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Legal Environment of Business 1
This assignment should be between 2 and 4 pages in total, and should be the product of careful thought and more than one draft. Please remember that when providing an answer to the specific questions posed, it is not enough to give the correct answer unless you back up that answer with a legal argument that includes the following:

A brief restatement of the legal question posed–usually a sentence or two that focus on the specific legal issue in this case, without reference to extraneous facts or information.
A statement of the applicable law or rule that should be applied to the facts in this case. This will be taken from the text, and will not consist of a personal opinion or ethical reaction, but rather be a statement (usually only one or two sentences) that summarizes the rule of law that you will apply to come to a correct answer. You should not restate the law in its entirety, but instead summarize the appropriate law into a short explanation of the ruling principle in this case.
Finally, a clear statement that explains how you applied the applicable law to these facts to reach a specific conclusion. This will be usually be a few sentences culminating in an answer to the specific question posed in the text. This portion of your answer should demonstrate original thinking and reasoning, and result in a definite conclusion.
All three elements are really needed for a complete answer and your entire answer should probably require, but not be longer than 5 or 6 sentences. Remember that a “gut” feeling, or an answer that tells me what you think is “right” is not enough in a course that emphasizes the accuracy of application and the importance of making a persuasive argument that explains that application

Legal Environment of Business 1
1. Santa Monica adopted a rent control ordinance authorizing the Rent Control Board to set the amount of rents that could be charged. At a hearing before it, the board determined that McHugh was charging his tenants a rent higher than the maximum allowed. McHugh claimed that the action of the board was improper because there was no jury trial. Is McHugh correct? Why or why not?
McHugh was correct. Since the hearing conducted by Santa Monica Rent Control Board was conducted under the Chapter Amendment that allowed the board to set maximum rent in local housing market and providing punishment for the landlords who overcharged the rent. However, the Chapter amendment under which Santa Monica Control Board used violated the judicial powers of Article VI, Section 1 of the Constitution of California by not providing a jury trial.
2. The Consumer Product Safety Commission is reconsidering a rule it first proposed in 1997 that would require child-resistant caps on household products, including cosmetics. When the rule was first proposed in 1997, it was resisted by the cosmetics industry and abandoned. However, in May 2001, a 16-month-old baby died after drinking baby oil from a bottle with a pull-tab cap. The proposed rule would cover products such as baby oil and suntan lotion and any products containing hydrocarbons such as cleansers and spot removers. The danger, according to the commission, is simply the inhalation by children, not necessarily the actual ingestion of the products. Five children have died from inhaling such fumes since 1993, and 6,400 children under the age of five were brought into emergency rooms and/or hospitalized for treatment after breathing in hydrocarbons. There is no medical treatment for the inhalation of hydrocarbons. Several companies in the suntan oil/lotion industry have supported the new regulations. The head of a consumer group has said, “We know these products cause death and injury. That is all we need to know”
What process must the CPSC follow to promulgate the rules? What do you think of the consumer group head’s statement? Will that statement alone justify the rulemaking?
CPSC rules have enhanced the health of small kids and it is important for the rules to be followed. The consumer group’s head statement can alone justify the rulemaking since it is completely true. The companies should be in position to justify any side effects associated to their goods even if marketing and selling of the goods is absolutely fine (Twomey, Jennings, and Greene, 2016). In order for the CPSC to promulgate the rules, social media can be used since is the media today that connects to majority of people.
3. Bernard Flinn operated a business known as Harvey Investment Co., Inc./High Risk Loans. Flinn worked as a loan broker, matching those who came to him with lenders willing to loan them money given their credit history and the amount involved. From 1982 through 1985, Flinn found loans for five people. Indiana requires that persons engaged in the business of brokering loans obtain a license from the state. Flinn was prosecuted for brokering loans without having a license. He raised the defense that he did not know that a license was required and that, accordingly, he lacked the criminal intent to broker loans without having a license. Does Flinn have a good defense? [Flinn v.Indiana, 563 N.E.2d 536 (Ind.)
