MGMT520 Final Exam Complete Solution ||MGMT520 Final Exam Complete Solution

Question: #8434

(TCO D) Short Answer Question and Facts for Page 1 Questions:

A well-known pharmaceutical company, Robins & Robins, is working through a public scandal. Three popular medications that they sell over the counter have been determined to be tainted with small particles of plastic explosive. The plastic explosives came from a Robins & Robins supplier named Casings, Inc., that supplies the capsule casings for the medication pills. Casings, Inc. also sells shell casings for ammunition. Over $8 million in inventory is impacted. The inventory is located throughout the Western United States, and it is possible that it has also made its way into parts of Canada.

Last fall, the FDA had promulgated an administrative proposed rule that would have required all pharmaceutical companies that sold over-the-counter medications to incorporate a special tracking bar code (i.e., UPC bars) on their packaging to ensure that recalls could be done with very little trouble. The bar codes cost about 35 cents per package.

Robins & Robins lobbied hard against this rule and managed to get it stopped in the public comments period. They utilized multiple arguments, including the cost (which would be passed on to consumers). They also raised “privacy” concerns, which they discussed simply to get public interest groups upset. (One of the drugs impacted is used for assisting with alcoholism treatment – specifically for withdrawal symptoms – and many alcoholics were afraid their use of the drug could be tracked back to them.) Robins & Robins argued that people would be concerned about purchasing the medication with a tracking mechanism included with the packaging and managed to get enough public interest groups against the rule. The FDA decided not to impose the rule.

Robins & Robins' contract with Casings, Inc., states, in section 14 B.2.a., "The remedy for defects in supplies shall be limited to the cost of the parts supplied." Casings, Inc. had negotiated that clause into the contract after a lawsuit from a person who was shot by a gun resulted in a partial judgment against Casings for contributory negligence.

Robins & Robins sues Casings, Inc., for indemnification from suits by injured victims from the medication, for the cost of the capsule shells, for attorney's fees, and for punitive damages. List any defenses Casings, Inc., would have under contract theory ONLY. (short answer question)

2. (TCO B) The FDA decides to require all pharmaceutical companies to immediately implement the tracking bars (UPC) as a result of the disaster with Robins & Robins. Robins & Robins decides not to challenge this and begins the process of adding them to all of their products. However, McFadden, Inc., a New York pharmaceutical company, realizes that this new requirement is going to bankrupt them immediately. McFadden did not participate in the original public comment period. However, this rule is different from the rule that went through that public comment period in that it specifically names four companies as being impacted: Robins & Robins, McFadden, Inc., Bayer, and Johnson & Johnson. On what bases can McFadden challenge this requirement imposed by the FDA, and can they be successful? Provide at least two bases under the Administrative Procedures Act and justify your answer. (Points: 30)

Answer - Two ways in which McFadden can contest the FDA ruling, and challenge the requirement that is imposed by the FDA are discussed below

1. Substantial Evidence Test - Given that the rule specifically states four companies that have been impacted, there is no evidence that the three other companies apart from Robins & Robins have been impacted. Due to this, the FDA would need to provide more evidence and data points to support its claim that McFadden was one of the companies impacted by not having implemented the tracking.

2. Failure to comply with APA - The FDA should have followed the right process and ensured that there is proper public notice, publication of the rule and period for public comment before the rule is passed. As the FDA had not followed this procedure and wanted to immediately implement the rule, McFadden can contest saying that the rule implementation was not in compliance with the APA, and hence would not be able to put a law practice without it going through the public notice and comment period.

Based on the above two points, McFadden would be able to stop the rule from being applied immediately, and it could be decided that the FDA meet the above two points before it can execute the ruling.

3. (TCO C) Robins & Robins immediately issued a massive recall for the tainted medication upon learning of the situation. Despite the recall, 1,400 children and 350 adults have been hospitalized after becoming very ill upon taking the tainted medication. Each of them had failed to note the recall after having already purchased the medication. It is quickly determined that they will need liver transplants and many of them are on a waiting list. During the wait, to date, 12 children have died. Their families are considering suing for both 402A and negligence. The attorneys stated that but for the lobbying efforts, the recall process would have been automated and the people would not have gotten sick or died.

You are the attorney for one of the dead children’s family. List the causes of action (if any) you would file against Robins & Robins, the FDA, and the bribed FDA member. List the elements of the causes of action, and set forth the facts that you have that would support a lawsuit against each of the three named defendants. State any defenses any of the three would have. Analyze the success of the defenses.

