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U.S. Constitution

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

–Preamble to the United States Constitution

The Constitution acted like a colossal merger, uniting a group of states with different interests, laws, and cultures. Under America’s first national  government, the Articles of Confederation, the states acted together only for specific purposes. The Constitution united its citizens as members of a whole, vesting the power of the union in the people. Without it, the American Experiment might have ended as quickly as it had begun.

Police Powers Law and Legal Definition

Police powers are granted to states in the 10th Amendment to the U.S. Constitution, which reserves to the states the rights and powers “not delegated to the United States,” which include protection of the welfare, safety, health and even morals of the public. Police powers denotes the basis for many regulatory subjects, such as licensing, inspection, zoning, safety regulations, and working conditions as well as law enforcement. Police powers may be used, for example to detain people or search things like vehicle.

It is a general term that expresses the fundamental power vested in every state to limit and regulate the exercise of private rights in the interest of public health, public morals, public safety, and the general welfare of the community. Governments have exercised police power to prohibit the sale of liquor and cigarettes and gambling. Cities and towns have prohibited the making of bricks in a town, the maintenance of livery stables, public laundries, billboards, public garages, coal yards and slaughterhouses.

The Police Power

Police power is the right to protect the country and its population from threats to the public health and safety. The term “police power” predates the development of organized police forces, which did not develop until the postcolonial period. In the colonial period, police power was used to control nuisances, such as tanneries that fouled the air and water in towns, to prevent the sale of bad food, and to quarantine persons who were infected with communicable diseases. Many of the colonies had active boards of health to administer the police power. This was one of the main governmental functions in the colonial period.

Under the Constitution, the states retained much of their police power but share the right to regulate health and safety issues with the federal government. Examples of the federal use of the police power are food and drug regulations, environmental preservation laws, and workplace safety laws. The states have companion laws in most of these areas, plus local public health enforcement such as restaurant inspections, communicable disease control, and drinking water sanitation. In most cases, the states share jurisdiction with the federal government and the courts will enforce whichever is the more strict law. State and local public health laws are exercises of the police power.

Jurisdiction

Jurisdiction is the authority granted by law to the courts to rule on legal matters and render judgments, according to the subject matter of the case, and the geographical region in which the issue took place. Areas of jurisdiction apply to local, state, and federal laws, which means that, for instance, a violation of federal law is tried in federal court. To explore this concept, consider the following jurisdiction definition.

Definition of Jurisdiction

Noun

1. The power and authority to administer justice by hearing and deciding legal cases

2. The territory over which such authority is exercised

3. The geographical area of a court’s legal authority, or of a law enforcement agent’s authority

Origin

1250-1300       Middle English <Latin jūris dictiōn

What is Jurisdiction

Jurisdiction is the term that refers to the limits of a legal authority. It can refer to both political territories and geographic regions, as well as the types of legal matters over which a legal body has authority. A formally authorized legal body is a court, political or governmental office, and in many situations, law enforcement agency. When a legal body holds jurisdiction, it has the authority to administer justice within that jurisdiction.

In the court system, there are three primary types of jurisdiction: subject matter, territorial, and in personam jurisdiction. If a court without proper jurisdiction hears a case, it does not have the authority to render a judgment, to provide the plaintiff with a remedy to his legal issue, or to hand down sentencing. For this reason, it is important for all parties involved to be sure the case has been filed in a court of proper jurisdiction. This is one of the first things that should be determined by the judge as well, before allowing the case to proceed.

Typically, a court holds more than one jurisdiction type in any case. This might mean the court can hear cases that originate in its geographical jurisdiction, and it has subject matter jurisdiction as well. As an example of jurisdiction, a family law court has the authority to hear and decide matters related to divorcechild custodychild support, and other related issues, if the family lives in its geographical region. Family court does not, however, have jurisdiction to hear a criminal case, even if it somehow relates to a family issue.

For example:

Jack and Anna have separated and are going through the divorce process, including a child custody battle. Anna initially left Jack after he had beat her up badly, putting her in the hospital, and sending the children to stay with their grandparents. Jack was arrested that day, and charged with felony spousal assault.

The family court is handling the issues of divorce and child custody, which are greatly affected by the behavior of the father for the past several years. It does not, however, have authority to try Jack on his criminal charges. That authority rests solely with the criminal court.

Courts of General Jurisdiction

Courts of general jurisdiction have authority to hear any type of case within its geographical and governmental jurisdiction, except where prohibited by law. These courts are often called “district courts,” or “superior courts,” depending on the state. In the state of New York, the state court of general jurisdiction is called the “Supreme Court,” which can be confusing, as it is not actually the state’s supreme court.

This means, for instance, that a state trial court of general jurisdiction might have authority to hear cases regarding a variety of subjects, within its geographical and governmental jurisdiction. In most states, however, the superior or district courts are divided by subject matter, with a specified court assigned all cases dealing with that topic. For instance, separate courts, or judges, will hear family court matters, civil lawsuits, small claims lawsuits, traffic court, drug court, and criminal court. These are known as courts of “limited jurisdiction.”

Determining Whether a Court Has Jurisdiction

In order to determine which court has jurisdiction over a legal matter certain questions must be addressed. These are:

1. Which court has jurisdiction in that geographical area (a civil lawsuit for an accident that occurred in Florida cannot generally be heard in California)

2. Which court has jurisdiction over the 
defendant
 (or over the person being charged or sued)

3. Which court has jurisdiction over the subject matter (is it family law, traffic violation, or civil lawsuit)

If the court in which any legal matter is filed lacks jurisdiction in even one of these areas, it does not have the authority to render judgment.

Subject Matter Jurisdiction

Subject matter jurisdiction is the authority of a court to hear cases involving a certain subject matter. A few examples of subject matter include bankruptcy, divorce, civil rights violations, and probate. The purpose of dividing a court system into such subject matter jurisdictions is to ensure that judges hearing certain types of cases are experienced in that area of law, as they work within it on a daily basis. It is just common sense that a judge specializing in bankruptcy cases not be allowed to hear a personal injury lawsuit.

Some types of jurisdiction, or lack thereof, can be waived by the parties, allowing the court to hear the case anyway. Subject matter jurisdiction, however, cannot be waived. If a court that does not have subject matter jurisdiction over a case makes a ruling on that case, the ruling can be invalidated.

For example:

As Alton was backing out of a parking space at the local mall, another car speeding down the aisle struck his car. While he had a stiff neck from the impact, Alton was more concerned about getting his car repairs taken care of, but the other driver’s insurance company is denying his claim.

A couple of weeks later, when Alton has to seek medical attention for the worsening pain in his neck and shoulder, he realizes he will have to file a civil lawsuit against the man who hit him, and against his insurance company. Alton knows where the courthouse is because he had hearings on his divorce there two years ago.

When Alton takes his civil lawsuit complaint to be filed with the court, he is told that the family law court cannot hear his personal injury lawsuit. Alton is redirected to the court that has subject matter jurisdiction over civil lawsuits and personal injury, to file his claim.

General Jurisdiction in State Courts vs. Federal Courts

While most states have courts of general jurisdiction, even if they have a system of courts with limited jurisdiction. On the other hand, the federal court system is limited by Article III of the U.S. Constitution as to subject matter. A primary issue in whether a federal court has jurisdiction over a civil case is whether the plaintiff has claimed a violation of the U.S. Constitution or federal law has occurred. This is referred as “federal-question jurisdiction.”

Criminal cases may be brought in either a state or federal court, depending on whose laws were violated. A defendant charged with violating a state theft law cannot be charged with that crime in a federal court. If he is accused of violating a federal law, such as trafficking in child pornography, he can be charged and tried in federal court. In some cases, a person may be charged and tried in both state and federal courts related to different elements of the same crime, and it has been ruled that this does not amount to 
double jeopardy
.

Territorial Jurisdiction

Territorial Jurisdiction refers to the authority a court has over cases within its specific geographical territory. If the court lacks territorial jurisdiction, it does not have the authority to make a ruling, or to hand down a sentence. Unlike subject matter jurisdiction, the defendant may be allowed to waive territorial jurisdiction in certain cases.

Territorial jurisdiction also applies to the geographical territory of a law enforcement agency, and therefore the prosecutor for that region. For instance, if Bob commits a crime in Bakersfield, California, the Bakersfield police have the authority to investigate, and the District Attorney for Bakersfield has the authority to bring criminal charges and prosecute the case. The criminal case would then be heard in the state court in Bakersfield.

There are certain exceptions. If someone is accused of committing crimes in more than one county or city within a single state, the crimes could be prosecuted in any of those jurisdictions, or each may choose to prosecute separately for the crime committed within its boundaries. If that person committed crimes in more than one state, or crossed state lines while committing the crime, the federal court has territorial jurisdiction.

In Personam Jurisdiction

The Latin term in personam jurisdiction, refers to a court’s jurisdiction over the person, though it also applies to an entity. Legal actions must be filed in a court that has some connection to the event, or to the parties involved. This only comes into play in certain situations. For instance, Jack drives across the boarder from his construction business in California, to do some construction repairs on a home in Nevada, then returns home. Later, the homeowner complains that Jack’s work was terrible, and that he was bilked out of his hard-earned money.

The homeowner files a civil lawsuit in Nevada, but Jack complains to the court that, because the homeowner hired the services of his business, which is based in California, it has no jurisdiction. The lawsuit should be filed in California. Generally, the Nevada court has no jurisdiction over Jack or his construction company, as they are based in another state. That court can, however, assert in personam jurisdiction, or personal jurisdiction, over Jack and his company, and hear the case where the work was done.

Police jurisdiction

Like the courts, law enforcement agencies are subject to issues of jurisdiction. Police jurisdiction refers primarily to the agency’s assigned geographic region. Within a single state, there may be several law enforcement agencies, which work together in a sort of choreographed maneuver:

· City police officers – have authority only within their city’s limits

· County sheriff’s deputies – have authority within their county, not including activities within the city limits

· State police or state troopers – have authority to act within their state, though they have authority only in limited circumstances within a county or city’s geographical regions

Each of these law enforcement agencies has their own territories, or police jurisdiction, but they work together to help ensure services are provided seamlessly between the regions. For instance, if city police chase a car across the city limits, they may be joined by county deputies to bring the chase to an end. State police often have broad authority, and are invited into the city or county jurisdictions to assist in certain cases.

