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Step 2: Review Case One: Blue Mood Clothing, Inc.
Now that you've finished your skills gap analysis and GAP survey, you take some time to collect your thoughts and review the first case Vice President Dodger assigned to you. First, you need an introduction to the legal environment of business. Next, you open the Blue Mood Clothing, Inc. case file to assess the details of this assignment.
Upon completing your initial review of the file, you begin thinking about the legal issues contained in the file. In the next step, you will gather the information you need to answer the questions from the VP.
Introduction to the Legal Environment of Business
The Legal Environment: Courts, Alternative Dispute Resolution, and Agency
by Rosemary Hartigan and Paula O'Callaghan, Professors, UMGC
Why Should I Care about the Law?
Why do businesspeople need to know anything about the law? Some people think of lawyers in business as a necessary evil. There is some truth to the "necessary" part: if everyone were scrupulously honest and had photographic memories regarding all statements uttered that could constitute promises, perhaps lawyers wouldn't be needed. But, alas, we are mere mortals with failing memories and sometimes failing ethics.
A Systems View of the Roles of the Lawyer and the Manager
One view of the respective roles of the lawyer and the manager in a business is that the lawyer should guide the manager in analyzing risk—this is in the lawyer's training, and it's the lawyer's responsibility to accurately convey the nature of legal risks to the client; however, it is up to the manager to make the final business call.
Generally speaking, lawyers are inherently conservative when it comes to risk. Managers can't abdicate responsibility for making the business call. This is one of the main reasons for managers to have legal literacy. You need to know when you need legal advice, and then what to do with it. Sometimes, basic legal knowledge is necessary on the front lines of dealing with customers and coworkers.
Knowing something about the law can assist you in prevention. Legal analysis skills help you to avert lawsuits and other unpleasantness so that you can stay focused on running your business. However, there will be instances in which you have to bring a legal-related matter to closure. Perhaps you've taken over from an executive who has left the department or company and left behind a problem that requires a legal solution. Or, you did something that triggered a legal response from a customer or vendor. If you know the relevant legal rules for your area of business, you'll know when it's appropriate to involve legal counsel.
Let's begin with a basic overview of the two types of law.
Differences between Civil and Criminal Law
American society highly values ingenuity and entrepreneurship, but there are legal limits on the conduct of commerce. Some of these limits are statutory, which means that a law-making body has enacted a specific law to regulate a specific activity (e.g., the Sherman Act statute regulating antitrust). Some of these legal limits are found in the common law (e.g., tort law imposing liability on an infinite variety of behaviors). Most of the legal limits on business fall into the category of civil law.
One big difference between civil and criminal law is in the potential penalties. Civil law liability carries penalties that are monetary—so-called damages. The culpable party pays damages in an amount the court believes will make the wronged party whole. This contrasts with criminal law, where the possible penalties are limits on personal freedom (such as incarceration or death), although monetary penalties are also possible (such as a fine payable to the government or restitution to the victim).
There is one major exception to the rule that business contracts do not involve criminal penalties for breach: this is in government contracting. Because so many students at UMGC have employment that involves contracts with the US government in some manner, this is often a point of confusion.
Government contracting is a special circumstance where the contracts involve civil law, yet breach of contract potentially involves criminal penalties. The criminal penalties can include jail time for serious violations. Those of you who work in this area probably have attended or will attend a professional development seminar about contract compliance in which you learn the particulars of your contractual obligations.
Trend Developments in Business Law
The past 20 years have seen a rise in the criminalization of business law. While it's still true that no one goes to prison for breaking the terms of a contract (notable exception: government contracting), there has been a marked increase in the number of business-related activities that carry possible criminal penalties.
Business activities that are punishable by criminal penalties (in addition to fines and damages) are known as white-collar crimes. Many of you are familiar with famous cases involving business people—Martha Stewart (ImClone), Kenneth Lay (Enron), Dennis Kozlowski (Tyco), and, of course, Bernie Madoff. Those businesspeople got themselves into the criminal justice system by committing fraud, lying to federal authorities, or otherwise invoking specific laws to deter commercial crimes such as insider trading of stock. The possible penalties for white-collar crime do include imprisonment as well as fines and damages.
When you see a businessperson in handcuffs doing the "perp walk," ask yourself, "What law has allegedly been broken?" Typically, there will be a law (statute) or a regulation (e.g., Securities and Exchange Commission [SEC] rule) that allegedly has been transgressed.
https://learn.umgc.edu/d2l/ext/rp/610227/lti/framedlaunch/43de3c14-dd50-474b-b14a-d0a23e551bbc
Resources
Step 3: Gather and Analyze Information
As you read through the materials, try to begin answering the questions Vice President Dodger asked you. You will likely encounter many new legal concepts, so take notes about which sections apply to this case so that you can easily refer back to them when you begin to write your presentation. The VP’s precise questions about the legal issues are as follows:
· Can Colossal Corporation terminate Alex without any notice or a hearing? Why or why not? This question relates to employment-at-will .
· Did Alex, Nick, Bill, or Juanita commit any crimes and, if so, which crimes did each person commit? Fully explain your answer for each person as you explore the subject of business criminal law .
· What defenses, if any, might the relevant persons allege in response to the crimes you identified? Fully explain your answer for each person.
· Did Alex, Nick, Bill, or Juanita commit any intentional torts and, if so, which intentional torts did each person commit? Read about the law of torts in order to make your determinations.
· What defenses, if any, might the relevant persons allege in response to the intentional torts you identified? Fully explain your answer for each person.
· Can anyone collect damages for the intentional torts? Who can collect and whom would they sue? Detail the specific damages that may be available to potential plaintiffs as you read about tort damages .
In the next step, you will formalize your thoughts so that they are ready to put into your presentation.
Employment at Will
Transcript
Employment at will is a doctrine of common law that allows either the employee or the employer to terminate an employment relationship at any time, for any reason, with or without notice, and even for a morally reprehensible reason, so long as the ending of the relationship does not fall into an exception to the employment-at-will doctrine.
Employment at will is the prevailing legal doctrine concerning employment relationship termination in 49 US states (not Montana). In the overwhelming majority of the United States, employment at will and its exceptions govern the rules by which one may legally terminate an employee.
The generally accepted exceptions to employment at will include
· express contract,
· implied contract,
· promissory estoppel,
· public policy violations, and
· good faith and fair dealing.
We discuss these five exceptions below.
Express Contract Exception
If an employer terminates an employee in violation of the terms of an express contract between the employer and employee, then the employee can sue the employer for breach of contract (and, in some states, wrongful termination).
For example, an employment contract guarantees that the employee will be employed by the employer for a definite duration of time, with cognizable boundaries, such as a "one-year period" or "for six months." The employer terminates the employee before the stated period has expired, and that termination is not otherwise permitted by the contract.
Likewise, consider a case where an employment contract states that an employee can be terminated only "for cause" or "for just cause," and the employee is terminated without cause.
Implied Contract Exception
Implied contracts are contracts created by the conduct of the parties, which include any representations or assurances made by the employer prior to or during the term of employment. In some states, an implied contract is an exception to the employment-at-will doctrine.
