The Delaware Supreme Court has recently handed a major blow to corporate directors and officers who believe the attorneys employed in their legal department necessarily have to keep everything under wraps.  The Indiana Electrical Workers Pension Trust Fund, a Walmart shareholder, filed suit against the directors and officers claiming they knew their employees may have been engaged in a sweeping bribery operation in Mexico.  But the company argued any communications made by its legal department is privileged and could not be disclosed for the purposes of the lawsuit.

The attorney-client privilege is a sacred one because it allows people to freely discuss their problems openly with their attorneys without fear that what they discuss can be used against them.  Courts, however, in extreme circumstances will allow a party to pierce the privilege and force an attorney to divulge these confidential communications.   Company officers have been abusing the privilege by using company attorneys to bounce-off ideas in order to concoct what may be tantamount to an illegal scheme and then shifting the responsibility to the legal department knowing that any communications have to be kept confidential.

Generally, the attorney-client privilege would have to apply in these situations, unless an employee is brave enough to be a whistle-blower.  But not everyone wants to step-up to the plate in these circumstances because, even though there are laws to protect them, whistleblowers fear the stigma that accompanies it.  Moreover, not all crimes are covered under the whistleblower laws, therefore, some nefarious conduct by corporations will go undetected.

Nevertheless, the Delaware Supreme Court articulated that the owners of the companies are really the shareholders; thus, the attorneys working in the legal department work for the shareholders. The court held the allegations made by plaintiffs Indiana Electrical Workers Pension Trust “‘implicate criminal conduct’” under the Foreign Corrupt Practices Act. The court further held that since the pension fund was a stockholder, the information “‘should be produced by Walmart pursuant to [an] exception to the attorney-client privilege.’”  As a result of the decision, the pension fund can now use the information to decide whether there was any wrongdoing.

Posted by Sydney J. Kpundeh.

The famous over the counter drug Tylenol was at the center of a case that was brought before a Pennsylvania federal district court in early November. The case involved a lady who had taken Extra Strength Tylenol for many years to treat various conditions. In Mid-August of 2010, she underwent lumbar laminectomy surgery and afterwards she was instructed by her doctor to take Regular Strength Tylenol in conjunction with Lorcet, a prescription drug containing acetaminophen, but not to exceed 4 grams of acetaminophen in a 24-hour period. For approximately two weeks, she used the Regular Strength Tylenol, as instructed, until the bottle ran out, after which she began using Extra Strength Tylenol. At some point, she stopped taking the Lorcet due to its side effects. On August 29, she unfortunately was diagnosed with acute liver failure and died two days later.

After her passing, her sister filed a products liability lawsuit, “including claims for defective design and negligent failure to warn against McNeil, which manufactures the drug, and Johnson & Johnson, McNeil’s parent company.” Her sister insisted that the defendants knew that Tylenol could cause liver damage when taken at or just above the recommended dose. Also, she claimed defendants were liable for the her sister’s death because they had failed to warn her of the “risks of injury and/or death.” The defendants moved for summary judgment on the ground that the sister had not offered sufficient evidence to support her failure to warn claim.

Under the Alabama Extended Manufacturer’s Liability Doctrine, there are two factors that must be shown to find the scope of a manufacturer’s legal duty. The first is that there is some potential danger and the second is that there is a possibility of a different design to avert that danger. In this case, sufficient evidence was presented to show that the manufacturers knew or should have known that Extra Strength Tylenol could cause liver damage. The facts also showed that the manufacturers were working to find a substitute. Finally, the evidence also showed that the plaintiff’s sister died of acetaminophen-induced liver failure after taking Extra Strength Tylenol as directed.

Sydney is a political science major with a minor in legal studies at Seton Hall University, Class of 2016.

Posted by Steven Otto.

