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It’s Not Easy Being Green: Bringing Real Life to the Undergraduate Legal Environment of Business Classroom Tanya M. Marcumn and Sandra J. Perrynn
It’s not easy being green. –Kermit the Frog.1
I. INTRODUCTIONFENGAGING STUDENTS
In the Legal Environment of Business course in a traditional undergrad-
uate business curriculum, students are expected to acquire knowledge
about many areas of the law and the application of law to business, society,
and the international marketplace. Current concepts in undergraduate
business education, such as ethics and sustainability, must also be included
in our classrooms. Some texts highlight issues with landmark cases or fea-
ture articles about businesses that have experienced high-profile legal and/
or ethical dilemmas. Using high-profile cases and newsworthy business
situations are useful in stimulating discussions. However, professors often
struggle with keeping students engaged while in the classroom. Most of
our students are of Generation Y or the Millennial Generation, young
adults who expect to be entertained in the classroom. Students often find it
difficult to relate to some of the traditional cases used in the textbooks to
illustrate the legal principles relevant to their studies and the underlying
curriculum. Real-world examples in the classroom have the best pedagog-
ical value because of their appeal to traditional college students.2
r 2010 The Authors Journal compilation r 2010 Academy of Legal Studies in Business
81
Journal of Legal Studies Education Volume 27, Issue 1, 81–104, Winter/Spring 2010
nAssistant Professor of Law, Bradley University.
nnProfessor of Law, Bradley University.
1JIM HENSON, IT’S NOT EASY BEING GREEN: AND OTHER THINGS TO CONSIDER (2005).
2See John D. Donnell, The Businessman and the Business Law Curriculum, 6 AM. BUS. L.J. 451 (1968), which basically made this point as far back as 1968.
TerraCycle, Inc. is a business that can portray many of the legal
principles taught in a Legal Environment of Business course, and this
business is interesting to students. This business and its actual litigation
with a competitor, coupled with hypothetical legal issues faced by typical
businesses, can be used as a basis for discussion for the entire semester to
illustrate many of the principles of a typical Legal Environment of Business
course. Although this semester-long case study focused on this particular
start-up business, any business of interest to students can be used.
II. THE BUSINESS: TERRACYCLE, INC.
TerraCycle, Inc. is a relatively new start-up business focusing on sustain-
ability and being green. Being green can be defined as having a positive
environmental attribute or objective3 and is currently a popular marketing
claim.4 Students are conscious of their carbon footprints and those of the
businesses around them. Empirical research shows that it pays to be
green.5
Two Princeton University college students started TerraCycle, Inc., a
socially responsible company that intends to make a profit while minimiz-
ing the waste of others. According to cofounder Tom Szaky, ‘‘we make the
world’s first product where literally every part of it is made from waste.
Our contents are garbage, and we package it directly in garbage.’’6
TerraCycle’s main product is liquefied organic plant food bottled di-
rectly in used plastic soda bottles. This product uses worms to break down
organic waste. This process is called vermicomposting and uses red wiggler
worms to produce TerraCycle’s main ingredient in their garden products,
3Businessdictionary.com, http://www.businessdictionary.com/definition/green.html (last vis- ited June 2, 2009).
4According to the Federal Trade Commission and the Environmental Protection Agency, Sorting Out ‘Green’ Advertising Claims, April 1999, environmental marketing claims must not mislead customers. Jointly, these two federal government agencies have issued guidelines for customers, Part 260, Guides for the Use of Environmental Marketing Claims, http://www.ftc.gov/ bcp/grnrule/guides980427.htm (last visited May 8, 2009).
5Stuart Hart & Guatam Ahuja, Does it Pay to Be Green? An Empirical Examination of the Rela- tionship between Emission Reduction and Firm Performance, 5 BUS. STRATEGY & THE ENV’T 30 (1996).
6Tom Szaky speaking on video embedded in their Web site at http://www.terracycle.net/ story.htm (last visited Mar. 29, 2009).
82 Vol. 27 / The Journal of Legal Studies Education
worm castings, better known as worm waste. The worm castings are
steeped in water to make ‘‘worm tea’’ or liquefied organic plant food.
The worm tea is then packaged in used plastic bottles and sold as fertilizer
for home use by organic gardeners. TerraCycle collects the used plastic
bottles from schools and nonprofit organizations across the United States.
These organizations earn money as a fundraiser collecting the bottles for
TerraCycle. Since its inception, TerraCycle has increased its product line.
The media awareness of TerraCycle began when TerraCycle was in-
volved in a lawsuit. OMS Investments, Inc. and The Scotts Company
LLC,7 known for its Miracle Gro fertilizer products, filed a lawsuit in fed-
eral district court in New Jersey against TerraCycle on March 7, 2007.8
TerraCycle, still in its infancy, was forced to defend its business practices.
TerraCycle used a unique media strategy to elicit media and public sym-
pathy by writing a blog on the Internet. This blog told TerraCycle’s story.
Of course, the use of a blog is something with which our modern and
technologically savvy students are familiar, and they can relate to this com-
pany. Using active learning in the classroom and TerraCycle as a business
example, business law professors can keep students engaged and cover all
the required legal topics in the Legal Environment of Business course.
Recently, TerraCycle was followed by the National Geographic’s television show, Garbage Moguls.9
III. CLASSROOM PEDAGOGY: ACTIVE LEARNING
Over two decades ago, two educational scholars developed the Seven Prin- ciples for Good Practice in Undergraduate Education10 in an attempt to improve
7The company’s Web site can be found at http://www.scotts.com/smg/ (last visited Mar. 29, 2009).
