• Counterfeit Canada Goose Jackets

    Since 1957, Canada Goose has been making the top-of-the-line winter gear.  Used by everyone from scientists at the South Pole to Iditarod racers in Alaska, the jacket, quite simply, keeps it wearers warm in the cold, the sub-zero cold. However, the company’s jackets are a prime target for counterfeiters.  In fact, the company has legal teams all over the world designated to fight the counterfeit battles.

    Canada Goose wants to protect its brand and it does so through unique production as steady enforcement against the copy-cats.  The unique production requires three hours of hand work stuffing the jacket’s 14 pockets to give that unique look.  In addition, the jackets have a specific amount of goose down as well as significant stitching and labeling requirements. 

    The pricey jackets (the cost can run as high as $800, with the $500 range being the most popular) have spawned an industry of counterfeiters. Canada Goose’s CEO says that the company has legal teams all over the world fighting for protection of the brand. One strategy that the company is using to help it spot counterfeit jackets is placing a unique hologram in each jacket. “What’s Inside a Canada Goose Jacket?” Fortune, February 4, 2013, p. 13. You can read about spotting a fake Canada Goose Jackets here.

    Canada Goose cannot protect through intellectual property claims the fact that it makes jackets or that those jackets are stuffed with down. Others do and may make down-stuffed jackets.  However, competitors cannot sell so-called copycat jackets, jackets that use the Canada Goose label or even look deceptively similar to the Canada Goose brand, something that allows the competitors to benefit from Canada Goose’s name, brand, advertising, and reputation. Just as Cartier, Louis Vuitton, and Gucci can obtain court orders to confiscate counterfeit purses, watches, and belts, Canada Goose can do the same with court processes to stop counterfeit sales, including taking the goods from the counterfeit sellers and destroying them.

    In addition to preventing the loss of sales, legal action helps to protect the Canada Goose brand.  Some of the knock-off jackets do not use goose down and customers begin to complain when they realize that they paid high dollar for something less than goose down.

    Discussion Starters

    1.      What can Canada Goose protect about its jackets?

    2.     What purpose would the individual holograms serve in Canada Goose’s litigation to stop counterfeit sales?

     

  • Deadly Brazil Nightclub Fire Fueled by Negligence

                    

    A tragic fire broke out at an overcrowded nightclub in Santa Maria, Brazil, a university town located at the southern tip of the country.  Students were celebrating the end of a vacation, about to return to class in the next few days.  The death toll is currently set at 231.

     The cause of the fire was reportedly pyrotechnics utilized by the band playing in the club.  For effect, the band lit flares that emitted silver sparks into the air. An errant spark apparently inflamed the ceiling foam used for sound insulation, causing the deadly flames and creating a toxic smoke, inhalation of which caused many of the deaths.  The band had used the same effects numerous times before without incident.

    Owners of a nightclub as well as other facilities to which the public is invited owe the duty to exercise reasonable care to protect the safety and wellbeing of customers, and to comply with building codes.  Owners are required to inspect the premises for hazards, correct any dangerous situations discovered, and if correction is not possible, post a warning until repairs can be made.  Failure to take these steps can result in liability for negligence, meaning carelessness.

    Numerous conditions in the Brazilian club suggest the owners failed to take necessary safety precautions.  For example, the facility had no fire alarms or sprinklers. Had these items been in place, they might have quickly alerted partiers to the fire and helped to extinguish it before it became a major conflagration 

     One of the band members observed small flames on the ceiling and was handed a fire extinguisher by a security guard.  Tragically, it was inoperable. Localities typically adopt building codes requiring that buildings be built and maintained consistent with various rules and specs intended to protect users' wellbeing.   Virtually all building codes require that operable fire extinguishers be maintained and readily accessible. A building code provision in Santa Maria required that working fire extinguishers be available every 1,500 square feet.  Sadly, the club did not abide by this rule.  Violation of a law designed to protect the public constitutes negligence per se, meaning the conduct is automatically considered negligent without the need for plaintiff to prove that a reasonable person would have acted differently.  

    Additionally, the club had only one exit.  Most building codes in this country require at least two separate and distinct exits for the very reason of expedited evacuation in case of fire or other emergency.

