | does not apply to federal agencies. |

13. Administrative agency rules consist of: a. | executive and independent rules. | b. | legislative and interpretive rules. | c. | informal and "notice and comment" rules. | d. | promulgated and unpromulgated rules. |

14. The U.S. Supreme Court’s holding in Ward’s Cove Packing v. Atonio: a. | differed from the holding in Griggs v. Duke Power Co. partly because the Court was more conservative at the time Ward’s Cove was decided. | b. | upheld the ruling in Griggs v. Duke Power Co. | c. | found that overt racial discrimination existed. | d. | set forth a “business necessity” requirement for employment hiring practices. |

15. A subpoena duces tecum is different from an ordinary subpoena in that a subpoena duces tecum: a. | can only be given to an expert to require a personal appearance before a court or administrative hearing. | b. | is binding on a person even if it is mailed to the person rather than handed to her by a process server. | c. | allows for privileged or confidential information to be turned over the a court or administrative agency. | d. | requires the person to bring specified documents to the court or administrative hearing. |

16. Congresswoman Sloan introduced a bill in the House of Representatives. If the bill is approved by the House committee specializing in that subject, the bill will go to: a. | a Senate committee specializing in the subject matter of the proposed legislation. | b. | the full House. | c. | a Conference Committee made up of representatives of both the House and Senate. | d. | the voters of her state for approval. |

17. Bert had his driver's license suspended by the state department of transportation. He believes his constitutional due process rights were violated by the administrative agency. Can he immediately file a court action to have agency's actions reviewed? a. | Yes. A court has the jurisdiction to immediately review an agency's alleged unconstitutional action. | b. | Yes. Bert must specifically allege his constitutional rights have been violated and file a court action in federal court - not a state court. | c. | No. Bert must first utilize the administrative agency's procedures to review the suspension before he seeks judicial review by a court. | d. | No. A court of law does not have jurisdiction to review an administrative agency's actions. |

18. TECO Coal Corporation mines and ships more than six million tons of coal annually. TECO is comprehensively regulated by the U.S. Bureau of Mines. The U.S. Bureau of Mines may conduct a surprise inspection of one of TECO's mines: a. | only if it has a search warrant. | b. | only if it has a subpoena. | c. | only if it has reason to believe a violation of a regulation has occurred. | d. | without a search warrant to ensure safety. |

19. SharCo and Blyron Productions are each applying for a television license. In deciding which applicant is better qualified, the FCC will hold an initial hearing before: a. | the OSHA. | b. | an administrative law judge. | c. | an administrative mediator. | d. | a House-Senate Conference Committee. |

20. Which statement is correct concerning judicial review of an administrative agency's action? a. | Courts usually accept the facts of the case as determined by the agency and often defer to the agency's interpretation of the law. | b. | Courts conduct a de novo review of the case. | c. | Courts ignore the facts of the case. | d. | Courts substitute their opinion for that of the agency. |

21. Tina wishes to learn what records the IRS has about her. Under the Freedom of Information Act (FOIA), a. | Tina can only obtain copies of declassified information. | b. | Tina is entitled to all information the IRS has about her. | c. | Tina can only obtain information about the IRS, not records concerning herself. | d. | Tina cannot obtain any information since the IRS is exempt from the FOIA. |

22. TECO Coal Corporation is interested in the inspections that the U.S. Bureau of Mines has conducted over the past year. To secure this information, TECO should: a. | issue a subpoena duces tecum. | b. | make a Freedom of Information Act request. | c. | make a de novo request. | d. | assert the substantial evidence rule. |

23.

24. The Consumer Product Safety Commission (CPSC) is an independent federal administrative agency. Which statement is correct about the chairperson? a. | The chairperson serves at the whim of the President and can be fired at any time. | b. | The chairperson can only be fired by the President for good cause. | c. | The chairperson cannot be fired by the President since the CPSC is an independent agency. | d. | The chairperson has a lifetime appointment and cannot be fired. |

25. Which law regulates how federal agencies make rules, conduct investigations, hold meetings and hearings, obtain information, and reach decisions? a. | The 1964 Civil Rights Act. | b. | The Clean Agency Act. | c. | The Administrative Procedure Act. | d. | The Freedom of Information Act. |

III. Chapter: Constitutional Law
TRUE/FALSE

1. By creating three independent and equal branches of the federal government, the U.S. Constitution limited the federal government’s power.

2. The Framers of our Constitution, a true cross section of the population at the time, created the Constitution by amending the Articles of Confederation, which had been the governing document of the colonists.

