Subject: Legal Environment Of Business
– Recommended textbook for the subject: Cheeseman, H. R. Legal Environment of Business: Online Commerce, Ethics, and Global Issues. (CHAPTERS 5, 6, 7 & 8)
– Answer the following essay questions:
1. The state of Alabama enacted a statute that imposed a tax on premiums earned by insurance companies. The statute imposed a 1 percent tax on domestic insurance companies (i.e., insurance companies that were incorporated in Alabama and had their principal office in the state). The statute imposed a 4 percent tax on the premiums earned by out-of-state insurance companies that sold insurance in Alabama. Out-of-state insurance companies could reduce the premium tax by 1 percent by investing at least 10 percent of their assets in Alabama. Domestic insurance companies did not have to invest any of their assets in Alabama. Metropolitan Life Insurance Company, an out-of-state insurance company, sued the state of Alabama, alleging that the Alabama statute violated the Equal Protection Clause of the U.S. Constitution. Who wins and why? Explain your answer.
2. Intex Recreation Corporation designed and sold the Extreme Sno-Tube II. This snow tube is ridden by a user down snow-covered hills and can reach speeds of 30 miles per hour. The snow tube has no steering device, and therefore a rider may end up spinning and going down a hill backward. Dan Falkner bought an Extreme Sno-Tube II and used it for sledding the same day. During Falkner’s second run, the tube rotated him backward about one-quarter to one-third of the way down the hill. A group of parents, including Tom Higgins, stood near the bottom of the hill. Higgins saw 7-year-old Kyle Potter walking in the path of Falkner’s speeding Sno-Tube. Higgins ran and grabbed Potter to save him from harm, but while he was doing so, the Sno-Tube hit Higgins and threw him into the air. Higgins landed on his forehead, which snapped his head back. The impact severed Higgins’s spinal cord and left him quadriplegic. Higgins sued Intex for damages based on strict liability. Is the snow tube defective? Explain your answer.
3. Joseph Burger was the owner of a junkyard in Brooklyn, New York. His business consisted, in part, of dismantling automobiles and selling their parts. The state of New York enacted a statute that requires automobile junkyards to keep certain records. The statute authorizes warrantless searches of vehicle dismantlers and automobile junkyards without prior notice. One day, five plain-clothes officers of the Auto Crimes Division of the New York City Police Department entered Burger’s junkyard to conduct a surprise inspection. Burger did not have either a license to conduct the business or records of the automobiles and vehicle parts on his premises, as required by state law. After conducting an inspection of the premises, the officers determined that Burger was in possession of stolen vehicles and parts. He was arrested and charged with criminal possession of stolen property. Burger moved to suppress the evidence. Did Burger act ethically in trying to suppress the evidence? Does the warrantless search of an automobile junkyard pursuant to a state statute that authorizes such a search constitute an unreasonable search and seizure in violation of the Fourth Amendment to the U.S. Constitution? Explain your answer.
4. James W. Newton, Jr., is an accomplished avant-garde jazz composer and flutist. Newton wrote a composition for the song “Choir,” a piece for flute and voice that incorporated elements of African American gospel music. Newton owns the copyright to the composition “Choir.” The Beastie Boys, a rap and hip-hop group, used six seconds of Newton’s “Choir” composition in their song “Pass the Mic” without obtaining a license from Newton to do so. Newton sued the Beastie Boys for copyright infringement. The Beastie Boys defended, arguing that their use of six seconds of Newton’s song was de minimis and therefore fair use. Does the incorporation of a short segment of a copyrighted musical composition into a new musical recording constitute fair use, or is it copyright infringement? Explain your answer.
5. Discuss the concept of federalism and the doctrine of separation of powers.