Solution Manual for
The Legal Environment of Business, 14th Edition by Roger E. Meiners
Chapter 1-22
Chapter 1
Table of Contents
Answer to Discussion Question .................................................................................................. 1
Answers to Case Questions ....................................................................................................... 1
Answers to Ethics and Social Questions .................................................................................... 3
Answer to Discussion Question
Should the common law maxim “Ignorance of the law is no excuse” apply to an immigrant who speaks
little English and was not educated in the United States? How about for a tourist who does not speak
English? Everyone knows criminal acts are prohibited, but what about subtler rules that differ across
countries and so may be misunderstood by foreigners?
Answer: It is generally true that ignorance of the law is no excuse. Citizens are deemed to have
constructive knowledge of the law. Yet, as well known as this rule is, it is surprising how often it is
proffered as an excuse. (A Westlaw search cases finds hundreds of examples). Examples include:
Deluco v. Dezi (Conn. Super) (lack of knowledge regarding the state‘s usury laws is no excuse for
the inclusion of an illegal interest rate in a sales contract); and Plumlee v. Paddock (ignorance of the
fact that the subject matter of the contract was illegal was not excuse). The courts have provided a
small exception to the rule when it comes to people in lack of English language skills. Consider
Flanery v. Kuska, (defendant did not speak English was advised by a friend that an answer to a
complaint was not required); Ramon v. Dept. of Transportation, (no English and an inability to
understand the law required for an excuse); Yurechko v. County of Allegheny, (Ignorance and with
the fact that the municipality suffered no hardship in late lawsuit filing was an excuse).
Answers to Case Questions
1. Facts from an English judge’s decision in 1884: “The crew of an English yacht . . . were cast away in
a storm on the high seas . . . and were compelled to put into an open boat. . . . They had no supply
of water and no supply of food. . . . That on the eighteenth day . . . they . . . suggested that one
should be sacrificed to save the rest. . . . That next day . . . they . . . went to the boy . . . put a knife
into his throat and killed him . . . the three men fed upon the body . . . of the boy for four days; [then]
the boat was picked up by a passing vessel, and [they] were rescued. . . . and committed for trial. . . .
if the men had not fed upon the body of the boy they would probably not have survived to be so
picked up and rescued, but would . . . have died of famine. The boy, being in a much weaker
condition, was likely to have died before them. . . . The real question in this case [is] whether killing
under the conditions set forth . . . be or be not murder.” Do you consider the acts to be immoral?
[Regina v. Dudley and Stephens, 14 Queens Bench Division 273 (1884)]
Answer: This points out that the legal system has limits. Its acceptability is dictated by legal culture--which
determines whether law will be enforced, obeyed, avoided, or abused. It is limited by the informal
rules of the society--its customs and values. One limit is the extent to which society will allow the
formal rules to be imposed when a crime is committed in odd circumstances. Here there was an
intentional murder. Does the motive for the murder, the effort to save several lives by sacrificing one
, life, make it a crime that should be punished? Not all crimes are treated the same. It also raises
questions about the desirability of not giving judges flexibility in sentencing.
There was a precedent for a light sentence in this case in U.S. law: U.S. v. Holmes, 20 F. Cas. 360
(No. 15383) (C.C.E.D. Pa. 1842). The case involved a sinking ocean liner. Several passengers made
it to the only lifeboat, which was far too overcrowded. The captain decided to save the women and
children and threw several men overboard. The lifeboat was rescued. The grand jury refused to
indict the captain from murder, only for manslaughter. He got a six month sentence.
The British judge in the case here imposed the death penalty upon the person who survived. The
judge found it difficult to rule that every man on board had the right to make law by his own hand.
The Crown reduced the sentence to six months.