    Reportedly anywhere from 1300-2000 people were in the club when the fire broke out.  The maximum capacity was 1000.  Maximum capacities are determined by fire chiefs based on the size of the space, the number of exits and the property's intended use.  The number identified represents  a reasonable amount of people who can safely occupy the building and exit it in the event of an emergency.  

    Additional circumstances frustrating people’s exit was lack of lighting directing people to the exit, lack of fire escapes, and initially, belief by security that people were leaving without paying their bill due to a fight.  Guards were trained to prevent people from leaving before they settle their account.  Until the officers realized the reason for the stampede, the doomed revelers were not allowed to leave, slowing the exit process. 

    All of these circumstances suggest negligence on the part of the two club owners. 

    There also exists the possibility of criminal liability for a homicide.  Gross negligence leading to death can, depending on the circumstances, constitute manslaughter, which is negligently causing someone’s death, or even murder, which includes causing death by depraved indifference to human life. 

    For additional information, click here. and here. 

    DISCUSSION QUESTIONS: 

    1)  What precautions could the owners of the club have taken to limit or avoid liability for the 231 deaths that occurred?

     2) Do you think the owners of the club should be prosecuted for manslaughter?  For murder?

  • Beyoncé, Lip-Synching, and the Law

    Since the presidential inauguration, the debate of our times has continued:  Did Beyoncé lip-synch the national anthem?  There is no definitive answer as yet.  We only know that the National Marine Band did not play during her performance, that a tape was played, and that those in charge of the event felt a live performance was too risky because the singer had not had the opportunity to rehearse with the band prior to her performance. 

    So, why so much concern about lip-synching?  The law can provide us with the answer.  A live performance carries the implied promise of actual singing.  If a singer does not perform live, then those who paid to attend the performance are victims of misrepresentation and/or a breach of a contract, something that entitles them to a remedy, generally a refund. When Britney Spears, who is well known for lip-synching during live performances, performed in Australia, the lip-synching was so obvious that fans walked out and demanded refunds.  The promoter complied and issued refunds.  If a singer has released CDs or songs for sales that represent that the voice is his or her own, and the voice is not that of the singer, then the same misrepresentation issues and damages apply. 

    The lip-synch debacle that resulted in the most extensive litigation came upon the discovery that the Grammy-Award-winning duo, Milli Vanilli (Rob Pilatus and Fab Morvan), had never performed any of their songs.  That is, the voices on their songs and during their live performances were not theirs.  They were indeed lip-synching, but they were not lip-synching to their own singing. The result was that the duo was required to return their Grammy awards.  In addition, there was a class-action lawsuit brought against the duo and their record company, Arista Records and parent Bertelsmann Music Group. Under the terms of a settlement of the case, those who had purchased Milli Vanilli albums and CDs were given cash rebates of $1-$3 per purchase, depending upon whether they purchased a single song or albums/CDs. 

    The legal issue in lip-synching is a significant one and one that is a basic requirement for contract performance:  What did you promise (by implication, custom or otherwise) and what did you deliver?  A lip-synched live performance is not the same as an actual live performance.  Audiences are paying to see and hear the singer’s voice and performance.  To the extent that is not provided, those who pay to see and hear have remedies.  You can read about various lip-synching disasters by Ashlee Simpson, Pavarotti, Mariah Carey, R. Kelly, 50 Cent, and others at Forbes magazine.

    Beyoncé and her record company are not on the legal line here because there was no paying audience.  Her obligation would be to the inaugural committee that booked her performance.  However, if the committee approved the actions taken by the singer and its producers because of fears about the lack of rehearsal, then there is no legal action.  The producer, as an agent of the committee, had the authority to change the live performance in the interest of quality and certainty. 

    Even those fans who are not of a mind to seek a refund are disappointed by lip-synching because of an underlying ethical issue – they just want to be told the truth about the singer’s performance.  Perhaps the answer is to place a disclaimer on concert tickets warning fans that there could be some lip-synching if there are weather conditions or other issues that prevent a solid live performance.

