Posted by Victoria Gencarelli.
Product liability is a prevailing issue and concern for companies and businesses who are marketing and selling their products. It is a company’s duty to take the liability for manufacturing and selling a product that is defective or damaged. By creating and issuing a defective product to the public, it increases the risk for dangers, damages, or harmful occurrences to take place with the use of the product. If in the case that a product is defective and capable of any danger, it is the company’s responsibility to issue a warning or a recall on the product. In this way they can they attempt to protect themselves from any legal issues and also protect the general public from encountering danger while using their products.
POM Wonderful is a company who produces fruit juices and fruit extracts, but is most commonly known for the produce of pomegranate juice. The Coca-Cola Company introduced a new “pomegranate blueberry” juice product, but POM wonderful believed the product to be false advertising to consumers. The juice was actually a blend together of apple and grape juices and only consisted of 0.2% pomegranate juice in it and also included the phrase “from concentrate with added ingredients and other flavors” in small typing. POM Wonderful presented this to the court in compliance with the Lanham Act because they believed that the name of the juice and the false advertising of the Coca-Cola Company’s “pomegranate blueberry” juice was misleading and contributing to a loss of sales for POM Wonderful.
In California federal district court, they deliberated the case and had not found POM successful in proving that the Coca-Cola Company was misleading their consumers into thinking that their “Enhanced Pomegranate Blueberry Flavored 100% Juice Blend” did not actually contain a high percentage of pomegranate juice. When the case reached the highest court, they disregarded POM Wonderful’s claim against the Coca-Cola Company and stating that Coca-Cola was not violating the FDA guidelines on product labeling. The POM Wonderful Company did lose out on millions of dollars in revenue and sales, but it was not seen as unfair competition and the jury ended the case in favor of the Coca-Cola Company. All in all, an issue such as this one has an overall impact on the food industry to be careful when labeling, marketing, and advertising their products to the public. It is always important to keep product liability in mind when generating products and selling them in order to avoid any potential problems in the long run.
Victoria is an accounting and finance major at the Stillman School of Business, Seton Hall University, Class of 2019.
Posted by Shalin Thomas.
The article that caught my attention and that I will be discussing is titled, “Companies Face Lawsuits Over Website Accessibility For Blind Users” by Sara Randazzo. Various world famous companies are being sued for not having accessibility on their websites for disabled users, specifically the blind. This means that website does not have a speaking feature which allows the customer to hear correctly what they are purchasing. Some of the companies that are facing these lawsuits include Toys “R” US, Burger King, and Anthropologie. Over 240 business like these are facing lawsuits and many of them are settling for between $10,000 and $75,000. The American Disabilities Act constrains the prejudice against all persons with disabilities and this issue violates that precedent.
Although this is an issue because it takes away the opportunity for the disabled to lead regular lives with outside hassle, these lawsuits are said to only be “a legal-fee shakedown and don’t improve accessibility”, as quoted from the article. The lawyers that take on these cases are ones that are ones that are trying to find “the next great cause of action”. Juan Carlos Gil, a legal blind resident of Miami, has sued over 30 businesses because their websites are not accessible to the disable. In one instance, he ordered racing wheels for his wheelchair online, and it was the wrong item because the website dictated it wrong. He along with his lawyer just want to make sure that no one is excluded from being able to surf the web.
Carlson Lynch is a partner of the law firm that brings to court many of these lawsuits. He has been sending letters to several companies before looking toward solutions for these issues. These lawsuits are given to judges who, most of the time, send them to mediation which results in the settling of the issue in private. The companies have a period of time where they can resolve the issues brought upon them. These suits are said to extend to mobile device applications as well.
Shalin is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
Source:
http://www.wsj.com/articles/companies-face-lawsuits-over-website-accessibility-for-blind-users-1478005201
Posted by Steven Catudal.
How much money should it cost to save someone’s life? Should companies be allowed to create prices on life-saving medications? Over the past few months, there has been more and more cases of pharmaceutical companies taking advantage of their monopoly and increasing prices. The price of an EpiPen, a device used to save someone from severe allergic reactions, has increased 500% in recent years according to the New York Times. Limited regulations and a lack of competition are causing US lawmakers to demand investigations about this large increase in price.
