• Rattlesnake Roundups by Gassing: A State Law Battle with Federal Overtones

    Sweetwater, Texas is the home of the world's largest rattlesnake roundup.  Each year, for the past 56 years, wranglers are invited to descend on Sweetwater to compete for the prize for catching the largest rattlesnake. When the wranglers bring in the snakes, the snakes are milked for their venom (used to develop vaccines and treatments), weighed and measured, and then killed for meat and their skins. The year-round residents of Sweetwater are grateful for the thinning out of the rattlesnake population because the indigenous snakes show up on their patios and driveways and often bite children and pets. Manny Fernandez, "Rattlesnake Wranglers, Armed With Gasoline," New York Times,  March 31, 2014, p. A10. 

    However, the methods the wranglers use to catch the snakes have been the subject of animal rights activists' concerns and resulted in state laws in 20 states.  Many of the wranglers use "gassing," a method by which gasoline fumes are pumped into the dens (holes, cracks, and crevices) where the rattlesnakes reside in order to drive them out, thus making catching much easier. The Texas State Parks and Wildlife Commission has been looking into the practice because of complaints from animal rights activists that claim the gassing causes impairments in all creatures in the area and, in some cases, results in death. The fumes do not go away easily and environmentalists claim that there is long-term damage to areas where gassing is used, including to other animals and plants.  The U.S. Fish and Wildlife Service has concluded that the gassing affects endangered species in the area such as the Comal Springs riffle beetle, the Bone Cave harvestman, and the Government Canyon Bat Cave spider.  Following a hearing in January, the Texas commission took no action.  A legislative proposal in Texas has been resisted to date.  However, the states surrounding Texas (Oklahoma, Louisiana, Arkansas, and New Mexico) do have state laws that prohibit gassing and many other states have followed the trend generally following petitions and proposals from zoologists. 

    In Texas, snake hunters are licensed, also a common requirement in the surrounding states. The snake hunters say that they pump in fumes for less than a minute from a can that holds about 50 cents worth of gas and that there is no harm. The economic consequences for Sweetwater would be devastating if gassing were outlawed because of the economic importance of the roundup.  In addition, Riley Sawyer, a Sweetwater resident, is the star of ANimal Planet's "Rattlesnake Republic," a show that features stories of capturing the snakes. 

    Presently, the practice of gassing continues to be under study in Texas regulatory agencies as well as by the EPA and Department of Interior at the federal level.  In the remaining 30 states that do not have current laws prohibit gassing, the issue is either in the form of proposed legislation or under study. 

    Discussion Starters

    1.  What are the issues in the regulation of gassing?

    2. What levels of law and regulation are involved in the issue of gassing? 

  • Ruling Holds College Athletes Are Employees; They Can Now Unionize


    A ruling this week determined that football players who receive athletic  scholarships  at Northwestern University qualify as employees  (workers who are “directed and controlled” in the performance of some compensated duties)  the school.  As such, they have the right to form a union ( an organization of workers that advocates or improvement of working conditions) and bargain collectively ( the process of negotiations between employers and representatives of employees' union addressing working conditions such as wage scales, working hours, benefits, grievance mechanisms, overtime pay, and more). This decision has been called revolutionary because no other football players in college sports have ever sought legal authorization  to unionize, and players have always been treated as student athletes, not workers.

    The players receive scholarships to pay for their education in exchange for participating in both practices and also competitions during which they represent the school .The university argued that involvement in sports is part of the overall educational experience. This view was rejected in the case.

    The decision, issued by a regional director of the National Labor Relations Board (NLRB) and was based on numerous factors including that the Northwestern scholarship football players devote up to 50 hours a week to the game.  As stated in the decision, this is more than many “undisputed full-time employees” work, and more time than the players spend on their studies.  , Further, the coaches control how the players' time is spent  at practice.  Additionally, the players are required to attend a one-month training camp at the end of the summer and spend 50-60 hours that week on the game. The players are recruited for their athletic ability, not their academics. Team guidelines require that players submit to drug testing, and players are prohibited from refusing a Facebook friend request by a coach. Athletes must live on campus for their freshman and sophomore years. If their grades fall below a certain threshold, they are required to attend study hall.  If the rules are disregarded, the scholarships can be revoked, a decision made by the coach.

     The NLRB s a national agency headed by a five person board, each of whom is appointed by the President of the United States. It has 26 regional offices located around the country, each headed by a regional director.

    .In addition to determining who qualifies as an employee, another of the agency’s functions is to decide if an appropriate bargaining unit exists for collective bargaining.  A collective bargaining unit is a group of employees whose jobs carry sufficient similarity that the workers have common interests (“community of interests”) relating to working conditions. The football players were determined to qualify as such a unit. Therefore, an election will be conducted.

    Decisions of the regional directors can be appealed to the 5 member Board of the NLRB whose offices are in Washington DC.  Northwestern University has announced that it will appeal.   If a party choses to appeal that decision, the case will be heard by a federal Court of Appeals. A final appeal would be to the United States Supreme Court.

    A union is created when a majority vote of employees in a bargaining unit choose to form onw. Another function of the NLRB is to organize secret ballot elections at worksites to determine whether employees wish to be represented by a union. The next step for the Northwestern players is to have such a secret ballot election.  If a majority opt for a union, there will be a union. Once a union is formed, collective bargaining can begin.

    The two issues of most concern to the players, and thus will be negotiated with the school if the election among players results in a majority decision to form a union, are better health care and limited practice hours. Another issue is handling of head injuries and coverage of medical expenses for former players with sports-related medical expenses.  Compensation to the players for commercial sponsorships is also on their list.

    The National College Athletic Association (NCAA) generates billions of dollars from football and men’s basketball.  For example, the current contract for broadcasting March Madness is worth $10.8 billion (yes, that's a "B") dollars over 14 years.

    The ruling applies only to Northwestern University football players who receive scholarships from the school.  But the case is now a precedent and will foreseeably be cited in similar union efforts at other private schools. The issue in public schools is governed by individual state laws.

    Given the significance of the decision, the case is anticipated to wend its way to the US Supreme Court.

    For more information, click here. http://www.nytimes.com/2014/03/27/sports/ncaafootball/national-labor-relations-board-rules-northwestern-players-are-employees-and-can-unionize.html?_r=0


    Do you agree with the ruling that Northwestern athletes receiving scholarships are employees?  Why or why not?