    Discussion Starters

    1.      Describe the possible legal issues in lip-synching.

    2.     Would it be possible for a singer to place a disclaimer on the tickets about live performances?

  • Airline Settles Breach of Contract Case; Drink Vouchers Will Be Honored

          

    Southwest Airlines has settled a $29 million class action lawsuit for breach of contract. The airlines sold millions of alcoholic beverage vouchers at five dollars each.  When issued the vouchers had no expiration date, meaning the passengers could exchange them for a drink on any future plane trip they took.  5.8 million of the vouchers remained unredeemed.  On August 1, 2010, the airline announced a change in its policy – the vouchers would be valid only during the flight in which the voucher was purchased.  Southwest intended to apply the new policy retroactively. 

    An Illinois man brought a class-action suit against the airline representing himself and all other Southwest passengers who purchased drink vouchers and had not yet redeemed them. He based his case on a claim of breach of contract  (failing to perform a contractual obligation) for Southwest’s failure to “honor the coupons that consumers had paid and bargained for.” 

    A class action is one in which a large group of plaintiffs, rather than just one, pursues a case.  The plaintiffs must be similarly-situated, meaning they all suffered a loss from a common cause.  In this case the plaintiffs all experienced a loss of five dollars from the airlines decision to cease accepting the $5.00 vouchers as payment for an alcoholic drink. 

    Rather than pursue this case to trial, Southwest decided enter a settlement agreement.  This is a contract in which the defendant agrees to rectify in some way the circumstances about which the plaintiff complains, and in return the plaintiff agrees to forbear from pursuing the lawsuit.  In the settlement agreement in this case, Southwest agreed it will henceforth include an expiration date on vouchers and will not retroactively invalidate them or shorten the expiration period.  If the airline decides to limit the time for redeeming coupons to the duration of the flight during which the voucher was purchased, that fact will be printed on the voucher in a conspicuous way. 

    Class action lawsuits expose hospitality facilities to a lot of liability that individual lawsuits would not.  In the Southwest case, if only one person was suing, the loss would have been $5.00 (or a multiple of $5.00 if the plaintiff bought more than one voucher), not an amount that will motivate most people to endure the time and expense required by a legal case.  But when the plaintiffs aggregate their losses, the expense to any one plaintiff is likely to be minimal and the combined loss can add up to a lot of potential liability for the defendant.

     For more information about this case, click here. 

    DISCUSSION QUESTIONS: 

    1) Why are class action lawsuits of concern to defendants? 

    2) What is the rationale for permitting class actions? 

    3) How could Southwest have avoided the lawsuit?

     

                                                                                                                                      

  • What If Your Match From an Online Dating Service Beats You? Can You Recover From Your Matchmaker?

    Match.com matched Nevada real estate agent Mary Kay Beckman with Wade Ridley in September 2010.  After knowing him online for only 8 days, she broke off their relationship.  However, in January 2011, Mr. Ridley, angry that Ms. Beckman would not agree to meet in person, hid in her garage armed with a knife.  When she entered the garage he stabbed and beat her so severely that she was hospitalized and placed on a ventilator.

    In February 2011, Mr. Ridley was arrested in Phoenix in connection with the stabbing death of Anne Simenson, who was killed in a manner similar to the lying-in-wait attack Mr. Ridley had committed against Ms. Beckman. Mr. Ridley entered a no-contest plea to criminal charges and was sentenced to 70 years in prison.  He committed suicide there in 2012.  

    Ms. Beckman has filed a suit in federal district court seeking $10 million in damages from Match.com, a dating website owned by IAC/InterActive Corp.  The suit alleges that Match.com failed to warn Ms. Beckman about the dangers of online dating. Her lawyer refers to online dating services as “absolutely not safe.” The suit also alleges that the service, through its site language and advertising leads users to believe that the service is safe. AP, "Nevada Woman Sues Online Dating Service Match.com  Over Brutal Attack," January 22, 2013.

    Generally, companies such as retailers as not liable for the criminal conduct of third parties unless they are aware of that criminal activity and have failed to take precautions or provide warnings to their customers.  However, Match.com has a slightly different situation in which one of its customers attacked another one of its customers. There is the question of the level of duty and care to customers and whether there is a duty to screen, warn, or do more than Match.com currently does.  Match.com does warn its customers to meet for dates in public places and to let others know whom they are meeting and when and where the meeting will take place. If you go to Match.com, you can see that there is a banner at the top of the opening page that includes a warning on the "do's and don't of online dating."