8An opinion on a motion to dismiss in the case can be found at http://www.websupp.org/data/ DNJ/3:07-cv-01064-52-DNJ.pdf (last visited Mar. 29, 2009).
9According to the Web site for National Geographic, ‘‘Recycling gets a makeover with a quirky group of young ‘eco-capitalists’ at TerraCycle, Inc.’’ Melissa Kennedy, producer/director, Garbage Moguls, Apr. 22, 2009. See http://channel.nationalgeographic.com/episode/garbage- moguls-4314/Overview (last visited May 10, 2009).
10Arthur W. Chickering & Zelda F. Gamson, Seven Principles for Good Practice in Undergraduate Education, AM. ASSOC. HEALTH ED. BULL., Mar. 1987, at 3–7. See also Arthur W. Chickering & Zelda F. Gamson, Applying the Seven Principles for Good Practice in Undergraduate Education, in NEW DIRECTIONS FOR TEACHING AND LEARNING (1991).
2010 / It’s Not Easy Being Green 83
the classroom experience for students through educating instructors on bet-
ter classroom techniques. These seven principles indicate that good practice
encourages student–faculty contact, cooperation among students, active
learning, gives prompt feedback, emphasizes time on task, communicates
high expectations, and respects diverse talents and ways of learning.11
College students today, commonly known as Generation Y or the
Millennials,12 expect much more than the traditional lecture during their
class periods. These students were born when various forms of technology
were readily available to them from an early age. Generation Y students
have been digitally connected 24/7 to a globalized world. Their socializa-
tion has been enhanced by the continuous use of technology.13 These
Generation Y students Google, blog, tweet, text, watch or listen to pod-
casts, socially network, and use the Internet for information and enjoy-
ment. They expect instant gratification.14
The instructor must bring entertainment to the classroom in order to
keep their attention. Students that are involved in highly active and inter-
active experiential learning are more likely to be able to apply the legal
concepts to factual situations. Instructors should use technology in the
classroom to engage the students in active learning. Students must do
something in the classroom other than merely passively listening to an in-
structor’s lecture. Students must read, listen, write, discuss, and engage in
higher-order analytical tasks to solve problems.15 One method of active
learning is to provide the students with small-group exercises in which
groups of students apply legal concepts from the course to real-life situ-
ations. These groups provide for small learning communities for the stu-
dents within the classroom.
According to the Association to Advance Collegiate Schools of Busi-
ness (AACSB) International Eligibility Procedures and Accreditation Standards
11Id.
12Joan Catherine Bohl, Generations X and Y in Law School: Practical Strategies for Teaching the ‘‘MTV/GOOGLE’’ Generation, 54 LOY. L. REV. 775 (2008) (stating that individuals born between 1977 and 2003 are members of Generation Y, also known as the Millennial Generation or simply ‘‘Millennials’’).
13Susan P. Eisner, Managing Generation Y, 70(4) SAM ADVANCED MGMT. J. 4 (Autumn 2005).
14See supra note 10.
15See Charles Bonwell & James Eison, Active Learning: Creating Excitement in the Classroom, ERIC DIGEST (Sept. 1991).
84 Vol. 27 / The Journal of Legal Studies Education
for Business Accreditation,16 business law is considered a traditional business subject and part of the required business school education. As such, the
AACSB International expects individual faculty members teaching busi-
ness law courses will actively involve students in the learning process.17
Our first charge is to engage the students so they participate in the learning
process in our business law classrooms. Our second charge is to incorporate
concepts of sustainability into the classroom. AACSB International has re-
cently incorporated sustainability into the business school educational envi-
ronment.18 AACSB International believes that schools of business should
develop a new generation of ethical leaders that can support a sustainable
society. The use of one business case study throughout the entire semester
can assist the professor in reaching these AACSB goals for the classroom.
Cases are used in most business schools as a teaching tool. Business
cases discuss actual issues that were faced by a business and are utilized for
the purpose of determining ‘‘what works and what does not work.’’19 To
that end, the single business case study method is one tool to bring to the
college classroom in order to engage the students and assist them with
active learning. The use of one business for the entire semester as a single
case study in the Legal Environment of Business classroom involves active
learning by the students and promotes continuity and a ‘‘big picture’’ view
of law and its impact on business.
Preparing for a semester-long case study is not an easy task. It involves
much more than creating a syllabus by the instructor. It requires the writing
of group assignments, researching cases and statutes, and planning, as many
of the resources need to be collected well in advance of their actual use in
class. This method of actively engaging the students also causes some addi-
tional grading work of these group activities throughout the semester.
Various cases can be assigned to the students to read and brief in
addition to the assigned textbook. The cases must be edited, assembled,
16AACSB, Eligibility Procedures and Accreditation Standards for Business Accreditation, adopted Apr. 25, 2003 (last revised Jan. 31, 2008).
17Id.
18See AACSB International’s First Annual Sustainability Conference held in Salt Lake City, Utah from July 30–31, 2008; second conference held in Minneapolis, Minnesota, July 29–31, 2009; and the third upcoming Conference to be held in Denver, Colorado on June 14–15, 2010.
19Rob Atkins, Growing Greener Grass: Looking from Legal Ethics to Business Ethics, and Back, 1 U. ST. THOMAS L.J. 951, 955 (2004).
