The Legal and Ethical Environment of Business

Title Page......Page 2
Copyright Page......Page 3
Dedication......Page 4
Preface......Page 5
About the Authors......Page 8
Table of Contents......Page 11
Ethical, Historical and Philosophical Foundations......Page 27
Chapter 1: Introduction to Ethical Decision-Making......Page 36
I. An Introduction to the Six-Step Process......Page 37
A. HMRP Step One: Identify the Moral Problem......Page 39
C. HMRP Step Three: Available Alternatives......Page 40
D. HMRP Step Four: Identify Personal Impacts......Page 41
E. HMRP Step Five: Apply Three Moral Frameworks......Page 42
F. HMRP Step Six: Conclusion......Page 43
Dodge v. Ford Motor Co., et al.......Page 44
Shlensky v. Wrigley......Page 51
Notes and Questions......Page 58
Chapter 2: Constitutional Issues Relevant to Business......Page 59
A. Federalism and State Powers......Page 63
B. Separation of Powers......Page 64
D. Individual Rights......Page 65
A. Commerce Power......Page 68
Heart of Atlanta Motel v. United States......Page 69
Amazon.com, LLC v. New York State Dept. of Taxation and Finance......Page 76
B. Taxing and Spending Power......Page 80
South Dakota v. Dole......Page 82
Youngstown Sheet & Tube Co. v. Sawyer......Page 87
A. Property Rights......Page 93
Berman v. Parker......Page 94
B. Commercial Speech and Other First Amendment Rights......Page 100
E.E.O.C. v. Alamo Rent-A-Car, LLC.......Page 101
New York Times v. U.S.......Page 106
Friedman v. Rogers......Page 109
C. Due Process......Page 115
State Farm Mutual Insurance Co. v. Campbell......Page 119
D. Equal Protection Issues......Page 120
F.C.C. v. Beach Communications, Inc.......Page 124
Korematsu v. United States......Page 129
Ricci v. DeStefano......Page 136
Notes and Comments on the Legal Environment of Business......Page 141
Notes and Comments on the Ethical Environment of Business......Page 143
Chapter 3: The Common Law System and Comparative Alternatives......Page 147
State v. Patin......Page 150
• ARTICLE: Mandatory or Persuasive Authority?......Page 157
Flood v. Kuhn......Page 158
Butterworth v. Nat’l League of Professional Baseball Clubs......Page 163
Lawrence v. City of New York......Page 169
Brown v. Board of Ed. of Topeka, Shawnee County, Kan.......Page 174
II. Contemporary Comparative Alternatives......Page 179
Case Société Chronopost v. Société Banchereau......Page 181
Notes and Comments on the Legal Environment of Business......Page 184
Notes and Comments on the Ethical Environment of Business......Page 185
Chapter 4: Jurisdiction and the Elements to a Trial......Page 189
A. Jurisdiction of the Court......Page 191
B. Personal Jurisdiction......Page 193
Pennoyer v. Neff......Page 194
International Shoe Co. v. State of Wash., Office of Unemployment Compensation and Payment......Page 199
Worldwide Volkswagen Corp. v. Woodson......Page 204
C. Jurisdiction Over the Property......Page 209
A. Service......Page 210
B. Choice of Venue......Page 212
C. Pleadings......Page 213
Gillispie v. Goodyear Service Stores......Page 214
D. Answering a Complaint......Page 220
E. Discovery......Page 223
F. The Trial......Page 224
Notes and Comments on the Legal Environment of Business......Page 225
Notes and Comments on the Ethical Environment of Business......Page 226
Chapter 5: Administrative Aspects......Page 229
I. Scope of Regulatory Agencies......Page 231
A.L.A. Schechter Poultry Corporation v. United States......Page 234
West Coast Hotel Co. v. Parrish......Page 241
II. Rulemaking, Lobbying and Capture......Page 246
• ARTICLE: Regulatory Capture of the FCC—Time to Clean House......Page 248
A. Due Process Issues Generally......Page 253
Maldonado v. Houstoun......Page 254
B. Standing and Ripeness......Page 259
Lujan v. Defenders of Wildlife......Page 261
C. Exactly Who Gets Sued?......Page 266
Gonzalez v. Reno......Page 267
IV. Congressional Control of Administrative Agencies......Page 274
VI. Other Controls......Page 275
Notes And Comments on the Legal Environment of Business......Page 277
