The Illinois Business Law Journal

The Sophisticated User Doctrine: Fair or Fowl

Introduction

Keith Wilson is a well trained ventilation and air conditioning (HVAC) technician. [1] Trained both on and off the job, Mr. Wilson had the highest certification available from the Environmental Protection Agency ("EPA"), a training that required passing a five-part examination. [2] His qualifications allowed him to purchase, braze, weld and replace parts on large commercial air conditioning systems. [3] These air conditioning systems use R-22, a hydrochloroflourocarbon refrigerant that can decompose into phosphane gas when exposed to heat, as is often the case when a technician brazes or welds an air conditioning system. [4] Exposure to phosphane gas and R-22 can cause numerous health problems which are detailed in Material Safety Data Sheets (MSDS's). [5] The California code requires employers to use the MSDS's to train their employees about the chemicals and dangers they can be exposed to on the job. [6] Mr. Wilson received a MSDS every time he purchased R-22 and he even read it on occasion. [7].

After years of being exposed to R-22, Mr. Wilson developed pulmonary fibrosis and sued the chemical manufacturers, suppliers and air conditioning unit manufacturers including the defendant, American Standard, Inc. [8] His contention was that the companies failed to adequately warn him of the dangers of being exposed to R-22. [9] The defendant moved for summary judgment claiming that it had no duty to warn to Mr. Wilson of the dangers of R-22 and as a professional HVAC technician, he should have known of the dangers of the chemical. [10] On appeal, the California Supreme Court agreed with the defendant reasoning that Mr. Wilson was a sophisticated user, one who knew or should have known of the dangers of being exposed to R-22, and as such, the manufacturer/distributor should and will be held blameless for exposing him to the chemical. [11]

Blockbuster's $1 Billion Bid on Circuit City

I. Introduction

     On April 14, 2008 Blockbuster Inc. announced publicly its offer to purchase electronic retailer Circuit City Inc. Blockbuster has been in talks with Circuit City for months regarding an acquisition. [1] On February 17, 2008 Blockbuster sent a letter to Circuit City Chairman Philip Schoonover offering over $1 billion for the transaction. [2] This is equivalent to $6 to $8 a share in cash for the company. [3]Blockbuster also stated that they were willing to pursue alternative deal structures to enable Circuit City shareholders to receive stock. [4] Circuit City is hesitant about the deal and has yet to reveal to Blockbuster its long-term corporate plans and performance data. [5] This paper will evaluate the benefits and negatives of the acquisition as well as discuss whether this merger should occur.

Home Is Where the Most Economically Beneficial Laws Are: Finding the Best Location to Incorporate Your Business

I.  Introduction

There are very few requirements for a business to be incorporated in a given state.  The business must usually have a registered agent in that state, but rarely are there requirements to construct an office or actually engage in commercial transactions. [1]  From the outset, it seems as though finding the best location to incorporate a business would be quite simple.  This prediction, however, could not be farther from the truth.  Finding the right place to "set up camp" is a long and crucial process; but if done properly, the initial research can lead to the creation of a business that uses state law to its advantage rather than demise.

Probing Spygate: Will the NFL Indemnify Key Witness?

I.    INTRODUCTION

    From the moment of its initial disclosure, the National Football League's (NFL's) so-called Spygate incident had the potential to be one of the more notorious sports scandals in recent memory.  During the first game of the 2007 season, a videographer on the New England Patriots sideline was caught taping the hand signals of New York Jets offensive coaches, a violation of Article 9 of the NFL Constitution and Bylaws.[1]  The intrigue was apparent: the league's modern-day dynasty had been caught red-handed, begging the question of whether the Patriots had broken league rules at any other times during its championship era.  The NFL's first-year commissioner, Roger Goodell, addressed the issue quickly, fining the team and head coach Bill Belichick a combined $750,000 and taking away a first-round draft pick.[2]  Despite its rapid action, the NFL's handling of the situation added to the mystery.  After announcing the penalty, the league destroyed the tapes it confiscated from the Patriots.[3]  Further fueling the controversy, U.S. Senator Arlen Specter publicly rebuked the Patriots, accusing the team of "stonewalling" his own investigation into the matter.[4]

    The questions followed the then-undefeated Patriots to Super Bowl XLII, when the Boston Herald reported that Matt Walsh, a former Patriots employee, allegedly taped the St. Louis Rams walk-through practice the day before New England's surprise upset of the Rams in Super Bowl XXXVI.[5]  Since that report, the NFL has expressed a desire to speak with Walsh regarding his knowledge of any potential wrongdoing by the team.[6]  Walsh, for his part, has suggested he has damaging information, but his legal representation is demanding full indemnity before revealing his knowledge or role in any malfeasance.[7]  The negotiations over the scope of an indemnity agreement have lasted for months, keeping the league in the dark as to what Walsh really knows.[8]

Cyberbullying: A Modern Problem

    A girl kills herself because she finds out the boy she liked on MySpace.com (“Myspace”) was actually a couple of girls, allegedly assisted by their parents, making fun of her. [1]  Another teenager is lured to a girl’s home and beaten repeatedly in retaliation for comments made on MySpace.com, while the beating is filmed for posting on MySpace. [2].  These events and others have highlighted the lack of adequate criminal laws about online harassment and online bullying – sometimes called cyberstalking or cyberbullying.
This article will examine the recent cases of cyberbullying, address examples of current laws that deal with cyberbullying and cyberstalking, and, finally, explain what needs to be changed about current laws to address the developing criminal area of cyberbullying.