The San Francisco rating company, Yelp, is not found liable for negative reviews posted on its site. This is because it relies on ratings posted by users, not the company itself. A federal appeals court on Monday, September 12, dismissed a libel lawsuit filed against Yelp by Douglas Kimzey, the owner of a Washington state locksmith company. The 9^th U.S. Circuit Court of Appeals ruled that, under federal law, Yelp is not liable for content it gets from its users. The features of Yelp are based on users’ input and it is not content created by the company, whose site helps guide people to anything from restaurants to plumbers and much more.

The court said that Douglas Kimzey’s business received a negative review on Yelp in 2011. Kimzey claimed that the negative review was actually meant for another business, and claimed that Yelp transferred the review to his business on purpose in an attempt to extort him. He claims that Yelp was trying to force him into paying to advertise with Yelp. The appeals court said that his allegations were not substantial and that there were no facts at all supporting Yelp fabricating content under a third party’s identity. Circuit Judge M. Margaret McKeown, writing for a unanimous three-judge panel decision, said “We fail to see how Yelp’s rating system, which is based on rating inputs from third parties and which reduces this information into a single, aggregate metric, is anything other than user-generated data.”

The appeals court previously ruled under the 1996 Communications Decency Act that “websites that provide what are known as ‘neutral tools’ to post material online cannot be held liable for libelous material posted by third parties.” Kimzey’s claim that Yelp should be held liable for distributing reviews to search engines was dismissed by this act. The appeals court stated that distributing the content does not make Yelp the creator or developer of the content.

Aaron Schur, Yelp’s senior director of litigation, said the appeals court “rightly confirmed Yelp’s ability to provide a forum for millions of consumers to share their experiences with local businesses.” Kimzey said he lost 95% of his business after getting one star on Yelp and said, “If you have a one-star rating, people won’t go near it (the business). They don’t care if you’ve been in business for one week or 25 years.” Obviously upset over what had occurred to him and the ruling, Kimzey, serving as his own attorney, plans to appeal to a larger court panel.

Steven is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2019.

Posted by Michael de Andrade.

A threat to European nations, Facebook is being seen as a social media giant who are stripping Europeans from their freedom. Facebook is being accused of “collecting digital information about people who are not its users,” by the Belgian Court’s. Many of the “Continent’s data watchdogs,” including the European Court of Justice, have been giving Facebook and other American technology companies a difficult time for the way they “gain access to, manage and use people’s digital information” because to these European “watchdogs,” Facebook is violating Europe’s strict data protection rules that preserves individual’s privacy to the same power as the “fundamental rights, such as freedom of expression.

The hearing was held in Brussels, Belgium on Monday, November 9th, where Facebook was denied the ability to “collect and store online information from people in Belgium who do not have an account with the social network” stating that Facebook did not have “individuals’ consent to gather the information.” With this decision, the Belgian Court took further action by stating that if Facebook fails to comply with the court’s decision, they’ll receive a “daily fine worth up to $270,000.” Facebook didn’t settle and in response they stated that they have used “cookies for more than five years without facing privacy complaints,” and that they are going to appeal the decision to the Belgian Court of Appeal. As the wait continues, Facebook is being further investigated by five European privacy regulators, which are from Belgium, France, Germany, the Netherlands and Spain, to see whether or not the “company’s new privacy conditions run afoul of their countries’ domestic data protection rules.”

In the end, Facebook is trying to combat these accusations by stating that only the Irish data protection authority has jurisdiction over its new privacy conditions because Facebook’s international headquarters are in Dublin. The position grew vastly in the last month after the European Court of Justice “gave national authorities greater powers over how companies like Facebook and Google store online data.” Facebook will continue to fight for what they believe are their rights, despite the judges’ ruling that the United States do not offer sufficient protection for Europeans if their data was misused by companies or by government agencies. The issue is still recently new and there are many situations yet to be settled.

Michael is a sports management major at the Stillman School of Business, Class of 2018.

Posted by Katie Kim.

In the technology industry, two leading companies may be heading to the Supreme Court over the design of smartphones. There is no confirmation of whether or not the case will be accepted, but the Supreme Court has not taken a design patent in over a century.