2010 / It’s Not Easy Being Green 85
and copied into a file and made available to the students electronically. The
cases can then be used as precedent to analyze TerraCycle’s real and fic-
titious legal predicaments presented to the students in the various group
exercises. This business can be used when assessing the knowledge and
analytical skills of the students in specific content areas in essay questions
on examinations. Throughout the semester, additional assigned reading
from journals and newspapers can provide the students with a greater
understanding from various perspectives about this business.20 The stu-
dents can research a wide variety of primary and secondary source mate-
rials on the Internet and examine the impact of legal events from
numerous perspectives. One of the founders of TerraCycle has recently
written a book explaining his journey from the dorm room to the board-
room of TerraCycle.21 Students can explore legal documents, read news
articles, make product comparisons, and even watch a clip from
YouTube.22
IV. CONNECTING TERRACYCLE, INC. TO STUDENTS
The first day of the course is a perfect opportunity to introduce the stu-
dents to TerraCycle’s business (or some other business chosen by the in-
structor) and to discuss some of the small-group exercises that the students
can expect to see throughout the semester. A discussion of instructor
expectations for the successful completion of group exercises by the stu-
20For just a few of the many articles that can be assigned to students as additional reading, see Ken Belson, Kept Out of Landfills and Reborn as a Bag, N.Y. TIMES, Sept. 23, 2008, available at http:// www.nytimes.com/2008/09/24/business/businessspecial2/24worm.html; Gwendolyn Bounds, A Growing Dispute: Fertilizer Start-Up Uses Web as a Defense, WALL ST. J., May 22, 2007; Mike Hof- man, Legal Lemons, PR Lemonade, INC. MAGAZINE (June 2007); Paul Smith, How to Recycle the Un- recyclable: Terracycle Shows the Way, Eco-entrepreneurs, Aug. 21, 2008, http://ecopreneurist.com/ 2008/08/21/how-to-recycle-the-unrecyclable-terracycle-shows-the-way/; OfficeMax Unveils Line of TerraCycle’s Made-from-Waste Office Products, GreenBiz.com (May 2, 2008), http://www. greenbiz.com/news/2008/05/02/officemax-unveils-terracycle-recycled-office-products.
21TOM SZAKY, REVOLUTION IN A BOTTLE: HOW TERRACYCLE REDEFINES GREEN BUSINESs (2009).
22You Tube, http://www.youtube.com, is a host site for user-generated videos. The site in- cludes network and professional content, as well as amateur videos. A short video that was part of the BBC World broadcast can be located at http://www.youtube.com/watch? v-FM6sxZFvJ5c. Related segments: Turning Worm Poop Into Organic Fertilizer; TerraCycle BBC World; Eco-Tech TerraCycle; TerraCycle Today Show; and TerraCycle Bottle Brigade Video; all available on YouTube.
86 Vol. 27 / The Journal of Legal Studies Education
dents should also be covered on the first day of class. The Internet can be
accessed in the mediated classroom to add visual experiences to this dis-
cussion. TerraCycle’s Web site23 is a useful way to introduce the students to
this business. The video embedded in the TerraCycle Web site is a great
introduction to the students who founded this business and their trials and
tribulations in starting and running their business. After viewing the video,
students can form groups, consisting of four or five students, to list some of
the ways they believe that laws affect them as college students and ways
they believe that TerraCycle’s business would be affected by laws. The
groups report their lists to the entire class, serving as an ice breaker and
leading to classroom discussion.
Two professors teaching Legal Environment of Business to three sec-
tions of about eighty total students first used TerraCycle as their continuous
business example during the fall semester of 2008. It was used again during
the spring semester of 2009. The professors designed the small-group as-
signments to be completed by the student groups within fifteen to twenty
minutes. While the students are working in groups, the instructor rotates
from group to group, providing small-group personalized instruction to
the students. Upon completion of the various group assignments, the entire
class participates in short discussions regarding their analysis of the legal
dilemmas. The small-group exercises often give the students the confi-
dence they need to participate in the classroom discussions on both days
when there is a group activity and on days when there is not. Grading of
these group exercises consists of evaluating the solutions and the students’
application of law to the facts. Each exercise is worth up to five points per
student if successfully completed. Approximately fifteen group exercises
were used throughout the semester. As the title of this article indicates, it
isn’t easy being green, but the time and effort is well worth it.
V. UTILIZATION OF TERRACYCLE FOR LESSONS IN THE CLASSROOM
As an introduction to law, many legal environment of business textbooks
begin with a classification of laws into groups like public versus private,
criminal versus civil, and substantive versus procedural. With a focus on
23See http://www.terracycle.net (last visited Mar. 29, 2009).
2010 / It’s Not Easy Being Green 87
TerraCycle and its business model, one of the first substantive class exer-
cises can involve a close look at a number of different state bottle deposit
laws. Here is an example of such an exercise:
TerraCycle uses recycled soda bottles for most of its fertilizer products.
Many states have bottle deposit laws. Let’s look at some bottle deposit
laws. Attached are summaries of the bottle deposit laws in California,
New York, Michigan, and Iowa. Also attached is a ‘‘frequently asked
questions’’ sheet about bottle deposit laws. Review the attached materials
and answer the following questions:
1. What are the purpose(s) of the laws?
2. Circle your answer. Classify the bottle deposit laws as:
Criminal/civil
Substantive/procedural
Public/private
3. What are the similarities among the laws?
4. What are the differences among the laws?
5. What beverage container is only covered in the California law and not
the others?