3. The Fifth Amendment to the Constitution provides Robert, an employee of Mattax Paper Co., due process protection from being fired without a hearing by a neutral fact finder.

4. Hall was arrested for burning the United States' flag in a protest of governmental policy. His action is protected under the First Amendment’s guarantee of free speech because the flag burning is considered symbolic speech.

5. The power to create laws regulating international commerce is given to Congress and the states concurrently under the U.S Constitution.

6. The "takings clause" prevents the government from taking private property for any reason.

7. Gadberry lives in a "common interest development" (CID) and has parked his new pickup truck in his driveway. The Neighborhood Association informs him that, according to their regulations, he may not have a truck in the sight of passersby. The Association has made an unconstitutional restriction of the property rights of residents of the CID.

8. Obscene speech is protected by the First Amendment.

9. The Pines, a small motel in central Georgia, may be subject to federal regulation even though it is not close enough to the state borders to have many guests from other states.

10. The First Amendment to the U.S. Constitution explicitly protects citizens from abridgment of the right of free speech by any level of government.

11. Misleading commercial speech may be outlawed altogether without violating the Constitution.

12. Professor Jones accuses Rachel, a senior at a large state university, of cheating on an exam. The Professor claims that Rachel must prove to him that she did not cheat. If she fails to convince him, she will be expelled from college. Rachel is being denied her due process rights.

13. Congress passed the federal OSHA establishing job safety standards. Illinois passed its own statute, seeking to protect the general public and workers from hazardous wastes. The Illinois statute did not violate the Commerce Clause because it imposed no restriction on interstate commerce. Local workers were obligated to obey both the federal and the state regulations.

14. Judicial review is the power of the federal courts to declare a statute or governmental action void.

15. A governmental classification based on gender would be subject to strict scrutiny.

MULTIPLE CHOICE

1. If there is a conflict between a state and federal law, generally the federal law will prevail because of the: a. | federalism doctrine. | b. | Supremacy Clause. | c. | paramount doctrine. | d. | Interstate Commerce Clause. |

2. The primary source of federal power to regulate business is the: a. | Supremacy Clause. | b. | Commerce Clause. | c. | Contract Clause. | d. | Privilege and Immunities Clause. |

3. The 14th Amendment's Equal Protection Clause "strict scrutiny" test will be used when the legislation: a. | affects an economic interest. | b. | affects a person's right to drive. | c. | differentiates on the basis of race. | d. | affects a person's right to drink alcoholic beverages. |

4. The Bill of Rights refers to: a. | the inalienable rights found at the beginning of the Constitution. | b. | the first ten amendments to the Constitution. | c. | a specific listing of individual rights found in the original text of the Constitution. | d. | a grouping of individual rights set forth by the United States Supreme Court shortly after the Constitution was ratified by the states. |

5. The United States v. Lopez case demonstrates which of the following? a. | There are no limitations on the federal government's power pursuant to the Interstate Commerce Clause. | b. | The extensive power of the states to regulate interstate commerce. | c.
| Limitations on federal power. | d. | Gun ownership cannot be regulated. |

6. Nevada passed a law banning all commercial billboards along state highways to rid the state highways of billboards, which are offensive to citizens. If this law were to be challenged, which of the following would a court examine to determine if the law is constitutional? a. | It would have to be established that the law furthers an interest of the state of Nevada to create a more aesthetically pleasing environment. | b. | It would have to be shown that the law directly and materially advances the state's goal of a more aesthetically pleasing environment. | c. | It would have to be shown that the law reaches no further than necessary to promote the state goal. | d. | All of the above. |

7. The states have a severely restricted power to enact laws that affect interstate commerce. This concept is called: a. | federalism. | b. | the undue burden concept. | c. | constitutional hierarchy. | d. | the dormant aspect of the Commerce Clause. |

8. West Virginia passed a statute regulating working conditions in its mines. If the statute is challenged in court on substantive due process
grounds: a. | it would be presumed invalid and would be struck down since it involves a fundamental right to work. | b. | it would be presumed invalid but would be struck down only if it is not necessary to achieve a compelling government interest. | c. | it would be presumed valid since it regulates economic or social conditions. | d. | it carries no presumptions, but must be evaluated based on the procedures involved. |

