The link to downloadGM520 Final Exam (2)TCO D Short Answer Question and Facts for Page 1 Questions:A well known pharmaceutical company, Robins & Robins, is working througha public scandal. Three popular medications that they sell over the counterhave been determined to be tainted with small particles of plasticexplosive. The plastic explosives came from a Robins &Robins suppliernamed Casings, Inc., that supplies the capsule casings for the medicationpills. Casings, Inc., also sells shell casings for ammunition. Over $8 million ininventory is impacted. The inventory is located throughout the Western UnitedStates, 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 wouldhave required all pharmaceutical companies that sold over-the-countermedications to incorporate a special tracking bar code (i.e., UPC bars)on their packaging to ensure that recalls could be done with very littletrouble. The bar codes cost about 35 cents per package.Robins & Robins lobbied hard against this rule and managed to get it stoppedin the public comments period. They utilized multiple arguments, including thecost (which would be passed on to consumers). They also raised “privacy”concerns, which they discussed simply to get public interest groupsupset. (One of the drugs impacted is used for assisting with alcoholismtreatment – specifically for withdrawal symptoms – and many alcoholics wereafraid their use of the drug could be tracked back to them.) Robins & Robinsargued that people would be concerned about purchasing the medication witha tracking mechanism included with the packaging and managed to getenough public interest groups against the rule. The FDA decided not toimpose the rule.Robins & Robins contract with Casings, Inc., states, in section 14 B.2.a., "Theremedy for defects in supplies shall be limited to the cost of the partssupplied." Casings, Inc., had negotiated that clause into the contract after alawsuit from a person who was shot by a gun resulted in a partial judgmentagainst Casings for contributory negligence.Robins & Robins sues Casings, Inc., for indemnification from suits by injuredvictims from the medication, for the cost of the capsule shells, for attorneysfees, and for punitive damages. List any defenses Casings, Inc., would haveunder contract theory ONLY. (short answer question)
2. TCO B. The FDA decides to require all pharmaceutical companies toimmediately implement the tracking bars (UPC) as a result of the disaster withRobins & Robins. Robins & Robins decides not to challenge this and beginsthe process of adding them to all of their products. However, McFadden, Inc.,a New York pharmaceutical company, realizes that this new requirement isgoing to bankrupt them immediately. McFadden did not participate in theoriginal public comment period. However, this rule is different from therule that went through that public comment period in that it specificallynames four companies as being impacted: Robins & Robins, McFadden, Inc.,Bayer, and Johnson & Johnson. On what bases can McFadden challenge thisrequirement imposed by the FDA, and can they be successful? Provide atleast two bases under the Administrative Procedures Act and justify youranswer. (Points: 30)3. TCO C. Robins & Robins immediately issued a massive recall for thetainted medication upon learning of the situation. Despite the recall, 1,400children and 350 adults have been hospitalized after becoming very ill upontaking the tainted medication. Each of them had failed to note the recall afterhaving already purchased the medication. It is quickly determined that theywill need liver transplants and many of them are on a waiting list. During thewait, to date, 12 children have died. Their families are considering suing forboth 402A and negligence. The attorneys stated that but for the lobbyingefforts, the recall process would have been automated and the people wouldnot have gotten sick or died.You are the attorney for one of the dead children’s family. List the causes ofaction (if any) you would file against Robins & Robins, the FDA, and thebribed FDA member. List the elements of the causes of action, and set forththe facts that you have that would support a lawsuit against each of the threenamed defendants. State any defenses any of the three would have. Analyzethe success of the defenses.TCO A. It is discovered that Robins & Robins knew about the taintedmedication 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 theshelves. Their “fake” recall failed. Using the Laura Nash method of analyzingethical 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 themiddle 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 ofwhat to do now that the deaths are escalating. What is the “right” thing for theCEO to do in this case? Did the model help you come to this conclusion, ordid you use some other method? Explain.Have you defined the problem accurately?
