In class, we discuss organized crime and its effects on business and society. Recently, Italian special agents, SCO, and the FBI arrested 13 persons in Calabria, Italy, allegedly connected with the ‘Ndrangheta crime family.

With affiliates in the U.S., the suspects were organizing cocaine shipments out of Costa Rica. Authorities arrested them in the middle of the night while they were sleeping and charged them with conspiracy to run an international drug trafficking ring.

The year-long investigation was named “Operation Columbus” and was jointly-led by federal authorities in Brooklyn and prosecutors in Calabria. Gregorio Gigliotti, an owner of pizza shop named “Cucino A Modo Mio” (I Cook My Way), located in Queens, NY, was arrested along with his wife and son. Italian investigators said they had information that he spearheaded the ring. “The Italian restaurant was the command center for bringing some drug shipments to New York and sending others to Europe or Calabria,” Grassi told reporters in Rome. The suspects allegedly shipped cocaine in crates containing cassava, a South American root vegetable.

According to the article, the ‘Ndrangheta has become Europe’s biggest cocaine dealer and has supplanted the Sicilian mafia as the major partner to the New York crime families.

Posted by Stephen D’Angelo.

Just six hours after New York Attorney General placed a temporary injunction, which would stop sites like Fanduel and DraftKings from doing business in New York, an appellate court saved them by issuing an emergency temporary stay that will allow New Yorkers to continue to use Fanduel and Draft Kings until further notice. This stay will last at least till the end of the year which is likely when a permanent decision will be made, “Eventually, both sides will go before a panel of four or five appellate judges” Randy Mastro said, from an outside council for DraftKings.

The State of New York is likely to win the case because of the wording of their law on gambling. Fantasy football gambling sites commonly use the defense that they don’t take wagers, they take entry fees. In many states, this allows them to continue to do business. But, New York is stating that their penal law does not refer to “wagering” or “betting.” Instead it states that a person, “risks something of value.”

Although New York has the upper hand, the laws in place are very vague. The statement regarding risking something of value had no relation to online fantasy sports gambling when created. It was worded this general because that would include gambling bookies in a gambling law. I personally do not believe that Fantasy sports gambling will be shut down in New York. The NBA, NHL, and MLB all own equity in Fanduel and the likelihood of the 600,000 New Yorkers who play daily fantasy to not be able to in the New Year is very slim.

Stephen is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2017.

Hacking into computer systems is nothing new, and government and businesses alike have always been aware that they must be one step ahead of computer criminals. But the attack on Sony Pictures Entertainment was more than that. It was a shot across the bow in what appears to be a potentially rampant future form of warfare. As a result, every cyber attack on government or business systems must now be carefully examined to see whether it is either criminal or an act of war.

In the face of evidence from the FBI that North Korea was responsible for the Sony attack, senior Republican senators disagree with the administration that it was only a form of “cybervandalism.” Sen. McCain stated this attack “is a new form of warfare, and we have to counter that form of warfare with a better form of warfare.” Sen. Lindsey Graham called “the cyberhacking ‘an act of terrorism’ and suggested re-imposing sanctions on North Korea and adding the country to the terrorism list.” In 2001, President George W. Bush called North Korea part of the “Axis of Evil,” along with Iran and Iraq.

The FBI concluded the attack on Sony was evidenced by IP addresses directly linked to North Korea. This attack was similar to those that occurred last year against South Korean banks and media outlets. The FBI stated:

We are deeply concerned about the destructive nature of this attack on a private sector entity and the ordinary citizens who worked there. . . . Further, North Korea’s attack on SPE reaffirms that cyber threats pose one of the gravest national security dangers to the United States. Though the FBI has seen a wide variety and increasing number of cyber intrusions, the destructive nature of this attack, coupled with its coercive nature, sets it apart.

North Korea’s actions were intended to inflict significant harm on a U.S. business and suppress the right of American citizens to express themselves. Such acts of intimidation fall outside the bounds of acceptable state behavior.

