MGMT 200 Flashcards
Federal judges are appointed to their positions for life. They do not have to run for election. True or false?
True
Judicial Review means that the:
a) supreme court has the power to declare legislative acts unconstitutional
b) the president has the power to appoint judges
c) congress has the power under the constitution to grant pardons
d) the Chief Justice is always appointed from current members of the Supreme Court
a
which of the following is NOT a response by a defendant to a plaintiffs initial pleading?:
a) complaint
b) answer
c) motion to dismiss
d) motion for summary judgement
a
over the years the Courts have clearly defined the parameters of free speech guaranteed by the first amendment. True or false?
false.
always changing
Concurrent jurisdiction refers to which of the following?
a) a case with both in peronam jursidition and in rem jurisdiction
b) a case involving minimal contacts
c) a case that may be filed in either the state or federal court system
d) personal service using a long-arm statute
c
Liebeck V. MCDONALDS
jury awarded Liebeck $2.86 million
judge reduced award to $640,000
parties settled
What is law?
a body of rules and conduct prescribed by controlling authority and having binding legal effect
who determines whether a law has “binding legal effect”?
judicial review
how are laws made?
- legislation: congress/state legislatures/ city and county governing bodies
- court decisions
- initiatives by the people
- regulations by government agencies
U.S. law is based on…
the English Common Law
What is common law?
use of case law as precedent
federalism
constitution as the foundation of all US laws
Stare Decisis
mandate that Inferior courts follow decisions of superior courts
-provides stability and predictability to legal system
alternate references for term common law: case law, court law, unwritten law
what is federalism?
a govt consisting of a union of more or less self-governing states under an umbrella of federal government
stare decisis
the common law doctrine that binds an inferior court to follow and apply decisions and interpretations of higher courts when similar cases arise.
Precedent
a court deicions on a question of law that gives authority or direction on a similar question of law in a later case with similar facts
Brown V Board of Education
in 1954 the US supreme court decided that maintaining separate schools for black and white children was unconstitutional.
–Equal Protection Clause of the fourteenth amendment to the constitution.
Statutes
laws enacted by congress or by state legislatures
Doctrine of Supremacy
swhenever state or local governments and the United States enact conflicting laws on the same subject, the federal law will prevail.
Judicial activists (or “activist” judges)
judges whose judicial philosophy includes treating the law as a vibrant and active source of rules. When faced with new issues, such judges are likely to see the constitution as a flexible document and stare decisis as challengeable when they believe important social needs must be addressed.
“Strict constitutionalist” judges
judges whose reading of the law narrowly interprets legal words and who subscribe to interpreting the law consistent with the believed meaning given it by the drafters.
Initiatives
law-making by the people
citizens can place proposed new laws on the ballots for direct vote by the people
Civil Law
the body of law, both federal and state, that pertains to civil or private rights enforced by civil actions.
examples: laws governing contracts
- individual right and duties and their enforcement
Criminal law
the body of statutory law, both federal and state, that declares what confuct is criminal and prescribes penalties for its commission.
-deals with crimes and their punishments
Private Law
the body of law regulating the rights and duties that exist between private persons (including private corporations)
-Example: contract law
Public law
the body of law directly concerned with public rights and obligations, such as constitutional, administrative, criminal, and international law
Ethics
standards of fair and honest conduct applied to social behavior
Morals
values concerning right and wrong
Procedural law
general principles and detailed rules that define the methods of administering substantive law.
-Example: dictates the dates and time limits within which papers must be filed, the size of paper used by attorneys, the size of the print to be used, what info must be contained in legal papers, how witnesses and parties can be orally examined before trial, etc.
Substantive Law
General principles and detailed rules that define legal rights and duties.
-Example: prohibits murder, requires a real estate agent to be licensed, and imposes speed limits and registration requirements on automobile drivers.
Concurring opinion
a written opinion wherein a judge agrees (concurs) with the result reached by another judge, but for different reasons from those stated by the other judge.
Dissenting opinion
a written opinion by a judge or judges who vote(s) contrary to the majority opinion and holding of the court
The Equal Protection Clause has the Fourteenth Amendment has been a useful tool for people attempting to reduce discrimination in this country. True or False?
True
Appellant or petitioner
the party who appeals to a higher court for review of a lower court ruling
Appellee or respondent
the party who, on appeal, defends the earlier court determination
Federal Law
- national in origin
- consistent with constitution
- supreme over state law
- exclusive in international affairs
- multiple sources of federal law
State Law
- ordinary affairs of citizens including most contract, tort, and criminal law
- multiple sources of state law
International Law
governing relations between sovereign nations
Domestic Law
Law of a particular sovereign nation
How do courts make laws?
The principle of Stare Decisis
- Latin term meaning “to stand by decided cases”
- treating these cases “precedent”
- application of doctrine in typical situations
Variables to consider when applying stare decisis:
- jurisdiction issues (which court, which state?)
- identity or similarity of facts
- currency
- ——change in cultural values
- ——change in scientific knowledge
Plessy v. Ferguson
Plessy attempted to sit in an all-white railroad car after refusing to sit in the black railway carriage car. Was arrested in 1890 Louisiana for violating a statute that provided for segregated “separate but equal” railroad accommodations
- Thirteenth Amendment Issue
- Plessy lost the case
-BUT, the case was later overruled by Brown v. Board of Education
Brown v. Board of Education
- Justice Warren wrote the opinion for a unanimous court, holding that separate facilities which segregate based on race are inherently unequal.
- segregation unconstitutional under the Equal Protection Clause of the Fourteenth Amendment
Citizens United v. Federal Election Commission
reversed the ban on electioneering communications, and also prior court decisions restricting “independent” contributions to campaigns.
The Tillman Act [1907]
Corporations may not donate directly to political candidates.
but…
Corporations found loopholes to funnel money though.
-courts and congress attempted to limit corporations’ influence on elections, but courts recognized corporations’ First Amendment rights to free speech.
