Devry MGMT520 Final Exam 2 ANSWERS

MGMT 520 Final Exam 2 ANSWERS
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. The inventory is located throughout the Western
United States, and it is possible that it has also made its way into parts of
Canada.
Last fall, the FDA had promulgated an administrative proposed rule
that would have required all pharmaceutical companies that sold
over-the-counter medications to incorporate a special tracking bar code (i.e.,
UPC bars) on their packaging to ensure that recalls could be done with very
little trouble. The bar codes cost about 35 cents per package.
Robins & Robins lobbied hard against this rule and managed to
get it stopped in the public comments period. They utilized multiple arguments,
including the cost (which would be passed on to consumers). They also raised
“privacy” concerns, which they discussed simply to get public interest groups
upset. (One of the drugs impacted is used for assisting with alcoholism
treatment – specifically for withdrawal symptoms – and many alcoholics were
afraid their use of the drug could be tracked back to them.) Robins &
Robins argued that people would be concerned about purchasing the medication
with a tracking mechanism included with the packaging and managed to get enough
public interest groups against the rule. The FDA decided not to impose the
rule.
Robins & Robins’ contract with Casings, Inc., states, in
section 14 B.2.a., “The remedy for defects in supplies shall be limited to the
cost of the parts supplied.” Casings, Inc., had negotiated that clause into the
contract after a lawsuit from a person who was shot by a gun resulted in a
partial judgment against Casings for contributory negligence.
Robins & Robins sues Casings, Inc., for indemnification from
suits by injured victims from the medication, for the cost of the capsule
shells, for attorney’s fees, and for punitive damages. List any defenses
Casings, Inc., would have under contract theory ONLY. (short answer question)
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 New York 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 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 children’s 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 defenses any of the three would have.
Analyze the success of the defenses.
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.
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)
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:
Dear Staff:
There is a new
Sheriff in town – and it is me. As your new leader, I am implementing a dress
code that includes no slacks or shorts for women and no earrings for male
teachers. Men shall all be clean shaven. Violators will be docked one week’s
pay; 2nd offenses will result in a one week suspension without pay and 3rd
offenses, dismissal. All teachers will address me as “Pastor Forester” or
“Amen, Pastor Forester.” Teachers who fail to abide by these dictates will be
docked two points on their annual evaluations. Amen, Pastor Forester.”
That day, one teacher, Anna Seenandfeld had a birthday party at
the school, having just turned 40. Her frown at the party showed everyone she
was not happy about her party. Pastor Forestor had bought black balloons for
her and joked with the other teachers about the “over the hill” teacher. The
next day, Pastor Forester goes into the teacher’s lounge and calls all
non-tenured teachers into his office. He tells them that he has assigned
himself to be their mentoring teacher and that effectively immediately they
will be evaluated weekly. One teacher, Anna Seenandfelt, begins to cry. Another
teacher, Andy DuFrane, rolls his eyes and says, “God! These menopausal women
should not be allowed around our students.” Pastor Forester goes to Anna and
hugs her, offering her a tissue. He pats her gently on the behind and whispers,
“Act your age, please.” When she pulls forcefully away from him, Pastor
Forester assigns her to work Saturday detention for the next three weeks to
“toughen her up.”
A pregnant P.E. teacher, Lisa Ready, is reassigned by Pastor
Forester to a math position (even though she has only three credits in math)
because Pastor Forester says this position is “less strenuous for a pregnant
lady.”
On the 3rd week of detention duty, a student stabs Anna, wounding
her severely. Although she survives and recovers, she loses one kidney as a
result of the injury. The school doesn’t offer health insurance, and Anna
incurs over $55,000 for her hospital bills; the student (and his family) is
insolvent.
One month later, a parent complains about his student being unable
to succeed in his math course due to the teacher’s (Lisa’s) incompetence,
Pastor Forester fires Lisa Ready for her inability to perform her job. Pastor
Forester tells Lisa in front of her class of students, and then walks her out
of the building; 2 hours later, Lisa goes into premature labor and delivers her
first son, who has severe health issues as a result of being premature. The
baby’s doctor states the cause of early labor as being from “intense duress and
undue stress.” Lisa’s husband’s health insurance covers all of the costs of the
birth and the baby’s care.
Pastor Forester is really not a Pastor. His real name is Jerry
Birches, who is a parolee with convictions for child molestation. His parole agreement
prohibits him being closer than 1000 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. This comes to the attention of the school board,
and 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.
Top of Form
1. TCO E. Anna and Lisa both sue the school and Pastor Forester
for discrimination and further, for liability for their injuries (the stabbing
damages and the damages to Lisa’s son’s health.) You are one of the board of
directors and need to analyze the liability of the school. Limit your answer to
the SCHOOL’S liability only.
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 defenses available to the school.
Bottom of Form
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, who is a parolee with convictions for child molestation. His parole
agreement prohibits him being closer than 1000 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. He
then sues the school for firing him for being a convicted felon. He claims that
is illegal, and he publicly attacks the church for their “less than Christian”
behavior 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 O’Donnell, the CEO and
Creative Director of Clean Clothes (a
Texas based lesbian women’s 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. To further the advertising impact, the
team uses an Ellen DeGeneres look-alike in the YouTube video, where the model
does the “Ellen dance” – and mouths “love the pants” as she points to her legs
and then walks off leading an Alpaca by a halter. Within months, the slacks are
a huge hit in the lesbian community. Clean Clothes sends a letter to their
attorney asking him to trademark their tagline, and move forward without
another thought about it.
Meanwhile, Men2Wimmin, a French company with a branch in New York,
has established a huge following in the gay and cross-dressing community. It
has used the tagline “Feminine Attitude, Masculine Fit” for many years to
advertise their drag queen dress collection for men on billboards, the internet
and television.
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 doesn’t 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 men’s 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:
1. TCO F. Ellen DeGeneres sues Clean Clothes for the use of a
look-alike model for the 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 men’s 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 JOSB’s countersuits? Do
you think any of the 3 will win their cases? (Why or why not.)