9. When Congress passed a criminal statute called the "Gun-Free School Zones Act," the Supreme Court ruled that: a. | the law was valid as a proper exercise of the power to regulate interstate commerce. | b. | the law was void for vagueness; thus, it was not valid. | c. | the law was not valid since Congress exceeded its power under the Commerce Clause. | d. | although the law was not a proper exercise of the power to regulate interstate commerce, Congress had the power to create such legislation on other grounds. Therefore, the statute was valid. |

10. Thompson raised 80 acres of corn, most of which he used to feed his own cattle. He locally sold what he did not use. Based on the Supreme Court’s ruling in Wickard v. Filburn: a. | Congress has no authority over Thompson’s activity based on the negative aspect of the Commerce Clause. | b. | Congress may regulate Thompson’s farming activity because it has a substantial economic effect on interstate commerce. | c. | only Thompson’s local government can regulate his farming activity. | d. | only Thompson’s state and local governments can regulate his farming activity. |

11. The doctrine of preemption is based on the Constitution's: a. | Commerce Clause. | b. | Due Process Clause. | c. | Equal Protection Clause. | d. | Supremacy Clause. |

12. Ikerd was entering the United States from a trip abroad when the Customs Service confiscated some goods she had purchased and brought back with her. The determination of whether the government is attempting to take property and what type of hearing the Customs Service must offer Ikerd, is an analysis of: a. | substantive due process. | b. | procedural due process. | c. | the Takings Clause. | d. | eminent domain. |

13. Every year the U.S. Supreme Court receives about 8,000 requests to review cases. Of this number, the Court will hear about: a. | 100. | b. | 1,000. | c. | 4,000. | d. | 6,000. |

15. Smalltown, located in a border state, seemed to favor Caucasians over Latinos in their hiring practices. The courts will review the practice using: a. | minimal scrutiny. | b. | intermediate scrutiny. | c. | strict scrutiny. | d. | Supremacy Clause scrutiny. |

16. Fundamental rights include all EXCEPT the right to: a. | drive. | b. | vote. | c. | free speech. | d. | travel. |

17. Judicial review can best be described as the power of federal courts to: a. | review state court decisions. | b. | review state executive action. | c. | review state and federal legislative and executive action. | d. | none of the above. |

18. The issue of the constitutional protections afforded flag burning was addressed in: a. | Texas v. Johnson. | b. | United States v. Lopez. | c. | Marbury v. Madison. | d. | Palmore v. Sidoti. |

19. The “dormant” aspect of the Commerce Clause: a. | is also known as the “negative” aspect. | b. | means that there are many unused powers still available to the government to regulate trade between the states. | c. | guarantees that Congress has the power to regulate trade with foreign countries that have not yet developed trade practices with the United States. | d. | guarantees that the states have the power, even if unused, to impose regulations affecting interstate commerce. |

20. Which of the following limitations does not apply to the government in civil proceedings to take a person's liberty or property? a. | Procedural Due Process. | b. | The Takings Clause. | c. | Substantive Due Process. | d. | The Equal Protection Clause. |

21. The Supreme Court’s approach during the period from the 1950s through the 1970s in deciding cases on constitutional grounds is described as: a. | judicial restraint. | b. | judicial activism. | c. | judicial review. | d. | the dormant aspect of its judicial power. |

22. Generally, constitutional protections do NOT apply to: a. | acts of the federal government. | b. | acts of state government. | c. | acts of administrative agencies. | d. | acts of privately owned businesses. |

23. Lori and her friends burn an American flag as an act of political protest. Lori is arrested for violating a state law that prohibits flag burning. The Supreme Court has ruled that laws making it illegal to burn an American flag: a. | are void because they deny a person due process rights. | b. | are void because a state court has no power to prosecute a person for burning the federal flag. | c. | are void because they violate a person's right to freedom of speech. | d. | are valid. |

24. A woman wishes to attend an all-male, publicly supported college. She claims the college is violating the Equal Protection Clause of the Constitution. What level of scrutiny will the court use when deciding this case? a. | Minimal scrutiny | b. | Intermediate scrutiny | c. | Strict scrutiny | d. | Compelling interest scrutiny |

25. Adam moved into an apartment complex. The rules of the complex prohibit unmarried men and women from living together in the same apartment. When Adam's friend, Diane, moved into the apartment he was served with eviction papers. Adam claims the apartment complex is violating his constitutional rights since it allows married couples to live together. Is Adam right? a. | Yes. His equal protection rights have been violated. | b. | No. His fundamental right of cohabitation has not been violated. | c. | Yes. He and Diane are being treated differently than married couples. | d. | No. Constitutional protections do not extend to privately owned apartment complexes. |

Chapter: International Torts and Business Torts

TRUE/FALSE

1. A tort is a violation of a duty imposed by the civil law.

2. The First Amendment guarantee of freedom of speech is an absolute right.

3. Public officials and public figures receive less protection from defamation than ordinary people.

4. Opinion is generally a valid defense in a defamation lawsuit because it cannot be proven to be true or false.

5. In order for a plaintiff to win a case involving intentional infliction of emotional distress, she must prove the defendant acted in an extreme and outrageous manner.