Mylan, the company now producing EpiPen’s, received the item through a merger with a generic German pharmaceutical company. When purchased, the German manufacturer would sell the EpiPen for around $57. Ever since the day of the merger, Mylan has been increasing the price. In May 2016, the price of an EpiPen was $608.61. Lawyers and politicians have been demanding that the price is decreased. They are investigating Mylan for breaking anti-trust laws and gouging customers. New York attorney general Eric Schneiderman said that, “No child’s life should be put at risk because a parent, school or health care provider cannot afford a simple, life-saving device because of a drugmaker’s anti-competitive practices.” Another opponent of Mylan’s strategy, Hilary Clinton, raised arguments against Mylan’s unethicality for charging so much for a life-saving medication.
The EpiPen now brings in more than $1 billion every year compared to the $200 million that it made for the prior German pharmaceutical company. As revenues have spiked, so has the salary of Mylan CEO Heather Bresch. She now earns more than $18 million through her salary and other compensations. That is 671% more than she earned in 2007, when the price spike began. When confronted with the increased price, Bresch defended herself saying that, “No one’s more frustrated than me.” She went on to explain that the high prices are caused by the United States health-care system. In comparison, EpiPens sold in Europe, are subsidized due to regulations on pharmaceutical companies. Bresch has the opportunity to make a change; she can make the EpiPen more affordable once again, but she cannot blame anyone but herself for this large jump. Once an EpiPen’s price returns back to a reasonable cost, then all people with severe allergies will have the opportunity to afford medication necessary to save their lives.
Steven is a member of The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, Class of 2020.
Sources:
http://www.cnbc.com/2016/08/25/mylan-expands-epipen-cost-cutting-programs-after-charges-of-price-gouging.html
Posted by Michaela Jerkowski.
In recent events, McDonald’s Restaurants settled a labor lawsuit pending from 2014, and was ordered in federal court to pay $3.75 million dollars to about 800 employees in California. The lawsuit states that Smith Family LP, who franchised five restaurants in California, “violated California law by failing to pay overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms.” (Fortune 6). The case was the first time in history that McDonald’s settled a class action law suit that was filed by franchise employees.
Over the past couple of years, McDonald’s has dealt with multiple different problems involving franchise employees. Aside from this multi-million dollar lawsuit, they were also hit with a sexual assault lawsuit involving 15 franchise employees. The McDonald’s corporation has been in and out of court trying to find out whether or not they are considered joint employers with the franchise owners who are causing this backlash with employees.
Although you might think that this lawsuit isn’t much of a high profile case, considering McDonald’s is a billion dollar company, the reason it’s been brought so much attention is because it’s the “the first time the company has settled legal claims by a group of U.S. workers at one of its franchises.”(Time 1). This lawsuit could open doors for many more that may appear in the future, so it would not be a surprise if the company now gets hit with more lawsuits.
Michaela is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
Sources:
http://time.com/4552835/mcdonalds-settlement-labor-law-california/?xid=IFT-Section
http://fortune.com/2016/11/01/mcdonalds-court-settlement-franchise-workers-california/
Posted by Melani Filosa.
The Consumer Product Safety Commission, a regulatory committee created by the Consumer Product Safety Act enacted in 1972, regulates all consumer products in order to protect the buyer. They promote safety by issuing recalls, developing standards, and requiring warning labels. Because this committee regulates consumer products, they first needed to define exactly what fell under the tile of a “consumer product.” The definition can be found in Section 3 of the CPSA (Consumer Product Safety Act) linked here https://www.cpsc.gov/PageFiles/105435/cpsa.pdf. The act creates exact parameters of what the CPSC can regulate, which excludes all firearms and ammunition. The exact language of the Act reads “The Consumer Product Safety Commission shall make no ruling or order that restricts the manufacture or sale of firearms, fire-arms ammunition, or components of firearms ammunition, including black powder or gunpowder for firearms Section 3(e) of P.L. 94-284 [S. 644]; May 11, 1976,” generating the obvious question: should firearms be included in the definition of “consumer product,” or would that type of regulation be unconstitutional. Because the debate over gun use has been in the spotlight, it is important to know the argument for more regulation and that against it. This post will aim to inform only, in the hopes of creating knowledgeable voters on either side of the issue.