  • Madoff Employees Convicted of Cooking the Books; 200 years in Jail Possible


    Five former employees of Bernard Madoff, all key players in helping him defraud investors for decades, were convicted of numerous fraud-related crimes.  Madoff was prominent in the securities industry and a sought-after investment advisor and money manager.  He pled guilty in 2009 to operating the largest Ponzi scheme in history, defrauding thousands of investors of  $60 billion dollars. A Ponzi scheme is a swindle in which investors are, unknowingly, paid with sums obtained from later investors, creating an illusion of profitability. Madoff is serving a sentence of 150 years in a federal prison.

    The five convicted henchmen include two computer programmers, the director of operations, and two portfolio managers  They assisted their boss in hiding from authorities Madoff’s scam, which cost many investors their life savings while enriching Madoff and the guilty five. They embellished financial data to yield non-existent earnings, made up fake securities trades, and manipulated the firm’s general ledger to deceive regulators, auditors and bankers. 

    The programmers wrote computer code that printed out fake trading documents and false account statements.  The programs were complex and were intended to deceive regulators and customers by backdating internal records and printing out millions of false documents that gave the impression that Madoff’s investment-advisory unit had a vast investment inventory. In fact, no trading occurred. Per the testimony, the programmer’s sought higher pay because of the risks associated with the work, and requested payment in diamonds to facilitate hiding the money and avoiding detection.

     On one occasion, a visiting auditor asked to see a trading ledger that would have supported the firm’s representations about the securities it owned for the auditor’s client.  Panic – there was no securities in the client’s account.  The solution - the auditor was diverted throughout much of the afternoon while several of the defendants created a fake ledger. It came off the printer warm, so they cooled it in the office refrigerator.  To make it appear worn, they played toss with it.  In the end, the auditor was satisfied.

    One night the group went out to dinner together on the evening before a planned audit by the accounting firm KPMG. One of the programmers offered a toast to “tricking the auditors.”

     The five were found guilty on all 59 charges. Among the crimes are conspiracy (agreeing with at least one other person to commit a crime together) to commit securities fraud (a brockerage firm giving false information to investors who use the data to make investment decisions), falsifying records of a broker-dealer, conspiracy to defraud clients, and filing false tax returns (intentionally submitting a tax return with material false information).  The maximum potential sentences range from 70 to 200 years, plus $5 millions of dollars in fines on each charge.   

    The key witness against the five was Madoff’s chief finance officer, Frank DiPascali.  He previously pled guilty to fraud, perjury and tax evasion, and faces 125 years in jail.  He agreed to testify for the prosecutor in exchange for the possibility of a reduced sentence. He hopes the prosecutors will submit a letter to DiPascali’s sentencing judge explaining his cooperation and recommending a reduced sentence.  Defense lawyers, attempting to discredit DiPascali,  argued to the jury that he was desperate to avoid a lifelong prison term and wanted to please the prosecutors, so could not be believed.  Apparently the jury credited DiPascali's description of events.

    Two elements are necessary to prove all crimes: wrongful conduct and a criminal mental state.(typically this means acting intentionally), The evidence establishing the wrongdoing was strong.  The primary issue at the trial was the criminal mental state. The defendants claimed they were misled by Madoff and were unaware they were perpetuating a fraud. The prosecutor argued, “The notion that these defendants didn’t know the trading was fake is an absurdity.”  A juror commented that the claim of ignorance was “embarrassing”.  Said another, “The evidence was just overwhelming.”

    Sentencing will occur in July.  Over objection of the prosecutor, the five have been released pending sentencing. It is likely the judge will impose significant prison time.

    If you are ever requestied or directed by a boss to do something you know is illegal or unethical, decline to participate and then share your concerns with senior management or the government agency with  oversight authority of the business..  The Sarbanes-Oxley Act adopted in 2002 provides significant protections to fired whistleblowers entitling them to reinstatement to their job, back pay, restoration of benefits and more.  The whistleblower may also be entitled to 10-30% of the monetary sanctions the wrongdoer is ordered to pay.  

    For further information, read here: http://dealbook.nytimes.com/2014/03/24/5-former-madoff-employees-found-guilty-of-fraud/?_php=true&_type=blogs&_r=0


    1)    What should the five defendants have done long before now?

    2)     If one of the five had reported the wrongdoing, how much money would s/he be entitled to collect from Madoff?




  • The Fitbit Product Liability Suit


    When it was introduced, the Fitbit sleek fitness tracker jumped ahead of Nike and other companies offering wrist products that track physical activity and through a website allow users to record and track their records and progress online.  The Fitbit has the added benefit of measuring sleep patterns.  However, the round-the-clock wear of the device seems to have resulted in some problems.

    The customer complaints from customers about wrist rashes and blisters from wearing the wrist device are rolling into the company and consumer agencies.  A class-action suit has been filed in California, and the damages in the complaint include not only recovery for the injuries users have experienced but also a requirement that the company issue warnings to all current Fitbit users and on the packaging to future purchasers about the development of these skin conditions from use of the device.

    The case is a classic product liability – Restatement 402A – case.  There appears to be a defect in the product design or material that results in rashes and rubbing on wrists of users.  Katherine Rosman, “Fitbit Faces Lawsuit Over Recalled Wristband,” Wall Street Journal, March 20, 2014. That Fitbit did not know about the problem prior to sale of the product is not a defense under strict tort liability standards.  The standard for recovery is that the product is in a defective condition that makes ti dangerous for users.  A defective condition can arise through design, poor quality manufacture, or the failure to warn of known defects.  Assuming there is causation between the rashes and the wrist product of Fitbit, that defect standard is met and prior knowledge of a problem on the part of Fitbit is not required.  And if Fitbit was aware of the problems, but did not include warnings, then there is product liability for the failure to warn.

    Fitbit is now in the midst of a recall for the devices so that it can correct whatever it deems to be causing the skin problems.


    1.    Explain the basis of a product liability suit.

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    2.    Why is prior knowledge of the problem not an issue in strict product liability suits?


  • GM's Failure to Disclose the Cobalt Defects: Bankruptcy Fraud?

    GM Must Pay For Pre-bankruptcy Ignition... by wochit


    GM has a mess on its hands.  Oh, the product liability issues with the failed ignition problems in its Cobalts and other small cars is a large and expensive problem.  The company’s failure to tell the National Highway Traffic Safety Commission (NHTSA) will result in some kind of a fine.  GM need only loko at last week’s settlement by the government with Toyota for that company’s alleged failure to disclose problems with its cars to understand that one billion dollars are on the line.  But, there is another problem looming that brings us a fascinating intermingling of so many areas of law.  The FBI is now investigating GM for its failure to disclose in its bankruptcy filings the problems with the Cobalt and other cars.

