Deck 3: Business Torts and Crimes

Question 1

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Frank Martini and Satanand Sharma hired James Little to represent them when sued by Amber Hotel Company. Little agreed to be paid $100 an hour less than his normal fee, provided that he would have a lien against any attorney fee award. In December, the court entered judgment against Amber. Amber appealed. The court then amended the judgment to award Martini and Sharma $152,700 in attorney's fees, and Amber did not appeal this. Martini, Sharma, and Amber negotiated about a settlement, and Little advised them of his right to the attorney's fee award. Martini and Sharma signed a settlement agreement by which Amber agreed to dismiss its appeal, and the plaintiffs agreed to abandon the fee award. The parties did not inform Little. He sued Amber for intentionally interfering with the performance of a contract. Should he recover?

Answer 1

When a third party intentionally interferes with a contract between two other parties, causing one of the contract parties to break the contract and also causing a loss to one of the contract parties, the third party commits the tort of interfering with a contract.
As per the case, JL had a contract with his clients, M and S. The contract stated that JL would represent MS in a suit against AH. In return, MS would pay JL a rate less than normal, however JL would also have a lien against any attorney fee award.AH interfered with the contract between JL and MS. Specifically, after the court had awarded attorney fees, AH negotiated a settlement with MS, in which MS agreed not to accept any attorney fee award. This settlement interrupted the contract between JL and MS. M and S broke their contract with JL by agreeing not to accept attorney fees, and caused a financial loss to JL.
There are two reasons that concluded that AH acted intentionally by interrupting the contract between JL and MS. They are listed below:
JL informed them of his lien on the attorney fee award before AH, the opposition and the defendant, MS negotiated their settlement. Thus, AH had prior knowledge that JL's contract with MS included attorney fees.
AH did not inform JL of the settlement or that MS agreed to give up attorney fees.
The above two reason shows that AH intentionally interfered with the contract between JL and MS. Hence, JL would recover the requisite damages.
Based on the above analysis, JL can assert a valid claim against AH for the intentional interference with a contract and JL should recover.
If the case occurred in a state where the third party interference must also be improper, JL should still recover. Although AH's settlement with MS was a valid and legal way for
AH to protect its self interests, the fact that AH failed to inform JL about the settlement or about the loss of attorney fees, supports the inference that AH was being deceptive and acting improperly. Thus, a court would conclude that AH's interference was improper and JL should recover.

Question 2

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Charles Ndhlovu regularly purchased large quantities of materials used in counterfeit manufacturing, such as blank CDs and DVDs, cases, and labeling paper. A store run by Ndhlovu did not display a business license and offered no signage or advertisement to indicate he sold CDs and DVDs. Law enforcement authorities sent a confidential informant to Ndhlovu's store to purchase CDs and DVDs. With $180, the informant bought 80 counterfeit discs labeled with well-known movie and music titles. Police raided Ndhlovu's store and seized over 6,500 counterfeit CDs and DVDs. Ndhlovu was charged and convicted of criminal copyright infringement. He argued on appeal that the government had failed to prove that his copyright infringement was committed for purposes of commercial gain. Should Ndhlovu's conviction be upheld?

Answer 2

Criminal copyright infringement covers illegal copying of software's known as pirated software's, content like data, music, information etc. circulated illegally over the internet.
To bring up a case of criminal copyright infringement, a prosecutor must prove the following three things:
1) There has been copyright infringement.
2) Infringement was a deliberate act.
3) Infringement was mainly done for a financial gain or for an advantage in business.
Facts: N was running a store of manufacturing blank CD's, DVD's and labeling paper. N didn't possess any business license for selling CD's and DVD's. Police raided at store and confiscated 6,500 CD's and DVD's. N was charged for criminal infringement for commercial gains. Should N conviction be upheld?
Outcome: No, N's conviction cannot be upheld.His act is clear case of copyright infringement. Copy write infringement occurs when illegal copies of copyright material are made and distributed. N made illegal copies of movies and music and sold them on his shop. Since, he sold them on his shop he did have commercial gain from them.
So, his appeal is baseless, as he indulged in intentional copyright infringement for the purpose of selling those copied CD's and make money.

Question 3

What must an injured party show in order to recover for an intentional tort?
b. What must be shown for a negligence tort?

Answer 3

(a)To succeed with an intentional tort claim, an injured party must show
• an act by a tortfeasor,
• that the tortfeasor intended to cause the consequences of the act, and
• that the injury was the result of the tortfeasor's act or of something set in motion by the act.
(b)To succeed with a negligent tort claim, an injured party must show
• a duty of care owed by the tortfeasor to the injured party,
• breach of that duty,
• that the injury was the foreseeable result of the breach, and
• damages to the injured party.

Question 4

To whom does the FCPA apply?

Question 5

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Teleline Inc. ran a telephone gambling game called "Let's Make a Deal" (LMD) using a 900 phone number. Playing the game cost $3.88 a minute. People who called were not charged for the phone calls, but only for the ability to gamble provided by Teleline. AT T carried the calls over its long-distance lines, and Teleline paid AT T for the cost of the calls. Felix Kemp's grandson called the 900 number. AT T listed Teleline's charges under the heading "direct dialed calls," as long-distance charges mixed in with charges for long-distance calls on phone bills mailed to Kemp. AT T's name and logo were displayed on the pages showing the LMD charges. The LMD charges were illegal gambling debts not collectable under state law. Kemp's local phone company told him he had to pay the charges, or his phone would be disconnected. He paid the phone bill and sued AT T for violating RICO, claiming mail fraud. Were the bills so misleading that they constituted fraud?