A few weeks ago, Samsung agreed to pay Apple $548 million in damages over a design patent but did not agree to it as part of a settlement. Apple took Samsung to court on the grounds that Samsung intentionally and knowingly copied Apple’s iPhone designs. Apple prides themselves on their innovation and when the threat of copycats infringe on their innovations it takes away from their profits. Apple submitted evidence that showed the evolution of the Samsung product increasingly resembled the Apple iPhone

At trial, Apple convinced the jury that some of the designs Samsung used on their smartphones, like the rounded rectangular corners and touch screen made of smaller icons, were taken from and patented by Apple.

On the other hand, Samsung argued that the law under design patents was misapplied. The law is meant to protect “ornamental” features that are not part of the products intended function. Samsung lawyers feel that this should have been made clear to the jury.

On Monday, Samsung filled an appeal to the Supreme Court. The company argues that the legal framework behind designed patents is flawed and out dated for the modern digital world. “The law was written for a time long before the smartphone was invented,” said Mark A. Lemley, a law professor and director of the Stanford University program in law, science and technology. If Samsung is left to stand with a sweeping rule against it then it will “lead to absurd results and have a devastating impact on companies.”

Katie is an accounting and finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Justin Ihnken.

For many years, especially those who found themselves in an area of economic success, investors who succeeded because they worked with a financial advisor. The roll of the advisor is to assist individuals in asset portfolio management. Investments in both fixed market vehicles, and those driven with equity in the market, have [for the majority of advisors] been the number one and two sources of financial security investments. Both of these categories are tied together with the strategic planning and goal orientations of specific individuals. This theory comes primarily because “your advisor” would allocate dollars in a way that would ultimately secure monies for specific reasons and even more so, provide an aspect of future practical growth.

As time continues, there are still many individuals that work with advisors and insist that they do planning and individual investments on their own. Coming changes in investments will show that there is a driving need for RIA’s (Registered Investment Advisor). Unfortunatly, the traditional fixed income and equity allocations are rather lacking for specific individuals that wish to diversify their portfolios accordingly. A recent study done by Bridget Bearden, director of retirement research at fund industry consultant, Strategic Insight, went as far as to say many folks do not understand that the effects of falling short on their diversification strategy may have a serious impact in the long run.

“The fund industry generally advocates a 10 percent to 20 percent allocation to liquid alternatives for risk mitigation. But many off-the-shelf asset allocation portfolios seem to fall short of that.”

Many RIA’s are of traditional thought, however the coming realization of alternative investments is proving itself to be a more prominent tool to properly advocate clients. An example of a small and “up and coming” firm that shows its mindset is multiple footsteps ahead of the curve would be that of Circled Squared Alternative Investments. Circled Squared was founded in 2014, by Jeffrey Sica, CEO and President of Sica Wealth Management. With the changing times and ability to allocate dollars properly will prove to be a huge outlet for this small powerhouse. In an interview with a Berkshire Hathaway associated press, Sica spoke on his outlook and thoughts on the future for both Circle Square and alternative investments.

Add to this the inescapable conclusion that investors are growing increasingly dissatisfied with the stagnant performance and unacceptable volatility they’re getting from traditional investments like stocks and bonds, and you have a situation in which advisors have fewer and fewer ways to provide value to their clients.

As the stock market continues to be a murky water, few dare to try to understand the various inlets and outlets of the market. With the change of alternative investments slowly phasing themselves into our everyday planning as RIA’s, we must work above and beyond the curve and enable our’ clients and potential clients alike to take advantage of the various opportunities that alternative investments withhold.

**About Circled Square Alternative Investments

“Circle Squared Alternative Investments is a firm devoted to providing independent financial advisors with access to a range of innovative alternative investments previously available only to institutions and ultra-high net-worth investors. The suite of investment products will include real estate, private equity, private credit, natural resources, private placement offerings, entertainment and media.”