The Bipartisan Campaign Reform Act of 2002
corporations could not publish “electioneering communications” within certain blackout periods.
Business and Free Speech
U.S. First Amendment freedom of speech
- most highly valued!
- have to examine on an individual basis
- commercial speech (advertisements)
- political statements by corporations (public issues)
- usually allowed : corporations are persons , treated as individuals who have free speech
-UNLESS: compelling state interest to prohibit (i.e. public safety or health)
In 1791 the first 10 amendments were ratified by the States. These are called…
The Bill of Rights
How are constitutional amendments made?
1) a proposed amendment must be passed by 2/3 vote in the House and Senate
2) then ratified by 3/4 of state legislatures OR
3) may be proposed by 2/3 of state legislature by calling for a constitutional convention
- —this must be ratified by 3/4 of state legislatures
The Defense of Marriage Act
Marriage being the bond between a man and a woman
Affirmative Action
Once used to help minorities (i.e. schools accepting a certain proportion of diff races) but this led to the idea of reverse racism
Indiana Religious Freedom Restoration Act
- Early 1990s: US supreme court ruled that an employer could fire employees who participated in a religious ritual (using peyote) if action doesnt explicitly favor or target a religion
- Federal Religious Freedom Act of 1993: govt may substantially burden the free expression of religion if dong so accomplishes a “compelling governmental interest” and is the “least restrictive means” of doing so
The Commerce Clause
- Congress has power to “regulate commerce w/foreign nations and among the several States and w/the Indian tribes”
- deals with “interstate commerce”
- state laws cannot interfere with federal commerce, federal law prevails
Katzenbach v. McClung
Principles of the case:
Family owned restaurant in Alabama argued it could segregate between customers. It argued that Federal law didnt apply to them.
-however, 1964 Civil Rights Act prohibits racial segregation in public accommodations if serving interstate travelers of if food moved in interstate commerce
Wickard v. Filburn (1942)
Commerce Clause Violation
- Ohio wheat farmer decides to keep some bushels of wheat for home use, fed law states that it affects the market prices of wheat, thus violating the commerce clause
- although one farmer doing this seems small and trivial, all small farmers together would impact “interstate” commerce and “market conditions”
- Congress may regulate all production
True or False? Almost all commerce is defined as “interstate”.
True.
Very broad, Congress may regulate all production
Necessary and Proper Clause
Power “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers…
- the power with the commerce clause provides BROAD congressional control of commerce
- most laws are necessary and proper
Federal Supremacy: The Supremacy Clause
if theres a state law that interferes with Federal law, Federal law prevails (state law become invalid)
EX: McCulloch v. Maryland
McCulloch v. Maryland (1819)
Maryland wanted to regulate National Bank
-NO. Violates Supremacy Clause
Can Congress establish a National Bank?
Yes, it is constitutional under the Necessary and Proper Clause, which EXPANDS, not restricts, Congress’s powers
Hughes v. Oklahoma
A state law that prohibited the transportation of minnows outside the state violated the Commerce Clause of the United States Constitution (Constitution).
Synopsis of Rule of Law. It is a violation of the Commerce Clause for states to enact laws that attempt to conserve natural resources for use by their own residents.
The Hughes Test
1) does statute regulate evenhandedly with only “incidental” effects on interstate commerce?
2) does statute serve a legitimate local purpose? if so,
3) could alternative means promote this local purpose as well without discriminating against interstate commerce?
Example: Fine to protect wildlife, but could be done in a less discriminatory way (against interstate commerce) by the state
What is the Fed. govts’ major income source?
Income Taxes!
Taxing Power
congress has the power to “lay and collect taxes”
- taxes used to raise revenue and/or deter/punish/encourage certain behavior
- Supreme Court: “the power to tax includes the power to destroy”
Which Amendment gave the Fed gov. the power to impose income taxes?
the 16th amendment
State Taxation
State taxes cannot impede interstate and international commerce
i.e. Goldberg v. Sweet
Goldberg v. Sweet
Illinois can tax long-distance calls or from the state unless taxpayer can show that another state has billed the call; if so, then the IL tax is refunded. Did not violate commerce clause.
Goldberg v. Sweet Tests: Constitutionality of State Taxes
1) the tax applies to an activity having substantial nexus with the state
2) the tax is fairly apportioned to those inside and outside the state
3) it does not discriminate against interstate commerce
4) it is fairly related to services provided by the state
What is a court?
a NEUTRAL forum authorized and funded by government (our taxes) to provide for the resolution of disputes between people and organizations
Trial Courts
- presentation of evidence
- determination of applicable law
- application of decided facts to applicable law
- jury, finder of fact. judge determiner of law and instructions to jury
Liability versus Guilty
liability= civil cases, responsibility to pay money guilty= criminal cases, punishment
Appellate Courts
- review of trail court record to ensure proper application of the law
- acceptance of the facts offered in trial court, no new evidence presented and no jury presented
When does a case get taken to Appellate court?
- when there is a bias as a result of courtroom conduct.
- attorneys argue here why the law should be interpreted in a way that favors their client
What is the purpose of an appellate court?
- affirm
- reverse
- remand the case back down to trial court and make them do it all over again.
Judicial Review
doctrine= review laws by congress
Brief
facts of the case, but in a way most beneficial to your client
-critical arguments
Oral Argument
arguing in front of the court
U.S. Supreme Court (highest appeals court)
- appointed by the executive branch
- 9 justices
- appointed for life
- may refuse to hear a case
- final authority
- supreme court takes up only the cases the justices want to hear. Need 4/9 vote to hear the case
Washington is part of which circuit?
the 9th circuit
Jurisdiction
the “power to speak the law”
- when used in reference to the courts, term refers to power and authority over a matter
- political boundaries of state and federal courts
Where is the only place laws are created?
