MGMT 520 Final
Exam
Page 1
TCO
D. 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 barcodes 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 attorneys
fees, and for punitive damages. List any defences Casings, Inc., would have
under contract theory ONLY for the damages caused by the explosives in their
drugs, over and above the cost of the capsule shells. (Points:15). (Short answer question)
List
any bases Robins & Robins could sue Casings, Inc., under contract theory
ONLY for the damages caused by the explosives in their drugs, overand above the
cost of the capsule shells. (short answer question) (Points:15)
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 NewYork
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 and350
adults have been hospitalized after becoming very ill upon taking the
taintedmedication. 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,
12children 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 childrens 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 defences any of the three would have. Analyze
the success of the defences.
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.
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:
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 defences available to the school.
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
JerryBirches 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 convicted felon. He claims that is illegal, and he publicly
attacks the church for their “less than Christian” behaviour 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 ODonnell, the CEO and Creative
Director of Clean Clothes (a Texas based lesbian womens 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 doesnt 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 mens 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:
TCO F.
Ellen
DeGeneres sues Clean Clothes for the use of a look-alike model forth 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 mens
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 JOSBs countersuits? Do you think any of
the 3 will win their cases? (Why or why not.) Analyze the case for all three
parties – who will win and why; what elements will they need to prove, and what
defenses can they show?
2. TCO G.

It is discovered that two weeks before the Ellen
show, she had sold $2million in JOSB stock (at a gain of about $2,200). The
morning after her show, Ellen sold JOSB short (which means she was betting the
stock price would 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
was suspected to be a result of a recall JOSB made on their entire line of
mens black and brown dress slacks when it was discovered that they had been
sewn together with white thread. Ellens previous trading activity shows that
she made it a normal practice to vigorously trade the stock of any company
with which she did business. A review of her trading activity for the past year
showed that she had bought and sold JOSB stock 25 different times, including
short sales like this one. Her overall trading for JOSB stock for the last 12
months was a net loss of $82,000.00. Do you think the SEC will file anything
against Ellen for her sales of JOSB? Is there any cause to do so? Analyze her
transactions with respect to insider trading activity (based on what you know)
and whether she should be concerned. Is her prior trading activity a defence?
Should Ellen have avoided discussing JOSB publicly on her show since she
typically trades their stock? (Points: 30)MGMT 520 Final
ExamPage 1TCO
D. 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 barcodes 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 attorneys
fees, and for punitive damages. List any defences Casings, Inc., would have
under contract theory ONLY for the damages caused by the explosives in their
drugs, over and above the cost of the capsule shells. (Points:15). (Short answer question)List
any bases Robins & Robins could sue Casings, Inc., under contract theory
ONLY for the damages caused by the explosives in their drugs, overand above the
cost of the capsule shells. (short answer question) (Points:15)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 NewYork
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 and350
adults have been hospitalized after becoming very ill upon taking the
taintedmedication. 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,
12children 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 childrens 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 defences any of the three would have. Analyze
the success of the defences.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.Page 2Question 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: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 defences available to the school.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
JerryBirches 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 convicted felon. He claims that is illegal, and he publicly
attacks the church for their “less than Christian” behaviour 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 ODonnell, the CEO and Creative
Director of Clean Clothes (a Texas based lesbian womens 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 doesnt 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 mens 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:TCO F.Ellen
DeGeneres sues Clean Clothes for the use of a look-alike model forth 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 mens
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 JOSBs countersuits? Do you think any of
the 3 will win their cases? (Why or why not.) Analyze the case for all three
parties – who will win and why; what elements will they need to prove, and what
defenses can they show?2. TCO G.