    This case (you can read the complaint here) will focus on what Match.com knew about its customers, (you can view a story about another case here) whether it had a duty to screen those customers, and whether it had a duty to warn that it does not conduct screening of customers of the site. For example, could there be a duty to screen for sex offenders using the site? The case will also deal with the question of whether we assume certain risks by using online dating services.

    Discussion Starters

    1.      Describe the general liability standards of merchants, retailers, etc. for the criminal acts of third parties against their customers.

    2.     What duties and levels of duties will Ms. Beckman argue Match.com must maintain?

  • Food Promotions Must Be Truthful; 11 Inches Is Not A Foot

                 

                                                                                          Subway sandwiches are a favorite of many.  The “Five dollar Footlong” (in some locations, “Seven dollar Footlong” )variety promises 12 inches of yummy bread, salad trimmings (lettuce, tomoato, onions, olives, etc.), and your favorite meat, chicken, tuna fish or vegetables..    When you plunk down your money you expect to get what was advertised – a full foot worth. 

     A recent expose by the New York Post discovered that the sandwich size at numerous shops measures 11 inches, not twelve. The newspaper’s investigation was triggered by a post on Subway’s website by an Australian customer who exhibited a photo of a turkey sub next to a measuring tape showing the sandwich to be one inch shy of the promised 12.  The picture went viral, gaining more than 118,000 “likes” in just 24 hours.  In response, a company spokesman stated that the photo “doesn’t meet our standards.  We always strive for our customers to have the most positive experience possible.” 

    Laws known as Truth in Menu require accuracy when describing a food product.  The term is a collective name applicable to various laws and regulations that have been implemented to require accuracy in the wording of menus and food promotions.  They are designed to protect consumers from fraudulent food and beverage claims. These laws require truthfulness in descriptions of various attributes of food including the preparation style, ingredients, origin, portion sizes and health benefits.  So for example, syrup promoted as “Made in Vermont” must be made there.  Orange juice described as “fresh” must not have been frozen. A menu item offering a dozen wings for a set price needs to be served with 12 wings, not 10 or 11.   

    Compliance with these rules is overseen by numerous government agencies.  Consumers who were misled can alert the relevant administrative entity which will investigate and prosecute if warranted.  Additionally the consumer can sue for  fraud,

    which is an intentional misrepresentation on which a customer relies and suffers a loss as a result.   In today’s world the consumer can also express his discontent online which can be a powerful tool in prompting correction of any inaccurate description. 

    One of the newest and most far reaching of the genre of truth in menu laws is the Menu Labelling Act adopted by Congress in 2010.  This statute requires chain restaurants with 20 or more outlets to list calorie and other nutrition information on menus and menu boards.  The Food and Drug Administration has developed proposed regulations and sought comment from the industry and other interested parties, a required step in the process of adopting regulations.  They should be finalized soon.  Once adopted, we will begin seeing more nutrition information in most chain restaurants.  Some states have passed similar statutes. 

    Anyone who feels cheated by Subway’s one inch slight has some recourse.  Based on the company’s spokesperson’s comments, a complaining customer can probably get  reimbursement by speaking with the local shop owner or a representative from the Subway company. Another remedy is to consult with a local administrative agency responsible for enforcing truth in menu laws, such as the attorney general’s office.  The agency will monitor corrections of founded violations.

    For more information click here.

     DISCUSSION QUESTION:

    What role do you think the concerns about the public's obesity played in the passage of the Menu Labelling Act?

     

     

  • Uber: Does a Phone App Qualify as a Taxi? A Transportation Company?

    Uber is a mobile phone app that allows its users to call for cabs and then pay for their cabs through their phones.  Oh, what a convenience!  This is the era of entrepreneurial techies who make life easier. The little-start up has raised $50,000,000 in capital since it began its service in 2010 in Europe.

    However, when Uber landed in the United States, regulators quite nearly put the new little company out of business.  California’s Public Utility Commission labeled the little start-up that could a transportation company and required it to pay a fine of $20,000 for operating without a license.  Washington D.C. tried to ban the service because the company was operating as a taxi or taxi service and was doing so without a license. San Francisco cab drivers filed suit against Uber for tortious interference with their exclusive contracts for payment and customer relations.

