Legal Environment and Business Law FINAL EXAM


BUS – 13 Legal Environment and Business Law FINAL EXAM

Take Home Exam – Answer Sheet Due: Thursday, December 14 during regularly scheduled final exam.

PLEASE: Put your NAME, BUS 13 TICKET # 20380 – FINAL EXAM on your answer sheet right now, your test will not be graded or recorded without this information. Return your answer sheet to me, IN PERSON ONLY, not your friend or study buddy or other helper. You will do this on Thursday, December 14 @ 12:45 – 2:45 p.m. in our regular meeting room, BGS 232. No make- ups, no exceptions, no friend or study buddy drop offs, no kidding! Important Test Taking Advice: Use the process of elimination when answering the multi-choice questions. After carefully reviewing the question and all responses, choose the BEST answer. Meaning the one that is MOST CORRECT out of all of the options presented. Please clearly and neatly mark your answer using a #2 pencil on the AccuScan answer sheet provided. Unless you are “99.99%”certain, beyond a reasonable doubt, that you need to change your answer from the “incorrect” choice to the “correct” choice, statistics show that you should not change your answer. More often than not, you will be making the wrong “guess” the second time around. Only change your answer when you are sure. If you notice that there are many answers which seem to all be “d” or “a” for example, do NOT let that influence your choice. Just choose the best response, whichever one it happens to be! I sometimes cannot control the order of the answers and or how they line up. For my “overthinkering” students, go with your gut – hopefully, we are on the same page. Don’t get tormented with guessing; you can always email me or confer with me at the time that the exam is due. I will be there for the full two hours to answer your questions before you turn in your answer sheet.

READ ALL OF THE INSTRUCTIONS TWICE BEFORE YOU BEGIN. READ ALL OF THE INSTRUCTIONS TWICE BEFORE YOU BEGIN. You may use: 1. Your class notes 2. Your textbook 3. All handouts and Note Sheets given in class 4. The internet and Bb You may not rely upon any other person’s help or input. YOYO = you’re on your own. Do not violate your position of trust with this take-home exam. If I suspect you have colluded with another student, you will both be awarded a ZERO for the exam and referred to college administrators for appropriate disciplinary action, including expulsion. I have spies. This final exam has 50 questions each question is worth 4 points each for a total of 200 points. 1. In determining a worker’s independent contractor status, the need for training a worker will be an

indication that that they are:


a. An independent contractor b. An employee c. An employer d. All of the above. 2. General Partnership interests are not commonly transferable without the permission of the other

partner(s). a. True b. False 3. Corporations must not file tax returns. a. True b. False 4. The ________________ is an important guideline for officers and directors in the routine management of corporate business. It is also important factor in determining the liability of the principals to the shareholders of a corporation for the decisions that are made in the operation of the business. a. fiduciary rule b. business judgment rule c. duty of loyalty d. corporate code of honor 5. Shareholders have neither the right nor obligation to manage the day-to-day business of the corporate enterprise. a. True b. False Click on the links below to read the news story about a lawsuit involving the copyright on the Happy Birthday song: Happy Birthday Lawsuit LA Times.pdf How the evidence in the case was found: answer/stories/201507310146 Answer the following questions about copyrights and public domain: 6. Facts which are helpful the Plaintiff’s claim that the Happy Birthday to You song is not protected by

Warner Music’s claimed copyright ownership include:

a. Music that was published before 1923 is generally considered to be in the public domain.


b. The author of the work acknowledged in a Time magazine interview that she had “long ago resigned herself to the fact that the ditty had become the common property of the nation.”

c. The discovery of a 1922 songbook that publishes the tune and its lyrics without any copyright notice. d. All of the above.

7. In the case of Golan v. Holder, the U.S. Supreme Court held that Congress can remove works from the

public domain without violating the Constitution.

a. True b. False

8. The civil lawsuit over the rights to use the Happy Birthday song that is the subject of the story was

originally filed in _________________ court because________________:

a. State court in Los Angeles because there is diversity jurisdiction. b. State court in Los Angeles because only California law applies. c. Federal court in New York because that is where the crime occurred. d. Federal court because copyright law is based upon federal statutes.

