LEONARD N. STERN SCHOOL OF BUSINESS
NEW YORK UNIVERSITY
PROFESSIONAL RESPONSIBILITY:
MARKETS, ETHICS & LAW (B02.3101.00)
(Fall Term 2007
 Dates: October 7, 14, 21
 Meeting Time: 9 am – 4 pm
 Classroom: K-MEC 2-90
PROFESSOR: RONALD BERENBEIM
 Office:
 Office Hours: By Appointment
 Phone: (212) 339-0352
 Email: ronald.berenbeim@conference-board.org
 Teaching Assistant: bradley.ispass@stern.nyu.edu

Secretary: icoleman@stern.nyu.edu or 998-0048
COURSE OBJECTIVES
The purpose of this course is to introduce the student to a broad range of “non-market”
issues encountered by managers and business professionals, and to help the student
develop a set of analytical perspectives for making judgments when such issues arise. In
economics many of these issues can be described as market failures or imperfections. To
a limited extent, we will illustrate how the legal system is used to redress such failures of
the market economy. We will also examine the role of ethical norms and reasoning in
resolving such issues in managerial life, and in establishing standards of professional
responsibility.
More directly, the student in this course will exercise professional judgment through
discussion and analysis. Most such exercises will require the analysis of one or more
cases, as indicated on the attached schedule of class assignments. In addition, we will
study writings in the fields of ethical reasoning, professional responsibility, and the law.
PROFESSIONAL RESPONSIBILITY COURSE PACK
Required Cases & Readings 2007-2008
All required cases and readings for this course are located in TWO SEPARATE places:
Your Professor’s Blackboard Page (free) AND a Xanedu Course Pack (purchase).
1. BLACKBOARD
On your professor’s Blackboard page you will find the Professional Responsibility
Cases and Readings 2007-2008 posted under the Course Documents link together with
a Table of Contents.
2. XANEDU.COM
On Xanedu.com you will find additional required readings for Professional
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Responsibility. To access these readings you will need to purchase a Xanedu access code
from the NYU Professional Bookstore.
Online ordering instructions for the Xanedu material:
Go to the NYU Book Store web site: http://www.bookstores.nyu.edu
Click on the "Search for a Book" link
Select the "Search by ISBN" option and enter ISBN 978300047318B
Proceed to Checkout and complete your order.
Within one business day of completing your order you will receive an email with your
Key Code that will give you access to your digital course pack.
Tax and shipping charges will be removed before your credit card is charged.
How to access your Xanedu Course Pack
1. Open a Web browser and go to www.xanedu.com.
2. ALREADY A REGISTERED XANEDU USER?
Log in to go to your My Xanedu page. At the bottom of your My Xanedu page is a
field labeled ‘Do you have a key for a Course Pack or ReSearch Engine?’ Enter the
16-digit key shown below, including the hyphens, into this field and click ‘Go’.
3. NOT A REGISTERED XANEDU USER?
You’ll need to register and create a user name and password. Click the Register link
under the “Students” login area on www.xanedu.com. Click the button labeled
‘Student Registration’. Complete the online registration form. Enter the 16-digit key
shown below, including the hyphens, at the bottom of the form. Submit the form.
Your My Xanedu page is displayed.
4. Select your Course Pack from the My Course Packs list and click ‘Go’.
Important things to know about the key and your digital Course Pack
 You can enter the numeric key shown above only one time. If you have a problem or
question, call Xanedu Customer Service at 800-218-5971, Option 3, or send email to
contact@xanedu.com.

Access to your digital Course Pack cannot be resold. Once you enter the numeric key,
only you can access the Course Pack.

You will have unlimited access to your digital Course Pack until whichever comes
first:
six months after the date of purchase,
Or two months after the last day of your course (as specified by your instructor).

To access your Course Pack at anytime:
1. Open a Web browser and go to www.xanedu.com.
2. Log in with your user name/password combination.
3. Select the Course Pack from the My Course Packs list on your My Xanedu page.
4. Click ‘Go’.
2
Problems?
Contact rkowal@stern.nyu.edu
PREPARATION FOR CLASS
Each class session consists of several study modules. Each study module contains
readings and study questions. Your primary obligation in this course is to prepare for
class discussion by thorough reading and analysis of assigned materials. Case discussions
and in-class activities are an essential part of the course. All students are responsible for
mentally preparing answers to all of the study questions before coming to class. The
instructor will ask some students to provide their answers orally, as a basis for further
discussion.