     In the company’s Chapter 11 2009 bankruptcy restructuring, GM was split into two companies.  The old GM was given all the closed plants and liabilities from the company, including liabilities related to product suits by car owners.  The new GM was given immunity from liability for any product liability claims that were made prior to the 2009 bankruptcy.  However, one of the requirements for the deposit of the claims in the old corporation and the release of liability for the new corporation is that the bankruptcy filing must be complete.  That is, GM must disclose to the court all potential liabilities that it might have.  GM has already admitted to federal officials investigating the car safety defects that it was aware of the safety problems as early as 2001.  GM has also disclosed to NHTSA investigators that it explored fixes for the ignitions in 2004 and 2005, but took no action.  Danielle Ivory and Matt Apuzzo, “G.M.’s Bankruptcy Drawn Into Defect Inquiry,” New York Times,   March 22, 2014, p. B1.

     The withholding of material information by the debtor in a bankruptcy filing can result in the debts not disclosed or about which information was withheld not being discharged. The result in the GM case would be that any liabilities not disclosed prior to the old GM spin-off would remain with the new GM.  

     GM is cooperating with the FBI in the bankruptcy fraud investigation and has already turned over documents requested by the agency.  In addition to the NHTSA investigation into its actions related to the Cobalt ignition issues, GM is also facing congressional investigations as well as criminal investigations related to its delay in recalling the cars.  GM has already admitted that unnamed employees made the decision not to issue recalls in part because of cost issues. Jeff Bennett and Sharon Terlep, “GM. Regulator Face Pressures on Recall Decisions,” Wall Street Journal, March 23-24, 2014, p. B1.  The NHTSA Office of Inspector General is also investigating that agency to determine whether the agency followed its processes in handling consumer complaints related to the Cobalt. finally, GM has hired a law firm to conduct its own internal investigation because, as new GM CEO Mary Barra has said, “Something went wrong with our processes.”




    1.      What are the implications if a debtor withholds information in its Chapter 11 reorganization?

    2.     What is the effct of the admission to NHTSA in the bankruptcy fraud case? 

  • Sex Crimes; Liability of Bosses; Credibility of Accusers; Politics and Prosecutions; The Case of Brigadier General Sinclair


    Brigadier General Jeffrey A. Sinclair, a once rising star in the Army, faced numerous charges based on alleged sexual assault ( knowingly causing another person to engage in a sexual act by force or threats)  involving a female captain who worked for him. The allegations included that he twice forced her into oral sex, and threatened to kill her and her family if she disclosed his actions.  If convicted, he could have faced life in prison and permanent registration as a sex offender.  The charges also included “open and notorious sexual acts” in a parked car in Germany and on a hotel balcony in Tucson, and making derogatory comments about women.   He recently pled guilty to lesser charges.

    Sinclair was deputy commander of the 82nd Airborne Division, and of American forces in southern Afghanistan.  The complainant was a military intelligence officer.  They had an apparently consensual sexual relationship for three years. 

    The charges were reduced, in part because of discrepancies in the victim’s testimony, and in part because of political influence perceived by the judge.   Thus, charges of forcible sodomy  (using threats of harm to cause another person to engage in oral or anal sex ) and  wrongful sexual conduct were dismissed.   Brigidier General Sinclair, a married man throughout the affair,  pled guilty to adultery (sex by a married person with someone other than the spouse) , requesting explicit photographs from female Army officers, possessing pornography in a combat zone, and maltreatment, meaning that Sinclair treated the captain “in a manner which, when viewed objectively under all the circumstances, was unwarranted, unjustified and unnecessary and reasonably could have caused mental harm or suffering during the course of an ongoing inappropriate sexual relationship.”

    None of the reduced charges involve sexual assault and do not require the Brigadier General to register as a sex offender (a registry in which defendants convicted of specified sex crimes must report their residence and activities to law enforcement; the information is publicly accessible) .  The sentence requires that he forfeit $5,000 a month in pay for four months, and no jail time was imposed.  Further, he is permitted to remain in the military, although he is expected to retire imminently.

    The captain received immunity (exemption) from prosecution.  Immunity is sometimes extended by the prosecutor to secure the testimony of a necessary but complicity witness.

    Concerning issues that developed with her testimony, forensic analysis (scientific examination of evidence) indicated she had testified untruthfully at a hearing.  The testimony involved dates when she discovered and used an old iPhone that contained voicemail from Sinclair described as “very loving and tender.”  The prosecution’s proof in a case charging sexual assault is typically heavily dependent on the credibility of the accuser’s testimony.  If issues develop with the complainant’s credibility, that creates a major hurdle to a successful prosecution.   

    Another factor that led to the reduction of charges was a belief by the judge that the senior Army commander overseeing the case may have been motivated by political considerations.  Specifically, the military is under pressure from Congress and the public to demonstrate intolerance of sexual activity in its ranks. The judge opined this may have prompted the Army to overcharge the case.  

    As a result of the reduced charges, concern exists that other military victims of sexual misconduct will be deterred from reporting sexual misconduct.

    The case offers many lessons.  First, appropriately, rank does not exempt a person from accountability for misbehavior.  Second, bosses who threaten retaliation to secure sexual favors face legal consequences.  Third, when someone’s freedom is at stake, nothing short of the whole truth is required.  Fourth, Politics should have no role in the prosecution of a case.  Finally, criminal liability typically results in great regret.  The remorse is clear from the Brigadier General’s  apology, “ I squandered  a fortune of life’s blessings; blessings of family, work and friendship.”    

    For more information, click here: http://www.nytimes.com/2014/03/21/us/general-sinclair-is-sentenced.html?hpw&rref=us&_r=0


    What makes sexual harassment by a boss of a subordinate particularly troublesome?

    Why do you think the judge was lenient in the sentence?



  • Fraud and Trademark Counterfeiting; Online Sales of Wedding and Prom Kockoff Gowns


    Sale on the internet of counterfeit wedding gowns and prom dresses has become rampant. The companies that sell them download images of dresses from legitimate designers’ websites and use them on their own sites without permission.  Buyers are led to believe they are buying a designer dress with a cheaper price tag.  Instead, the companies sell knockoffs.  When the gown arrives, it often looks nothing like the picture but rather, like a cheap imitation. Buyers’ attempts to return the dress and get a refund are unavailing.  Sometimes the dress never even arrives, although full payment was made. 

    Lawsuits addressed at this situation have been brought by the American Bridal and Prom Industry Association (ABPIA).  Its members lose sales to the imposters.  The basis of the lawsuit is likely fraud.  This tort consists of the following elements: 1) defendant made an untruthful statement; 2) defendant knew when he made the statement that it was false; 3) defendant’s purpose in making the comment was to induce reliance by the plaintiff; 4) plaintiff did in fact reasonably rely (the victim is required to do some investigation into the legitimacy of the product, and not just blindly accept the seller’s representations); 5) plaintiff suffered a financial loss attributable to the fraud.