6. Under Section 230 of the Communications Decency Act, Internet service providers are held responsible for defamatory postings by third parties.

7. If Gloria threw a rock which hit Merle, she is liable for an intentional tort of battery only if she intended to injure or harm Merle.

8. Lori works for Big Corporation as an "at will" employee. Richard, owner of a small store, offers to pay Lori much more money if she will leave Big Corp and work for his store. When Lori starts to work for Richard, Big Corp correctly claims Richard is liable for tortious interference with a contract.

9. A salesclerk at Braybon's Department Store observed a customer remove a ring from a display case and put it in her purse. In most states, Braybon's will be able to detain the customer for suspicion of shoplifting.

10. Dewayne sold a space heater to Vivian, telling her it would heat a 200-square-foot area, even though he knew it would effectively heat only about one third of that space. Dewayne is liable for the intentional tort of fraud.

11. Working out some frustrations after a bad game, Jessica angrily hits a baseball and then sees it is flying toward the umpire. She yells, “Watch out!” The umpire ducks and the ball misses him. Since there was no physical contact, no assault or battery occurred.

12. In an advertisement, FreshAir, Inc. compared its air freshener to a competing brand. The ad stated that FreshAir lasted for 3 hours while the competitor, Smell Sweet, lasted for only 36 minutes. In fact Smell Sweet freshens the air for more than 2 hours. FreshAir has not violated the Lanham Act because of the First Amendment's guarantee of freedom of speech.

13. Punitive damages are intended to punish the defendant for conduct that is extreme and outrageous.

14. Ahmi was a witness in a lawsuit. When asked why he fired Rana, Ahmi replied, "Rana was fired for willful misconduct." Indeed, Rana had not engaged in any misconduct. Rana will be able to successfully sue Ahmi for defamation based on what Ahmi said in court.

15. Krista, the Director of Sales at Trein, Inc., had supervised Rex's work for eight years. Rex applied for a job at E-presto, Inc. E-presto called Krista for a recommendation. In giving the recommendation, Krista will be protected from a claim of defamation by a qualified privilege provided she acts in good faith.

MULTIPLE CHOICE

1. Which of the following statements about torts is correct? a. | A tortious act is always a criminal act. | b. | A criminal act is always a tortious act. | c. | A tortious act may also be a criminal act. | d. | All the above are correct. |

2. Shortly after Brian started to work at Trevit, Inc., a co-worker, Lee, began asking him out. Brian said no. Nevertheless, Lee persisted. One day Lee touched Brian's crotch. Which statement is correct? a. | Lee defamed Brian. | b. | Lee committed the tort of trespass. | c. | Lee committed the tort of interference with a prospective advantage. | d. | Lee committed the tort of battery. |

3. Jim told his manager, Lana, that a co-worker, Diane, had been in prison for theft. Lana checked into the matter and, when she learned that Diane had served time in prison for theft, fired her. a. | Jim is liable to Diane for defamation. | b. | Jim is liable to Diane for defamation unless he can show a legitimate reason for having to tell Lana about Diane's prison history. | c. | Jim is liable to Diane for defamation only if she is a public figure. | d. | Jim is not liable to Diane for defamation. |

4. A national magazine published an article about a famous television star. The television personality is upset because the information contained in the story is not correct. If the actress sues the magazine: a. | she will need to show that the magazine has a history of being "reckless" with facts on a regular basis. | b. | she will need to show that the magazine either knew the story was false or acted with reckless disregard of the facts. | c. | she will need to show that the magazine failed to attempt to verify the story by trying to contact her or her agent before the story was printed. | d. | she will need to show that the magazine could have discovered that the story was false but failed to do so. |

5. Theft is to the criminal law as ____ is to the civil law. a. | stealing | b. | appropriating | c. | conversion | d. | trespass |

