Torts/ Product Liability

Employment
Environmental
International
Criminal

A videogame company just solved major technical problem that will allow it to enhance its product. The CEO
announced this to all employees on Sunday morning. As soon as the stock markets open on Monday, three
people buy large blocks of the company shares. These people are the company’s CFO, the head janitor of the
company and a longtime friend of the janitor who works in another city. Discuss.
The use of inside information is illegal under the securities law. Anyone that uses information not known to the
market has violated the law. The CFO has better access to the information but that does not let the janitor off the
hook. The CFO is also an “insider” making it a different matter if the CFO sells the securities purchased with 6
months. The janitor probably told his friend but may not have given the friend enough information to make the
friend realize that he was using inside information.

You work for a company that has aspirations to “go public” someday. Corporate officials are indifferent to the
securities law in the belief that it would not apply to this effort. Could they be right?
The company might be exempt because it is in an industry specifically excluded by the securities law. These
include areas that are highly regulated by other authorities such as .
The other exemption possibilities include a small amount of dollar value for the offering, the sale of securities
only to accredited investor parties such as the institutional funds. It could also be that the company and its
business are confined to one state, and so will be the people to whom they offer the stock.

D owes money to a creditor. You ask D what kind of creditor he has. D says that it does not make a difference
because he has to repay the loan no matter what. Does it matter?
It is true that if D repays the loan, the nature of the creditor does not matter. D’s loan is a contract and all D has
to do is to perform that contract to the letter.
However, if D does not pay the loan, the nature of the creditor does matter. If the creditor is a regular non-
secured creditor, that person would have to sue D win the law suit, get a judgment and then use court-approved
methods to enforce that judgment. If the creditor is secured, the creditor can repossess the property serving as
collateral for the loan, sell the collateral, apply the proceeds to the unpaid loan.

One day Poorguy left the door to his apartment open after going to work. Badguy went into Poorguy’s
apartment to steal Poorguy’s stuff. Seeing nothing valuable, Badguy stole nothing from Poorguy but instead
smashed a hole into the thin wall allowing Badguy to get into the apartment next door occupied by Richguy.
Badguy then stole all of Richguy’s stuff. Richguy wants to sue somebody. Discuss.
Richguy vs. Badguy
-Trespassing
-Trespass to chattle

Poorguy vs. Badguy

-Trespassing

Richguy vs. Poorguy

-negligence?
-duty
-causation?

In 1994 a woman purchased coffee at McDonald’s. When the cup tipped over, the coffee burned the woman
requiring extensive medical treatment. Make your best case for and against the woman in a lawsuit against
McDonald’s.
Product liability
Was the coffee defective?
Was it made hotter than it needed to be
Warning labels – not then
Assumption of the risk?
Product misuse – how was it spilled

Every year many people are injured while riding on roller coasters at amusement parks, but only some of them
successfully sue for their losses. Others sue and lose. Why?
Successes
-Safety apparati failed
-Safety apparati imperfectly monitored
-No misconduct
-Victim was of appropriate size for the ude
Failures
-Contributory negligence
-Victim adds to the risk
-Assumption of the risk?
-No defect found

While on an out-of-town trip, two staff auditors (one male, one female) engage in a one-time sexual relationship
with each other. Shortly thereafter the man is promoted and becomes the woman’s superior. In his position, the
man must recommend one person to receive a big pay bonus. Discuss legal issues if he recommend this woman
or if he recommend somebody else.
Recommends the woman:
1) Complaints of sexual discrimination (hostile work environment) by others.

Does not recommend the woman:

1) Complaint of sexual discrimination by the woman

Both are predicated on the use of non-relevant cues to make decisions and are hard to deny.

A firm with a certain job to fill interviews people for that job. The population of people looking to work at this
company in this job are 50% male and 50% female. However, every time somebody gets this job, they are
always male. Discuss.
Does a bona fide occupational qualification exist for this job which makes men more suitable and tends to rule
out a higher percentage of women?
-Ideally it should depend on some physical difference between the genders
-Cannot be preference of clientele
-Cannot be a marketing mech
This test has been used in racial discrimination but would seem to apply here as well

Many people, including certain people running for US president, feel that the federal government is doing too
much to protect the environment. How would this argument be made?
Environmental protection creates costs that if paid for by U.S companies make products more expensive and
therefore fewer will be produced creating more unemployment
-in international competition, the situation would make U.S. companies less competitive
Environmental protection sometimes punishes “innocent” parties since the law is not fault-based. As such, they
are not consistent with normal ideas of jurisprudence.
Environmental laws are too absolute, failing to take costs of compliance into account. As such, they are
different than most legal resolution that attempts to balance interests.

A U.S. company and a Chinese company make a contract. How do we know which law (U.S. or China) governs
the contract? If the U.S. is suing the Chinese country can the lawsuit, can the US company sue the Chinese
company in the U.S.A.?
The contract might stipulate which country’s law will apply. If not, there may be some other indication about
what the intention of the parties about this might have been. If not, a court will look to where the contract is
performed or the country most involved in performance.
Even if Chinese law is to be used, a U.S. court could hear the case if jurisdiction over that Chinese company can
be achieved. Therefore that company has to have some presence here, or has to be deemed to be doing business
here.

For some time, MP3 products that competed with Apple’s iPod were unable to download music from Apple’s
iStore because Apple refused to license the software to competitors that would allow the download. Discuss.
This could be seen as a tying arrangement by Apple. If you wanted to shop at the iStore (a place that had more
music files than any other) you had to have an Apple player. This made sense for Apple because the real money
was made selling iPods, relative to the “give away” pricing of most songs.

Staples and Office Depot are the two largest office supply companies in the US. Recently, they have proposed a
merger. Staples successfully acquired OfficeMax, another large company in this industry, in 2013. What
factors would be important in whether or not the new proposal will actually happen?
How much competition exists between these two stores?
How many cities in the U.S.A. have both
How similar is their product lines
Do they have similar growth models were they might be competing more in the future
HHF1?