Appellate courts, “stare decisis”
in personam
power over the person
examples:
-contract was breached
-if you did business in WA , drive a car, etc., theres long arm statute to be tried in the state
in rem
power over a thing
-usually property or a relationship
Jurisdiction and the Internet. Zippo case.
three rules to know:
- Passive websites: make info available, reading only
- Interactive websites: more interactive and commercial, greater chances that the courts will say they have jurisdiction over the case.
- commercial websites: contracts, knowing and repeated transmission of computer files
Early Steps in a civil lawsuit- pleading by plaintiff
- complaint
- summons
- service of process (obtaining jurisdiction)
- reply if necessary
Early Steps in a civil lawsuit- pleading defendant
- answer
- demurrer or motion to dismiss
- cross-complaint or counter-claim
Deposition
questioning of parties and witnesses under oath
Motion to Produce
request for documents and things
request for admissions
request of opposing party to agree on certain facts
-helps narrow the scope of inquiry
Interrogatories
- written questions to the opposing party requesting written answers
- this procedure is abused, people bombard each other with piles of paperwork
Civil cases require ____ out of 6 votes of jurors for a jury agreement.
5
Problems with the adversary system
- access to the system
- may take years for a problem to be resolved
- the courts are clogged
- are the results always fair?
inquisitorial system
- counter system to adversarial system
- judge can investigate the dispute, question witnesses, and independently seek out evidence
- although attorneys still necessary in countries with such systems, the lawyers end up playing a less crucial role to the administration of justice
Attorney-at-law
aka lawyer
- a person authorized by law to represent persons (clients) in legal matters
Fiduciary Relationship
- a position of trust undertaking to act for the benefit of another
- must exercise the utmost good faith, honesty, and fairness toward client
Attorney-Client Privilege
- purpose is to encourage full and open disclosure
- rule of evidence protects all communications between a client and his or her attorney from disclosure in a legal proceeding
- attorney cant be compelled by stature or court to reveal such info except in a few narrow circumstances
- client but not the attorney may waive the privilege
What is an engagement letter?
terms and conditions for when you are hiring an attorney
Pro bono publico
helping those who could not otherwise afford a lawyer
What are the 3 branches of the federal govt?
THE SEPARATION OF POWERS
- Congress (legislative–enacts laws)
- Executive (president– enforces laws)
- Judicial (supreme court, lower courts–reviews laws, resolves ambiguities)
Concurrent authority
when state law is more restrictive, its law applies as long as doing so enables federal compliance (e.g. state minimum wages)
Federal Preemption
When it is clear that the U.S. congress only wants federal regulation in a general area, it will strike down state law, even if it doesnt conflict
Example: Interstate commerce
The Police Power
the inherently regulatory power of the state to pass laws to protect the public health, safety, welfare, and morals of the community
The Bill of Rights
- protects citizens against the federal govt.
- comprised of the first 10 amendments
- extended to the state via the 14th amendment (key amendment that expands the right)
The First Amendment
freedom of speech, press, right to assembly, right to petition for redress, separation of church and state, and right to free exercise of religion
Corporate Political Speech
-corporations are treated as persons
-therefore, corporate political speech is treated the same way as individuals political speech
REASONS:
-“no taxation without representation”- corporations are taxpayers
-corporations are not capable of voting
-CPS does not threaten individuals
The Fourth Amendment
the right of individuals to be secure in their persons, their homes, and their personal property
- no unreasonable searches and seizures
- requires probable cause and a warrant for searches
The Fifth Amendment
-protects against self-incrimination and double jeopardy
Due Process
- procedural: notice and opportunity to be heard; to confront witnesses
- substantive: protection against arbitrary laws unrelated to legitimate state purposes
The Fourteenth amendment
- applies the Bill of Rights and the Due Process Clause to the states
- -exceptions: grand jury & right to jury trials
- the Equal Protection Clause
- -all are entitled to equal protection of the laws, citizens and non-citizens
Heresay
out of court statement
cannot be used if the person who said it is not there
- Unverified information heard or received from another; rumor.
- Evidence that is not within the personal knowledge of a witness, such as testimony regarding statements made by someone other than the witness, and that therefore may be inadmissible to establish the truth of a particular contention because the accuracy of the evidence cannot be verified through cross-examination.
Litigation
means trials
Alternative Dispute Resolution- Negotiation
two-way communication for the purpose of persuasion
- bargaining process in which parties plan the future, structure a transaction, or fix a problem
- voluntary and informal
- should be used early in the litigation process
Mediation
-a form of negotiation with the addition of a skilled third party expert who assists (facilitates) the parties to negotiate their own resolution
Mediation: Which cases are most appropriate to use this method?
- Parties have a stake in resolving the dispute
- parties share some degree of responsibility for conflict
- parties are interdependent on the cooperation of one another to meet their goals or satisfy their interests
How mediation works
- parties choose a mediator
- the mediator will start process with the parties together, then seperate them and go back and forth btwn them
Mediation vs. Litigation
- Mediation
- private
- parties remain in control
- mediator facilitates agreement instead of imposing a resolution
- non-adversarial
Litigation
- public
- govt takes over entire control
- resolution imposed by court
- adversarial
Mediation Resolution Forms
- binding written agreement
- binding oral agreement
- working agreement
- agreement to meet again, to continue working on prob, or agreement on some issues
Alternative Dispute Resolution- Arbitration
- disputing parties agree to select a neutral third party to hear and decide the dispute
- generally private
- requires passive approval of govt, as awards are ultimately enforceable in the courts
- authorized and encouraged by federal and state statutes
The Arbitration Process
Both sides submit briefs of facts and law to neutral arbitrator
Proceedings are private not public
No official record is made
Like a court proceeding, witnessed testify and the evidence is presented
Rules of evidence are relaxed
Decisions announced within 30 days
Pros and cons of arbitration
Pro: Faster from filing to hearing Cheaper Private Less adversarial than litigation More certain resolution
Cons:
Public is unaware of disputed it may have interest in
Does not add to the development of the law
Not always less expensive?
