BUSINESS LAW – ASSIGNMENT

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questions attached .

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3-13) In 2007, an Alabama court ordered a father to pay $600 for monthly postminority educational support. Ten months later, in December of that year, the mother brought the father to court because the father was not paying the educational support. He also had not shown up for the court hearing, and was therefore in contempt of court. However, the father argued that under Ala. R. Civ. P. 60(b), he did not have to make the payments because his attorney did not tell him about the court hearing. The rule he cited could have protected him because the rule provides relief for a defendant based on “mistake, inadvertence, surprise, or excusable neglect.” Unfortunately for the father, the rule also states that an appeal must be made four months after the original order; the father in this case made the appeal 10 months later. Thus, due to the missed deadline, the court would have no jurisdiction over the case. Nevertheless, the appellant court then considered taking the father’s appeal under a subsection of the 60(b) rule, 60(b)(6). This section states that an order may be undone for “any . . . reason justifying relief.” This subsection also contains a time limit more ambiguous than four months, stating that “[the appeal] only has to be brought within a ‘reasonable time.’” Was the father’s appeal successful? Did the court determine whether it had jurisdiction over the case? Noll v. Noll, 2010 Ala. Civ. App. LEXIS 32.

3-14) The three Missouri plaintiffs owned Whispering Lane Kennel, a Missouri business that breeds and shows AKC dogs, especially the Chinese Crested breed. Defendants show and sell Chinese Crested dogs in competition with plaintiffs. Defendants ran a website, [no longer online] www.stop-whisperingland.com, that posted negative information about plaintiffs’ kennel that was viewed by people around the country, including at least 25 Missouri residents who were in the dog breeding business. The owners of Whispering Lane Kennel sued out-of-state defendants for libel in state district court in Missouri. The court held that minimum contacts had not been established, so Missouri courts did not have jurisdiction over defendants. How do you think the court ruled on plaintiffs appeal? Why? Baldwin v. Fisher-Smith, —S.W.3d— (2010 WL 2662977, Ct. App., Mo., 2010).

3-15) A debtor who had defaulted on a student loan asked a bankruptcy court to decide that the student-loan principal was fully paid. The court made a determination about the student-loan principal, determining that the debtor still owed what was due on the student loan. However, the court also decided that postpetition interest was to be awarded, and collection costs were to be denied. Subsequently, the Educational Credit Management Corporation appealed this decision, claiming that the court lacked jurisdiction over postpetition interest and collection costs because the court was a bankruptcy court. In other words, postpetition interest and collection costs did not fall under United States Code Title 11 (over which the bankruptcy court had jurisdiction) or 28 U.S.C. § 1334(a) or (b) (over which the bankruptcy court also had jurisdiction). Furthermore, the Credit Management Corporation argued that a bankruptcy proceeding is completely unrelated to collection costs and postpetition interest. Do you think the Credit Management Corporation’s appeal was successful? Was the decision of the first court reversed? Educational Credit Management Corp. v. Kirkland, 600 F.3d 310; 2010 U.S. App. LEXIS 5212 (4th Cir. 2010).

3-16) Joseph Hazel, a tractor-trailer operator for R & D Transport, was involved in a car accident while working. Hazel’s tractor-trailer struck a vehicle in which A.H., a minor, was a passenger. The accident occurred in Dearborn County, and Hazel’s residence and R & D Transport’s principal place of business are in Hendricks County. Sarah Richardson, suing for herself and as the guardian of A.H., filed suit in Porter County where they resided. Richardson sued, in part, for damages to “orthotic devices [and] clothing” for A.H. that were normally kept in Porter County. Hazel and R & D filed a motion to have the case transferred to either Hendricks County or Dearborn County. What is the proper venue for the trial? R & D Transport, Inc. v. A.H., 859 N.E.2d 332 (Ind. 2006).

3-17 )In 2004, EJS Properties LLC sued the city of Toledo and Bob McCloskey, alleging the city violated constitutional rights to property, liberty, and due process by denying a rezoning application from EJS in 2002. The company said that then-councilman McCloskey demanded a $100,000 payment to approve the deal and the rest of the council followed his lead in eventually denying the rezoning request. Eventually the case made it to the U.S. 6th Circuit Court of Appeals. However, the judge who had previously heard the case was still making decisions on some small parts of the case. The Appellate court grappled with whether it had jurisdiction over the case yet with the prior court still acting on it. How did this case turn out? EJS PROPERTIES, LLC v. City of Toledo, 689 F.3d 535 – Court of Appeals, 6th Circuit, 2012.

