Monthly Archives: April 2017

Microsoft Corp. v. United States

Posted by Michelle Belvin.

Microsoft Corp. v. United States is a ruling by the United States Court of Appeals for the Second Circuit that a warrant issued under the Stored Communications Act (SCA) cannot compel American companies to produce information stored in servers outside the United States.

The warrant issued directed Microsoft to seize and produce the contents of an e‐mail account, which was believed to be used in the development of narcotics trafficking. Microsoft did deliver the customer’s non‐content information to the government as was asked, and that data was stored in the United States. However, in order for Microsoft to fully comply with the warrant, it would have to obtain customer content that is located in Ireland and then transport it into the United States. “Believing the data in Ireland to be beyond the jurisdiction of the warrant, Microsoft moved to quash the warrant.” The court concluded that Congress did not intend the SCA’s warrant provisions to apply extraterritorially. The Second Circuit “held that the government cannot compel Internet Service Providers (ISPs) to turn over data stored overseas, even with a warrant.”

The SCA also does not authorize a U.S. court to issue and enforce a SCA warrant against a U.S. based service provider for the contents of a customer’s electronic communications stored on servers located outside the United States. Therefore, the court concluded that the district court lacked authority to enforce the warrant against Microsoft.

Michelle is a business management major at the Stillman School of Business, Seton Hall University, Class of 2020.

Sources:

http://harvardlawreview.org/2016/12/microsoft-corp-v-united-states/

https://www.justice.gov/opa/blog-entry/file/937006/download

 

The Battle: Apple v. Microsoft

Posted by Ysabel Capitan.

The optimal way to study business law is to see how it is applied in the real world by seeing the myriad of legal battles under the field.  Of course, in a naturally competitive world of corporate entities, lawsuits are common defense mechanism and tactic for upholding the success and integrity of a business.  Perhaps the quintessential legal battle in business law in the technology industry can hail from the lawsuit that Apple had set out against Microsoft in 1988. Technology and business savants in Bill Gates and Steve Jobs would see their lives changed forever with this lawsuit after the latter accused the former of stealing their intellectual property.

Apple sued Microsoft in a copyright dispute for stealing their graphic user interface in their computing devices. The way a user runs a computer today is because of Steve Jobs’ and Apple’s foray into operating systems.  The symbols on the monitor, the mouse icon, the application list, it is because of Apple’s popularization of their operating system.  Bill Gates then made a similar system that we all know as Windows for Microsoft computers by using his own set of icons.  For example, instead of calling them “applications” on a Macintosh computer, Bill Gates called it a “program” to differentiate it just enough on Windows.  Apple, who was infuriated over their work being plagiarized, decided to take matters into court with a lawsuit. According to the New York Times in 1988, “Hoping to protect a key selling point of its Macintosh, Apple Computer Inc. filed a copyright-infringement suit against the Microsoft Corporation and the Hewlett-Packard Company.  Apple said software programs sold by the two companies infringed on copyrights Apple held for the way information is presented and controlled on Macintosh screens.“

Apple argued that while Microsoft did change things slightly, the overall premise was the same thing as copying. Microsoft cleverly argued that they would have to copy them entirely in order for this to be a copyright dispute. According to the Seattle Times, “Apple felt the question was too narrow. Attorney Edward Stead argued that a ‘substantial similarity’ standard taking into account small differences but considering overall resemblance – ‘look and feel’- should be applied. “We think it is important that innovative graphical computer works receive the protection to which they are entitled under the copyright law,” Stead said. But Microsoft attorney Bill Neukom countered, “In order to have a copyright infringement, you have to copy. And we didn’t copy.”

Microsoft did just enough to win the lawsuit and shows how tricky copyright law and the entire field of intellectual property is.  Because this was done in a time where computing was a brand new aspect, the courts believed that Microsoft changed enough in order for them to win the lawsuit. It would be interesting to see how a court ruling would have been done today in a time where technology has so clearly advanced to the public. Regardless, this court cases shows the inherent subjectivity of copyright law and how the entire field is truly in a gray area — and not in black or white.

Ysabel is a marketing and finance major at the Stillman School of Business, Seton Hall University, Class of 2019. 