There will most likely be more cooperation between business and government in sharing information and technology. Only together can this new threat to our national security and economy be defeated.

A federal court has ruled that the House of Representatives, collectively, has standing to sue the Executive Branch over a provision in the Obama-care legislation dealing with cost-sharing subsidies. These subsidies are intended to help lower income people with their deductibles and co-pays. “Many legal observers expected the lawsuit to fail on standing: that Congress wouldn’t be able to show a way in which the Obama administration had harmed legislators, a prerequisite for a court challenge.”

House Republicans argue these subsidies are being illegally paid by the Treasury to insurers and claims the House “never appropriated” the funding. The House alleges it “has been injured, and will continue to be injured, by the unconstitutional actions of defendants . . . which, among other things, usurp the House’s legislative authority.”

Courts hear cases and controversies, and unless a plaintiff has sustained some type of injury, courts cannot take the case and will dismiss it for lack of standing. But here, the court found the House has standing to sue because they are allegedly harmed as an institution, not as individual members. The court held, “The Congress is the only body empowered by the Constitution to adopt laws directing monies to be spent from the U.S. Treasury. . . . Yet this constitutional structure would collapse, and the role of the House would be meaningless, if the Executive could circumvent the appropriations process and spend funds however it pleases. If such actions are taken . . . the House as an institution has standing to sue.”

Posted by Kimberly Culcay.

In the article, “What the PCAOB’s new related-party standard means for auditors,” Maria L. Murphy captures the new standard put in place by the Public Company Accounting Oversight Board (PCAOB). The new standard will require auditors to perform specific procedures that are intended to strengthen auditor performance in high-risk areas, such as significant unusual transactions and financial relationships, and transactions with executive officers. The reason behind the new standard is that in the areas of accounting mentioned above there was a lack of guidance on how to report or treat certain transactions.

The Auditing Standard (AS) No. 18 requires auditors to understand the relationships and transactions with related party transactions as if they were someone working in the company. The auditors must also understand and document the process of understanding the relationships and transactions of the company just as the internal controls of the company itself. The auditors not only have to record how they gained understanding of the relationships and transactions but the auditors must properly account for the transactions, perform procedures to test that the company’s related parties and transactions with those parties have been completely and accurately identified, accounted for, and disclosed. Before this standard, there was a vague and unstructured way of handling related party transactions. Related party transactions are a way that a company can commit fraud by transferring property to a related party thereby creating a conflict of interest. In the article, it also states that the AU Section 316, Consideration of Fraud in a Financial Statement Audit, was amended to require specific procedures to identify and evaluate significant unusual transactions. The main point of amending the standards is for the professional auditors to be able to identify procedures quickly if a situation of fraud exists.

I think amending the standards of accounting to include specific procedures to prevent fraud from happening rather than a professional figuring out what to do if fraud is already done is way more useful. I also think that with the incentive to have these procedures in place, it eliminates some of the gray area of accounting. The need for Forensic Accountants has increased ever since the recession in 2008, with all of the fraud that was done due to the lack of strict standards and procedures to be able to detect fraud early. I am currently a graduate student at Montclair State University; I have been striving to complete my combined program in Accounting BS/MS with a Certificate in Forensic Accounting. Personally, I find that in the emerging economy people have learned from the mistakes made in the past with the scandals, fraud and so on. I think it is important to be a Forensic Accountant in order to apply sophisticated set skills in other aspects of accounting and litigation. I think that if you already know how to be an accountant and with some background knowledge on Forensics, then it could be easier to detect some of the common problems that lead to fraud.

Kimberly is an accounting major with a certification in forensic accounting at Feliciano School of Business, Montclair State University.

Reference:  Murphy, Maria L. “What the PCAOB’s New Related-party Standard Means for Auditors.” Journal of Accountancy. 22 July 2014. Web. 20 Oct. 2015. .

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.

Research proposal posted by Valentina Reyes.