Notes and Comments on the Ethical Environment of Business......Page 278
Chapter 6: Corporate Criminal Issues......Page 280
I. General Notions of Corporate Liability......Page 282
A. Basic Components......Page 283
• ARTICLE: Purposeful Crime......Page 284
U.S. v. Thomas......Page 286
A. Foreign Corrupt Practices......Page 291
U.S. v. Kozeny......Page 292
B. Other Examples of White Collar Crime......Page 297
C. RICO......Page 298
III. Reflexive Use of Criminal Law......Page 299
A. Legal Incentives for Organizational Culture and Ethics......Page 300
Notes and Comments on the Legal Environment of Business......Page 304
Notes and Comments on the Ethical Environment of Business......Page 305
Chapter 7: Property Law......Page 307
A. Tangible and Intangible......Page 309
C. Divided and Undivided......Page 310
D. Limited or Unlimited as to Time......Page 311
E. Five Kinds of Estates—Real Property......Page 312
1. Fee Simple......Page 313
2. Life Estates......Page 314
Estate and Inheritance Taxes of $40 Million Led William Wrigley to Negotiate the Sale of the Chicago Cubs to Tribune Company......Page 317
B. Concurrent Ownership......Page 318
III. Transfer Issues of Real Estate......Page 321
Bd. of Education of City of Minneapolis v. Hughes......Page 325
A. Adverse Possession......Page 328
Helm v. Clark......Page 329
Kelo v. City of New London, Connecticut......Page 335
C. Foreclosures......Page 341
IV. Incorporeal Interests: Non-possessory......Page 342
Collins Trust v. Allamakee County Bd. of Supervisors......Page 345
Ashby v. Maechling......Page 350
V. Restrictive Covenants and Zoning......Page 356
Renton v. Playtime Theatres, Inc.......Page 357
Willett v. Cerro Gordo County Bd. of Adjustment......Page 362
Notes and Comments on the Legal Environment of Business......Page 366
Notes and Comments on the Ethical Environment of Business......Page 367
Chapter 8: Intellectual Property......Page 370
A. Copyrights......Page 371
Bridgeport Music Inc., v. Dimension Films......Page 373
Marcus v. Rowley......Page 381
A&M Records, Inc. v. Napster......Page 386
B. Trademarks and Patents......Page 391
Apple, Inc. v. Samsung Electronics Co., Inc.......Page 392
L.A. Gear v. Thom McAn Shoe Co.......Page 406
Bowman v. Monsanto Co.......Page 411
Rescuecom Corp. v. Google, Inc.......Page 417
Notes and Comments on the Legal Environment of Business......Page 422
Notes and Comments on the Ethical Environment of Business......Page 423
Chapter 9: Contracts: Common Law Fundamentals and Concepts......Page 426
I. General Concepts and Classifications of Contracts......Page 428
A. Parties to the Contract Must Have Capacity......Page 429
1. Internal Impediments to Capacity......Page 430
Wadge v. Kittleson......Page 431
Halbman v. Lemke......Page 433
Lloyd v. Jordan......Page 440
Sparrow v. Demonico......Page 444
Williamson v. Matthews......Page 449
2. External Impediments to Capacity......Page 453
Eckstein v. Eckstein......Page 455
2. Implied Contracts......Page 461
3. Mutual Assent......Page 463
Lefkowitz v. Great Minneapolis Surplus Store......Page 464
Steinberg v. Chicago Medical School......Page 468
C. Consideration......Page 471
1. General Framework......Page 472
Yerkovich v. AAA......Page 473
2. Detrimental Reliance......Page 478
D. Legal Purpose and Public Policy Constraints......Page 479
Jimerson v. Tetlin Native Corp.......Page 480
2. Public Policy Issues......Page 483
Market*Access Int’l, Inc. et al., v. KMD Media, LLC......Page 485
1. Statute of Frauds......Page 490
Ayalla v. Southridge Presbyterian Church......Page 491
Parker v. Crider Poultry Inc.......Page 497
Webb Manufacturing Co. v. Sinoff......Page 500
2. Parol Evidence Rule......Page 504
Lapierre v. Cabral......Page 505
F. Remedies......Page 510
1. Legal Remedies......Page 511
Certified Fire Protection, Inc. v. Precision Construction, Inc.......Page 512
Sullivan v. O’Connor......Page 518
2. Equitable Remedies......Page 522
Florida Panthers Hockey Club, Ltd. v. Miami Sports and Exhibition Authority......Page 524
Wilkie v. Auto-Owners Ins. Co.......Page 529