 

Lawsuit Against Monsanto – Weed Killer

Posted by Marina Tesoriero.

On March 14, federal courts unsealed documents that question the safety of Monsanto’s lead product, Roundup weed killer. Monsanto’s products, including Roundup, are used everywhere, from commercial farms, to the seeds in your backyard. Previous research has found this product and other similar products to be reasonably safe to use. That was until recently, a federal court case in San Francisco disputed that “Roundup’s main ingredient might cause cancer.”

Judge Vince Chhabria is ruling over litigation brought by people who claim to have developed non-Hodgkin’s lymphoma as a result of exposure to glyphosate, the main ingredient found in Roundup (Hakim, Monsanto Weed Killer). Chhabria is also accountable for unsealing documents. In one unsealed email, William F. Heydens, a Monsanto executive allowed other company executives to hire academics to write their name on the research ghostwritten by Monsanto. Monsanto denied having scientists ghostwrite papers and insists glyphosate is not a carcinogen.

Documents attained by federal courts show emails show between Monsanto and federal officials that suggest, “Monsanto had ghostwritten research that was later attributes to academics” (Hakim, Monsanto Weed Killer). These emails also suggested that an officer at the Environmental Protection Agency (EPA) made efforts to abolish negative reviews conducted by the United States Department of Health and Human Services about glyphosate. The documents also show that the safety assessment performed by the EPA caused disagreements within the agency itself. Robin Greenwald, a lawyer at Weitz & Luxenberg, and is also part of the litigation says, “There are superb scientists in the world who would disagree with Monsanto, even the EPA has disagreements within the agency.” These actions leave users uneasy and concerned for their health.

Marina is a business student at the Stillman School of Business, Seton Hall University.

VW to Pay $1.2 Billion or More to US Owners of Big Diesels

Posted by Chris Jaramillo.

This article from CNBC dated February 1, 2017 states Volkswagen rigged many of their automobiles that have larger diesel engines to cheat and pass emissions tests. Wolfsburg-based Volkswagen has admitted it equipped diesel engines with software that turned the emissions controls off during every day driving which resulted in cars emitting 40 times the US limits of nitrogen oxides. This pollutant is very harmful to people and about 11 million cars worldwide have the deceptive software.

In a settlement Volkswagen has agreed to pay anywhere from $1.2 billion to as much as $4 billion in buybacks and compensation to settle the claims.  About 78,000 Audi’s, Volkswagen’s, and Porsche’s with 3.0-liter diesel engines are involved. The proposed settlement was filed before Judge Charles R. Breyer in US District Court in San Francisco. Previously, about 500,000 smaller 2.0-liter diesel engines were also rigged to cheat and pass emissions tests and Volkswagen agreed on a $15 billion in that settlement. The head of Volkswagen Group of America, Hinrich J Woebcken stated “all of our customers with affected vehicles in the United States will have a resolution available to them.  We will continue to work to earn back the trust of all our stakeholders.”  Owners of older models from 2009-2012 will be offered buybacks or trade-ins because they cannot be fixed to pass the emissions tests. They will also be monetarily compensated according to a statement from the owners’ attorneys.

The US environmental authorities must approve Volkswagens proposed repair and the deal must still get court approval to take effect. Many German investors are suing the company saying that were not informed in a timely manner and Volkswagens shares plunged drastically.  Even though the company’s reputation took a beating sales didn’t stop and they passed Toyota last year to become the world’s largest carmaker by sales.

Chris is finance and marketing major at the Stillman School of Business, Seton Hall University, Class of 2019.

 

Audi Raided By German Police

Posted by Nicole M. Encalada.

After Volkswagen faced its emissions scandal in back in 2015, German police have decided to further the criminal investigation by searching Audi’s German headquarters and offices in Ingolstadt. Back in March, Audi had been placed under a fraud investigation in regards to its parent company, Volkswagen. The main goal in this investigation was to determine who was responsible for the corrupt actions, which released an illegal amount of emissions. Moritz Dreschel, Audi spokesperson stated, “Audi is fully cooperating with authorities as we have the highest interest in clarifying matters.” He also went on to say that the raids were not only held in Igoldstadt, but in their plant in Neckarsulm.