Federal law enforcement officials have authority to arrest a person who has violated a federal law, regardless of which jurisdiction he is in. This is because they have authority to act when federal laws are violated, regardless of location within the U.S.

In general, a law enforcement officer does not have the authority to arrest someone outside his jurisdiction. Similarly, an off duty police officer, who is on vacation in another state, has no authority to detain or arrest someone in his official capacity as a police officer. This lack of police jurisdiction does not prevent the officer from making a citizen’s arrest while waiting for officers to arrive.

An Example of Jurisdiction

One of the first considerations for any court in the land is whether it has jurisdiction over any case brought before it. Laypeople bringing their own suit are often unaware of limitations to jurisdiction, which is understandable. This leaves the court responsible for making that determination before the case can move forward.

Foreign Company Sued over Faulty Part

In the 1980s, a young couple were riding a motorcycle which crashed because of a faulty valve that had been produced in Japan. The driver was seriously injured, and his wife, riding as passenger, was killed in the accident. The victim filed a civil lawsuit in the California court, where the victims lived, and the accident happened, against the Taiwanese distributor of the value, Cheng Shin Rubber Industrial Co. Cheng Shin Rubber had purchased the valves to use in their assembly of thousands of motorcycle wheels.

Cheng Shin filed a complaint with the court, asserting that the faulty valves had been manufactured by Asahi Metal Industry Co, in Japan, and that Cheng Shin had no knowledge that they were faulty. The complaint asked to be relieved of responsibility in the lawsuit, and that Asahi instead be held responsible. Asahi argued that the court in California had no jurisdiction over the company. The California court, however, ruled that it had personal jurisdiction based on the company’s awareness of the scope to which its products would be distributed internationally.

A series of appeals ensued, until the matter was brought before the U.S. Supreme Court in 1986. In 
Asahi Metal Indus. v. Superior Court
 the Court addressed the issue of whether the state court properly took personal jurisdiction over the Japanese company, simply by the fact that it should have known that its products, which were sold to a Taiwanese company, and shipped directly to that company, would make it into the California market.

The Court applied the following test to determine whether the state court could assert personal jurisdiction over a foreign defendant:

· What is the burden on the defendant to bring his case in a foreign land?

· What are the interests of the state in which the lawsuit was filed in the litigation?

· What is the interest of the plaintiff in litigating the matter in that state?

· Does the allowance of personal jurisdiction serve interstate efficiency?

· Does the allowance of personal jurisdiction serve interstate policy interests?

The U.S. Supreme Court ruled that California could not claim personal jurisdiction over the Japanese company, which has no presence in the U.S., does no business in the country, and owns no property in the country. The Court held that, should the California court be allowed to exercise jurisdiction over Asahi, the act would be “unreasonable and unfair.”

Related Legal Terms and Issues

· Appellate Court – A court having jurisdiction to review decisions of a trial-level or other lower court.

· Authority – The right or power to make decisions, to give orders, or to control something or someone.

· Defendant – A party against whom a lawsuit has been filed in civil court, or who has been accused of, or charged with, a crime or offense.

· Judgment – A formal decision made by a court in a lawsuit.

· Plaintiff – A person who brings a legal action against another person or entity, such as in a civil lawsuit, or criminal proceedings.

Jurisdiction in Cyberspace

This article was edited and reviewed by 

FindLaw Attorney Writers
 | Last updated March 26, 2008

American Bar Association Section of Business Law
Cyberspace Law Committee

Coping with Personal Jurisdiction in Cyberspace
ABA Subcommittee on Internet Law Liability Report #3

Until the Internet’s advent, a business operating within one state was subject to suit only in that state. Only a business developing a national or international focus had to assess the risk of becoming subject to suit in other states or countries. Performing that risk assessment was usually simple. Traditionally, whether a particular court can exercise control over a particular defendant depends on their physical locus, described in such terms as residence, domicile or place of business. For example, a corporation can generally be sued in any state where it maintains a place of business. The Internet introduces a new dimension towards the question of where a party is subject to suit. If a company has a Web site, it has a presence everywhere that Web site can be accessed. In short, across the entire world. Over the Internet, an individual can have the same impact on entities in other states and countries as can a multi-national corporation. Now, even smaller businesses must assess the risk, arising from use of the Internet, of becoming subject to suit in other states or countries. The location of a company’s cyberassets, its maintaining a Web site, or its use of the Internet can all effect where it is subject to suit.

Top of Form

Bottom of Form

Already, numerous courts have examined the question of when a defendant’s operation of a Web site creates personal jurisdiction. The decisions of these courts are not always consistent, but they are starting to reflect some common themes. This paper’s purpose is not to review the body of decisional law,[1] but to examine the emerging themes and discuss their application to actual business planning.


Personal Jurisdiction Basics

The judicial decisions to date in the United States, regardless of their result, are based upon well-developed and long established personal jurisdiction doctrines. Understanding these doctrines is essential to analyzing the emerging decisional law related to Internet use. Personal jurisdiction is based on the interaction between an affirmative statutory or common-law source law dictating the scope of the court’s jurisdiction, and limitations imposed by constitutional due process rights. State courts can always assert jurisdiction over an entity or things physically present in the state.

[2]

 State courts also assert personal jurisdiction over entities located outside of the state using “long-arm statutes.” Long-arm statutes differ from state to state, but tend to be similar. The Uniform Interstate and International Procedure Act is typical.

1.02 [Personal Jurisdiction Based upon Enduring Relationship]

A court may exercise personal jurisdiction over a person domiciled in, organized under the laws of, or maintaining his or its principal place of business in, this state as to any [cause of action].

1.03 [Personal Jurisdiction Based on Conduct]

(a) A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a [cause of action] arising from the person’s:

(1) transacting any business in this state;

(2) contracting to supply services or things in this state;

(3) causing tortious injury by an act or omission in this state; [or]

(4) causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this state…

(b) When jurisdiction over a person is based solely upon this section, only a [cause of action] arising from acts enumerated in this section may be asserted against him.

[3]

In determining whether the court has jurisdiction, the first step is to examine the applicable long-arm statute, or common-law equivalent, to determine whether the statute grants the court jurisdiction over the out-of-state defendant. The second step is to evaluate whether the exercise of jurisdiction in the particular case violates due process rights granted under the United States Constitution.

[4]

Constitutional due process is satisfied if the defendant has “minimum contacts” with the forum state so that subjecting the defendant to suit in that state satisfies considerations of “fair play and substantial justice.”

[5]

In determining whether “minimum contacts” exist, the court should consider “the relationship among the defendant, the forum, and the litigation.”

[6]

 In determining whether exercising jurisdiction will satisfy “traditional notions of fair play and substantial justice” the court should focus on the contacts in light of other factors such as:

1. the burden on the defendant;

2. the forum state’s interest in adjudicating the dispute;

3. the plaintiff’s interest in obtaining the most efficient resolution of the controversy;

4. the interstate judicial system’s interest in most efficient resolution of controversies; and

5. the shared interest of the several states in furthering fundamental substantive social policies.

[7]

Establishing jurisdiction requires “some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.”

[8]

Activities within a state that can result in a party subjecting itself to suit in that state include purposefully selling goods in the state,

[9]

 maintaining a physical office or store in the state, entering into a contract with someone in the state,

[10]

 or committing a tortious act within the state. In general, the more passive the defendant was with respect to a transaction, and the fewer events related to the transaction occurred within the forum state, the less likely the court will exercise jurisdiction over the defendant. The difficulty arises in determining when maintaining a Web site, accessible to people in a state, is an activity directed at a state sufficient to allow the state to exercise personal jurisdiction over the Web site owner.


Personal Jurisdiction, Multimedia and Broadcasting

In evaluating the ability to obtain personal jurisdiction over a defendant due to operation of a Web site, a parallel can be drawn to print publications. Print publications, like Web sites, come into contact with several jurisdictions, based on conduct that occurs primarily in one location. Print publications are created by conduct concentrated at the location of the author and publisher. The activity creating a Web site occurs in the state in which the Web site is developed, and the locus of the Web server. However, like a broadly distributed magazine or broadcast, a Web site is accessible everywhere.

The United States Supreme Court has held that a state can exercise personal jurisdiction over a publisher accused of publishing libelous material about a resident of that state when the publisher targets its economic activity at that state. In Keeton v. Hustler Magazine, Inc.[11], the United States District Court for the District of New Hampshire was able to exercise personal jurisdiction over an Ohio corporation because the defendant’s magazine circulation in the state of New Hampshire created minimum contacts with that state. Jurisdiction was appropriate because of the state’s interest in discouraging libel by the defendant against its citizens.

In a companion case, Calder v. Jones [12], the Supreme Court held that a California court could exercise personal jurisdiction against an author and editor, both resident in Florida, who had libeled a California resident in an article published in the National Enquirer newspaper. The court determined that the defendants had purposefully targeted their libelous activity at California by publishing their article containing libelous material about a California resident in a magazine which they knew was sold and circulated in California and “must reasonably anticipate being haled into court” in California.

In these cases, the tortious act is the knowing publication in the state attempting to exercise personal jurisdiction over the defendant. The results differ if the tortious act is unrelated to the act of publication. If, instead of publishing an article in a magazine or newspaper circulated in the forum state, the defendant submits advertising to a nationally circulated magazine or newspaper, the fact of that advertising is generally not sufficient to create jurisdiction, unless the claim arises from the advertising. For example, in 

IDS Life Insurance Company v. SunAmerica, Inc.,[13]

 the defendant advertised in nationally circulated newspapers and magazines and on national television, and maintained an Internet Web site. The District Court for the Northern District of Illinois held that such advertising did not involve systematic and continuous contact with the forum state, Illinois, and concluded that it did not have personal jurisdiction over the defendant.

[14]

 In Gaingolo v. Walt Disney World Co.[15] a district court judge noted that allowing national advertising to make a defendant subject to suit wherever the advertisement appeared would “substantially undermine the law of personal jurisdiction.”


Personal Jurisdiction Based on Internet Contacts

Based on the rules expressed in cases like IDS Life Insurance and Gaingolo, operating a Web site or advertising on the Internet should not, by itself, subject a party to global jurisdiction. But, based on the Keeton and Calder decisions, a person committing a tortious act using the Internet should expect to be subject to jurisdiction in the state at which the tortious act is directed. Several courts have addressed the issue of whether maintaining a Web site accessible from a state subjects the owner of the Web site to personal jurisdiction in that state.