GRADING
The weights for the student’s overall grade are:
Class Participation
Homework: Written Study Question Analysis
Term Paper Project
20%
40%
40%
HOMEWORK: WRITTEN STUDY QUESTION ANALYSIS (2 to 3 pages typed)
DUE: Papers must be submitted prior to the session in which the paper is discussed
Each student should perform a written analysis for 3 study questions over the course of
the term. That is, for any session of his or her choosing the student should write out his
or her analysis of any one of the assigned study questions. These analyses should be 2-3
pages in length. The student can submit more than 3 written analyses, but only the top 3
grades will count. All students must write a study question analysis for question two,
session one and submit it prior to the first day of class (October 7).
TERM PAPER DESCRIPTION: (1 page typed) (Optional)
DUE: Session Two
A one-page description of your term paper project as described below.
TERM PAPER PROJECT: (7 – 9 pages typed & double-spaced)
DUE: October 29, 2007
The purpose of this paper is to allow the student to apply principles of professional
responsibility to an actual, specific business situation. The student will describe a
situation with which he or she has first-hand familiarity. The student may have been a
major or minor actor in the situation, or may have merely witnessed the situation. In any
event, the requirements are that the situation raise ethical or legal issues and that the
student was there. It would not be appropriate to analyze a situation if you were not in a
position to observe it directly.
Organize the term paper as follows:
I. Situation
Provide a description of the situation or practice; this description must be detailed and
rich enough to allow the reader to get a clear sense of the issues and circumstances (2-3
3
pages).
II. Analysis
Apply some method or methods of ethical (or perhaps legal) reasoning to the situation
and examine the results of this application. Are the results logical, beneficial, counter
intuitive, or in any other way problematic? Here the student should apply, wherever
appropriate, concepts from the course and its readings. Also, the student should cite the
relevant law (2-3 pages).
III. Resolution & Conclusion
Describe how the situation was actually resolved. Discuss this resolution in light of the
ethical analysis from section II (2-3 pages).
Evaluation of Term Paper Project: Good performance (hence good grades) on this
assignment consists of systematically and thoroughly applying relevant concepts and
methods from the course to the situation, and in testing the worth of those concepts and
methods in resolving the ethical issues it presents.
Confidentiality of Term Paper Projects:
The contents of the term paper projects that you submit are held strictly confidential. The
term papers are not read by anyone other than the professor and are not disseminated in
any fashion to other person(s).
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COURSE SCHEDULE
TOPICS & ASSIGNMENTS
DAY I: OCTOBER 7, 2007
SESSION #1
DATE: OCTOBER 7, 2007
MARKET FAILURES & PROFESSIONAL DILEMMAS
READINGS
Economic Theories of
Regulation: Normative vs.
Positive”
The Price of Lobster
Thermidor
Pollution Case Highlights
Trend to Let Employees
Take the Rap.”
Making An Ethical
Decision
Linda N. Edwards &
Franklin R. Edwards
Course Pack
Course Concepts
The Economist
http:/www.suboceansafety.
org
Dean Starkman
Moral Standards Across
Borders
Terry Halbert & Elaine
Ingulli
Course Concepts
Control By Law
STUDY QUESTIONS
1. Why do market failures tend to bring about laws or regulations to counter their effects?
2. Based on the Edwards article which market failures or imperfections are present in the
“Lobster Thermidor” (The Economist) case? In the “Pollution” (Starkman) case?
3. How might ethical methodology help an executive or legislator to make more effective
decisions in the presence of market imperfections?
4. Based on the Halbert & Ingulli reading identify at least one market failure related to
your employment situation and apply the methods of ethical reasoning to this market
failure.