    An additional cause of action could be violation of a general business statute common to most states that prohibits deceptive business practices, which consist of unfair and misleading conduct while transacting business). Further, if the knockoff dresses contain the name of a designer who has no connection with the clothing item, the seller may be liable for the crime of trademark counterfeiting. This consists of offering for sale goods that bear an imitation of a trademark for the purpose of misleading buyers about the item's origin. 

     To date, the courts have sided with ABPIA and entered preliminary injunctions (a court order issued prior to trial that requires a defendant to do or refrain from doing something) against the knock-off retailers, A federal judge has ordered over 1,000 websites to cease and desist (hault) selling counterfeit   dresses and formal wear.  The judge also  froze their online payment accounts (disabled the ability to accept online  payments from customers)  such as by use of PayPal, and ordered the registrars of the website domains to disable the websites until further notice.

    Keep in mind that proms and weddings are major events in a girl’s life. When the knock-offs arrive, they often look like a cheap impostor rather than the designer dress the buyer thought she ordered.  This often leads to melt downs, lots of tears, and parents conceding to invest in a second dress, a considerable added expense.

    The mother of one girl who unknowingly ordered an imposter dress described the situation as follows, “My daughter looked online for a dress to save money, and she found a beautiful sea-foam green dress with gorgeous beading on the bodice on a website called dreamprom.com.  It’s the exact same image of the same dress as on the website of the legitimate designer, so she ordered it, saving more than $200.”  But the dress that was delivered was a “dramatic departure” from the designer gown.  It was baby-blue with plastic beading in an awkward pattern.  The skirt  was made of a mesh lining instead of fabric. The dress was delivered in a 10 by 12 inch envelope postmarked from overseas. The mother sought a refund but it never came.  Besides the loss of funds, the mother was forced to buy another dress for her daughter.

    ABPIA has founds 1000’s of other websites that are marketing and selling counterfeit  gowns.   Additional legal action will be pursued.

    Lawsuits are not the only method being utilized by ABPIA to stop the flow of bogus designer gowns.  The organization is in discussions with Google, Inc. seeking to persuade the search engine to bar offending dress companies from using Google’s Sponsored AdWords (links to websites that pay for placement next to Google search results, targeted to the topic of a search and geographical location of a searcher) and Sponsored Images (AdWords that include pictures) to generate traffic to the imitators’ websites. 

    Note: Fashion designs are not protected by copyright.  Therefore knockoffs do not constitute violations of the law.  So, for example, the store Forever 21, which sells look-alike dressers imitating those created by famous designers, are not guilty of any wrongdoing.  The defendant companies in the ABPIA lawsuit transgressed by misleading customers  to think their dresses were the ones made by the designer.

    For more information, see: http://www.abpia.org/buyer-beware-abpia-featured-on-good-morning-america/

    DISCUSSION QUESTION: How might a state attorney general be helpful in this situation?





  • Georgetown Law Grad Indicted for Accounting Fraud – Never Took an Accounting Course

    Zachary Warren graduated magna *** laude from Georgetown Law School.  He has held the plum position of a clerkship in the Federal sixth circuit. He has also been charged with felony fraud in a 114-count indictment, along with the chairman, the chief financial officer, and executive director of Dewey & LeBoeuf, once one of the world’s largest law firms, which declared bankruptcy in 2012.

    Mr. Warren, 29 years old, has never taken an accounting course.  Yet, he stands accused of what Manhattan’s District Attorney calls, “a massive effort to cook the books” during the last days of Dewey & LeBoeuf in a vain effort to save the firm as creditors closed in and cash flow was no more.

    Mr. Warren is free on $200,000 bail, Judge Gibbons, his employer at the Sixth Circuit, continues to employ him, and his job offer from the law firm of Williams & Connolly is still intact.  Mr. Warren thought he was helping in the DA’s investigation and was surprised to be indicted.  He has also cooperated with the SEC in its investigation into Dewey & LeBoeuf’s issuance of a bond offering based on allegedly false financial statements. Those who know him are stunned at the indictment. Matthew Goldstein, “4 Accused of Systemic Fraud That Sank Global Law Firm,” New York Times, March 7, 2014, p. A1.

    The indictment is not a pretty picture of lawyers, who were desperate to keep the firm going. In a 2008 e-mail included in the indictment, Joel Sanders, the former CFO of Dewey & LeBoeuf, wrote to Frank Canellas, the director of finance, “Can you find another clueless auditor?” They needed $50 million in income to meet loan covenants.   Mr. Sanders, Stephen DiCarmine (former executive director), Steven Davis (former chairman), and Mr. Warren (former clients relations manager (i.e., he collected bills due from clients)) have been charged with systemic fraud because of an alleged four-year scheme to manipulate Dewey & LeBoeuf's books to keep the firm going under during the financial crisis. Their e-mails also spoke of "fake income" and "accounting tricks."   Mr. Canella did respond to Mr. Sanders, "That's the plan.  Worked perfect this year." 

    Other phrases that appear in the e-mails among the indicted:  “Accounting tricks,” “fake income,” and “cooking the books.” FBI agents called the e-mails and acts of the partner/managers “brazen.” In one e-mail to Mr. Warren quoted in the indictment, an employee who is not named wrote, “Great job dude! We kicked ass!” in his joy over finding a way to overcome an income shortfall of $50 million.  Mr. Warren responded, "Hey man, I don't know where you come up with some of this stuff, but you saved the day. It's been a rough year but it's been damn good. Nice work dude. Let's get paid!” Indictment. Jennifer Smith and Ashby Jones, “Fallen Law Firm’s Leaders Are Indicted,” Wall Street Journal, March 7, 2014, p. B1.

    Mr. Warren’s lawyer calls his indictment “a travesty,” and that his client was not involved in any accounting fraud.  However, Mr. Warren has been in near constant communications with investigators from both the local and federal offices.  He maintains that he was not told that he was a target.  Lawyers for the government agencies indicate that they advised him to seek legal counsel and that he was in jeopardy. James B. Stewart, “A Dragnet at Dewey & LeBoeuf Snares a Minnow,” New York Times, March 13, 2014, p. B1.

    Criminal defense lawyers are abuzz about Mr. Warren’s indictment because they believe the lack of warnings and counsel were a violation of his civil liberties.  The lessons?  No matter what your job at a company, if prosecutors want to ask you questions, seek legal help first!

