Posted by Avery Smith

This is the Business Law breakdown and today I will be talking about the article After a year in FTX’s shadow, the crypto industry is delighting in Bankman-Fried’s conviction written by Allison Morrow of CNN. The article was updated on Saturday November 4th, 2023. It is about the downfall of FTX founder Sam Bankman-Fried, who was recently convicted for fraud after it was found that the crypto company was based on fraud. The company has gone bankrupt and some say that the findings have sent the once trending crypto community back a few years. 

With the recent conviction of Bankman-Fried the most interesting part the article had pointed out is that “No one is happier about that than the professionals in the industry that made him, for a time, a rock star.”. This specific quote brings out how everything changed with findings of fraud. It’s very serious in the world of business especially crypto as it shows that the company wasn’t ethical as one thought. Crypto is struggling now after with questions about what is being done with money and where it is coming from. The SEC has attacked FTX with hostility lately even with the company filing for bankruptcy as that is the way it will attack digital currency for now on because of the unknown. 

This article was very interesting to me based on the fact that I remember how significant the news was when FTX initially had been called for fraud. FTX had multiple celebrities that were advertising it as well so the name was familiar. With this being non-ethical Bankman-Fried being convicted for fraud makes sense as he didn’t follow appropriate laws or clean funding. It sends things into an unknown for the Crypto community of how it will be able to grow with situations such as these the reason why it might not be able too.

Article link: https://www.cnn.com/2023/11/04/business/crypto-industry-bankman-fried-guilty/index.htmlLinks to an external site.

Avery is a sports management major at the Stillman School of Business, Seton Hall University, Class of 2026.

Posted by Navith Rangel

It is no secret that the FTX debacle has been rather scandalous to say the least. Defrauding millionaires and enlisting in A-List celebrities to promote his cryptocurrency, Sam Bankman-Fried definitely did not think that being convicted of fraud was in his list of possibilities. Oftentimes in America, white collar crime goes unpunished, but in the case of Bankman-Fried, this is a twisted and conniving tale. The article that I decided to choose details the case and provides background knowledge surrounding Bankman-Fried, especially his pretrial antics.

FTX was a company that had a meteoric rise, confiding in the likes of Tom Brady and Stephen Curry to help promote this new cryptocurrency. However, just as fast as the rise, the collapse began and it turned out that this new cryptocurrency was actually broke, and could not pay their investors. As a result, the company went bankrupt and all fingers got pointed to founder Bankman-Fried, as the alleged exuberant amount of money being made just somehow disappeared. In turn, Bankman-Fried was then indicted on fraud charges and put behind bars for his crimes. In the article it details that Bankman-Fried performed multiple “antics” which ultimately will haunt him following this massive sentencing. After being arrested in the Bahamas last December, the article states, “The FTX co-founder has ‘shown a willingness and a desire to risk crossing the line in an effort to get right up to it, no matter where the line is,’ Kaplan said during a July hearing. Prosecutors had previously raised concerns about Bankman-Fried’s use of encrypted messaging app Signal to contact FTX’s US general counsel and suggest they “vet things together.” Kaplan called it an attempt at witness tampering” (Bultman 2023). These wild tactics thus has put Bankman-Fried into hot water with prosecutors and the judge and can ultimately affect his final sentencing. The enormous amounts of money additionally tied into the case can also result in a bloated sentencing and the article predicts it to be the maximum amount of life sentences. The article then compares this case with other high-profile white collar crime cases and the sentencing given out. In the case of Enron and their CEO Jeffrey Skilling, he was sentenced to 24 years, but after an appeal was brought down to 14 years. Another example the article uses is the case of Bernie Madoff and his billion dollar Ponzi scheme which yielded a sentencing of 150 years, the maximum. By bringing up these examples, the article’s author helps paint the sentencing picture and try to predict where Bankman-Fried could fall after all this.

Ultimately, I chose this blog post for the mere fact of the refreshing sight of a millionaire being held accountable for their crimes. Too often have we seen white collar criminals get off with lenient sentences and Bankman-Fried’s condescending and smug actions have resulted in him now paying the price. Although at the end of the article it states that the Judge presiding over the case has no empirical basis and in many cases has given lenient sentences, I have no doubt in my mind that Bankman-Fried will most likely see close to a maximum sentence. The high profile nature of the case and the amount of money lost, culminated with Bankman-Fried not doing himself any favors with his antics, the sentencing should be a lengthy one.

Navith is a political science major at the College of Arts and Sciences, Seton Hall University, Class of 2024.

https://news.bloomberglaw.com/securities-law/bankman-frieds-pre-trial-antics-haunt-him-before-sentencing-1Links to an external site.