This exercise gives the students an opportunity to apply the classification
of law concepts to actual laws. It also provides a comparison of the various
ways different states have chosen to reduce waste. Students begin thinking
about different state laws, their application to business, and sustainability
issues.
One of the next major topics in most Legal Environment of Business
course is a discussion of the judicial system and alternative dispute reso-
lution. The lawsuit by Scotts against TerraCycle, Inc. alleged claims of false
advertising, trade dress infringement, trade dress dilution, unfair compe-
tition, and unjust enrichment against TerraCycle. The relief sought was
both equitable and legal in nature in that injunctive relief and monetary
damages for lost profits were sought. TerraCycle filed an answer with
affirmative defenses and counterclaims and demanded a jury trial. While
the case was pending, a Web site24 was available to view the actual com-
24The original blog site, http://www.suedbyscotts.com, is no longer a functioning link because, as part of the settlement agreement, TerraCycle was required to remove it and post the terms of the agreement between the two companies instead. See Wendy Bounds, When It’s Good to Be
88 Vol. 27 / The Journal of Legal Studies Education
plaint filed in the case, as well as the answer and all of the exhibits. A copy
of the complaint filed by Scotts against TerraCycle can be provided to the
student groups.25
First and foremost, the students can discuss the merits of filing a lawsuit
versus using an alternative dispute resolution method to resolve a dispute
between two companies. Students can look at how businesses can best resolve
disputes and the strategies that a business should follow if litigation is inev-
itable. Second, in trying to understand the jurisdiction of various courts, this
case can be used to illustrate many of the jurisdictional concepts such as state
court versus federal court subject matter jurisdiction. Students can see how
jurisdiction is pleaded in a legal document, what these legal documents ac-
tually look like, how a business would ask for damages and remedies from
the court, the statements made of each party’s legal rights, and other relevant
information obtained from actually viewing legal documents in their entirety.
Students can see how counterclaims and affirmative defenses are pleaded
and can explore the various stages in civil litigation.
Subsequent to the filing of the pleadings in the case, the parties mu-
tually decided to settle the dispute. Settlement of disputes is quite com-
mon,26 and this provides such an example for students. Students can
continue the study of this case to discuss the concept of corporate social
responsibility. Both businesses and their strategies can be compared and
their effects on customers, employees, shareholders, and communities can
be evaluated. As corporations have been in the media spotlight for many of
their unethical behaviors, ethical decisions of business are also important.
What concerns did each of the businesses take when developing the mis-
sions of each? What concerns did Scotts have in determining to litigate the
resolution of their dispute against TerraCycle? The strategy of posting the
litigation on the Internet for all to view is an interesting angle used by
TerraCycle. As a relatively new company, TerraCycle did not feel that it
Sued, WALL ST. J., Sept. 27, 2007, available at http://www.terracycle.net/media/07-09-27_wsj/ 07-09-27_wsj.htm.
25We have pdf files of the complaint and related exhibits.
26According to the U.S. Department of Justice, Office of Justice Programs, Bureau of Justice Statistics, civil litigation in state courts represents a major component of the total number of cases filed each year. Civil lawsuits outnumber their criminal counterparts by nearly two mil- lion cases. Of all of the civil cases filed each year, less than three percent actually will go through a trial. The remaining ninety-seven percent settle their disputes out of court. See http://www.ojp.usdoj.gov/bjs/pub/ascii/cjrd.txt (last visited Mar. 29, 2009).
2010 / It’s Not Easy Being Green 89
had the funds necessary to defend their actions. It started a campaign on
the Internet to generate additional funds as well as to inform the public of
the lawsuit. This strategy is usually not one used by corporations. Com-
paring these strategies can lead to classroom discussion on decisions to
litigate, goodwill, and media attention.
Another of the group exercises brought reality into the classroom,
combining the issues of service of process and litigation with a constitutional
issue. TerraCycle hosts an annual ‘‘graffiti jam’’ event. During this event,
graffiti artists give demonstrations and compete. A fictitious summons and
complaint (attached as Appendix A) was prepared in which issues of due
process and free speech regarding the graffiti jam were involved. The issues
were based on a similar case that can be provided to the students to assist
them with their analysis.27 A template for the summons was found on the
Internet from the state of New Jersey’s Web site.28 Two university police
officers were given the documents in advance of class. The officers served the
summons and complaint on the class by selecting a student as a represen-
tative of the class, checking that student’s identification, and completing the
affidavit of service. Our students reacted with surprise and bewilderment
about what was going on, and then amusement. Then the students broke
into groups to examine the documents and determine the legal claims of
both the plaintiff and the defendant.
Appendix B contains an exercise on mediation. It involves resolving a
dispute regarding the negotiation of a lease extension of the property in
which TerraCycle does its business. After a discussion of the different forms
of alternative dispute resolution methods, the students form small groups.
The instructor selects a mediator in each group and determines which
students within the group will represent TerraCycle and Urban Properties
(the property owner). The fact sheet is distributed to each group, with
special facts for each party to the mediation.
Appendix C contains a group exercise where the students examine
the facts surrounding a slip and fall to determine if negligence has oc-
curred. Appendix D contains two fact patterns with questions about the
performance of contracts. Appendix E contains an exercise where the stu-
dents examine a state criminal statute and apply it to a fact pattern. It also
contains a state civil wrongful termination claim. The standard of proof in a
27Vincenty v. Bloomberg, 476 F.3d 74 (2d Cir. 2007).