5
TRUTH & DISCLOSURE
READINGS
Bluffing
Ethics and the New Game
Theory
Bitter Pill
Jim T. Priest
Gary Miller
Ralph T. King, Jr
Familiar Refrain:
Douglas A. Blackmon
Consultant’s Advice on
Diversity was Anything but
Diverse
Today’s Analyst Often
Roger Lowenstein
Wears Two Hats
Double Agents in the
Roy C. Smith
Financial System
Course Pack
Course Concepts
Course Concepts
Truth & Disclosure
(“Truth”)
“Truth”
“Truth”
“Truth”
The Numbers Game
Arthur Levitt
“Truth”
You Have The Only Hard
Copy
Ghost Story
Peter Elkind
“Truth”
Anna Wilde Mathews
“Truth”
STUDY QUESTIONS
1. Would a “Bluffer” (Priest) voice any objections to the (i) corporate actions of Boots
described in “Bitter Pill” and (ii) Towers Perrin in the “Familiar Refrain” case? Do you
agree with Carr? Can you identify any market failures in “Bitter Pill” and “Familiar
Refrain”?
2. How would Gary Miller (“Ethics & the New Game Theory”) and Arthur Levitt (“The
Numbers Game”) assess the long-term effects of bluffing as applied to (i) the job of an
equity analyst (“Today’s Analyst”) and (ii) the criteria for revising a stock ratings system
discussed by Hoffman (“You Have the Only Hard Copy”)?
3. Is there anything ethically wrong about the actions of the medical ghostwriters as
described in “Ghost Story”? What would happen if all or most drug companies behaved
in similar ways? Do their actions fall within the scope of business bluffing according to
Priest?
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GIFTS, SIDE DEALS & CONFLICTS OF INTEREST
READINGS
Neutral Omni-Partial Rule
Making
Bribery & The Foreign
Corrupt Practices Act
Buynow Stores
Roger Berg
Wall Street and the
Nursery School
Hat Trick
A Bribe by Any Other
Name
Marsh & McLennan
Companies
Drug Maker’s Efforts to
Compete in Lucrative
Insulin Market are Under
Scrutiny
Ronald M. Green
http://www.usdoj.gov/crimina
l/fraud/docs/dojdocb.html
Bruce Buchanan
Ronald M. Green
Gretchen Morgenson & Pat
McGeehan
Gretchen Morgenson
Neil Weinberg
Course Pack
Course Concepts
Gifts, Side Deals &
Conflicts of Interest
(“Gifts”)
Gifts
Gifts
Gifts
Gifts
Gifts
Ingo Walter
Gifts
Gardner Harris & Robert Pear
Gifts
STUDY QUESTIONS
1. Make a list of all the gift practices described in Buynow Stores. In your judgment,
which of these, if any, are inappropriate? Use ethical concepts and methods from the
Green and Halbert/Ingulli readings to support your position.
2. Do the Roger Berg and Wall Street Nursery School cases differ materially from
Buynow Stores? Use ethical concepts and methods from the Green and Halbert/Ingulli
readings to support your position.
3. Has Novo Nordisk and their “anchor in office program” created any market failures or
engaged in any conflicts of interest in their current insulin drug marketing practices
(“Drug Makers Efforts to Compete in Lucrative Insulin Market Are Under Scrutiny”)?
Are the Novo sales representatives engaging in bribery? Should drug companies refrain
from such activities and risk losing business?
4. What was Marsh & McLennan’s exposure to reputational risk versus Putnam’s profits
from the firm’s allowing hedge funds to engage in late trading and market timing? If you
conclude that the risks exceeded the returns, why did the firm engage in the practice?
AGENCY & FIDUCIARY DUTY
7
READINGS
Disloyal Agents
Moral Hazard
Quality Department Stores
Old City Enterprises
The Business Judgment
Rule & The Duty of Care
The Man Who Paid the
Price for Sizing Up Enron
Plasma International
You Bought, They Sold
My Patients Are Dying
At The Center of Fraud,
WorldCom Official Sees
Life Unravel
David Cavers
Robert Pindyck & Daniel
Rubenfeld
Lawrence Zicklin
Lawrence Zicklin
Constance Bagley & Diane
Savage
Richard A. Oppel, Jr.
TW. Zimmer & P.L.Preston
Mark Gimein
Lawrence Zicklin
Susan Pulliam
Course Pack
Agency & Fiduciary Duty
(“Agency”)
Course Concepts
Agency
Agency
Board of Directors
Agency
Agency
Agency
Agency
Agency
STUDY QUESTIONS
1. Sketch out the relationships between parties described or implied in the case
“Quality Department Stores” Which of these can be called “fiduciary” relationships
according to Cavers (“Disloyal Agents”)? Given your analysis, how should the
investment manager vote?