Last year, Volkswagen admitted to having equipped its engines with a software that was able to detect when the vehicle itself is being tested. Once detected, emissions controls would shut off. The software would release the solution that would neutralize the emissions, making the high levels undetectable. The result; Volkswagen’s cars would emit 40 times more emission than the EPA allows of nitrogen oxide. It is not only a danger to the environment, but it garners concerns for the public’s health. Unfortunately, over 2 million of the company’s vehicles used this software.

The parent company has since pleaded guilty to all fraud charges in the United States. Volkswagen has now agreed to pay $22 billion in penalties and settlement charges in the U.S. Now, there are six executives facing criminal charges, although prosecutors have not yet released any names of those executives. While top managers have assured the public that they are not responsible for the company’s wrongdoings, investigators are looking for any evidence of criminal behavior or any violations by Audi or its parent company. Both companies are now subject to different penalties as both companies are based in different German jurisdictions.

Nicole is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Sources:

https://www.nytimes.com/2017/03/15/business/audi-vw-diesel-emissions.html

https://www.usatoday.com/story/money/cars/2017/03/15/audi-german-headquarters-searched-emissions-probe/99199964/

 

Wells Fargo Phony Account Scandal

Posted by Varundeep Singh.

Over the past few years Wells Fargo employees have been secretly scheming customers and breaking rules and crossing ethical boundaries that should not be crossed. Wells Fargo employees were making “dummy accounts,” or best described as fake accounts, to meet their sales quotas and receive bonuses. These accounts were not authorized, but they still somehow made the bank a lot of money because Wells Fargo customers were being charged random fees that were not rightfully associated to them. The employees went as far as making fake emails and fake pin numbers to make these accounts look real and make them work. In the article it states, “The scope of the scandal is shocking. An analysis conducted by a consulting firm hired by Wells Fargo concluded that bank employees opened over 1.5 million deposit accounts that may not have been authorized.” This shows how huge the scandal really was and how far the employees at Wells Fargo went just to meet their quota.

In many cases, the employees would take money out of customers accounts and put it into the fake accounts. This would lead to over draft fees because customers would not have enough money in their account. Wells Fargo was charging these fees and making money off of their customers who did nothing wrong. This dilemma with Wells Fargo shows how corrupt big banks can be and how much stricter they need to be on their employees. 1.5 million fake accounts is a lot of illegal activity and the fact that the company took so long to catch on shows that their management was really weak and careless. This is morally wrong and Wells Fargo should have been fined more than they did get fined.

Wells Fargo’s agreed to pay $185 million in fines and $5 million in refunds to their customers. Many people feel that they were let off too easy because the scope of this scandal was much more humongous and impacted people more. With all these dummy accounts, it is evident that Wells Fargo definitely schemed more than $5 million from customers.

I believe that a big bank such as Wells Fargo should know where they stand and by letting a scandal like this happen; they have shown that they cannot be trusted. In my opinion Wells Fargo should have faced much bigger consequences and by paying such a small amount of money and firing 5300 employees within two years they were still let off very easily. All in all, the Wells Fargo scandal will forever be an example of how big banks cannot be trusted and how there should be stricter regulations towards these banks. Something like this should be avoidable in the future if the right actions are taken now.

Varundeep is a finance and management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Trump University Lawsuit – When Is Enough, Enough?

Posted by Michael J Underkofler.

Immense controversy erupted during the election of 2016 with Donald J. Trump surrounding various issues. However, one of the biggest had to have been the various suits brought up against him regarding ample amounts of students enrolled at the infamous Trump University. “The suits contended that Trump University students had been cheated out of thousands of dollars in tuition through high-pressure sales techniques and false claims about what they would learn.” Trump and his lawyers agreed to a settlement with the student body, but one individual wanted more than just a large dollar amount.

Sherri Simpson, one of the students affected, tried objecting to the $25 million agreement to settle the fraudulent claims, saying she wants Donald tried on “criminal racketeering charges” and would not be satisfied until she received an apology. One of the lawyers, Patrick Coughlin, is quoted saying, “What she is looking for is an apology, and you can’t get that.” Ms. Simpson later responded by saying, “For him to go out there and say, well, ‘I didn’t do anything wrong,’ it’s disgusting.”

