FORM A
1st Examination
Law 3800, Legal Environment
Dr. Edmonds
Spring Semester, 2014
This is a closed book examination. Any conversation or communication
between students during the Examination will be considered prima facie
evidence of academic dishonesty.
Questions 1 – 3 are based upon the following facts. Buildco, a corporation
engaged in the manufacture of hydraulic valves for aircraft, contracts with Mrs.
Murphy’s Aluminum Storm Door and Aircraft Manufacturing (Murphy’s) to
design and manufacture special valves for Murphy’s. Included in the contract that
they negotiate and sign is the following language:
“Buildco and Mrs. Murphy’s Aluminum Storm Door and Aircraft
Manufacturing agree that any dispute arising under this agreement that cannot be
resolved by the parties shall be submitted to binding arbitration under the rules of
the American Arbitration Association.”
A dispute arises between the parties to the contract about the meaning of a term in
the contract. The parties attempt to resolve the conflict by discussion between the
parties but fail. The parties then attempt to settle their dispute by using a neutral
third party to facilitate settlement but again they cannot resolve the dispute. Per the
above contract language, the dispute is then submitted to an arbitrator for
resolution and the arbitrator makes a ruling.
1. Which of the following is a true statement regarding this situation to this point?
a. The parties have engaged in alternative dispute resolution by using
negotiation, mediation and arbitration in that order.
b. The parties have engaged in a structured out of court process by using
face to face talks, third party intervention and arbitration in that order.
c. The parties have engaged in alternative dispute resolution by using face to
face talks, third party intervention and arbitration in that order.
d. The parties have wasted their time as either party always has the right to
sue for breach of contract under these facts.
The provision of the contract under dispute reads “The parties agree that payment
for valves delivered and accepted by Buyer will be made by Buyer within a
commercially reasonable time after delivery and acceptance.” Buyer pays Seller 90
days after each shipment is delivered and accepted. Seller claims that 90 days is
way too long and not a “commercially reasonable” time period. Seller wants Buyer
to pay interest on any and all payments made more than 30 days after acceptance.
In her ruling the arbitrator declares that the parties should never have used a
provision that allows any form of delayed payment and rules that Buyer must pay
Seller at the time of delivery and that Buyer owes interest on any payment not
made at the time of delivery. Buyer attempts to appeal the arbitrator’s decision in a
court having jurisdiction to hear contract disputes.
2. Which of the following is the correct criterion that the court must apply to
decide if the court has the power to review the arbitrator’s decision?
a. The arbitrator made a mistake of fact or law in her ruling.
b. The arbitrator engaged in fraud, bias, denial of due process, or mistake of
important fact in her ruling.
c. The arbitrator exceeded her authority under the contract, engaged in bias,
engaged in fraud, or denied either party due process of law.
d. Any of the above would allow a court to step into the process and allow a
lawsuit to set aside the arbitrator’s ruling.
3. Under these facts, what should the court do?
a. Dismiss the lawsuit and allow the arbitrator’s decision to stand; it was
binding arbitration.
b. Allow the lawsuit, overrule the arbitrator’s decision and issue a ruling
resolving the dispute.
c. Allow the lawsuit, reverse the arbitrator’s decision and send the case back
for a new arbitration.
d. Allow the lawsuit, and issue a ruling correcting the arbitrator’s ruling.
Questions 4 – 6 are based upon the following facts. An employee of a scrap metal
processing company in New Jersey is fatally injured while operating a huge metal
cutting machine. His estate claims the machine was negligently designed and thus
caused his injury and sues the manufacturer of the machine in a New Jersey State
Court. The manufacturer is a British corporation having its headquarters and
principal place of business in England. The manufacture objects to being sued in
the New Jersey state court, claiming the court has no power over the manufacturer
as in J. McIntyre Machinery v. Nicastro, 131 S. Ct. 2780 (2011)
4. Which of the following issues has McIntyre Machinery raised by its objection?
a. in rem jurisdiction
b. Venue.
c. in personam jurisdiction
d. States’ rights.
e. none of the above.