Notes and Comments on the Legal Environment of Business......Page 536
Notes and Comments on the Ethical Environment of Business......Page 538
Chapter 10: Contracts: The Uniform Commercial Code......Page 543
Brooks Cotton Company, Inc. v. Williams......Page 547
II. Contract Terms......Page 552
Cartamundi USA, Inc. v. Bunky’s Enterprises, Inc.......Page 553
III. Writings......Page 559
IV. Remedies......Page 560
Kabbalah Jeans, Inc. v. Cn USA International Corp.......Page 561
King Aircraft Sales, Inc., v. Lane......Page 566
Notes and Comments on the Legal Environment of Business......Page 572
Notes and Comments on the Ethical Environment of Business......Page 573
Chapter 11: Torts......Page 575
A. The Prima Facie Case......Page 577
Link v. Wabash Railroad Co.......Page 578
1. Duty......Page 581
Claxton v. Atlantic Richfield Co.......Page 583
Howland v. Sears, Roebuck & Co.......Page 588
Robinson v. Lindsay......Page 591
Andrews v. United Airlines, Inc.......Page 594
Canterbury v. Spence......Page 596
2. Breach of Duty......Page 600
Stubbs v. City of Rochester......Page 601
Benn v. Thomas......Page 605
Allstate Insurance Co. v. Mazzola......Page 608
Seffert v. Los Angeles Transit Lines......Page 611
1. Res Ispa Loquitor......Page 615
C. Defenses......Page 616
A. Historical Antecedents......Page 617
Collins v. Otto......Page 618
1. One Free Bite......Page 620
Vanderwater v. Hatch......Page 621
C. Defenses......Page 623
III. Intentional Torts......Page 624
Wishnatsky v. Huey......Page 625
Picard v. Barry Pontiac-Buick, Inc.......Page 627
Martin v. Reynolds Metals Co.......Page 629
Milkovich v. Lorain Journal Co.......Page 632
E. Defenses......Page 636
• ARTICLE: Man Claims Emotional Distress Due to Bird Insults......Page 637
Notes and Comments on the Legal Environment of Business......Page 639
Notes and Comments on the Ethical Environment of Business......Page 640
Chapter 12: Products Liability......Page 644
I. General Concepts and Classifications of Products Liability......Page 646
Wyda v. Makita Elec. Works, Ltd.......Page 652
II. Contractual Theories of Product Liability......Page 654
Bayliner Marine Corp. v. Crow......Page 655
Royal Indemnity Co. v. Tyco Fire Products, LP......Page 660
B. Implied Warranty of Merchantability......Page 665
Crowe v. CarMax Auto Superstores, Inc.......Page 666
Woodruff v. Clark County Farm Bureau Co-op. Ass’n......Page 671
C. Implied Warranty for Particular Purpose......Page 676
Matter of Clements and Van Wagnen Const. Co.......Page 677
D. Warranty of Title......Page 679
Lawson v. Turner......Page 680
A. Negligence......Page 682
MacPherson v. Buick Motor Co.......Page 684
Escola v. Coca Cola Bottling Co. of Fresno......Page 689
B. Strict Liability......Page 694
Brewer v. Oriard Powder Co.......Page 695
Transue v. Aesthetech Corp.......Page 699
Barker v. Lull Engineering Co.......Page 704
BMW of North America, Inc. v. Gore......Page 709
Harley-Davidson Motor Co., Inc. v. Wisniewski......Page 713
V. Defenses......Page 716
A. Contract (Warranty) Theories......Page 717
Trans-Spec Truck Service, Inc. v. Caterpillar Inc.......Page 718
General Motors Corporation v. Sanchez......Page 721
Johnson v. Clark Equipment Co.......Page 726
Jones v. Ryobi, Ltd.......Page 731
Notes and Comments on the Legal Environment of Business......Page 734
Notes and Comments on the Ethical Environment of Business......Page 735
Chapter 13: The Law of Agency......Page 738
I. Relationship of Principal and Agent......Page 739
A. Creation of the Agency Relationship......Page 740
Croisant v. Watrud......Page 741
B. Duties of Agent to Principal......Page 746
Tarnowski v. Resop......Page 747
D. Termination of the Agency Relationship......Page 752
Gaddy v. Douglass......Page 753
A. Contract......Page 758
1. Actual Authority......Page 759
2. Apparent Authority......Page 765
3. Disclosed and Undisclosed Principals......Page 768
Hayes v. Far West Services, Inc.......Page 769
Notes and Questions on the Legal Environment of Business......Page 774
Notes and Questions on the Ethical Environment of Business......Page 777