    However, Uber has survived because Uber users and its CEO and lawyers relied on statutory interpretation to gain the company an exemption from the usual city regulations that apply to transportations services.  Uber does not own any vehicles and therefore could not be classified as a transportation company.  The California regulation and fine did not apply. Uber also does not operate any cabs (or even own a cab) and did not fit the definition of a taxi or taxi company.  The customers explained that Uber furnished a service of connecting potential customers with cab and transportation companies.  The cab and transportation services were regulated and the statutory goal of consumer safety was achieved despite Uber’s presence as a go-between. Uber has won its legal battles in 18 cities. However, view one of Uber's websites and notice what is on the page.

    Uber did lose the battle to do business in New York City because the cabs there have exclusive payment contract arrangements and Uber was interfering with those exclusive arrangements. Brian Chen, "A Feisty Start-Up Is Met With a Regulatory Snarl," New York Times, December 2, 2012. Tortious interference banned the Uber app.  However, Uber is still operating in New York City, but only offers car services, not an app for cabs.

    Uber says that it consults with a lawyer before it begins doing business in any city, but does no actually contact regulators.  Uber also says that is works with the cab companies to make them aware of the service.  Some of the cab companies have welcomed Uber as a service for their customers.

    Discussion Starters

    1.      What do you learn about the importance of statutory interpretation from Uber’s experience?

    2.     Why did Uber lose the right to offer its services in New York City?

  • Auditors Must Audit Well; Lax Examinations Lead to Liability

                     

    The Securities and Exchange Commission has pressed charges against two auditors of KPMG LLP for malpractice in failing to discover problems at a Nebraska  bank that later went bankrupt. Specifically the SEC claims the two accountants, one a KPMG partner and the other a senior manager, did not sufficiently review bad loan reserves at TierOne Bank. The bank experienced millions of dollars in losses on troubled loans made during the height of the financial crisis and before the bank eventually failed in 2010.  The SEC had previously filed suit against three of TierOne’s executives.  Two of them, the CEO and bank president, agreed to settlements of a half and a quarter million dollars, respectively.  Allegations against the third are still pending.

     The case against the KPMG auditors alleges that the two ignored red flags and relied on outdated appraisals of the collateral backing TierOnes loans when their 2008 audit gave the company a thumbs up. Allegations in the case claim that the bank had expanded into riskier modes of lending without disclosing to investors and regulators all of the perils.

    Unlike the executives, auditors are not involved in financial institutions lending and risk-management decisions, and it was those decisions which contributed to the recession.  However, all of the big four accounting firms had major clients that collapsed and received large government bailouts.

    The SEC has been the target of some criticism for not pursuing auditors more aggressively.  By failing to discover accounting improprieties, they may have enabled the conduct among executives that led to the crisis.  Some attorneys general offices have filed similar suits, claiming auditors overlooked – intentionally or otherwise – accounting fraud occurring by their large banking clients.

    The auditors role is critical.  If, in their investigations, they catch fraud, inaccuracies or questionable accounting practices, they can promptly halt illegal and unethical managers.  This has the very real ability of saving the company from ruin and thereby protecting jobs of employees, avoiding waste of investors’ money, and preventing havoc in our economy.  In addition, the audited financial records are what investors rely on when initially deciding what companies’ securities to purchase.  If the auditors’ examination of a company’s finances is sloppy or insufficiently thorough, investors can be misled.

    For all of these reasons, agencies that provide oversight to the financial markets must provide motivation to all players in the industry to perform their job objectively, by the rules, and diligently. Prosecution for lax work is one way to provide that motivation.

    The case against the KPMG auditors has been brought as an administrative proceeding within the SEC.  Potential penalties include stripping the auditors of the right to audit public companies, a central component of a CPA’s role.

    For more information click here.

    DISCUSSION QUESTIONS

    1)    Why is it important for the SEC to pursue cases like the one described in this post?

    2)    What is your opinion of the appropriateness of the penalty described in the last sentence - removing the right from auditors to audit public companies?