    Discussion Starters

    1.      What do the criminal charges involve?

    2.     How do you think Mr. Warren might have been involved? 

  • Defamation Case Against Nancy Grace; Court Denies Motion to Dismiss


    Nancy Grace is the star of The Nancy Grace Show which airs on the TV network  HLN.  The show covers legal news and typically concentrates on one or two cases per episode.  Grace and her producers are being sued for libel (defamation that is written or broadcast on TV or radio)  based on a comment made on the air about Michael C. Skakel.  He is the Kennedy cousin who was convicted in 2002 of the 1975 murder of his teen-age girlfriend, Martha Moxley. 

    The offending comments occurred during an interview by Grace of Beth Karas, a legal expert for cable and network news programming. Both Grace and Karas have regularly reported on the Skakel case and its developments, and so are recognized as knowledgeable about the case.. The timing of the interview coincided with a sentence review hearing, a procedure at which Skakel argued that his sentence was inappropriate.He was an inmate then, hoping for parole.  On the air, Grace asked Karas for the “crux” of the facts of the case, which Karas described. Then Grace asked, “Isn’t it true that the Kennedy cousin [Skakel] apparently was up in a tree masturbating trying to look into Moxley’s bedroom window?”  Karas responded, “Well his DNA was found yes . . . up in the tree.”  Grace responded, “Beth, I love the way you put it so delicately, ‘his DNA,’ you know, it was sperm, there I said it, and so he places himself there up in a tree masturbating looking down at her window, and whoa, she turns up dead within a couple of hours.”  Karas then confirmed that she meant sperm.

    The exchange was widely published on various broadcast and social media outlets and on YouTube, plus the written transcript of the interview was re-aired on the HLNtv.com website. 

    Skakel has always maintained his innocence.  When convicted, he was sentenced to 20 years in prison. His conviction was overturned in 2013 and he has been free on bail pending an appeal by the prosecution. 

    Grace and HLN moved to dismiss the complaint on the ground that the comments were but a “minor inaccuracy”, and the defendant did not suffer damages to reputation, the injury associated with defamation, because his reputation was already ruined by the murder conviction.

    Skakel argued the damage to his reputation could have far-reaching effects, including negatively impacting the Parole Board and his attempt to salvage his reputation, and also may have tainted the jury pool for a possible new trial.

    The definition of defamation in Connecticut, where this case is being heard, is a published “communication that tends to harm the reputation of another so as to lower him in the estimation of the community.”  The court said not only is truth a complete defense, but so too is  “substantial truth.”  This means if the gist of the alleged defamation is true, minor errors that do not change a reader’s perception of the statement do not support a defamation case.  Grace and HLN claimed the statements were substantially true.

    The court disagreed.  The judge stated, “Where no DNA evidence was found, a statement to the contrary is not just a minor inaccuracy . . .Grace’s and Karas’ colloquy directly contradicts the actual evidence presented at trial.. . . The representation of two celebrated attorneys who attended Skakel’s trial  that Skakel’s DNA was found near the crime scene would tend to solidify and validate Mr. Skakel’s guilt in the minds” of many.

    The court thus denied defendant’s motion to dismiss.  As a result, the case will either  proceed to a civil trial or be settled.

    For more information, see Skakel v. Grace, et all, 2014 WL 902675 (Conn., 3/7/14). 


    In what way does ethics play a role in this case?


    DNA is a substance inhuman cells found in all secretions including sweat, saliva, blood urine and semen. Each person’s DNA is unique to him or her.  Thus, DNA found at the scene of a crime is a powerful tool to assist in identifying the perpetrator or exonerating a suspect because the DNA either does or does not match the suspect.

  • Jumping Ship After Your Employer Springs For Your MBA

    Companies often offer promising young employees a deal that is tough to refuse.  Their employers will pay for their MBA – always tuition, and often tuition plus living expenses – if the employee will return to work for at least two years after completing the degree.  If the beneficiary of the tuition largess does not return to work, the money has to be repaid to the employer, plus interest. Melissa Korn, “M.B.A.s Sour on Strings-Attached Tuition,” Wall Street Journal, March 6, 2014, p. B6.

    The contract terms are interesting, because there is a loophole.  Many MBAs are reaching the conclusion that they can go with another firm after graduation, make more money, and repay the money, easily, because the offers they receive from other companies include salaries that make repayment of the loans painless. Some MBAs go with another company and take out loans to repay their now-former employers the masters-education advance. One Harvard MBA noted, “The choice of what you do after business school should be based on what you want to do long term, rather than short-term economics.”

    And some who do return to their employers indicate that they feel “trapped,” because “It feels like you owe them.” They indicate that being debt-free does not mean that they are free from obligations. Still other newly minted MBAs who are under employer obligations say that, “even unemployment is better than doing something that you know you don’t love.”  

    As for the law, the contract obligates the employees to return, but does provide an out -- a damages clause -- in the event that they do not return. With the contract providing the way for an "out," it is not surprising that some would feel the better option is to pay what the employer felt was a prohibitive amount, but, really, turns out to be surmountable by those who are attractive to other employers. 


    1.      Do the contracts for these tuition arrangements cover the full intent of the parties’ agreement?


    2.     Are there ethical issues in not returning to work for your employer?  In working for another company?  In working for a competitor?  

  • Whistleblower Controller at Playboy Awarded $6 Million by Jury


    A former controller of Playboy Enterprises who became a whistleblower was terminated in 2012.  Catherine Zulfer sued for  retaliatory discharge and age discrimination.  A jury just awarded her a $6 million judgment.

    In 2010, Zulfer was directed by the chief financial officer (CFO), apparently with approval of Playboy’s chief executive officer,  to accrue bonuses for top executives worth $1 million.  She refused because the board of directors had not approved the extra pay, and the company was facing significant losses.    She also reported the attempted swindle to the board.  Thereafter, the CFO took action to undercut her.   She was excluded from meetings and discussions about matters for which she was responsible, and information crucial for her job was withheld.  Further, 15 corporate accounting positions in her division were eliminated, leaving the duties of those positions unaddressed . Then the company adopted an alleged cost-cutting plan of laying off employees who had worked at Playboy for more than ten years.  She had been there 30.  When she was terminated, the CFO attempted to deny her severance pay.

    The jury determined Zulfer was fired in violation of federal whistleblower protections provided by Sarbanes-Oxley Act, also titled the Corporate and Auditing Accountability and Responsibility Act. It was adopted in 2002 in the wake of several large corporate financial scandals in which senior management misdirected to themselves large amounts of corporate money.  The Act shields  from adverse employment actions employees of publicly traded companies who whistleblow.  This means - inform corporate management or government regulatory agencies of the commission by corporate employees of fraud or violations of regulations of the Securities and Exchange Commission. The Act prohibits not only retaliatory discharge but also changes to the whistleblower’s terms and conditions of employment including reprimands, demotions, blacklisting and other forms of discrimination. 