Posted by Alessia Goncalves

Several leading US teaching hospitals are under scrutiny due to allegations made by doctors about a risky practice: surgeons scheduling multiple operations simultaneously and then billing Medicare for work they didn’t do. These claims have emerged from various federal and state lawsuits, shedding light on concurrent surgeries, bribery, kickbacks, and improper compensation. Hospitals such as the University of Southern California’s hospital system and the University of Pittsburgh Medical Center have been accused of leaving patients unattended during critical parts of surgeries, leading to concerns about patient safety and ethical standards.

Concurrent surgeries involve surgeons delegating tasks to residents without adequate supervision, breaching Medicare rules that require the lead surgeon to be present during crucial stages of an operation. Allegations suggest that surgeons often leave the operating room to perform other procedures, sometimes in different facilities. Hospitals are accused of manipulating billing records and engaging in fraudulent practices to maximize profits, putting patients at risk in the process. “At a teaching hospital, you have to make sure they are ready to do surgery on their own at the end of five years,” said Dr. Seth Leopold, professor of orthopedics and sports medicine at the University of Washington. “There has to be a progression, to let somebody have the stick at a certain point, but you have to be in the room observing and training them, both for their sake and the patient’s. I watched them like a hawk” (Holland, 5).

The issue gained prominence with lawsuits against Massachusetts General Hospital, where orthopedic surgeons voiced concerns about overlapping surgeries leading to unnecessary procedures and patient risks. Healthcare professionals at various hospitals, including Erlanger Health System and USC Keck Hospital, have faced repercussions for raising these concerns, resulting in legal battles and wrongful termination lawsuits. These cases, filed under the False Claims Act, highlight the need for transparency, accountability, and adherence to medical ethics in healthcare institutions. Upholding ethical standards is essential to ensuring patient safety and maintaining the integrity of the medical profession.

Article Link: https://news.bloomberglaw.com/us-law-week/doctors-ghost-patients-charge-for-surgeries-left-to-residents

Alessia is a finance major at the Stillman School of Business, Seton Hall University, Class of 2026.

Posted by Maria J. Gomez.

In a world where Artificial Intelligence is taking a big hit and influencing many fields, I don’t believe that many thought it would also take on the legal field. For some context, after the AI scared many by showing how easily it could come up with well acquired things within seconds, it scared the people, but most definitely the working force. Given that for the longest time we have lived in a society where one of the major potential conflicts is being overruled by artificially run robots. That being said, many thought that with the new implementation of AI the world would shift drastically from a workforce mostly led by humans, to a workforce that would simply be made up of technological machinery and AI. Although that has not happened as soon as people expected it to, it does not necessarily mean that it is still out of the picture. And now, seeing that it is possible for it to take over the legal field where it is mostly led by the “exercise of professional judgment and interpersonal engagement” it has been proven, as it is said in this article, that AI can do the same (Magdinier).

This article explains how there are four professional competencies for lawyers and any professional that can be narrowed down to. They are the following: knowledge being in the center core, judgment, content creation and persuasion. Looking at each one individually, knowledge covers the applicable laws and regulations, as well as the client’s business and their market and industry practice. After knowledge comes judgment, or the ability of a person to make the right decisions around things such as content look and feel, interpersonal and organizational dynamics and how to balance commercial and operational drivers. Later on comes content creation which are things like the writings made, graphic slideshows, spreadsheets with statistics, etc.. Lastly, comes persuasion. According to what Magdinier stated in the article, persuasion is and has “always been the lawyer’s superpower. Persuasion is the competency that executes with maximum effectiveness the delivery of all that knowledge, judgment, and content.” 

Now, where does Artificial Intelligence come into play? And how exactly can a digital machine create arguments that carry such humane characteristics? At the current moment, AI excels at the performance of knowledge and content creation; however, it is expected that it will increase its performance on the rest of the competencies. The reason for this is because of how fast the datasets grow and the way that service providers and practitioners invest in the design and build of new use cases. If the situation keeps progressing the way it seems, soon enough AI systems will be able to” accumulate, organize, summarize, extract, and pattern-shift information…” that will “…augment how lawyers come to form their judgements and the tools available for persuasion” (Magdinier). Ultimately, the article ends on advice given to the younger upcoming lawyers. It claimed that those who are entering a world of AI-enabled lawyering, should consider thinking about the current limitations of generative AI tools and use that to their advantage. It ends it by saying that AI is not self-aware and it doesn’t exercise its own judgment. Therefore, it has no idea what a person intends to do with the outputs that a person gives them. Yet, its ability to inform a person’s judgment and enhance their persuasiveness will definitely transform the law field moving forward. 