9. In order for Warner to charge user royalties for use of the Happy Birthday song, the song must be

used as part of a “profit making enterprise.”

a. True b. False

End of Happy Birthday copyright lawsuit questions. 10. In order to qualify for a patent, the submitted idea must be__________. a. Obvious b. Unused c. Novel d. None of the above 11. A ___________________ is a combination of words and symbols that a business uses to identify its

products and distinguish them from others. a. service mark b. copyright c. utility patent d. trademark 12. Parody is: a. Not protected by copyright law b. A fair use of copyrighted material c. Protected under the DMCA d. None of the above


13. A prospectus: a. Must be made available to all investors before purchasing stock b. Includes important disclosures about a company c. Is included in a company’s SEC registration statement d. All of the above 14. According to the California Court of Appeal’s holding in Chopra vs. Helio Solutions, Inc., as discussed in your textbook and elsewhere, shareholders have some rights to corporate information, but they are not entitled to access corporate confidences and secrets. a. True b. False

15. Refusal to submit to a polygraph test is a valid reason to fire a worker. a. True b. False 16. Failure to disclose the fact that you are pregnant to your potential employer during the hiring

process constitutes fraud and is legal grounds for termination. a. True b. False 17. An employer can face serious fines and penalties for misclassification of a worker as an Independent

Contractor instead of an employee. a. True b. False Please read the newspaper articles by clicking on the links below: Read the follow up story at: death-questions-raised-about-ties-to-driver/ And then answer the following questions: 18. Representative Lois Capps (D- Santa Barbara) of the U.S. Congress should be held liable for the death

of Mallory Dies. a. True, but only if the doctrine of Respondeat Superior can be properly applied b. False, Morua was clearly not working for Capps at the time of the accident and therefore he is solely

responsible for his actions.


c. True, it is clear that Raymond Morua was acting Rep. Capps’ behalf at the time of the accident. d. None of the above. 19. The office of Lois Capps had a legal duty under federal law as an employer and a member of the U.S.

Congress to conduct a thorough criminal background check prior to hiring her staff members. a. True b. False 20. Generally, the tortious conduct of an employee will be imputed to his or her employer as long as the

wrongful actions of the employee occurred within the course and scope of the employment relationship.

a. True b. False 21. The family of Ms. Dies, the decedent in the story, filed the lawsuit in federal court because:

a. There is diversity jurisdiction. b. The Defendant was employed by the federal government and was allegedly acting within the course

and scope of his employment when the incident occurred, therefore federal law will apply. c. All wrongful death cases must be brought in federal court d. All of the above.

22. The Uniform Trade Secrets Act (UTSA) covers: a. Stock trades b. Unlawful disclosure of protected information c. The American Law Institute d. None of the above 23. Allen calls PepsiCo, the makers of Pepsi Cola saying that he’s an employee of Coca-Cola and he has

the Coca-Cola secret recipe. The recipe is legendary as a closely guarded secret supposedly known to only a handful of people in the world. They arrange a meeting. Allen begins the meeting by stating that he acquired the recipe legally and the PepsiCo representative says that they believe him and they will buy it. Allen in fact stole the recipe. Since PepsiCo does not know specifically that the recipe was acquired improperly by Allen, they cannot be guilty of misappropriation.

a) True b) False

24. A ___________________ is a combination of words and symbols that a business uses to identify its products and distinguish them from others.