6. Wholesome Bread, Inc. advertised that its honey wheat bread had 25% fewer calories than a competing brand, Valley Grains. In fact Wholesome's bread had the same amount of calories as Valley Grains' bread. Wholesome Bread's conduct: a. | does not violate the Lanham Act because of the First Amendment freedom of speech. | b. | does not violate the Lanham Act because Wholesome did not act with actual malice. | c. | does not violate the Lanham Act because comparative ads are exempt from the law. | d. | violates the Lanham Act. |

7. Adam decided to play a practical joke on Linda, a co-worker. As Linda was leaving the office one night, Adam, wearing a mask, stepped out from behind some bushes. He pointed a handgun made out of licorice at her and demanded her purse. He then pushed the candy gun to her head and told her if she told anybody he'd kill her. Linda was very scared during the whole incident. She did not think it was funny when Adam pulled the mask off and took a bite out of the gun as he gave her the purse back. Which statement is correct? a. | Adam committed an assault but not a battery. | b. | Adam committed a battery but not an assault. | c. | Adam committed an assault and a battery. | d. | Adam committed neither an assault nor a battery since he used a candy gun and was only playing a joke on Linda. |

8. Adam decided to play a practical joke on Linda, a co-worker. As Linda was leaving the office one night, Adam, wearing a mask, stepped out from behind some bushes. He pointed a handgun made out of licorice at her and demanded her purse. He then pushed the candy gun to her head and told her if she told anybody he'd kill her. Linda was very scared during the whole incident. She did not think it was funny when Adam pulled the mask off and took a bite out of the gun as he gave her the purse back. Did Adam commit the tort of intentional infliction of emotional distress? a. | Yes, as his conduct was intentional. | b. | Yes, but only if Adam intended to cause Linda serious emotional distress. | c. | No, since he was only playing a practical joke. | d. | No, since Linda was not physically hurt by Adam. |

9. John was driving home one night in a terrible snow storm when his car stalled. He managed to push the car onto a small shopping center's parking lot. The next day about noon he came to get the car and it had been towed away by the owner of the parking lot. The owner explained she had to remove the car to clean the snow off her lot and told John where the car had been towed. Which statement is correct? a. | The owner of the parking lot is liable for conversion. She took John's car without his consent. | b. | The parking lot owner has a qualified privilege for towing the car since it was a business necessity. | c. | Even though John left his car in the parking lot under emergency conditions, he still committed a trespass on the owner's property. | d. | All the above are correct. |

10. An intentional tort involves conduct in which: a. | the defendant intended to harm the plaintiff. | b. | the defendant intended a certain physical act which ends up injuring someone. | c. | injuries are caused to someone because of the defendant’s neglect or oversight. | d. | there is resulting punishment, including prison, for the defendant. |

11. Trein, Inc. entered into a one-year, $1 million contract with Mia, a sports celebrity, to promote Trein's products. E-presto Inc., a competitor of Trein, was interested in having Mia promote its products and knew of her contract with Trein. E-presto offered Mia a three-year, $5 million contract. Mia left Trein and signed with E-presto. Which statement is correct? a. | Trein is liable for tortious interference with a contract. | b. | Mia is liable for tortious interference with a contract. | c. | E-presto is liable for tortious interference with a contract. | d. | Both Mia and E-presto are liable for tortious interference with a contract. |

12. A salesclerk at Sparkle Jewelry Store observed a customer remove a ring from a display case and put it in his pocket. In most states, Sparkle: a. | can reasonably detain the customer for suspicion of shoplifting. | b. | cannot detain the customer but can alert the police. | c. | cannot detain the customer but once the customer leaves the store, the salesclerk can make a citizen's arrest. | d. | cannot detain the customer but can sue for conversion. |

13. Trein, Inc. entered into a one-year, $1 million contract with Mia, a sports celebrity, to promote Trein's products. E-presto Inc., a competitor of Trein, was interested in having Mia promote its products but knew of her contract with Trein. E-presto offered Mia a three-year, $5 million contract. Mia left Trein and signed with E-presto. If Trein sues E-presto for tortious interference with a contract, E-presto: a. | will be able to establish a justification since E-presto was acting to protect an existing economic interest. | b. | will be able to establish a justification because, in talking to Mia, E-presto was exercising its First Amendment freedom of speech. | c. | will be able to establish a justification because to decide otherwise would subject Mia to involuntary servitude. | d. | will not be able to establish a justification. |