Is Your Ad Deceptive?

I. Introduction   

Small business owners often take out an advertisement in a local paper or, more in line with the times, advertise on a website.  The advertisement, however, can sometimes create liability for the business owner if the ad is found to be deceptive. [1]  This article will discuss the different sources of the law regarding deceptive advertising and then generally describe what makes an advertisement deceptive.  It will then explore the trends and adaptation of the law regarding web logs and advertising.  In conclusion, this article will present considerations that a small business owner should take into account when deciding to post an advertisement.

BALCO’d: How Will the Tammy Thomas Conviction Affect Barry Bonds and Future Steroids Cases?

I. Introduction

Barry Bonds’ publicity may arise from his feats on the baseball diamond as Major League Baseball’s (“MLB”) all-time home run king, or it may arise from allegations that he took anabolic steroids to gain an edge on the playing field.[i] His negative publicity has recently subsided, primarily because he is not currently signed to a contract by an MLB franchise, and the steroids controversy lost momentum. However, Bonds’ name may re-enter the public consciousness with the recent conviction of Tammy Thomas for perjury and obstruction of justice.[ii] Thomas denied use of steroids, like many athletes before her, that have been in the position of being accused of the same.[iii] However, she was convicted under evidence that clearly indicated that she had used anabolic steroids.[iv] The result of this case may have a significant effect on any future litigation involving Bonds, and further-reaching implications on future steroids criminal cases.

---

Primary Dealers Credit Facility: Changes for Market Liquidity

I. Introduction

On March 17, 2008, Bear Stearns, one of the oldest and largest global investment firms on Wall Street unexpectedly collapsed and was sold to J.P. Morgan Chase & Co at a fire-sale price of $2 a share in stock, approximately $236 million.[1]  With the rumors about Bear Stearns' losses in the mortgage industry circulating in the market, investors pulled their money out, the firm was short on cash, and the deepening losses left Bear Stearns with no other choice but to sell to their white knight, J.P. Morgan Chase & Co.[2]  With the help of the Federal Reserve, the acquisition price was later revised to approximately $10 per share, totaling $1 billion; however, even the revised deal was still much lower than the company's value of $20 billion in January 2007.[3]

In response to the ongoing credit crisis and the sudden crash of Bear Stearns, the Federal Reserve ("Fed") took several measures to help ease the market.  Wanting to ensure that other investment banks can avoid a crash like Bear Stearns, on March 16, 2008, the Fed Board of Governors announced a new loan program and established the "Primary Dealer Credit Facility"  ("PDCF").[4] This new program is designed to help struggling investment banks avoid a liquidity crisis.[5] 

Seagate Files Patent Infringement Lawsuit Against Competitor

I.     Introduction
        In response to increasing market pressure on their core business, Seagate Technologies is asserting a handful of its patents against manufacturers of flash memory-based solid state drives (SSDs) products.  Seagate Technology is currently the world’s largest manufacturer of hard-disk drives (HDDs), but lags behind several competitors in the SSD market.  [1]  On Monday, April 14th, Seagate Technology filed a patent infringement lawsuit against STEC.  The lawsuit, filed in the US District Court for the Northern District of California, alleges infringement of four Seagate patents.   [2]  Industry commentators believe that Seagate’s lawsuit is a result of increasing market pressure on their core business, which competes directly with that of STEC.  By filing an infringement lawsuit now, Seagate opens several options for itself in the face of a potential collapse in sales for its major products.   