28See http://www.judiciary.state.nj.us/forms.htm (last visited Mar. 29, 2009).
90 Vol. 27 / The Journal of Legal Studies Education
criminal case versus a civil case is also illustrated by this exercise. Appendix
F contains an exercise used as a follow-up to the lecture regarding various
federal statutes that affect the workers in the workplace. Students examine
several work-related legal issues to quickly spot the applicable statute.
Other group exercises using TerraCycle as the affected business in-
cluded hypothetical issues involving administrative law, contract forma-
tion, agency, and business formation. Utilizing the same company
throughout the semester saves class time, as the students did not have to
read lengthy descriptions of businesses each time a group activity was as-
signed in class. TerraCycle can be used in examinations to assess students
in the application of the legal principles. Appendix G includes some sam-
ple essay questions.
Many lessons can be learned by students studying this case and using it
to illustrate legal concepts. Students will develop their analytical and critical
thinking skills to formulate well-reasoned discussions regarding multiple
legal and ethical topics based on this company and its strategy when faced
with litigation. These group activities give students knowledge of the com-
plexity of the law in its application to factual situations involving business, an
awareness that the law rarely provides black and white answers, and an ap-
preciation that the law is constantly evolving and changing.
VI. STUDENT IMPRESSIONS
Feedback from the undergraduate business law students shows students
found the group exercises enjoyable and challenging. Students in three sec-
tions of the Legal Environment of Business course were surveyed regarding
the use of the semester-long case study. The survey included the following
statements:
1. The TerraCycle business and law-related exercises helped me under-
stand the legal environment of business.
2. The expectations in the class exercises were made clear by the professor.
3. I think the points assigned to the exercises were fair in relation to the
total points available in the course.
4. I think the exercises were graded fairly.
5. There were too many class exercises related to TerraCycle.
6. I would rather work on the TerraCycle exercises as homework instead
of in class.
2010 / It’s Not Easy Being Green 91
7. I would rather work on the TerraCycle exercises in a group rather
than alone.
8. The actual Scotts Miracle-Gro v. TerraCycle complaint we talked about in class helped me understand the first step in the litigation process.
9. The service of the City of Trenton v. TerraCycle complaint by the Bradley police officer helped me understand how service of process occurs.
10. I would rather have class exercises about different businesses instead
of just TerraCycle.
The students were given the following rating scale: (e) strongly agree, (d)
agree, (c) neutralFneither agree nor disagree, (b) disagree, and (a) strongly disagree. The results were compiled both as individual sections
of the course and as a group (Figure 1). As a whole, the students in the
three different sections of the Legal Environment of Business courses be-
lieved that the group exercises related to the TerraCycle case study were
helpful to them (Figure 2). The students also preferred working in groups
to resolve exercises as opposed to working individually. The students pre-
ferred to do these exercises in class rather than assigned to them as home-
work.
25
30
35
40
45
0
5
10
15
20
Help Understand
Too Many Homework Group Complaint helped
Service helped
Different businesses
P e rc e n t
Questions
Series1 Series2 Series3 Series4 Series5
Figure 1: Question Responses
92 Vol. 27 / The Journal of Legal Studies Education
Strongly Disagree 5% Disagree
7% Neutral
2%
Agree 25%
Strongly Agree 61%
Figure 2: Group Work Preferred (7)
Strongly Disagree 3%
Disagree 5%
Neutral 24%
Strongly Agree 25%
Agree 43%
Figure 3: Exercises Assisted Student’s Understanding (1)
2010 / It’s Not Easy Being Green 93
Students were asked about two specific exercises they had completed
within groups during the semester. One exercise involved their study of
the actual complaint filed in the real litigation involving TerraCycle and
The Scotts Company LLC. Most students felt that this exercise was useful
to their understanding of the first step in the litigation process (Figure 3).
The second exercise involved the service of process upon the class of a
complaint by a uniformed university police officer. The students believed
that this service exercise was helpful in understanding how the service of
process occurs. Although this survey of students was very basic, it showed
that the students thought that the use of these in-class group exercises was
helpful to their understanding of the concepts of the course.
These surveys were conducted at the end of the semester. Future
classes will have surveys after completion of select exercises, rather than
waiting until the end of the semester. It is believed that students’ answers
will be more accurate when the exercise has just been completed and is
fresh in their minds.
VII. CONCLUSION
The new trend is to buy organic items and have a sustainable business. Uti-
lizing this company and its legal hurdles will engage the students with a
current and interesting business model and help them better understand the
application of legal principles to real-world situations. Student evaluations
have indicated that they have enjoyed the utilization of this case to discuss
many of the legal concepts in class. The instructor of a Legal Environment of
Business course can use the facts of this case to further generate discussion in
other areas studied in class with ‘‘what if TerraCycle did this?’’ Active learn-
ing with a real business example is likely to be more effective in teaching the
legal concepts and making them memorable for the students.
APPENDIX A: JURISDICTION AND CONSTITUTIONAL LAW EXERCISE
Based on the complaint below, first, state whether the court jurisdiction is
proper and why. Second, identify the constitutional issue in this dispute.
Next, provide the legal argument for each of the parties.
94 Vol. 27 / The Journal of Legal Studies Education
SUPERIOR COURT OF NEW JERSEY
LAW DIVISION
Mercer County
City of Trenton, NJ,
319 East State Street
Trenton, NJ 08608 Docket Number: C:
Plaintiff, CV-00981-08
v. CIVIL ACTION
COMPLAINT
TerraCycle, Inc.
