Posted by Robert Santos.
Usually when people go on vacation, they come home with a souvenir of some sort such as a hat or refrigerator magnet. Lauren Guerra will be going home with a little more than a silly souvenir–in fact she will be going home with 3.5 million dollars. This will be a trip to remember for Guerra but not in the way one would want. Although Guerra will be going home a very rich woman, the damage that has been done is something that all the money in the world couldn’t fix.
On October 27, 2013, Lauren Guerra was one of the many passengers on the Star Line Tours of Hollywood bus giving a tour to passengers of Hollywood. These buses are popular and very well known for they give tours of the famous locations in California, and are known for the unique design of not having a roof but a open deck level for tourists to have a better view of sites and take better pictures. Unfortunately this would be Guerra’s biggest regret, for while aboard one of these buses, a tree branch flew into her face leaving her permanently disfigured. She immediately sued the company after hearing of another death on the same type of bus under the same company. In July 2014, and has been in a back and forth battle since then.
The court battle was vigorous and both sides seemed to have fair arguments. Mark Cunningham who is the attorney for the Starline Bus Company argued that Guerra was at fault because she was standing while the bus was in motion and also was drinking prior to being on the bus. Brian Kabateck, who is Guerra’s attorney, responded by admitting his client did indeed have a drink or two before entering the bus. But there was no way anyone could of avoided this injury, sober or not. Guerra’s attorney argued Star Line could have done more to prevent the situation such as having a worker on the second level of the bus, and also having individuals scout to see what type of environment the bus routes consisted of before actually allowing the buses on them. After a day-long discussion among jurors, the court finally awarded Guerra a settlement of 3.5 million dollars.
Something says that whether you weigh the negatives or the positives, Guerra will never forget this vacation.
Robert is a philosophy major at Seton Hall University, Class of 2016.
Posted by Robert Santos.
It seems that multiple companies are beginning to merge in an attempt for one company to make a larger profit and the other company to remain alive. Some companies tend to merge in order to both strengthen their profits and publicity. In this specific case, these companies merged in order to create a better and more powerful drug that could be beneficial and a game changer for individuals who suffer from multiple sclerosis. Or so it seemed. Unfortunately for these French companies, there well planned venture did not go as planned.
In 2011, a giant French pharmaceutical company known as Sanofi acquired Genzyme, a small biotech company based in Cambridge, Massachusetts. Sanofi paid 20 billion dollars for the company, and although that seems a bit much for a small-time company, Genzyme was making strides to create a powerful and promising treatment to multiple sclerosis called Lemtrada. It seemed like a good deal that would not only benefit the two companies but the world as well.
Unfortunately things did not turn out for the best with this venture between the two companies. It turned out that Sanofi was developing their own treatment to multiple sclerosis. The drug is called Aubagio and would have been a competitor against Lemtrada. Sanofli was faced with a dilemma: they could have followed F.D.A regulations and worked to seek approval for Lemtrada, or finish working on Aubagio. The only catch would be that by focusing on Lemtrada, Sonafli would have to give additional payments to the Genzyme rights holders in the estimate of 3.8 billion dollars. Of course Sonafli choose the latter option and focused on their drug without the right holders of Genzyme knowing, and now a lawsuit has been issued.
A lawsuit was filed against Sonafli by Genzyme rights holders under the claim that Sonafli failed to fulfil its obligations under their deal. Because of this, the individuals who invested in Genzyme have not received the money owed to them in a sum of 708 million dollars. The lawsuit claims Sonafli may have taken it upon themselves to slow the approval of Lemtrada through the F.D.A in order to avoid having to pay the right holders of Genzyme, while the approval of Sonafli’s drug Aubagio was an easier process and did not have as much difficulty of being approved as Lemtrada did. It has already been noted by F.D.A officials that the time process for Lemtrada to be approved took longer than it should have, therefore, it already seems that Sofali is in the wrong.
Unfortunately, this is a case where the wellbeing of individuals is outweighed by the possibility of profit. If what Genzyme is claiming is true, we would have been witness to another company thinking about their pockets before the health of many. Considering the impact these drugs could have had on the lives of the somewhat 2.3 million people in the world who suffer from multiple sclerosis, it is a sad thing to see money interrupting the process of progress. Hopefully, we see some agreement and it happens as fast as possible so these companies can go back to focusing on what’s important, and that’s saving a life.