2. Which fiduciary duties might be at issue in “Old City Enterprises” and in “Plasma
International”? Are Ed Stevens in “Old City” and Sol Levin of “Plasma” acting properly
in terms of shareholder interests and ethical standards? Are there any moral hazards
present here?
3. Considering the Gimein reading (“You Bought, They Sold”) what are appropriate
limits, if any, on sales of stock by corporate insiders? Does this behavior present any
moral hazards, particularly to shareholders? Do the fiduciary duties materially differ with
the behavior of Chung Wu broker (“Man Who Paid the Price”)?
4. Describe the various fiduciary relationships in “My Patients Are Dying." Are any
fiduciary responsibilities owed to the patients who are dying? According to Cavers
(“Disloyal Agents”), have any fiduciary duties been breached in this case?
WHISTLE BLOWING & LOYALTY
READINGS
The Return of Qui Tam
Priscilla R. Budeiri
Course Pack
Whistle Blowing
8
Aircraft Brake Scandal
He Told. He Suffered.
Now He’s a Hero
A Whistle-Blower Rocks
an Industry
Doctor Explains Why He
Blew the Whistle”
How Ex-Accountant
Added Up To Trouble for
Humbled Xerox
Moment of Truth: A
Whistleblower’s Dilemma
in the Financial Services
Industry
Legal Tangle At The
Fountain of Youth
Fraud Busting Begins At
Home
Kermit Vandivier
Kurt Eichenwald
Whistle Blowing
Whistle Blowing
Charles Haddad, with Amy
Barrett
Melody Petersen
Whistle Blowing
James Bandler & Mark
Maremont
Whistle Blowing
Donald Schepers &
Harry Rosen
Whistle Blowing
Business Week
Whistle Blowing
Mark Green
Whistle Blowing
Whistle Blowing
STUDY QUESTIONS
1. Consider the position of Searle Lawson in the “Aircraft Brake Scandal” case. At what
point, if any, should he have blown the whistle to someone outside B.F. Goodrich? Use
ethical concepts and reasoning to support your position.
2. Evaluate the 4 options facing Steiner, a potential whistleblower, in ‘The Moment of
Truth” case. Pick the option that you would choose and justify your choice using course
concepts.
3. Discuss the role(s) that whistle blowing laws play in the health care industry. Are these
laws primarily a mechanism for preventing health care fraud against the government (“A
Whistle-Blower Rocks an Industry”) or do these laws serve other purposes as well
(“Doctor Explains Why He Blew The Whistle”) and (“Legal Tangle At The Fountain of
Youth”)?
4. Mark Jorgeson (“He Told He Suffered” - Prudential) and James Bingham (“How ExAccountant” - Xerox) worked at major corporations where they tried to bring truthful
accounting numbers to the attention of top management and investors. What personal
risks did they run? How did the outcomes of their cases reflect their different approaches
to whistle blowing?
5. Do you agree with Mark Green (“Fraud Busting Begins At Home”) that enacting
whistle blowing laws is a good idea for state legislatures? Should private corporations
also utilize whistle blowing; that is, should corporations offer rewards to employees who
blow the whistle on their colleagues?
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SESSION TWO
DATE: OCTOBER 14, 2007
SALES AND MARKETING
READINGS
Investment
Management: Business...
Or Profession…
The Selling of Breast
Cancer
Commissions on Sales at
Brock Mason
West Virginia
Consolidated Investment
Fund
Disorders Made to Order
Responsibility Yes, But to
Whom
Drug Makers Scrutinized
Over Grants
John C. Bogle
Course Pack
Sales & Marketing
Susan Orenstein
Sales & Marketing
Tom L. Beauchamp
Sales & Marketing
Ingo Walter
Sales & Marketing
Brendan I. Koerner
Lawrence Zicklin
Sales & Marketing
Sales & Marketing
Gardner Harris
Sales & Marketing
STUDY QUESTIONS
1. In the “Brock Mason” case, Mr. Tithe, the branch manager, describes the situation with
the widow as “unfortunate” but not “unfair.” Do you agree? Use ethical methods and
concepts to justify your position. Is the situation at Brock Mason similar to that in the
“Responsibility Yes, But to Whom” case?