The developing theme in the cases is to base jurisdiction on the extent to which the activity performed by maintenance of the Web site is directed toward the forum state. Important factors include the level of interactivity in the Web site, whether the Web site content is directed toward an audience including residents of the forum state, whether the Web site has been accessed by residents of the forum state, or whether a particular activity of the Web site giving rise to the cause of action was directed at the forum state. Some decisions have expressed this analysis as sorting Web sites into three categories.

[16]

 Where the defendant actively does business over the Internet directed at the forum state, the forum state can exercise jurisdiction over the defendant. Where the Web site provides a lower level of interactivity by allowing the defendant to exchange information with customers over the Internet, the court must assess the level of interactivity and commercial nature of the Web site to determine if sufficient contacts exist to warrant the exercise of jurisdiction. Where the defendant passively provides information or an advertisement on a Web site, without other contacts existing with the forum state, the forum state can not exercise personal jurisdiction over the defendant.

Most Internet jurisdiction cases, like that resulting in the Panavision International, L.P. v. Toeppen decision, involve trademark disputes involving use of the Web site domain name and hold that the forum state can exercise jurisdiction over the owner of the Web site because the infringing conduct targets the forum state and thus creates a basis for specific jurisdiction.

[17]

 As in the publishing arena, the Web site must knowingly target potential viewers in the forum state. An alleged injury related to the operation of the Web site is insufficient to create jurisdiction where the Web site operation is not directed at the forum state and no other contacts with the forum state are found.

[18]

 Further, when Web site operation is unrelated to the conduct, courts have generally not allowed exercise of general jurisdiction based on the presence of a passive advertising Web site.

[19]

One early decision is Inset Systems, Inc. v. Instruction Set, Inc.[20] A Massachusetts corporation allegedly used a Connecticut corporation’s trademark as its domain name. The defendant advertised its goods for sale using a Web site available through the contested domain name. The Connecticut “long-arm” statute[21] allows personal jurisdiction over a non-resident on any cause of action arising from business solicited within Connecticut, if the solicitation was repeated. The court concluded that advertising using a Web site, by itself, is a sufficiently repetitive contact sufficient to allow Connecticut to exercise personal jurisdiction under its “long-arm” statute. The court then, in addressing the constitutional issues, stated that:

In the present case, Instruction has directed its advertising activities via the Internet and its toll-free number toward not only the state of Connecticut, but to all states…advertisement on the Internet can reach as many as 10,000 Internet users within Connecticut alone. Further, once posted on the Internet, unlike television and radio advertising, the advertisement is available continuously to any Internet user. ISI has therefore, purposefully availed itself of the privilege of doing business within Connecticut.

The United States District Court for the Eastern District of Missouri reached a similar result in Maritz, Inc. v. Cybergold, Inc. In that case, which also involved a trademark dispute over use of a domain name, a California company advertised on the Internet and received at least 131 hits from Missouri residents. The District Court held that this was sufficient for a Missouri court to obtain personal jurisdiction over the California defendant.

The United States Court of Appeals for the Ninth Circuit reached a different result in another trademark case, Cybersell, Inc. v. Cybersell, Inc.,[23] because it determined that the Web site was not directed at the forum state. The plaintiff was an Arizona corporation that advertises for commercial services over the Internet. The defendant was a Florida corporation that offered Web site construction services over the Internet under the name “Cybersell.” The court found that no part of the defendant’s business was sought or achieved in Arizona. The only contact with Arizona was the fact that the defendant’s Web site was accessible over the Internet by Arizona residents. The court held that this contact, constituting mere passive advertising, was insufficient to provide a basis for jurisdiction.

Both the Inset and Cybergold cases involved a trademark dispute over a domain name being used by the defendant in interstate commerce. Thus, the cause of action was related to the defendant’s contact with the forum state. In the IDS Life Insurance Company v. SunAmerica, Inc. case, the United States District Court for the Northern District of Illinois addressed the question of obtaining personal jurisdiction over an out-of-state defendant in a tort case where the cause of action was unrelated to the Internet advertising. The Illinois “long-arm” statute allows an Illinois court to exercise personal jurisdiction over an out-of-state defendant if the defendant is doing business in Illinois by carrying on “continuous and systematic” business in the state.

[24]

 The court compared the defendant’s advertising on its Web site with the defendant’s advertisements in nationally circulated newspapers and magazines and on national television. The court concluded that maintaining advertising on a Web site, although accessible in Illinois, does not constitute an advertisement directed at Illinois and therefore Illinois could not exercise personal jurisdiction over the defendant.


International Personal Jurisdiction

Cases examining whether a Web site maintained outside of the United States can allow a United States court to exercise personal jurisdiction over the Web site owner follow the same analysis as the purely domestic cases. The first case to discuss the issue of specific jurisdiction in an international context was 

Minnesota v. Granite Gate Resorts, Inc.[26]

Granite Gate Resorts, Inc., a Nevada Corporation, advertised on the Internet a Web site known as WagerNet. WagerNet was maintained on a web server located in Belize by a Belize registered corporation. The Minnesota Attorney General took the position that his state can exercise personal jurisdiction over any party which uses the Internet to conduct any activity illegal in Minnesota. He filed a complaint against Granite Gate Resorts, Inc. alleging deceptive trade practices, false advertising and consumer fraud for advertising in Minnesota. The Minnesota Court of Appeals held that because the Web site was accessible by Minnesota residents, and because the defendant had directed its advertisements at customers in the United States, including residents of Minnesota, it could exercise personal jurisdiction over the defendant.

In 

Weber v. Jolly Hotels,[27]

 the United States District Court for the District of New Jersey addressed whether a United States court could exercise general personal jurisdiction over a foreign defendant based solely on maintenance of a passive Web site. The defendant was a hotel, located in Italy, which maintained a Web site as an advertisement. The plaintiff, a New Jersey resident, sustained injuries while visiting the hotel in Italy. On returning to the United States, the plaintiff sued the defendant in New Jersey state court,

[27]

 and claimed the New Jersey court could assert personal jurisdiction over the defendant based on its Web site. The Court determined that maintaining a Web site as an advertisement is comparable to advertising in a national magazine and is insufficient to allow the forum court to establish personal jurisdiction over the defendant. Because the defendant’s sole contact with New Jersey was its Web site, and because the injury was not related to the Web site, the court declined to exercise jurisdiction over the Italian defendant.

Owners of Web sites maintained in the United States should address whether operating the Web site will subject them to the jurisdiction of courts in other countries. Foreign courts will determine whether they can exercise jurisdiction over a defendant resident in the United States based upon the foreign country’s own rules, which may differ from those used by United States courts. Further, because widespread use of the Internet is occurring later in many foreign countries than in the United States, little or no guidance may be available to predict how a particular country’s courts might address the issue.

Nevertheless, the risk of being sued overseas does exist. For example, in the 

LG Berlin[28]

case, a German court found it could exercise jurisdiction over a defendant based in Kansas City based on the fact that the Web site operated at the defendant’s domain name was accessible at the plaintiff’s location in Germany. In another case, 

Action Asia Publishing, Ltd. v. Jake Taylor and Best Internet Communications,[29]

the Supreme Court of Hong Kong attempted to exercise jurisdiction over a California Internet service provider by issuing a Writ of Summons against the defendant. That case settled before the issue of jurisdiction was determined.


Conclusion

A company putting a Web site on the Internet should remain aware that its Web site may expand the geographic scope of its business. Depending on the nature of the business and the Web site content, the company might now be directing its activities toward customers in other states and countries. This makes it subject to foreign laws and regulations governing business activities and possibly subject to jurisdiction in foreign courts. Thinking in advance about the nature of its business and the content of its Web site will help the company assess the risk of its being hailed into a foreign court, even if definitive answers are not available.

Some protective measures may be available. The company might use click-through agreements or disclaimers to clarify a geographic focus. Trademark searches will help assess the risk of a trademark infringement suit resulting from use of the Web site and help pinpoint the location of potential plaintiffs. Where a trademark infringement suit is anticipated, a preemptive lawsuit can be filed in the company’s home state or where the domain name registrar is located. A company can perform a global review of the laws governing its industry to identify particular jurisdictions where it might become subject to suit. Once it identifies specific problem states or countries, it can obtain an opinion regarding that jurisdiction’s laws and case law regarding Web site based jurisdiction. Where a potential problem exists, the company can bring its business methods into compliance with the problem jurisdiction’s laws. No company will be able to completely predict or prevent being sued in foreign courts. However, being aware of the problem is the first step in minimizing the risk it creates.

Alternative Dispute Resolution (ADR): Overview

Created by 

FindLaw’s team

 of legal writers and editors | Last updated August 03, 2018

A wide variety of processes, practices, and techniques fall within the definition of “alternative dispute resolution.” Arbitration and mediation are the best known and most frequently used types of ADR, but not the only ones. Minitrials, early neutral evaluations, and summary jury trials are less well-known forms of ADR. Many of these ADR techniques have little in common except that negotiation plays a prominent role in each. Parties to ADR procedures generally agree that a negotiated settlement is worth pursuing before investing time and money in full blown civil litigation.

Arbitration

Arbitration is the process of referring a dispute to an impartial intermediary chosen by the parties who agree in advance to abide by the arbitrator’s award that is issued after a hearing at which all parties have the opportunity to be heard. Arbitration resembles traditional civil litigation in that a neutral intermediary hears the disputants’ arguments and imposes a final and binding decision that is enforceable by the courts. One difference is that in arbitration the disputants elect to settle any future disputes by arbitration before a dispute actually arises, whereas with civil litigation the judicial system is generally chosen by a disgruntled party after a dispute has materialized. Another difference is that the disputants to an arbitration select the intermediary who will serve as arbitrator, whereas parties to civil litigation have little to no control over who will preside as the judge in judicial proceedings.

Arbitration also resembles litigation in that many parties use arbitration as a springboard to negotiation. Parties who know that their dispute will wind up in arbitration often fail to commence serious negotiations until shortly before or shortly after the arbitration proceedings have begun. Frequently, negotiations will continue simultaneously with the arbitration proceedings, meaning the parties’ representatives will discuss settlement outside the hearing room while the hearing itself is underway inside. Arbitration can even expedite negotiations, since the parties know that once the arbitrator has issued a decision, the decision is typically final and rarely appeal-able.

