ADM 477 IWU Free Market Approach Business Law Discussion

ADM 477: Business Law

I can provide book link if needed.

Getting Started

The Quality Egg case brings a whole new meaning to the term rotten egg! In 2014, Quality Egg, LLC, was fined $7 million for food adulteration, product misbranding, and bribery. In addition, the company owner, Austin DeCoster, and the CEO, Peter DeCoster, were sentenced to three months in federal prison stemming from their role in Salmonellaoutbreaks that affected more than 60,000 consumers. Both men were prosecuted according to the Park Doctrine, which makes company executives liable for Food, Drug, and Cosmetic Act (FDCA) violations. Under the Park Doctrine, the government did not have to prove that the executives knowingly shipped contaminated eggs. Just by virtue of being company executives, they should have known of the extreme filth and neglect of the company’s hen house operations and that the shipped eggs were both contaminated and unfit for consumption.

There doesn’t seem to be a limit to the reach of the Park Doctrine. The Food and Drug Administration recently warned distributors of dietary supplements that they, too, can be held liable under the Park Doctrine. What’s interesting about this legal development is that a company can be held liable for contractor misconduct. Moral of the story: be careful selecting contractors to manufacture or package your products!

Upon successful completion of the course material, you will be able to:

Explain the role of administrative agencies in regulating business.

Resources

Textbook: The Legal Environment of Business

Website: Consumer Product Safety Commission

Background Information

In 1972, the Consumer Product Safety Act gave rise to the Consumer Product Safety Commission (CPSC). This federal regulatory agency’s goals are to educate consumers and to protect them from unreasonably dangerous products. The commission issues regulations, educates the general public about potential hazards, and administers both civil and criminal penalties for safety infractions. The commission also can issue recalls and require corrective action for products deemed to be unreasonably dangerous. Manufacturers, retailers, distributors, and importers all fall under the CPSC’s jurisdiction.

In the past, the CPSC has been criticized for its slow response to crises involving consumer product recalls. Most recently, CPSC has been applauded for its swift response to safety issues involving hoverboard manufacturers. Numerous consumers have been injured by fires resulting from exploding lithium batteries in the devices.

Instructions

Review the rubric to make sure you understand the criteria for earning your grade.

In your textbook, The Legal Environment of Business, read Chapter 17, “The Regulatory Process.”

Access the website for the Consumer Product Safety Commission (CPSC) at http://www.cpsc.gov and review the agency’s functions and responsibilities. There, you also will find news releases and videos on product recalls/news and safety tips.

Navigate to the threaded discussion and respond to the following prompts:Present a reasoned argument as to whether the public would be better served by a “free market” approach to product safety (for example, consumers refraining from buying products that have resulted in too many injuries or deaths), or whether the public is better served by the existence of the CPSC. Consider if social media has changed the balance of power between producers/sellers and buyers/consumers.

Your initial post is due by the end of the fourth day of the workshop.

Read and respond to at least two of your classmates’ postings, as well as all instructor follow-up questions directed to you, by the end of the workshop.

Your postings should also:Be well developed by providing clear answers with evidence of critical thinking.Add greater depth to the discussion by introducing new ideas.Provide clarification to classmates’ questions and provide insight into the discussion.Be posted on three different days during the workshop.