2. In what ways, if any, could we determine that pharmaceutical companies (“Disorders
Made to Order”) are ethically responsible for promoting new mental illnesses in order to
boost their profits from drug sales (“Drug Makers Scrutinized over Grants”)? Or,
companies that support causes such as breast cancer (“Selling of Breast Cancer”) to
market their brand?
3. In his article, “Investment Management: Business . . . or Profession,” John Bogle
implies that much of the mutual fund business is driven by moral hazards and fiduciary
duty problems. Do you agree? Are any of these problems evident in the “West Virginia
CIF” case?
BOARD OF DIRECTORS
READINGS
The Business Judgment
Constance Bagley & Diane
Rule
Savage
Course Pack
Board of Directors
(“Directors”)
10
Our Schizophrenic
Conception of the Business
Corporation
Crisis of Corporate Ethics
The Director’s New
Clothes
Delaware Justices Uphold
Ruling on Disney
Severance
Excerpts from the Report
of a Special Committee
Investigating Enron
Boeing CEO Resigns Over
Affair With Subordinate
Off To The Races Again,
Leaving Many Behind
Lessons From the Not
Always So Wonderful
World of Disney
CEO Pay in Crosshairs
William T. Allen
Ethical Theories
Roy C. Smith
Joan Lubin
“Directors”
“Directors”
Rita Farrell
“Directors”
New York Times
“ Directors”
Renae Merle
“ Directors”
Eric Dash
“Directors”
Harvey L. Pitt
“Directors”
Aaron Elstein
“Directors”
STUDY QUESTIONS:
1. Apply the Business Judgment Rule (Bagley) to the situations faced by the boards of
directors of Walt Disney (“Delaware Justices Uphold Ruling on Disney Severance”) and
Enron (“Committee Investigating Enron”). Were the actions taken by these boards of
directors justified by the business judgment rule?
2. The nature of a corporation has been defined by the 1978 and 1990 Business
Roundtables on Governance (“Director’s New Clothes”) as well as by Allen
(“Schizophrenic Conception”) – contrast and compare their definitions of a corporation.
Which conception of the business corporation do you think currently dominates the crisis
in corporate governance?
3. Does the issue of executive compensation (“Off to The Races Again” & “CEO Pay in
Crosshairs”) reflect a failure in corporate governance according to Smith (“Crisis of
Corporate Ethics”)? Were any market failures created when corporate executives were
paid excessive amounts? And if so, how would you remedy this situation?
INSIDER TRADING
READINGS
What is Insider Trading?
http://www.sec.gov/answers/
insider.htm
Course Pack
Insider Trading
11
An Accountant’s Small
Time Insider Trading
Raymond Dirks and Equity
Funding of America
Trading Room Ethics”
Martha Stewart
The Case for Insider
Trading
The Cost of Inequity
Tom L. Beauchamp
Insider Trading
Roy C. Smith
Insider Trading
Lawrence Zicklin
Roy C. Smith
Henry G. Manne
Insider Trading
Insider Trading
Insider Trading
The Economist
Insider Trading
STUDY QUESTIONS
1. Should the accountant, Davidson, trade on the information he has obtained from Wolff
(“Accountant’s Small Time”)? Use legal theories of insider trading as defined by the
Securities and Exchange Commission http://www.sec.gov/answers/insider.htm (“What is
Insider Trading/”) and ethical concepts to support your position.
2. Compare the behavior of Dirks (“Raymond Dirks”) with that of Stewart (“Martha
Stewart”) in relationship to the concept of fiduciary duty. Why was Dirks reprimanded by
the SEC but ultimately exonerated by the Supreme Court? Use legal and ethical concepts
to support your position.
3. Read “Trading Room Ethics” carefully and outline the exact procedure Teri Forman
employs to move large blocks of stock. Is this insider trading? Why or why not?
4. Do laws forbidding insider trading make financial markets more or less efficient? Use
ideas from both economics and ethics to justify your position as well as including
Manne’s thesis (”The Case for Insider Trading”) on insider trading.
CONTROL BY LAW
READINGS
Living with the
Organizational Sentencing
Guidelines
Strong Law Enforcement Is
Good for the Economy
Prosecutors’ Tough New
Tactics Turn Firms Against
Employees
When the Company
Becomes a Cop
Life in a Federal
Prosecutor’s Cross Hairs
Conviction of Banker
Jeffrey Kaplan, Linda S.