The federal judge overseeing the case, Gonzalo P. Curiel, ultimately denied the objection after deeming the amount of money more than fair. Countless other students who would have been deprived of the money if the objection had gone through, not to mention an indefinite timetable. In the article it even describes how the woman’s own lawyers were surprised and disappointed that Ms. Simpson would even bother to object to the settlement.

Michael is a finance major at the Stillman School of Business, Seton Hall University, Class of 2020.

Take Reasonable Precautions to Protect Sensitive Information

Posted by Griffin Mehl.

Up until recently the idea of a self-driving car has simply been a dream. The whole concept surrounding the thought that a car could be capable of operating on its own was just too much for people to handle. However, over the past several years this notion has changed. People and companies have begun to invest a significant amount of time and money into the exploration and discovery of this technology. As can be imagined, this idea has become less futuristic and more realistic a rivalry has begun to develop between companies trying to create these cars. As can be inferred from the article, two of the big names that have made a statement in this field are both Alphabet (“an American multinational conglomerate founded on October 2, 2015 by the two founders of Google”-Wikipedia) and Uber (“ transportation network company headquartered in San Francisco” –Wikipedia). In fact these companies are currently involved in a lawsuit. A vital person involved in this whole ordeal is “Anthony Levandowski, an engineer who left Waymo and launched self-driving truck company Otto.” For those of you who don’t know Waymo is simply “Google’s self-driving car company.”

As can be gathered from the article, there is currently an issue that has risen between Uber and Alphabet. More specifically Waymo is the one who “brought a lawsuit against the embattled ride-hailing service, alleging that Uber stole the proprietary design of a system built in its vehicles.” This all stems back to Mr. Lavandowski the engineer who used to work at Waymo. While he was under employment there, he decided to download a trove of data and self-driving technology onto his personal computer. This was done that way he could work from anywhere and wouldn’t have to be in the office to access this vital information/technology/drawings/specs for self-driving cars. After working with Waymo for a stint of time Lavandowski decided to split and create his own company “Otto” as I mentioned before. After this divide “Waymo alleged that Levandowski used that information to build his company.” All this would have been missed had it not been for a simple erroneous email that a Waymo employee received. In that email a Vendor thought he was reaching out to Uber, but instead he was mistakenly reaching out to Waymo. The email contained “specs for Otto’s circuit board technology — a central system for the self-driving vehicles — that Waymo alleges looks very similar to the tech it’s developing”. Basically, what Waymo was able to realize was that “Otto” (and the man behind it) which is now under contract by Uber had been using information and technology that was initially created by Waymo.

So, what can be taken away from this? First, if you or even the company you are a part of is working with patented information and critical data (like Waymo was) it is important to make the procedures for sharing that information known. It is very hard to blame someone for violating a procedure if they are not well informed about the rules in the first place. Second, if you or the company you are a part of deal with sensitive materials there are many preventive steps that can be taken in order to avoid that information from getting into others hands. An example of this would be a nondisclosure agreement. By signing one of these, it makes it clear that people who are in contact with classified information know they cannot share that information with anyone else. Finally, the most basic point is to make sure you are sending your messages/emails to the right people. I can’t tell you how many times I have mistakenly sent an email to the wrong person. If there is some classified information in your email that you wouldn’t want anyone but your intended audience to see it wouldn’t hurt to check who it’s going to twice.

Sources:

“Alphabet Inc.” Wikipedia. Wikimedia Foundation, 27 Mar. 2017. Web. 31 Mar. 2017.

“Uber (company).” Wikipedia. Wikimedia Foundation, 29 Mar. 2017. Web. 31 Mar. 2017.

https://www.entrepreneur.com/article/290792

Griffin is a finance major with a minor in accounting and certificate in entrepreneurial studies at the Stillman School of Business, Seton Hall University, Class of 2019.

Airlines Adjusting to the US Government’s Laptop Ban

Posted by Krista Cerpina.