The Trace, an online news media source whose mission is to “close that deficit through daily reporting, investigations,” wrote an article titled “Cars, Toys, and Aspirin have to Meet Mandatory Safety Standards. Guns Don’t. Here’s Why,” written by Olivia Li. The argument in favor of expanding the definition often relies on the popular gun/car analogy, used by individuals and President Obama alike. Here is essentially how that analogy goes: automobiles have regulations, such as seatbelt use and airbag regulations, in order to protect both drivers and pedestrians, and we have also created regulatory agencies to oversee that automobiles are built to meet these standards. At the same time, there are no regulations or oversight in the creation of guns, which are arguably used in households and therefore a consumer product, just like a car. Li writes:
No federal agency oversees how firearms are designed or built. While the federal government can mandate recalls of unsafe toys, polluting cars, or even discolored medications, it’s unable to recall defective firearms. There is also no system in place to track accidental deaths caused by malfunctioning weapons. Rather, the firearms industry self-polices its products, establishing its own design standards and initiating its own voluntary recalls.
This quote captures the essence of the argument in favor of expanding the definition. If every other product used by a consumer, which is pretty much everything, can be regulated, why should guns be any different. It is important to note, however, that there are safety standards imposed by SAMMI, Sporting Arms and Ammunition Manufacturers’ Institute, yet these standards are voluntary. Those who wish to expand the definition believe these regulations should not be voluntary and gun safety should not “fall on the shoulders of the gun owner,” but instead by mandated by the federal government and regulated by in agencies.
Again, the question asked by those in favor of expanding the definition is why are guns different than other products, which leads to the argument against the change to the definition. The two major arguments from this side are 1) there are regulations, and the gun manufacturer can only be held responsible to a point, and of course 2) the Second Amendment. The first defense, argued by NPR on their “Break it Down” page, where they breakdown what candidates and politicians say and fact check their statements. The article entitled “FACT CHECK: Are Gun-Makers ‘Totally Free of Liability For Their Behavior’?” points out that, in fact, gun companies are liable for their products in certain instances and are responsible for meeting standards and regulations. This leads to the arguments against expansion of the definition. They essentially argue that with more regulations, gun manufacturers will unfairly be held responsible for misuse of guns, turning the gun/automobile analogy on its head saying car manufacturers are not held responsible for drunk drivers. This argument relies on the gun doing what it is intended to do. As Kortzleben states “If you aim and fire a gun at an attacker, it’s doing what it was intended to do.” Finally, the Second Amendment argument states that the U.S. Constitution does not allow for the same regulation of guns, and that any changes to include guns as a consumer product would be unconstitutional, which again can be found in the CPSA itself.
As one can easily see, after reading the arguments on either side of the discussion, the authority and legality to include guns and firearms under the definition of consumer product is unclear. Both arguments root themselves in the American legal system. For this reason, it is imperative to understand the discussion and confront the proposed problems in either argument, creating an informed constituency who cares about their rights and the issues. The argument over gun control is not going anywhere, and therefore it becomes each of our duty to know the debate.
Melani is an English major with a minor in legal studies at the Seton Hall University, Class of 2018.
Works Cited:
https://www.cpsc.gov/PageFiles/105435/cpsa.pdf
https://www.thetrace.org/2016/01/gun-safety-standards/
http://www.npr.org/sections/itsallpolitics/2015/10/06/446348616/fact-check-are-gun-makers-totally-free-of-liability-for-their-behavior
Posted by Gregory Scavelli.
Super storm Sandy had a devastating impact on the North-Eastern portion of the United States, areas like Long Island, New Jersey and Connecticut got trashed because of the regions un-preparedness in cases of the storm. To bring in a personal connection, the area that I am from on Long Island got it particularly bad, the Long Beach boardwalk that was a staple of the town since 1914 was completely broken down and destroyed and after that the town went into rebuilding mode. Now Long Beach is for the most part is better than the way it was before the storm. This was happening the other regions as well, the Jersey Shore was another area that got hit particularly badly. It’s been 4 years since the storm, but now that the re-building process is almost complete a lot of problems are steaming from it.