4. (TCO A) It is discovered that Robins & Robins knew about the tainted medication 2 months earlier than they announced the recall. They hid it and, in fact, sent out contract buyers to try to buy up all of the medication off the shelves. Their “fake” recall failed. Using the Laura Nash method of analyzing ethical dilemmas, analyze the ethical dilemma faced by the CEO of Robins & Robins for the fact that they saved 35 cents/package and are now in the middle of a major, life-threatening recall. Analyze their “fake” recall as well. Show all of the steps of the model and give a recommendation to the CEO of what to do now that the deaths are escalating. What is the “right” thing for the CEO to do in this case? Did the model help you come to this conclusion, or did you use some other method? Explain.

5. (TCO I) A Canadian citizen whose son (resident of Ontario) died from the medication sues Robins & Robins in a California court. The court there is well known for being victim friendly and providing huge pay-outs to victim families. In Canada, the cap on non-pecuniary damages is around $300,000. Punitive damages in Canada are rarely allowed. Robins & Robins moves to dismiss the case under the theory of sovereign immunity. Will Robins & Robins win this motion using this theory? Why or why not? (short answer question) (Points: 15)

6. (TCO I) A Canadian citizen whose son (resident of Ontario) died from the medication sues Robins & Robins in a California court. The court there is well known for being victim friendly and providing huge payouts to victim families. In Canada, the cap on non-pecuniary damages is around $300,000. Punitive damages in Canada are rarely allowed. Will this Canadian citizen be permitted to sue Robins & Robins in this California court? Why or why not? (short answer question) This is a same scenario, but the last question is different. See answer below to the last part.

Page 2

Question 2 - 2 essays, 30 points each.

7. (TCO E and H) A private high school hires a new Superintendent, George Forester. The school is owned by a local Lutheran Church and is run by a board of directors chosen by church members. Supt. Forester shows up for his first day of work, and sends a memo via intercompany mail to all teachers:

8. (TCO E) Anna and Lisa both sue the school and Pastor Forester for discrimination and further, for liability for their injuries (the stabbing damages and the damages to Lisa’s son’s health.) You are one of the board of directors and need to analyze the liability of the school. Limit your answer to the SCHOOL'S liability only.

Write a brief memo as to whether Pastor Forester committed illegal or discriminatory practices in his brief tenure described in this situation. Then, analyze the potential liability of the school. Discuss agency liability, as well as any employment law aspects. Explain whether you feel that the two injured teachers have cases for recovery against the school. Discuss whether the school being a religious, private school has any bearing on or protection from liability. Include all defences available to the school.

9. (TCO H and E) In the discovery portion of the case, it is determined that Pastor Forester is really not a Pastor. His real name is Jerry Birches, who is a parolee with convictions for child molestation. His parole agreement prohibits him being closer than 1000 feet to any school. In order to cut costs, the school had stopped doing background checks on new employees, and this slipped through the cracks. The President of the Board of Directors immediately fires Pastor “Jerry Birches” Forester and notifies his parole officer of the violations. Pastor Forester claims the board knew about his background, because one member of the board (his aunt Theresa) knew the truth. He claims her knowledge should be imputed to the entire board of directors. He then sues the school for firing him for being a convicted felon. He claims that is illegal, and he publicly attacks the church for their "less than Christian" behavior in firing him.

The board immediately convenes to discuss “damage control.” They know you took a Law and Ethics course recently and ask you to write a news release to the local newspaper, explaining the situation. Using ethical and legal considerations (including the fact you are in the middle of multiple lawsuits), write the brief news release. Then, explain why you wrote it the way you did.

(Points: 30)

Page 3 - Two essays at 30 points each.

10. (TCO F and G) Laura Etheridge and Rita O’Donnell, the CEO and Creative Director of Clean Clothes (a Texas based lesbian women’s clothing line) brainstormed together and came up with a tagline for their new slacks line: “Masculine Attitude, Feminine Fit.” They market the product on YouTube, Twitter, and Face Book showcasing their “Funky Femme” slacks collection, made from a material which resembles alpaca wool, but is actually organic cotton. To further the advertising impact, the team uses an Ellen DeGeneres look-alike in the YouTube video, where the model does the “Ellen dance” – and mouths “love the pants” as she points to her legs and then walks off leading an Alpaca by a halter. Within months, the slacks are a huge hit in the lesbian community. Clean Clothes sends a letter to their attorney asking him to trademark their tagline, and move forward without another thought about it.

Meanwhile, Men2Wimmin, a French company with a branch in New York, has established a huge following in the gay and cross-dressing community. It has used the tagline “Feminine Attitude, Masculine Fit” for many years to advertise their drag queen dress collection for men on billboards, the internet and television.