There are two different forms of arbitration: private and judicial arbitration. Private arbitration is the most common form of ADR. Sometimes referred to as contractual arbitration, private arbitration is the product of an agreement to arbitrate drafted by the parties who enter a relationship anticipating that disputes will arise, but who mutually desire to keep any such disputes out of the courts. Private arbitration agreements typically identify the person who will serve as arbitrator. The arbitrator need not be a judge or government official. Instead, the arbitrator can be a private person whom the parties feel will have sufficient knowledge, experience, and equanimity to resolve a dispute in a reasonable manner. In some states, legislation prescribes the qualifications one must satisfy to be eligible for appointment as an arbitrator.

A private arbitrator’s power is derived completely from the arbitration agreement, which may also limit the issues the arbitrator has authority to resolve. Private arbitration agreements are supported in many states by statutes that provide for judicial enforcement of agreements to arbitrate and arbitrator-rendered awards. However, statutes governing private arbitration often set forth criteria that must be followed before an arbitration agreement will be binding on both parties and enforced by a court. If those criteria are satisfied, a court will normally deem the arbitrator’s decision final and enforceable. The losing party may only appeal the decision upon a showing of fraud, misrepresentation, arbitrariness, or capriciousness by the arbitrator.

Private arbitration is the primary method of settling labor disputes between unions and employers. For example, unions and employers almost always include an arbitration clause in their formal negotiations, known as collective bargaining agreements. By doing so, they agree to arbitrate future employee grievances over wages, hours, working conditions, and job security. Many real estate and insurance contracts also make arbitration the exclusive method of negotiating and resolving certain disputes that can arise between the parties entering those types of relationships.

Judicial arbitration, sometimes called court-annexed arbitration, is a non-binding form of arbitration, which means that any party dissatisfied with the arbitrator’s decision may choose to go to trial rather than accept the decision. However, most jurisdictions prescribe a specific time period within which the parties to a judicial arbitration may elect to reject the arbitrator’s decision and go to trial. If this time period expires before either party has rejected the arbitrator’s decision, the decision becomes final, binding, and just as enforceable as a private arbitrator’s decision.

Judicial arbitration is usually mandated by statute, court rule, or regulation. Many of these statutes were enacted to govern disputes for amounts that exceed the jurisdiction of small claims court but fall short of the amount required for trial in civil court. For example, in New York State claims for over $3,000 and for less than $10,000 must be submitted to non-binding judicial arbitration. NY CPLR Rule section 3405. Ten federal district courts also have mandatory programs for non-binding judicial arbitration that are funded by Congress. For example, rule 30 of the Local Rules of Court for the U.S. District Court for the Western District of Missouri provides that cases designated for compulsory, non-binding arbitration are those in which the damage award could not reasonably be expected to exceed $100,000.

Because judicial arbitration is mandatory but non-binding, it often serves as a means of facilitating negotiation between the parties to a dispute. Civil court calendars are frequently backlogged with hundreds of lawsuits. States hope that by mandating nonbinding arbitration for certain disputes the parties will see the value of a negotiated settlement where both parties compromise their positions, since their positions would likely be compromised were their dispute to be resolved in civil court. Seldom do litigants receive everything they ask for in their petitions, complaints, and answers.

Private and judicial arbitration are generally less costly and more time efficient than formal civil litigation. It has been estimated that the average arbitration takes 4 to 5 months while litigation may take several years. The cost of arbitration is minimal compared to civil trials as well, since the American Arbitration Association (AAA) charges only a nominal filing fee and the arbitrator may even work without a fee to broaden his or her professional experience.

Mediation

Mediation is a rapidly growing ADR technique. It consists of assisted negotiations in which the disputants agree to enlist the help of a neutral intermediary, whose job it is to facilitate a voluntary, mutually acceptable settlement. A mediator’s primary function is to identify issues, explore possible bases for agreement, discuss the consequences of reaching impasse, and encourage each party to accommodate the interests of other parties through negotiation. However, unlike arbitrators, mediators lack the power to impose a decision on the parties if they fail to reach an agreement on their own.

Top of Form

Bottom of Form

Mediation is sometimes referred to as conciliation, or conciliated negotiation. However, the terms are not necessarily interchangeable. Conciliation focuses more on the early stages of negotiation, such as opening the channels of communication, bringing the disputants together, and identifying points of mutual agreement. Mediation focuses more on the later stages of negotiation, exploring weaknesses in each party’s position, investigating areas where the parties disagree but might be inclined to compromise, and suggesting possible mutually agreeable outcomes. Conciliation and mediation typically work well when the disputants are involved in a long-term relationship, such as married partners, wholesaler and retailer, and manufacturer and distributor, to name a few. Mediation and conciliation also work well for “polycentric” problems that are not easily solved by all-or-nothing solutions, as with certain antitrust suits involving a myriad of complex issues.

Although some jurisdictions have enacted statutes that govern mediation, most mediation proceedings are voluntary for both parties. Accordingly, a mediator’s influence is limited by the autonomy of the parties and their willingness to negotiate in good faith. Thus, a mediator can go no further than the parties themselves are willing to go. Since agreements reached by mediation bear the parties’ own imprint, however, many observers feel that they are more likely to be adhered to than decisions imposed by an arbitrator or court. Disputants who participate in mediation without representation of legal counsel are also more likely to adhere to settlements when the alternative is to pursue civil litigation, where attorneys fees consume a significant portion of any monetary award granted to the parties.

Minitrials

A minitrial is a process by which the attorneys for the parties present a brief version of the case to a panel, often comprised of the clients themselves and a neutral intermediary who chairs the process. Expert witnesses (and less frequently, lay witnesses) may be used in presenting the case. After the presentation, the clients, normally top management representatives who by now are more aware of the strengths and weaknesses of their positions, attempt to negotiate a settlement of the dispute. If a negotiated settlement is not reached, the parties may allow the intermediary to mediate the dispute or render a non-binding advisory opinion regarding the likely outcome of the case were it to be tried in civil court.

Minitrials are increasingly used by businesses to resolve large-scale disputes involving product liability questions, antitrust issues, billion dollar construction contracts, and mass tort or disaster litigation. The federal government also makes use of minitrials for disputes involving telecommunications. The Code of Federal regulations establishes procedures whereby individuals and entities under investigation by the FCC can request a minitrial prior to commencement of more formal administrative proceedings. 47 CFR section 1.730.

Minitrials are often effective because they usually result in bringing top management officials together to negotiate the legal issues underlying a dispute. Early in the negotiation process, upper management is sometimes pre-occupied by the business side of a dispute. Minitrials tend to shift management’s focus to the outstanding legal issues. Minitrials also allow businesses to share information with each other and with their attorneys, providing a forum for initial face-to-face negotiations. Management also generally prefers the time-saving, abbreviated nature of minitrials over the more time-consuming and costly civil-litigation alternative. Minitrials expedite negotiations as well, by making them more realistic. Once the parties have seen their case play out in court, even in truncated fashion, the parties are less likely to posture over less relevant or meaningless issues.

Summary Jury Trials

Summary jury trials are an ADR technique used primarily in federal courts, where they provide parties with the opportunity to “try” their cases before an advisory panel of jurors, without having to face the final and possibly adverse decision of a regular jury in civil court. The purpose of the summary jury trial is to facilitate pretrial termination of cases in which a significant impediment to negotiation is disagreement between the attorneys or parties regarding a civil jury’s likely findings on liability or damages in the case. Like minitrials, summary jury trials give the parties a chance to reach a preliminary assessment of the strengths and weaknesses of their positions and proceed with negotiations from a common starting point, namely the advisory jury’s findings. Both summary jury trials and minitrials can ordinarily be scheduled and completed before formal civil cases would normally reach a court’s docket.

Summary jury trials are presided over by a judge or magistrate in federal district court. A ten-member jury venire is presented to counsel for consideration. Counsel are provided with a short character profile of each juror and then given two challenges to arrive at a final six-member jury for the proceeding. Each attorney is given one hour to describe his or her client’s case to the jury. After counsel’s presentations, the presiding judge or magistrate delivers to the jury a brief statement of the applicable law, and the jury retires to deliberate. Juries are encouraged to return a consensus verdict, but they may return a special report that anonymously lists the view of each juror as to liability and damages. After the verdict or special report has been returned, counsel meet with the presiding judge or magistrate to discuss the verdict and to establish a timetable for settlement negotiations. Evidentiary and procedural rules are few and flexible.

Early Neutral Evaluation

Early neutral evaluation is an informal process by which a neutral intermediary is appointed to hear the facts and arguments of counsel and the parties. After the hearing, the intermediary provides an evaluation of the strengths and weaknesses of the parties’ positions and the parties’ potential exposure to liability for money damages. The parties, counsel, and intermediary then engage in discussions designed to assist the parties in identifying the agreed upon facts, isolating the issues in dispute, locating areas in which further investigation would be useful, and devising a plan to streamline the investigative process. Settlement negotiations and mediation may follow, but only if the parties desire. In some jurisdictions, early neutral evaluation is a court-ordered ADR technique. However, even in these jurisdictions the parties are given the option of hiring their own neutral intermediary or having the court appoint one.

The objective of early neutral evaluation is to obtain an early assessment of the parties’ dispute by a credible outsider who has no interest in the outcome of the dispute but who has sufficient knowledge and experience to sift through the facts and issues and find the ground shared by the parties and the ground separating them. Much like in the other forms of ADR, the success of early neutral evaluation depends largely on the disputants’ faith in the neutral intermediary. It also depends in large part on the disputants’ willingness to compromise and settle the dispute. Successful early neutral evaluations can lead directly to meaningful negotiations.

Conclusion: Negotiation, ADR, and Civil Litigation

The procedures and techniques discussed above are the most commonly employed methods of ADR. Negotiation plays an important role in each method, either primarily or secondarily. However, there are countless other ADR methods, many of which modify or combine the above methods. For example, it is not uncommon for disputants to begin negotiations with early neutral evaluation and then move to nonbinding mediation. If mediation fails, the parties may proceed with binding arbitration. The goal with each type of ADR is for the parties to find the most effective way of resolving their dispute without resorting to litigation. The process has been criticized as a waste of time by some legal observers who believe that the same time could be spent pursuing the claims in civil court, where negotiation also plays a prominent role and litigants are protected by a panoply of formal rights, procedures, and rules. But many participants in unsuccessful ADR proceedings believe it is useful to determine that their disputes are not amenable to a negotiated settlement before commencing a lawsuit.