2. Smoking is a serious health hazard. Cigarettes are legal. Should cigarette manufacturers be liable
for the serious illnesses and untimely deaths caused by their unavoidably dangerous products, even
though they post a warning on the package and consumers voluntarily assume the health risks by
smoking? [Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)]
Answer: The general rule that exists now is that since the government has ordered the posting of warning
labels on cigarettes, and since the dangers of smoking are well known, consumers have been
warned and are not due compensation if they kill themselves by smoking. The Cippoline case, since
reviewed by the Supreme Court, appears to be of limited impact since the victim was adjudged to
have become addicted to cigarettes before the warning label was ordered in 1964. If cigarette
makers were held responsible for all health problems associated with cigarettes, then, like alcohol
and other dangerous products, the damages would likely be so high it would effectively ban the
products. Presumably, in a free society if adults are clearly informed of the risks of products that
cannot be made safe, they accept the risk. Tobacco and alcohol producers cannot take the dangers
out of the products except at the margin by encouraging responsible drinking and the like. Are drugs
like cocaine different?
3. Two eight-year-old boys were seriously injured when riding Honda mini-trail bikes. The boys were
riding on public streets, ran a stop sign, and were hit by a truck. The bikes had clear warning labels
on the front stating they were only for off-road use. The manual stated the bikes were not to be used
on public streets. The parents sued Honda. The supreme court of Washington said one basic issue
existed: “Is a manufacturer liable when children are injured while riding one of its mini-trail bikes on a
public road in violation of manufacturer and parental warnings?” Is it unethical to make products like
mini-trail bikes children will use when we know accidents like this will happen? [Baughn v. Honda
Motor Co., 727 P.2d 655 Sup. Ct, Wash., (1986)]
Answer: The court found no liability for the manufacturers. There was no defect; the product was safe for
intended use. Safety instructions were clear; the parents let the boys ride the bikes. Anything can be
dangerous--baseballs are dangerous when they hit the head, swings are dangerous when kids jump
out of them; there is only so much that can be done to make the government the ―national nanny‖ as
the Washington Post once said about excessive consumer protection. Parents must accept a high
degree of responsible for their own children.
4. Johnson Controls adopted a “fetal protection policy” that women of childbearing age could not work
in the battery-making division of the company. Exposure to lead in the battery operation could cause
harm to unborn babies. The company was concerned about possible legal liability for injury suffered
by babies of mothers who had worked in the battery division. The Supreme Court held the company
policy was illegal. It was an “excuse for denying women equal employment opportunities.” Is the
Court forcing the company to be unethical by allowing pregnant women who ignore the warnings to
expose their babies to the lead? [United Auto Workers v. Johnson Controls, 499 U.S. 187 (1991)]
Answer: The Court held it a form of sex discrimination to prevent women of child-bearing age from
holding the more dangerous jobs. The company argued that it did this to protect itself from possible
liability in case of damage to babies and that the decision was ethical. The replacements for these
workers were often men or more senior women, who tended to be higher income workers, so this
, was not a current cost-saving move. Note that a 2002 ruling related to the ADA significantly
restricted this earlier case.
5. McGrory worked for Applied Signal Technology in a supervisory position. He was accused of
violating the company’s policies on sexual harassment. An internal investigation determined he did
not violate the policy but that he was evasive and violated the company’s personal ethics code. He
was fired and sued for wrongful termination, contending that if he did not violate sexual harassment
rules he should not have been subject to termination. Do standards of law and ethics need to be the
same for an employer? [McGrory v. Applied Signal Technology, 152 Cal.Rptr.3d 154 (2013)]
Answer: The appeals court affirmed that the employer had the right to terminate the employee for failure
to be fully cooperative in the investigation of the complaint of sexual harassment that had been filed
against him. While he was not found to have violated the harassment policy, he was evasive and
uncooperative, which violated the company‘s code of ethics, which was a justification for termination.
6. Baker works as a document clerk for the Minnesota Supreme Court. After she had worked there for
13 years the Minnesota judicial branch adopted a policy concerning proper Internet use and stated
that employees must adhere to the highest ethical standards when using the Internet. Eleven years
later, she was fired for excessive surfing on the Internet during working hours. She contended she
did not know about the policy. Is that an adequate defense for her? [Baker v. Minnesota Supreme
Court, 2016 WL 102513 (2016)]
Answer: The Minnesota high court held that Baker‘s termination was proper. She violated standards
expected of employees. She had been warned about excessive personal Internet use during work
time, including buying and selling goods for a little business she ran. The claim that she did not know
about the ethics of Internet use was not credible as the policy was posted for all employees who
received e-mails about any changes to the policy. The fact that the term ―ethical‖ was used in the
policy does not likely impact this decision.