a. service mark


b. copyright c. utility patent d. trademark 25. The Digital Millennium Copyright Act (DMCA) provides: a. That it is illegal delete copyright information from an author’s work b. That copyrights are inherently difficult to enforce and therefore not allowable c. That scrambling devices may circumvent encryption d. All of the above 26. “A __________________is set up to allow an individual to own and operate a business. A _____________has total control, receives all profits from and is responsible for taxes and liabilities of the business. If a ______________ is formed with a name other than the individual’s name (example: John Smiths Fishing Shop), a Fictitious Business Name Statement must be filed with the county where the principal place of business is located. No formation documents are required to be filed with the California Secretary of State. Other state filings may be required depending on the type of business.” a. sole proprietorship b. general partnership c. limited liability partnership d. none of the above 27. Trademarks and service marks with secondary meaning cannot, by themselves, be trademarked. a. True b. False c. Unless they have been used for a long time and are associated with a product in the public’s mind. d. Unless the new user pays the original user a statutory fee 28. Size shape color and texture can be trademarked as “trade dress.” a. True b. False Read this story about Wells Fargo Bank and the pending employee and shareholder lawsuits against it: Wells Fargo Targeting Native Americans Lawsuit LA Times.pdf Answer these questions based on the news story: 29. Wells Fargo employees have sued the bank for unlawful employment practices which include: a. Retaliating against them for refusing to engage in unethical acts b. Being fired, demoted, denied promotions and forced to work without pay c. Being punished for not following orders to engage in wrongdoing d. All of the above


30. According to the story, the lawsuits against Wells Fargo may proceed to the point where the bank

will be required to: a. Change its name to protect the innocent b. Turn over documents and evidence c. Fire and jail the entire board of directors d. All of the above Read this news story about Wells Fargo arbitration clauses: Wells Fargo Lawsuit Arbitration Clauses LA Times.pdf 31. According to the story, the new state law that is proposed by California state lawmaker, Dodd, may

be invalidated by: a. Preemption under the supremacy clause of the U.S. Constitution b. A challenge before the U.S. Supreme Court c. Both a & b d. None of the above 32. The Wells Fargo customers who have sued the bank for the unlawful account openings and other

illegal actions have, thus far, had their lawsuits dismissed because: a. They did not have a legitimate legal claim b. They filed in federal court instead of state court c. They signed a contract that prevented them from suing in the courts d. Their agreement contained an arbitration clause e. Both c & d 33. According to the article, a federal law is not likely to be passed because:

a. Republican lawmakers do not support the passage of a federal law that would protect consumers from banks that open fraudulent accounts and therefore, it will not move forward

b. The supreme court will not pass such a statute c. Senator Brown and Representative Sherman do not the necessary support to have a house and/or

senate bill go to a vote.

d. Both a & c Read this story about Wells Fargo shareholder suits. 34. According to the article, shareholder lawsuits are one way that investors can hold corporate

executives accountable, other ways to hold executives accountable are: a. Vote directors out of their positions on the board b. Withhold support for executive compensation


c. Cause companies to make a change in executive pay with a “say on pay” vote d. All of the above 35. According to Professor Hanley of Lehigh University, shareholder lawsuits such as the one against

Wells Fargo described in the story, serve more than just a means to recover money, the lawsuits can also:

a. Uncover the truth b. Hold the right people accountable c. Send the wrongdoers to jail d. Both a & b

Read the news story and answer the questions that follow: “Who can sue over bad data?” By: David G. Savage, November 1, 2015 – Los Angeles Times

The Supreme Court is set to hear a clash between privacy laws that protect American consumers and the desire of online data providers to avoid potentially crippling lawsuits if they post inaccurate information on the Web.

On Monday the justices will take up the case of Thomas Robins, a Virginia man who sued Spokeo, a Pasadena-based tech company that calls itself a “people search engine.”

Spokeo sells profiles of people drawn from data available online. When the company produced a profile of Robins, he was surprised to see himself described as married with children, in his 50s, with a graduate degree and a professional job.

None of that was true. He was 29, unmarried and unemployed.

Robins sued. He did so with the help of Jay Edelson, a Chicago-based class-action attorney who proudly cites a newspaper article that says he may be the “most hated person” in Silicon Valley. Edelson brought the case as a class action on behalf of “millions of individuals” like Robins whose profiles appear on Spokeo.