Defendant.
Plaintiff, City of Trenton, by its City Attorney, R. Denise Lyles, with its place
of business located at 319 East State Street, City of Trenton, County of
Mercer, State of New Jersey, complaining of defendant, states as follows:
1. Plaintiff is the City of Trenton, New Jersey.
2. Defendant is a business incorporated in state of New Jer-
sey and conducting business within the state.
3. On or about, August 15, 2008, defendant applied for a limited
special use permit from the City of Trenton for the purpose of
a festival to be held at 121 New York Avenue, Trenton, New
Jersey. The stated purpose was to celebrate the summer youth
program and be held on September 15, 2008.
4. Subsequent to August 15, 2008, the City of Trenton has
become aware that this festival has been promoted as
‘‘Terracycle’s Annual Worm Poop Graffiti Jam.’’
5. Pursuant to N.J. City Code, section 42-12, 1-2, no person
shall be in possession of objects for the purpose of produc-
ing graffiti. The festival will be in violation of said city code.
6. On or about August 30, the City of Trenton notified de-
fendant that the limited special use permit was rescinded/
revoked, and all further action for the activity should be
stopped.
7. It is the belief of the City of Trenton that the defendant is
attempting to continue with its activities on September 30,
2008.
2010 / It’s Not Easy Being Green 95
WHEREFORE, plaintiff requests:
1. The payment of all legal expenses incurred by the City of
Trenton due to this litigation, including reasonable attor-
ney fees and costs of this suit;
2. An order enjoining the defendant from its activities that
promote graffiti;
3. Damages; and
4. Any other relief as the court may deem proper.
CERTIFICATE OF NO OTHER ACTIONS
I certify that the dispute about which the City of Trenton is suing is not the
subject of any other action pending in any other court or pending arbi-
tration proceeding to the best of my knowledge and belief. Also, to the best
of my knowledge and belief no other action or arbitration proceeding is
contemplated. Further, other than the parties set forth in this complaint, I
know of no other parties that should be made a part of this lawsuit. In
addition, I recognize my continuing obligation to file and serve on all par-
ties and the court an amended certification if there is a change in the facts
stated in this original certification.
Dated: 09/10/08 Signature: _____________________
R. Denise Lyles, City Attorney
JURY DEMAND
The plaintiff demands trial by a jury on all of the friable issues of this
complaint, pursuant to New Jersey Court Rules 1:8-2(b) and 4:35-1(a).
Dated: 09/10/08 Signature: _____________________
R. Denise Lyles, City Attorney
APPENDIX B: ALTERNATIVE DISPUTE RESOLUTION EXERCISE
Terracycle, Inc. and its landlord, Urban Properties, are having a dispute.
First, the lease is about to expire and the parties are attempting to nego-
tiate a new lease for the property located at 121 New York Avenue, Tren-
ton, New Jersey. Here are the issues remaining:
96 Vol. 27 / The Journal of Legal Studies Education
1. Rent amount. The current lease indicates a quarterly lease payment of
$7,000. Terracycle wants to continue with this rent amount. Urban
Properties wants the rent to be $14,000, due to the increased per square
foot rental prices in the area. Terracycle argues that the rent prices have
gone up due to its impact on the community.
2. Parking. The current lease allows for 20 parking spaces at a nearby lot
also owned by Urban Properties. The price per month for individuals
purchasing parking passes from Urban Properties has gone from $50 to
$150. Terracycle wants 5 more parking spaces and Urban wants to only
include 10 in the new lease.
3. The current lease does not talk about community events or celebrations
held at the property. Urban Properties wants to include a provision
limiting gatherings to the employees, owners, and their families. Ter-
racycle does not want a limitation due to their quite popular event, the
Graffiti Jam.
In addition to the lease renewal, there is currently litigation pending be-
tween the parties. At the 2007 Graffiti Jam, police and the city of Trenton
issued tickets for various city ordinances that were violated. Urban Prop-
erties received several citations due to this event occurring on their prop-
erty. As a result, a lawsuit is pending wherein Urban Properties is suing
Terracycle for the payment of all legal fees and citations due to the event.
Of course, Terracycle doesn’t want to pay.
This is a mediation exercise. One person in the group will be the me-
diator. The others will divide into the two sides, Urban and Terracycle.
All issues should be attempted to be resolved. Any resolutions will be
reduced to writing and agreed to by both sides. Creativity and in-depth
analysis of the issues will receive full credit.
Secret Facts for TerraCycle: TerracCycle has plans to expand. In this expansion, they anticipate
hiring several new employees. In order to attract these new people, Ter-
raCycle wants to offer parking spaces in this busy urban area. Individual
parking prices would be $1501.
In addition to the Graffiti Jam, TerraCycle is going to be having
several recycling celebrations in the upcoming two years. They want to
2010 / It’s Not Easy Being Green 97
make sure that their leases allow for these celebrations. One such
celebration would include several top musical artists to come to the
warehouse and festival. You can be creative with these festivals and
the intentions in the lease. TerraCycle does not want to loose this
location!
Secret facts for Urban Properties: Urban has a prospective new buyer for the property. The
potential buyer does not want a long-term lease on the premises.
Urban has just purchased the two pieces of property adjacent to this
property.
APPENDIX C: NEGLIGENCE EXERCISE
Could This Be a Case of Negligence?