Maria is a student in the College of Arts and Sciences at Seton Hall University.

https://setonhall.instructure.com/courses/6067/discussion_topics/11406?module_item_id=78113

Posted by Alivia Confessore.

The Stain on forced labor on Nike Shoes- Extra Credit Blog Post 1
The article “The China Challenge: The Stain of forced Labor on Nike Shows”, by Amelia Pang, is about how Nike’s shoe factory is forcing young women and child to work. Nikes largest shoe supplier factory is owned by south kora in Taekwang, 8 million pairs of shoes are produced a year. It has partnered with the chinses government forced labor programs, which is why young women and children are being forced to work in the factories.

Theses programs are linked to crimes against humanity. One of the programs takes Turkic residents and forces them to leave behind their children and families to work in factories across China. Victims can’t even return home after finishing their work in the factories as the government relocated them. After arriving to the factors and working all day making shoes, they have to attend a “military style management” classes at night for “patriotic education”.

Nike has claimed they don’t use forced labor anymore. After multiple reports of the way theses factories are ran and how connected they are with Nike, do we believe their statement? In the article it states, “When I asked Nike to provide a general description of its new auditing protocol, its communications department declined to provide any comment beyond a link to a vague statement on its website”(Pang). Nike declining to comment on this issue is suspicious and make me believe this situation is still going on.

Alivia is a business administration major with a minor in criminal justice at the Stillman School of Business, Seton Hall University, Class of 2025.

Works Cited
Pang, amelia. “The China Challenge: The Stain of Forced Labor on Nike Shoes.” Www.discoursemagazine.com, 5 Jan. 2022, www.discoursemagazine.com/p/the-china-challenge-the-stain-of-forced-labor-on-nike-shoes.

Posted by Red Beyer.

Mike Jeffries, former CEO of the Abercrombie & Fitch brand, has recently been accused of running a sex-trafficking operation involving abuse of the company’s male models. On Friday, October 27th, 2023, a lawsuit was filed claiming that “the CEO allegedly used promises of a job at Abercrombie to lure young men to locations around the world and coerced them to have sex with him and others” (Fox Business).

Actor and model David Bradberry, who initiated the lawsuit, claims that the former-CEO would purposely seek out college-aged men, coercing them into sexual activity and subjecting them to various forms of assault. In regards to his personal experience with the company, Bradberry was approached by Jeffries himself in 2010, where he was told he would not be allowed a meeting with the brand’s modeling scout unless the two were to engage in an act of ‘oral sex.’

Even after this event took place, Bradberry alledgedly continued to be forced into sexual situations in promise of a job. However, even after allegedly being drugged, raped and sexually abused by Jeffries and his team, Bradberry’s lawyer states that he was still never hired for the job.

Jeffries stepped down from his position in 2014, just four years after his encounter with David Bradberry due to a “a string of poor results” within the company. However, despite his current lack of authority, Bradberry is still determined to take legal action against Jeffries for the abuse he imposed upon his workers.

Red Beyer is a business and finance major attending the Stillman School of Business in Seton Hall University, Class of 2026.

Link to the original source: https://www.foxbusiness.com/markets/abercrombie-sued-former-ceos-alleged-abuse-male-models Links to an external site.

Posted by Onyekachi Ajaero

The blog discusses how the Delaware Court of Chancery’s jurisdiction over claims involving the release of escrowed funds is evolving. The court’s limited jurisdiction is first outlined, with a focus on the significance of equitable character or relief in determining the court’s subject matter jurisdiction. The Xlete case, which first established the Court of Chancery’s recognition of equitable jurisdiction over claims for the release of funds held in escrow, is cited by the author as a historical precedent. Recent rulings from the Court, which point to conflicts between the availability of sufficient legal remedies and the need for equitable relief, have cast doubt on the precedent’s ability to be applied going forward.

The blog then delves into specific cases, such as Elavon v. Electronic Transaction Systems Corp., ISS Facility Services, Inc. v. JanCo FS 2, LLC, and Buescher v. Landsea Homes Corp., where the Court of Chancery dismissed claims for lack of subject matter jurisdiction, challenging the traditional reliance on the Xlete precedent. Vice Chancellor Glasscock’s opinions highlight the need for a more nuanced interpretation of claims involving the release of escrowed funds, emphasizing the availability of declaratory judgments as adequate legal remedies and questioning the necessity of equitable relief. The author urges practitioners to consider the implications of these recent decisions, including the potential transfer of cases to the Delaware Superior Court’s Complex Commercial Litigation Division (CCLD), which has proven to be a reliable alternative for resolving complex business disputes.