Despite its success over the past three decades, ADR is not the appropriate choice for all disputants or all legal disputes. Many individuals and entities still resist ADR because it lacks the substantive, procedural, and evidentiary protections available in formal civil litigation. For example, parties to ADR typically waive their rights to object to evidence that might be deemed inadmissible under the rules of court. Hearsay evidence is a common example of evidence that is considered by the parties and intermediaries in ADR forums but that is generally excluded from civil trials. If a disputant believes that he or she would be sacrificing too many rights and protections by waiving the formalities of civil litigation, ADR will not be the appropriate method of dispute resolution.

1. Textbook Chapter 7- Introduction to Tort Law

· https://saylordotorg.github.io/text_advanced-business-law-and-the-legal-environment/s10-introduction-to-tort-law.html

2. Instructor note 1

· IT IS IMPORTANT TO BE VERY PRECISE WHEN DISCUSSING LEGAL DEFENSES. 

· PLEASE NOTE:  THE LEGAL DEFENSES TO NEGLIGENCE ARE ASSUMPTION OF RISK, COMPARATIVE NEGLIGENCE if permitted as a defense in the state in question)  OR CONTRIBUTORY NEGIGENCE (if permitted as a defense in the state in question).

· IT IS IMPORTANT  TO REVIEW ALL THE INFO BELOW.  Negligence law is complex and this information is aimed at helping you sort it out and understand and correctly analyze negligence situations. 

· Please review the Summary Comments modules in week 1, just below the week 1 module in Content.  It is very important as a guide to improving work each week.

· _____________________

· There is a lot of info and material to cover in this class.  Please read all the assigned materials and use them as resources for completing assignments. Please do not use the internet for searching other materials or legal cases.  Much of the internet legal info is inaccurate, outdated and/or misleading and confusing.  This is particularly true of legal cases. A few cases are used as examples in assigned materials, but they are clearly explained and thus, can be useful.

· When creating analyses for Discussion and Learning Activities, identify the precise issue(s) on which the assignment is bases, and the precise question(s) being asked.  Respond to the precise issues and questions.  It is important to be careful to include irrelevant info that can weaken an argument and likely create an inaccurate analysis.  Resist telling the reader everything you have read/learned; just focus on the relevant information that directly an clearly supports your conclusions. 

· For example:

· Discussion 1 in week 1 focused on state jurisdiction in the case between ABC and Clean and whether and why the VA court could have jurisdiction in the case.  This was a case involving two states and diversity of citizenship between the parties.  The precise issue was whether the VA courts could have personal jurisdiction over both parties and if so, why.  It was not an issue of federal  jurisdiction.  To discuss federal jurisdiction is irrelevant and can confuse the reader.

· Subject matter jurisdiction is usually automatic as each case is presumably and typically filed in the correct court or it would be automatically moved to the proper court with subject matter jurisdiction before personal jurisdiction would even be considered.   It is ok to explain subject matter jurisdiction it in the Learning Activity in week 1, but actually not necessary as the more important and precise issue was the VA court obtaining personal jurisdiction over both parties.

· _________________________

· Negligence Information – ULTRA IMPORTANT

· Contributory and comparative negligence are discussed in some of the assigned readings, and it is easy to fall into a “trap” and get off track on these concepts.   To avoid the “trap”, digest the following.

· 1.  Contributory and comparative negligence are simply defenses a defendant in a negligence case MIGHT raise IF either is permitted as  legal defense in the state in which a case is heard.  . 

· For example:

· Consider that Windows R Us is sued for negligence by Joe who claims Windows negligently installed a new window in his house that fell out when he tried to open it and severely cut his arm.  Windows might defend itself by claiming that Joe was also careless (negligent) and partly responsible for the injury when he hammered on the window to get it open.  IF comparative negligence is allowed as a defense in the jurisdiction in which the case is heard, then Windows can raise this defense.  It might or might not be successful, but Windows can raise it.  If the accident is found to be partly due to Joe’s hammering the window, then the court will determine to what % Windows is responsible for the accident /injury and to what % Joe is responsible.  Assume Windows is found to be 30% responsible for the accident/injury and Joe 70% responsible.  Windows will pay 30% of the total expenses/compensation damages in the case, Joe will pay for the other 70% of the expenses.

· 2.  Contributory and comparative negligence are NOT permitted to be used as a defense in all jurisdictions (states).  Only 5 states permit contributory negligence, so it cannot be raised as a defense in most states.  Because contributory negligence is a common law concept that if permitted as a defense in a state, is considered unfair to an injured plaintiff because it bars all recovery by the injured plaintiff.  So, if a plaintiff is ruled to have contributed to ANY degree to the injury, the plaintiff cannot recover any damages for the injury.  

· For example, in Joe’s scenario above, if contributory negligence had been permitted as a defense and Joe was found to be even 1% negligent, he would not be able to cover ANY expenses/compensation damages.  

· If a class question asks you to describe all possible legal defenses in negligence, it is appropriate to explain assumption of risk and contributory and comparative negligence. However, in discussing contributory and comparative negligence as defenses, it is necessary to explain they are not permitted in all states and thus cannot be raised as defenses unless one or the other is permitted in a state.  Assumption of risk is a legal defense that can be raised in all states. 

· Please note that defendants can raise permitted legal defenses, but it is not guaranteed that any defense will be successful.

· If contributory negligence is not permitted as a defense in a state, it cannot ever be raised as a defense by a defendant – period. 

· Comparative negligence is permitted in many states, but not all states.   Unless a state permits it as a defense, it cannot ever be raised as a defense by a defendant – period. 

· Neither contributory Nor comparative negligence can be raised in ANY case unless it is clear that one or the other is permitted in as state.  IN OUR ASSIGNMENTS, NEITHER CONTRIBUTORY NOR COMPARATIVE NEGLIGENCE CAN BE RAISED AS A DEFENSE UNLESS THE FACTS WE ARE GIVEN TELLS US ONE OR THE OTHER IS PERMITTED IN THE STATE.

· 3.  Please do not, do not, do not mention contributory or comparative negligence in an analysis UNLESS the scenario facts tell you that one or the other is permitted as a defense in the jurisdiction involved in the scenario.  To discuss either defense when the facts have not told you one or the other is permitted in the jurisdiction muddies the analysis, is irrelevant and can weaken the analysis.

· 4.  Contributory and comparative negligence are NOT both permitted in any state.  Each state permits one or the other, or neither. 

· If neither is permitted, a defendant has other legal defenses to raise.

3. Instructor note 2 (Negligence)

· Additional Comments on Negligence:

· Negligence is such an important area in biz law, but complex and more difficult that it appears on its face – negligence and product liability are the most difficult areas of law we cover.  Tort law can be confusing and cause you to get mired in the abyss of torts.  Please follow my guidance for analysis and you will stay out of the abyss (not meaning to sound arrogant, but this comes from decades of teaching biz law) and it is my job to keep you from falling into the abyss.  🙂

· Here goes…

· Negligence cases should be analyzed as follows, and in this order:

· Examine the 4 elements to Negligence in order:  duty, breach, causation, harm.  Let’s look at them individually.

· 1.  duty:   Is there a duty – under the totality of circumstances – to the injured party (this is important)? Consider the different levels of duty, i.e., common carriers have a heightened duty of care, duty to invitees is greater than the duty to guests, etc. Review this info in the book – the level of duty of care owed is essential to the analysis.  

· If no duty exists, examination of elements over, no case.  If duty exists, go on to 2nd element, breach of the duty.

· As an aside:   For example, there is no duty to rescue (no, there isn’t, contrary to popular myth), so assume Joe is walking down the street, sees that little Susie has fallen off her bike and her leg is bleeding.  Does Joe have a duty to help Susie under the circumstances?  NO, end of examination, no case. If Joe is a physician, does that create a duty under these circumstances? NO.  Suppose no one comes along for an hour to help Susie and the bleeding and injury is worsened by the fact that no one stopped to help.  Is Joe liable, did he have a duty to help?  NO, end of examination, no case.   

· I know what you are probably thinking: we have Good Samaritan laws in each state to protect from liability people who choose to help those in peril, but Good Sam laws do not create a duty to rescue. Yes, ethical arguments can be made to help others, but there is no general legal duty.

· There are circumstances where there is a duty to rescue.  For example an ON-duty police officer has a duty to help in most circumstances, a physician ON duty in an ER has a duty in most circumstances, etc. 

· 2.  breach: If a duty exists, then what constitutes being as “careful” as possible – under the totality of circumstances? Was thparty as careful as possible – under the totality of the circumstances?  Is it reasonably foreseeable, under the circumstances, that if one acts carelessly an accident could occur?

· If so, then no breach, examination of elements over, no case.  If the party was unduly careless – under the totality of the circumstances – then there is a breach, proceed to the next element.  .

· 3.  causation:  Here it gets really tricky.  If there is duty, a breach of duty by careless conduct, then examine the precise careless conduct that occurred viz a viz the harm/injury that occurred.   Is this careless conduct the 
DIRECT cause (synonymous with actual cause and proximate cause)
of harm/injury that occurred – under the totality of the circumstances?  AND, was it the direct cause of the type of injury that occurred to the specific plaintiff?  Was it reasonably foreseeable – under the totality of circumstances – that if the party acted carelessly in the specific manner he/she acted, that a specific harm/injury is likely to occur, and to a specific plaintiff who was injured?   IF so, there is causation, proceed to final element of harm.

· If not, then no causation exists, examination of elements over, no case. 

· A party can have duty, breach that duty by acting carelessly, but the careless conduct MAY NOT be the direct cause of the harm that occurs; the careless conduct MAY NOT be reasonably foreseeable to cause the type of harm that occurred or to the specific party that was injured.   If this is true, then no causation, examination of elements over, no case.

· Please forget the phrase, “but for”, take it out of your vocabulary.  You don’t need it to analyze a negligence case and it is more confusing than helpful, particularly in res ipsa loquitor cases and negligence per se cases (more on these later).

· 4.  harm: If there is duty, breach of duty and causation, is there actual harm/injury to person or property? If so, likely there is a valid case, and off to court we go with the injured party seeking damages.

· If there is no actual harm/injury, then examination of elements over, no case.  There MUST be harm/injury to proceed to court in a negligence case.  People often have a duty to be careful, and act carelessly, but no harm results, thus no case.  For example, people frequently drive over the speed limit but no harm occurs, thus no case.

