CALIFORNIA STATE UNIVERSITY, LOS ANGELES
College of Business and Economics, Department of Finance and Law
FINANCE 2050 – LEGAL AND REGULATORY ENVIRONMENT OF BUSINESS I
Instructor: Prof. Mark S. Simonian
Spring Semester, 2017
1. Carefully READ the hypothetical “facts” in the Narrative.
2. Next, CONSIDER the “question” that you have been asked to answer.
3. Then, RESEARCH the law relevant to these issues in your textbook and/or online.
4. Finally, ANSWER the numbered Questions.
(You should be able to answer all of the Questions presented in less than two typewritten pages.)
You must follow ALL “Format Requirements for Written Work,” as specified on page 4 of the Class Syllabus. You also must label your answers – e.g., “a.” or “b)” – rather than writing one run-on essay in response to the discretely numbered Questions presented. IF YOU DO NOT FOLLOW ALL OF THESE INSTRUCTIONS, YOU WILL FAIL (i.e., RECEIVE ZERO (0) POINTS FOR) THIS ASSIGNMENT.
You may receive partial credit for identifying or explaining the legal doctrines or terms of art that apply, but, because this Research Problem is an “open book/open notes” assignment, your answers will be graded primarily on completeness and clarity of thought, legal analysis, and written expression.
You may quote from the Beatty Business Law and the Legal Environment Text or from online sources, but you MUST ATTRIBUTE ANY MATERIAL OBTAINED FROM AN OUTSIDE SOURCE. (A simple attribution, such as, “As stated in the Beatty Text at page 517,” or “As stated in the FindLaw webpage on ‘negligence’,” will suffice. You need not use full term-paper citation format.) ANY PAPER THAT ATTEMPTS TO PLAGARIZE OR “PASS OFF” ANOTHER’S WRITING (QUOTING WITHOUT ATTRIBUTION) WILL RECEIVE ZERO (0) POINTS.
Per the Instructor’s policy on late papers, as stated in the Class Syllabus, YOUR ANSWERS ARE DUE AT THE BEGINNING OF CLASS on the Due Date for this Assignment. LATE PAPERS MAY RECEIVE ZERO (0) POINTS.
WARNING: Although you may work with other students to analyze the case excerpt, research materials, and questions, your answers must be written IN YOUR OWN WORDS. If any of your answers are substantially similar in wording to another student’s answers (i.e., if you copy or are copied from), each student will FAIL this Assignment (i.e., receive ZERO (0) POINTS as a grade). It is YOUR RESPONSIBILITY to safeguard your own written answers so that no one else copies them.
I. NARRATIVE “FACTS” –
A. Background –
1. You work as a Financial Assistant at the Los Angeles office of Global Dominance Corporation (GDC), a large multinational firm. GDC has lost a great deal of business over the past year, with many rounds of “downsizing” (layoffs), contributing to a severe slump in employee morale and a resulting loss of productivity.
2. Your boss, Hugh G. Goe, has tried many different ways to boost employee morale (and productivity) in the Finance Department –
• Giving out free cupcakes to employees on Fridays;
• Creating an “Employee of the Month” program, with perks such as a “close-in” executive parking space for 30 days;
• “Buck Off” certificates at various local retailers, entitling Finance Department employees to discounts at local retailers; and
• “Family Day at Disneyland,” in which Finance Department families were “invited” to the amusement park for the day at the “special event” rate of $90 per person (“Such a deal!”).
3. Each of these promotions has been a dismal failure for different reasons, but primarily because GDC employees are overworked (having had to assume the responsibilities of those who have been laid off), underpaid (now doing the work of two or three employees for the same salary), and fearful (of losing their jobs at any moment in the next “wave” of “Company Right-Sizing”).
4. To give one last attempt at boosting employee morale (and productivity), your boss (who says, “Don’t call me ‘Boss;’ call me “Hugh G.”) had wanted to hold a Finance Department-sponsored “Happy Hour Spring Fling” pool party at his country club – the High Above Country Club – one Friday this month, beginning at 4:30 p.m. – with food, beverage, decorations, and … of course, swimming, golf, and tennis. (Rounds of golf are too expensive for all, but qualified employees can sign up for the First Annual GDC Golf Challenge, starting at noon that day, if they pay the daily greens fee and cart costs (beginning at $450 per round).)
5. Hugh G. wanted employees to be allowed to bring spouses, domestic partners, or significant others to this Happy Hour Spring Fling, and Hugh G. wanted the event to feature a company-sponsored “open bar” (“All you can quaff, for free.”), with the “good stuff” – high-end brews, wines, champagnes, and liquor – that “most of my staff can’t really afford.”
6. Unfortunately, for Hugh G.’s grandiose plans, the High Above Country Club wanted to charge a small fortune, which Hugh G. could not justify to GDC’s upper management (“What do we care? Half of them will be gone by fall – fired or quit – anyway!” Hugh was told by his executive level boss).
7. So, Hugh G. put you “in charge” of his party, knowing that you live in a large apartment complex not far from many major freeways (easy access) and that your apartment complex has a sizeable pool and Jacuzzi area, along with a couple of tennis courts, a “workout” room, and multipurpose meeting room. As a tenant, you can “reserve” these facilities for free. Hugh G. expected you to “host” this “social” event … or be fired.
I. NARRATIVE “FACTS” – (Continued)
A. Background – (Continued)
8. Although most of the costs of the “Spring Fling” were to be borne by Hugh G.’s “budgeted discretionary funds,” there still were unreimbursed costs associated with throwing a party for about 200 people … and then, there was the matter of the other tenants in the complex and their guests, who probably would want to attend this party.