For example, if an employer provides an employee handbook to a new employee, the provisions in the handbook may be considered part of the contractual relationship. Often, such handbooks outline a procedure for performance review, discipline, and discharge of the employee. An employer who fails to live up to procedural obligations prior to discharging an employee could be liable.
Promissory Estoppel Exception
In many states, promissory estoppel acts as an exception to the employment-at-will doctrine. That is, when an employer makes a promise to an employee of employment or a period of employment, and the employee relies on that promise to his detriment, and it leads to injustice, then an employee may be able to have that promise enforced regardless of employment at will.
For example, John is offered a job with Widget Co. He discusses with Widget's manager that, to take the job, he needs to move from California to New Jersey and give up an already lucrative position with benefits. The manager assures John that he will have gainful employment and a substantially larger income with Widget Co. for at least a year if he makes the move. In reliance on this promise, John quits his job and moves to New Jersey to begin work at Widget Co. After one week, John is laid off. Despite being an employee at will, John may be able to recover under the theory of promissory estoppel.
Public Policy Violations Exception
Most states in the United States prohibit an employer from firing an employee if the reason for the action violates some readily accepted public policy. This prohibition prevents an employer from terminating an employee for exercising a legal right, including a right contained in state and federal laws; or for failing to perform an illegal act for the employer.
Firing an employee for performing some public duty (showing up to jury duty), for exposing illegal conduct (such as reporting violation of some law to the employer or a government agency), or for exercising her rights as a US or state citizen (such as voting) are all against public policy.
This exception to employment at will encompasses the inability to terminate an employee if doing so would violate her state or federal statutory rights. If an employee is terminated because of her race, this may be a violation of Title VII of the Civil Rights Act of 1964, and so an otherwise at-will employee would have a claim against the employer for violating a federal statute.
Moreover, it is against public policy to terminate an employee for refusing to commit an illegal act, such as a crime.
Good Faith and Fair Dealing Exception
A minority of states impose upon the employer a duty to exercise good faith and fair dealing in regard to all employees. This doctrine, to varying degrees, means that an employer must treat an employee fairly in the decision to fire her. This generally means that an employer would violate these duties in firing an employee without due cause or justification.
The preceding five generally accepted exceptions to employment at will allow injured parties to seek recovery even in the face of the employment-at-will doctrine. As such, they limit the circumstances by which an employer can terminate an employee.
Licenses and Attributions
Business Law: An Introduction, by TheBusinessProfessor.com, Jason M. Gordon & Colleagues has been adapted with permission from Jason M. Gordon. © Business Professor, LLC.
Learning Topic
Business Criminal Law
Criminal laws prohibit or require certain conduct such that violations of the laws would constitute an offense against the general public (society as a whole). Criminal law convictions may result in jail or prison sentences, fines (paid to the government), or, in some cases (in some states and federally), the death penalty.
The Constitution provides both state governments and the federal government with the power to pass and enforce criminal laws, and also places limitations and affirmative obligations on the government in relation to criminal defendants. That is, the Constitution sets the outermost boundaries of how the government can investigate, arrest, try, and sentence criminal defendants. The Constitution, through its Eighth Amendment, also sets the minimum requirements for the bail and prison conditions of criminal offenders.
Resources
Learning Resource
Receiving Stolen Property
All jurisdictions criminalize receiving stolen property to deter theft and to break up organized criminal enterprises that benefit from stealing and selling stolen goods. Criminal statutes on receiving stolen property are often targeted at pawnbrokers or fences who regularly buy and sell property that is the subject of one of the theft crimes. The Model Penal Code, a model law adopted by many states, includes receiving stolen property in its consolidated theft offense (Model Penal Code §§ 223.1, 223.6). Receiving stolen property has the elements of criminal act, criminal intent, attendant circumstances, causation, and harm.
Receiving Stolen Property Act
The criminal act element required for receiving stolen property in many jurisdictions is receiving, retaining, disposing of (Ala. Code § 13A-8-16, 2011), selling (Cal. Penal Code § 496, 2011), trafficking in (Fla. Stat. Ann. § 812.019, 2011), buying, or aiding in concealment (Mass. Gen. Laws ch. 266 § 60) of stolen personal property. The Model Penal Code defines the criminal act element as receiving, retaining, or disposing of stolen movable property (Model Penal Code § 223.6(1)). The criminal act does not generally require the defendant to be in actual physical possession of the property, as long as the defendant retains control over the item(s) (Ga. Code § 16-8-7, 2011). This would be a constructive possession. The Model Penal Code defines receiving as "acquiring possession, control or title, or lending on the security of the property" (Model Penal Code § 223.6(1)). Note that the criminal act element of receiving stolen property includes both buying and selling. Thus dealers that regularly purchase and then sell stolen items can be prosecuted for both of these acts under the same statute.
Example of Receiving Stolen Property Act
Chanel, a fence who deals in stolen designer perfume, arranges a sale between one of her thieves, Burt, and a regular customer, Sandra. Chanel directs Burt to drop off a shipment of one crate of the stolen perfume at Chanel's storage facility and gives Burt the key. Chanel pays Burt five thousand dollars for the perfume delivery. Chanel thereafter accepts a payment of ten thousand dollars from Sandra and gives Sandra another key with instructions to pick up the perfume the next day after it has been delivered. Chanel could probably be charged with and convicted of receiving stolen property in most jurisdictions. Although Chanel did not ever acquire actual possession of the stolen designer perfume, Chanel had control over the property or constructive possession through her storage facility. Chanel's acts of buying the perfume for five thousand dollars and then selling it for ten thousand dollars both would be criminalized under one statute in many jurisdictions. Chanel could be prosecuted for both acts as separate charges of receiving stolen property.
Receiving Stolen Property Intent
The criminal intent element required for receiving stolen property has two parts. First, the defendant must have the intent to commit the criminal act, which could be specific intent or purposely, general intent or knowingly, recklessly, or negligently to either buy-receive or sell-dispose of stolen personal property, depending on the jurisdiction. This means that the defendant must have actual knowledge that the property is stolen (Mass. Gen. Laws ch. 266 § 60, 2011), or the defendant must be aware or should be aware of a risk that the property is stolen (Ala. Code § 13A-8-16(a), 2011). The Model Penal Code requires the defendant to purposely commit the act knowing that the property is stolen or believing that the property has probably been stolen (Model Penal Code § 223.6(1)). The Model Penal Code also provides a presumption of knowledge or belief when the defendant is a dealer, which is defined as a "person in the business of buying or selling goods, including a pawnbroker," and has been found in possession or control of property stolen from two or more persons on more than one occasion, or has received stolen property in another transaction within the year preceding the transaction charged, or acquires the property for consideration far below its reasonable value (Model Penal Code § 223.6(2)). Many state statutes have a similar provision (Ala. Code § 13A-8-16, 2011).