The suit is based on the federal Fair Credit Reporting Act of 1970. Congress passed that law after hearing tales of people who had been denied mortgages or insurance because of false information in their credit files. It said victims of false reports could claim damages of $100 to $1,000.

Fast-forward to today, and multiply that amount by a class of a million or more. It sends a shudder through corporate America.

“If you have automatic damages for statutory violations, it is a ticket for class actions to sue for millions and even billions on behalf of people who didn’t suffer any harm,” said Washington lawyer Roy T. Englert, who represents the U.S. Chamber of Commerce.


Robins lost the first round, before a federal district judge in Los Angeles, who tossed out his case in 2011 saying he could not sue because he had not shown he had actually been hurt by a profile that made him appear better-educated and more successful.

He had claimed his job prospects were hurt by Spokeo’s inaccurate profile, but U.S. District Judge Otis Wright called that “speculative” and “implausible.”

Robins did better at the 9th Circuit Court of Appeals, which revived his case. Congress gave Americans protection against inaccurate credit reports, Judge Diarmuid O’Scannlain wrote, ruling that the “alleged violations of Robins’s statutory rights are sufficient” to give him his day in court.

Spokeo’s attorneys appealed to the Supreme Court. They cited 29 similar class-action claims that had been filed in just four previous months. They also pointed to a dozen other laws that call for small-damage claims.

Plaintiffs can seek damages for unwanted phone calls or text messages, they noted, as well as improper disclosure of videos, mislabeled food, a failure to provide full notices involving loans or debts and retaining or disclosing personal information from credit cards and other electronic transactions.

Lawyers for Google, Facebook, Netflix, Twitter and Ebay told the court they too now faced or were threatened by huge class claims for alleged technical violations in which no one had proven they suffered actual harm. Over objections of the Obama administration, the justices agreed to consider the case.

Joining the case on Spokeo’s side, corporate and tech lawyers have urged the high court to close the courthouse door to such massive claims. They argue that although Congress authorized damages for individuals, the Constitution bars lawsuits from people who cannot show they suffered real harm, or a true “injury in fact.”

“Mr. Robins has conceded that nothing happened to him because of the allegedly inaccurate information,” said Jason Matthes, general counsel for Spokeo. “We rely on the public data we collect, and we make it as accurate as possible.”

Consumer and privacy advocates have rallied behind Robins and his class-action claim. They point to the growth of data banks that compile thousands of bits of information on every person, some of which is accurate and some not. And they cite the well-publicized security breaches that may expose the personal information of millions to hackers and thieves.

If the court makes class-action cases harder to bring, few individuals will take the trouble to challenge companies for violating their privacy if all they can recover is a small sum, they say.

“We think the loss of privacy is very serious. This is no time for the court to make it harder to bring lawsuits against companies that are making money for the data of individuals,” said Marc Rotenberg, president of the Electronic Privacy Information Center.


Last year, the Federal Trade Commission reported on nine data brokers (not including Spokeo) that collect, compile and sell vast amounts of personal information.

One broker claimed to have 3,000 data points on nearly every U.S. consumer, describing everything from shopping and personal habits to medical troubles and political leanings. Another claimed to have a billion profiles of people around the world. At the same time, the FTC said, most consumers have no way to check or confirm the information.

Consumer-rights advocates say class-action suits can enforce federal privacy protections and force data brokers to do more to ensure their profiles of people are accurate.

“The business community is urging the court to make a sweeping and pretty radical change in the law,” said Paul Bland, executive director of Public Justice.

The legal question involved is who has standing to sue. The Constitution says that federal courts have authority over “all cases, in law and equity, arising under this Constitution [and] the law of the United States.”

Since Robins sued Spokeo for violating the federal law on credit reports, he would appear to have standing as a plaintiff.