Tort law carries the “no duty to rescue” principle, which establishes an individual’s freedom to choose whether to intervene in situations of peril while imposing no sanction on those who choose not to act. “While there is properly in law a duty not to harm, there is not . . . a negative duty not to allow harm to happen” (U.S. Supreme Court Justice Oliver Wendell Holmes). So long as there is no fiduciary relationship – which is defined as a relationship of trust or legal obligation of a person to another – between the two parties, an individual is not obliged to intervene, even if refraining from doing so may lead to the impending death of the other. This principle was established with the idea that people should not be held responsible for the demise of others unless they were directly involved with the causation of the incidents that led to the other’s peril, or had some established duty of care to the other, and to protect one’s freedom of choice.

In some instances, some courts may find that if a person began to rescue another and then ceased, the rescuer may be found liable if the reasonable person would have continued to rescue the victim. Under the umbrella of negligence, this is called “undertaking to act.” However, some states provide immunity from liability under specific statutes typically referred to as “Good Samaritan laws.” These statutes are put in place to protect those who, in good faith, decide to help in an emergency situation from being sued in civil court for any damage which may result from their act or omission to act. Depending on the situation, courts may wish to protect a rescuer or deem them responsible for negligent acts if the additional damage caused to the plaintiff resulted from an unreasonable act by the rescuer.

While the “no duty to rescue” principle was put in place to protect people’s liberty to choose, it also gives people power to allow others to perish. On the one hand, people are free to choose whether to get involved, but if they choose not to help when they are capable of helping and when the help may save a life, then they have the indirect power over another’s life. The principle also reinforces individualistic behavior that is already very much present in American society and culture which is often noted as being extremely averse to collectivism. Further, if a person intends another to perish by doing nothing, they may be able to get away with being the indirect cause of the other’s demise by choosing to do nothing out of a desire to cause the other harm. In this case, we have the element of mens rea without actus reus (so long as the bystander was not involved in the proximate cause of the victim’s accident or ailment), and the person intending to do harm by doing nothing could be protected under the law. In the case that the defendant was involved in the proximate cause of the victim’s accident, as was the case in Podias v. Mairs, the defendant could be found guilty for doing nothing because at that point, a fiduciary relationship is formed because but for the defendant’s actions, the victim would not have been put in danger.

Catholic social teaching teaches us that we should love everyone and show a sense of community towards our neighbors. We should treat everyone how we would like to be treated and respect and protect all forms of life. Whether we are free to choose, we should do the correct thing and provide help when we can for those who need it because if we are the difference between life and death for another, it does not take much away from us to give another what they can never get back. Gaudium et Spes states “[…] the duty which is imposed upon us, that we build a better world based upon truth and justice. Thus, we are witnesses of the birth of a new humanism, one in which man is defined first of all by this responsibility to his brothers and to    history.”

Works Cited

http://www.siue.edu/~evailat/i-mill.html

http://injury.findlaw.com/accident-injury-law/specific-legal-duties.html

http://caselaw.findlaw.com/nj-superior-court-appellate-division/1187493.html

https://www.stthomas.edu/media/catholicstudies/center/ryan/conferences/2005-vatican/Uelmen.pdf

http://www.vatican.va/archive/hist_councils/ii_vatican_council/documents/vat-ii_const_19651207_gaudium-et-spes_en.html

http://injury.findlaw.com/accident-injury-law/specific-legal-duties.html

http://negligence.uslegal.com/specific-duties/duty-to-rescue/

https://www.shrm.org/legalissues/stateandlocalresources/stateandlocalstatutesandregulations/documents/goodsamaritanlaws.pdf

Posted by Ovais Ahmed.