Robert is a philosophy major at Seton Hall University, Class of 2016.
Posted by Deane Franco.
In a recent article posted in the Wall Street Journal, I read about General Motors being charged with punitive damages due to a defective part causing multiple deaths. General motors had been in the process of recalling millions of vehicles, when a defective ignition switch caused 100 or so deaths.
The punitive damages will be limited to the extent of a lawsuit based on claims and knowledge that GM had of a new company auto maker’s 2009 restructuring. GM attempted to prevent plaintiffs for bringing punitive damages based on personal injury or wrongful death. Unfortunately for GM, Robert Hilliard who is representing all those injured by GM feels that punitive damages “are the only way to properly compensate victims who have been harmed by defect.” This is because punitive damages are meant to be a large enough punishment to the corporation to send a notable message with the intent of assuring the corporation understands its wrong doing.
Although GM tried to fight the punitive damages, the plaintiffs won outright. What this means for GM is that punitive damages could reach millions or even billions of dollars awarded to those affected, depending on the ruling, previous defective GM part cases may also be included.
GM has already paid $935 million in damages and has also agreed to $625 million in compensation for the victims. But we will see if the court will stop there. Moreover, GM is being considered for additional charges because they had acknowledged that they mislead regulators about the defective car parts and still put them into production. The hairy part, however, comes in when GM addresses their bankruptcy filing, because technically, “Old GM” filed for bankruptcy and would be responsible for all these defective parts liabilities and, “New GM,” the product of the bankruptcy reorganization, is a new company separate from the actions of the old.
This article relates to the discussion post this week in class where we discussed the hot coffee spill in Liebeck vs. McDonalds. In that situation, punitive damages were used not necessarily as a fair compensation to the victim, but to ensure McDonald’s knew of its intentional wrong doing and would be more likely to halt such procedures.
The pricing of the punitive damages was said to be very important for Mr. Hillard because he knows that those damages tend to run very high and would lead to fair compensation for the victim’s losses. This is a little different from the Liebeck case, because in that case, there appeared to be dual responsibility as to both the temperature and the spilling of coffee; in this GM case, all responsibility falls on the manufacturer for selling a defective car which caused death to numerous victims. It does not matter that GM has rebranded itself after going through bankruptcy filings. At this point in time, there may be products on the market that have not been recalled, which caused injury and or death to numerous victims. For these reasons, the punitive damages should be high to balance out the victim’s loss and GM’s punishment.
Deane is a member of the The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, and a finance and information technology management major, Class of 2018.
Posted by Abigail Anaemeje.
Yet, another automobile scandal! In September, the Environmental Protection Agency found that Volkswagen sold 482,000 cars in the U.S. that contained a “defeat device.” This type of software was used in diesel engines, “that could detect when they were being tested, changing the performance accordingly to improve results.” The result of this led to the “engines emitting nitrogen oxide pollutants 40 times above what is allowed in the US.” In addition, in November of this year, Volkswagen also found irregularities of carbon dioxide emissions levels in about 800,000 cars in Europe. In response to the emission-cheating scandal, Volkswagen has acknowledge their failure. As a result, they will have to pay a fine to the EPA of $37,500 for every vehicle that goes against the allowed standards.
This issue has not only effected the U.S. and Europe, but also France, South Korea, the UK, Italy, Canada, and Germany. In total, 500,000 cars in the U.S., 2.4 million in Germany, and 1.2 million cars in the U.K. have been recalled as a result of the emissions scandal. So far, no employees have been directly fired over the incident. However, the management board member and the head of sales and marketing, Christina Klingler is leaving the company on an unrelated issue.
Abigail is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Abigail Anaemeje.
