Business Law Question

Part I (25 points each) – Write a short essay answer for each of the following six topics.

1. A FedEx driver, Dan, is driving 50 mph on a street that has a posted 25 mph speed limit. Pedestrian Patty jaywalks in the middle of the block, stepping out from between parked cars into the street, where she is hit by driver Dan’s FedEx truck and is seriously injured. Patty sues FedEx and Dan to recover for her injuries, which total $100,000 in medical bills and lost income. They live in a state that applies a comparative negligence doctrine. Explain how Patty’s claim could most likely be affected by a comparative negligence doctrine.

2. In a product liability claim based on strict liability, the plaintiff must show that the product was “defective” in some way. Excluding “warranty” claims, describe four types of “defects” that could be the basis for a strict liability claim, and give an example of each.

3. A lab technician is an at-will employee of Company A and her company introduces some new chemicals she must use in her lab that give off a bad smell that disturbs her. She checks on Google and learns that the chemicals are subject to federal OSHA regulations that require special air handling equipment to keep the vapor from building up to levels that would present a risk to the health of persons exposed to them. She repeatedly complains about the lack of the required air handling facilities in her lab, and takes her own frequent breaks away from the lab work to get regular fresher air. Eventually, she is terminated by Company A for being less productive than her similarly-situated colleagues. Explain the grounds on which she can bring a claim for wrongful termination and what her general odds of success are.

4. Explain the basic differences between a Chapter 7 bankruptcy and a Chapter 11 bankruptcy, noting in particular what the usual different result is (1) for the bankrupt company that filed the action, and (b) for the general unsecured creditors of the bankrupt company.

5. Assume that a product causes an injury due to a hidden manufacturing defect (the product’s internal wiring was incorrectly assembled, causing the product to explode when it is switched on). Explain (a) whether the retailer of the product and the manufacturer of the product generally can be held liable to the injured plaintiff if the plaintiff’s claim is based on negligence, and (b) whether the retailer and the manufacturer can be held liable if the plaintiff’s claim is based on strict liability.

6. An employee of Company A writes software code and as part of her job she wrote the code that provides for a simpler, more user-friendly way for consumers to enter their shipping details and credit card info on Company A’s website and retain that data for later one-click shopping visits to the website. She quits her job and starts working at Company B, whose products do not compete with Company A’s products, and volunteers that she can improve Company B’s website functionality in the same way. She had on her personal computer the code that she wrote for Company A because she was on work-from-home status when she prepared it, and she uses it again to improve Company B’s website. Explain whether Company A’s intellectual property rights have been infringed by Company B incorporating this code in their website’s operation.

PART II (50 points each). Write a short essay answer on each of the following four topics.

A. Target, Inc. ordered 100,000 artificial Christmas trees from Supplier A in Shanghai and 100,000 artificial Christmas trees from Supplier B in Taipei, for delivery by October 15th, for sale during the holiday season. Both Suppliers charged $30 per tree, payable upon delivery. Supplier A was able to deliver its 100,000 trees on time, but Supplier B encountered a meltdown and notified Target that it could only deliver 50,000 trees on time. Target then asked Supplier A to operate additional overtime production lines, and Supplier A was able to deliver on time an additional 25,000 trees at $50 each (the $20 per tree increase was mostly due to overtime costs and using air freight instead of ocean vessels to deliver on time). Target sold out the entire 175,000 trees it had available at an average profit of $40 per tree. In light of the reduced supply available, Target cancelled billboard and other marketing promotions it had scheduled for markets where it wouldn’t have adequate inventory to sell, and incurred $25,000 in cancellation fees and wasted production costs. Discuss what claims Target can bring against Supplier B and what amount of damages it most likely could recover on each claim. Use specific dollar amounts and explain how you arrived at them.

B. Michelle Garnaut is a celebrity chef who operates “M on Market,” a very high end and successful restaurant in San Francisco. Her sister Mandy was always jealous of Michelle when they grew up together, and became even more jealous when Mandy’s modest neighborhood restaurant failed and went out of business. In her anger, Mandy posted 3 reviews of M on Market on the Michelin Guide website, under fake names over a 10-day period, falsely claiming that each purported customer had become seriously sick after dining at that restaurant. M on Market’s reservations declined by 20% for six months. Assuming that good computer forensics could establish that Mandy posted the fake reviews, discuss what claims Michelle could bring against the Michelin Guide and against Mandy, and what types of damages, if any, she likely could recover from each of them.

C. United Shipping Company (“USC”) operates a package delivery business similar to FedEx and UPS. 95% of USC’s driver/delivery employees are male. USC requires applicants for these positions to take a test to demonstrate they can lift a 200-lb box and carry it while walking briskly for 25 yards. Assume that USC can show that there are both male and female applicants who fail this test, that many more of its female job applicants fail this test compared to male applicants, and that all of its male and female hires passed this test. Two female job applicants who did not pass this test and were not hired by USC filed a class action on behalf of female applicants claiming that USC discriminates against women applicants for the driver/delivery jobs. What arguments can the female plaintiffs make and what type of evidence would they need to present to have a successful discrimination claim?

D. Company A gets involved in a major public controversy over its spending of corporate funds to contribute to various “extremist” political groups and candidates, who happen to also support policies favorable to Company A’s business. The shareholders of Company A get upset and vote in favor of an amendment to the Company’s bylaws that prohibits donating corporate funds to any political candidates or any organizations that endorse political candidates. Company A files a lawsuit to enjoin or block the bylaw amendment from being applied to Company A because it violates Company A’s First Amendment rights to free speech and to spend money to give effective voice to its free speech rights.  Discuss whether the bylaw amendment violates Company A’s First Amendment rights.