5. Which of the following laws would the estate of Nicastro argue gives the New
Jersey state court the power to compel McIntyre Machinery to appear and defend
the Nicastro lawsuit?
a. The Federal “long arm” statute
b. The New Jersey state statute creating “long arm” jurisdiction in New
Jersey state courts.
c. The Federal Supremacy Clause
d. The Federal Landrum-Griffin Act.
6. Which of the following legal “tests” should the U.S. Supreme Court apply in
deciding this case?
a. The substantial effect test.
b. The substantial presence test.
c. The minimum presence test.
d. Both a and b.
Questions 7 and 8 are based upon the following facts. The State of Utah legislature
passes a law limiting the length of all semi-truck trailers operating within the State
of Utah to be 45 feet in length or shorter. The national standard length is 54 feet. A
national trucking company objects to the Utah law as placing an unreasonable
burden upon the trucking industry by requiring trucks passing through Utah to use
a shorter trailer than in standard use all over the country and sues to invalidate
Utah’s law. The case winds its way to the U.S. Supreme Court.
7. Which of the following legal standards should the Supreme Court apply in
deciding this case?
a. The substantial effect test.
b. The procedural due process test.
c. The dormant or negative aspect test.
d. The equal protection test.
8. Which of the following recent Supreme Court cases applied the correct
test and would be precedent for the Supreme Court in this case?
a. Wickard v. Fillmore
b. United States v. Lopez
c. Granholm v. Heald
d. Roe v. Wade
e. Western v. Central Michigan
Questions 9 and 10 are based upon the following facts. O.J. Simpson was arrested
and charged with the crime of murder, based upon the allegation that he murdered
his ex-wife and her friend. He was tried before a jury and found not guilty.
Subsequently the family of his ex-wife sued him in civil court for the tort of
inflicting a wrongful death. A jury in the civil case found for the family and held
that Simpson had intentionally killed his ex-wife.
9. Is the jury verdict in the second lawsuit valid?
a. No, it is double jeopardy.
b. No, he was already found not guilty by a previous jury.
c. Yes.
d. Both a and b.
10. Your answer to Question 9 is properly based upon which of the following?
a. The doctrine of double jeopardy.
b. The concept of parallel lawsuits.
c. The difference in the burden of proof and purpose of the two different
cases.
d. Fundamental fairness.
e. both b and c.
Questions 11 and 12 are based upon the following facts. The United States Senate
is holding a hearing on the issue of confirmation of a presidential nominee to the
Supreme Court. Of particular concern to a group of senators is the question of
whether or not the nominee will, if appointed, vote to uphold a prior landmark
abortion rights decision of the Supreme Court.
11. What case are we talking about?
a. Roe vs. Wade
b. New Jersey vs. T.L.O.
c. Heart of Atlanta Motel vs. United States
d. Fish vs. Fish
12. Which of the following legal doctrines is in play in this discussion?
a. In Rem jurisdiction
b. in personam jurisdiction
c. stare decisis
d. All of the above
Questions 13 and 14 are based upon the following facts. Plaintiff owns a large tract
of very valuable land. Much of the land’s value comes from the fact that it is
covered in old growth hardwood forest making it very desirable for expensive
residential development. Plaintiff visits his land one day to discover to his horror
that a crew of lumberjacks is beginning to cut and remove his trees. He tells them
to stop, but the refuse, mistakenly believing they are on property they have
permission to clear cut. Plaintiff files a complaint in a local court to begin a lawsuit
against the lumberjacks. Plaintiff asks the court to issue an order stopping the
lumberjacks from cutting any more of his trees.
13. Which of the following is/are true with regard to Plaintiff’s lawsuit?
a. He is asking the court to assert in personnam jurisdiction over
lumberjacks.
the
b. He is asking the court to assert in rem jurisdiction over the lumberjacks.
c. He is asking the court to assert venue over the lumberjacks.
d. He is asking the court to assert subject matter jurisdiction over the
individual lumberjacks.