14. Runyon was ready to sign a two-year agreement with Barnett Corp. to become Barnett’s sales representative for a three-state area. LaPrise, who wants to be the representative for that area, threatens Runyon with bodily harm if he takes the position. Runyon decides his physical well being is more important to him than the job, so he does not accept the position. LaPrise: a. | committed tortious interference with a contract. | b. | committed tortious interference with a prospective advantage. | c. | committed a battery. | d. | caused a breach of contract and committed the tort of intrusion. |

15. A company that makes a commercial with a person who does an excellent, realistic job of pretending to be a famous movie star could be sued by the real actor for the tort of: a. | intrusion. | b. | defamation. | c. | commercial exploitation. | d. | none of the above, since public figures are often imitated by other actors. |

16. Which of the following is a valid defense to a defamation claim? a. | The statement was true. | b. | The statement was only an opinion. | c. | The person making the statement made it only to the plaintiff, not to any third parties. | d. | All of the above. |

17. Jerry believes his co-worker, Ben, is using illegal drugs. Since both he and Ben are nurses, Jerry is concerned Ben's drug usage could result in injury to a patient. He tells his supervisor, Cyndi. Cyndi talks with Jerry about the alleged drug usage and Ben produces a bottle of prescription medicine he is required to take for high blood pressure. The medication does not affect his ability to do his work. When Ben learns it was Jerry who reported him, Ben claims that Jerry committed an act of defamation when Jerry told Cyndi he used illegal drugs. Is Ben right? a. | Yes. Jerry committed slander. | b. | Yes. Jerry committed libel. | c. | No. Ben is, in fact, using drugs. | d. | No. Jerry is protected by the qualified privilege defense. |

18. Angela sued Tom for battery. Angela was awarded $30,000 for future medical expenses. Five years after the award, Angela realizes that her medical expenses will far exceed $30,000. Under the single recovery principle: a. | Angela will be able to submit the additional medical bills to the court for payment. | b. | Tom will have to pay the additional medical bills. | c. | Tom will have a qualified privilege and only have to pay a portion of the additional medical expenses. | d. | Angela will have no recourse against Tom or the court for the medical expenses as long as the original award was reasonable. |

19. Rodney was employed by Deluxe Discount Store. Rodney's manager directed him to check the prices of dog food at Huge Savings Store. The manager of Huge Savings Store saw Rodney writing down prices and asked him to leave. Rodney, fearful that he would be fired by Deluxe, refused to leave. Rodney committed the tort of: a. | larceny. | b. | trespass. | c. | misrepresentation. | d. | conversion. |

20. The elements in a defamation case are: a. | defamatory statement; falseness; communication; and injury. | b. | a contract; knowledge of the contract; improper inducement; injury. | c. | false or misleading fact statements; statements in commercial advertising; likelihood of harm. | d. | duty; breach of duty; proximate causation; and damages. |

21. Howson won a lawsuit against Hardwick for intentionally inflicting emotional distress. The jury awarded Howson $500,000 in compensatory damages. It also awarded Howson $4 million in punitive damages because Hardwick was quite wealthy and the jury thought a large amount was necessary for Hardwick to feel the punishing effects of the judgment. How does the jury’s award fit into the guidelines offered by the U.S. Supreme Court? a. | The punitive award is excessive because it exceeds the Supreme Court’s suggested ratio of compensatory damages to punitive damages. | b. | The punitive award is excessive because the Supreme Court has stated that the trial court may not use the defendant’s wealth as an excuse to award an unreasonably high award. | c. | The punitive award is excessive both because of the ratio of compensatory damages to punitive damages and because the punitive damage award was based partly on the defendant’s wealth. | d. | The jury award is not excessive based on the Supreme Court’s guidelines. |

22. E-trex, Inc. wanted Prince, a professional basketball player, to endorse its products. Prince, however, was not interested. E-trex was not deterred and hired a person who looked and sounded liked Prince for its commercials. a. | E-trex has defamed Prince. | b. | E-trex has interfered with a contract. | c. | E-trex has interfered with a prospective advantage. | d. | E-trex's conduct raises the issue of commercial exploitation. |

23. In awarding punitive damages, a court must consider: a. | the reprehensibility of the defendant's conduct. | b. | the ratio between the harm suffered and the award. | c. | the difference between the punitive award and any civil penalties used in similar cases. | d. | All of the above. |

24. Don was standing in a cafeteria line holding a plate. Tim was upset with Don. Tim turned Don around and grabbed the plate out of Don's hand. Tim then held the plate up and threatened to break it over Don's head. Tim has committed: a. | a battery, but not an assault. | b. | an assault, but not a battery. | c. | both an assault and a battery. | d. | neither an assault nor a battery. |