But the Supreme Court has said that “cases” refers to actual disputes in which a person or group can show a specific injury. In 1992, for example, the court tossed out a suit by environmentalists who had accused the Bush administration of failing to enforce protections for endangered species. Justice Antonin Scalia said the members of Defenders of Wildlife who sued could point to no personal harm they had suffered.

The case of Spokeo vs. Robins poses a major question of whether Congress can create legal rights for Americans — such as a protection against inaccurate credit reports — that would then give people a right to sue in federal court.

Judge Wright, when he dismissed the case, said that a simple violation of the Federal Credit Reporting Act does not by itself confer standing because if it did, “the federal courts [would] be inundated by Web surfers’ endless complaints.”

But the 9th Circuit, in its ruling, said that all a plaintiff would need to show to get into court was that a statutory right had been violated.

The justices will hear arguments from both sides Monday and will probably issue a ruling in the spring.

End of news story.

Questions about news story: 36. Mr. Robins, the plaintiff in the original lawsuit against Spokeo claims that he has been

damaged in what way?


a. That Spokeo published incorrect information about him in its online data base b. That his job prospects were hurt by Spokeo’s inaccurate profile c. Both a & b d. None of the above

37. One of the most important and main issues in the case Spokeo, Inc. v. Robins case is:

a. Whether one man can represent an entire class of injured claimants or must they each bring his or her own claim against the party who allegedly violated the federal Fair Credit Reporting Act.

b. Whether Mr. Robins has standing to sue, or if he needs to show, a specific injury from the Defendant’s actions, beyond a mere violation of the law.

c. Whether the case is “ripe” for consideration by the Supreme Court based upon the earlier and binding ruling of the 9th Circuit Court of Appeal

d. None of the above BIG HINT: Click on the link below to listen to the audio of the first several minutes of oral argument before the U.S. Supreme Court in the case of Spokeo, Inc. v. Robins. 38. The federal district court judge in Los Angeles tossed out Mr. Robins’ case because:

a. His claims were speculative and implausible b. He could not show that he had been actually hurt by Spokeo c. Spokeo made him appear better educated and more successful than he actually was d. All of the above

39. The commentators in the Spokeo, Inc. v. Robins newspaper story represent the same conflicting

lobbing and advocacy organizations that were profiled in the Hot Coffee movie, to wit:

a. The U.S. Supreme Court b. The Federal District Court c. Public Justice and the U.S. Chamber of Commerce d. None of the above

40. Marc Rotenberg of the Electronic Privacy Information Center says that a ruling by the

Supreme Court, in favor of Spokeo, Inc. will make it harder for consumers to bring lawsuits.

a. True b. False

End of questions re: Spokeo, Inc. v. Robins Visit this website of the “Electronic Frontier Foundation” @


Then read this news story about the Section 230 of the Communications Decency Act “Case Could Stifle Online Speech” Yelp Review Lawsuit Story LA Times.pdf And answer the following questions which are based upon the news article – not the website: 41. Section 230 of Communications Decency Act protects _____________.

a. Law firm clients b. Lawyers c. Internet publishers that host user comments d. None of the above

42. The case of Hassle v. Bird was appealed to the California Supreme Court because:

a. Yelp was ordered to remove content from its site and, it’s not a party to the underlying lawsuit and was not given notice and an opportunity to be heard (aka due process).

b. Section 230 of the CDA provides protection to those who repeat or publish information, not the original author of defamatory comments.

c. If the case is not challenged, there will be a legal basis for anyone to remove one side of a debate. d. All of the above

43. For purposes of establishing and comparing due process rights for Yelp! UCLA Law Professor, Eugene

Volokh, compares the internet to:

a. A bookstore possessing obscene materials b. An art gallery containing allegedly obscene artworks c. Both a & b d. None of the above

44. Hassell got into a hassle with Bird over her flying away (withdrawing) from representation of Bird in

a personal injury case.

a. True b. False

45. Hassell prevailed on her underlying case for libel due to ______________.

a. The merits of her case after a 3 week jury trial b. A default judgment, similar to that of the neighbors of Copper the barking dog c. A ruling of an arbitrator in a binding arbitration according to the newly imposed “Wells Fargo

Rule” d. All of the above.