Dakin, Melinda R. Smolin
Course Pack
Control By Law
Eliot Spitzer
Control By Law
Laurie P. Cohen
Control By Law
Linda Himelstein
Control By Law
Ann Davis
Control By Law
Jonathan D. Glater
Control By Law
12
Vindicates New Strategy
by Prosecutors
Deals & Consequences
The Thompson Memo,
U.S. Dept. of Justice.
1/20/2003
Ebbers’ Sentence Adds Up
How Many CFO’s Been
Convicted?
How Prepared Are
Companies for the Revised
Sentencing Guidelines?
The Convergence of
Principle and Rule-Based
Ethics Programs
KPMG Ruling Marks
Setback for Prosecutors
London Thomas Jr.
http://www.usdoj.gov/dag/cftf
/corporate_guidelines.htm
Control By Law
Control By Law
Dan Small
Kate Plourd
Control By Law
Control By Law
Ronald Berenbeim
Control By Law
Ronald Berenbeim
Control By Law
David Reilly & Paul Davies
Control By Law
STUDY QUESTIONS
1. How do you think the U.S. Sentencing Guidelines (“Living with the Organizational
Sentencing Guidelines”) might change corporate behavior? Consider this from the
perspective of the corporation as employer (“When the Company Becomes a Cop” and
“Prosecutors’ Tough New Tactics”).
2. Are the compliance costs of the U.S. sentencing guidelines justified (‘How Prepared
Are Companies for the Revised Sentencing Guidelines?”)? Would an ethics based
approach make implementation of compliance programs more effective (“The
Convergence of Principle and Rule-Based Ethics Programs”)?
3. Do you agree with the prosecutor’s approach to white-collar crime (“Conviction of
Banker Vindicates New Strategy by Prosecutors” & “U.S. Dept. of Justice: Thompson
Memo”)? Do the courts agree (“KPMG Ruling Marks Setback for Prosecutors”)?
4. What are the implications of the Corporate Sentencing Guidelines for employees,
CFOs (“How Many CFO’s Have Been Convicted?”) and judges? Compare and consider
the situations of Daniel Bayly from Merrill Lynch (“Deals & Consequences”), Sharon
Hogge (”Life in a Federal Prosecutor’s Cross Hairs”) and Bernard Ebbers from
WorldCom (“Ebbers’ Sentence Adds Up”).
PRIVACY
READINGS
Monday 9:01 A.M.
Open Secrets
Ronald Smithies
Ellen Schlutz
Course Pack
Privacy
Privacy
13
Prying Times
Ann Carrns
Privacy
Monitoring of Employees
Allison Michael & Scott M.
Privacy
Still Growing
Lidman
TGB Insurance Services
No. B153400 (Cal. Ct. App.
Privacy
Corp v. Superior Court
2002)
STUDY QUESTIONS
1. Should firms face any restrictions on the internal use of data gathered from their own
employees? Consider this specifically with respect to medical/psychological information
(“Open Secrets”). Use ethical concepts and methods to justify your position.
2. Is the idea of privacy for individuals becoming obsolete in the Internet age? How do
privacy and technology interact (“Prying Times” & “Monitoring of Employees Still
Growing”)? Which market failures surround the issue of privacy? How, then, does the
right to privacy interact with economic efficiency?
3. (A) Draft a policy guideline for a firm as to what aspects of its employee’s lives are to
be considered private, along with applicable safeguards. Assume this memo will be
distributed to all employees, both current and prospective. (B) Briefly state your
reasoning in setting this policy. Did the “TGB Services Corp. v. Superior Court” decision
influence your privacy policy?
SESSION THREE
DATE: OCTOBER 21, 2007
PRODUCT LIABILITY
READINGS
Risk Allocation: Products
Liability
A.H. Robins: Dalkon
Shield
The Class-Action
Quandary: Cash Payment,
No Apology
In Breast Implants Scandal,
Where Was Dow
Corning’s Concern for
Women?
Will the Lawyers Kill Off
Norplant?