· ____________________________________________________________

· This is the way to analyze negligence claims.  Notice how I have inserted direct/actual/proximate cause into causation.  Note that “totality of circumstances” is included in each element (essential to examine ALL the circumstances – negligence does not occur in a vacuum).  Note where foreseeability fits into the analysis:  it means foreseeability of the type of harm/injury that occurred as the result of the specific careless conduct, and it refers to foreseeability of the specific plaintiff who was injured by the specific careless conduct.

· Example Analysis:  Brakes, Inc fixes A’s car brakes but does so incorrectly so they are likely to fail.  Neither party is aware of this, so A leaves with the supposedly repaired car.  A is driving carefully (not negligently) down the city street when A hits the brake at a stop sign, but the brakes fail and A hits a tree.  A’s car is damaged and A has a broken arm.  A sues Brakes for negligence.  Is Brakes liable?

· Go through the analysis:

· duty:  Does Brakes have a legal duty to A to repair A’s brakes carefully, under the circumstances?  Absolutely, and a heightened one:  A is an invitee viz a viz Brakes.

· breach:  Did Brakes breach the duty by acting carelessly under the circumstances?  Is it reasonably foreseeable that if Brakes acts carelessly/negligently that an accident could occur?  Absolutely, Brakes was careless in repairing the brakes – remember negligence involves careless accidents with NO INTENT to be careless or cause harm.

· causation:  was the careless conduct (repairing the brakes incorrectly/carelessly) under the circumstances the direct cause of the accident (that is, the brakes failing and causing A to hit a tree?) that occurred?  Absolutely.  Is it reasonably foreseeable that if you are careless in repairing brakes that the brakes may fail and an accident is likely to occur with the car?  Absolutely.  Is it reasonably foreseeable that the type of accident (brakes failing, car crashing) that occurred could result from careless brake repair?  Absolutely.  Is it reasonably foreseeable that the specific plaintiff (the driver of the car) could be injured as a result of the faulty brake repair?  Absolutely.

· harm:  did actual harm occur from the breach of duty/careless conduct?  Absolutely:  harm to the car (personal property) and physical injury to A.

· Off to court we go, A sues for compensatory damages for harm to the car and for medical expenses for his arm injury.  Easy case, A wins.

· Example 2 Analysis:  Let’s consider a slightly different case.

· Brakes, Inc fixes A’s car brakes but does so incorrectly so they are likely to fail.  Neither party is aware of this, so A leaves with the supposedly repaired car.  A is driving carefully (not negligently) down the city street when  B runs a stop sign, hits A’s car causing A’s car to skid; A hits the brakes but they fail and A hits a tree.  A’s car is damaged and A has a broken arm.  A sues B for negligence and damage to his car and arm.  Is B liable?

· duty.  Does B have a duty to drive carefully, not negligently, under the circumstances (on a public street)? Absolutely.

· breach:  Was the careless conduct of running a stop sign, a breach of duty to drive carefully, under the circumstances? Is it reasonably foreseeable that if B runs a stop sign an accident could occur?  Absolutely.

· causation:  Was the careless conduct of running a stop sign the direct cause of the accident that occurred (that is, A’s hitting a tree)?  Absolutely.  (No, the faulty brakes were not the DIRECT cause of A’s hitting the tree; the direct cause was B running the stop sign).  Was it reasonably foreseeable that if B runs a stop sign an auto accident is likely to occur and harm/injury likely to occur to those involved in the accident, i.e, the drivers of the cars?  Absolutely.

· Don’t be misled; the direct, foreseeable cause of the accident that occurred is not the failure of the brakes. Just because Brakes repaired A’s brakes carelessly, it is not foreseeable that B will run a stop sign causing A to hit a tree, etc.  This scenario fails for breach and causation.

· 4.  harm:  Did harm occur?  Absolutely – to A’s car and arm.  Was it reasonably foreseeable that if B ran a stop sign, there might be a car accident involving B and another car?  And reasonably foreseeable that the driver of the other car could be harmed, as well as the driver of the other car?   Absolutely.

· Off to court we go…..A collects damages from B.  Easy case.

· Example 3 Analysis:  Let’s make it a bit more complicated.

· Brakes, Inc fixes A’s car brakes but does so incorrectly so they are likely to fail.  Neither party is aware of this, so A leaves with the supposedly repaired car.  A is driving carefully (not negligently) down the city street when  B runs a stop sign, hits A’s car causing A’s car to skid; A hits the brakes but they fail and A hits a parked car which explodes.  Pieces of exploding car metal fly in the air several yards and hit Mary who is walking on the sidewalk; Mary’s arm is cut badly so stitches are required.  Mary sues Brakes for negligence.  The owner of the parked car that exploded also sues Brakes in a separate case.   Who wins?

· Go thru the analysis:

· Brakes has a duty to repair cars carefully, they breached that duty by carelessly repairing the brakes.  But were the carelessly repaired brakes direct cause of the specific type of accident that occurred and the specific harm that occurred to Mary?

· NO, it fails on causation.  It was not reasonably foreseeable that by carelessly repairing the brakes, B would run a stop sign, hit A causing A to hit a parked car, causing the car to explode, causing flying metal to hit a pedestrian.  The carelessly repaired brakes are NOT the direct cause of the injury to Mary OR to the damage to the parked car.  There is NO foreseeability, end of case, Mary is out of luck.  It may seem unfair to Mary but also would be unfair to Brakes (or any defendant) to hold them liable for every remote accident that occurs involving A’s car.

· Is Brakes liable to the owner of the parked car?  NO, it fails on causation.  It was not reasonably foreseeable that by carelessly repairing the brakes, B would run a stop sign, hit A causing A to hit the parked car, causing the car to explode.   The carelessly repaired brakes are NOT the direct cause of the injury to the parked car.

· BUT, assume Mary sues A or B for negligence in this case.  Are either of them liable?  

· A is not liable; A did not breach a duty of care or act negligently at all.

· B is not liable; the claim fails on causation again.  It is not reasonably foreseeable that by B’s carelessly running a stop sign, hitting A causing A to hit a parked car, the car would explode, causing flying metal to injure Mary.   The accident that occurred causing the harm, and the plaintiff that was injured are too remote from the point of the careless conduct (running the stop sign) to constitute direct causation.  

· BUT, if A sued B for damage to A’s car, A would have a good case as there is duty, breach and causation as well as harm that is foreseeable under the circumstances.  If B runs a stop sign, it is reasonably foreseeable B might hit a car and cause damage to the car and/or driver.

· If you find a long, unlikely chain of events leading to ultimate injury to a person, it is likely a case without direct causation because it was not directly foreseeable that the accident/injury that occurred would have occurred to the particular plaintiff in question.

4. Instructor note 3

· https://www.wcc.state.md.us/gen_info/wcc_benefits.htmlI

5. Instructor note 4

· Introduction to Torts  

· Introduction:     Torts are civil wrongs or offenses against persons or property resulting in some level of injury.  There are numerous specific torts that fall into four general categories:  (1) unintentional torts, e.g., negligence, (2) intentional torts, e.g., trespass to property, and (3) strict liability, which includes liability for abnormally dangerous activities, e.g., use of explosives, and (4) strict product liability for defective products.  The primary goal of tort law is to compensate for damages incurred.   Among the types of damages for which an injured party may recover are compensation for property loss or damage, for medical expenses, for loss of earnings capacity, and for pain and suffering; in some cases, punitive damages may be awarded to punish the wrongdoer for a particularly egregious offense.  Tort law is based primarily in state case law and statutory law with the Restatement of Torts (2nd) used by courts and legislatures as a guideline.    

· Intentional Torts/Business Torts

· Introduction:     Intentional torts are civil offenses in which a wrongdoer (tortfeasor) intentionally commits an act against persons, property or a business that the wrongdoer knew or should have known would result in some level of harm to property, persons, or business.  Types of intentional torts against persons include civil assault and battery, false imprisonment, intentional infliction of emotional distress, defamation, invasion of privacy, appropriation, and fraudulent misrepresentation.  Intentional torts against property include trespass to land, trespass to personal property, conversion, and disparagement of property.  Special business torts are wrongful interference with a contractual relationship, wrongful interference with a business relationship, and disparagement of a product.

· Negligence 

· Introduction:     Negligence is an unintentional tort in which the wrongdoer does not intend to cause harm as a result of the wrongdoer’s conduct.  Negligent acts are the result of the wrongdoer acting carelessly, or failing to act, thus, not exercising an ordinary level of care that a reasonable person would have exercised under the same circumstances.  To create liability, a wrongdoer’s conduct must create a risk of harm that is reasonably foreseeable under the circumstances.  The plaintiff/injured party must prove the elements of negligence that include, (1) that the defendant/wrongdoer owed a legal duty of care to the plaintiff under the circumstances, (2) that the wrongdoer acted in a careless manner so as to breach the duty of care, (3) that the breach was the cause of harm to the plaintiff, (4) and resulted in specific harm for which damages can be recovered.   A defendant may attempt to defend against a negligence claim by asserting legal defenses of a superceding event, or assumption of risk, or, in certain jurisdictions, comparative or contributory negligence on the part of the plaintiff.

6. Elements of Negligence Summary

· https://www.findlaw.com/injury/accident-injury-law/elements-of-a-negligence-case.html

7. Premises Liability

· https://www.nolo.com/legal-encyclopedia/what-premises-liability.html

8. Introduction to Torts (Video)

· https://youtu.be/_KHIWhwj5as

9. Maryland Workers’ Compensation Law

· https://www.wcc.state.md.us/Gen_Info/WCC_Benefits.html

1. Textbook Chapter 17- Products Liability

https://saylordotorg.github.io/text_law-for-entrepreneurs/s20-products-liability

2. Product Liability: Manufacturing Defects vs. Design Defects

https://corporate.findlaw.com/litigation-disputes/product-liability-manufacturing-defects-vs-design-defects.html

3. Exploring Warranties and Product Liability

https://www.lawteacher.net/free-law-essays/contract-law/exploring-warranties-and-product-liability-contract-law-essay.php

4. Implied Warranty: Merchantability; Usage of Trade

https://www.law.cornell.edu/ucc/2/2-314

5. Implied Warranty: Fitness for Particular Purpose

https://www.law.cornell.edu/ucc/2/2-315

6. Express Warranties by Affirmation, Promise, Description, Sample.

https://www.law.cornell.edu/ucc/2/2-313

7. Exclusion or Modification of Warranties.

https://www.law.cornell.edu/ucc/2/2-316

Project 1 (Worth 15 points/15%) 

· Submit to Assignment Folder.