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

Sources:

1. D’Allegro, Joe. “A Retirement Riddle Placing $1 Trillion at Risk.” Cnbc.com. CNBC, 10 Nov. 2015. Web. 12 Nov. 2015.

2. Healy, Andrew. “Jeff Sica Launches New Alternative Investments Firm for RIAs; Unlocks Door to ‘Real Economy’.” Business Wire: A Berkshire Hathaway Company. Berkshire

Posted by Chase Mulligan.

On October 21, 2016 a coordinated distributed denial-of-service attack (DDoS) was made on internet systems operated by Domain Name Systems (DNS) provider Dyn resulting in massive disruption of internet services across the United States and Europe. Internet services along most of the east coast, west coast, and southern parts of the country were affected. The cyber-attack has been called an “historic attack”; (flashcritic.com) the first robot-based digital assault using the Internet of Things that linked millions of on-line devices in a coordinated operation. This tactic uses a novel approach of manipulating electronic devices connected to the Internet of Things for the attack capitalizing on the weak security of these devices and raising the question of responsibility and liability.

Anonymous and New World Hackers using recently released malicious software (malware) called Mirai, created a robot network for the attack. The significant aspect of the attack is the use of the Mirai botnet code to take control of devices that are used on what is called the Internet of Things. These devices are electronic devices not directly connect to computers but are connected through the internet and include such items as webcams, smart TV’s, routers, security cameras, DVRs, and similar devices. By using these electronic devices the hackers were able to take control of a virtual army of attackers. While the multiple attack across multiple directions is considered sophisticated, the actual use of the electronic devices is considered uncomplicated. Many of the compromised electronic devices are used by homes or small business and often lack security capabilities or contain elementary security that is easily compromised. The hackers had little difficulty installing the Mirai malware and taking control of the devices when needed for the attack.

Security organizations are taking measures to identify the comprised devises and developing ways to combat the Mirai command and control system. However, the cost and potential liability for placing unsecured or poorly security protected electronic devices on the Internet of Things is a looming question. If someone or a company experiences a significant loss of money, compromise of data, or destruction of assets; who is liable? Surely the hackers, but are the companies that market poorly or non-secure smart electronic devices; is the person or concern that uses the devices responsible, jointly or wholly? An area of Cyber-law is now in the making.

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

Posted by Michael de Andrade.

A threat to European nations, Facebook is being seen as a social media giant who are stripping Europeans from their freedom. Facebook is being accused of “collecting digital information about people who are not its users,” by the Belgian Court’s. Many of the “Continent’s data watchdogs,” including the European Court of Justice, have been giving Facebook and other American technology companies a difficult time for the way they “gain access to, manage and use people’s digital information” because to these European “watchdogs,” Facebook is violating Europe’s strict data protection rules that preserves individual’s privacy to the same power as the “fundamental rights, such as freedom of expression.

The hearing was held in Brussels, Belgium on Monday, November 9th, where Facebook was denied the ability to “collect and store online information from people in Belgium who do not have an account with the social network” stating that Facebook did not have “individuals’ consent to gather the information.” With this decision, the Belgian Court took further action by stating that if Facebook fails to comply with the court’s decision, they’ll receive a “daily fine worth up to $270,000.” Facebook didn’t settle and in response they stated that they have used “cookies for more than five years without facing privacy complaints,” and that they are going to appeal the decision to the Belgian Court of Appeal. As the wait continues, Facebook is being further investigated by five European privacy regulators, which are from Belgium, France, Germany, the Netherlands and Spain, to see whether or not the “company’s new privacy conditions run afoul of their countries’ domestic data protection rules.”

In the end, Facebook is trying to combat these accusations by stating that only the Irish data protection authority has jurisdiction over its new privacy conditions because Facebook’s international headquarters are in Dublin. The position grew vastly in the last month after the European Court of Justice “gave national authorities greater powers over how companies like Facebook and Google store online data.” Facebook will continue to fight for what they believe are their rights, despite the judges’ ruling that the United States do not offer sufficient protection for Europeans if their data was misused by companies or by government agencies. The issue is still recently new and there are many situations yet to be settled.