Legal Myths: The
McDonald’s Hot Coffee
Case”
Good Pill, Bad Pill:
Science Makes It Hard to
Course Pack
Terry Halbert & Elaine Ingulli Product Liability
A. R. Gina & Terry Sullivan
Product Liability
Meryl Gordon
Product Liability
Andrew W. Singer
Product Liability
Gina Kolata
Product Liability
The Public Citizen
Product Liability
Gina Kolata
Product Liability
14
Decipher
Vioxx ‘Trial in a Box’
Cuts Cost of Filing Suit
Repeated Defect in Heart
Devices Exposes a History
of Problems
Heather Won Tesoriero
Product Liability
Barry Meier
Product Liability
STUDY QUESTIONS
1. Should A.H. Robins have introduced the Dalkon Shield when it did (“A.H.Robins”)?
Which legal theories of product liability (Clarkson, et al) may apply to A.H. Robins? Do
they have any defenses? What method of ethical reasoning seems most appropriate to this
problem?
2. Was McDonald’s “negligent” and/or strictly liable, i.e. “strict product liability”
(Clarkson, et al) for selling “unreasonably dangerous” coffee in the “hot coffee” case
(“McDonald’s Hot Coffee Case”)? Does McDonald’s have any legal defenses?
3. In terms of litigating product liability cases can you draw any distinctions between the
Vioxx (“Vioxx ‘Trial in a Box’ Cuts Cost of Filing Suit”), Norplant (“Will the Lawyers
Kill off Norplant?”) and breast implants (“In Breast Implants Scandal, Where Was Dow
Corning’s Concern for Women?”) cases? Are there moral hazards present in these cases
or in product liability cases in general?
4. Have any fiduciary duties been breached in the Guidant heart device case (“Repeated
Defect in Heart Devices Exposes a History of Problems”) and the Vioxx situation (“Good
Pill, Bad Pill: Science Makes it hard to Decipher”). And can you identify any market
failures?
DISCRIMINATION
READINGS
Equal Employment
Opportunity Commission
Sexual-Orientation
Protection Added to New
York Law
Foreign Assignment
Now Look Who’s
Taunting. Now Look
Who’s Suing
Fear of Firing
Too Old to Work
Can Employers Alter
Hiring Practices to Cut
http://www.eeoc.gov
Course Pack
Discrimination
Casey J. Dickinson
Discrimination
Thomas Dunfee and Diana
Robertson
Jane Gross
Discrimination
Michael Orey
Adam Cohen
Ann Zimmerman
Discrimination
Discrimination
Discrimination
Discrimination
15
Health Costs?
Mind If I Peek At Your
Paycheck?
Brian Hindo
Discrimination
STUDY QUESTIONS
1. In the “Foreign Assignment” case, how would you judge the actions of Bill
Vitam? Use ethical concepts as well as the law, to justify your position. According to the
EEOC, can the bank (employer) be held liable for sexual harassment created by its
employees? Does the bank have any affirmative defenses according to the Equal
Employment Opportunity Commission (http://www.eeoc.gov)?
2. Is discrimination based on age (“Too Old to Work?”) different from discrimination
based on sex (“Now Look Who’s Taunting, Now Look Who’s Suing”)? Should similar
laws and regulations be applied to all of these classes? Should pay discrepancies be
treated differently than other forms of discrimination (“Mind If I Peek at Your
Paycheck?”)? Justify your position.
3. Is discouraging unhealthy job applicants a form of discrimination (“Can Employers
Alter Hiring Policies to Cut Health Costs?”)? What about avoiding hiring capable
applicants who fall within a “protected class” due to potential litigation costs (“Fear of
Firing”)?
SOCIAL RESPONSIBILITY TO STAKEHOLDERS
READINGS
The Social Responsibility
Milton Friedman
of Business is to Increase
Its Profits
Our Schizophrenic
William T. Allen
Conception of the Business
Corporation
Restricted Reasons and
Arthur Isak Applbaum
Permissible Violation
Toy Maker Faces Dilemma Joseph Pereira
as Water Gun Spurs
Violence
Bally’s Grand Casino, For Heidi Evans
Elaine Cohen, Is Her One
True Home
Cut Loose
Anne-Marie Cusac
Down and Out in White
Nelson D. Schwartz
Collar America
Credit Card Companies
Joseph Cahill
Target New Niche: the
Mentally Disabled
Course Pack
Social Responsibility
Ethical Theories
Ethical Theories
Social Responsibility
Social Responsibility
Social Responsibility
Globalization & Domestic
Markets
Social Responsibility
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The Right Thing: When
Good Ethics Aren’t Good
Business
Jeffrey Seglin
Social Responsibility
STUDY QUESTIONS
1. What advice would Friedman (“The Social Responsibility of Business is to Increase
Profits”) and Allen (“Our Schizophrenic Conception of the Business Corporation”) give
to the CEO of Larami Corp., manufacturer of the Super Soaker (“Toymaker Faces
Dilemma”)? Would you agree with Friedman and/or Allen? Use ethical methods and
concepts of fiduciary duty to support your position.