Often then arbitrator doesn’t disclose rationale for decision
Common uses of arbitration
Labor disputes
Business conflicts
Consumer complaints
Other civil matters: torts, contract cases
Another ADR method: Expert fact-finding
A non-binding process in which an appointed expert investigated or hears facts on selected issues
Early neutral evaluation
Process providing disputing parties with an early and candid evaluation of the merits of a case
Mini-trial
A private, voluntary, informal form of dispute resolution in which attorneys for each disputant make a brief presentation of his or her best case before officials for each side who have authority to settle
Another ADR method: summary jury trial
Process in which parties present their cases to a private mock jury, which then gives the parties an advisory verdict
Another ADR method: collective law practice
A method whereby the parties agree to resolve their disputes without court intervention using interest based negotiation practices
Tim Arnold
Jury duty experience
John White
Supreme Court trial lawyer
Formation and licensing of business organizations
All a matter of state law!
Sole proprietorship
- a person doing business for himself/herself
- usually the proprietor owns all of the business property
- responsible for control of the business
- responsible for management
- responsible for liabilities and debt
- may hire agents, liable for them as well
- capital must come from the owners own resources or is borrowed
- profits from the business are taxed directly to the owners income
- record keeping formalities are at the owners discretion
Partnerships
An association of two or more persons to carry on a business as co-owners for a profit
- partners or general partners control the operations and profits
Each of the partners has a fiduciary duty to the others
–Latta v. Kilburn : one partner may not use partnership assets for own benefit
- under state laws, a partnership may be sued as an entity
- if the partnership agreement does not state otherwise, profits are divided equally
The partnership agreement
- basics: place/date of formation, identification of applicable state law
- finances: parties’ contributions, additional capital contributions, ownership, distribution of profits, priority rights (if any) in payments
- management
- dissolution: rights of partners to leave, death of a partner, valuation of partnership shares, limits on transferability of partnership shares, arbitration (mediation?) of disputes
- presumption: each parter has an equal voice in partnership
Termination of general partnership
Dissolution occurs when an event takes place to dissolve the partnership
Change of the composition of the partners
Withdrawal of a partner
Death of partner
“Winding up” of a business involves completing any unfinished business
If terminated, partnership must be reformed
Common: partnership purchases life insurance on partners so that that money can be used to by back the interest of deceased partner from his/her estate
Limited Partnership
2 of more people (partners) who have entered into an agreement to carry on a business venture for profit
-must have a written agreement filed wiping he state called Certificate of Limited Partnership. This puts 3rd parties on notice that the limited partners assets are not available to satisfy any claims against the limited partnership
Must have: General partners (at least one) Manage the business Are liable to creditors Have the duty to account to the limited partners
Limited partners (at least one)
Are investors only
Do not manage the business
Are not liable for debts
Limited partners become general partners at law is they…
Participate in or manage the business (lose their limited liability)
Corporations
- legal entities/ persons
- can sue and be sued
- has constitutional rights
- – except the privilege against self-incriminations (only officers and employees have that right as individuals)
- liable for agents actions and contracts
- each state has its own corporation laws, federal govt plays very limited role
Closed corporation
Shares held by only one or small group of shareholders, stock not traded on a stock exchange
Public corporation
Stock is traded on a stock exchange, is likely to have many shareholders
At the first meeting, shareholders…
Elect a Board of Directors
Enact bylaws or rules that govern the internal operations
Indie the corporations stock
Shareholders
Owners of the corporations, no day to day control of activities
Shareholders meetings need at least half total shares present
Shareholders elect board of directors
No legal relationship to creditors
Board of Directors
Have management power over large decisions
Can be removed from office by shareholders for cause (breach of duty/misconduct)
Have fiduciary duty of loyalty to the other shareholders
Managers (of a corporation)
Appointed/hired by directors to manage day to day decisions
Have broad duties of care and loyalty to directors
Employees
Workers
True or false? CEO usually has more power than the Board of Directors.
True
Business judgement rule
Makes directors and managers immune from liability
When problems result from honest mistakes in judgement
If there was reasonable basis for their decision or they acted in good faith
Termination of the corporation
Dissolution
Voluntary
-approval of the shareholders and the board of directors
Involuntary
-the state dissolved it
Sometimes due to fraud in the establishment of corporation or bankruptcy of the corporation
“Wind up” business to pay creditors and disburse profits to shareholders
Professional Service Corporations (PCs)
-created by state laws
-owners of PC can only be professionals involved in the firm itself (I.e. MD’s shoe practices are tied together)
-created to have limited liability for its members
Example: Drs in join to reduce liability risk for malpractice of a member doctor
Stock usually cannot be sold to outside investors
Washington’s Social Purpose Corporations
A separate corporate license from a for-profit corporation
Corporation elects a social purpose
It is authorized to conduct business in a manner that is intended to promote positive short term or long term effects of the corporations activities upon any or all of:
1) the corporations employees, suppliers, or customers
2) the local, state, national, or world community
3) the environment
Limited Liabilty Companies (LLC)
- treated like a corporation for liability purposes but like a partnership for federal tax purposes
- limited liability of owners, the same as a corporations
- an LLC does not have a perpetual life
But if remaining members give consent, the LLC can continue
LLCs (limited liability corporations)
Offer limited liability, as do corporations
Avoid double taxation (of corporation on its earnings, then on shareholders receipts)
Taxed like a partnership: passes income through to members of the LLC
A “social purposes” LLC? = PLLC; similar to PSC, provides professional services
Business and Taxation
- corporate profits are taxed at corporate tax rate
- dividends are taxed at each individual shareholders tax rate
- in effect this is “double taxation” of the same profits, but the Supreme Court has held that since corporations and shareholders are 2 separate entities, there’s no double taxation
True or false? Partnership pays no income taxes.
True. Income passes to parties who pay tax on their share of income.
Administrative systems are the 4th branch of government because…
They can act as courts and enforce laws and create them too
What are the powers delegated to agencies by congress?