3-18) An engineer had formerly been involved with manufacturing nuclear reactor parts that were to be put onto U.S. Navy vessels. However, he was fired after superiors heard he had been complaining to coworkers about quality control problems he felt he had observed. Such complaints were determined by his superiors as likely breaking the company’s Navy contract. Subsequently, the engineer was fired. The engineer then brought suit against the company for wrongful discharge in 2005. However, he brought the suit in a federal court. His reasoning for suing the company in a federal court was that the firing violated two federal statutes. Specifically, both statutes banned the submission of untrue claims to the military or federal government. Generally, these statutes concern fraud in government contracting, although the engineer felt that his firing could be loosely linked to government statutes. A wrongful discharge suit, however, is generally subject to state law. Therefore, the company attempted to move the suit from the federal court to a state court, arguing that the federal court had absolutely no jurisdiction over the case. Was the case moved to a state court, or did the federal court want to hear the case because the firing could be loosely tied to federal statutes? Eastman v. Marine Mechanical Corp., 438 F.3d 544; 2006 U.S. App. LEXIS 3530 (6th Cir. 2006).

5-16) Scrap metal is a big business in Tennessee, and most of the scrap metal is shipped out of state. Tennessee was concerned that much of the metal being sold to dealers in the state was stolen, so the legislature passed a law designed to give law enforcement a better opportunity to determine whether metal on dealers’ lots was stolen. The new law included, among other provisions, requirements for screening of metal sellers, recordkeeping requirements, and a 10-day waiting period between when purchased metal could be resold by a dealer. The Scrap Recyclers Association sued the state, arguing that the law violated the Commerce Clause and also the Fifth Amendment. The district court upheld the law and the Recyclers appealed. What do you think the outcome of this case was and why? Tennessee Scrap Recyclers Association v. Bredesen, 556 F.3d 442 (6th Cir. 2009).

5-17) Aurora, Colorado, passed an ordinance banning pit bulls and other selected breeds of dogs from being inside the city limits. The American Canine Foundation, an organization aimed at improving the canine industry, sued to have the ordinance struck down as unconstitutional. The Foundation argued that the ordinance infringed on their constitutional rights, in violation of the Fifth and Fourteenth Amendments. Specifically, they argued the law resulted in an uncompensated taking and violated the Due Process and Equal Protection Clauses. Explain why the ordinance is or is not constitutional. American Canine Foundation v. City of Aurora, Colorado, 618 F. Supp. 2d 1271; 2009 WL 1370893 (D. Colo. 2009).

5-18 )A defendant, Antoine Jones, was under suspicion of trafficking narcotics. To investigate the defendant, plaintiff government agents installed a GPS tracking device on the undercarriage of a vehicle registered to the defendant’s wife while it was parked in a public parking lot. For the next 28 days the government used this device to track the vehicle’s movements. In court, the defendant sought a motion to suppress evidence obtained through the GPS device, alleging that it violated the Fourth Amendment. The court found that admission of the evidence obtained by warrantless use of the GPS device by the government agents violated the Fourth Amendment, and constituted an unreasonable search. Do you agree with the court’s decision on appeal? Why or why not? Based on your reading in this chapter, what evidence would the court need to determine whether a violation of the Fourth Amendment existed? United States v. Jones, 132 S. Ct. 945 (2012).

