1. State Senator Leghornne accuses State Senator Gentile, the sponsor of an education bill, of being a "child lover" during a filibuster. Gentile had recently married his 18-year-old former intern. 2. Gentile's spouse attempted suicide after being distraught by Leghornne's comments. He has now recovered and seeks legal advice. 3. A radio station learns the FCC plans to require more public service announcements, which could bankrupt the small station with little advertising revenue.

1. (TCOs D, E, F) State Senator Leghornne, while filibustering the
opposition party’s proposed statute on public education, accuses
State Senator Gentile, the bill’s sponsor, of being an
“unabashed child lover.” It is common knowledge that State
Senator Gentile, who is gay, recently married an 18-year-old
college intern who had worked in his legislative offices. The
relationship and the marriage were covered in the local papers.
Although many conservative people had “their opinions” on the
matter, most dealt with the situation with decorum and respect.
State Senator Leghornne had recently and vehemently opposed
the state’s same sex marriage law. State Senator Gentile’s
spouse was so distraught and upset by the comments made
during the filibuster that he attempted suicide by overdosing on
sleeping pills. Fortunately, State Senator Gentile returned home
in time to call an ambulance, and all are now doing fine.
Senator Gentile’s spouse seeks your advice about possible legal
actions that he could bring against State Senator Leghornne. He
points out to you that he met State Senator Gentile when he was
18, an adult allowed to marry under state law, and that their
marriage and relationship are perfectly proper pursuant to the
state’s same sex marriage law.
(Points : 15)
(TCOs B, C, G, I) KWRF, a small market radio station, learns
from reading in the industry trade magazine that the Federal
Communications Commission (FCC) has proposed a regulation
change. The regulation will require radio stations to do an
additional 20 minutes of public service announcements each
week. As KWRF serves a small niche market, and has minimal
advertising revenue, the loss of 20 minutes of air time could
bankrupt them.
What should KWRF do regarding the proposed change?
(Points : 15)
(TCO C) Three professors from Keller’s New Jersey campus,

2. Robinson, Romney, and Obama, decide to visit ABC Go-kart
facility together in Pennsylvania. This decision is made after a
lengthy faculty brunch, at which unlimited alcoholic mimosas
were served. ABC Go-kart advertises at the college’s various
campuses and, in fact, the professors use their faculty discount
at the facility. At the facility signs are posted everywhere in
bold: “BY PARTICIPATING IN Go-KART RACING, YOU
VOLUNTARILY ASSUME THE RISK OF ANY DEATH OR
INJURY THAT MAY RESULT. “ Additionally, the professors
hurriedly sign a contract, which states: “YOU ARE GIVING UP
ALL LEGAL RIGHTS”; “ABC WILL NOT BE HELD LIABLE
FOR ANY NEGLIGENCE RESULTING IN YOUR INJURY OR
DEATH”; and “THE PARTIES AGREE THAT ANY POSSIBLE
LEGAL ACTION WILL BE HEARD IN THE STATE OF
PENNSYLVANIA.”
Professor Robinson, who lives in New York City, is sick and
sweating profusely after consuming a great deal of alcohol. He
decides not to race. He suspects that he is having a minor
reaction as he is diabetic and drank more than he intended. In
the Waiting Area, which is located next to the track, he takes
off his helmet. There is a sign posted that says “KEEP YOUR
RACE HELMET ON WHILE IN THE WAITING AREA!"
Obama and Romney, who dislike each other for unknown
reasons, are the only ones on the track. They use go-carts
manufactured by Kartmatic. As they begin the race they drive
very aggressively. Unbeknownst to either party, Fred, ABC’s
mechanic, fed up with low pay, did not do the usual morning
inspection of the brakes and tires on either vehicle that
morning. ABC had been contemplating firing Fred due to his
erratic work habits. ABC instructed Fred to inspect the
Kartmatics daily as they never trusted their brake mechanism.
Kartmatics are regularly marketed to amusement parks. Their
instruction manual states that they are not to be used for racing.
After two laps, Obama’s brakes fail as he tries to aggressively
pass Romney. He crashes into Romney’s kart near the waiting
area. The brakes on both vehicles fail to hold. A tire dislodges