Chapter 14: Employment Law......Page 779
I. Common Law Foundations......Page 781
Toussaint v. Blue Cross & Blue Shield......Page 782
II. Labor Rights and Collective Bargaining......Page 786
United Public Workers, AFSCME Local 646, AFL-CIO v. Yogi......Page 787
A. Income, Benefits, Health and Safety......Page 792
International Union v. Johnson Controls, Inc.......Page 795
Nelson v. University Of Hawai‘i......Page 799
C. Anti-Discrimination......Page 803
Wards Cove Packing Co., Inc. v. Atonio......Page 804
City of Ontario, Cal. v. Quon......Page 809
E. Tortious Interference and Covenants Not to Compete......Page 814
Greenville Automatic Gas Co. v. Automatic Propane Gas and Supp., LLC......Page 815
Notes and Comments on the Legal Environment of Business......Page 819
Notes and Comments on the Ethical Environment of Business......Page 820
Chapter 15: Introduction to Business Organizations......Page 823
I. Choice of Entity......Page 824
B. General Partnership......Page 825
C. Limited Partnership......Page 826
E. Limited Liability Limited Partnership (LLLP)......Page 827
F. Corporation......Page 828
G. Limited Liability Company (LLC)......Page 832
II. A Short History of the Corporation......Page 833
III. The Purpose of the Corporation......Page 843
IV. A Note on Delaware Incorporation......Page 848
V. The Players in the Corporation: Shareholders, Directors, and Officers......Page 853
Notes and Questions......Page 855
Appendix A: Characteristics of Common Law and Civil Law Countries......Page 860
Appendix B: National Conference of State Legislatures State Employment-Related Discrimination Statutes......Page 866
Appendix C: Summary of Selected Federal Laws and Regulations Addressing Confidentiality, Privacy and Security......Page 879
Glossary......Page 889
Index......Page 912
Title Page......Page 939
Copyright Page......Page 940
Contents......Page 941
Chapter 1: Introduction to Ethical Decision-Making......Page 950
I.  An Introduction to the Six-Step Process......Page 951
Crossing the Invisible Line of Ethical Boundaries......Page 952
II.  The Aims of This Book......Page 972
Chapter 2: Accounting......Page 979
Client Confidentiality and Fraud: Should Auditors Be Able to Exercise More Ethical Judgment?......Page 980
Questions......Page 986
Securities and Exchange Commission v. Biovail Corp., et al.......Page 987
Questions......Page 990
Barlow Clowes International Ltd. v. Eurotrust International Ltd.......Page 991
Questions......Page 996
SEC Charges India-Based Affiliates of PWC for Role in Satyam Accounting Fraud......Page 997
V.  Legal/Law Firms......Page 1000
In the Matter of William A. Murray, Third......Page 1001
SEC Charges HealthSouth Corp., CEO Richard Scrushy with $1.4 Billion Accounting Fraud......Page 1015
VII.  Energy......Page 1019
Arthur Andersen LLP v. United States......Page 1020
Questions......Page 1022
Report of the Special Examination of Freddie Mac......Page 1023
IX.  Transportation......Page 1033
Grimshaw v. Ford Motor Co.......Page 1034
Questions......Page 1043
Chapter 3: Marketing......Page 1045
GlaxoSmithKline to Plead Guilty and Pay $3 Billion to Resolve Fraud Allegations and Failure to Report Safety Data......Page 1046
II.  Financial......Page 1053
CFPB Orders American Express to Pay $59.5 Million for Illegal Credit Card Practices......Page 1054
Questions......Page 1059
Johnson & Johnson to Pay More than $2.2 Billion ]to Resolve Criminal and Civil Investigations......Page 1060
IV.  Transportation......Page 1069
Sustainability: It’s Not Easy Being Green......Page 1070
Questions......Page 1074
Lawyer Advertising and Marketing Ethics Today: An Overview......Page 1075
VI.  Energy......Page 1084
Chapter 4: Strategy......Page 1087
Banking: Five Banks Blazing the Ethical Trail......Page 1088
II.  High-Tech/Computer......Page 1093
Hosni Mubarak and Wael Ghonim Top List of Google’s Most-Searched-for People in Egypt......Page 1094
Questions......Page 1096
How Well Embedded Is Ethics in Your Firm Culture?......Page 1097