Flinn does not have a good defense since from the case he does not clearly understand what he is doing which is a problem since one involving in financial firms should have good knowledge of all the processes. The other thing that indicate that Flinn lack a good defense is that by the time he incorporated his financial firm; he was supposed to obtain a license to run that kind of business from the authorities in place. In most states, the license is obtained 6 month prior to or after opening the business.
4. Dr. Doyle E. Campbell, an ophthalmologist, established his practice in southern Ohio in 1971. Many of Dr. Campbell’s patients are elderly people who qualify for federal Medicare benefits and state Medicaid benefits. Under the existing financing system, a doctor who treats a Medicare patient is required to submit a “Medicare Health Insurance Claim Form” (HCFA Form 1500). The doctor is required to certify that “the services shown on this form were medically indicated and necessary for the health of the patient and were personally rendered by me or were rendered incident to my professional service by my employees.” Claims Dr. Campbell submitted for his elderly patients ranged from $900 to $950, of which $530 to $680 were covered by the Medicare program. The government alleged that Dr. Campbell billed Medicare for several treatments that were either not performed or not necessary. Dr. Campbell was charged with fraud for the paperwork he submitted. Has he committed a crime? [United States v. Campbell, 845 F.2d 1374 (6th Cir.)]
Dr. Campbell has committed a crime according to this case by filling false claims about the patients. The Doctor was basically conning his patients through taking advantage of their lack of medical knowledge and playing upon their fears to gain more money from them. He either performed irrelevant treatment and unnecessary or provided them with medication that were unnecessary at a higher cost. The doctor taking advantage of his patients’ lack of medical knowledge to gain more money committed a crime.
5. Christensen Shipyards built a 155-foot yacht for Tiger Woods at its Vancouver, Washington, facilities. It used Tiger’s name and photographs relating to the building of the yacht in promotional materials for the shipyard without seeking his permission. Was this a right of publicity tort because Tiger could assert that his name and photos were used to attract attention to the shipyard to obtain commercial advantage? Did the shipyard have a First Amendment right to present the truthful facts regarding its building of the yacht and the owner’s identity as promotional materials? Does the fact that the yacht was named Privacy have an impact on this case? Would it make a difference as to the outcome of this case if the contract for building the yacht had a clause prohibiting the use of Tiger’s name or photo without his permission?
The right to publicity tort protects the celebrities’ images or likeness to be used for commercial purposes without their consent. In this case, Christensen Shipyards building a 155-foot yacht for Tiger Woods at its Vancouver, Washington, facilities violated Wood’s tort right. The First Amendment rights for the shipyard do not cover the commercial speech in this case. The privacy name of the yacht does not hold any impact or affect anything legally. If the contract clause existed that prohibited Wood’s image or name to be used without permission, then in the process that Wood pursue the case he would have a stronger argument against the shipyard.
6. While snowboarding down a slope at Mammoth Mountain Ski Area (Mammoth), 17-year-old David Graham was engaged in a snowball fight with his 14-year-old brother. As he was “preparing to throw a snowball” at his brother, David slammed into Liam Madigan, who was working as a ski school instructor for Mammoth, and injured him. Madigan sued Graham for damages for reckless and dangerous behavior. The defense contended that the claim was barred under the doctrine of assumption of the risk, applicable in the state, arising from the risk inherent in the sport that allows for vigorous participation and frees a participant from a legal duty to act with due care. Decide. [Mammoth Mountain Ski Area v. Graham, 38 Cal. Rptr. 3d 422
The ski instructor who was instructing a minor to throw a slowball was injured when the minor hit him in his preparation to snowball. The instructor was valid for compensation from his employer since he got injured in the line of duty. However, since the instructor would have anticipated or known the risks of possible injuries or collisions, he should not be compensated by the employer. The instructor had the duty to use ordinary care to avoid injury a duty that in this situation he did not accord to as per the principles of negligence law.