- legislative
- investigative
- adjudicatory
- enforcement
What was the first federal agency?
The Interstate Commerce Commission in 1887
How does congress give an agency power and authority?
Through its legislative delegation to allow the agency to perform the regulatory process
What does the enabling statute do?
Delegates power to agencies
Why are agencies created?
To have expertise and supervision over special problems about which congress is concerned
Types of administrative agencies: Executive departments
A dependent executive agency or department is headed by a single appointment at the pleasure of the president
- example: FBI; Homeland Security
Agencies’ procedural law
regulations specifying what process the IRS must use when changing a tax rule
Agencies’ substantive laws
regulations that allow student loan interest to be deducible under specified circumstances
Administrative agencies are created by…
- constitution: (Federal; courts; state; courts, Bureau of Statistics, agriculture&immigration, public instruction)
- statute creating agency (enabling statute)- most common
- executive fiat authorized by statute
The Enabling Statute
- congress creates the agency and the agency further defines itself and its mission
- delegations are lawful provided they are not overly broad. guidelines need to be provided in the enabling statute
- the legislature recognizes the complexity of detailed govt regulation of the subject activity and the necessity that person who create the law be experts in the field they regulate
- agencies are given various powers to accomplish the objectives of the enabling statute
Administrative Procedure Act (APA)
-law that mandates various procedures for most federal administrative agencies
-basic purposes
requires agencies to keep public informed of their organization, procedures, and rules
provide for public participation in the rulemaking process
establish uniform standards for conduct of formal rulemaking and adjudication
define scope of judicial review
Delegation of Power
-Guidelines to determine whether delegation is valid:
- to whom is the delegation made?
- is the delegation for a proper purpose?
- have guidelines for delegated conduct been provided in the legislations?
- does a fair process for creating regulations or administering tasks exist?
- reason for the delegation
- does delegation effect personal rights
Examples of State Agencies
- Executive: DSHS, Dept of licenses, Dept of labor and industries
- Independent/ administered by the board: UW, Utilities and Transportation Commission
- Independent/ elected by voters: Attorney General, Secretary of State, Insurance Commissioner
Example of enabling statute: Sarbanes-Oxley Act of 2002
followed Enron, Worldcom, and other failures
- created Public Company Accounting Oversight
- key provisions
Example of enabling statute: Dodd-Frank Act of 2010
followed financial meltdown of 2008-2009
- created Bureau of Consumer Financial Protection
- key provisions
Administrative Functions: Quasi-Legislation - Rulemaking
- licensing
- regulations
Administrative functions: Investigation
- findings
- reports
- search/siezure
Administrative functions: Enforcement
- licensing authority
- quasi-adjudication- formal fact finding and review
- orders/ decisions
Quasi-legislation: Rules and Regulations
-primarily controlled by the Administrative Procedure Act
-Process for rulemaking: rulemaking agencies are subject to the same constitutional procedural requirements as the legislature
-informal consultation
-correspondence
-polls
-questionnaires
-conferences
interviews
legislative type hearings
types of agency rules
regulations
- substantive: legal equivalent of a statute. compels compliance, creates rights and duties
- procedural: how to perfect rights and comply with mandated duties
rules
-interpretative: what an agency determines a stature or regulation means. internal rules
once regulations are adopted , they have the same force of law as a statute
rules and regulations: the APA
federal register- publications and notice
- requirements for comment proceedings
- proposed rules, and final duties
- -parties are usually given 60 days to comment
- -public hearing may be part of the process
- -notice must provide indication of what will take place
Negotiated Rule Making:
brings together representatives of a rulemaking agency and stakeholders to seek consensus rules before the agency formally submits the rule to the rulemaking process
Agency Information Gathering: Physical Inspections
-right to be secure from unreasonable search and seizure- warrant requirements are less demanding for an administrative search than a criminal investigation
–self-incrimination protection exists
Administrative Hearing- Quasi-adjudication
- policy making by hearing and resolution of individual disputes
- decides fact based cases when an agency’s action denies a person a license, right, entitlement, or privilege
- general requirement of Due Process: Fair Treatment
- -balance of private interest with the govts interest
Freedom of Information Act
- req. that govt agencies make info available to the public (part of the APA)
- each agency reqd to make information available
Judicial Review
- ultimate power to declare the law exists in the courts
- the extent and nature of the review is subject to limitation. Limiting factors:
- -legislative
- -executive
- -the courts themselves
- -the Chevron Doctrine
Judicial review continued
-APA sets out procedural requirements for court review
-jurisdiction is needed by the court to hear the case
-action must be reviewable by the courts (review may be prohibited by statute)
-party must have standing to seek court review of an agency action
0the
Ripeness Doctrine
the agency action must be final to warrant judicial review
Exhaustion Doctrine
Parties must complete all agency appeals before turning to the courts under the exhaustion doctrine
Defenses to Agency Action
- agency exceeded statutory authority
- agency improperly interpreted laws
- agency violated a constitutional provision
- agency acted in violation of procedural requirements
- agency acted arbritarily or capriciously, or abused its discretion
- the agency’s conclusion was not supported by substantial evidence
Chevron, USA vs. Natural Resources Defense Council (landmark case)
- EPA enacted a rule interpreting the Clean Air Act
- National Resources Defense Council challenged EPAs rule
- said rule was inconsistent with the clean air act
- court of appeals overturned the EPA regulation
- decision was appealed
- agencies are allowed to fill gaps left by congress
“Do old regulations apply to new forms of competition?” (Do we need congressional action?)
- example: existing firms want new firms subject to the same rules
- Problem: if they way regulations are written does not envision new inventions, are they really covered under the regs?