14. Which of the following is/are true with regard to the remedy Plaintiff is asking
the court to grant?
a. It is a remedy in law.
b. It is called an injunction.
c. It is remedy which would require the court to exercise equity jurisdiction.
d. Both a and b.
e. both b and c.
Questions 15 – 17 are based upon the following facts. BikeCo is a small startup
company founded by two recent Haworth College of Business Graduates. BikeCo
manufactures specially designed bicycles for people with disabilities. It is doing
quite well. BikeCo advertises its bikes on the internet, offering the bikes for sale
and shipping to customers in all 50 states. BikeCo negotiates a sale of a custom
bike to a family in Georgia for use by their disabled daughter. The family pays for
the bike by credit card over the internet, and BikeCo ships the bike to Georgia. The
bike is designed perfectly and allows the little girl to ride for the first time. Sadly, a
BikeCo employee was sloppy in welding the bike’s frame and it breaks shortly
after being put into use, seriously injuring the little girl. BikeCo promptly and
appropriately fires the welder. The little girl’s family sues BikeCo in a local
Georgia court. Everybody in the entire county where the little girl lives and the
family’s lawsuit against BikeCo is filed knows and loves her. Understandably, the
BikeCo owners are concerned they won’t get a fair trial in the Georgia court.
15. Do the owners of BikeCo have an alternative to defending the lawsuit in the
Georgia State court?
a. No; they sold the bike in Georgia and thus the Georgia State court has
exclusive jurisdiction over them under the Georgia long arm statute.
b. Perhaps they may be able to get the case transferred to a Federal court
under the Federal Court’s appellate jurisdiction.
c. Perhaps they may be able to get the case transferred to a Federal court
under the Federal Court’s diversity jurisdiction.
d. Perhaps they may be able to get the case transferred to a Federal court
under the Federal Court’s equity jurisdiction.
16. Which of the following will be important to BikeCo owners attempt to get the
matter moved to a Federal court?
a. The family sues for over $35,000.
b. The family sues for over $55,000.
c. The family sues for over $75,000.
d. The family sues for emotional pain and suffering.
17. If the Federal Court takes control over the lawsuit at the request of BikeCo’s
owners, the court would be doing which of the following?
a. Exercising its Federal Question jurisdiction.
b. Exercising its Original Jurisdiction.
c. Exercising its Diversity Jurisdiction.
d. Exercising its Equity Jurisdiction.
Questions 18 – 20 are based upon the following facts. A motel owner in Atlanta,
Georgia decides he will not rent rooms to people of color. The U.S. Department of
Justice sues him to stop his conduct under the Federal civil Right Act passed by the
U.S. Congress. Heart of Atlanta Motel v. U.S., 379 U.S. 241 (1964).
18. If the U. S. Supreme Court were to find that the portion of the Civil Rights Act
that the U.S. Government sought to enforce upon the owner of the Heart of Atlanta
Motel was Constitutional (and thus enforceable) it would have to do so based upon
which of the following?
a. Congress’ power to regulate intrastate commerce under Article 3, Section
5 of the Constitution.
b. Congress’ power to regulate interstate commerce under Article 1, Section
8 of the Constitution.
c. Congress’ power to regulate interstate commerce under Article 2,
Section 11 of the Constitution.
d. Congress’ power to regulate interstate commerce under the Necessary and
Proper Clause of the Constitution.
19. In deciding the Heart of Atlanta case, which of the following did the Supreme
Court find very important?
a. The fact that the U.S. Constitution itself specifically prohibits
discrimination in the provision of public accommodations.
b. The fact that people of color were less likely to travel in interstate
commerce if they were subject to racial discrimination.
c. The fact that Georgia as a state, had failed to enact legislation ending
racial discrimination.
d. All of the above.