    The act authorizes the following remedies for successful plaintiffs: reinstatement to their job; back pay with interest; restoration of seniority, sick leave and other benefits; reimbursement for attorney’s fees; and damages for emotional distress and loss of professional reputation.   Zulfer’s $6 million verdict against Playboy  is believed to be the largest award to date under Sarbanes-Oxley Act. 

    Other noteworthy provisions of  Sarbanes-Oxley Act include a requirement that top management individually certify the accuracy of corporate financial records, and a significant increase in the penalties for fraudulent financial activities.

    The age discrimination claim was based on Playboy’s plan of terminating people who had been with the company for more than ten years.  The jury viewed this as unfair treatment against older employees. The Age Discrimination in Employment Act , a federal law, protects workers who are age 40 and over.  Since Zulfer had worked for the company for 30 years, she was in the protected class.   Some states have laws that also protect employees younger than 40 as well.


    What goal is Congress seeking to achieve by including in Sarbanes Oxley Act compensation for whistleblowers who are subject to retaliation? 






  • Federal Judge Says Lawyer Who Sued Chevron for Ecuador Oil Spill "Perverted" Justice: Judge Denies Execution of Judgment Against Chevron



    In a 485-page opinion, a federal judge has ruled against attorney, Steven Donziger, and in favor of Chevron in its efforts to have a $9.5 billion Ecuadorian trial verdict entered against the company. Mr. Donziger has been involved in litigation on behalf of Ecuadorian farmers against Chevron for 20 years based on alleged pollution of the Ecuadorian Amazon jungle.  The Ecuadorian courts issued the $9.5 billion judgment, but Chevron has no assets in Ecuador.  In order to collect the judgment, Mr. Donziger has filed judgment execution proceedings in courts all around the world, including the United States.

    A Harvard Law School grad, Mr. Donziger, engaged in some questionable tactics in the original trial of the case in Ecuador.  He has admitted that he paid an expert witness with whom he had a personal relationship and did not disclose that conflict.  The star witness for Mr. Donziger in the case was former Ecuadorean judge, Alberto Guerra, who testified for Chevron in the U.S. judgment proceedings that resulted in the court’s decision in Chevron’s favor. Mr. Guerra testified that he was paid $1,000 per month (and offered a share of the verdict) to ghostwrite favorable opinions for the presiding Ecuadorian judge for Mr. Donziger’s plaintiffs. The presiding judge in the Ecuador case, Nicholas Zambrano, was offered $500,000 in the pay-out if he would rule against Chevron in the case. Clifford Krauss, “Lawyer Concedes Mistakes in Chevron Case,” New York Times, November 14, 2013. p. B1.

    In his decision,  Chevron Corp. v. Donziger, --- F.Supp.2d ----, 2014 WL 815553 (S.D.N.Y. 2014), Judge Lewis Kaplan began with the following introduction:

    This case is extraordinary. The facts are many and sometimes complex. They include things that normally come only out of Hollywood—coded emails among Donziger and his colleagues describing their private interactions with and machinations directed at judges and a court appointed expert, their payments to a supposedly neutral expert out of a secret account, a lawyer who invited a film crew to innumerable private strategy meetings and even to ex parte meetings with judges, an Ecuadorian judge who claims to have written the multibillion dollar decision but who was so inexperienced and uncomfortable with civil cases that he had someone else (a former judge who had been removed from the bench) draft some civil decisions for him, an 18–year old typist who supposedly did Internet research in American, English, and French law for the same judge, who knew only Spanish, and much more.

    Judge Kaplan refused to enforce the judgment because it was obtained fraudulently.  He also ruled that Mr. Donziger was not entitled to any of the proceeds (he was to receive $600 million under a contingency arrangement) recovered in the judgment because he “fabricated evidence,” “went over to the dark side,”  and failed to offer “any innocent explanation of these events, either in written testimony or on the witness stand.”

    The effect of the finding of fraud on the judgment by a credible court and judge in the United Statesis that courts in other countries are unlikely to honor the judgment to allow for collection of the original Ecuadorian finding. Another possible effect of the 6-week trial and finding of fraud is that Mr. Donziger and others could be prosecuted for violations of the FCPA.  Jennifer Smith and Daniel Gilbert, "Judge Rips Lawyer, Boosting Chevron," Wall Street Journal, March 5, 2014, p. B1. 

    Discussion Starters

    1.      What is the impact of the judge’s ruling on the ability of Mr. Donziger to collect the $9.5 billion judgment that he won against Chevron in Ecuador?


    2.     Explain the fraud the court concluded that Mr. Donziger committed. 

  • Near-Drowning in Spacewalk: NASA and Water in the Spacesuit Helmet

    In July 2013, NASA ended a spacewalk by two astronauts after only 90 minutes (although scheduled to go on for  for 60-70 hours.  because Luca Parmitano reported that cooling water had leaked into his helmet and was covering his ears, nose, and mouth.

    The Mishap Investigation Board (MIB) began its engineering inquiry and in a report released February 26, 2014, the conclusions were as follows:

    1.      The suit had leaked before, but the leak was not reported.

    2.     The engineering team had not really found a root cause of the problem when the suit first leaked.

    3.     The decision was made to go ahead with the spacewalk in the interest of “getting the job done” without regard for the safety of the astronauts involved.

    In its press release on the MIB report, NASA offered the following concern from tis chief administrator:

    “I am especially concerned about cultural factors that may have contributed to the event.  In our exuberance to get the job done, we may have allowed ourselves to accept the commonly accepted causes for small anomalies.  We have a responsibility not to move on from any abnormal situation until we understand it fully or have suitable mitigations to prevent it happening again.”The incident was quite serious with Parmitano blinded by the water and relying on memory to get back to the airlock cabin and then be pulled in by the astronauts on board the space station. You can view another video of the accident here.  

    Although the incident involves a government agency, it demonstrates a psychology that can infiltrate a culture and result in harm to employees and others.  The psychology is that whatever went wrong:

    1.      That this is, “Just a one-time thing.”

    2.     There’s no need to delay work because of the suit issues because the problem does not seem to be serious

    3.     The consequences for a set-back in the work at the international space station could be less funding or no funding, or in the original spacesuit walk, getting the repairs to the building done. .

    Culture often trumps rules as incentive award go to those who take higher risks. 