3. at a high-rate of speed, and hits Professor Robinson in the head,
rendering him unconscious and bleeding from head injuries. His
helmet is lying on the ground nearby. An ambulance is called.
The medical technicians, seeing the head injuries, fail to notice
the medical alert bracelet on Professor Robinson’s wrist. At the
hospital, Robinson dies from insulin shock and other
complications due to his diabetes while the emergency room
doctor was doing a procedure to prevent blood clots and a
possible stroke from the head injury. At autopsy, it was later
learned that Professor Robinson had been rendered brain dead
by accident at the ABC Go-kart facility.
(a) What claims may Professor Robinson’s widow bring against
the various parties?
(b) What defenses might each party bring against the possible
claims asserted by Professor Robinson’s widow?
(c) In what state should the case be brought?
(Points : 30)
(TCOs A, D, E) Daphne Vega Rueben, a then-unknown salsa
singer, signed a three album recording contract with Rainbow
Music, Inc. Rainbow Music was a boutique label specializing in
Latin artists. Vega Rueben’s first album for Rainbow was
moderately successful. The second album, unfortunately, was
panned by the critics and did not sell. Rainbow Music was
acquired by BigMusicMedia, Inc. BigMusicMedia, in an effort
to re-vitalize Vega Rueben’s career, encouraged her to leave the
salsa style she was committed to and do more commercially
viable pop material. Vega Rueben rejected this request. Furious
with BigMusicMedia, Vega Rueben wanted to end the contract.
On her own, with what remaining personal funds she had left,
she immediately went to an independent recording studio and
did sessions toward a third album without approval or consent
by BigMusicMedia. Using her concert band, she recorded tracks
for over 30 songs. Due to the financial failure of Vega Rueben’s
second album and her recent unsuccessful concert tour,

4. BigMusicMedia did not do the final production work on Vega
Rueben’s third album.
Vega Rueben, then entered into a contract with BonitaCancion
Communications, Inc. She began recording a new salsa album
with BonitaCancion in conjunction with a concert tour that they
financed and produced. At her concerts, Vega Rueben would
regularly introduce the new material that would be on her new
album.
Shortly after the concert tour began, BigMusicMedia brings
suit against Daphne Vega Rueben and BonitaCancion
Communications, Inc.
(a) What causes of action might BigMusicMedia bring against
Vega Rueben and BonitaCancion?
(b) What causes of action might Vega Rueben and
BonitaCancion bring against BigMusicMedia?
(c) What types of relief might either party seek?
(Points : 30)
(TCOs A, B, F, H)
PART A
Paul and Thomas Franklin, brothers, are college students and
web designers. While at the University of Megalopolis, a
private, for-profit college in the “Quad State” area, they started
an online chat service called FaceLinked. Paul attended and
resided at the college’s campus in the State of Quadrahenria.
Thomas, who was on probation during college for a low level
felony drug conviction, could not be a resident student and took
classes at the campus in the Commonwealth of New Guernsey
campus. The chat service began by putting information from the
school’s student directory online, and offering blog, chat, and
message board features. FaceLinked was such a hit that within a
year, the school advised the brothers that they had to remove
FaceLinked from the university’s server as it was utilizing too

5. many resources. This was not a problem as the Franklins found
advertisers, so they were able to move FaceLinked to a private
server without charging user fees. In fact, FaceLinked was
earning so much revenue that the Franklin brothers were able to
pay themselves and the six friends who helped them start and
operate it salaries. The Franklin brothers are graduating from
the University of Megalopolis and will be attending separate
graduate programs. Paul will attend Quadrahenria State
University, and Thomas the College of New Guernsey. As
FaceLinked is so successful, the brothers not only plan to
expand it to the two new colleges that they are attending, but to
as many other colleges within the four states comprising the
“Quad State” area as possible. They even have hopes of “going
national.” As part of their plan to expand to other campuses,
they expect to recruit a student from each of the new schools
“to get them in.” They wish to formalize FaceLinked by
organizing it as a proper business. The brothers would like to
maintain a majority interest in the business, give about 20
percent to the six friends from their undergraduate days who
helped them run the service, and use the remaining interest in
the business to attract other investors and use employee
incentives.
They seek your advice on (a) the form of business they should
use, (b) who might have a claim on the business, and (c) how
they might protect themselves from claims regarding a
computerized internet platform?
PART B
FaceLinked has been a phenomenal success for over ten years.
They are now a worldwide social networking phenomenon. Over
the years and the various incarnations of the business
enterprise, they are now a corporation with just under 100
shareholders. In anticipation of a public offering, they have just
completed a private stock offering and allowed several of the
initial equity owners to exercise stock options. The Franklin
brothers each exercised options to purchase 10,000 shares for