Michael is a sports management major at the Stillman School of Business, Class of 2018.

Posted by Spencer Sink.

Volkswagen is currently in the process of being sued for deliberately manufacturing cars that essentially cheat the emissions test. This case is somewhat similar to the cases with Toyota and General Motors, as Volkswagen will most definitely be forced to compensate the current vehicle owners for selling faulty products. However, we will most likely see even higher punitive damages being paid in the Volkswagen case because of the fact that Volkswagen admitted to intentionally cheating on emissions. The Toyota and General Motors cases were both honest mistakes made by the companies.

Volkswagen was given a short amount of time to attempt to find a way to mechanically fix the issue in the cars, and make them environmentally acceptable. However, even if they did fix the emissions, either the fuel efficiency or the overall vehicle performance would change, forcing Volkswagen to compensate owners for the loss in value.

What Volkswagen did was completely wrong, and must be punished accordingly. Deliberately cheating the emissions tests, and creating excess pollution, is unacceptable. If it were up to me, I would force Volkswagen to pay high punitive damages to ensure that nothing like this ever happens again. Volkswagen owners should be compensated accordingly for being blindly brought into this situation.

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

Posted by Brianna Montalvo.

Since 2014, General Motors has been having ignition switch issues with their vehicles which has lead to 30 million recalls. As of Tuesday, March 29 2016, a jury in New York City has yet to reach a verdict on the ignition switch controversy. This case was brought to the jury by a lawyer who is defending a man and a woman whom were in an accident on a New Orleans bridge back in 2014. The couple claim the ignition switch of their GM vehicle is to blame for the accident.

As stated, “Hundreds of claims remain against the automaker after GM revealed two years ago that it had continued to sell flawed vehicles for more than a decade after discovering an ignition switch defect in Chevy Cobalts and other small cars,” (Neumeister). It has been said that the ignition switch itself can slip out of position making it difficult to steer or stop the vehicle, which then would cause the vehicle to stall. GM has claimed they fixed their problem, which I believe is highly doubtful. The plaintiff’s attorney claimed that a key chain had pulled the weight of the keys down which would cause the switch to be pulled out of position, initiating the car to stall and cause an accident. General Motor’s attorney blamed ice as the probable cause in the accident, since there were no serious injuries or dents to the car, only a few minor scratches on the bumper.

Although a verdict has not been reached, I would not be surprised if the ignition switch in fact was the cause of the accident. In September of 2015, General Motors declared it had settled 1,385 death and injury cases for $275 million and a class-action shareholders’ lawsuit for $300 million. The company has given millions towards a numerous amount of claims. $600 million was paid to settle 399 claims to a fund GM established. 124 deaths, as well as 275 injuries were covered with those claims.

I feel that it was unethical of General Motors to continue selling their vehicles with the ignition switch defect. They claim they fixed it, but I do not believe it is something to fix that easily and quickly. There have been hundreds of deaths and injuries due to the ignition switch recall. They will always get business since vehicles will always be in demand, but I believe they should fix the ignition switch so that they wouldn’t have to deal with so many recalls, as well as have any deaths or injuries on their conscious.

Brianna is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Posted by Sheyenne Hurt-Lewis.

General Motors created millions of vehicles with defective ignition switches. This defect is linked to more than 100 deaths and 200 reported injuries. Many lawsuits have arisen from these defective switches which makes General Motors likely to face a large sum of punitive damages which, “could amount to millions, if not billions of dollars,” as stated by Judge Gerber. Punitive damages are those intended to punish the wrongdoer and deter others from similar wrongdoing. “GM had sought to block plaintiffs, including those suing for personal injury or wrongful death, from making punitive damages claims.” The recent defects ignited numerous other complaints of other GM cars recalled in 2014 that were “equipped with a faulty ignition switch that can slip out of the run position and disable safety features including air bags.” The effects of these defects have resulted in numerous injuries and lost lives.