The second aspect of criminal intent for receiving stolen property is the defendant's specific intent or purposeful desire to deprive the victim of the property permanently, which is required in some jurisdictions (Hawaii Criminal Jury Instructions No. 10.00, 10.20, 2011). This creates a failure of proof or affirmative defense that the defendant received and retained the stolen property with the intent to return it to the true owner (Ga. Code § 16-8-7(a), 2011). The Model Penal Code also provides a defense if "the property is received, retained, or disposed of with purpose to restore it to the owner" (Model Penal Code § 223.6(1)).
Example of Receiving Stolen Property Intent
Chip's iPod breaks, so he decides to go to the local electronics store and buy a new one. As he is approaching the store, Heather saunters over from a nearby alley and asks him if he wants to buy a brand new iPod for ten dollars. Suspicious of the price, Chip asks Heather to see the iPod. She hands it to him, and he notices that the box looks like it has been tampered with and a price tag removed. He shrugs, takes ten dollars out of his wallet, and hands it to Heather in exchange for the iPod. In jurisdictions that require actual knowledge that the property is stolen, Chip probably does not have the appropriate criminal intent for receiving stolen property because he did not know Heather and had no way of knowing if Heather was selling him stolen property. In jurisdictions that require awareness of a risk that the property is stolen, Chip may have the appropriate criminal intent because he knew the price was too low and noticed that the box had been tampered with to remove evidence of an actual price or vendor.
Change the example so that Chip is a pawnshop broker, and Heather brings the iPod into his shop to pawn for the price of ten dollars. In many jurisdictions, if Chip accepts the iPod to pawn, this creates a presumption of receiving stolen property criminal intent. Chip is considered a dealer, and in many jurisdictions, dealers who acquire property for consideration that they know is far below the reasonable value are subject to this type of presumption.
Change the example again so that Chip notices the following message written on the back of the iPod box: "This iPod is the property of Eugene Schumaker." Chip is Eugene Schumaker's friend, so he pays Heather the ten dollars to purchase the iPod so he can return it to Eugene. In many jurisdictions and under the Model Penal Code, Chip can use his intent to return the stolen property to its true owner as a failure of proof or affirmative defense to receiving stolen property.
Licenses and Attributions
4.6 SWOT Analysis from Mastering Strategic Management by the University of Minnesota Libraries Publishing is an adaptation of a work whose original author and publisher request anonymity and is available under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International license. © 2015, University of Minnesota. UMGC has modified this work and it is available under the original license.
Learning Resource
Criminal Law and Procedure
Criminal Law
Criminal law is public law passed by the federal, state, or local government. It restricts or requires affirmative conduct of its citizens under the threat of prosecution. These prohibitions may be in the form of a statute, common law rule, regulatory rule or decision, or local ordinance. Criminal laws prohibit conduct that is either considered malum in se or malum prohibitum:
· Malum in se means that conduct is inherently wrong without regard to a statute proscribing the conduct. For example, most people consider murder and theft to be innately wrong or evil without regard to a government's prohibition of the conduct.
· Malum prohibitum means that conduct is not necessarily wrong or evil, but it is made illegal based upon a law. For example, a public company's failure to adequately disclose corporate information to the public is made illegal by statute. Without such a statute, it may not be considered inherently wrong.
The authority for each type of law may differ, but generally criminal laws are enforced by the government and exist to protect the health, safety, and welfare of citizens. This includes protecting the property and rights of those citizens. Failing to comply with criminal laws can result in fines or imprisonment.
Ask Yourself
· Do you generally believe that criminal laws are effective at curbing prohibited conduct? Do they effectively protect the health, safety, and welfare of citizens? Does a criminal penalty ever violate the purpose of protecting citizens? With the prison population at record levels in the US, is there a need to reform the criminal punishment system? If so, what are some alternatives that may achieve a similar purpose to the penalty of imprisonment?
· Explain the primary differences between criminal law and civil law?
What Are the Elements of a Crime?
Every crime is composed of certain elements. Common among all crimes are the physical and mental characteristic of the defendant in failing to comply with the criminal law.
Actus Reus
Actus reus is a latin phrase meaning "guilty act." This element simply means that the individual committed the act proscribed by the statute. In some cases a threat to act or a failure to act constitutes the crime. In any event, the defendant must be responsible for that action or inaction.
For example, if an individual is involuntarily intoxicated, this may negate the actus reus. If someone slips drugs in a person's drink unknowingly, it may excuse the voluntary act required to find a person guilty of a criminal offense. That is, she may not have the control over her physical actions necessary to satisfy the actus reus. The act of voluntary intoxication, however, will not excuse the actus reus. Voluntarily drinking or taking medications is a sufficient act.
Mens Rea
Mens rea is a latin phrase meaning a "guilty mind." This generally means that there must be some mental intent to commit the act that is wrongful under the law.
General Intent
General intent crimes simply require that the individual intend to do the act that constitutes a crime, without specific intent as to the results of the harmful action. General intent crimes include the following:
· criminal negligence—If an actor intends a physical act that is negligent under the circumstances, she may be criminally liable for the harm resulting from the action. Generally, the action must pose a foreseeable risk of harm and the actor's failure to observe due care brings about that harm. For example, Bob is driving while texting on his phone. He takes his eyes off of the road and accidentally strikes a pedestrian who is killed. In this instance, he may be criminally negligent.
· strict liability crimes—This type of crime does not require a defendant's mens rea. That is, if an individual undertakes an action, regardless of whether there was intent, she is criminally liable. For example, An individual who has sexual intercourse with someone under the legal age of consent may be convicted of statutory rape. It does not matter if the defendant believed that the other person was above the legal age of consent. A strict liability crime looks solely at the action and not the intent of the parties.
Specific Intent
Specific intent crimes require that the individual have the intent to achieve that harmful result or be indifferent or reckless with regard to the probable results of her conduct. The specific intent requirement is generally satisfied if the defendant acts recklessly with regard to the potential harm that could result from her actions or inactions. Specific intent crimes include both intentional crime and criminal recklessness:
· intentional crime—The actor intends the physical act and the likely result of that act constituting a crime. For example, Tom intentionally provides false information to a bank when applying for a line of credit. When the bank learns of the false information, it presses charges against Tom for fraud. If Tom is able to demonstrate that he did not know that the information was false, it will negate the specific intent required for a charge of fraud.
· criminal recklessness—An actor may be criminally liable for undertaking an action without regard for the potential harm to persons or property. Generally, the actor must understand the substantial risk and consciously disregard it. For example, Merrick is anxious to try out his new bow and arrow. He walks outside and fires an arrow straight up into the air. Merrick lives in the city and the area is densely populated. He knows that it is a substantial risk that the arrow will strike someone, but he disregards this risk. He will likely be criminally reckless if that arrow strikes someone.
In some instances, a guilty act may constitute more than one crime. This may be the case when one crime is a "lesser-included offense" of another crime. That is, less than all of the elements required for one crime may meet all of the elements of another crime. For example, theft may be a lesser-included crime of burglary. A general intent crime may be a lesser-included offense of a specific intent crime.
Ask Yourself
· Do you think the mental element of a crime is important? If a person causes harm without intent, is there less reason to subject that individual to criminal punishment?