Broad investigative powers of agencies by:
- monitoring and self reporting by business: business is concerned with 5th amendment violations re: self incrimination
- Direct observation of agency
- agency obtains info through subpoena power: directs person receiving subpoena to appear and testify, or to produce documents
5th amendment self incrimination concerns of businesses
this privilege applies to individuals only! does not apply to corporations or other legal entities
-corporation MUST produce documents requested by an administrative agency
- if business doesnt comply, will receive fines and penalties for non-reporting under the law
- if they do comply, info may incriminate business or persons within an organization
- compliance can place business “between a rock and hard place”
General principles of 4th amendment search and seizure guidelines of administrative agencies
NEED WARRANT- “routine inspections”
NO WARRANT- “open field observation”
NO WARRANT- consent by management for agency to look over or search the premises
NO WARRANT- closely regulated industries
-i.e. pharmaceuticals industry, nuclear facility, even junk years if protection of evidence needed
Agencys Enforcement Power
have an array of enforcement tools in civil and criminal penalties:
Possible Sanctions:
-prohibitions, requirements, limitations
-withholding of relief, penalties and fines
-destruction, taking, seizing, withholding of property
-assessment of damages, reimbursements, reinstitution, compensation, costs, charges or fees
-requirement, revocation, suspension of license
Informal Procedures:
-tests, inspections, permits, negotiations, advice, settlements
Formal Procedures:
-adjudicatory hearings that may lead to litigations
what is a “tort”?
-a breach of duty owed to another that causes harm.
The three groups that torts fall into:
- negligence
- intentional torts
- strict liability
business torts
- arise from careless errors or intentional actions
- large awards
- plaintiffs think of businesses as “deep pockets”
- business can be liable under agency law if a tort results in an activity “within the scope of the workers employment”
How do businesses become involved in tort actions?
- a person is harmed by the actions of a business or its employees
- a person is harmed by a product manufactured or distributed by a business
- a business is harmed by the wrongful actions of another business or person
the role of tort law
- civil law, other than a breach of contract, for which the law provides a remedy
- fear of tort action deters injurious behavior by others
- punitive damages punish malicious/extremely reckless behavior
Torts based on negligence
- unintentional careless conduct that creates an unreasonable risk of harm to others
- breach of duty of care
- owed to the plaintiff
- breach through an act or omission
- causation (casual connection to the injury)
- injury/damages
- there can be a negligence action even if there was no intent to do harm
Negligence: Duty of care and the reasonable person standard
- the standard is how persons in the relative community ought to behave
- one must be reasonable, always
- not liable for everything- only “unreasonable” acts
Reasonable person standard
-what a reasonable person would do in same or similar circumstances
Causation
-causation between a party’s act and another’s injury
cause in fact
-shows the persons conduct is the actual cause of he event that created the injury (some courts call this the “but for” test) [sine qua non rule]
proximate cause
-indicates that the liability bears a reasonable relationship to the negligent conduct
res ipsa loquitur
in some cases, cause is so obvious the thing speaks for itself
no liabilty
if consequences are too remote-then no liability
Defenses to a negligence action:
1) assumption of risk
2) Comparative Negligence
3) Contributory Negligence
1) Assumption of risk
-the injured party knew or should have known of the risk and voluntarily assumed it
-complete bar to the plaintiffs case
(Pelman, Liebeck cases)
2) Comparative Negligence
- damages are reduced by % of injuries caused by plaintiff’s own negligence
- pure comparative negligence (Washington)
- comparative negligence 50% rule (28 states)
3) Contributory Negligence
- plaintiffs action contributed to the injuries
- plaintiff’s case is completely barred
intentional torts against persons
establishing intent
- person knew what he/she was doing
- intent to do the act which reasonably would result in harm to the plaintiff
- knew/should have known the possible consequences of an action
- willfull misconduct
the diff types of intentional torts against persons
- assault
- battery
- false imprisonment
- infliction of emotional distress
- invasion of privacy
- defamation: libel and slander
Intent
- state of mind of defendant
- person knew what he/she was doing
- knowledge that certain results would likely occur
- willful acts invading protected interests
- a reasonable person would have known the action would create harmful circumstances
Assault
- placing plaintiff in fear of immediate bodily injury
- intent to act to cause a harmful or offensive contact
- plaintiff has imminent apprehension or fear
Assault
-fear
-if a reasonable person under the same or similar circumstances would have apprehension of bodily harm or offensive contact
Battery
-unlawful touching
-intentional physical contact without consent
-use of fist, hand, or kicking
-use of weapon, i.e. guns or weapons
-unwanted kisses
-assault and battery often linked together in a lawsuit
-
False imprisonment (false arrest)
- intentional holding, detaining or confinement
- freedom to come and go is restrained
- restraint (may be physical or mental)
- lawsuits often arise from detention of suspected shoplifters
defenses by businesses regarding detention of shoplifters:
- restraint was in a reasonable manner
- restraint was in a reasonable time
- basis for the detention was valid
infliction of emotional distress
- intentional conduct: so outrageous, it creates severe mental or emotional distress
- bill collectors or landlords who badger, are profane, or threaten lay the background for a lawsuit
Invasion of privacy
- infringement on a person’s right of solitude and freedom from unwarranted public exposure
- use of a person’s name or picture without permission
- intrusion on solitude (i.e. wiretap)
- placing a person in false light (publishing a false story)
- public exposure of private facts (debts, drug use)
Defenses:
- right of privacy waived by public figures, politicians, entertainers, sports personalities, etc.
- information about an individual taken from public files or records
James vs. Bob Ross Buick
James got fired but took the client list with him
- forgery of signature is a variant of tort generally known as invasion of privacy
- mere incidental use of a person’s name or likeness is not actionable
- cant object to mere mention of name or appearance brought before the public when they are open to public observation
- appropriation occurs where there is commercial benefit of value from the use of name or likeness
Defamation (libel/slander)
Definition: an intentional false communication that injures a person’s or company’s reputation or good name
Defamation (Libel/Slander) Elements of the tort:
- false or defamatory
- published or communicated to a third person
- causing harm or injury to the plaintiff
- if person who has false statement said TO THEM, then tells a 3rd party: “self-publication” and no tort
Defamation per se: presumption of harm
- no proof of harm/injury is necessary
- examples: person has committed a crime; has a sexually communicable disease
- workplace defamation: info given re: job performance or info spread within business unnecessary about an employee
“Tort liability for internet servers”
- in Zeran vs. America Online: AOL not liable in tort for defamatory message that AOL user user sent.