Robert Hillard is representing nearly 1,500 plaintiffs suing GM for the injuries and deaths that are tied to the defective ignition switch. Hillard is confident that his clients are capable of being awarded the punitive damages they are seeking. GM has already spent $575 million to settle Hillard’s cases but there are still a large number of cases that remain unsettled. In September, GM agreed to pay nearly $900 million to settle a case similar to this. In addition to this payment, they were also forced to pay a $35 million fine for failing to report the defect themselves when they were first made aware of it. The company created a compensation fund of $625 million for victims.

GM attempted to restructure, and split into “New GM” and “Old GM.” Old GM kept all liabilities but agreed to be held responsible for “future product-liability cases involving other vehicles.” Judge Gerber wrote, “New GM may be held responsible, on claims for both compensatory and punitive damages, for its own knowledge and conduct” on the basis that workers were aware of the defective switch and related accident claims. However, it was made clear by Judge Gerber that punitive damages can only be sought against New GM if and only if it’s solely on the basis of the conduct or knowledge of New GM.

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

Posted by Kristen Czerepusko.

Recently, General Motors has been facing some lawsuits stemming from defective ignition switches in millions of their vehicles. This defect has led to over 100 deaths and 200 injuries. General Motors has decided to block those who are suing for personal injury and those making punitive damage claims. The defective car models were recalled in 2014 and were further proven to have been equipped with faulty ignition switches. With this defect, the switch can disable safety features including air bags which are vital to safety when operating a vehicle.

To make matters worse, not only did General Motors know they had a defective product, they acknowledged the fact that they mislead regulators about the defect altogether. To cope with this, General Motors invoked upon a “bankruptcy shield” to limit legal exposure on account of their defective switch. Today, there are over 1,385 individuals with death or injury claims who didn’t receive anything from General Motors. The company still faces hundreds of cases that have yet to be settled.

Punitive damages are something that should never be limited when dealing with defective products. There should never be a cap on the amount of money somebody should be allowed to receive from the careless act of a company manufacturing and selling a defective product. What makes it even worse is the fact that General Motors knew their products were defective and did not care enough to try and prevent further injuries. They acted very unethically and inhumanely with how they handled their cases by using a so-called “bankruptcy shield.” If punitive damages were ever to have a limit, companies would not care to try and make their products better but would instead continue to make harmful products. It is not yet clear how much will be awarded to the individuals who have had serious damages or to the loved ones to those who lost their lives but I hope justice is served to all who deserve it in this case.

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

Posted by Shakil Rahman.

For a car to be eligible for sale, it has to pass various tests which are placed in order to make sure that the cars for safe for use by the customers. Certain improvements are made to cars to also make sure that during an accident, there are some protections for the customer inside the car. GM motors ignition switch for the some small cars in the late 1990s and early 2000s were defective and it would shut of the engine during driving and this also prevented from the airbags from deploying during a crash. While GM executives and engineers became aware of the defective ignition switch, they did not attempt to fix the problem as it was assessed to be too costly. But by 2012, it was discovered that the defective switch also prevented the air bags from deploying. GM did not disclose the safety hazard to its customers, which led to over 120 deaths and multiple injuries. In 2014, GM started recalling cars with faulty ignition switch in order to fix it, and after the recall, multiple customers filed lawsuits against GM for the injuries caused due to the defective ignition switch. Lawsuits were filed against GM for false advertising due to not disclosing the defect to customer before buying the product. GM came to a settlement with the customers and agreed to pay $575 Million as compensation and also paid $900 million pay to US.

There are various points of interest in the case that are related to corporate responsibility, advertisements and negligence. The lawsuits that were filed against General Motors were for false advertising, and for injuries caused from malfunctioning products created by General Motors. General Motors car’s ignition switch was faulty and therefore sometimes it would shut down the engine while driving and since the engine shut down, the air bags would not deploy during an accident. So the defective ignition switch would cause the car to shut down while driving and therefore causing car accidents and also the air bags would not be deployed which would lead to the injury from the crash to be amplified. Therefore, General Motors is liable for the injuries caused by the defect, because their product is directly causing the accidents and the injuries that are related to it.

