Fundamentals of Business Law

Business

Quiz 32 :

Cases

Quiz 32 :

Cases

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Law What was the majority's decision on the principal issue before the court in this case? What were the reasons for this decision?
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The facts show that the plaintiff bought a hybrid automobile in 2004. The EPA estimated city and highway driving for the vehicle. The Plaintiff tried to return the car because it did not meet the estimated amounts. The court held or found that the federal law requiring the display of (EPA) fuel economy standards on new cars did not preempt state consumer protection laws.
The plaintiff asked the court to reverse its finding that federal law preempted or disallowed his claim against the automaker for deceptive advertising. He argued that the federal law on preemption did not prevent the states from regulating advertising on vehicles. In essence the argument submitted by the plaintiff was that the federal law did not preempt the state. The court majority found that only the manufacturer would not have to do anything different in its disclosure of estimates.

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Law How would the dissent apply the law to the facts differently than the majority did? What were the dissent's reasons?
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A review of the case reveals that the non-majority justices or dissenter's found the plaintiff's complaint was seeking to force the auto manufacturer to change its fuel disclosures in a manner different than the regulating body.
The facts and record as a whole indicate that there is ample evidence that the judgment rendered against the plaintiff was not erroneous but correct. The federal law that requires displaying mileage estimates preempts the state law that imposes a requirement of displaying of different standards.
The cause of action relied heavily on the statements in the defendant's brochure that were alleged to violate state consumer protection laws. The dissenter's found the federal law as exhibited a federal presence in the measurement and disclosure of automobile fuel economy estimates and in advertising fuel economy.

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Ethics Suppose that the defendant automaker opposed this action solely to avoid paying for a car that had proved to be a "lemon." Would this have been unethical? Explain.
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The facts in the instant problem show that an adverse finding could result in affecting the large number of defendant's vehicles in the stream of commerce and to other manufacturer's products. This could lead to settlement monies being paid to many consumers. Paying out settlement monies would have an effect on the bottom line and profit margins. It is a well-recognized business ethics principle that to assert a position in litigation mainly out of a concern for profit constitutes an ethical violation. The ethical aspiration requires any such action to be taken out of a belief in the truth or "rightness" of the position.
Commercial entities and businesses have numerous stakeholders and owe duties to many. Examples of expectations are as follows: shareholders are owed returns, employees are owed pay for their work, and communities are owed growing economies. Retained earnings or profits are necessary to meet these duties. Ethical business decision-making requires truth and honesty in all proffered legal arguments.

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Economic Dimensions Is the majority's ruling or the dissent's position more favorable for the auto market? Why?
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Implications for the Businessperson What does the interpretation of the law in this case suggest to businesspersons who sell products labeled with statements mandated by federal or state law?
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What did the majority rule in this case, and why?
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Why did the dissent disagree with the majority's ruling?
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Social Consideration. Why did the majority conclude that "[m]ajority ownership by a foreign state, noy control, is the benchmark of instrumentality status"?
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Ethical Dimensions. Under what circumstances might a court "pierce the corporate veil" to hold a corporation's owner liable? Should the United States Supreme Court have applied these principles in this case to hold that the Dead Sea companies were instrumentalities of the state under the FSIA? Why or why not?
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Implications for the Investor. How might the holding in this case affect investments in foreign "instrumentalities"?
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Law What was the majority's decision on the principal question before the Court in this case? What were the reasons for this decision?
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Law How did the dissent interpret the issue before the Court? What were the reasons for this interpretation?
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Ethics Suppose that either or both of the parties in this case had asserted their respective positions only to increase their profits. Would this have been unethical? Explain.
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Economic Dimensions This case resolved what seems to be a technical question in a dispute between a pharmaceutical maker and a biotechnology firm. What is the practical importance of the ruling?
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Implications for the Businessperson What does the outcome of this case suggest to the smaller start-up company that relies on a license to obtain patented technology?
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Law What did the majority conclude on the issue before the court in this case? What reasoning supported this conclusion?
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Law On what important point did the dissent disagree with the majority, and why?
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Ethics How do you view David's statements and John's actions? Did David take unethical advantage of his cousin, luring him in bad faith? Was John too willing to rely on assurances concerning events that he should have known from experience might not occur? Discuss.
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Economic Dimensions What does this case indicate about employment and employment contracts?
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Implications for the Investor Why would an investor like Warburg Pincus not want someone like John in an executive role in an enterprise for which the investor was providing significant capital?
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