As we know, TerraCycle’s business is based on products made from waste.
TerraCycle uses garbage to feed its worms and the worms in turn pro-
duce their product. The product is bottled and sold in stores throughout
the United States and Canada. TerraCycle gets much of its food for its
worms from the waste products of local restaurants.
Assume the following fact pattern:
Anna Peale applied on-line for a position working in the corporate
office of TerraCycle as a video intern for the summer of 2009. Anna
interviewed for the position at the corporate office in Trenton, New
Jersey. Upon entering the building, she slipped and fell. Immediately, she
felt pain, looked down and saw that her ankle was likely broken.
Anna also noticed a couple of black, flattened out, and gritty banana
peels underneath her. She had slipped on bananas. An ambulance
was called, she went to the hospital, and had to have surgery to set
the ankle break. She never did have an interview. Several weeks have
passed and Anna has not received any information about the internship
position. Anna called TerraCycle inquiring about the internship to find that
it had been filled. Anna also had to miss classes and exams due to this injury.
Could this be negligence? Discuss.
98 Vol. 27 / The Journal of Legal Studies Education
APPENDIX D: CONTRACT PERFORMANCE EXERCISE
Question 1:
Phil is a tax accountant. He promises TerraCycle that he will complete its
corporate tax return, the individual income tax returns for each of its
officers, prepare the W-2’s that will be distributed to TerraCycle’s em-
ployees, Forms 941, Employer’s Quarterly Federal Tax Returns and the
Form 940, Employer’s Annual Federal Unemployment Tax Return. Ter-
raCycle’s fiscal year ended October 31, 2008. TerraCycle has agreed to
pay Phil $1,200.00 for this tax preparation package. Phil has completed
the Forms 941 for three quarters (based on the calendar year) and no
other work. Yesterday, Phil called Tom and Jon, the founders of the
company, and informed them that as of January 31, 2009, he would not
be able to finish completion of the work. He anticipates that he can finish
the Form 940 for the year ending December 31, 2009, Form 941 for the
last quarter of 2008, and the W-2’s, but no further returns. TerraCycle
has already paid $600.00 to Phil. Tom called ABC Accounting and a price
of $2,000 was quoted to prepare the corporate income tax return and
$500 for each individual tax return. What should TerraCycle do? Explain
your answers, keeping in mind the following:
a. Is this substantial performance or a material breach of contract?
b. What affect does Phil’s telephone call have on this situation?
c. Does TerraCycle still have to pay the remaining $600?
d. How would you measure the damages, including the types of damages?
Question 2:
Jon wrote a $500 check to Phil as a deposit on Phil’s 240Z car. The memo
section of the check read: ‘‘Deposit on 1978 240Z car of Phil Mole. Sale
price $4,500.’’ Phil initialed the memo section. When Jon returned the
next day with the remaining $4,000, Phil said, ‘‘Sorry, I sold the car for
$4,000 cash yesterday and sent your check back via mail.’’ The cheapest
240Z Jon can find is $5,200. What are Jon’s rights? Discuss, keeping in
mind the following:
a. Was a contract formed?
2010 / It’s Not Easy Being Green 99
b. Are there any Statute of Frauds problems?
c. Could Jon collect any damages?
d. Are consequential damages available?
e. Are incidental damages available?
APPENDIX E: BUSINESS CRIME AND BUSINESS TORTS
Facts:
TerraCycle uses wood pallets to move their finished products into trucks
for shipping. After much use, the pallets develop cracks or break making
them dangerous to use when carrying a full load. The damaged pallets
have been piling up in a corner of the warehouse.
TerraCycle has just entered into an agreement with the City of Trenton
Park District. The park district has equipment to grind tree limbs into
mulch and has agreed to take the damaged pallets and grind them up for
mulch. The mulch is available free to Trenton residents who bring their
own truck to haul it away.
TerraCycle’s warehouse employees have seen the damaged pallets collect-
ing in the corner and haven’t been informed of the plans for the pallets.
Frank, one of the employees, decides to take a few of the damaged pallets
to use for firewood for a bonfire and cookout he is planning at his home.
Frank loads several into his truck at the end of his shift. One of Frank’s
coworkers, Ted, sees Frank load the pallets into his truck. Ted has always
disliked Frank and decides to call the police and tell them Frank is stealing
the pallets. The police go to Frank’s house, find the pallets in his backyard,
and arrest him for theft.
TerraCycle is unhappy that one of their best employees, Frank, has been
arrested for taking the pallets. They are equally unhappy that Ted got the
police involved without talking to TerraCycle’s management first. This is
just the latest in a number of issues with Ted, which include absenteeism
and a poor attitude when he is at work. Ted is an at-will employee.
TerraCycle decides to fire Ted.
100 Vol. 27 / The Journal of Legal Studies Education
New Jersey law on theft:
§ 2C:20-3. Theft by unlawful taking or disposition
a. Movable property. A person is guilty of theft if he unlawfully takes, or
exercises unlawful control over, movable property of another with
purpose to deprive him thereof.
b. Immovable property. A person is guilty of theft if he unlawfully
transfers any interest in immovable property of another with purpose
to benefit himself or another not entitled thereto.
Definition of purposely: A person acts purposely with respect to the nature of his conduct or a result thereof if it is his conscious object to engage in
conduct of that nature or to cause such a result. A person acts purposely
with respect to attendant circumstances if he is aware of the existence of
such circumstances or he believes or hopes that they exist. ‘‘With purpose,’’
‘‘designed,’’ ‘‘with design’’ or equivalent terms have the same meaning.