5-19) Fred Phelps, founder and pastor of a Baptist church in Kansas, believes that God hates homosexuality and is punishing America for tolerating it. To publicize this belief, Phelps and some members of his church picket funerals of homosexuals and maintain a website, [no longer online] www.godhatesfags.com, to publicize their views. Phelps and some of his family members picketed the funeral of a Marine killed in Iraq, Matthew Snyder, carrying signs saying “God Hates the USA,” “Fag Troops,” “America is doomed,” “Pope in hell,” and “Thank God for dead soldiers.” They alerted the media, in advance, of their plans to picket the funeral. When they returned to Kansas after the picketing, they posted pictures of the picketing on their website and stated on the site that Snyder’s father, Albert, had taught Matthew “to defy his creator,” “raised him for the devil,” and “taught him that God was a liar.” Albert Snyder sued for intrusion into privacy and mental distress. The jury awarded him $2.9 million in compensatory damages and $8 million in punitive damages. The judge reduced the total damage award to $5 million. Phelps appealed, arguing that his activities were protected by the First Amendment. What do you believe happened on appeal? Why? Snyder v. Phelps, 580 F.3d 206 (4th Cir. 2009). 5-20 In 1996, a practicing lawyer from Colorado was disbarred. In 2011, he brought a $5 million suit against the U.S. government, claiming that the revocation of his license to practice law constituted a governmental taking, and that he was entitled to just compensation. The plaintiff argued that under the Tucker Act, the revocation amounted to the taking of public property. In the end, the court threw out the case because of the six-year statute of limitations. However, the court had an alternative explanation it could have used, had the case been within the six-year limit. According to the court, the Fifth Amendment does not mandate the payment of money as compensation. Had the case not been barred because of time, could the plaintiff have sought compensation other than monetary payment? Why or why not? Smith v. United States, 2012 U.S. Claims (Fed. Cl., May 30, 2012)

7-14) The Johns-Manville Corporation made a variety of building and other products. It was a major producer of asbestos, which was used for insulation in buildings. It has been medically proven that excessive exposure to asbestos causes asbestosis, a fatal lung disease. Thousands of employees of the company and consumers who were exposed to asbestos and had contracted this fatal disease sued the company for damages. In response, the company filed for reorganization bankruptcy. It argued that if it did not, an otherwise viable company that provided thousands of jobs and served a useful purpose in this country would be destroyed, and that without the declaration of bankruptcy a few of the plaintiffs who filed their lawsuits first would win awards of millions of dollars, leaving nothing for the remainder of the plaintiffs. Under the bankruptcy court’s protection, the company was restructured to survive. As part of the release from bankruptcy, the company contributed money to a fund to pay current and future claimants. The fund was not large enough to pay all injured persons the full amount of their claims. Was it ethical for Johns-Manville to declare bankruptcy? Select a school of social responsibility that the board of directors might use to rationalize its conduct in declaring bankruptcy. Explain. In re Johns-Manville Corp., 36 B.R. 727 (Bankr. Ct. S.D.N.Y. 1984).

7-15) Richard Fraser was an “exclusive career insurance agent” under a contract with Nationwide Mutual Insurance Co. Fraser leased computer hardware and software from Nationwide for his business. During a dispute between Nationwide and the Nationwide Insurance Independent Contractors Association, an organization representing Fraser and other exclusive career agents, Fraser prepared a letter to Nationwide competitors asking whether they were interested in acquiring the represented agents’ policyholders. Nationwide obtained a copy of the letter and searched its electronic file server for email indicating that the letter had been sent. It found a stored email that Fraser had sent to a coworker indicating that the letter had been sent to at least one competitor. The email was retrieved from the coworker’s file of already received and discarded messages stored on the server. When Nationwide canceled its contract with Fraser, he filed a suit in a federal district court against the firm, alleging, among other things, violations of various federal laws prohibiting the interception of electronic communications during transmission. Did Nationwide act ethically in retrieving the email? Which school of socially responsible conduct did Richard Fraser represent through his conduct? Explain. Which school did Nationwide represent? Explain. Fraser v. Nationwide Mut. Ins. Co., 135 F. Supp. 3d 623 (E.D. Pa. 2001).

7-16) Charles Zandford was a securities broker for Prudential Securities, Inc., in Annapolis, Maryland. In 1987, he persuaded William Wood, an elderly man in poor health, to open a joint investment account for himself and his mentally retarded daughter. The stated investment objectives for the account were “safety of principal and income.” The Woods gave Zandford discretion to manage their account and to engage in transactions for their benefit without prior approval. Relying on Zandford’s promise to “conservatively invest” their money, the Woods entrusted him with $419,255. Zandford immediately began writing checks to himself on the account. Paying the checks required selling securities in the account. Before William’s death in 1991, all of the money was gone. Zandford was convicted of wire fraud and sentenced to more than four years in prison. The SEC filed a suit in a federal district court against Zandford, alleging in part misappropriation of $343,000 of the Woods’ securities and seeking disgorgement of that amount. Which theory of ethics did Zandford represent? Explain. Which theory of ethics did the SEC represent? Explain. SEC v. Zandford, 535 U.S. 813 (2002).