Enron and Citigroup Settle: MegaClaims Litigation Comes to an End

I. Introduction

In late March Enron Creditors Recovery Corp. ("Enron") settled its latest and final MegaClaim against Citigroup, the largest bank in the U.S. [1] Citigroup agreed to pay $1.66 billion to Enron over its alleged responsibility in Enron's downfall. [2] In addition, Citigroup is releasing $4.25 billion in claims against the Enron estate, including a $4 billion claim reserve established by the U.S. Bankruptcy Court for the Southern District of New York. [3] Citigroup denied any wrongdoing in its dealings with Enron, but stated that it settled solely to avoid the expense and uncertainty of litigation. [4] Trial was set to start in April. Initially, Enron had sought $3 billion from Citigroup, alleging that number represented the amount fraudulently transferred by Enron to Citigroup. [5] Enron contended that Citigroup, in particular, played a central role in its collapse. [6]

Ambiguity In Contemporary Money Laundering Statutes

I. Introduction

At the end of last year, the United States Supreme Court granted a petition for writ of certiorari for the appeal of convicted felon Humberto Fidel Regalado Cuellar. [1] The Court's ultimate decision in the case of United States v. Cuellar will be of immense importance, and can have far reaching effects. The Cuellar case will allow the United States Supreme Court to give lower courts guidance in the proper interpretation of current statutes criminalizing money laundering. Currently, a plethora of crimes are in the penumbra of money laundering charges. Such aggressive interpretation and application of money laundering charges is troubling in light of its original purpose. Clearly, much has changed since the passage of the 1970 Bank Secrecy Act "BSA". [2] Furthermore, the meaning of money laundering has expanded to "cover almost any financial crime", and marks a far departure from its original conceptualization. [3] Should the Court affirm Cuellar's conviction and potentially allow prosecutors "unfettered discretion to go after anyone who touches dirty cash?" [4] On the contrast, should the Court return money laundering charges to the intent of the 1986 Congress that moved to criminalize the act of money laundering?

Is a Frachise for You? Making the Right Decision on Starting a Franchise

I. Introduction

Starting a franchise can be a lucrative business. However, franchising is also an expensive start-up venture and can have significant legal consequences if not done properly. This article will first define a franchise and discuss the different types. It will then discuss financing a franchise and the legal issues of starting a franchise. Finally, the article will conclude by discussing the best way to go about starting a franchise.

M&A Trend In 2008

In the first financial quarter of 2008, a steady trend in M&A activity is patent. The weak dollar, the economic slowdown, banks’ lack of liquidity, or the motivation to add shareholder value are all viable reasons for the trend in M&A activity.

Some corporations, in 2007, projected M&A to remain strong until, “private-equity buyers pushed up target prices too high and economic growth slow[ed].” [1] A New York investment bank for media and information industries tracked buyouts in the media world for the first quarter of 2008 and reported 202 transactions that had a total value of $13.4 billion. [2] This figure is in no way a cap on the total dollar value of all M&A activity in the first quarter since the $13.4 billion represents only M&A activity in the media and information industries.

Corporate Social Responsibility in China: Can Consumers Alter Inadequate Legal Enforcement?

Introduction
Competitive advantages direct the trend toward international business and multinational corporations. [1]. Interestingly, a situation may arise where multinational corporations are not subject to international laws because they do not have the requisite international legal personality, not subject to host country laws because they do not directly control workers there, and are sparingly regulated by their home countries. [2].
In China, workplace conditions are grisly. Over 126,000 workers died in 2005 as China had the highest illness and injury rate in world history. [3]. This harms everyone from workers in China to the U.S. economy who is short between 500,000 and 1 million manufacturing jobs due to cost advantages gained from quashing Chinese workers’ rights. [4]. And perhaps it affects the products put out by Chinese manufacturers. A series of recalls, many involving children’s toys, recently shifted the spotlight toward Chinese factories and raised concern over safety standards and corporate accountability abroad.

Unauthorized Aliens and Credit Cards: Are Banks Violating Federal Law?

I. Introduction

An estimated 11.6 million unauthorized aliens [1] are currently in the United States.  [2]  This growing population has not gone unnoticed by American financial institutions.  For years banks have offered checking and some savings accounts to aliens without requiring them to prove valid immigration status.  [3]  In recent years, however, banks have widened the scope of financial products available to aliens who do not have a Social Security Number.  [4]  While the intent of these products was to provide services to green card holders and legal nonimmigrants, fairly relaxed identification requirements and the overly general specifications of the USA PATRIOT Act ("Patriot Act") allow unauthorized aliens to take advantage of these products in many situations.  [5]  Although some have argued that banks are violating the Patriot Act's Customer Identification Program ("CIP") requirement by agreeing to accept non-traditional identification to establish new accounts, this argument does not appear to be consistent with the language of the statute.  [6]   A more intriguing legal argument is the possibility that banks are violating the Immigration and Nationality Act ("INA")  by offering these products that are, at least in theory, available to unauthorized immigrants.  Specifically, some have asserted that banks are unlawfully encouraging and inducing aliens to reside in the United States in violation of section 274 of the INA.  [7]  Regardless of whether or not banks are acting in violation of immigration law, legislation has been proposed that would close the loophole allowing unauthorized aliens to take advantage of these products.  [8]  By requiring proof of a valid visa by way of an identification card issued by the Department of Homeland Security ("DHS"), Congress can allow the enormous population of legal immigrants and nonimmigrants access to financial products without also extending these benefits to unauthorized aliens.