- Doe vs. Cahill: when defamatory statements are posted, victim of the statements has a right to obtain the identity of the party who sent the material (here Doe is the anonymous defendant)
true or false? torts with businesses are often settled out of court.
true
types of torts
- intentional
- negligence
- strict liability
- torts are traditional common law
- more and more statutes are playing an important role in this area of the law
Fraud
- deliberate deception
- intentional misrepresentation or fraud
1) representation has been made knowingly
2) without belief in its truth, OR
3) recklessly and careless whether it is true or false
-
interference with contractual relations
-breaking the contract benefits a 3rd party (the tortfeaser)
interference with prospective economic advantage
- a business attempts to improve its place in the market by interfering with another’s business
- unreasonable, improper manner of interference
- predatory behavior, not “merely competitive”
Product liability
- liability of producers and sellers of goods re: defective products
- we want companies to have incentives to ensure their products are safe
history of consumer products and negligence
- in the 19th century courts, there was the “privity of contract” requirement- a contractual relationship with the manufacturer was needed
- burden on consumer
- if there was no relationship, caveat emptor applied- “let the buyer beware”
MacPherson vs. Buick Motor Company (1916 landmark case)
Buick sells cars to dealers
NY dealer sells car to MacPherson
wheels made by another company; wheel collapses, causing accident that results in injury
MacPherson files a negligence suit; issue is whether Buick owed a duty of care and vigilance to the eventual purchaser (MacPherson) rather than just to the dealer
tort law applies, MacPherson wins
-manufacturer has primary control over product design and safety
-defects could have been discovered by reasonable inspection, which was omitted, so Buick negligent in tort
-buick responsible for the finished product
Negligence in Tort
manufacturer must exercise reasonable care under the circumstances
- care must be taken to avoid misrepresentation
- defects and dangers must be revealed
- casual connection must be present between the product or the design defect and the injury
Strict liability created under contract law- implied warranty of safety
implied warranty of safety
- manufactured products
- food products
implied warranty of merchantability
under the UCC implied warranty for fitness for a particular purpose
implied AT LAW- weather the manufacturer wants such a warranty for the product or not
Strict liability created under contract law- Express warranty
Express Warranty
- guarantee of safety or performance
- by model
- by statement
- by contract
- by advertising
- Misrepresentation theory is used as well to create strict liability
strict liability in tort
-manufacturers are strictly liable for defective products
-the court asks:
was the product defective?
did the defect create an unreasonable dangerous product or instrumentality?
was the defect a proximate cause or substantial factor of the injury?
did the injury cause damages?
courts DO NOT worry about carefulness, due care, reasonableness, etc.
Greenman/Rs Torts (Second)
seller of defective product liable if
- the seller is engaged in the business of selling such a product, and
- the product is expected to and does reach the user without substantial change in its condition
this rule applies even if
- the seller exercised all reasonable care in preparation and sale of product, and
- the user has not bought the product from, or entered into a contractual relationship with the seller
Crime:
-positive or negative action that violates a penal law
-not a civil law
-act against a state or federal govt or even local govt (against the people)
-congress and state legislatures decide the criminality of actions- mostly statutory
-govt determines punishments
-
What is a “crime”? Black’s law dictionary…
any act done in violation of those duties which an individual owes to the community, and for the breach of which the law has provided that the offender shall make satisfaction to the public”
Crime Categories
- felonies more serious than misdemeanors
- classifications (class A, Class B) and degrees (first degree, second degree) denote seriousness of criminal charge
- violent crimes- murder, manslaughter, assault
- non-violent crimes: vehicle theft, burglaries
- victimeless crimes: possession of illegal drugs
- white collar crimes- embezzlement, bribery, fraud
- punishment depends on the category under which a person is convicted:
- —imprisonment/fines
- —unable to own a firearm
- —removal from public office
- —disqualified from holding office or voting
classifications of crime in washington
- misdemeanors: not more than 90 days incarceration, not more than $1000 fine, or both
- gross misdemeanors: max 1 yr incarceration, max $5000 fine, or both
- felonies: most serious; sentences and fines greater than above
- note: all above where no other terms provided by law
classifications of felonies
- class A: punishable by imprisonment for life, or a fine of $50,000, or both (1st degree murder, 1st degree assault)
- class b: not more than 10 yrs. or $20000, or both (money laundering)
- class C: not more than 5 years, or $10,000, or both (fraud)
Crimes and elements of crimes
-govt agency decides who will be charged with crime
Requirements for prosecution
- Actus reus: the guilty act
- Mens rea: criminal intent
- a crime may be based on negligence
constitutional right: 5th Amendment
- miranda rights must be read if a person is accused of or held in suspicion of a crime
- -right to remain silent (under the 5th amendment)
- statements made can be used against you in court
- right to be represented by counsel
- if accused cannot afford attorney, one will be provided by the court
commonwealth vs. Angelo Todesca Corporation
To prove corporation is guilty of criminal offense, must prove:
1) individual committed a criminal offense
2) a the time of committing offense, person “was engaged in some particular corporate business”; AND
3) individual had authority to act for corporation on its behalf to carry out particular business when offenses occurred
Defenses
- raise doubts in jurors minds through alibi
- present other evidence that crime was not committed
- affirmative defenses: even if prosecutors claims are true, other facts prevent the claims from constituting the crime
- intoxication and insanity may be used (but rarely successful)
- improper procedure in the criminal prosecution
- statute of limitations has run (time varies by crime)
- –unsolved murders–> statute of limitations may never end
- statute of limitations can “toll”, to stop running of time (e.g. if criminal flees country to avoid prosecution)
- self defense in violent crimes cases (use of force justifiable to protect oneself against another)
- entrapment (law enforcement sets a trap to lure someone into committing a crime he/she had no intention of committing- this can be tricky as a defense)