The blog, taken as a whole, highlights how the Court of Chancery’s handling of cases involving the release of escrowed funds is changing and warns practitioners not to rely solely on previous decisions. The Court’s recent rulings appear to indicate a change in its position on equitable jurisdiction, which should cause parties and their attorneys to carefully consider which courthouse is best for their particular claims. The blog also emphasizes the CCLD’s increasing acceptance as a substitute forum for handling complicated business conflicts, stressing the significance of taking into account both courts’ qualifications and capacities when pursuing legal action concerning post-closing disagreements over escrowed funds.

Onyekachi is a finance and accounting major at the Stillman School of Business, Seton Hall University, Class of 2026.

Blog link: https://www.americanbar.org/groups/business_law/resources/business-law-today/2023-november/delaware-court-of-chancery-calls-into-question-equitable-jurisdiction/

Posted by Siya Patel.

On September 10, 2022, 21-year-old college student Sarah Katz bought and consumed Panera Bread’s Charged Lemonades, passing away later that day. The lawsuit filed by her parents says that “the company ‘failed to properly warn’ customers about the potential dangers of Charged Lemonade and misleadingly marketing the drink as ‘clean.’” Katz had a preexisting heart condition known as Long QT Type 1 Syndrome since the age of five. She took daily medication and avoided any energy drinks or highly caffeinated drinks in general. Her condition affects the electrical system that controls the person’s heartbeat. According to the medical examination report, the cause of death was arrhythmia caused by the Long QT Syndrome. The report had no mention of the Charged Lemonade.

About two months after the death, Charged Lemonade gained a lot of traction on social media, especially TikTok. Many users were shocked to learn about the caffeine content in the drink. The FDA advises that “most healthy adults can safely consume up to 400 milligrams of caffeine per day, or about four or five cups of regular coffee, depending on the brand and roast.” The large 30-ounce cup contains 390 milligrams, and the regular 20-ounce cup contains 260 milligrams of caffeine. The large serving “has more caffeine than a 12-ounce Red Bull and a 16-ounce Monster Energy Drink combined.” At the Panera location where Ms. Kantz bought the drink, the drink was “offered next to beverages that did not have caffeine or had less caffeine. It was not advertised as an energy drink. It was unclear how much of the drink Ms. Kantz consumed because she subscribed to Panera’s Unlimited Sip Club, which allows free refills at the self-serve station.

The complaint also mentions that the caffeine content could have potentially also been altered by the manner in which the drink was prepared. Panera workers mixed the drink at the restaurant itself which caused a lack of quality control. After drinking the lemonade, Ms. Katz went into cardiac arrest in a restaurant. She was taken to a hospital where she suffered a second cardiac arrest, ultimately leading to her death. On the Panera website, the lemonades are described as energy drinks, but they are also marked to contain clean caffeine. The actual caffeine content of each size is not listed.

Siya is a dual Diplomacy and Economics major at Seton Hall University, Class of 2026.

https://www.nytimes.com/2023/10/24/us/panera-caffeine-charged-lemonade-death.html Links to an external site.

Posted by Logan Murray.

In September of 2022 a college student at the University of Pennsylvania, Sarah Katz, died after drinking one of Panera Bread’s Charged Lemonades. Katz had a heart condition for most of her life and was known for being very cautious and attentive when it came to what she consumed. Her parents state that Katz would not have known that the Panera Bread Charged Lemonades were an energy drink and likely thought it had a safe amount of caffeine.

Amanda Holpuch of the New York Times details the facts of the case. Holpuch writes, “The lawsuit said that the company “failed to properly warn” customers about the potential dangers of its Charged Lemonade and misleadingly marketed the drink as “clean,” even though the large size has more caffeine than a 12-ounce Red Bull and a 16-ounce Monster Energy Drink combined” (Holpuch). Both Red Bulls and Monster Energy Drinks are widely marketed and commonly thought of as energy drinks. It is alarming that a Charged Lemonade has as much caffeine as both drinks combined and is not marketed similarly. Holpuch addressed Katz condition stating, “Ms. Katz’s heart condition, Long QT Type 1 Syndrome, affects the electrical system that controls a person’s heartbeat, the complaint said. She was diagnosed with the condition when she was 5 years old, took daily medication and avoided energy drinks and other highly caffeinated beverages, the complaint said” (Holpuch). This is an important fact because it shows that Katz was attentive when it came to avoiding highly caffeinated drinks and would have avoided the Charged Lemonade as well if she was aware of its contents.