Since the storm New Jersey state prosecutors have filled criminal chargers to 161 cases for over 15 million dollars on account of fraud. More than one third of those cases have been fired this year. An example of an Ocean County motel pleaded guilty to falsely claiming that he had sheltered Sandy victims to get $81,000 in federal funds.
The problem facing many of these corporations is that many of them have no ethical business policies. For example raising the price of gas in the time of a crisis is very unethical because in most of these crisis situations people are low on money and making the pay extra for basic needs is unethical. Also, taking personal benefit in a crisis situation is also unethical, the example I earlier about the motel using falsified records to get reimbursed is just taking a situation in which people are suffering and using it for gain. Which is just a very un-ethical way of doing business.
Gregory is a sports management and marketing major with a minor in legal studies at the Stillman School of Business, Seton Hall University, Class of 2019.
Posted by Katherine Harris.
This article brings up the question whether or not a company has liability in how or when the customer uses their product. In this case, Ashley Kubiak was driving her Dodge Ram truck, as she checked her iPhone for text messages. Kubiak then crashed her truck into another vehicle killing two people and paralyzing a child. This is just one case of distracted driving that we have seen a rise in throughout the past 50 years. The families of the victims have sued Apple because, Apple knows that their devices are distracting to drivers, but did not prevent Kubiak from using it while driving.
While a Texas magistrate made a suggestion to dismiss the case on the grounds that the lawyers could not prove the iPhone caused the fatal accident. “Ms. Kubiak was convicted of negligent homicide and sentenced to five years on probation” (Richtel). Kubiak now leaves her phone in the back seat to avoid the temptation of using it while driving. This case of Apple’s iPhone product liability puts Apple in a difficult situation. Especially, because Apple has the technology to prevent texting while operating a motor vehicle, but has not implemented it.
Although, there are laws and public education initiatives against distracted driving, Apple, Verizon, and AT&T acknowledge the effectiveness of these campaigns. Deborah Hersman, the president of the National Safety Council and the former chairwoman of the National Transportation Safety Board said it best, “The technology exists – we just don’t have the stomach to implement it” (Richtel). Implementing the technology to turn off text messaging while someone is driving brings up questions about the economic, social, and ethical concerns.
Katherine is a marketing and economics major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Lilli Wofsy.
On October 11, 2016, Samsung reported that they would completely recall the Galaxy Note 7 and stop trying to fix the product overall. After there were many reports of the smartphone exploding or causing severe burns, Samsung attempted to fix the problem. With the hope of still profiting from the product, Samsung “decided to continue shipping new Galaxy Note 7s containing batteries from a different supplier” (Chen and Sang-Hun). Yet, using ATL battery instead of the original SDI battery did not help solve the issue of overheating. Many former employees of Samsung expressed they felt that the “militaristic” environment did not allow for there to be any communication from workers and the corporate bosses who just wanted to release the device.
While there have been “92 reports of Note 7 batteries overheating in the United States,” this is not the only Samsung product that has been flawed (Chen and Sang-Hun). There has been a recall in Australia for 144,000 washer machines that were likely to start fires in homes. Samsung has also had to recall “184,000 microwave ovens in the United States and 210,000 refrigerators in South Korea” (Chen and Sang-Hun). Though they have had many small recalls other than these large ones, customers have positively described their quickness in replacing or refunding their clients for the inconvenience.
Samsung has faced a hard hit due to the recent issues they have had with their products. On October 12th, Samsung noted they “absorb[ed] $2 billion in losses” (Chen and Sang-Hun). They reportedly earned 33.3 percent less that what they had projected to earn from the Galaxy Note 7. Between October 11th and 12th, the company’s shares went down 8.65 percent. With Samsung fighting with Apple to keep up with their never-ending battle, Samsung might be releasing products too quickly in hopes of beating their opponent. Yet Apple has not faced as many large recalls when compared to Samsung, rather they have only recalled one of their Nano products and one type of Beats. Maybe if Samsung’s workers have more openness about possible problems with products or testing out products more prior to releasing them, they can revive their company and make back up what they have lost from their present predicament.