· Donald is driving down the road listening to his favorite heavy metal songs. He gets so excited that he does not realize that he is traveling 20 mph over the speed limit. A police officer witnesses the speeding, stops Donald's car, and issues him a citation. Donald goes home and looks up the citation under state law. The statute indicates that speeding is a strict liability crime. What does this mean for Donald? Does it matter that Donald's excessive speed was accidental? Would it matter if Donald were temporarily disoriented when driving due to a carbon monoxide leak in his car that caused him to lose the ability to effectively control his automobile?
Classifications of Criminal Conduct
Criminal conduct is generally classified by the level of severity and the potential punishment from breaking the law. The two primary classifications of crimes are as follow:
· misdemeanor—a crime of lesser significance that is punishable by a fine or a joint sentence of less than one year
· felony—a more serious crime punishable by fine or imprisonment in a penitentiary for a period of one year or more
Historically, the common law identified treason as a class of serious offense that was separate from a felony. Also, today, many jurisdictions identify a less severe form of criminal act, known as an infraction. The infraction is generally a minor violation of an ordinance or regulation.
Ask Yourself
· Do you believe that laws are always classified appropriately? Do you believe that criminal conduct is generally classified too leniently or too harshly? Do you believe that the misclassification of crimes has a negative impact on society?
· Clark is a college student at City College. He is at a house party drinking alcohol when the police arrive to break up the party. Clark is cited for underage drinking. Angry at the occurrence, Clark gets into an argument with a police officer and punches him. Clark is arrested and taken to jail. What is the likely classification of each of Clark's criminal acts? Why?
Process for Initiating and Processing Criminal Charges against a Defendant
The general process for initiating criminal charges against an accused is as follows:
· arrest—An arrest is the first step of the prosecutorial process. It involves the physical detention of an individual. If the defendant is an organization, the arrest may be carried out through injunctions against continued business operations. The arrest takes place pursuant to some form of legal authority. This may include the arresting individual witnessing criminal activity or pursuant to an arrest warrant.
· initial appearance—Once an individual is arrested, she has a right to be informed of the charges against her. As such, the defendant must go before a judicial officer within a statutory period (generally 72 hours) to receive notice of the charges.
· bringing charges—To bring formal charges against someone, the case is handed over to the prosecuting officer of the court. The prosecuting attorney may have any number of titles (solicitor, district attorney, etc.). This prosecuting officer orchestrates the process for bringing charges against a defendant in the name of the people of that jurisdiction. For example, the charges may read, "US v. John Smith" or "State of Georgia v. John Smith." Who has the decision- making authority to bringing charges against the defendant depends upon the classification of the alleged criminal conduct. A prosecutor must file an "information" with the court to begin prosecution of a misdemeanor. The prosecutor must submit the matter to a grand jury to bring felony charges against a defendant. The grand jury decides to bring felony charges against a defendant, this is known as handing down an "indictment."
· arraignment—The arraignment is the first appearance by the defendant before the court to answer the criminal charges. At the arraignment, the court will review the defendant's rights and accept the defendant's plea. The plea will either be guilty, not guilty, or nolo contendere (no contest). If the defendant pleads guilty (or no contest), the court will set a trial date for sentencing. If the defendant pleads not guilty, the court will set the matter for trial.
· trial burden—To convict a defendant of a crime, the government bears the burden of proof and the burden of persuasion. Burden of proof means that the government must demonstrate sufficient evidence to demonstrate each element of the charged offense. The burden of persuasion means that evidence must be sufficient to convince a jury that the defendant is guilty beyond a reasonable doubt.
Each step of the criminal process may vary slightly among jurisdictions. Prosecution of a violation of a criminal law is carried out in an Article III court (judicial branch court). Article I courts (administrative courts) do not prosecute violations of criminal law.
Note that states establish a special court, juvenile court, to handle criminal infractions by adolescents.
Ask Yourself
· Of the major steps in the criminal process, do you think any procedural step is more important in terms of observing a defendant's due process rights? Can you think of situations or examples of how a defendant's rights could be infringed upon in each of the steps?
· Laura receives notice from the state's criminal law division that she has been indicted for illegally trading in corporate securities. The criminal detective advises Laura to report to the local police station where she will be processed for arrest and detention. On the way to the police station, Laura calls her attorney and asks about the process that she will face if the government continues with the charges against her. If you are Laura's attorney, explain to Laura the process that she can expect.
Common Crimes Involving the Property of Others
Each state adopts its own criminal statutes. Some of the more common types of named criminal offenses against someone else's property include the following:
· larceny—Larceny is the unlawful taking (theft) of personal property with the intent to permanently deprive the rightful owner of it.
· robbery—Robbery is theft through violence or threat.
· burglary—Burglary is theft by breaking into a building (sometimes at night) with intent to commit a felony therein.
· extortion—Extortion is the unlawful obtaining of another's property though coercion, such as the threat of violence.
· embezzlement—Embezzlement is the theft of money by an individual entrusted to hold it.
· fraud, false pretenses, and theft by deception—Fraud, false pretenses, and theft by deception involve deceiving someone to unlawfully take possession of her property. While fraud generally involves deception, false pretenses and theft by deception requires a knowingly false representation.
There are many statutory and common-law charges involving the property of others. These above- mentioned examples, however, are generally uniform across jurisdictions.
Ask Yourself
· How do you feel about the premise of revoking an individual's liberty for actions that harm the possessions or property of others? Does the individual's intent when carrying out these actions influence your opinion?
· What is the difference between larceny, robbery and burglary? What is the difference between extortion and embezzlement? What is the difference between fraud and theft by deception?
Activities Constituting Fraud
The elements of the crime of fraud vary between jurisdictions. Consistent with the federal fraud statute, fraud is the unlawful taking of another's property through the following types of knowing and willful conduct:
· falsifying, concealing, or covering up any trick, scheme, or device
· making any material false fictitious, or fraudulent statement or representation about a material fact
· making or using any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry
Related charges, commonly known as false pretenses and theft by deception generally constitute the following types of conduct:
· intentionally creating or reinforcing an impression that is false
· failing to correct an impression that is false and that the person does not believe to be true if there is a confidential or fiduciary relationship between the parties
· preventing another from acquiring information that is relevant to a transaction
· failing to disclose a known lien or other legal impediment to property being transferred.
The elements of the above charges are generally common among most jurisdictions, with slight variations in the language or wording.
Ask Yourself
· Fraud generally entails wrongfully obtaining resources or benefits from another person by deceptive means. In your opinion, does the fact that the individual voluntarily provides the resources or benefits to the fraudster in any way mitigate or lessen the reprehensible nature of the actions?
· Doreen is seeking to borrow funds to run her business. She approaches several wealthy individuals in town and pitches the virtues of her business. She goes further than over representing the strength of her business. She lies about the incomes generated over the past several months. Convinced by her presentation and the business's strong performance, several individuals make loans to the business of $10,000 or more. Doreen continues operations and uses the funds to pay herself a substantial salary. Ultimately, the business fails and shuts down. Has Doreen committed a crime? If so, what?