The other portion of the lawsuits was about false advertisement by General Motors about their cars. General Motors did not know about their defective ignition switch before 2005 but decided to not recall the cars after a risk assessment about the expense that will needed to fix the ignition switch. Now even if they decided to stop selling cars with faulty ignition switch, they still did not make an effort to fix the ignition switch for cars that were already sold and also did not warn the customers about the product’s defect. This is not only false advertisement but also negligence because the customers were going to be harmed even after using the product as it was intended to be used. So in conclusion, General Motors was liable for the injuries that were caused by their defective products because they did not inform the customers about the hazard of using the product and also for not attempting to fix a defect that could injure the customers.

The irony of the whole situation is that General Motors decided not to recall the vehicles in 2005 to fix the defect because of the fact that they came to the conclusion that it would too expensive. And now in 2015, their insistence on not recalling the cars back for repairs back in 2005 has led to a federal fine of $900 million and settlements of $575 million for the customers who were injured due to the cars faulty switch.

In the business world, when a company is attempting to look at the direction the company is going they need to see how their actions might affect the company in the long term. While paying for the repairs in 2005 may have been expensive, right now they have paid around $2 billion dollars in fine and are predicted to pay around $2.7 billion for repairing the recalled cars. And on top of that, the break of trust between GM and the customers are surely going to affect the company’s progress and profit.

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

Posted by Connor Lynch. 

An article from The Wall Street Journal titled, “General Motors May Face Punitive Damages Over Ignition Switches” is a perfect example of short-run profit maximization versus long-run profit maximization. As of November 9, General Motors can face punitive damages in several lawsuits regarding defective ignition switches in millions of vehicles. Although those vehicles have all been recalled, the defective part has been linked to more than 100 deaths.

U.S. Bankruptcy Judge Robert E. Gerber has linked GM to the deaths and injuries caused by the defective part in millions of their vehicles. After the case has been discussed, “Texas lawyer Robert Hilliard, who represents people suing GM for injuries and deaths tied to the defective ignition switch, called the decision ‘a major win’ for plaintiffs, contending that punitive damages are the only way to properly compensate victims who have been harmed by the defect.” Although it seems as if it was a complete loss for the defendant, a GM spokesperson said the company disputed the statement that the ruling was an utter victory for plaintiffs.

Punitive damages are damages intended to deter the defendants and others from getting involved in conduct that is similar to the actions that formed the basis of the lawsuit. Punitive damages are also used to punish corporations for wrongdoing such as selling defective products. Those defective products usually lead to death/injury which often can lead to large awards from the jury. It is unclear to what the punitive damages of this case will amount to: “Judge Gerber at one point in his ruling suggested GM’s punitive damages exposure could amount to millions, if not billions, of dollars, though any actual exposure will depend on whether legal claims against the company are settled or ultimately successful.”

This is not the first time that General Motors has been involved with a defective product recall resulting in punitive damages. Last year GM agreed to pay $35 million for failing to alert the public about the specific defect in a timely manner. Judge Gerber’s ruling stems from separating the “Old GM” and “New GM” because of the controversial belief that GM has retained liabilities pertaining to their restructuring.

“Old GM” had so many problems at one point that they were forced to restructure and become a new and reformed company. This has resulted in product-liability, “GM, as part of the bankruptcy restructuring, agreed to assume responsibility for future product-liability cases involving older vehicles, or those under the purview of Old GM.” General Motors’ reconstruction has allowed them to avoid several lawsuits because of their “bankruptcy shield.” Judge Gerber has ruled that “New GM” may be held responsible for the recent defective ignition switch that has caused over 100 deaths. Punitive damages may be sought out to the extent of new GM’s knowledge on the subject matter involving the defective ignition switch. Because of all the injuries/deaths, there are over 1,000 plaintiffs represented by Texas attorney, Mr. Hilliard. General Motors seems as if it is doomed to pay more money in punitive damages in addition to the $575 million they have paid recently to settle cases involving defective products.