25. Which of the following is a true statement about tort reform? a. | Almost all the states have passed statutes limiting the amount a jury can award in a tort case. | b. | Congress has proposed and debated bills placing limits on tort awards, but so far has not enacted such legislation. | c. | Large medical malpractice awards account for about 60 percent of the dramatic increase in health care costs in the United States during the last two decades. | d. | All of the above. |

Essay Questions

1. A successful plaintiff usually receives compensatory damages, which are supposed to place the plaintiff in the position she was in before the defendant’s conduct caused injury. Wilma can receive money for medical expenses she proves by producing bills from her medical providers. If a doctor testifies that she will need future treatment, she may also be awarded the expected cost. Under the single recovery principle, the court awards a lump sum for past and future expenses, and any unexpected expenses that arise in the future cannot be recovered. Paula is liable for Wilma’s lost wages caused by the battery. Also, Wilma may receive payment for pain and suffering. Punitive damages, intended to punish the defendant for conduct that is extreme and outrageous, are awarded in relatively few cases.

2. Identify and discuss two specific causes of action a plaintiff can allege that deal specifically with privacy rights.

ANS:
Two causes of action under the general umbrella of privacy are intrusion and commercial exploitation. Intrusion, such as peeping through someone's windows or wiretapping a telephone, is a tort if a reasonable person would find it offensive. The tort of commercial exploitation occurs if someone's likeness or voice is used for commercial purposes without permission.

3. Tracy is an "at will" employee of Zebra Toy Company. One afternoon she has lunch with a friend who works in marketing for her company's biggest competitor, Tiger Toys. Over a period of about three months, Tiger Toy representatives convince Tracy to work with them. Tiger offers a larger base salary with bigger commissions than she had with Zebra. When Tracy leaves Zebra, it sues Tiger Toys claiming it intentionally interfered with a contractual relationship. Will Zebra Toy Company be successful?

ANS:
No. An "at will" employee is free to leave anytime she wishes (just as her employer is free to terminate her employment at any time). A claim for interference with a contractual relationship must involve a "definite" duration contract (e.g., contact for two years) rather than an indefinite duration (e.g., at will employment) contract.

4. On its Web site, Otrex, Inc. claimed that its pain reliever was more effective than Nelton, a competing pain reliever. Discuss the elements that Nelton must prove to win a case under Section 43(a) of the Lanham Act.

ANS: Nelton must prove that: (a) Otrex made false or misleading fact statements about Nelton's product; (b) Otrex used the statements in commercial advertising or promotion; and (c) the statements created the likelihood of harm to Nelton.

5. As assistant manager of a discount department store, you have been asked to review the store's policy concerning shoplifters. (a) Discuss the legal standard used in most states governing the detention of suspected shoplifters. (b) In reviewing the store's policy, discuss some of the items that you will consider.

ANS: a) | Generally, a store may detain a customer for alleged shoplifting provided there is a reasonable basis for the suspicion and the detention is done reasonably. | | | b) | Some of the items that should be considered include: what is a "reasonable" suspicion of shoplifting; what is "reasonable" detention; how private should the detention be; how can bias and prejudice be avoided; and how much questioning should the store do. |

5. ATC, Inc. offered health insurance benefits to unmarried same-sex domestic partners but not to unmarried, cohabiting heterosexual couples. Ray, an employee of ATC, Inc., challenged the benefit plan, claiming that it was in violation of Title VII of the Civil Rights Act. Under the Civil Rights Act, an employer may not discriminate against any individual on the basis of sex. Discuss the tools that a court may use in interpreting the Civil Rights Act.

ANS:
There are three primary tools that a court may use in interpreting a statute: plain meaning rule; legislative history and intent; and public policy. According to the plain meaning rule, when a statute’s words have ordinary, everyday significance, the court will simply apply the commonsense definition. If the language is unclear, the court must look at the law’s history to determine the intent of the legislature. If the legislative history is unclear, courts will rely on general public policies.

Essay Questions . Pablo, a resident of New Mexico, while driving through Arizona was struck by a SUV driven by Dick, a resident of California. Dick was speeding when the accident happened and Pablo suffered severe injuries that ruined a potential acting career. Pablo's damages are estimated at $200,000. Discuss the court system(s) in which Pablo may bring a lawsuit.

ANS:
Pablo could bring this case in the federal court system because he and Dick are residents of different states and there is more than $75,000 in dispute. This is a diversity case. Filing in federal court is optional, however, so Pablo could alternatively bring this action in a state system.