Good Faith and Fraud
Fraud requires knowing and willful conduct carried out with the intent to defraud someone. As such, good faith in one's actions is a defense to the allegations. The defense is that the defendant acted in good faith and did not have the necessary intent to defraud anyone. It does not matter that a person's statement or belief is wrong, there is no action for fraud unless intent is deceive is present. Further, an individual's lack of due care in making a statement is not relevant in determining fraud.
Ask Yourself
· How do you feel about the mental intent requirement for a charge of fraud? Do you think a person should be able to escape a criminal fraud charge if she is reckless in her actions? What if she recognizes that her assertions are extremely unlikely, but she leads a customer or client to believe that the unlikely result is reasonably certain?
· Mitchell owns a baseball card of Mickey Mantle. He believes that the card is an original rookie card. He offers to sell the card to Amy for $1,500. Amy buys the card. No long afterward, she has the card inspected and learns that it is simply a reproduction of the original card and is not worth any money. She is angry at Mitchell and asks your opinion on whether she should report the incident to the police. Has Mitchell committed fraud? Why or why not?
Common Types of Business Fraud
Many examples of business fraud include a scheme or plan designed to take from a person the tangible right of honest services. Below are some common examples of fraud in the business context:
· mail or wire fraud—It is illegal to use the US postal service or electronic means of interstate communication to carry out a scheme to defraud. This is a very broad statute, as it includes any fraudulent conduct employing mail or wire transmission. To mail means a communication is sent or received through use of the US Postal Service or any interstate carrier. Wire transmission includes the use of radio, television, telephone, Internet, or other wired form of communication.
· securities fraud—Federal laws defining securities fraud are the Securities Acts of 1933 and the Securities Exchange Act of 1934. Section 17 of the 1933 Act covers fraudulent activity in the issuance of securities Section 10 and Rule 10(b)(5) of the 1934 Act cover fraud in the purchase or sale of a security.
· insurance fraud—This is a common state-law crime in which an insured makes a fraudulent claim for benefits under an insurance policy. For example, intentionally setting fire to the building of a failing business to collect the insurance proceeds is insurance fraud.
· health care fraud—Health care fraud generally involves making fraudulent claims for payment or reimbursement of health care expenses. The common offenders are health care providers who make fraudulent claims for reimbursement for services never performed or unnecessary. The prosecution usually falls under the False Claims Act.
· tax fraud—Tax fraud is the knowing concealment of transactions or property ownership in an attempt to illegally avoid paying federal, state, or local taxes.
Ask Yourself
· Do you think there should be varying degrees of fraud? When does in individual's conscious decision to do a poor job or cut corners amount to a plan or scheme to defraud the individual paying for the services? Could an intentional misstatement amount quality of services or effectiveness of a product amount to fraud? Could it be fraud if an individual misrepresents (or lies about) a work process in order to get hired or win a contract?
· Javier opens a personal wealth investment business. He represents to clients that he can generate above-average returns on their investment with minimal risk. He claims to have insider information on many new business ventures that makes them a certain success. He makes up fake disclosure documents for business that do not exist or have no connection with Javier. In reality, Javier is running a Ponzi scheme in which he takes money from investors and uses the funds to pay returns to other investors. He also spends much of the remaining funds soliciting new investors through email and direct-mail advertisements. What crimes, if any, has Javier committed? Why?
Conspiracy
Conspiracy involves an agreement between individuals to commit a crime. Conspiracy is a separate charge or crime than the crime agreed to by the parties. In a conspiracy, each member becomes the agent of the other member or members. Each person in the conspiracy does not have to know all of the details. Each person simply needs to understand that the plan is illegal and knowingly and willfully join in that plan on one occasion. The conspiracy or conspired act does not have to be successful. The formal elements of a conspiracy charge are as follows:
· multiple people—There must be two or more persons.
· mutual understanding—In some way or manner, these people must come to a mutual understanding to try to accomplish a common and unlawful plan.
· willfulness—The defendant must willfully become a member of the conspiracy.
· overt act—During the existence of the conspiracy, one of the conspirators must knowingly commit at least one of the overt acts described in the indictment (formal charge).
· purposeful act—The overt act was knowingly committed in an effort to carry out or accomplish some objective of the conspiracy.
The essence of a conspiracy offense is the making of an agreement followed by the commission of any overt act in furtherance of that agreement. While direct evidence is preferable, circumstantial evidence may be used to prove a conspiracy.
Ask Yourself
· Do you think a person should be liable for conspiracy to commit a crime if they were not involved in the planning of the crime? What if conspirators solicit a third party to commit an illegal act that is part of the conspiracy, but the third party does not know about or agree upon the conspired scheme? How much evidence do you think must be present to demonstrate alleged conspirators have arrived at a mutual understanding?
· Sarah, Jane, and Tommy need money to support their drug habits. They devise a plan to break into April's house and rob her. As soon as they begin planning, Sarah realizes that this is a very bad idea. She tells Tommy and Jane that she made a mistake and she wants no part of the plan. Tommy and Jane, undeterred by Sarah backing out, go to April's house to determine the best way to break in. A neighbor notices them creeping around the house and calls the police. The police arrest Tommy, Jane, and Sarah and charge them all with conspiracy. Will Sarah, Jane, and Tommy be found guilty of conspiracy? Why or why not?
Obstruction of Justice
Obstruction of justice is an intentional act carried out with the intent to obstruct the legislative or judicial process. This charge seeks to protect legislative, judicial, and administrative proceedings.
Ask Yourself
· How do you feel about charging a friend or family member of an accused individual for harboring (hiding) that individual to prevent her arrest? What if a friend or family member withholds or fails to give to authorities any information that implicates a family member in a crime? What if a friend or family member specifically lies when questioned by authorities to prevent an arrest?
· Barry witnesses a masked individual pull a pistol on two unsuspecting tourists and demand their valuables. He then watches the perpetrator run away down the street. At the end of the street, the perpetrator throws his weapon in the trashcan and continues to flee. Barry walks to the end of the street and removes the robber's weapon from the trash can. He likes the gun and decides to keep it for himself. When the police arrive on the scene, they question everyone in the area, including Barry. Barry refuses to answer the police questions and does not mention the weapon he found. Has Barry committed a crime?
Providing a False Statement
False Statement to a Bank
Making a false statement to a bank involves presenting financial information to a bank when requesting a loan. It is a federal crime for anyone to willfully make a false statement to a federally insured financial institution. Lending institutions rely upon a company's financial statements in extending credit or granting a loan. An individual must intentionally make the false statement to the financial institution in order to secure some form of financial rights (such as a loan or guarantee). The statement must relate to a material fact or consideration that the individual knows to be false. A fact is material if it is an important consideration in the determination of whether or not to extend a financial benefit.
False Statement to a Federal Agency
The US Code makes it a federal crime for an individual to willfully and knowingly make a false or fraudulent statement to a department or agency of the United States. The false statement must be material in nature. Making a materially false statement to another person with knowledge that it will be transmitted to a federal agency is also a crime.
Federal appellate courts recognize the "exculpatory no" exception for simple denials made in response to government questioning as part of a criminal investigation. This type of reaction to government questioning will not lead to charges of making a false statement.