Connor is an accounting/finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Genna Salvtoriello.

General Motors has been hit with a $3 billion dollar lawsuit by the state of Arizona. The lawsuit is due to a record number of 2.6 million vehicles this spring that have been claimed to be linked to safety defects such as a faulty ignition switch. This defect has been linked to 33 deaths and more injuries according to Kenneth Feinberg, who is looking after compensation to the victims of this defect and the damage that it has caused. Arizona’s lawsuit is focusing on the loss of value GM car owners have suffered due to the now damaged reputation of the “General Motors” name. The law that Arizona is suing General Motor’s under is a consumer fraud law that has a maximum penalty of $10,000. And that’s just for each individual violation. There are about 300,000 GM vehicles that are registered in the state of Arizona. Which means a judge could fine General Motors up to $3 billion dollar, according to a report in the New York Times.

However, the ignition doesn’t seem to be the only issue with GM cars. The lawsuit that Arizona is pending shows not just one, but multiple defects with the GM vehicles. These defects include seat belts, brake lights, airbags and transmission cables. The GM vehicles have dropped significantly in value because of the safety defects, which has cost those car owners to lose thousands of dollars. “GM is committed to setting a new industry standard for safety, quality and excellence. This includes recalling vehicles proactively when we identify a safety issue,” said spokesman James Cain. GM is also under investigation by the U.S. attorney in New York, congressional committees, and the National Highway Traffic Safety Administration. The number of claimants is rising for GM who is running a compensation program. The company is allowing potential victims of this recall over faulty ignition switches an extra month to file claims seeking compensation. It will be clear in the near future to see just how many people have been put at risk, or even worse, actually hurt by this life threatening recall.

Genna is a marketing major at Montclair State University, Class of 2017.

One of the causes of action a plaintiff can bring in a product’s liability lawsuit is a defective design claim. General Motors is facing multiple lawsuits over faulty ignition switches installed in the following vehicles: Chevy Cobalt (2005-2010) and HHR (2006-2011); Pontiac G5 (2007-2010) and Solstice (2006-2010); Saturn Ion (2003-2007) and Sky (2007-2010). More than 2.6 million have been recalled.

A Georgia couple who settled a lawsuit with GM for their daughter’s death is suing again on the grounds that GM’s lead design engineer lied when he testified he had no knowledge of any design “changes” to the switches. Their daughter was killed when her 2005 Cobalt slipped into accessory mode, cutting off the engine and causing her to collide with another vehicle. Her family settled based on this information.

But in recent disclosures to the National Highway Traffic Safety Administration and Congress that testimony appears to be false. The company apparently knew about the problem for years. Now, the family has filed another lawsuit claiming they would not have settled if they had known that evidence was concealed. GM denies the accusation.Settlements are contractual, and therefore, considered final once the parties agree to the terms.  Like all contracts, there are certain situations where a settlement agreement would be deemed void.  In this case, plaintiffs would have to convince a judge that they were somehow misled or defrauded by what GM did or said in order for the settlement to be void and the case to proceed.

Posted by Cullen Dana.

Timothy Livingston, a business owner of Whole Lot of Nothing LLC, pleaded guilty to “hijacking customer’s email accounts to send unsolicited ‘spam’ messages.” He also admitted he and his fellow employee, who pleaded guilty along with another employee after Livingston did, created a “software that appropriated a corporate website belonging to a New York-based technology company in order to use its servers to send spam that appeared to be from the company.”

The man generated, according to his prosecutors, “$1.3 million and property” from his hacking scandal. Livingston entered “his plea in federal court in Newark, New Jersey to three counts” one being “conspiracy to commit fraud and related activity in connection with computers and access devices.”

Livingston agreed to give up $1.35 million as well as the property he gained from the scandal. He is scheduled to be “sentenced January 27, 2017.”

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