     

     

  • The Grad Student Who Gave Free Access to JSTOR Commits Suicide as His Trial Approached

    Aaron Swartz, a 26-year-old computer genius, was something of a hero in the “everything on the Internet should be free” subculture. In 2011, he was charged with federal felonies for allegedly breaking into a computer wiring closet and connected a computer to MIT’s computer system that resulted in giving users free access to JSTOR, a service that, for a subscription price, provides access to millions of academic journals.  The result was that students at MIT enjoyed free access to the Internet at a cost of $1 million to the system’s owners. However, Mr. Swartz did not charge for the access and realized no personal financial gain from the project. He was charged with criminal copyright violations. At the time, Mr. Swartz was a graduate student at Harvard studying ethics.

     The potential sentences for the crimes was 30 years.  With the trial approaching, friends indicate that he was concerned that he was being used by prosecutors as an example to deter the open-access movement and had become increasingly depressed.  Mr. Swartz’s inability to mount a defense, the number of charges, and the potential prison time contributed to that depression. He also saw his actions as being good, but yet he was being persecuted for the good he felt he was doing.

    Prosecutors have great discretion in charging computer crimes.  For example, Mr. Swartz could have been charged with a simple physical trespass for going into the wiring closet at MIT to hook up his computer.  He could also be charged with vicarious liability for copyright infringement.  And he could have been charged with computer fraud for diverting JSTOR users way from the payment requirements. JSTOR was not pursuing the recovery of its losses.  The issue of online crimes continues to evolve because of the nature of the information available on the Internet. Those who agreed with Mr. Swartz’s movements and actions feel that the overzealousness of prosecutors contributed to his death. 

    There are great differences among experts and prosecutors on actions such as those of the late Mr. Swartz.  For example, when Mr. Swartz was first charged with the crimes in 2011, Carmen Ortiz, the U.S. Attorney bringing the charges stated, "Stealing is stealing whether you use a computer command or a crowbar, and whether you take documents, data or dollars. It is equally harmful to the victim whether you sell what you have stolen or give it away." Mr. Swartz responded, "It's called stealing or piracy, as if sharing a wealth of knowledge were the moral equivalent of plundering a ship and murdering its crew.  But sharing isn't immoral -- it's a moral imperative.  Only those blinded by greed would refuse to let a friend make a copy." Noam Cohen, "A Data Crusader, a Defendant, and Now, a Cause," New York Times, January 14, 2012, p. A1. Mr. Swartz co-founded Reddit, a social news site that he later sold to Conde Nast for approximately $10 million.

     Discussion Starters

     1.      What is the purpose of the movement Mr. Swartz supported?

    2.     What lesser crimes could Mr. Swartz have been charged with?

    3.  Do you see any flaws in Mr. Swartz's reasoning on sharing files and making information all free on the Internet? Was his sale of Reddit consistent with his views?

  • Deadly Fall from Roller Coaster Case Settled; Negligence and Related Doctrines

     

    Sadly, an Iraq war veteran was killed when he fell out of a roller coaster at a former Six Flags Theme Park.   James Hackemer had been hurt in combat by a roadside bomb.  His legs were badly injured necessitating amputation of both.    

    Signs posted at the roller coaster at Darian Lake Theme Park in northern New York state that riders are required to have both legs.  Park workers allowed him to ride nonetheless.  Unfortunately he was thrown from his seat and restraints on the second-highest of three hills on the coaster.  The ride reaches speeds of up to 70 miles per hour.  Its highest peak is 208 feet. As he fell, Hackemer struck the front of the eight-car train and landed 150 feet below.

    Plaintiff settled his lawsuit with the park for a seven figure amount.  The settlement agreement requires that the amount remain confidential; both sides are precluded from disclosing it.

    Negligence in operating a business can lead to liability.  Negligence is failing to act as a reasonable person would when faced with a foreseeable risk.  The managers of the amusement park apparently recognized that dangers were presented for people without legs because the signage identified the need for those limbs to utilize the ride.  The park thus incurred a duty to do whatever was reasonably necessary to ensure guests missing legs didnot participate.  Good training of staff is an important component of the park’s duty to act reasonably.  If the park failed to  adequately train its staff, the park would be negligent and liability would attach. 

    Perhaps the park was indeed diligent in training its staff and yet a ride attendant capitulated to urging by the veteran to ride the coaster.  In this situation attendant would be negligent resulting in liability to the park based on respondeat superior, the rule that holds owners liable for the negligence of their employees.    There are several reasons for this rule.  It is the law’s way of encouraging owners to screen job applicants well, train them well, and manage them well. 