In September of this year, a settlement was finally reached involving GM and their issue involving small- car ignition switches. In the last year, the company has had to recall over 2.6 million of their older cars to replace defective switches that, “shuts off the engine and disables power-assisted steering, power brakes and the air bags.” Such problems have been found in models such as the Saturn Ion and Chevrolet Cobalt. This deadly case drew even more attention when it was the cause of at least 124 deaths and 275 injuries. GM, the Detroit automaker, admits that, “some of its employees knew about the problem for more than a decade, but no cars were recalled until early last year.” After hiring a federal prosecutor, Anton Valukas, he discovered that there has been no wrongdoing made by the top executives. However, in light of the incident, 15 employees of GM have been fired for falling to act in correcting the issue.
Overall, GM Motors will have to pay a wire fraud charge of $900 million in a late prosecution agreement. As for the families who have lost their loved ones, each will receive at least $1 million. In addition, $625 million has been set aside to compensate people who will agree with the settlement. Ironically, this case occurred a year after Toyota was caught hiding information about its defects that caused similar outcomes. Since it was much severe, Toyota agreed to pay a penalty of $1.2 billion; making it the largest penalty enforced on an automobile company.
Abigail is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Yasmine Miller.
Around the time of July, 2015 Whole Foods was being sued for misleading sugar claims. Shoppers of Whole Foods were angry when discovering that the evaporated cane juice is actually sugar. The company has built their popular reputation on only selling foods that are supposed to be healthier than the foods that you would get in local grocery store. Whole Foods has been fighting against their allegations in the misleading and false advertisements on their cookies.
According to the article “The plaintiffs allege that Whole Foods called sugar “evaporated cane juice” on the label of its Gluten Free All Natural Nutmeal Raisin Cookies in an attempt to make consumers believe that the cookies do not contain as much sugar as they in fact contain.” Further, still today Whole Foods denies the claims in the Missouri lawsuit. “In their filing in support of this motion, they argue that no reasonable customer could have been led, by the label on its cookies, to believe that the product didn’t contain sugar.”
Whole Foods mislead their customers by conceiving them that their healthy snack (cookies) weren’t as healthy as everyone thought. The company mislead and falsely advertised their cookies and violated laws that are in place to protect clients from being misled about products and or services. From my understanding, businesses are not allowed to make statements that lead to incorrect impressions.
Whole Foods violated the Code of Conduct in Business for their deception and dishonesty towards their customers. A code of conduct (also known as the code ethics) provides employees with guidance for handling difficult ethnical situations related to the business. Whole Foods definitely violated this conduct.
Yasmine is a psychology major at Seton Hall University, Class of 2017.
Posted by Leonardo Terzulli.
Two new cases that have just arose, DraftKings and FanDuel, two one-day fantasy sports websites that guarantee immediate cash payouts, have been banned in the state of New York. New York’s Attorney General Eric Schneiderman, sent a cease-and-desist letter earlier this past week accusing FanDuel and DraftKings to be considered illegal gambling. This whole debate started over news that had been circulating that an employee who worked for DraftKings won $350,000 in a contest on the website. There were allegations that the employee had inside information that was used to help him win the contest. DraftKings response to the allegation was “the information was only available after player lineups had been locked in.” Both companies claim that employees are banned from participating in competition on the website, and failed to check-up on internal controls.
Both DraftKings and FanDuel have chose to file lawsuits feeling that the Attorney General wasn’t fair in his cease-and-desist order. “The two companies made separate filings that asked the New York Supreme Court to throw out Schneiderman’s order. In its lawsuit, DraftKings argued that Schneiderman’s cease-and-desist order is unconstitutional, saying the Attorney General acted as ‘judge, jury and executioner.’”
While there are already a few states that have prohibited daily sports, I feel that this case is really going to be contingent on the employee who violated the rules and lack of check-up on the internal control in the companies.
Leonardo is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Leonardo Terzulli.
McDonald’s has recently been involved in a case of a customer, Lynn Gipson, having hot water spill on her at a McDonald’s drive-through. The incident happened in 2012 when a cup’s lid popped off, “spilling the scalding water and causing second-degree burns on Ms. Gipson’s thigh and stomach,” a quote from the court documents. This incident is similar to the 1994 incident when Stella Liebeck sued McDonald’s in the case Liebeck v. McDonald’s Restaurants in which a top to a coffee lid came off in between Liebeck’s legs causing severe burn injuries with resulted in skin grafting. The turnout for this case was Liebeck was awarded $2.86 million. Gipson is alleging that McDonald’s drive-through employees delivered tea and other hot liquid substances in a negligent matter.