1. The problem in terms of its magnitude and impact was not definedaccurately, which could have led the CEO to make the wrong decision2. Given that the issue has now been firmly established, the problem, itsimpact and consequence should be seen, to be appreciated fully.How would you define the problem if you stood on the other side of the fence?1. Risk or harm leading to personal injury or even loss of life2. Loss of life and loss of trustHow did this situation occur in the first place?1. Faulty quality checking and manufacturing. Faulty supplies.2. Negligent decision to go ahead with fake recallTo whom and to what do you give your loyalty as a person and as a memberof the organization?1. To investors and shareholders. To customers2. To customers direct affected. To customers and society.What is your intention in making this decision?1. To save money2. To ensure the company is fair, and to take up responsibilityHow does this intention compare with the probable results?1. Inadequate2. FairWhom could your decision or action injure?1. Innocent end customers and consumers2. Innocent end customers and consumersCan you discuss the problem with the affected parties before you make yourdecision?1. No2. No
Are you confident that your position will be as valid over a long period of timeas it seems now?1. No2. YesCould you disclose without qualm your decision or action to your boss, yourCEO, your family, society as a whole?1. No2. YesWhat is the symbolic potential of your action if understood? If misunderstood?1. Loss of trust, let down of customers and community the company operatesin2. Loss of trustUnder what conditions would you allow exceptions to your stand?1. If risk of loss of life is minimal, and if the company is able to do most of therecalls within a quick time2. When company has done all it can, and factors are not in its control5. TCO I. A Canadian citizen whose son (resident of Ontario) died from themedication sues Robins & Robins in a California court. The court there is wellknown for being victim friendly and providing huge payouts to victim families.In Canada, the cap on nonpecuniary damages is around $300,000. Punitivedamages in Canada are rarely allowed. Robins & Robins moves to dismissthe case under the theory of sovereign immunity. Will Robins & Robins winthis motion using this theory? Why or why not? (short answerquestion) (Points: 15)Page 2Question 2 - 2 essays, 30 points each.TCO E and H. A private high school hires a new Superintendent, GeorgeForester. The school is owned by a local Lutheran Church and is run by aboard of directors chosen by church members. Supt. Forester shows up forhis 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 amimplementing a dress code that includes no slacks or shorts for women andno earrings for male teachers. Men shall all be clean shaven. Violators willbe docked one week’s pay; 2nd offenses will result in a one week suspensionwithout pay and 3rd offenses, dismissal. All teachers will address me as“Pastor Forester” or “Amen, Pastor Forester.” Teachers who fail to abide bythese 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 nothappy about her party. Pastor Forestor had bought black balloons for her andjoked 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-tenuredteachers into his office. He tells them that he has assigned himself to be theirmentoring teacher and that effectively immediately they will be evaluatedweekly. One teacher, Anna Seenandfelt, begins to cry. Another teacher, AndyDuFrane, rolls his eyes and says, "God! These menopausal women shouldnot be allowed around our students." Pastor Forester goes to Anna and hugsher, offering her a tissue. He pats her gently on the behind and whispers, "Actyour age, please." When she pulls forcefully away from him, Pastor Foresterassigns her to work Saturday detention for the next three weeks to “toughenher up.”TCO E. Anna and Lisa both sue the school and Pastor Forester fordiscrimination and further, for liability for their injuries (the stabbing damagesand the damages to Lisa’s son’s health.) You are one of the board of directorsand need to analyze the liability of the school. Limit your answer to theSCHOOLS liability only.Write a brief memo as to whether Pastor Forester committed illegal ordiscriminatory practices in his brief tenure described in this situation. Then,analyze the potential liability of the school. Discuss agency liability, as well asany employment law aspects. Explain whether you feel that the two injuredteachers have cases for recovery against the school. Discuss whether theschool being a religious, private school has any bearing on or protection fromliability. Include all defenses available to the school.Bottom of FormGiven that both Anna and Lisa were discriminated against due to their gender(less strenuous for a pregnant lady) and age (Act your age, please / totoughen her up), they have valid claims against the school due to the acts ofits representative. In addition to that, the schools agent had placed themunder undue stress and in a dangerous position, due to which they had tosuffer. Drawing from employment law "discriminatory practices also includeharassment on the basis of race, color, religion, sex, national origin, disability,