7. An owner abandoned his van in an alley in Chicago. In spite of repeated complaints to the police, the van was allowed to remain in the alley. After several months, it was stripped of most of the parts that could be removed. Jamin Ortiz, age 11, was walking down the alley when the van’s gas tank exploded. The flames from the explosion set fire to Jamin’s clothing, and he was severely burned. Jamin and his family brought suit against the city of Chicago to recover damages for his injuries. Could the city be held responsible for injuries caused by property owned by someone else? Why or why not? [Ortiz v. Chicago, 398 N.E.2d 1007 (Ill. App.)]
The city of Chicago should be held responsible for Jamin’s injuries caused by the abandoned vehicle explosion. The city has a responsibility regarding the security of the streets including taking care of abandoned or vehicles involved in an accident. According to the case, the city had ignored several complaints regarding the abandoned van which had been left there for more than two month which exceeds the two week period that the city have before towing it away. Chicago city did not take any precautions in prevent the situation even though it could not be foreseen.
8. Hegyes was driving her car when it was negligently struck by a Unjian Enterprises truck. She was injured, and an implant was placed in her body to counteract the injuries. She sued Unjian, and the case was settled. Two years later Hegyes became pregnant. The growing fetus pressed against the implant, making it necessary for her doctor to deliver the child 51 days prematurely by Cesarean section. Because of its premature birth, the child had a breathing handicap. Suit was brought against Unjian Enterprises for the harm sustained by the child. Was the defendant liable? [Hegyes v. Unjian Enterprises, Inc., 286 Cal. Rptr. 85 (Cal. App.)]
Since Unjian Enterprise had completed its duty care for Hegyes, it was not liable for the liable for the premature child. The premature child situation does not apply in any law; neither does any law mention that any foreseen incident happening in a later life to hold the same company responsible. Therefore, the defendant being held responsible would be an unwarranted extension of a duty of care.

9. Kendra Knight took part in a friendly game of touch football. She had played before and was familiar with football. Michael Jewett was on her team. In the course of play, Michael bumped into Kendra and knocked her to the ground. He stepped on her hand; causing injury to a little finger that later required its amputation. She sued Michael for damages. He defended on the ground that she had assumed the risk. Kendra claimed that assumption of risk could not be raised as a defense because the state legislature had adopted the standard of comparative negligence. What happens if contributory negligence applies? What happens if the defense of comparative negligence applies?
According to the contributory negligence, a party that suffers due to their own partial negligence then that party recovers nothing. Since Knight was familiar with football as she had played before, but was not fully aware with the risk associated though partially responsible, she recovers nothing (Justia, 2019). When it comes to doctrine of comparative negligence, the recovery of the plaintiff reduces by a percentage in which he or she is at fault for damages occurred on them. This doctrine holds that both parties are to be held accountable though the plaintiff may generally recover implying that Michael may have to pay for Knight’s injury.

10. The American Geophysical Union and 82 other publishers of scientific and technical journals brought a class-action lawsuit against Texaco, claiming that Texaco’s unauthorized photocopying of articles from their journals constituted a copyright infringement. Texaco’s defense was that the copying was fair use under Section 107 of the Copyright Act of 1976. To avoid extensive discovery, the parties agreed to focus on one randomly selected Texaco scientist, Dr. Donald Chickering, who had photocopies of eight articles from the Journal of Catalysis in his files. The trial court judge held that the copying of the eight articles did not constitute fair use, and Texaco appealed. [American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir.)]
In this case, the ruling should be based upon the reason for Texaco making the copies. The fair use of copyrighted materials allows the materials to be used in commercial nature or nonprofit educational purposes. The ruling should also consider the value of the copyrighted material and the amount of material that was used. It is hard, therefore, to justify in this case if the materials were only used for research purposes, technical purposes or if Texaco just wanted to avoid paying for the information they needed from the materials. However, if the American Geophysical Union lost money when Texaco made copies of the materials, then Texaco should be held accountable.

Justia (2019). Comparative & Contributory Negligence. Retrieved from https://www.justia.com/injury/negligence-theory/comparative-contributory-negligence/
Twomey, D., Jennings, M., and Greene, J. (2016). Business Law: Principles for Today’s Commercial Environment. Cengage Learning, M01 1 – 1320 pages.

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