Holpuch also outlines the safety of the Charged Lemonade in the general sense. She writes, “About two months after Ms. Katz’s death, Charged Lemonade attracted widespread attention and media coverage after a video was posted on TikTok by a user who was shocked by the drink’s unexpected caffeine content […] Sarah Baus said in the video that she routinely drank the lemonade, but had only just learned about how much caffeine was in it” (Holpuch). I think this two-month timeline is also valuable to see how Panera Bread may not have changed it’s transparency practices following Katz death. Holpuch continues, “According to the [FDA], most “healthy adults” can safely consume up to 400 milligrams of caffeine per day” (Holpuch). The large 30-ounce Charged Lemonade contains 390 milligrams of caffeine. Holpuch also notes, “[T]he legal complaint said, the drink was offered next to beverages that did not have caffeine, or had less caffeine. It was not advertised as an energy drink […] The caffeine content could also have been affected by how the drink was prepared, according to the complaint, because Panera workers mix it at the restaurant, which caused “a lack of quality control”’ (Holpuch). The Charged Lemonade’s placement next to non-caffeinated drinks is potentially misleading to consumers and the lack of quality control is alarming due to how close a large Charged Lemonade is to the FDA stated maximum safe amount of caffeine (10 milligram difference). I would not be surprised if Panera Bread settled this lawsuit rather quickly.

Logan is a Sports Management & Mathematical Finance Major, Legal Studies Minor, at the Stillman School of Business, Seton Hall University, Class of 2024.

https://www.law.com/therecorder/2023/10/12/family-of-man-killed-in-october-2021-plane-crash-files-product-liability-lawsuit-against-textron/

Posted by Catriona Larouche.

In early October, the Tennessee Supreme Court issued “an important decision making clear that in a breach of a contract dispute, the aggrieved party may recover more in damages than the parties’ contract permits, such as punitive, incidental, and consequential damages”. For a long time, it remained unclear in Tennessee whether sophisticated parties negotiating goods and services contracts would prohibit recovery of consequential, incidental, and other damages beyond what was included in their contract. Consequently, parties entering a contract could decide what recovery they might receive in the event of a breach without resorting to common law or statutory liability for other damages, placing some parties at a disadvantage.

Let’s assume the scenario where there is a sophisticated contract between two parties. Company A agrees to provide a service to Company B but fails to meet deadlines and breaches the contract. Shortly after signing the contract, Company A knew it would not be able to fulfill its duties to the contract. At the time of the contract signing, Company B did not anticipate such a breach and used a standard services agreement limiting them to damages of the price paid and excluding any consequential, incidental, and punitive damages. In this case, Company B has already paid Company A, and now, due to the breach, company B cannot fulfill its promises to its clients. As a result, Company B incurs a greater loss that is beyond the contract terms. In this case, the newly Tennessee Supreme Court decision would indeed help Company B in retrieving its losses not covered in the original contract. This past scenario is exactly what happened on September 28th, 2023, in the ruling of Commercial Painting Inc. The Weitz Company LLc case.

It is also crucial to keep in mind the economic loss doctrine in product liability cases. Since 2009, the Tennessee courts, for example in the Lincoln General Ins. Co. v. Detroit Diesel Corp. case has changed the economic loss liability doctrine in product liability cases. This doctrine says that when damages from a breach of contract are only economic damages, the plaintiff has no action under tort law. Therefore, if a defective product only damages itself, meaning it does not cause personal injury, the owner is in the same position as if it never had the product. The remedy in these cases should be limited to what was specified in the contract. Unfortunately, the economic loss doctrine is flexible and can be challenging in certain cases where it is difficult to differentiate recoverable tort damages or not.

In my opinion, I do believe this ruling from the Tennessee Supreme Court is fair. It assures that parties need to be held responsible for their actions and that the party who suffers from the breach gains reasonable damages. On the other hand, if only economic damages are present, the law will not provide other remedies, which I do also think is a fair decision.

In conclusion, the aim of this decision it to prevent parties from evading responsibility for their actions and to ensure that parties suffering from the breach of contract are properly supported, even if the remedies were not explicitly written in the contract.

Catriona is an International Business Major and Legal Studies in Business Minor at the Stillman School of Business, Seton Hall University, Class of 2024.

https://www.adamsandreese.com/news-knowledge/allen-woods-tennessee-supreme-court-economic-loss-doctrine Links to an external site.