Evidence (in criminal cases)
- strict standards for gathering and presentation at trial
- -evidence was handled properly
- called “chain of custody”
- if improperly obtained or presented, evidence is excluded (under procedural due process)
- -called the exclusionary rule
- -4th amendment protection
- -may be referred to as “fruit of the poisonous tree”
- authorities may
- -search property
- -seize documents and other physical items
- warrants usually needed for search of property, persons, or seizure of property (“hot pursuit” exception)
- warrant is issued by judge or magistrate
- law enforcement officials must show probable cause to a judge to obtain a warrant
prosecution process
- occurs when prosecuting attorney has enough evidence to made criminal charges
- will be either a misdemeanor or felony
- in some cases, grand jury will review a potential felony case (called special inquest in WA state cases)
- if grand jury determines probable cause, usually will issue an indictment against the accused
Arraignment
- accused placed under arrest based on a warrant
- in non-violent matters, accused may turn herself in, rather than being taken into custody by the police
- suspect is “booked” at police station, photographed, fingerprinted and searched
- opportunity to contact an attorney
- arraignment: court appearance before judge or magistrate
- judge may release the accused, or require bail and will set a court date
- often defendants plea bargain- plead guilty to charges or lesser charge or plead no contest in exchange for agreed recommendation for punishment
Discovery
- civil litigation: reduce surprises
- -both sides must turn over anything requested by the other side
criminal law cases: parties do own investigations and disclose only subset of what is found to the other side prior to trial
law enforcement may be conducting investigation that defendant knows nothing about
prosecution must disclose any exculpatory evidence
- evidence which might show defendant is not guilty
- the choice to disclose left up o prosecutions lawyers, but may be subject to challenge
Trial
trial: if matter goes to trial, govt attorney presents prosecutions case
- defendant must be found guilty “beyond a reasonable doubt”
- if jury finds defendant innocent- end of matter
- DOUBLE JEOPARDY prevents a defendant from being tried a 2nd time for the same criminal charges
- if jury cant agree on verdict, there is mistrial, and prosecutor will decide whether to proceed again
White Collar Crime
“crime committed by a person of respectability and high social status in the course of his occupation”
- criminal activity for the financial advantage occurring in business
- FBI estimates such crimes create $1/3 trillion in losses each year
- most cases are against individuals; corporations may also be prosecuted
- antitrust: violatoin under the Sherman Act and Clayton Act
- –prison terms involved in price fixing and anti-competitive practices
White Collar Crime
-Bankruptcy Fraud
-PERSON OR CORPORATION HIDES LIES ABOUT ASSETS IN BANKRUPTCY PROCEEDING (also applies to creditors giving false info or illegal pressure to bankruptcy petitioners)
White collar crime
-Bribery
offer or taking money, goods, services, etc. to influence official actions or decisions
white collar crime:
-counterfeiting
copying of genuine items without authorization- money, designer clothing, other products
Foreign Corrupt Practices Act
prohibits bribing foreign officials in their official capacity to influence them to do any act in violation f his or her lawful duty, or to secure any improper advantage in obtaining business for or with, or to direct business, to any person or identity
-applies both to US firms and persons operating overseas, and to foreign firms and persons who cause an act in furtherance of such a corrupt payment within US borders
White Collar Crime: Racketeer Influenced and Corrupt Organizations (RICO) Act
- originally an extra weapon against organized crime, esp. mafia
- -bribery, extortion, mail fraud, etc.
- successful rico claims can get back 3 times the amount of actual damages + attorneys fees through civil claims
- is now used in suits against persons, businesses, political protest groups and terrorist organizations
Sentencing Guidlines
court considers:
- standard range based on the crime
- how egregious or aggravated was the offense?
- what is the defendants criminal record?
- in State vs. Barkley (Washington), US supreme court held that any sentence above the standard range must be imposed by a jury, not by the judge
Sarbanes-Oxley Act
- followed Enroon, WorldCom, Tyco scandals
- CEO and CFO must sign and certify the accuracy of quarterly and annual financial reports
- if statements false, they individually face criminal penalties up o $5 million and 20 yrs in prison
Employment Law: Principal-Agent Relationship
agency: the fiduciary relationship which results from the manifestation of consent by one person to another hat the other shall act on his behalf and subject to his control, and by the consent by the other so to act.
principal: one who empowers another to act on his or her behalf
Agent: one authorized by another to represent his/her/their interests including the right to contact
- -allows person to increase the number of economic relationships through others
- -relationship is a fiduciary relationship (one of trust and confidence); agent has duty of loyaly
Employer and Employee
An employer is a person hired to perform services for an employer:
- employees physical conduct controlled by, or is subject to control by, the employer
- contract relationship
- may or may not be an agent
Most employment laws (state and federal) apply only to the employer-employee relationship
social security
-income tax withholding
-workers compensation
Respondeat Superior
-employer liability for the tortious conduct of a servant, acting within the scope of employment
Rationale for doctrine:
- employer should pay for the harm caused by those who further his/her interests
- employer’s relative deep pockets
- encourages preventative measures
Employer- Independent Contractor
independent contractors are not employees, but are hired to perform tasks in a more independent and usually more temporary fashion
employer generally not liable for for negligence of independent contractor and has few govt reporting or collecting responsibilities
independent contractor may or may not be an agent (e.g. an attorney representing employer)
Questions to determine is person is an independent contractor
1) what control does the employer exercise over the details of the work?
2) does the person in an occupation or business distinct from that of the employer?
3) is the work usually done under the employers direction or supervision?
4) does the employer supply tools or equipment required at the place of work?
5) how long is the period of employment?
6) is payment for the project by time period, or upon completion?
7) what degree of skill is reqd of the employee