An article posted on bloomberg.com talks about an appeal made by ex-Goldman Sachs trader Deeb Salem to get an extra $5 million he thinks he deserves in bonus money. He has already received $8.25 million and still wants to get more money out of his former company. I don’t understand why the trader can’t settle with the money he has already made, which is more than the average American would probably ever make. To me, it spells out nothing but greed. Salem states he helped Goldman Sachs earn $7 billion in profit and was sought after by many investment professionals in his industry. The article states:

In September, Justice Eileen Bransten denied Salem’s request to set aside a Financial Industry Regulatory Authority panel decision to dismiss his claim, and granted Goldman Sachs’s request to seal portions of the dispute with the former trader. Salem told a state appeals court in Manhattan today that the judge erred in her decision, according to a filing. Salem claimed he helped the bank earn more than $7 billion, and told the arbitration panel Feb. 25 that he was one of the most sought-after investment professionals in the mortgage industry. The panel, described by Salem’s lawyer as a ‘kangaroo court,’ didn’t let Salem call some of Goldman Sachs (GS)’ top trading executives as witnesses, resulting in a miscarriage of justice, according to his original petition.

Goldman Sachs claimed they gave Salem the opportunity to give his evidence, and followed through fully with the law in denying his award claim. Therefore, Salem has appealed the decision is continues his fight for the extra $5 million he believes he deserves due to his efforts at Goldman Sachs.

Ovais is a business administration major with a concentration in management at Montclair State University, Class of 2015.

Research proposal posted by Elizabeth Donald.

Part One: Topic Explanation

Liberty of contract was originally introduced into U.S. constitutional jurisprudence through the case of Lochner v. New York, 198 U.S. 45 (1905). In this case, Joseph F. Lochner challenged a provision of the New York Bakeshop Act of 1895 that prohibited bakers from working more than ten hours per day and 60 hours per week. The Supreme Court held that this regulation failed to pass constitutional muster in violation of the Due Process Clause of the Fourteenth Amendment. In doing so, the Court found “liberty of contract,” that is, the freedom of individuals and groups to enter into contracts, to be a fundamental right under the Fourteenth Amendment.  Other Supreme Court decisions continued to build on this idea during what is now referred to as “The Lochner Era” of cases. This includes Adkins v. Children’s Hospital, 261 U.S. 525 (1923), invalidating a minimum wage law and Pierce v. Society of Sisters, 286 U.S. 510 (1925), deeming unconstitutional a regulation that led to the closing of many private Catholic schools.

Part Two: Pros and Cons

The Lochner decision was considered one of the most controversial cases of its time after being handed down in 1905. Progressive jurists, politicians, and scholars alike denounced Lochner, whether for attempting to constitutionalize laissez-faire economics or for exceeding judicial authority.[1] They believed that the conservative-leaning Lochner majority reached far beyond the scope of its powers. This is because although the U.S. Constitution does not explicitly list “liberty of contract” as a fundamental right, the court still found it to be so under the Fourteenth Amendment Due Process Clause which states, “[N]or shall any person … be deprived of life, liberty, or property, without due process of law.” U.S. Const. amend. XVI, § 1. In finding a liberty of contract within the Constitution, Progressives saw the majority as an advocate of big business that attempted to adopt policy by means of judicial decision. These Progressive jurists instead encouraged a deference to the legislature on all matters, economic and personal. Since the early 20^th century, Progressive ideology has shifted, but still views liberty of contract in a negative light.

Flashing forward to today, jurists across the political spectrum remain highly critical of Lochner. Constitutional theorist Bruce Ackerman places Lochner in his “anticanon” of cases. Unlike early 20^th century Progressives, today’s Progressive jurists typically believe in using strict scrutiny to analyze laws regarding personal rights. Yet, they now isolate personal liberties from economic liberties, which are still considered unwarranting of constitutional protection.[2] Twenty-first century conservatives, likewise, do not tend to favor liberty of contract. Conservative jurists today often advocate for a deference to the legislature on both personal and economic issues. Thus, the conservative viewpoint has also significantly shifted from the Lochner Era right-wing belief that natural rights precede positive law and that liberty of contract is one of those inherent natural rights. This leaves little room for hope for the few present-day proponents of liberty of contract. However, the idea of contractual freedom as a fundamental right might not be as bad as many make it seem. In fact, liberty of contract is really a derivative of the natural law.