Ellen DeGeneres learns that her likeness is being used to advertise for Clean Clothes. She watches the ad and is incensed. She spends the next week on her show bashing the Clean Clothes Company and states that she would never endorse the use of Alpaca wool for clothing, as she feels shearing them is cruel. (She doesn’t catch that the pants are really made from cotton.) Further, she says she feels that lesbian women should not need to shop at special stores, although she admits she often shops in the men’s department at Joseph A. Bank (JOSB). Her comments cause a precipitous drop in sales at both Joseph A. Bank (JOSB) and Clean Clothes. Using the above fact pattern, analyze fully, the following questions:

11. (TCO F) Ellen DeGeneres sues Clean Clothes for the use of a look-alike model for the slacks advertisement. She includes Lanham Act, misappropriation, and "Right of Publicity" claims in her complaint. Clean Clothes countersues for product disparagement. Joseph A. Bank (JOSB) sues Ellen for impacting their men’s clothing sales with her unsolicited comment. What facts will Ellen use to support her cases and why will those support her cases? What defenses will Ellen have against Clean Clothes and JOSB's countersuits? Do you think any of the 3 will win their cases? (Why or why not.)

12. (TCO G) It is discovered that two weeks before the Ellen show, she had sold $2 million in JOSB stock (at a gain of about $2,200). The morning after her show, Ellen sold JOSB short (which means she was betting the stock price would go down), and she made another $210,000 in the next week on that trade. The swing in the price was not directly tied to her comments, but was suspected to be a result of a recall JOSB made on their entire line of men's black and brown dress slacks when it was discovered that they had been sewn together with white thread. Ellen's previous trading activity shows that she made it a normal practice to “vigorously trade” the stock of any company with which she did business. A review of her trading activity for the past year showed that she had bought and sold JOSB stock 25 different times, including short sales like this one. Her overall trading for JOSB stock for the last 12 months was a net loss of $82,000.00. Do you think the SEC will file anything against Ellen for her sales of JOSB? Is there any cause to do so? Analyze her transactions with respect to insider trading activity (based on what you know) – and whether she should be concerned. Is her prior trading activity a defense? Should Ellen have avoided discussing JOSB publicly on her show since she typically trades their stock? (Points: 30)

13. (TCO B) Name one argument that Robins & Robins could have used to fight against the imposition of a tracking bar (UPC) requirement in the event their lobbying efforts during public comments had failed. Explain the argument and the procedural method Robins would use to fight it. If Robins had not gotten involved in the public comments period, would your answer change? Why?

3. (TCO F) Eagle Standard AInc. (ESI) a major engineering firm specialized in designing aircraft parts for government contracts. ESI employees project managers and 42 engineers who are divided into project group of 6-7 members. The majority of project team leaders have spent time in France and Britain learning new technology. The Eagle 6 project team consisting of 6 engineers is developing new equipment for a jet fighter. The project has been ongoing for 18 months and all 6 engineers have been with this project group since its inception working together on all projects. Eagle 6 works well together.

However, the Eagle 6 team has the most technical project and its engineers have been working too much overtime. The senior project manager, Bruce Chanick interviewed and hired a new engineer to help out Richard Hue. Rich has good qualifications and seems to be knowledgeable and motivated. The work is challenging and gives him the opportunity to showcase his computer skills and engineering knowledge. Two weeks in he quickly became a contributing member of the team showing initiative and the willingness to work overtime and weekends to research possible solutions to potential problems. Richard was particularly adept with the computer system and Bruce is ecstatic about his new hire Richard is a loner on and off the job. He is from country x a small island with a high power-distance culture all of the other members of the team member felt Richard flouts his education and knowledge and none of them like him in fact can't stand him.

Bruce told Tim that Richard thinks that the rest of the team are slackers who talk about bowling and sport instead of working Richard thinks he is disliked because he's from Country X. Bruce Wants to keep everyone in the company and more importantly within the team so how should Bruce handle this problem? Detail what he should do by applying at least two conflict management methods to enhance group and team performance include roles and decision making in our response.

1. (TCO B) Faxco Incorporated is a business with 500 employees. The CEO of the company has recently learned based on employee surveys. That the employees are not very happy with the company in fact the CEO is starting to believe that this may be the reason why Faxco is experiencing slower sales and a recent budget crisis which threatens to shut down the company in 3 years if it is not fixed.