Construction of statutes with respect to culpability requirements: Pre-
scribed culpability requirement applies to all material elements. When the
law defining an offense prescribes the kind of culpability that is sufficient
for the commission of an offense, without distinguishing among the ma-
terial elements thereof, such provision shall apply to all the material ele-
ments of the offense, unless a contrary purpose plainly appears.
Affirmative defense: It is an affirmative defense to prosecution for theft that the actor:
(1) Was unaware that the property or service was that of another;
(2) Acted under an honest claim of right to the property or service in-
volved or that he had a right to acquire or dispose of it as he did; or
(3) Took property exposed for sale, intending to purchase and pay for it
promptly, or reasonably believing that the owner, if present, would
have consented.
First Question Set:
Is Frank guilty of theft? Answer the following questions to make your de-
termination:
2010 / It’s Not Easy Being Green 101
1. What is (are) the act(s) prohibited by the theft statute?
2. What is the mental state associated with theft?
3. Does the mental state apply to all the elements?
4. What must the state show to establish that Frank is guilty of theft?
Ted has consulted an attorney about his firing from TerraCycle. Terra
Cycle has just received a letter from his attorney claiming that TerraCycle
has committed the tort of retaliatory discharge because Ted was fired after
he called the police about Frank. The elements of retaliatory discharge are
as follows:
� Employee is discharged by employer � The discharge in retaliation for the employee’s activities � The discharge is in contravention of clearly mandated public policy
Second Question Set:
Is TerraCycle liable for the retaliatory discharge of Ted?
Answer the following questions to make your determination:
1. Did TerraCycle discharge Ted?
2. Was the discharge in retaliation for calling the police or did Terra-
Cycle have other legitimate reasons for firing him?
3. What is the clearly mandated public policy that would be involved?
Ted is calling himself a ‘‘citizen crime fighter.’’
APPENDIX F: EMPLOYEE WELFARE EXERCISE
From the various statutes dealing with employee welfare, select a statute
most relevant to the situation:
1. TerraCycle wants to close one of its production plants.
2. Two employees, one male and one female are hired on the same date
to feed the worms. One is paid a different hourly rate than the other.
102 Vol. 27 / The Journal of Legal Studies Education
3. TerraCycle’s employees have decided to organize a union.
4. TerraCycle wants to pay its employees $6.00 an hour to work.
5. TerraCycle wants to hire an after school student worker, age 16.
6. Who might be liable for the violation of #5?
7. Employees believe that they should wear goggles and protective
footwear.
8. Bob, the shift supervisor, slips on a banana peel near the worm trays.
9. Times are tough, Violet is permanently laid off.
10. Fred and his wife adopt a child.
APPENDIX G: SAMPLE ESSAY QUESTIONS
Question 1:
The restaurant located down the block from TerraCycle Inc., called
the Eco Street Restaurant, served patty melt sandwiches with sautéed
onions on them. The sautéed onions were stored in oil at the restaurant,
then heated in the microwave oven, and finally added to the sand-
wiches before serving them to customers. Unbeknownst to Eco Street,
the toxin botulism type A was growing in the onions, and was not de-
stroyed by microwaving the onions. Over 30 people were sickened by the
botulism (food poisoning). Now, think of the food as a product (it is a
product).
Which TWO causes of action, one based on contract theory and one
based on tort theory, would you suggest might be successfully used by
these victims against Eco Street restaurant? Discuss these two causes of
action and include the elements of each cause of action and how those
elements would be satisfied by the facts. Reach a legal conclusion for this
lawsuit by the customers.
2010 / It’s Not Easy Being Green 103
Question 2:
The State of New Jersey passed a law, ‘‘all stores, shops, saloons, and all
places of public business, licensed under the law of New Jersey, shall be
closed on Sunday.’’ The statute had 25 exemptions including drug stores,
hotels, restaurants, theaters, and the state fair. TerraCycle wants to chal-
lenge the Sunday closing law on its constitutionality. What constitutional
provisions would apply?
Question 3:
TerraCycle filed a complaint against the city of Trenton, NJ for the denial
of an application that TerraCycle submitted to the appropriate city office
for two permits. TerraCycle wanted to obtain the city’s approval for its
Annual Worm Poop Graffiti Jam. TerraCycle expected the best showing
ever by nationally known artists, local artists, and even was providing a
booth for those who wanted to try it for the first time. TerraCycle was
planning to hold this event in its parking lot and adjacent city park. The
city has been fighting local gangs and others to prevent the public de-
struction caused by graffiti. The city recently passed an ordinance fining
those who engage in any form of graffiti in the amount of at least $500 per
violation, including fines for those aiding in the perpetration of graffiti.
TerraCycle did not know anything about the passing of the local ordi-
nance. If they had, a company representative would have attended the
public hearings in objection to the proposed ban. TerraCycle submitted its
application on the afternoon of September 5 and it was stamped ‘‘denied’’
with a date of September 5 and no explanation. TerraCycle does not be-
lieve that a proper examination of its application was made by the city, thus
the filing of the complaint.
Discuss the merits of TerraCycle’s case for denial of due process and its
rights pursuant to the First Amendment.
Include any arguments against the positions that would likely be taken by
the city of Trenton. Include the necessary classifications, definitions, and
application of standards that the court may use in exercising judicial review
of these issues.
104 Vol. 27 / The Journal of Legal Studies Education
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