6. $5 a share. Also in anticipation of the public offering, pursuant
to the early intervention drug plea he made while in college,
Thomas Franklin had his conviction expunged. In addition,
FaceLinked sold $10 million in two year advertising contracts,
which would allow the clients to back out for a 90 percent
refund. These unusual contracts increased their current revenue
by 15%. As FaceLinked is such a phenomenon, the hype
regarding the public offering has been enormous. Even college
students are attempting to buy the stock. Days before the public
offering, the following occurred: (a) a broker at their
underwriter, Silversmith & Baggs, showed a pension fund
director a draft version of the prospectus; (b) Paul sold 1000
shares of the stock that he purchased through the stock option
plan for $45 a share, telling the private investor that the issue
price for the public offering would be at least $60 a share; and
(c) several of the people who bought stock in the private
offering sold it at a nice profit. The initial public stock offering
had many problems. The NASDAQ computer system, which was
implemented pursuant to a recent regulation change by the
Securities And Exchange Commission (SEC), could not keep up
with the demand. The system could not accurately report the
price, and many day traders, including Big Profit Hedge Fund,
lost money. Big Profit had formally filed its opposition to the
SEC’s regulation when it was proposed. After the public
offering was completed, FaceLinked stock stabilized at $40 a
share, well below the initial offering price of $70 a share. In
light of the fiasco of the public offering and the bad press that it
generated, users began to drop FaceLinked in favor of a new,
upstart rival service offered by TronCom. Fearful that the new
advertisers would back out of their contracts, the Franklin
brothers sold a great deal of their stock.
What issues does FaceLinked, its officers, and stockholders
face under (a) state securities law, (b) the Securities Act of
1933, and (c) the Securities and Exchange Act of 1934?
(Points : 60)

7. (TCOs A, D, E) Woody worked at the local country club pool as
a lifeguard, not a swim teacher, for the summer of 2013. Woody
was a public school physical education teacher. The country
club did not do a background check or confirm any references
when they hired him. They relied on the “say-so” of Woody’s
brother, a member of the country club board of directors. The
country club only did a cursory internet search of the state’s
Department of Education website to verify that he had a valid
teaching certificate. When one of the swim instructors
unexpectedly quit one day, he took over the class. Initially, the
class went well. Eventually, Woody also took over coaching the
club’s competitive swim team. When he became the swimming
coach, Woody effectively stopped “teaching” the swim classes.
Instead, he had all the swimmers in the classes do races and
train for competitive meets during the 30 minute lessons.
Woody had done this many times during the summer. His boss,
the country club director, knew this and, as the swim team was
winning, ignored complaints from parents and students. Woody
raced with the swimmers and pushed the winners out of the way
when they tried to touch the side of the pool so that Woody’s
team would win each time. This was not the first time that
Woody had injured swimmers. Last year, he was arrested for
physically abusing a child he coached at his school. Although
the criminal charges were dropped, Woody is on administrative
leave from his public school job until an administrative hearing
with the state Department of Education can be held in the fall.
The incident was reported in several local papers, and his
administrative suspension is listed on the state’s database.
Several of the children, ages 6-8, reported to their parents that
they had been physically assaulted by Woody while in swim
class for not “working hard enough!” The children had bruises
on their shoulders. In addition, Woody began “kidding” an 18
year old black college student who worked as a lifeguard and
assisted Woody with the coaching. Over time, Woody’s “jokes”