Question 6

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
A shipment of computers arrived at a freight-moving facility and was moved to a trailer. At night, employees in the warehouse at the facility heard suspicious noises outside and called the police. Upon arriving, an officer saw a man carrying a box and stepping down from a trailer. The officers approached but could not find the man. They looked under the trailers and found five unopened computer boxes hidden behind the wheels of a trailer. The officers finally spotted the legs of two people under another trailer. Adolph Spears, Jr., was one of the men. A hand truck was found near a hole in the fence enclosing the facility. Was there evidence of any computer crime?

Question 7

Is it always a tort when competitors intentionally injure one another? Explain.

Question 8

For what companies is debarment a serious penalty and why?

Question 9

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Shelly Nitz, a real estate agent affiliated with Home Services of Nebraska, Inc., represented the seller of a home. The home purchaser hired Matthew Steinhausen, sole member of Steinhausen Home Inspections, LLC, to perform an inspection prior to closing the home sale. Nitz considered some of the items in Steinhausen's report to be beyond the scope of a typical home inspection and felt his comments were detrimental to the home seller. Some time later, Nitz responded to a question regarding Steinhausen's services via an e-mail forum for Home Services agents. Nitz stated that Steinhausen had done an inspection for one of her listings and that she "would never let him near one of [her] listings ever again!!! Total idiot." Steinhausen sued Nitz and Home Services, alleging libel. Was Nitz's description of Steinhausen as a "total idiot" fact or opinion? Should she be liable?

Question 10

Explain the benefit to plaintiffs of the doctrine of strict tort liability.

Question 11

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Universal Furniture International Inc. held copyrights on the designs of two furniture lines it sold. The designer had started with public domain sources, but blended elements from different historical periods and created changes until he found the designs aesthetically pleasing. He had blended the elements to create a different look. A major buyer of the lines asked Collezione Europa USA Inc. to produce a cheaper version. Collezione did not know of the copyrights, but thought the designs were not entitled to copyright protection and could be imitated. It produced furniture so similar that when Universal's senior vice president saw the pieces, he thought they actually were Universal pieces. Universal sued Collezione for infringement. Did Collezione have the right to imitate the designs?

Question 12

What marks are entitled to trademark protection?

Question 13

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
The Los Angeles Police Department charged police officer Kelly Chrisman with misuse of department computers. He accessed the police department's computer system for nonduty-related activities-specifically to search about people such as celebrities, his girlfriend, her friends, and himself. The relevant statute made it a crime to access any computer knowingly and without permission. Did Chrisman violate the statute?

Question 14

How does the Anticybersquatting Consumer Protection Act (ACPA) protect trademark owners from trademark infringement and dilution?

Question 15

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
When Emeka Uyamadu tried to check his luggage at an airport, seven laptop computers in it set off an alarm. Since he did not have required export documents, customs officials kept the computers. When Uyamadu returned to the United States, he told police and signed a statement saying he had bought the computers at Internet auctions in May, even though he was told they were stolen June 6. He was charged with their theft. Should he be found guilty of computer theft?

Question 16

What rights do parents have under the Children's Online Privacy Protection Act (COPPA)?

Question 17

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
Haydel Enterprises owned and operated a bakery in New Orleans, Louisiana, selling pastries such as Mardi Gras king cakes. Haydel asked an artist to design a "bead dog" to replicate the dogs made out of beads thrown at Mardi Gras celebrations. Haydel registered the words "MARDI GRAS BEAD DOG" and the bead dog design as trademarks covering items such as king cake pastries, jewelry, and clothing. Over a six-year period, Haydel sold about 80 clothing items and 300 jewelry items featuring bead dogs, plus an unidentified number of king cakes with bead dogs. One magazine article featuring Haydel's products called bead dogs "an iconic Mardi Gras symbol." Three years after Haydel registered the bead dog trademarks, Raquel Duarte began selling jewelry featuring bead dogs. Duarte filed a lawsuit against Haydel in which she asked the court to declare that she was not breaking any trademark law by selling the bead dog jewelry and requested Haydel's trademarks be canceled. Duarte argued that Haydel's trademarks were descriptive in nature and had not acquired distinctiveness whereby customers associated the trademarks with Haydel's goods. Was Duarte correct?

Question 18

Why have civil RICO cases been so popular?

Question 19

When the concluding question in a case problem can be answered simply yes or no, state the legal principle or rule of law that supports your answer.
W hile they were dating, Heather Borrack and her boyfriend, Charles Reed, spent a day with his family on a lake swimming. Reed led Borrack up a steep path to a cliff above the lake. Once at the top of the cliff, Borrack told Reed that she wanted to return to the lake, but he refused to go back down the path with her and she was too frightened to return on the steep path by herself. Reed then tricked Borrack into jumping off the cliff by jumping himself and leaving her alone at the top. Borrack jumped off the cliff and was severely injured when she hit the water. She sued Reed for negligence, arguing that his conduct created a significant risk for her due to the terrain and that he had a duty to lessen the risk or take precautions so that Borrack did not harm herself. Did Reed's actions create a duty to Borrack?

Question 20

What are the three elements of criminal copyright infringement?