Lilli is an English and legal studies minor at Seton Hall University, Class of 2018.
Sources:
Posted by Timothy O’Shea.
Tesla Motors, an automotive company in the Automotive Energy Storage industry, “who’s mission is to accelerate the world’s transition to sustainable energy.”(tesla.com) It “was founded in 2003 by a group of engineers in Silicon Valley who wanted to prove that electric cars could be better than gasoline-powered cars”(tesla.com). As of now, all Tesla Cars will be made with complete self-driving software. It is their belief that these self-driven vehicles will help to improve safety while also aiding in the transition to the world’s sustainability. However, Tesla’s autonomy options have had some challenges and have caused Tesla some trouble. Tesla has now faced a number of lawsuit’s regarding false advertising and marketing, more specifically false advertising and marketing of the car’s “Insane Mode”, a performance mode intended for fast acceleration, and also for the car’s autonomous mode.
After a few crashes, one of which was fatal, Tesla Motors has been receiving criticism for the way in which it chose to market and deploy its Autopilot driving-assist system. In the summer of 2016, Tesla was admittedly being investigated by the National Highway Traffic Safety Administration, for its first reported fatality in a self-driving vehicle, while a second potential crash, involving the Autopilot feature, arose. Multiple cases have erected in China after Tesla crashes, with one resulting in fatality, a 23 year old driver whose “dashboard camera showed the car hitting a cleaning truck from behind while traveling on a highway in central Hebei province.”(forbes.com) Another fatal crash took place in Florida, where Joshua Brown, 40 year old supporter of Tesla, was hit by a tractor trailer which was undetected by neither driver nor autopilot. A final crash that raise concern against Tesla’s Autopilot software occurred on the Pennsylvania Turnpike on July 1, where Albert Scaglione reportedly activated the self-driving feature prior to hitting the guard rail “off the right side of the roadway… crossed over the eastbound lanes and hit the concrete median.”
Amongst the many crashes and accusations, Tesla has continued to stand behind it’s autopilot saying that the crashes resulted from human error, rather than system error, and in most cases the opposing parties have not been able to prove otherwise. On a bold posting on its website, the company said “there is no car company in the world that cares more about safety than Tesla and our track record reflects that.”(usatoday.com) This statement resulted from the NHTSA’s disclosure it was further investigating the electric car company for the possibility of having their customers sign non-disclosure agreements that would impede reporting. With repeated complaints, the NHTSA continues to investigate the validity of Tesla motors vehicle safety but has not found any major problems at this time. From suspension concerns, to accusations of false advertising, to crashes and claims against the Autopilot feature, Tesla remains under consistent fire and has been on its toes ready to adapt and turn its feedback into more environmentally, economically, and logistically friendly features.
In more current news, Tesla has been running into some speed bumps in its growth and develop in Germany. The Federal Motor Transport Authority of Germany, has recently sent a request to Tesla asking them to stop advertising the “electric vehicles’ Autopilot function, claiming that this feature misleads drivers into unsafe inattention to the road.”(eetimes.com) Yhe claim released in late September, implies that Motor companies must refrain from using misleading terms like “auto-pilot”, “automated”, or “self-driving” if their cars do not possess the ability to control themselves completely independent of human involvement.” (eetimes.com) Tesla has responded saying its “Autopilot always requires that the driver remain engaged and ready to take over at any time.” (electrek.com)
Timothy O’Shea is an undecided business major at the Stillman School of Business, Seton Hall University, Class of 2019.
Sources:
Tesla issues thorough response following harsh critique of Autopilot by German authorities
http://www.eetimes.com/document.asp?doc_id=1330633
https://www.tesla.com/about
http://www.forbes.com/sites/dougyoung/2016/09/19/tesla-takes-new-china-hit-with-driver-death-lawsuit/#37346299284f
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.