Unlike the case the in 1994, McDonald’s is most likely opting to not take the case to court and settle. The turnout for the 1994 case ended in the jury calling for McDonald’s to pay punitive damages. Knowing that they have faced a few court cases already this year, and that they will probably lose this case again, they feel the best choice for them is to just settle with Gipson’s terms. Although the case is still not fully resolved, it is safe to say that McDonald’s is going to lose. Similar to the 1994 case, this is a case that might seem a little obscure but, Lynn Gipson exerted all of her options, taking into account all actions by both parties, and taking the educated step to ensure she was given justice.
Leonardo is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Ryan Neligan.
Human beings have a natural tendency to expand upon whatever the present is. In America, pilgrims settled in the state of Massachusetts and eventually expanded all the way to California. This trend of expanding continues today, as now people look forward to what is beyond Earth: Outer Space. This week Congress has passed a bill called the Space Act of 2015, which will help the small business of asteroid mining become an official operation.
The resources that are in outer space could be quite valuable to our world for the future. There are so many things untouched out there and in such great supply. In the past, “the prospect of large scale extraction of minerals from other planets or cosmic bodies has been both technologically and legally questionable, with starry-eyed entrepreneurs hard at work on the first part, but without much guidance on the second” (Good Magazine). Our civilization has not had the knowledge or technology in order to make obtaining a vast amount of resources from outer space an appropriate business. That has changed in current day though, as technology has made leaps forward in progress of this venture, and now to is officially about to become legitimate. With the passing of the Act, the business of space mining could boom into a full blown industry in the market, for “this lays the legal groundwork for private businesses to own extra-planetary resources, as well as sell their goods back on Earth” (Good Magazine). Huge potential is seen for space mining. Businesses are waiting for the new act to become official so they can jump into the extraterrestrial world of space mining and make as profit off of it.
The Space Act of 2015 is not yet complete to be used, but it is laying the foundation to open up endless possibilities that reach far beyond he extant of this world. Humans continue to expand the horizons that are in front of them, and this act would put them in the galaxies.
Ryan Neligan is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Ryan Neligan.
Earlier in the month, the state of New York banned the use of Fanduel and Draftkings, both websites in which people use to bet on daily fantasy sports. These websites are run daily in which people place down money and compete against each other in order to see who the best judge of sports is, and the winner acquires a large sum of money from those people who took place in the game. Games like this take place all over the world through these websites and have instantly gained a great amount of popularity.
The attention it is getting from the population has caused some heads to turn, such as the state government of New York. It has seen these websites as illegal gambling taking place within the state, and New York’s attorney general is set on shutting down this business. FanDuel and DraftKings are not going down without a fight though, as “the two biggest daily fantasy sports sites are taking on Eric Schneiderman in court, accusing him in lawsuits of bullying and abusing his powers in ordering that they stop operations in New York and are seeking a judge’s order to let them keep operating” (BloombergBusiness). To lose the participation of New York would be a huge blow for these two businesses, because New York accounts for “more than $1 billion each and have drawn investors across the sports, media and venture-capital industries. The state accounts for 5 percent of FanDuel’s customers and more than 7 percent for DraftKings, according to the companies’ filings” (BloombergBusienss).
Fanduel and DraftKings are taking action and are filing suit against this banning, for they do not see their business as an illegal online gambling site. They see it as a game of skill and knowledge in sports. Fanduel stated in its complaint about the case that “Such a shutdown would deprive hundreds of thousands of subscribing New Yorkers of the opportunity to pit their skills against the skills of others in selecting a ‘fantasy’ team of athletes from different sports teams and competing in contests offering prizes to the players whose fantasy teams perform best” (BloombergBusiness).
The case can be made for both sides of the argument. These websites are definitely a test of skill in the area of sports just like when people play regular Fantasy games, but it can also be seen as a website used for gambling and requiring money online, which is illegal in the state of New York. If these website continuing operating, the attorney general will take action and put chargers against these companies. The people of New York will be watching this case closely to see what the final outcome is, but for now daily fantasy sports has been banned from the state.
Ryan Neligan is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.