Questions......Page 1100
Abigail Alliance for Better Access to Developmental Drugs v. McClellan......Page 1101
Questions......Page 1106
V.  Energy......Page 1107
Presbyterian Church Of Sudan v. Talisman Energy, Inc.......Page 1108
Dodge v. Ford Motor Co.......Page 1115
Shlensky v. Wrigley......Page 1120
Chapter 5: Operations......Page 1127
Corporate Profile: How Analytics Enhance the Guest Experience at Walt Disney World......Page 1128
II.  Government......Page 1133
Managing Government Ethics......Page 1134
Questions......Page 1138
Chapter 6: Statistics......Page 1139
Big Data: The Next Frontier for Innovation, Competition, and Productivity......Page 1140
II.  High-Tech/Computer......Page 1144
Is High Frequency Trading Ethical?......Page 1145
Questions......Page 1151
The Impact Law Firm Economics Can Have on Your Legal Career......Page 1152
Questions......Page 1168
Former Bush EPA Official Confirms 2004 EPA Fracking Study Was Misused......Page 1169
V.  Government......Page 1172
For Coherence Sake: Defer Using the New PARCC Tests for HS Graduation......Page 1173
VI.  Transportation......Page 1180
2009 Traffic Death Statistics......Page 1181
Questions......Page 1183
Chapter 7: Technology......Page 1185
At the Crossroads of Lawyering and Technology: Ethics......Page 1186
Why “Star Wars” Did Not Ruin Sci-Fi......Page 1192
Questions......Page 1195
Hydraulic Fracking: An Ethical Perspective......Page 1196
Why NGOs Label Technology As Nasty Or Nice......Page 1205
Questions......Page 1209
Chapter 8: Communications......Page 1210
Justice Department, Federal and State Partners Secure Record $13 Billion Global Settlement with JPMorgan for Misleading Investors About Securities Containing Toxic Mortgages......Page 1211
Even Smart Companies Are Dumb About Crisis Communications......Page 1218
Questions......Page 1222
2001 Winner: Ford Motor Company......Page 1223
IV.  Energy......Page 1225
Lessons in Crisis Communication: An Analysis of BP’s Response to the Gulf Oil Disaster......Page 1226
V.  Government......Page 1230
Fukushima Nuclear Disaster: A Study in Poor Crisis Communication......Page 1231
VI.  NGO......Page 1235
Red Cross Offers Key Lessons in Crisis Communications......Page 1236
Questions......Page 1239
How Southwest Airlines Wrangled Four Social Media Crises......Page 1240
Questions......Page 1243
Chapter 9: Human Resources......Page 1245
Who Would Trust a Bank?......Page 1246
Questions......Page 1249
Non-Competition Covenants in Internet Time......Page 1250
III.  Legal/Law Firms......Page 1253
Weeks v. Baker & McKenzie......Page 1254
EEOC Sues Capital Healthcare Solutions for Disability Discrimination......Page 1269
V.  Government......Page 1271
Colwell v. Department of Health and Human Services......Page 1272
Questions......Page 1288
BAE Systems Subsidiary to Pay $55,000 to Settle EEOC Disability Discrimination Suit......Page 1289
Questions......Page 1290
Chapter 10: Business, Economics, & Public Policy......Page 1292
How Should the Law of Products Liability Be Harmonized? What Americans Can Learn From Europeans......Page 1293
Questions......Page 1305
Why Ignoring the NIST Framework Could Cost You......Page 1306
Questions......Page 1308
A Closer Look at Stadium Subsidies......Page 1309
Questions......Page 1320
Five Common Arguments Against Climate Change Policies That Can Only Be Effectively Responded to on Ethical Grounds......Page 1321
V.  NGO......Page 1326
Principles for Non-Governmental Organizations......Page 1327
Questions......Page 1335
Chapter 11: Finance......Page 1337
Shining a Light on Dark Pools......Page 1338
Questions......Page 1356
Canada Starts Bitcoin Regulation: Virtual Currencies Mentioned in 2014 Budget Implementation Bill......Page 1357
III.  Health Care......Page 1360
HealthSouth: A Case Study in Corporate Fraud......Page 1361
Questions......Page 1368
United States of America v. Jeffrey K. Skilling and Richard A. Causey......Page 1369
Questions......Page 1378
Chapter 12: Payoffs: Business and Peace......Page 1379
Business and Peace Initiative......Page 1381