    If there had been an injury or death as a result of the suit’s problems, there could liability for administrators for failure to take action when there were no adequate steps taken to ensure that the issue did not happen again.

    Discussion Starters

    1.      Would the manufacturer of the suit have any recourse for damages due to the faulty suit?

    2.     Could liability be imposed on NASA officials for the failure to take action despite knowledge of a problem if there had been an injury or death?  

  • Manufacturers of Wipes Sued for Breach of Express Warranty; Product not Flushable



    Moistened wipes are used by many to clean babies, bodies, cars and most other things.  They have become a very popular product, evidenced by annual sales of $6 billion and growing 5-6% annually. The product’s appeal is its enhancement of sanitation and removal of germs

     Most of the wipes are promoted as “flushable”, suggesting they are safe to discard in the toilet as a place to begin their journey as they, like all other waste, travel through household pipes, sewer pumps and arrive at water treatment plants.. Other descriptors used by manufacturers include “sewer-and-septic-safe” and “biodegradable”.  However, a recent class action lawsuit  (a lawsuit with many plaintiffs, all of whom were injured by the same cause) challenges this claim.  The defendants are two manufacturers of wipes including Cottonelle and Kirkland which makes wipes for Costco Wholesale Corporation, a membership-only warehouse club. 

    The case asserts that the product does not break down in water as advertised.  Instead, the named plaintiff  (the person whose name is identified in the case caption of a class action)  complained of major plumbing and clogging issues caused by wipes, necessitating $600  worth of plumbing services to clear pipes in his home. They were full of undisintegrated wipes which caused a blockage and prevented water from flowing through.  Likewise, the NYC Department of Environmental Protection (DEP) noted that the wipes were made of strong fibers that did not readily deteriorate in water, causing problems with the city’s sewer systems. The municipality spends $18 million a year to collect and discard debris caught in machinery at its 14 waste water treatment plants, most of which is “flushable” wipes.  The city recommends people throw the wipes in a garbage can and not in the toilet.  London, among other cities, too has experienced the same problem, which nearly paralyzed that city’s sewer system last summer.  So much for the lyrics, “I love Paris in the summer. . . . “

    In comparison, toilet paper disintegrates in water in about one minute.

    The lawsuit claims that the representations regarding the wipes being flushable are false and misleading. Plaintiffs seek damages of more than $5 million. The class consists of approximately 100 people.  The complaint claims consumers worldwide have been forced to endure clogged pipes, flooding, jammed sewers, and problems with septic tanks, all due to using so-called “flushable” wipes.

    The cause of action asserted in the lawsuit is likely breach of an express warranty. An express warranty is a representation made by a seller of goods concerning the quality, condition, description or performance potential of a product. Breach means violation, or failing to perform or meet expectations.

     An express warranty can be made orally or in writing in an advertisement, brochure, or promotional materials on a product’s packaging or elsewhere. The terms “flushable, biodegradable or sewer-safe”, when used on packaging or in ads, constitute a description of the wipes and thereby create an express warranty that the cleaning devices will rapidly dissolve in water. Since they fell short, the warranty is breached. . 

    For an express warranty to arise, the description must have been part of the basis of the bargain, meaning part of what induced the purchaser to buy.  In today’s world many people are concerned about the environment and are willing to adjust their conduct to avoid damaging our physical world.  It is fair to anticipate that “flushable” and like descriptions were an enticement to many purchasers, thus satisfying the basis of the bargain element.  

    Some terms used to describe consumer products have a specific definition.  Anyone using the term must comply with its legal meaning.  Thus for example, the word “organic” to define food has a legal definition – the food must be produced in a way that complies with standards set by national governments and international organic industry trade organizations.  There is as yet no recognized legal definition of “flushables.”   Industry representatives plan to meet later this year to develop a proposed definition. In the meantime, the word's common meaning when used in normal parlance – that the wipes will dissolve quickly in water – constitutes the warranty.


    What is the purpose of the requirement of basis of the bargain in a lawsuit for breach of express warranty?



  • Sports Bar Settles Lawsuit for Nonpayment of Minimum Wage and Overtime, Tip Pool Violations and More


    A  popular sports bar chain in Philadelphia and New Jersey has settled a back wage claim brought by the Department of Labor (DOL).  Chickie’s and Pete’s has nine sports bars.  Servers and bartenders alleged that the owners violated the Fair Labor Standards Act  (FLSA), also known as the Wage and Hours Law.  That statute mandates a minimum hourly wage, and extra pay for workers whose hours exceed forty in a week.  The DOL determined that the chain illegally underpaid its 1,159  workers and illegally took a percentage of tip pools, a percentage of tips collected from tipped employees that is divided among a group of specified employees. The money for the pool is typically collected at the end of each shift.

    Minimum Wage

    Under  federal law, the current minimum wage is $7.25.  States can set a higher but not lower rate.  An exception to minimum wage exists for tipped employees (workers who regularly receive tips) such as restaurant servers.  Eateries need only pay them $2.13 an hour provided customers’ tips bridge the gap to $7.25.  If the tips fall short of that figure, the restaurant  must make up the difference. The sports bars paid their workers a flat $15/shift which was often insufficient to cover the minimum tipped wage of $2.13/hour.

    Overtime Pay

    Overtime pay laws require that employers pay employees “time and a half” which means a worker’s hourly wage plus half again, for every hour worked in excess of 40 during a week.

    Tip Pools

    Concerning splitting tip pools, federal law prohibits employers and managers from receiving any part of the pool. Yet the owner of Chickie’s and Pete’s kept approximately 60% (60%!!). 

    Payment for Training and Uniforms

    The DOL found other violations including failure to pay workers while attending  mandatory meetings for training and other job-related matters, and requiring employees to pay for their uniforms. The FLSA requires employers to pay employees for time spent in attendance at required training, such as orientation or sexual harassment training. Concerning uniforms, the law permits employers to deduct from employees’ pay the cost of supplying and cleaning uniforms provided employees’ wages after the deduction do not fall below minimum wage.   Since the sports bar chain violated the minimum wage law and deducted costs for uniforms, the business violated the FLSA.

    Ignorance of the Law Is Not A Defense

    The owner blamed his errors on the complexity of the laws surrounding payment of tipped workers.  This, of course, is not a good defense. If business owners or managers do not understand any relevant laws, it is their responsibility to hire a lawyer to advise them.   Ignorance of the law is not a defense!


    To settle the matter, Chickie’s and Pete’s agreed to pay $6.8 million in back wages and a $50,000 civil money penalty.  Additionally, the company agreed to permit outside auditors to monitor compliance, and to train all employees about their rights under the Fair Labor Standards Act and tip pools.  Finally, the owner agreed to write an article for a restaurant trade publication about an employer’s obligations under  the federal law.  