· Due Tuesday, 11:59 pm ET.

Purpose: This project requires you to identify and assess legal issues, apply the law to the facts and make recommendations.  The issues relate to the concepts and assigned materials covered in weeks 1, 2, and 3.  

This project will guide you in preparing a PowerPoint presentation.

This project meets the following course outcomes:

· recommend appropriate actions in the business environment based on an understanding of sources of law, substantive legal concepts, legal process and procedure, and available remedies; and

· analyze tort rights, obligations, liabilities, and remedies in the business environment.

Background/Facts:  TLG is continuing to work with its new client, Viral Clean (Clean), a commercial cleaning company incorporated in Maryland, but doing business in all Mid-Atlantic states.  Clean’s owners have primary concerns about negligence risks and liabilities related to potential accidents occurring in their public business space to employees and/or customers.

Clean is headquartered in commercial space in a local shopping center. This is a public space that includes private business offices, a public reception area, a conference meeting area, and space for potential and existing clients to meet to discuss cleaning jobs, buy cleaning products, and complete contracts for cleaning services.  The shopping center is busy and heavily trafficked with shoppers.

Winnie and Ralph request that you research and recommend a plan to identify potential negligence risks/liabilities and ways to minimize those potential negligence risks in Clean’s public facility.  You will then make a PowerPoint supported presentation to the Clean owners. The Clean owners will use the plan to refine policies and procedures to prevent and/or minimize their liabilities. 

Instructions

Prepare a PowerPoint (PPT) presentation to:

(1) develop a plan to identify and explain potential negligence risks/liabilities, and 

(2) recommend ways to minimize those potential negligence risks in Clean’s public facility.  

(3) The plan focuses on potential tort liabilities for negligence (do not discuss or include the tort of strict product liability in this project).

The PowerPoint presentation will be labeled in 2 parts:

There is no set number of PPT slides required, but it is important to be complete and comprehensive in the presentation.  

Use only the assigned resources available in the classroom for the project.

Formatting 

· An opening slide with your name, class name and number and date of submission

· An Introductory slide is always appropriate and appreciated

· A Summary or Conclusion slide is also appropriate

· The Speaker Notes on a final slide titled “Resources” should reflect the full APA citation of all resources. (Note: There should be an in-text citation in the Speaker Notes narrative wherever a supportive resource is referenced.)

· Using PowerPoint slides, create two (2) distinct parts of your presentation:

1.  Identify and explain 3 different specific situations that could create negligence risks/liabilities for Clean in its public facility. Explain why/how each situation creates possible negligence liability

· Part I.  Risks and Liabilities

A.  Negligence Risk Situation 1

B.  Negligence Risk Situation 2

C.  Negligence Risk Situation 3

2. Develop and explain policies and/or procedures Clean could implement to prevent or minimize the negligence risk/liability for each situation discussed in 1 above.

· Part II.  Policies and Procedures

1.  Policy/Procedure for Negligence Risk Situation 1

2.  Policy/Procedure for Negligence Risk Situation 2

3.  Policy/Procedure for Negligence Risk Situation 3

Remember you are the “presenter” and, as such, you will be reading your Speaker Notes the same way you would a presentation paper. (The “narrative”, which is a clear, complete explanation of the content and points you are making, goes in the Speaker Notes). The Clean owners (audience) will be looking at the slides which should include highlights and illustrations of your comments for that slide. The slide content should align with the narrative in the Speaker Notes. (See the attached PowerPoint sample.) Please see the attached “Sample PP Slide”

· HINT: Many presenters will compose their presentation first, then divide it into the PowerPoint slide format by placing the narrative on the Speaker Notes area of each slide and using the slide itself to underscore important points.

· Alternatively, some presenters create an outline of their presentation, then paste elements of the outline onto the PowerPoint slides. They then compose the narrative in the Speaker Notes to describe and expound on the slide.

Sample PowerPoint Slide

Note the parallel between the content of the Slide and the narrative in the Speaker Notes.

Syllabus and Late Policy

Syllabus: Important UMGC policies are included in the Syllabus >>Content >>Syllabus.

Please review the Syllabus information yourself and refer students to the Syllabus for their review.

Please closely review the UMGC policies for “Incomplete” grades.

Late Policy: Please review the Late Policy posted in the classroom by >>Content>>Late Policy. There have been changes to the Late Policy.

Please refer students to the Late Policy for their review.

The class syllabus includes important information for the student as well as the assigned faculty instructor. It is located under the CONTENT tab in a specific module labeled Syllabus. Assigned faculty instructors are reminded to review the Syllabus at the onset of each class as some content may have changed. Instructors should also remind their students of the Syllabus as a resource to answer many of the questions they may have about the class, assignments, UMGC policies, etc. The syllabus also included a generic class schedule. Instructors are encouraged to amend this schedule with actual assignment due dates.

Among the UMGC policies reflected in the Syllabus is 170.71 Policy of Grade of Incomplete. The Incomplete (I) grade is entered when circumstances beyond the student’s control make it impossible for the student to complete the required workload (e.g., class assignments) within the scheduled class period. The eligibility for an Incomplete course grade is included in this policy statement.

The Syllabus also includes a separate statement on the Late Policy. Note that in many classes the Late Policy has 1) been lifted from the Syllabus and is presented as a separate Module in CONTENTS or 2) is replicated in CONTENTS. In any case their should be no significant difference between any iteration of the class Late Policy. The Late Policy is very important to students as it can have a direct impact on the grade assessment for their class assignments. Assigned instructors should direct their students to review the Late Policy.

2

Learning Activity W3 2

Learning Activity W3

TO: Winnie James, Ralph Anders

FROM: Daeyoung Yoo

DATE: April 2, 2022

RE: EPI and Clean Product Liability

Introduction

Viral Clean group has launched the products during the coronavirus, and it is a highly competitive time for marketers. Being a member of the consultancy group, I have to guide them that they are making the wrong choice by reselling EPI from their marketplace. The coronavirus has taught that the products should be owned and cleaned of all claims and liabilities. When the company has decided to resale EPI products, there is a list of possible product liability claims.

A. Identify and explain the possible liabilities claims (EXCEPT omit warranty liabilities) Clean could face under product liability law for reselling EPI cleaning products directly to customers from its public place of business.

The first product liability claim that the company could face is the express warranty. The company will resale the products; the strict liability is difficult to give because it is observed that the companies usually create the unique description that the customers get to use the product. It is impossible to give such a description during resale for anything like this. The implied warranty is stricter than the other because Clean does not know how the situation could be changed for the consumers on using the products. Making claims on the products by writing the model safety and the description will be a risk for the company. Section 2-315 of the UCC imposed a liability known as the fitness for a particular purpose. Many resellers claim that the product is fit for a certain purpose, and they remain successful as well, but there is a risk if the product does not remain fit for the mentioned particular purposes. Tort negligence is one of the biggest product liabilities claims that Clean could face because it has not made the product itself. There might be a design error or the product error that may lead to product use issues. It is important to know that the company should be aware of all the above-mentioned products (Government Regulation and the Legal Environment of Business, 2012).

B. Recommend specific actions that Clean could take to reduce its liabilities under product liability law for reselling EPI cleaning products

The company requires certain actions to take to reduce the product liability. First, it should recognize as the reseller instead of a brand. The brand and company are responsible for all the liabilities, torts, and negligence. In contrast, the resellers claim that the modification and the originality of designs depending on the company’s real manufacturer. The next step is to use the product before referring it to the customers frequently. For example, the fitness for a particular purpose and the implied liability can only be prevented when Clean employees have personally experienced the product. The company can also reassure that there will be no error or defect after the product comes to Clean, but the real manufacturers are liable for all the defects, errors, and negligence. The customers should claim the product liabilities to the original manufacturers (FindLaw, 2017).

Conclusion

In conclusion, it is suggested that Clean members should be aware of liability claims. The customers and the regulatory authorities can ask for clarification on the product liability. There are various types of product liabilities, and good companies have sufficient information about the products and the relevant claims.

Reference

FindLaw. (2017, January 30). Product Liability: Manufacturing Defects vs. Design Defects – FindLaw. Retrieved April 2, 2022, from https://corporate.findlaw.com/litigation-disputes/product-liability-manufacturing-defects-vs-design-defects.html

Government Regulation and the Legal Environment of Business (2012). Saylor Academy

Learning Activity W2 2

Learning Activity W2

TO: Winnie James, Ralph Anders

FROM: Daeyoung Yoo

DATE: 26 March 2022

RE: Clean Negligence Risks and Liabilities

1. Jack is the company employee, and he had to face a serious injury because of two boxes placed by Client’s An employee. After analyzing the facts, it is assumed that Jack cannot have a negligence claim against the client. The negligence claim must have the four components to prove the negligence of another company. These components include duty, breach, causation, and harm. No doubt, Jack has the causation and harm during the case, and these can be used to prove the negligence claim, but he does not have breach information. The breach could occur if the client promised him that there would be no barriers on the way. It is important to understand that it will come in comparative negligence if a negligence claim is filed (FindLaw, 2019)

2. If Jack raises the negligence claim against the client, he must have enough conditions and defenses against client A. on the other hand, client A has different potential defenses against Jack. The possible defenses against the employee are assumption of risk, contributory negligence, and comparative negligence. The assumption of risk states that the employee should know that the pathway cannot be cleared of the people and the obstacles. No doubt, he ensured that there was nothing in the hallway, but he just had it in his mind that there might be the people or the other instruments. Moving on, contributory and comparative negligence can both be raised as a defense. The contributory negligence may claim that Jack broke his ankle to avoid the work and take a rest. The client may raise the defense that Jack should admit his mistake, and there will be an investigation against the workers of client A. Jack will also be shown his fault if there is the employee’s fault. It should be noted that the client may have to raise the potential defense because Jack did not have any deal or duty with the client, and he is not responsible for the loss.