Ask Yourself
· How does a false statement to a financial institution compare to a false statement to a governmental agency? Does criminal liability for a false statement to a governmental agency implicate the 1st Amendment?
· Donnie needs capital to run his business. He goes to the local bank and talks with a loan officer. As part of the loan application process, Donnie must submit his business's financial history. Donnie makes up some financial statements with false information about the business's operations and sales. The bank relies on these statements in loaning $30,000 to Donnie's business. Donnie's business takes off and is successful. He is easily able to repay the loan. Has Donnie committed a crime?
Aiding and Abetting Criminal Activity
Aiding and abetting involves providing assistance to someone accused of a crime. The assistance must relate to the criminal activity, such as assistance preparing to commit the crime, covering up the criminal activity, or evading law enforcement. This charge can be very similar to conspiracy. Under state law, the crime of aiding and abetting is often referred to as accessory. An individual can be an accessory before or after the commission of the crime. Accessory before the fact means that the individual helps in preparation of the criminal activity. Accessory after the fact means that the individual helps conceal or cover up the crime.
Ask Yourself
· When should offering general support to an individual who commits a crime constitute accessory? Is a person an accessory if she knowingly provides the accused with a weapon or tools to commit a crime? What if the third party simply provides information to the accused that is useful in committing the crime? What if a person allows the accused to stay with them after learning that there is a warrant for the accused's arrest?
· Hank commits a violent crime and is on the run from the police. Prior to committing the crime, he expressed to his friend, Joanna, that he needed a handgun to rob someone. Joanna, ever the loyal friend, helps him acquire the gun. After the crime is committed, Hank flees and asks his mother Edith for help in leaving the state. Edith allows Hank to take her vehicle and flee the state. Has Joanna or Edith committed crimes?
White-Collar Crime?
White-collar crime characterizes crimes by criminals of high socioeconomic status or individuals who hold high-ranking, professional positions, such as corporate executives. More broadly, it includes any offense that occurs in a business or professional setting. These crimes can either be for personal gain or with the purpose of harming or benefiting the business.
Unlike individuals, corporations cannot be put into jail. Corporations can, however, be fined and face other criminal penalties, such as involuntary dissolution.
White-collar crimes includes: embezzling money, making electronic advances to fictitious employee, and accepting kickbacks from suppliers.
Ask Yourself
· Do you feel like white-collar crimes are punished as regularly or severely as non-white-collar crimes? How do you feel about the inability to incarcerate a business entity, when these entities receive many of the same rights and procedural protections of human beings?
· Gina is the Chief Financial Officer of ABC, Inc. In her role, she approves all major expenditures of corporate funds. She authorizes the use of corporate funds to pay for her vacation to the Bahamas with her family. She uses the funds for travel, lodging, gambling, and dining. She is able to conceal the expenditures by acting as disbursing and approval authority. Do Gina's actions constitute white-collar crime?
Crimes Directed at Conduct Endangering Workers
In some instances, a corporate official may be charged with a crime for conduct committed in furtherance of her job duties. Particularly, conduct by business officials that endanger workers may be criminal in nature.
The Occupational Safety and Health Administration (OSHA) or equivalent state agencies may investigate businesses for violation of health and safety standards. If an agency uncovers potentially criminal conduct, it can turn the investigation over to state or federal authorities for investigation and potential prosecution.
Examples of such criminal actions include when a business official commits an assault and battery of an employee or makes decisions that recklessly endanger or company workers. If a company official orders extremely dangerous process, such as handling dangerous chemicals, or fails to institute adequate safety precautions, she may face criminal liability if a worker is injured or killed.
Ask Yourself
· If you have read the famous book by Upton Sinclair, The Jungle, you are aware of the harsh working conditions that workers in the United States faced at the turn of the twentieth century. Do you think that criminalizing decision making by corporate executives helped to curve these harsh employer practices? Do you think the criminal penalties against businesses are sufficient to deter these practices?
· Earl is a movie director. He is known for the action sequences in his documentary films. He hires, Faith, a recent film graduate to work on his movie set. As part of a film, Earl wants to film a chase sequence on a railroad track. Earl mounts a camera on the bumper of a vehicle and instructs faith to maneuver it during the action scene. During the scene, Faith is bounced from the vehicle and severely injured. Has Earl committed a crime against faith.
Bribery and Other Illegal Payments
Offering, receiving, or soliciting something of value for the purpose of influencing the action of an official in the discharge of her public or legal duties is illegal in both the domestic and international contexts. Under federal law, this sort of activity is prohibited by the Foreign Corrupt Practices Act (FCPA), which specifically serves to prevent kickbacks to facilitate business transactions.
There is an exception under the FCPA that allows payment to individuals to undertake their procedural or routine tasks when such payments are customary in a country.
Ask Yourself
· Do you think businesses should be prevented from paying government officials for official action that helps or favors the business? Should these prohibitions apply outside of the United States as well? Does it change your opinion if the act of paying officials in a particular foreign country is so common that it is expected? Should there be an exception when bidding for contracts against foreign companies that are openly paying officials?
· Sean owns a company and seeks to sell goods to the Brazilian government, specifically the development department. Sean knows that the Brazilian market is difficult to break into for foreigners. Sean, with the purpose of improving his chances of winning the contract, buys very lavish gifts and has them delivered to the home of the director of the development department. Has Sean committed a crime?
RICO Act
The Racketeer Influenced and Corrupt Organizations Act (RICO) imposes criminal and civil liability upon those businesspersons who engage in certain prohibited activities that directly affect interstate commerce. The law is commonly used to impose criminal sanctions and forfeiture of resources used in furtherance of the criminal enterprise. Elements of a RICO action include:
· involvement in an enterprise—This may include using or investing income from prohibited activities to acquire an interest in or to operate an enterprise; acquiring or maintaining an interest in or control of an enterprise; or conducting or participating in the conduct of an enterprise while being employed by or associated with it.
· pattern of racketeering—Racketeering is defined as "any act or threat" involving a specified state crime or any "act" subject to indictment under various federal statutes. There must be some pattern of or recurring activity constituting racketeering.
The law makes it unlawful for any person employed by or associated with any enterprise to conduct or participate in a violation of the law. The law foresees two separate entities: person and the enterprise. Generally, employment alone is insufficient to hold someone liable under RICO.
Ask Yourself
· Do you think this statute goes too far by allowing the government to charge individuals who are not directly involved in the criminal activity? Is the ability to reach those facilitating a criminal activity (and their assets) necessary to the administration of justice?
· Gloria makes a living by illegally importing cocaine into Florida from Colombia, SA. She does not have any hands on the process. Rather, she hires every part of the activity. Once the drugs arrive, she hires Terry to pack them in the trunk of a car and sends them to a distributor in New York. She hires Robert to drive the vehicle carrying the drugs. On the way, Robert is stopped and arrested by North Carolina police officers. The Federal Bureau of Investigation gets involved and traces the scheme back to Gloria. How can the FBI potentially charge Gloria for her involvement in drug trafficking?