    The FLSA authorizes numerous avenues for employees who are underpaid to seek redress.  In addition to a lawsuit by the DOL, another of the options is for individual employees to file a lawsuit for back pay (money owed but not paid by an employer to an employee for services rendered) plus an equal amount as liquidated damages (a resolved amount), plus attorney’s fees and court costs.  In addition to the DOL case against Chickie’s and Pete’s, 90 current and former workers sued as well, resulting in a settlement of  $1.68 million.

     Pending Minimum Wage Legislation

    Some members of Congress, together with President Obama have proposed legislation to raise minimum wage to $10.10/hour, and tipped minimum wage to $7.10/hour.


    1) Why, as as a component of the remedy in this case, is the employer required to train employees about their rights under the FLSA?

    2) What are the arguments for and against increasing minimum wage?


  • The Tuna Battle Over 100% American: Government Contracts at Stake


    The top three tuna sellers in the United States are all foreign-owned companies, Chicken of the Sea, Bumble Bee, and StarKist.  However, the battle between them centers on which tuna is the most American.  Under U.S. Department of Agriculture (USDA) requirements for winning contracts for the school lunch programs, the tuna must be 100% U.S. produced. James H. Hagerty, “Now Packed With Drama: Cans of Tuna Fish,” Wall Street Journal, February 18, 2014, p. B1. Presently, StarKist is the only tuna qualified for the school lunch programs.

    As a result, Chicken of the Sea and Bumble Bee are working to have the rules changed so that they qualify.  In order to persuade regulators to make the change, the companies are staging a public relations battle over business practices.  For example, StarKist cleans its tuna in American Samoa, something its competitors say is not as good as having canning facilities in the United States, something that Chicken of the Sea and Bumble Bee can claim.   But, StarKist and Chicken of the Sea point to the death of a worker in an industrial pressure cooker at a Bumble Bee plant in California just 16 months ago.  And Bumble Bee and StarKist point to child labor issues at Chicken of the Sea’s plants in Thailand.  And other arguments focus on minimum wages at the factories as well as StarKist being cited for unsanitary conditions at its plants.  StarKist pays between $4.76 and $10 per hour to its workers in American Samoa, but Chicken of the Sea psy $12 per hour to its workers in Georgia, and Bumble Bee pays $18 per hour to its workers in California. And most workers at StarKist’s American Samoa plant are citizens of Samoa, not the United States.  Whereas, all of Bumble Bee’s and Chicken of the Sea’s workers are U.S. citizens.

    The goal of the public relations ploys is to get officials at the USDA to reconsider the 100% American rule and realize that there are other factors at play, thus causing the reversal of the rule. Bumble Bee has proposed reducing the requirement to 85%, thereby allowing a better look at the behaviors of all of the companies.

    All three CEOs have written to the agency asking that the 100% American rule be revised.  The agency would have to open a rulemaking proceeding and allow comments, not just from the tuna producers, but the public, schools, parents, environmentalists, and labor groups. The controversy would escalate with so many differing views and positions.  The USDA has not yet responded to the pleas to change the rule. And StarKist has a new label with Charlie the Tuna carrying a U.S. flag.  

    Discussion Starters

    1.      Explain the arguments for changing the 100% rule.


    2.     Describe how the competitors are undertaking a public relations battle. 

  • Killer Whales, Ethics, Sea World, & A Government Investigator


    The documentary “Blackfish” focuses on the death of SeaWorld trainer, Dawn Brancheau, who was killed by an orca whale named Tilikum.  “Blackfish” was featured at the Sundance Film Festival in 2013 and went on to theaters and then CNN and Netflix. The film’s message is that killer whales should not be used for entertainment purposes, and SeaWorld has been the target of many groups that have been motivated by the film.

    However, SeaWorld filed a complaint with the Department of Labor (DOL) because it discovered that the DOL employee in charge of the 2010 Brancheau investigation alleging that the employee, Laura A. Padgett, of leaking confidential documents to the film makers and of having close relationships with animal rights activities.  The complaint contains copies of post Ms. Padgett made on social media cheering on the activists and the film.  For example, one post on her Facebook site linked to a story, “’Blackfish’ on the move in Europe.” and added her comment, “Wow – take that Sea World!!!!  They’ve got to be nervous now.”  The complaint contains photos of Ms. Pafgett with the film’s producers at Sundance and other film events, and also notes that Ms. Padgett attended both the debut of the film at Sundance and its New York premiere when it went to the box office. The complaint cites the provisions of the department’s ethical code that prohibits employees from using their position to benefit those with whom they are privately affiliated or to imply an endorsement for a particular work, activity, or event. Michael Cieply, “SeaWorld Questions Ethics of ‘Blackfish’ Investigator,” New York Times, February 28, 2014, p. B1

    The film’s producers indicate that Ms. Padgett’s attendance was simply to see how her agency was depicted in the film.

    The legal tussles between DOL and SeaWorld have been ongoing. Following the trainer’s death, the sheriff’s office, which conducted its investigation of the death, found a tape that included portions of the fatal attack.  The DOL obtained the tape for use in its investigation and a Freedom of Information Act (FOIA) request to make the tapes available for the public was opposed by Ms. Brancheau’s family as well as by SeaWorld.  Brancheau v. Secretary of Labor, 2012 WL 1072227 (M.D. Fla. 2012).  SeaWorld intervened to have the tape declared private commercial property that could not be revealed under FOIA.  The court found that there was no private right of action for such copyright claims and that because DOL had not released the tape, the court could not take jurisdiction under a copyright claim. held that restricted interaction between the trainers and the orcas.  With regard to the family, the court found that the death scene materials were not protected under any FOIA statutes and were not “records” for purposes of applying the Privacy Act to prevent release. Brancheau v. Secretary of Labor, 2011 WL 4105047 (M.D. Fla. 2011).

    A final case, that is currently under appeal, deals with DOL’s limitations imposed on SeaWorld for interaction between trainers and orcas. That sanction is under review by the DC circuit court.  Solis v. Sea World of Florida, LLC, 2013 WL 1365763 (M.D. Fla. 2013).

    The Department of Labor will review the current complaint – and depending on its findings, SeaWorld will have the right of appeal to the federal circuit court for D.C. – its third run to the courts in the case. Meanwhile, Ms. Brancheau's family has spoken out indicating that she never believed that the animals were treated cruelly. 


    1.      Review what happened with the tapes, the FOIA, and the Privacy Act.


    2.     Explain the right to challenge an administrative agency and the basis for that challenge here.