3. After determining the facts and the legislation, it is observed that the situation is not recommended for the lawsuit. Both the parties should cooperate and should analyze the laws. It might be possible that both parties resolve the issue by discussion. The lawsuit will require the complete demonstration of the facts, and the loss will be compensated by client A. If the loss has to be compensated, the negligence from Jack will also be demonstrated. Both the parties will be at risk of reputation damage. For this purpose, it is recommended that the parties should inform the negligence claim and the defenses. The client may offer compensation in the form of treatment. It was a minor fracture, and no major surgery was needed in this case (Saylor Academy, 2012).

Reference

FindLaw. (2019, September 30). Elements of a Negligence Case. Retrieved March 26, 2022, from https://www.findlaw.com/injury/accident-injury-law/elements-of-a-negligence-case.html

[Saylor Academy]. (2012, June 26). Saylor.org BUS205: “Business Law” [Video]. YouTube. https://www.youtube.com/watch?v=_KHIWhwj5as&feature=youtu.be

Learning Activity W1 2

Learning Activity W1

1. Analyze and explain whether the Delaware restriction on the sale of Shine-It violates the Interstate Commerce Clause.

The interstate commerce law is an integral part of the USA constitution, and it has been designed to recognize the police power related to commerce activities among Nations and states. The clause was launched in 1887 and the US constitution is considered to be the base of all laws. It mentioned that Congress possesses exclusive jurisdiction to manage regulations or commerce in international countries, Indian tribes, and different states. In the given case scenario, Delaware’s restrictions on “Sale of Shine” actions are against the US Constitution because the company operates in other states, making it “interstate commerce” where the states are directly divested from the power to impose and regulate such prohibition. State and federal courts honor each other in a highly complicated manner (Government Regulation and the Legal Environment of Business, 2012). The Delaware restriction must not be enforced on the Shine It without prior agreement and consent of Congress because the Federal department of the government can only practice the Interstate Commerce clause.

2. Analyze whether the doctrine of “police powers” derived from the 10th Amendment of the U.S. Constitution applies to the Delaware law.

The case can be evaluated under the 10th Amendment of the USA constitution. The doctrine of police power States The power not directed to the USA by the Constitution, nor is prohibited to the state, is reserved to the people, or states respectively. In simple words, the “police power doctrine” enables the separate state to have regulations if that does not go in opposition to federal law. However, in the case of Delaware restriction, it is crucial to mention that the doctrine does not justify prohibition. The primary reason is that the “interstates commerce Clause” divests the USA states from interstate commerce regulations. Therefore, the given case can only be solved by the involvement of Delaware and Congress, as a state have no right to enforce these restrictions under police doctrine of the “10th Amendment.” The latter is only implicated if the USA constitution does not delegate the power. In the USA there is a check system to ensure the power is effectively separated in various branches of government. This is known as separation of power manner (Government Regulation and the Legal Environment of Business, 2012). Still, “exclusively delegate” to Congress makes the Doctrine of police power inapplicable.

3. Discuss why it is essential for businesses to understand the impact of the Interstate Commerce Clause and state police powers.

To understand the direct regulatory body, any company needs to be entirely aware of the potential use of the state police power and interstate commerce Act. A business must operate in its state of origin would only be regulated by the given state as its operations do not apply to other nations or states. For this reason, the company would not fall under this jurisdiction of the interstate commerce clause, and they would be directly accountable by the state police powers. However, a company that operated in multiple states would be under the impact of the interstate commerce clause. In the given case scenario, the business needs to be aware of the restrictions of the state police power about their activities.

Moreover, the main issue would be taken to Congress (under commerce clause) directly because of the lack of the State’s power regulating such industries manner (Government Regulation and the Legal Environment of Business, 2012). The interstate commerce clause is also implicated in companies operating in the international market as it directly mentions that regulations are also imposed on commerce working in foreign countries. Therefore, when a business decides business expansion outside its state of origin, it would directly enter the domain of Federal and Congress law.

Reference

Government Regulation and the Legal Environment of Business (2012).  Saylor Academy.

Learning Activity W3

Learning Activity W3

TO: Winnie James, Ralph Anders

FROM: Daeyoung Yoo

DATE: April 2, 2022

RE: EPI and Clean Product Liability

Introduction

Viral Clean group has launched the products during the coronavirus, and it is a

highly competitive time for marketers. Being a member of the consultancy group, I have to

guide them that they are making the wrong choice by reselling EPI from their marketplace.

The coronavirus has taught that the products should be owned and cleaned of all claims and

liabilities. When the company has decided to resale EPI products, there is a list of possible

product liability claims.

A. Identify and explain the possible liabilities claims (EXCEPT omit warranty

liabilities) Clean could face under product liability law for reselling EPI cleaning

products directly to customers from its public place of business.

The first product liability claim that the company could face is the express warranty.

The company will resale the products; the strict liability is difficult to give because it is

observed that the companies usually create the unique description that the customers get to

use the product. It is impossible to give such a description during resale for anything like this.

The implied warranty is stricter than the other because Clean does not know how the situation

could be changed for the consumers on using the products. Making claims on the products by

writing the model safety and the description will be a risk for the company. Section 2-315 of

the UCC imposed a liability known as the fitness for a particular purpose. Many resellers

claim that the product is fit for a certain purpose, and they remain successful as well, but

there is a risk if the product does not remain fit for the mentioned particular purposes. Tort

please note instructions are to NOT discuss wrranties; and all products do not carry an express warranty
?/unclear re: “get to use the product” ?
do you mean strict product liability? strict liability a different tort – see Instructor Notes, please
again we are not discussing warranties in this assignment; it would not be Clean’s responsibility to write modelsafety and description. This is the responsibility of the manufacturer
again we are not discussing warrantnies
what does “other” refer to directly? unclear?
what is meant by “owned and cleaned” needs clearer explanation
1
2
3
4
5
14
15

Learning Activity W3

negligence is one of the biggest product liabilities claims that Clean could face because it has

not made the product itself. There might be a design error or the product error that may lead

to product use issues. It is important to know that the company should be aware of all the

above-mentioned products (Government Regulation and the Legal Environment of Business,

2012).

B. Recommend specific actions that Clean could take to reduce its liabilities under

product liability law for reselling EPI cleaning products

The company requires certain actions to take to reduce the product liability. First, it

should recognize as the reseller instead of a brand. The brand and company are responsible

for all the liabilities, torts, and negligence. In contrast, the resellers claim that the

modification and the originality of designs depending on the company’s real manufacturer.

The next step is to use the product before referring it to the customers frequently. For

example, the fitness for a particular purpose and the implied liability can only be prevented

when Clean employees have personally experienced the product. The company can also

reassure that there will be no error or defect after the product comes to Clean, but the real

manufacturers are liable for all the defects, errors, and negligence. The customers should

claim the product liabilities to the original manufacturers (FindLaw, 2017).

Conclusion

In conclusion, it is suggested that Clean members should be aware of liability claims.

The customers and the regulatory authorities can ask for clarification on the product liability.

There are various types of product liabilities, and good companies have sufficient information

about the products and the relevant claims.

this is product liability law and we are not discussing negligence except as negligence under product liability is part of the defective product claims
unclear what this means??
good idea
Clean can also be liable as can anyone in the chain of distribution
unclear?
what are some ways Clean could do this?
unclear?
6
7
8
9
11
12
13

Learning Activity W3

Reference

FindLaw. (2017, January 30). Product Liability: Manufacturing Defects vs. Design Defects –

FindLaw. Retrieved April 2, 2022, from https://corporate.findlaw.com/litigation-

disputes/product-liability-manufacturing-defects-vs-design-defects.html

Government Regulation and the Legal Environment of Business (2012). Saylor Academy

References always has an S on the end
10

1. Risks and Liabilities

                                  A. Negligence Risk Situation 1:

                       Poor Employee Training

· As Clean is primarily a commercial cleaning company, and uses high-potency commercial grade liquid and solid cleaning agents in order to carry out its work effectively for customers. Employees need to be highly trained and educated about the various methods of using and disposing of aforementioned cleaning agents, as they can be highly dangerous to the general public if left unchecked, creating liability for the company.

B. Negligence Risk Situation 2:

                Poor Storage Methods

· ​​​​​​​Since Clean is headquartered in the shopping center, it will store at least some of the cleaning agents there itself. Any form of leak and/or spillage for any reason whatsoever, whether it be a natural disaster, poor quality containers, or something else, can lead to accumulation of hazardous cleaning agents in the shopping center, creating a health hazard for the general populace and creating a liability for Clean.

1. Negligence Risk Situation 3:

 Inadequate Security Protocols

1. Since the nature of chemicals stored by Clean is hazardous in nature, they must, as an organization, ensure installation of proper security protocols to ensure that only authorized personnel have access to them. Failure to do so can lead to theft, which in the case of chemicals, can be disastrous, as the criminals may choose to use them to deadly effect elsewhere, creating criminal negligence liability for the company.

2.Policies and Procedures

​1. Policy/Procedure for Negligence Risk Situation 1: Ensure Industry Standard Training

· All Clean employees, upon joining should be made to go through a rigorous training and education period of 2-3 months to ensure they have adequate knowledge of the various tools, and chemicals they will be working with, as well as best practices in terms of using and disposing of aforementioned agents. Industry certified instructors may be hired on a contractual basis to conduct training sessions and ensure all new employees are tested.

                                                               2.policy/Procedure for Negligence Risk Situation 2:

​​​​a. Move headquarters to a dedicated facility, AND/OR

· Shifting headquarters to a dedicated facility will help ensure any accidental spillage caused does not affect people outside of the organization, as it eliminates the proximity of customers of other businesses present in the shopping center.

     b. Ensure Industry Grade Storage Protocols

· This can be done in conjunction with the procedure mentioned above, or in the event that moving headquarters proves too costly an endeavor. Ensuring that storage of chemicals and agents is done in a manner that minimizes or eliminates chances of leakage will also minimize the risk. This can be done by creating a dedicated facility for storage, consisting of multiple layers, acting as fallbacks for one another, as well as using Industry-grade containers to ensure no accidental spillage or leakage occurs.

3.Policy/Procedure for Negligence Risk Situation 3: 

Ensure Installation and Implementation of High-End Security and Surveillance Protocols

1. Installation of Identity and Access Management (IAM) Software, Surveillance cameras, assigning of roles and duties based on authorization and experience can help ameliorate some of the risk associated with Security. Advanced features such as Biometrics, Access Logs, and others may also be used to keep an account of all those who have accessed the storage.

 

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