PTS: 1 MSC: AACSB Communication | AACSB Reflective Thinking

4. What are the advantages and disadvantages of using arbitration rather than litigation?

ANS:
The advantages of arbitration include using an impartial third party who often has expertise in the field to settle the dispute. The parties may have selected the arbitrator in advance or may have set forth a procedure to select a mutually agreeable arbitrator. Arbitration allows both sides to keep secret information that would have to be divulged in a court case. In most cases, use of an arbitrator will allow the case to be resolved much more quickly than utilizing traditional litigation techniques and it will probably be less expensive. A disadvantage to arbitration is that the parties may be barred from using the court system. After the arbitrator's ruling, the court cannot correct a mistake of law made by the arbitrator. An arbitrator may issue a binding decision without giving reasons for the decision. Parties in arbitration give up many rights litigants retain, such as discovery and class action.

PTS: 1 MSC: AACSB Communication

5. Lance sued Mega Corp. for negligence, and a jury awarded him $1.2 million. Mega Corp. filed a motion for judgment NOV, and that motion was denied by the trial court. Mega Corp. then appealed the case. Discuss a judgment NOV and when it is appropriate for a judge to grant such a judgment.

ANS:
A judgment NOV (non obstante veredicto or not withstanding the jury’s verdict) can be entered by the court when the judge is convinced that the evidence presented does not equate to the verdict reached by the jury. The judge, being a trier of fact as well as of law, shares the fact-finding process with the jury -- the jury cannot award damages in a civil trial inconsistent with the evidence. Generally, the judge will defer to the decision of the jury but in some cases where extreme findings are reached by the jury totally inconsistent with the evidence, the judge will nullify the jury's verdict.

ESSAY

1. Discuss the four most important limitations on the power of federal administrative agencies.

ANS:
The four most important limitations on the power of federal administrative agencies are: statutory control; political control; judicial review; and informational control. Statutory control exists through enabling legislation, which may limit an agency to the use of formal rulemaking or may limit the issues the agency may investigate. The APA also imposes controls. Political control may be exercised by the President or Congress. Control by the President is greatest with executive agencies. Congress controls through funding and through the power to approve presidential nominees to head agencies. Businesses or individuals directly harmed by administrative rules, investigations, or adjudications generally have a right to have such action reviewed in federal court after taking all possible appeals within the agency itself. Informational control has been created by the Freedom of Information Act and the Privacy Act.

PTS: 1 MSC: AACSB Communication

2. Define the common law. Discuss its conflicting goals and the doctrine created to serve one of these goals.

ANS:
The common law is judge-made law. It is the total of all the cases decided by appellate courts. Although most new law is statutory, common law predominates in tort, contract, and agency law, and it is very important in property and employment law. The common law attempts to accommodate the conflicting goals of predictability and flexibility. The need for predictability created the doctrine of stare decisis, which means “let the decision stand.” Stare decisis indicates that once a court has decided a particular issue, it will generally apply the same rule in future cases. The law must also be somewhat flexible in order to respond to new problems and changing social mores.

PTS: 1 MSC: AACSB Communication

3. Big Corporation is served with a subpoena to turn over business records to an administrative agency. What are three possible legal grounds the company can raise to avoid producing the requested records?

ANS:
The company can argue that the requested records (1) are irrelevant to the investigation, (2) will be unreasonably burdensome to produce, or (3) contain privileged information.

PTS: 1 MSC: AACSB Communication | AACSB Reflective Thinking

4. Discuss the role of money in the legislative process and the Congressional and Supreme Court controls on campaign spending since the 1970s.

ANS:
Campaign contributions and spending have created controversy for decades. Congress passed the Federal Election Campaign Act (FECA) in 1971 to limit the amount of his or her own money a federal candidate could spend. Amendments to the FECA limited how much the campaign could spend as a whole and how much another person could spend to promote a candidate. In 1976, the Supreme Court ruled mandatory spending limites violate the First Amendment. The Court allowed Congress to limit campaign contributions from individuals and groups but not to limit what a candidate could spend. Congress made several statutory attempts to limit campaign spending during the 2000s, but these were unsuccessful. A recent statute prohibited pre-election ads paid for by unions or corporations mentioning candidates by name. The Supreme Court declared the statute void as an unconstitutional violation of free speech. At this time, campaign contributions and spending are largely uncontrolled. Most members of Congress are very rich. Once elected, members of Congress often stay in office.