2. If you were the manager of “Bally’s Grand Casino”, would you do anything differently
with respect to Elaine Cohen? What would Friedman (“Increase Profits”) and Allen
(“Schizophrenic Conception”) advise the manager to do? Use ethical methods and legal
concepts to support your position.
3. Did the CEO of Smith & Wesson fulfill his fiduciary duties (“The Right Thing”)?
Justify your position. How would Applbaum (“Restricted Reasons & Permissible
Violation”) judge his behavior?
4. Does IBM owe any duty to Asbeck (“Cut Loose”) regarding his health care benefits
upon retirement? How would Allen (Schizophrenic Conception”) and Friedman
(“Increase Profits”) respond to IBM’s behavior?
5. Do companies violate any fiduciary duties when they outsource American white-collar
jobs to cheaper labor markets in third world countries (“Down & Out in White Collar
America”)? Apply ethical concepts and market failures to this dilemma.
MORAL STANDARDS ACROSS BORDERS
READINGS
United States Bill of
Rights
In Praise of Cheap Labor:
Bad Jobs at Bad Wages…
Human Rights on the Eve
of the 21st Century
Universal Declaration of
Human Rights
The Oil Rig
For Cruise Workers, Life
is No “Love Boat”
Stretching Federal Labor
Law into the South Pacific
http://www.usinfo.state.gov
Course Pack
Moral Standards
Paul Krugman
Moral Standards
His Holiness the Dalai Lama
Moral Standards
http://www.un.org
Moral Standards
Joanne B. Ciulla
Joshua Harris Prager
Moral Standards
Moral Standards
Seth Faison
Moral Standards
17
Lives Held Cheap in
Bangladesh Sweatshops
Low-Wage Costa Ricans
Make Baseballs for
Millionaires
Nobodies: Does Slavery
Exist in America?
Up Against Wal-Mart
Barry Bearak
Moral Standards
Tim Weiner
Moral Standards
John Bowe
An Ugly Side of Free
Trade: Sweatshops in
Jordan
Evildoers? How the West’s
Net Vanguard Toils
Behind the Great Firewall
of China
Steven Green house &
Michael Barbaro
Globalization & Domestic
Markets
Globalization & Domestic
Markets
Moral Standards
Karen Olsson
Mure Dickie & Stephanie
Kirchgaessner
Moral Standards
STUDY QUESTIONS
1. According to the “United States Bill of Rights” and the “Universal Declaration of
Human Rights” have any basic human rights been violated in the “Oil Rig” case? Are the
ex-pats justified in getting better treatment than the Angolans?
2. Should cruise workers that service US ports enjoy the rights of other US workers (“Life
Is No Love Boat”)? Are sweatshops unethical according to Krugman (“In Praise of
Cheap Labor”) or the Dalai Lama?
3. Should US labor and safety laws apply to the Northern Mariana Islands (“Stretching
Federal Labor”)? What about sweatshops or working conditions in America (“Nobodies”
& “Up Against Walmart”)?
4. Do human rights exist? If so, as a corporation how would you apply these ideas to
workers in Bangladesh (“Lives Held Cheap in Bangladesh Sweatshops”), Costa Rica
sweatshops (“Low-Wage Costa Ricans Make Baseballs for Millionaires”) and Jordan
(“An Ugly Side of Free Trade: Sweatshops in Jordan”)?
5. Is Google ethically justified in restricting internet access in China (“Evildoers? How
the West’s Net Vanguard Toils”)? Apply ethical concepts in support of your position.
What about from the human rights perspective (Universal Declaration of Human Rights
& Dalai Lama)?
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