Last week the Department of Homeland Security placed a ban on large electronics during non-stop flights to the US from airports in North Africa and Middle East. The ban forbids passengers to carry on board any electronic devices larger than a cell phone. Many passengers traveling for business are almost “inseparable” from their laptops because many prefer to use travel time for work, so the new ban has been a headache not only for the airlines but also for their customers. Corporate business travelers are the most important block of costumers to the affected airlines, therefore airlines are cleverly defying the ban to keep their customers satisfied.

The travel industries well known airlines such as Emirates, Qatar Airways, Etihad, and Turkish Airlines have all been coming up with creative ways to counter the ban. To minimize the time passengers have to spend apart from their electronic devices, Emirates announces a service on March 23, that will allow the passengers to not check their devices in their luggage, rather the staff members will collect them at the gate. The laptops and other electronic devices will then be packed in secure boxes before storing them in cargo hold. Emirates Airline President Sir Tim Clark spoke to Business Insider and addressed the new operations regarding the ban. “Our aim is to ensure compliance with the new rules, while minimizing disruption to passenger flow and impact on customer experience,” Clark said in a statement. “Our new complimentary service enables passengers, particularly those flying for business, to have the flexibility to use their devices until the last possible moment.”

Other airlines such as Etihad Airways have also been trying to find ways to compromise with their costumers while not disobeying the new ban. “To help guests keep in touch with work, friends and family, we are offering First & Business Class guests free WiFi and iPads on all our US-bound flights, beginning Sunday, April 2,” Etihad said. The airlines and their passengers are still adjusting to the new ban, but according to Tim Clark, the airlines do not have any conclusive data on the long-term effect the laptop ban will have on their business and they do not expect to see any changes until May.

Krista is a business major at the Stillman School of Business, Seton Hall University, Class of 2020.

Antitrust Lawsuit Against AT&T

Posted by Keith DeYoung.

On Thursday, March 23rd, The Justice Department ended its antitrust lawsuit against AT&T’s DIRECTV with a settlement. In early November 2016, The Justice Department filed the lawsuit, after they claimed DIRECTV was in talks with three of its rivals, then AT&T, Charter Communications, and Cox Communications. These communications allegedly contained confidential information about whether or not to carry Sports Net LA, the sole provider of Dodger games. Time Warner Cable in a deal believed to be worth 8.35 million dollars, acquired the rights to distribute the channel, and thus the other companies would have to pay Time Warner Cable in order to provide it to their viewers. However, the other cable providers believed that Time Warner Cable was charging too much for its product, and thus did not buy the rights.

In the Justice Department’s view, they broke the law when they allegedly discussed that none of them would buy the channel, in order to make sure that each company would not lose customers if one company bought the channel and the others did not. However, DIRECTV claims they did not communicate with any other company, and reason that no one accepted the channel was solely due to its price.

By allegedly agreeing not to buy the sports channel amongst themselves, and ensuring none of them would lose viewers, the Justice Department argues that the companies were in fact violating antitrust law because they were sharing confidential information amongst themselves in order to seek financial gain and stability. Antitrust laws seek to prevent vast amounts of a certain market from being held in the hands of a few, as well as promotes competition, and an overall free marketplace. This prevents monopolies and total control over a market, which often ends in unfair prices for consumers. Although DIRECTV, AT&T, Charter Communications, and Cox Communications were four different companies at the time, by collaborating and making the agreement not to carry the sports channel, it can be argued that they resembled a trust by acting as a group, and thus prompted the Justice Department to file this suit. However, by settling the case, the Justice Department instead of taking severe legal action, gave AT&T’s DIRECTV an agreement that they do not illegally communicate with other companies over confidential matters.

Now that the case is settled, AT&T who owns DIRECTV can now legally focus on their pending acquisition of Time Warner Cable. Many are critical of this deal and similarly to antitrust law, claim that it is concentrating the power of this particular market into the hands of too few, and thus creating a monopoly. Hopefully, learning legal lessons from their antitrust case, AT&T and DIRECTV can successfully tread the thin line between strategic move, and totally and unethically taking over of an entire market.

Keith is a finance major at the Stillman School of Business, Seton Hall University.

Sources:

https://www.wsj.com/articles/justice-department-settles-antitrust-claim-against-directv-1490312878

https://www.wsj.com/articles/justice-department-sues-directv-for-collusion-during-dodgers-tv-talks-1478105262