genetic information, or age" [http://www.eeoc.gov/facts/qanda.html].based onthis, it can be said that Pastor Forester committed multiple instances of illegaland discriminatory practices during his tenure.The potential liability that the school has in this context is to investigate thecase, take action that would ensure that the affected parties are treated fairlyand also ensure that initiatives are taken that would prevent such activitiesfrom taking place again. [http://www.mcnair.net/?&&] As the principal in thiscase, the school would have liability due to the actions of its agent, who hadactual and apparent authority, which caused harm to others.The two injured teachers have cases for recovery against the school, as theirinjuries was directly caused due to the actions of the schools agent. Recoveryshould however be limited to the damages that they suffered.In spite of being a religious private school, it has responsibility to ensure that itdoes not discriminate against or harass its employees to their detriment, andhence would be liable. The defenses that the school can use in this case wasthat actions of its representative were necessary as they we in line andrelation to their job and hence a business necessity. The school could alsosuggest that the agent had illegal authority and when he was exceeding hisapparent authority, the teachers should have complained to the board to takeaction.TCO H and E. In the discovery portion of the case, it is determined that PastorForester is really not a Pastor. His real name is Jerry Birches, who is aparolee with convictions for child molestation. His parole agreement prohibitshim being closer than 1000 feet to any school. In order to cut costs, theschool had stopped doing background checks on new employees, and thisslipped through the cracks. The President of the Board of Directorsimmediately fires Pastor “Jerry Birches” Forester and notifies his parole officerof the violations. Pastor Forester claims the board knew about hisbackground, because one member of the board (his aunt Theresa) knew thetruth. He claims her knowledge should be imputed to the entire board ofdirectors. 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 thanChristian" behavior in firing him.The board immediately convenes to discuss “damage control.” They knowyou took a Law and Ethics course recently and ask you to write a newsrelease to the local newspaper, explaining the situation. Using ethical andlegal considerations (including the fact you are in the middle of multiplelawsuits), write the brief news release. Then, explain why you wrote it the wayyou did.(Points: 30)
Page 3Page 3 - Two essays at 30 points each.TCOs F & G. Laura Etheridge and Rita O’Donnell, the CEO and CreativeDirector 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 organiccotton. To further the advertising impact, the team uses an Ellen DeGenereslook-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 offleading an Alpaca by a halter. Within months, the slacks are a huge hit in thelesbian community. Clean Clothes sends a letter to their attorney asking himto 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. Ithas used the tagline “Feminine Attitude, Masculine Fit” for many years toadvertise their drag queen dress collection for men on billboards, the internetand television.Ellen DeGeneres learns that her likeness is being used to advertise for CleanClothes. She watches the ad and is incensed. She spends the next week onher show bashing the Clean Clothes company, and states that she wouldnever endorse the use of Alpaca wool for clothing, as she feels shearing themis 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 atspecial stores, although she admits she often shops in the men’s departmentat Joseph A. Bank (JOSB). Her comments cause a precipitous drop in salesat both Joseph A. Bank (JOSB) and Clean Clothes. Using the above factpattern, analyze fully, the following questions:TCO F. Ellen DeGeneres sues Clean Clothes for the use of a look-alike modelfor the slacks advertisement. She includes Lanham Act, misappropriation,and "Right of Publicity" claims in her complaint. Clean Clothes countersuesfor product disparagement. Joseph A. Bank (JOSB) sues Ellen for impactingtheir men’s clothing sales with her unsolicited comment. What facts willEllen use to support her cases and why will those support her cases? Whatdefenses will Ellen have against Clean Clothes and JOSBs countersuits? Doyou think any of the 3 will win their cases? (Whyorwhynot.)2. TCO G. It is discovered that two weeks before the Ellen show, she had sold$2 million in JOSB stock (at a gain of about $2,200). The morning after hershow, Ellen sold JOSB short (which means she was betting the stock pricewould go down), and she made another $210,000 in the next week on that
trade. The swing in the price was not directly tied to her comments, but wassuspected to be a result of a recall JOSB made on their entire line of mensblack and brown dress slacks when it was discovered that they had beensewn together with white thread. Ellens previous trading activity shows thatshe made it a normal practice to “vigorously trade” the stock of any companywith which she did business. A review of her trading activity for the past yearshowed that she had bought and sold JOSB stock 25 different times, includingshort sales like this one. Her overall trading for JOSB stock for the last 12months was a net loss of $82,000.00. Do you think the SEC will file anythingagainst Ellen for her sales of JOSB? Is there any cause to do so? Analyze hertransactions with respect to insider trading activity (based on what you know)– and whether she should be concerned. Is her prior trading activity adefense? Should Ellen have avoided discussing JOSB publicly on hershow since she typically trades their stock? (Points: 30)