Subject: Legal Environment Of Business
– Recommended textbook for the subject: Cheeseman, H. R. Legal Environment of Business: Online Commerce, Ethics, and Global Issues. (CHAPTERS 22, 23, 24 & 25)
– Answer the following essay questions:
1. The Maricopa County Medical Society (Society) is a professional association that represents doctors of medicine, osteopathy, and podiatry in Maricopa County, Arizona. The society formed the Maricopa Foundation for Medical Care (Foundation), a nonprofit Arizona corporation. Approximately 1,750 doctors, who represent 70 percent of the practitioners in the country, belong to Foundation. Foundation acts as an insurance administrator between its member doctors and insurance companies that pay patients’ medical bills. Foundation established a maximum fee schedule for various medical services. The member doctors agreed to abide by this fee schedule when providing services to patients. The state of Arizona brought this action against Society and Foundation and its members, alleging price fixing, in violation of Section 1 of the Sherman Act. Who wins? Explain.
2. Leon A. Tashof operated a store known as the New York Jewelry Company. The store was located in an area that served low-income consumers, many of whom had low-paying jobs and had no bank or charge accounts. About 85 percent of the store’s sales were made on credit. The store advertised eyeglasses “from $7.50 complete,” including “lenses, frames and case.” Tashof advertised this sale extensively on radio and in newspapers. Evidence showed that of the 1,400 pairs of eyeglasses sold by the store, fewer than 10 were sold for $7.50; the rest were more expensive glasses. The Federal Trade Commission sued Tashof for engaging in bait-and-switch marketing, in violation of Section 5 of the Federal Trade Commission Act.
a. Explain what a bait and switch is.
b. Was Tashof’s conduct in this case ethical?
c. Who wins, and why?
3. Pilot Petroleum Associates, Inc., and various affiliated companies distributed gasoline to retail gasoline stations in the state of New York. Pilot owned some of these stations and leased them to individual operators who were under contract to purchase gasoline from Pilot. The EPA took samples of gasoline from five different service stations to which Pilot had sold unleaded gasoline. These samples showed that Pilot had delivered “unleaded gasoline that contained amounts of lead in excess of that permitted by the Clean Air Act and EPA regulations.” The United States brought criminal charges against Pilot for violating the act and EPA regulations and sought fines from Pilot. Who wins? Explain.
4. Sharon Love entered into a written lease agreement with Monarch Apartments for apartment 4 at 441 Winfield in Topeka, Kansas. Shortly after moving in, she experienced serious problems with termites. Her walls swelled, clouds of dirt came out, and when she checked on her children one night, she saw termites flying around the room. She complained to Monarch, which arranged for the apartment to be fumigated. When the termite problem persisted, Monarch moved Love and her children to apartment 2. Upon moving in, Love noticed that roaches crawled over the walls, ceilings, and floors of the apartment. She complained, and Monarch called an exterminator, who sprayed the apartment. When the roach problem persisted, Love vacated the premises. Has Love lawfully terminated the lease? Explain.
5. Discuss the functions of the Consumer Financial Protection Bureau and the provisions of the Consumer Financial Protection Act of 2010.