False Claims Act
The False Claims Act (FCA) is a federal law that provides criminal and civil sanctions for those who commit fraud against the US Government. It is well known for authorizing a special type of civil action, qui tam, or whistleblowing, which allows a civil plaintiff to bring an action against a company on behalf of the federal government. The criminal and civil provisions of the FCA prohibit the following conduct:
· knowingly presenting, or causing to be presented a false claim for payment or approval
· knowingly making, using, or causing to be made or used, a false record or statement material to a false or fraudulent claim
· conspiring to commit any violation of the False Claims Act
· falsely certifying the type or amount of property to be used by the government
· certifying receipt of property on a document without completely knowing that the information is true
· knowingly buying Government property from an unauthorized officer of the government
· knowingly making, using, or causing to be made or used a false record to avoid, or decrease an obligation to pay or transmit property to the government
· retaliation based upon reporting any of the above infractions.
The unique aspect of the FCA is that it allows individuals reporting criminal fraud against the government and those bringing qui tam actions to receive a portion of the proceeds recovered by the government.
Ask Yourself
· What do you think is the justification for allowing civilians to bring an action on behalf of the government? What do you think about awarding a whistleblowing civilian a portion of the civil damages recovered against a company? What is the reasoning behind allowing these types of actions?
· Ron works in the manufacturing services unit for ABC, Inc. ABC has a large contract with the federal government to manufacture steel storage containers. The contract allows ABC to charge the government for all materials used in manufacturing and for the labor costs. Ron noticed that ABC was routinely ordering shipments of steel fittings at $25,000 each as part of the materials order for the government contract. In reality, ABC was only using a small portion of the fittings on the contract, and was selling the remaining units to third parties. Ron decides to inform the government that it is being routinely over charged by ABC. Has ABC committed a crime? What rights and protections does Ron have in reporting ABC's conduct?
Sarbanes-Oxley Act
The Sarbanes-Oxley Act (SOX) is a set of federal laws addressing criminal and unethical conduct of public company boards and management. It also addresses the accounting and auditing practice of firms servicing these public companies. The criminal sanctions under the statute are as follows:
· Title VIII & XI—This portion of SOX contains the Corporate and Criminal Fraud Accountability Act of 2002. It provides criminal charges for the creation or destruction of fraudulent corporate records. It generally addresses fraud through the uses of corporate records and provides established ranges of criminal penalty. It also establishes protections against retaliation for those reporting such activity.
· Title IX—This portion of SOX is called the White Collar Crime Penalty Enhancement Act of 2002. It provides criminal charges for illegal and unethical conduct by officers and managers that harms the public. It specifically requires corporate managers to certify that records are true and accurate.
SOX was passed in the wake of numerous corporate scandals that rocked the financial markets, such as World Com, TyCo, Enron, and Arthur Andersen.
Ask Yourself
· Do you think that additional government regulation of corporate practices in the form of criminal penalties helps to curb unethical conduct? Do any positive effects outweigh the negative consequences to the business (such as increased costs, bureaucracy, etc.)?
· Derek is CFO of ABC, Inc. After years of declining profits, Derek devises a method for improving the appearance of ABC's balance sheet. Derek creates a group of limited liability companies that are owned by ABC. ABC transfers corporate debt to these entities, which is reported off of the main balance sheet and in the footnotes of the financial statements. Derek knows that this form of disclosure is likely to convince investors that ABC has a strong financial position. Has Derek committed a crime?
Cyber Crime
Federal law provides that a person who intentionally accesses a computer without authorization or exceeds authorized access to obtain classified, restricted, or protected data, or attempts to do so, is subject to criminal prosecution.
Types of cybercriminal conduct include: hacking, cyber terrorism, destruction of data, unlawful appropriation of data or services.
Ask Yourself
· Do you think it should be a crime for individuals like Edward Snowden to disclose governmental data? Do you think it should be a crime to access the back-end database on someone's private website? At the opposite end of the spectrum, if someone walks away from a public computer and fails to log out of her email account, do you think it should be criminal to read that person's emails? What if you were to send an email (even as a joke) from that person's email account?
Defenses to Criminal Conduct
Common defenses to criminal conduct include:
· negating mental capacity—Certain conditions of the defendant may negate the mental capacity to commit a crime. Defenses commonly negating capacity include mental incompetence, insanity, involuntary intoxication, and infancy.
· negating intent—Certain conditions may negate the requisite intent (men rea) required by a particular crime. A mistake of fact or voluntary intoxication may negate the mental intent required to find guilt for a particular crime.
· other general defenses—These defenses constitute defenses to certain criminal charges. Common examples include the following:
· duress—This means applying undue pressure (often pursuant to a position of power or authority over an individual) to coerce activity deemed to be criminal conduct. Holding a gun to someone to make them steal would be an example of duress.
· necessity—Necessity is when an individual had no choice but to break the law in order to avoid significant harm. There must not be another reasonable manner of avoiding the harm and the harm avoided must be greater than the harm caused by breaking the law. For example, Hank sees an individual planting a bomb in a public park. The individual runs off. Hank pulls out his concealed weapon and fires it into the air multiple times. This act causes all the bystanders to flee running. His act of firing the weapon was criminal, but it was done out of necessity.
· entrapment—This involves the wrongful solicitation and inducement to commit criminal activity by a government official (particularly the police). For example, a police officer tells Adam that he can make some extra money by helping me transport drugs from Florida to New York. He or she provides Adam with a vehicle loaded with illegal drugs and then arrests Adam for carrying out the plan. The officer has entrapped him.
· justifiable use of force—Individuals may generally use a certain level of force to protect themselves and their property. The use of force is generally limited to the ability to respond with a reasonable amount of force given the situation. For example, Thomas is walking down the street when he is attacked by two men. Fearing for his physical safety, Thomas uses a can of mace to spray and disorient his attackers. Thomas has not battered his assailants, as his use of force was justified in defense of his safety.
The availability or applicability of any defense depends upon the type and nature of the criminal charges.
Ask Yourself
· What is your impression of defenses to criminal activity? Do you believe most defenses posed in criminal actions are valid or are they overused hindrances to the execution of justice? Can you think of any famous criminal cases where one of the defenses earned an acquittal for a defendant?
· Geoffrey is walking home from a party and is stopped by the police. The police are concerned that Geoffrey is intoxicated and administer a field sobriety test, which Geoffrey fails. The police charge Geoffrey for public intoxication. Geoffrey contends that he did not drink or take drugs that night. A blood test shows that Geoffrey has alcohol in his system. Unbeknownst to Geoffrey, someone at the party had spiked the punch bowl from which Geoffrey was drinking. What defenses might Geoffrey employ at trial?
Licenses and Attributions
Business Law: An Introduction, by TheBusinessProfessor.com, Jason M. Gordon & Colleagues has been adapted with permission from Jason M. Gordon. © Business Professor, LLC.
Law of Torts
The legal system in the United States is a common-law system with civil law and criminal law components. The civil-law component of the US common-law system should not be confused with the civil-law system, which is a separate system of law originating in ancient Rome and adopted by most European countries. The US common-law system includes different procedures for redressing civil-law violations (e.g., the law of tort, contract, agency, employment, divorce, and business organizations) than for redressing criminal-law violations (e.g., larceny, murder, rape, and robbery).