You are a consultant and the CEO has asked you to visit the company for a week and analyze what might be going wrong. Here is your notes form the week (1) Attended manager 1’s staff meeting. He has 200 employees working under him Manager 1 talking about the recent budget problems that Faxco is having. He said it’s not like we didn’t know this was coming. The company makes a junky product compared to our competitor and half the time. I think the manufacturing department is cutting corners. Overheard manager 1 tells an employee. I don’t blame anyone if they are looking for work elsewhere.

(2) Overhead three employees talking after Manager 1's staff meeting Employees are upset about the idea that the manufacturing department is cutting corners and creating junky products. The company advertises its products as having the finest quality and durability.

(3) Attended Manger 2's staff meeting he runs the Tech department and has 20 employees. He was very upset with the Marketing department. He stated someone over in marketing reported to the CEO that a computer technician from this department was rude to them. I did not even ask who it was that was supposedly being rude. I know we're all techies in this customers do is complain. It us versus them apparently so we have to watch out. In light of what you learned in MGMT 591 about Diversity job satisfaction and attitudes please write up a neatly organized analysis for the CEO.

Solution: #8441

MGMT520 Final Exam Complete Solution ||MGMT520 Final Exam Complete Solutio

(TCO D) Short Answer Question and Facts for Page 1 Questions: A well-known pharmaceutical company, Robins & Robins, is working through a public scandal. Three popular medications that they sell over the counter have been determined to be tainted with small particles of plastic explosive. The plastic explosives came from a Robins & Robins supplier named Casings, Inc., that supplies the capsule casings for the medication pills. Casings, Inc. also sells shell casings for ammunition. Over $8 million in inventory is impacted. The inventory is located throughout the Western United States, and it is possible that it has also made its way into parts of Canada. Last fall, the FDA had promulgated an administrative proposed rule that would have required all pharmaceutical companies that sold over-the-counter medications to incorporate a special tracking bar code (i.e., UPC bars) on their packaging to ensure that recalls could be done with very little trouble. The bar codes cost about 35 cents per package. Robins & Robins lobbied hard against this rule and managed to get it stopped in the public comments period. They utilized multiple arguments, including the cost (which would be passed on to consumers). They also raised “privacy” concerns, which they discussed simply to get public interest groups upset. (One of the drugs impacted is used for assisting with alcoholism treatment – specifically for withdrawal symptoms – and many alcoholics were afraid their use of the drug could be tracked back to them.) Robins & Robins argued that people would be concerned about purchasing the medication with a tracking mechanism included with the packaging and managed to get enough public interest groups against the rule. The FDA decided not to impose the rule. Robins & Robins' contract with Casings, Inc., states, in section 14 B.2.a., "The remedy for defects in supplies shall be limited to the cost of the parts supplied." Casings, Inc. had negotiated that clause into the contract after a lawsuit from a person who was shot by a gun resulted in a partial judgment against Casings for contributory negligence. Robins & Robins sues Casings, Inc., for indemnification from suits by injured victims from the medication, for the cost of the capsule shells, for attorney's fees, and for punitive damages. List any defenses Casings, Inc., would have under contract theory ONLY. (short answer question) 2. (TCO B) The FDA decides to require all pharmaceutical companies to immediately implement the tracking bars (UPC) as a result of the disaster with Robins & Robins. Robins & Robins decides not to challenge this and begins the process of adding them to all of their products. However, McFadden, Inc., a New York pharmaceutical company, realizes that this new requirement is going to bankrupt them immediately. McFadden did not participate in the original public comment period. However, this rule is different from the rule that went through that public comment period in that it specifically names four companies as being impacted: Robins & Robins, McFadden, Inc., Bayer, and Johnson & Johnson. On what bases can McFadden challenge this requirement imposed by the FDA, and can they be successful? Provide at least two bases under the Administrative Procedures Act and justify your answer. (Points: 30) Answer - Two ways in which McFadden can contest the FDA ruling, and challenge the requirement that is imposed by the FDA are discussed below 1. Substantial Evidence Test - Given that the rule specifically states four companies that have been impacted, there is no evidence that the three other companies apart from Robins & Robins have been impacted. Due to this, the FDA would need to provide more evidence and data points to support its claim that McFadden was one of the companies impacted by not having implemented the tracking. 2. Failure to comply with APA - The FDA should have followed the right process and ensured that there is proper public notice, publication of the rule and period for public comment before the rule is passed. As the FDA had not followed this procedure and wanted to immediately implement the rule, McFadden can contest saying that the rule implementation was not in compliance with the APA, and hence would not be able to put a law practice without it going through the public notice and comment period. Based on the above two points, McFadden would be able to stop the rule from being applied immediately, and it could be decided that the FDA meet the above two points before it can execute the ruling. 3. (TCO C) Robins & Robins immediately i...