20. How did the Supreme Court rule in Heart of Atlanta?
a. The Supreme Court upheld the enforcement of the Civil Right Act under
Congress’ inherent powers under the Necessary and Proper Clause of the
U.S. Constitution.
b. The Supreme Court upheld the enforcement of the Civil Right Act under
Congress’ power granted in the Commerce Clause of the U. S.
Constitution.
c. The Supreme Court determined that the Motel Owner’s actions constituted
only intrastate activity.
d. None of the above.
Questions 21and 22 are based upon the following facts. A farmer grows more
wheat than the quota he was allocated under a Federal law designed to support the
price of wheat, Wickard v. Fillburn. The farmer sues to invalidate the application
of the law to him, proving that he didn’t sell any of his wheat but only used it on
his farm as seed and animal feed.
21. How did the Supreme Court rule in the Wickard v. Fillburn case?
a. For the farmer.
b. The Court upheld the law as applied to the farmer.
22. Which of the following legal doctrines did the Supreme Court use to decide the
Wickard v. Fillburn case?
a. The “substantial effect” rule.
b. The “negative aspect of the Commerce Clause” rule.
c. The “affirmative action” rule.
d. The “no fair folding” rule.
Questions 23 –25 are based upon the following facts. Michigan enacted a law that
allowed in state wineries to sell their wines directly to consumers, but required all
out of state wineries to sell their wines to a wholesaler (middleman) before they
could be sold at retail. Out of state wineries challenged the law and the case
wound its way to the U. S. Supreme Court. Granholm v. Heald.
23. What did the Michigan authorities argue in claiming that the Michigan law was
Constitutional?
a. That it was necessary to prevent sales of wine (an alcoholic beverage) to
minors over the internet.
b. That the Michigan law only regulated activity within the State of
Michigan.
c. That the Michigan Law was necessary to insure the purity of wines sold in
Michigan.
d. a and b.
e. a, b and c.
24. How did the U.S. Supreme Court rule in the Granholm v. Heald case?
a. They upheld the Michigan law.
b. They struck down the Michigan law.
25. On which of the following legal doctrines did the Supreme Court base its ruling
in Granholm v. Heald?
a. The “dormant” or “negative” aspect of the Commerce Clause.
b. The “substantial effect” rule.
c. The “Inherent Powers” rule.
d. The “States Rights” doctrine.
26. In Marbury v. Madison, chief justice John Marshall created perhaps the most
significant “Constitutional” power possessed by U.S. Courts. It is known as:
a. Congressional Review.
b. Judicial Oversight.
c. Judicial Review.
d. Appellate Review.
27. Which branches of government in the United States are subject to the
application of the power you identified in Question 26?
a. The judicial branch.
b. The executive branch
c. The legislative branch.
d. All of the above.
Questions 28 and 29 are based upon the following facts. The Federal Congress
passed a criminal law making it a crime to possess a gun in a “Gun Free School
Zone”. Lopez was arrested for possessing a gun in a “Gun Free School Zone” and
sentenced to prison. He appealed his conviction all the way to the U.S. Supreme
Court. United States v. Lopez.
28. How did the Supreme Court rule?
a. The Court upheld the conviction of Lopez.
b. The Court reversed the conviction of Lopez.
29. Why?
a. Because the facts supported Lopez’ conviction; he intentionally took a
gun into a “Gun Free School Zone” in violation of Federal law.
b. Because Lopez’ conduct could not substantially affect any sort of
interstate commerce.
c. Because upholding Lopez’ conviction would convert Congress’ power to
that of a general police power.
d. Because a general police power is one retained by the States under our
Constitution.
e. b, c and d above.
30. Which of the previous issues on this examination contain or raise both a legal
and an ethical issue under current standards of conduct?
a. The facts underlying Questions 15 – 17.
b. The facts underlying Questions 9 – 10.
c. The facts underlying Questions 4 – 6.
d. The facts underlying Questions 18 – 20.
e. Both b and d.