B. The Plan –
9. Lacking meaningful choice, you opened your home (and the apartment complex in which you live) to 200 invited “guests” (i.e., company employees and contractors) and one significant other (i.e., spouse, domestic partner, close personal friend) per “guest.” Each invited, company-affiliated party-goer was supposed to have a green wristband and was not to be charged for entry to the party, for food, or for beverages (including alcohol).
10. Other residents of the apartment complex, their “friends,” and assorted uninvited revelers were to be allowed into the party, but charged $25 per person (to defray costs). These people were to be given a red wristband, entitling them to entry to the party, to food, and to beverages (including alcohol).
C. The Reality –
11. People like free things; people like to drink to excess. Even though almost none of the invited “guests” think highly of your boss, the chance to eat and drink for free (combined with a looming threat of being fired/terminated for being absent) drove attendance at your company-sponsored “social” gathering to almost 100% of the invitees. In fact, some “guests” brought many others with them (meaning you had to give out a boatload of new green wristbands). Alcohol consumption among the “guests” went beyond all reason, with dozens of people stumbling out – fully inebriated – to their cars.
12. Your building is full of “party animals” … and teenagers … all looking for booze. Perhaps they were spurred by social media postings; perhaps they saw the colorful flyers around the complex. For whatever reason, too many of your neighbors wanted to join the party. Too many unsupervised 16 – 20 year olds came to the door and headed straight for the “open bar.” The scene was crazy! Many entered without paying. Many who were underage consumed mass quantities of alcohol. There were not enough staffers to check i.d.s or issue wristbands properly (e.g., only to adults). There were not enough security persons to “escort” intoxicated people and underage drinkers out of the “event.” There were not enough trained bartenders/servers to demand proof of age before serving alcohol, to prevent already intoxicated partiers from additional consumption of alcohol, or to make sure that inebriated partiers did not get ill or drink and drive.
13. You could not be everywhere you were needed (as the “host”) during the party. So many things were happening at once. Even with the catering company staff, there were not enough people to manage the party properly. The scene was crazy! The event was out of control, even though you, your outnumbered staffers, and your few “security” people did the best each of you could.
I. NARRATIVE “FACTS” – (Continued)
C. The Reality – (Continued)
14. You covered your costs. While you broke even (i.e., did not lose money or make money on the event), the accounting did not leave room for attorney’s fees (see, the next item, below).
15. You have been sued. One young man who attended your “party,” Enn E. Briyate, a resident of the apartment complex next door, arrived already obviously intoxicated. While you were attending to other hosting duties, Briyate was served three more tequila shots and two beers. He staggered to his car, drove off, and shortly afterward, passed out behind the wheel. Ultimately, he crashed his car into five other parked cars. Before paramedics had arrived, Briyate died of a combination of alcohol poisoning and accident trauma. Briyate’s family and each of the owners of the damaged cars have sued you in separate lawsuits, alleging your negligence and other liability in “selling” alcohol to a minor as part of the operation of a business.
II. LEGALLY SIGNIFICANT FACTS –
CONSIDER these facts, which may be legally significant and have an impact on your conclusions:
a. Businesses that serve alcohol are regulated by law and can face liability for serving – over-serving – alcohol.
b. Your “party” took place in a residential setting (an apartment complex), your home. Arguably, it was a “social” gathering. You were the “host.”
c. Your “party” was, in part, paid for by your employer, and, arguably, was a “company party,” because all of the specifically “invited guests” (wearing green wristbands) were employees or contractors of the company. There was a business purpose to the party, and your employer hoped to benefit from it.
d. Most of those who attended the “party” and were not “invited guests” (or with “invited guests”) were charged an admission fee ($25), which entitled them, among other things, to drink alcohol for free. The admission fee helped cover your cost of serving food and beverages, including alcohol.
e. In California, a person must be at least 21 years old to be served alcohol legally.
f. The person who over-consumed alcohol at your “party” and died – doing damage to the property of others in the process – was under the age of 21 and had no legal right to be served alcohol.
g. Your “party” had little or no control on who was admitted or on who was served alcohol.
h. Your “party” had little or no control on how much alcohol people were served and whether people were allowed to leave the “party” (and drive) when they were clearly intoxicated.
III. QUESTION –
ANSWER this question:
Under California law, do you face legal liability to the Briyate family and/or to those people whose property he damaged? (In other words, will you lose the lawsuits that have been filed against you following the “party” that you hosted?)
[HINT: In answering this question, please be certain to cite any California statutes and case law (particularly recent California Supreme Court or California Court of Appeal case decisions) that apply.]
IV. SUGGESTIONS – RESEARCH –
In addition to basic search engine (e.g., Google, Yahoo, Bing) searches using applicable terms (e.g., California and “serve alcohol” and party and host OR California alcohol law OR California alcohol service), you may also research legal resources presented in the Case Analysis Assignment (e.g., www.findlaw.com and the Wex legal encyclopedia or other parts of the wide-ranging legal library/database maintained by the Legal Information Institute (LII), located at https://www.law.cornell.edu online).
V. SUGGESTIONS – CITATION FORMAT –
A. Proper form for citation is as follows:
For a California statute:
California Civil Code Section 1234
For a California Supreme Court case:
Skywalker v. Vader (2011) 57 Cal.4th 1039
For a California Appellate Court case:
Jabba v. Solo (2010) 44 Cal.App.4th 539
B. NOTE: The model of legal analysis has three steps:
1. State the law.
2. Apply the facts (to the law).
3. Come to a conclusion.]