Tort law, an important component of civil law within the US common-law system, generally encompasses situations where an individual’s conduct causes harm to another. A tort is literally translated from French as a wrong. These wrongs give rise to claims in court, when a specific statutory or common-law tort is committed. When a tort is committed, one may seek monetary compensation (damages) for the tort in court.
Tort law may be divided into three broad categories of tort: intentional torts, negligence, and strict liability torts. Intentional torts generally require that one “intended” to cause the consequences of the act. That is, one must have intended to perform the act that caused harm to another. Negligence generally requires that one be at fault for committing the act. Negligence theory underlies many personal-injury actions, such as car accidents. Strict liability torts require neither intent nor fault; simply causing harm to an individual while performing one of an enumerated list of strict liability torts gives rise to damages (even if a person did not intend the act and was not at fault for it).
Intentional torts often have counterparts within criminal law. For example, if Joe strikes Dave across the face with a stick, Joe may be liable for a civil battery and a criminal battery. The civil action for battery may result in Dave receiving compensation for the harm done to him, including costs of medical bills, pain and suffering, and compensation for work missed while in the hospital. Simultaneously, a criminal action may be brought against Dave for a criminal battery. The criminal action is not about compensation, but instead is about punishing Joe for committing a crime. Punishments for the crime may include jail time, fines (paid to the government), and community service.
Although some intentional torts have criminal counterparts, not all do. In some cases, a wrong against an individual is merely a civil wrong and has no criminal repercussions. Certain defamation claims, for example, may result in compensation but have no criminal counterpart, so will not result in a correlative criminal action. One very famous incident involving both civil and criminal claims is that of O.J. Simpson, who was tried criminally and found not guilty. However, O.J. Simpson was found civilly liable to the family members of the deceased and had to pay those families millions in compensation for the civil wrongs.
Check Your Knowledge
Choose the best answer to each question.
Question 1
Which of the following is the key characteristic of a common law system (the answer being the central feature that distinguishes it from a civil law system)?
Common law systems use juries.
Common law systems utilize judges to interpret the law.
Common law systems abide by precedent.
Common law systems are rooted in Europe.
Question 2
Which of the following is NOT a type of tort?
intentional tort
breach of contract
negligence
strict liability
Question 3
Which of the following is the most accurate statement of the relationship between torts and crimes?
Some torts also involve correlative crimes, but not all torts involve correlative crimes.
All torts involve correlative crimes.
No torts involve correlative crimes.
Torts may be considered a branch of crimes.
Question 4
Which of the following is NOT a type of invasion of privacy?
disclosure of private information
use of name of likeness
invade physical solitude
defamation
Question 5
Which of the following torts involves a non-party to a contract knowingly inducing a party to the contract to fail to honor or breach the agreement?
interference with prospective advantage
disparagement
interference with contractual relations
wrongful appropriation of business interests
Resources
· Common Law versus Civil Law Legal Systems
· Legal Theory & Foundations and Law of Torts
Licenses and Attributions
Business Law: An Introduction, by TheBusinessProfessor.com, Jason M. Gordon & Colleagues has been adapted with permission from Jason M. Gordon. © Business Professor, LLC.
© 2021 University of Maryland Global Campus
All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity of inform
Learning Topic
Tort Damages
The overarching purpose of tort law is to provide remedies, usually in the form of damages (monetary awards), to persons injured by the civil wrongs of others. Damages awarded for tort violations include compensatory and punitive damages.
The aim of compensatory damages is to place the injured party in the same position that party would have been in had the tort never been committed, that is, to make the injured party whole. Compensatory damages are sometimes categorized into two types: special and general compensatory damages. Special damages are quantifiable monetary losses incurred by the injured party, such as the cost of replacing or repairing damaged property, medical costs, past lost wages and benefits, future lost wages and benefits, and other quantifiable costs resulting from the tort. General damages, on the other hand, are not easily quantifiable and include pain and suffering, loss of consortium, loss of reputation, and loss of mental or physical capacity resulting from a tort.
In some egregious cases, courts also award punitive damages. Punitive damages are intended to punish a tortfeasor (person who commits a tort) for engaging in particularly wanton or reckless conduct that reflects a disregard for the interests of others. Punitive damages are often limited by courts to approximately three times the amount of compensatory damages, in order to satisfy the due process requirements of the Constitution (exceeding these approximate amounts may be deemed an unconstitutional deprivation of another person’s property). Thus, punitive damages are reserved for the most egregious of tort cases, and appeals often follow when a trial court awards them. They are generally only available for intentional torts, although they are sometimes available for cases of gross negligence.
Resources
https://learn.umgc.edu/d2l/ext/rp/610227/lti/framedlaunch/43de3c14-dd50-474b-b14a-d0a23e551bbc
Step 4: Focus on Your Rationale and Conclusions: Create Your Outline
You've finished your research. You've reflected on how the facts and the law come together in this situation. You've analyzed the possible arguments and determined which seem most reasonable. Now it is time to formulate these arguments, addressing all the issues raised by the narrative in the Blue Mood Clothing, Inc. case file Vice President Dodger gave you.
Outline your presentation to the leadership team, either on paper or in a Word document; don't make the PowerPoint yet. Review your outline to make certain it covers all relevant points and progresses in a logical order. Identify the major bullet points that you will highlight on your slides, and allocate the appropriate supporting information to each bullet point—make sure that you have adequately covered all the relevant arguments or reasons needed to support them. In the next step, you'll use your outline to create the PowerPoint presentation for the VP.
https://learn.umgc.edu/d2l/ext/rp/610227/lti/framedlaunch/43de3c14-dd50-474b-b14a-d0a23e551bbc
Step 5: Communicate Your Findings and Conclusions to the Vice President of Colossal Corporation: Create Your PowerPoint
You have finished getting all of your ideas organized surrounding the Blue Mood Clothing case when you receive an email with delivery instructions from Vice President Dodger:
INBOX (1 NEW EMAIL)
From: Kenneth Dodger, Vice President, Colossal Corporation
To: You
Just wanted to check in as you begin to communicate your findings and conclusions on the Blue Mood Clothing case.
I'd like you to use your outline and research notes from your work on this case to prepare a narrated PowerPoint for the senior leadership team. As you will not deliver this in person, it will need to follow the form of an asynchronous presentation.
Further, here is a list of additional requirements I need you to follow to meet standard presentation protocol:
· Include a title slide, with your name on it, introducing the presentation.
· On the presentation slides, include only the major bullet points for each issue.
· Include no more than 20 slides.
· Use your narration to provide the supporting rationale for each major bullet point.
· Include a script of your narration in the notes section of the PowerPoint.
· Title your files using this protocol: yourlastname_BlueMoodPowerPoint_date.
· The final slide must present a clear summary of your major conclusions and any recommendations.
You should be prepared to answer questions about your presentation after you have submitted it. That should be all for now.
Looking forward to seeing the final product,
Ken
Submit your narrated PowerPoint to the submission dropbox located in the final step of this project