    It is likely that the case, had it proceeded to trial, would have involved comparative negligence, the rule that applies when both the plaintiff and defendant are negligent.  If the sign was well situated and not obstructed by trees or the like, Hackemer would have become aware of the warning against double amputees riding but chose nonetheless to take the risk.  This would be negligence on his part.  When comparative negligence applies, the jury is required to allocate the liability between the two litigants. Jurors must decide what percentage out of 100 plaintiff is liable for the accident, and what percentage is attributable to defendant. Plaintiff then collects that percentage of his damages allocated to defendant.  For example, if a plaintiff suffers $100,000 worth of damages and defendant is determined to be 70% responsible, plaintiff collects 70% of his loss which would be $70,000.

    Another legal principle at play is assumption of risk.  This doctrine provides that when a plaintiff knowingly engages in dangerous activity, he understands that he may be injured by the normal risks of the activity and agrees not to sue.  The sign on the coaster should have made plaintiff at least somewhat aware of the risks associated with participating in the ride.

    A settlement is a way to resolve a lawsuit without going to trial.  Plaintiff agrees to accept a negotiated amount of money, and defendant agrees to pay.  Additionally, plaintiff agrees not to sue for any additional money.  In recent times many settlement agreement include a requirement that the settlement amount remain confidential.

    For more information, click here.

    DISCUSSION QUESTION:

    If you were a juror in this case and assuming the parties did not settle, what percentage of liability would you attribute to each party and why?   What additional information might you want to know before making the allocation?

  • Obscene Gestures and the First Amendment: Digitus Impudicus

    John Swartz has been learning about the First Amendment for six years. Mr. Swartz was a passenger in his then fiancé’s (Judy Mayton Swartz) car on Memorial Day in 2006 when he spotted a police car with an officer using a radar gun.  Mr. Swartz expressed his feelings toward the officer by extending his right arm out the passenger window, up to the roof, and then using his middle finger to communicate. Benjamin Weiser, "Obscene Gesture Produces Years of Legal Battling," New York Times, January 4, 2012, p. A17.

    Officer Richard Insogna says that he followed the car after seeing the finger raised because he believed it was a signal for help.  Officer Insogna says that St. Johnsville is a calm little place and he was not used to seeing such expressions and assumed the best about Mr. Swartz. Mr. Swartz was arrested after the couple stopped in front of their home.  Mr. Swartz got out of the car and walked to the trunk of the car. Officer Insogna ordered Mr. Swartz and Judy to get back in the car. Mr. Swartz initially refused, telling Officer Insogna that he had not been driving the car. Officer Insogna called for back-up at this point. Officer Insogna again told Mr. Swartz to get back in the car, stating that this was a traffic stop. Judy then urged John to reenter the car, and they both did so. Officer Insogna checked license and registration and told them both that they were free to go.  Mr. Swartz then walked toward officer Insogna, saying “I'd like to speak to you man to man.” As he started walking toward Insogna, who was more than 20 feet away, three other officers stepped in front of him. John stopped, walked away from the officers, and said to himself in a voice apparently too low for his words to be understood, “I feel like an ass.” One of the other officers asked John what he had said, and John repeated his remark loud enough to be heard. At that point another officer said, “That does it, you're under arrest,” but did not say for what.

    Mr. Swartz was then handcuffed, placed in a police car, and driven to the police station, where he was given an appearance ticket and released. At the station, he was told he had been arrested for disorderly conduct. The charges were later dropped.

    However, Mr. Swartz then filed a civil rights suit against the city of St. Johnsville. Mr. Swartz says that his use of the middle finger was a message regarding his disagreement with police policy of using officers for radar and speeding patrol rather than in patrolling and solving crimes. 

    Initially, Mr. Swartz’s suit was dismissed, but the second circuit held that the suit could proceed. Swartz v. Insogna, 2013 Wl 28364 (2nd Cir. 2013)The civil rights action is grounded in the freedom of expression. 