46. Legal experts say that allowing a publisher to be blindsided this way simply provides enemies of free

speech with a “roadmap” for circumventing 1st Amendment safeguards of all kinds.

a. True b. False


(Not mandatory – for more detail and perspective on the above questions see Washington Post story at: will-decide-can-court-order-yelp-to-take-down-defendants-post-though-yelp-wasnt-even-a-party-to-the- lawsuit/?utm_term=.3da271bb4feb ) Read the following story and answer the questions:

Former USC linebacker Lamar Dawson sues NCAA and Pac-12

By: Nathan Fenno – L.A. Times – September 16, 2016

Former USC linebacker Lamar Dawson sued the NCAA and Pac-12 on Monday, alleging the organizations violated state and federal laws governing wages and hours as “joint employers” of Division I football players.

Filed in U.S. District Court in San Francisco, the class-action lawsuit accused the NCAA and Pac-12 of breaching the Fair Labor Standards Act and California law by not paying football players minimum wage or overtime. “Plaintiff was repeatedly paid a substandard wage insofar as he was denied full pay for all hours worked, including overtime pay, and was frequently permitted to work without receiving required minimum wage payments,” the 45-page complaint said.

Dawson, a prize recruit out of high school in Kentucky, played for USC from 2011 through 2015. He started during three seasons but was a backup last year until a shoulder injury prematurely ended his season.

“The NCAA and the leagues are big business that derive enormous financial benefits from the labor of the athletes,” Dawson’s New York-based attorney, Mark Rifkin, said in an email. “The undeniable economic reality of that relationship requires the athletes to be recognized as employees. Therefore, the athletes must be paid mandatory minimum wages and overtime for their labor.”

A Pac-12 spokesman said the conference has reviewed the lawsuit and will “vigorously” defend itself. “As has been made clear throughout the legal process, student-athletes are not employees,” the spokesman said. The NCAA disputed the complaint’s premise.

“(We) strongly disagree with the notion that college students participating in athletics are employees,” Donald Remy, the organization’s chief legal officer, said in a statement. “Our experience is that these college students, like their non-athlete colleagues, are very focused on their academic endeavors. Moreover, they have a passion for their sport and a commitment to their teammates that can’t be equated to punching a time clock.”

The lawsuit, which also accused the NCAA and Pac-12 of unfair business practices, seeks unpaid wages and overtime, plus interest, in addition to a variety of unspecified damages.

47. Lamar Dawson contends that he was entitled to ____________ as a(n) ______________ while playing for USC.

a. Minimum wage/employee


b. Full benefits/player c. Overtime pay/worker d. Both a & c

48. The NCAA and Pac -12 are jointly accused of:

a. Violating state and federal laws b. Failing to pay minimum wage c. Unfair business practices d. All of the above.

End of NCAA lawsuit story questions. 49. Whether or not a worker can be fired at any time is one factor to consider when determining

their “employee” vs. “independent contractor” status. a. True b. False 50. Two U.S. Supreme Court cases: Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (SWANCC) (2001) and Rapanos v. United States (2006) both focused on interpretation of which federal environmental law? a. Marine Mammal Protection Act b. The Clean Air Act c. The Paris Climate Change Accord d. The Clean Water Act

FIVE POINTS EXTRA CREDIT OPPORTUNITY: In a short paragraph on the back of your Accuscan answer sheet – please state the one significant legal fact or rule of law that you have learned in BUS 13 that you found most interesting, useful, surprising, inspiring, ridiculous, or otherwise memorable. Neat, legible, succinct, well written and substantive responses will be considered for the extra credit. I will subjectively consider your work and award 0-5 points accordingly! PLEASE: Put your NAME, DATE, BUS 13 TICKET # 20380 – Fall 17 – FINAL EXAM on your answer sheet right now!


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