The natural law, according to St. Pope John Paul II, is a law that resides within the “depths of the conscience.” It is written on the hearts of all men, according to which God will be the judge. Legal theorists have found certain rights to be inherent within this natural law. The Constitution itself was founded on the idea of natural rights. James Madison, a drafter of the Constitution, believed that man “embraces everything to which a man may attach a value and have a right; and which leaves to everyone else the like advantage…”[3] This idea was the bedrock of the Due Process Clause of the Fifth Amendment, which was eventually applied to the states through the Fourteenth. Therefore, the Court majority in Lochner simply viewed liberty of contract as one of these natural rights under due process. This reading of the Due Process Clause achieves much greater validation than suggested by Lochner’s opponents. The Civil Rights Act of 1866, 14 Stat. 27-30, which gave way to the Fourteenth Amendment, listed liberty of contract first in the rights accorded to man. In this act, the 39^th Congress wrote that, “[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties …” This act served the purpose of enforcing the natural rights of man. Therefore, the Lochner majority’s belief in liberty of contract as a fundamental right was not unwarranted.

Part Three: Questions of Ethics

Liberty of contract is intertwined with ethics because the very idea of ethics rests on the natural law. St. Thomas Aquinas said that the natural law “constitutes the principles of practical rationality,” which are the rules by which human action is to be judged as reasonable or unreasonable.[4] It is from this ethical theory that fundamental rights were developed. Not only that, but contractual freedom is essential to business ethics as well. The significance of liberty of contract comes through in the employment-at-will rule which gives employers unfettered power to “dismiss their employees at will for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of a legal wrong.” However, because the employment-at-will theory is supported by laissez-faire economics, it too is often criticized by Progressive jurists who oppose free markets. Yet, even though early 20^th century Progressive jurists denounced the Lochner decision for its association with laissez-faire ideals, this does not invalidate the fact that liberty of contract can be viewed as a fundamental right within the natural law. Further, just because liberty of contract is an economic liberty does not mean it cannot be a fundamental liberty. Since provisions of the Constitution and the Civil Rights Act of 1866 demonstrate that both the Founding Fathers and the 39^th Congress understood liberty of contract as deriving from the natural law, it is valid to not only consider this liberty as fundamental, but also ethical.

Works cited:

[1] David E. Bernstein, Rehabilitating Lochner (2012).

[2] Ibid.

[3] Colleen Sheehan, James Madison and Our First Duty, THE CENTER FOR VISION AND VALUES (Sep. 23, 2014), http://www.visionandvalues.org/2014/09/james-madison-and-our-first-duty-by-dr-colleen-sheehan/.

[4] Aquinas, ST I-II. Q94.

Posted by Da’Naysia Aarons.

In an article called, “Lawsuits and Consumer Reporters Fight Home Warranty Companies,” Heidi Turner discusses how home warranty companies are being sued by consumers. An investigative reporter was asked to look into a company called Sensible Home Warranty who was allegedly selling consumers a warranty policy. However, when one consumer asked for a new microwave, Sensible Home warranty refused to pay out her claim. While investigating the company, a reporter name Michelle Mortensen found that Sensible Home Warranty has more than 1,950 complaints. In the article it states, “An investigation into the company was undertaken by the Nevada Division of Insurance but in the meantime, the company reportedly went out of business.”

Due to the fact that the company was mistreating their consumers and taking advantage of their money, the company was fined $5,000 dollars for not complying with the state’s Service Warranty Act. In the article it further states, “The business failed to pay legitimate claims made on home warranty contracts sold in the State of Utah, or to pay them in a timely manner, and the business failed to respond to inquiries of the commissioner.”

Since many other home warranty companies have been taking advantage of other consumers, lawsuits have been filed against them.

Da’Naysia is an international business major at Montclair State University, Class of 2017.