    The opinion in the case covers a wide range of issues, including whether the officer had probably cause for following the Swartz car. The case concludes that there was no probably cause for arrest because Mr. Swartz was, in effect, apologizing for his actions, and that there was malicious prosecution as a result when Mr. Swartz was arrested. In addition, the disorderly conduct statute does not specifically prohibit speech by defendants unless the speech is intended to incite or create public disorder.  Further, without some type of threat or fear on the part of the officer, the use of such a statute to prevent Mr. Swartz’s expressions (however communicated) would be a violation of his First Amendment rights.

    The court noted that Mr. Swartz had damages, including the cost of an attorney to deal with the disorderly conduct charges. 

    The court ordered that the case be set for trial in federal district court amid colorful references to the history of the use of digitus impudicus, which goes back to the Roman Empire and began in the United States in 1886 when a Boston Beaneaters pitcher communicated via digitus with the opposing New York Giants Ira P. Robbins, Digitus Impudicus: The Middle Finger and the Law, 41 U.C. Davis L.Rev. 1403, 1415 (2008)

    Discussion Starters

    1.      What is the difference between speech and speech that creates a riot?

    2.     What damages does Mr. Swartz have?

  • Google Settles with FTC -- No Antitrust Charges

    The search-engine giant dodged antitrust charges on Thursday. Following a 19-month-long investigation, the FTC did not find sufficient evidence of antitrust violations by Google. The investigation focused on whether Google was fine-tuning its search engines so that the results favored Google products and services so that users were not directed to competitors. Scott Martin, "FTC: Google Agrees to Changes," USA Today, January 4, 2013, p. 1B.

    While the FTC did find evidence that Google was changing its search engine, the commissioners concluded that the reason for the changes was not to allow Google to highlight its own products but, rather, to improve the search experience of its users. “In making their case to regulators, Google executives traveled to Washington and applied lessons learned from Microsoft’s antitrust battle. The army of executives, lawyers, lobbyists and engineers argued “that technology is such a fast-moving industry that regulatory burdens would hinder its evolution,” and that the “definition of competition in the tech industry is also different and constantly changing,” Edward Wyatt, "U.S. Ends Inquiry Into Way Google Sets Up Searches," New York Times, January 4, 2013, p. A1.

    Despite the findings, however, Google did agree to make some changes in its business practices. For example, advertisers will be given more flexibility in managing their ad campaigns with Google rivals.  Google has been maintaining a great deal of control over its advertisers using other search platforms.  That type of control was similar to the controls Microsoft attempted to exercise over chip and computer manufacturers when it refused to allow them to install Netscape if they wanted to have Microsoft products.  They were required to offer all Microsoft services if they wanted to install the Microsoft operating system.

    Google has agreed, albeit informally, to stop lifting content from its rivals in order to use that information for its own specialized search results. Google had been posting online content from sites such as Yelp (for restaurant reviews) as its own content. Google had refused to stop this practice of lifting content because it argued that what it was doing was covered under the fair use exemptions of copyright laws.  Amir Efrati and Brent Kendall, "Google Dodges Antitrust Hit," Wall Street Journal, January 4, 2013, p. A1.

    Finally, Google has agreed to employ fair licensing terms when competitors seek access to Google patents that cover standardized technologies (smartphones, tablets, game consoles).  Google had been obtaining injunctions against competitors for using such patents thus precluding their use as long as litigation proceeded.

    The Google agreements are informal with no fines or sanctions.  There is no consent decree.  However, the FTC has pledged to “vigorously monitor”  Google’s practices in the three areas of search design, content lifting, and patent licensing.

    Some worry, including Microsoft,  that monoplization has occurred. Wyatt notes, By allowing Google to continue to present search results that highlight its own services, the F.T.C. decision could enable Google to further strengthen its already dominant position on the Internet. It also enables Google to avoid a costly and lengthy legal war of attrition like the antitrust battle that Microsoft waged in the 1990s.”  However,if Google is ahead of its rivals because of superior skill, foresight, and industry in operating its search engine and selling its products, then antitrust charges are not appropriate.  If, however, Google’s market dominance comes from any of the three practices it has agreed to stop, then its competition methods would have run afoul of federal laws. Going forward, we will know whether Google can maintain its market dominance on the merits.

    Discussion Starters

    1.    List the three practices that the FTC was investigating and what Google must do going forward to prevent antitrust violations.

    2.     Explain why the FTC did not bring any charges against Google.