Answers to Ethics and Social Questions
1. The federal tax code is riddled with special-interest loopholes. Most of these exist because firms and
trade associations lobby Congress and provide campaign support to members of Congress to gain
special favors to individual firms or industries. Is it ethical for firms to seek special privilege?
Answer: The nature of our political system forces firms to participate in the political process. Those that
fail to do so, if they are of any size, are more likely to be subject to political attack. In a sense, firms
―buy‖ protection by keeping a flow of contributions going, especially to incumbent members of
Congress. Competition also means that if a firm does not lobby for special privilege, then it may
suffer if competitors achieve such status in the tax code or some area of regulation. Many business
leaders do not much care for the Washington, D.C. operations their firms support but know that it is a
part of the modern legal environment of business.
2. “Fair trade” goods have become popular, as some people are willing to pay more to know the goods
come from workers paid a decent price for their efforts. However, some retailers who sell fair trade
goods mark them up substantially more than nonfair trade goods. One study showed that coffee
growers got an average of 44 cents a pound more for fair trade coffee, but the coffee at retail was
marked up an additional $3.46 per pound. At one supermarket chain, fair trade bananas that cost an
extra 3.6 cents per pound were marked up four times the price of non-fair trade bananas. Fair trade
goods are claimed to be a form of social responsibility. Is that true if it just means higher profit
margins?
Answer: The high mark up suppresses the demand for fair trade goods, thereby reducing the market for
fair trade goods. If the retail prices reflected the actual additional cost, not the profit maximizing price
to the retailer that exploits the goodwill from ―fair trade,‖ then it is hard to argue that the company is
being particularly socially responsible.
, 3. A chemical company located a new plant in a depressed area with high unemployment in West
Virginia. It built a state-of-the-art plant that had the latest pollution control technology meeting all
EPA requirements. It created 2,500 jobs. The company was attacked for polluting a previously
pristine area. Had the plant been built in an industrial area, such as the coast near Houston, no one
would have been likely to complain. Was the company socially irresponsible for building the plant in
such an area?
Answer: The company was in a no-win situation. It was attacked by environmentalists and some locals for
―destroying‖ the environment, even though the pollution was acceptable. When the company later
stated it would close the plant, which as not profitable, it came under fire for destroying jobs. It
eventually upgraded the plant and kept it open, but it was never a profitable operation. The plant
should probably not have been built in such a remote location, as that made it a target. Built in a
higher-density area and there would have been fewer issues as the environmental impact on an
existing industrial area would have been small. Corporate social responsibility can involve difficult
tradeoffs that do not always allow a win-win result.
4. Discussion of ethics issues focuses on company examples. What personal ethics matter? Surveys
indicate that many students have cheated in classes one way or another, pad their resumes when
seeking jobs, and have improperly downloaded copyrighted music. Does ethics “begin at home”?
Answer: If ethics is to be theoretical or applied only in formal situations, then it means little in practice.
Solution and Answer Guide
Meiners, The Legal Environment of Business, 14e, 9780357451724; Chapter 2: The Court System
Table of Contents
Answer to Discussion Question .................................................................................................. 4
Answers to Case Questions ....................................................................................................... 5
Answer to Ethics and Social Question........................................................................................ 7
Answer to Discussion Question
Judges in many nations are trained for their offices in law school. They are hired into the judicial system
and work their way up through that system. In the United States, there is no special training to be a judge;
it is an honor bestowed, usually on senior attorneys, or it is an office one runs for in some states. What
advantages might the other system have over the U.S. method?
Answer: Judges in Europe and Japan play a quasi-prosecutor role, so they are quite different than U.S.
judges. The instruct attorneys on what evidence they want to see. So in that sense, their roles are
quite different. Further, judges in most countries do not have as much independence as do U.S.
judges. Not relying on the legislature or executive to retain a job, and having the power to strike
down statutes for violating constitutional rights, is important in the integrity of the U.S. system and its
structure. That does not address the issue of competence, but I have never seen a study that tries to
address that issue.
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