8. toward the young man became very aggressive. Woody
continued even though the young man asked him to stop. In
fact, after the young man told Woody to stop as he felt
harassed, Woody hired another lifeguard to assist him with the
coaching. The country club director was aware of this situation,
but as the swim team was winning, he took the position that it
was an interpersonal issue that the two should workout among
themselves.
Several parents brought suit against the local country club,
Woody, and the country club director. The young lifeguard has
also brought suit. The local country club pool alleges that they
are not liable. Discuss the ethical, liability, and agency issues
presented by this matter, and all defenses available to the local
country club pool.
(Points : 30)
(TCOs G and I) In the 1930s, after immigrating to the U.S. from
Ireland at the onset of World War II, Shamus and Mary
McCream opened a bakery in Boston. They specialized in snack
cakes. McCream Cup Cakes became so popular in the area that
the family stopped being actual bakers and became
manufacturers/ food processors of the snack cakes on a regional
basis. After returning from the war, their son Steve completed
college and began working in television advertising in the early
1950s. Steve approached his parents and his older brother Tom,
who was now running the business, about the possibilities of
advertising and “going national.” The family liked the idea and
began advertising and expanding. In addition, to fuel the
expansion, they offered retailers price discounts and other
incentives if they prominently positioned the store displays set-
up by McCream rack jobbers. By the 1960s, they were a
national brand, controlling over 80 percent of the snack food
industry.
In the 1970s, with the advent of the hippie counter-culture and
the back-to-Earth movement, a new competitor made an impact

9. on the McCream business. The company, Healthy Snacks, began
advertising that their products only used natural ingredients.
They even began running a commercial in which a mother and
child compared their Healthy Snacks with a lampooned product
named “Cup Cake McCrumbs,” stating that it tasted like poison
and dog food! Tiny-Big- Brian, a counter-culture pop star with a
late night UHF and cable show, joined in on the controversy
created by the commercial and stated that he did not understand
how people, “could buy such poisonous dog food and serve it to
their children as snacks!” Market studies showed that McCream
Cup Cakes sales suffered. As a result, McCream began a more
aggressive shelf space and display marketing campaign to
combat Healthy Snacks’s television advertising. McCream’s
marketing efforts were successful. By also offering volume
discount incentives, they had prevailed upon retailers in their
traditional East Coast and Midwest markets to prominently
display their products. To counter this strategy, Healthy Snacks
offered a deep discount to WaySafeMart, a Southwest and West
Coast discount chain, in exchange for an agreement to
exclusively sell only their snack foods.
In reality, McCream Cup Cakes used only FDA approved
ingredients and preservatives and were made in American plants
that always passed inspections. In contrast, although Healthy
Snacks’s pilot plant was in Florida, it had subcontracted the
bulk of its production to a plant in the Dominican Republic. As
a result, to maintain a level of quality, Healthy Snacks used the
maximum amount of preservatives allowed under the law of the
Dominican Republic for the imported product. The level was so
high, reactions to the food were often reported. The levels were
higher than those allowed by FDA regulations, but allowed per
an agricultural import/export treaty between the United States
and the Dominican Republic. Several people who ate these
Healthy Snacks required emergency room visits. A child in
Georgia, with food allergy problems, even died. Her parents
served her the snack, relying on the advertising, not knowing
that some of the natural ingredients used in the Dominican

10. Republic-made product were dangerous to her.
The McCream family seeks your advice and opinion regarding:
(1) Healthy Snacks’s advertising campaign.
(2) The marketing and distribution campaigns both companies
have engaged in.
(3) The liability issues Healthy Snacks faces regarding their
use of food manufactured outside of the United States.
(Points : 30)
(TCOs A, E, F) John and Edwin Booth, brothers and actors,
decide to retire after years on the road. They remember a town
in Louisiana they were familiar with from their travels. From
the internet, they learn of a farm a few miles outside of town
that seems ideal. There is a great house and lots of land. The
brothers wish to convert the farm to a restaurant-hotel with a
dinner theater. They contact the realtor by phone, and make
arrangements to buy the parcel. The Booth brothers plan on
traveling to Louisiana prior to the closing to look things over,
but are unable to do so due to their touring schedule. The
realtor, whose commission is technically paid by the proceeds
to the seller, and who has a listing contract with the seller,
advises the Booths that she will handle everything. Louisiana
custom, law, and practice does not require a purchaser of land
to have an attorney. The realtor does only the bare minimum
needed for title to transfer to the Booths. On their behalf, she
only has a minimal title search and minimal inspections are
done, and she obtains a minimal coverage title insurance policy.
As the area near the farm was once occupied by a large
chemical plant, when the realtor represents local purchasers, as
a precaution, she advises the buyers to get the maximum
possible title search and title insurance, and to get all possible
inspections done. It is her regular practice to caution local
purchasers who she represents about the former chemical plant.

11. After closing on the property, the Booths learn of the old
chemical plant. They seek your advice as to their liability and
the liability of any other parties.
(Points : 30)