The Legal Environment of Business: A Critical Thinking Approach , 8th Edition Solution Manual

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The Legal Environment of Business: A Critical Thinking Approach1-1Chapter 1Critical Thinking and Legal ReasoningIntroductionChapter one is the most important chapter in the text. This chapter is important because itpresents the framework for studying the legal environment of business that not only increasesstudents’understanding of significant legal ideas, but also promotes critical thinking. This chapteraddresses these questions:Why is critical thinking important?What is the critical thinking model the text asks instructors to apply throughout the book?What are the various steps involved in the critical thinking process?How does critical thinking invigorate legal reasoning?How should the critical thinking approach be used while dealing with cases?Achieving Teaching ExcellenceUnderstanding the Importance of EvaluationKubasek, Brennan & Browne begin their book by defining critical thinking. They tell instructorsthat critical thinking means the ability to recognize the structure of an argument and apply a set ofevaluative criteria to assess the merits of the argument. This section of theInstructor’sManualexplains how critical thinking relates toBloom’sTaxonomy of Educational Objectives. Thisexplanation will emphasize the skill of evaluation.Bloom developed a hierarchy of six cognitive operations. The operation at the higher levelsubsumes all those levels below. Here is a presentation ofBloom’sTaxonomy, from the lowest levelto the highest level:Knowledge: This is the lowest level of learning and is a prerequisite for all operations tofollow. This level relies primarily on the intellectual processes of recall and memory.Comprehension: The learner must go beyond knowledge and show understanding. Studentscan paraphrase or explain something they have heard or read.Application: The learner can apply what he or she has comprehended. Students can useinformation or principles in a specific situation.Analysis: The learner can break down into parts the knowledge applied and comprehended.Students can show the ability to take apart information to discover the underlying structureand hidden meanings and assumptions.

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The Legal Environment of Business: A Critical Thinking Approach1-2Synthesis: The learner must be able to creatively combine knowledge analyzed from severaldomains. Students can reassemble component parts into a new structure not previouslyapparent.Evaluation: This is the highest level. The learner must be able to critically appraise theknowledge she has analyzed and synthesized. Students can make critical judgments.The first three levels are often called lower-order thinking skills. Here are some questions thatwould encourage students to develop lower-order thinking skills. The questions are related toUnitedStates of America v. Martha Stewart and Peter Bacanovic[hereinafterMartha Stewart], the caseChapter One studies.1.Was theMartha Stewartcase a state or a federal case? [Knowledge]2.What did the court decide inMartha Stewart? [Comprehension]3.Given thecourt’sdecision in theMartha Stewartcase, what would happen ifa witness’sperjured testimony had been a key factor in the conviction of a defendant? [Application]The last three levels are often called higher-order thinking skills. Here are some questions thatencourage students to develop higher-order thinking skills.1.Explain why the court discounted Lawrence F. Stewart’s [hereinafter Lawrence] testimony.[Analysis]2.Explain how Lawrence’s testimony about the “$60” notation relates to the broader caseagainst the defendants. [Synthesis]3.Point out inadequacies in the court’s reasoning in theMartha Stewartcase. [Evaluation]How does the critical thinking model Kubasek, Brennan & Browne present in Chapter Onerelate to Bloom’s taxonomy? Let’s look at the two:Steps 1 through 4 of the critical thinking model correspond to the skills of knowledge,comprehension, application, analysis, and synthesis. Steps 5 through 8 correspond to the highestthinking skill—Evaluation. That means that when instructors ask students to evaluate legalarguments, they are pursuing the highest thinking skill. Critical thinking asks students to evaluate. Ifstudents can engage in critical thinking and succeed, they have shown that they have mastered all theskill levels below evaluation in the hierarchy—knowledge, comprehension, application, analysis,and synthesis. Working with students on the highest level of thinking is rewarding. Teaching using acritical thinking approach is also helpful to our students.

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The Legal Environment of Business: A Critical Thinking Approach1-3ReferencesThomas R. McDaniel,“Designing Essay Questions for Different Levels of Learning,”27IMPROVING COLLEGE AND UNIVERSITY TEACHING 120 (Summer 1979).Robert J. Kloss,“Toward Asking the Right Questions,”61 THE CLEARING HOUSE 245(1988).Benjamin S. Bloom, ed., TAXONOMY OF EDUCATIONAL OBJECTIVES (1956).Chapter Overview, Case Summary and Topic OutlineChapter OverviewThis chapter begins by defining critical thinking, then explains the critical thinking model usedthroughout the book. The final section of the chapter parallels the second section, but presents thematerial in more depth. To prepare well, instructors should make sure to read this last section of thechapter more than once. Encourage students to read it several times. Understanding this material willhelp instructors use the textbook.The Critical Thinking ModelThe first four help us understand how thecourt’s argument fits together.1.What are the facts?2.What is the issue?3.What are the reasons and conclusion?4.What are the relevant rules of law?Bloom’s TaxonomyThe first three are lower-order thinking skills.1.Knowledge2.Comprehension3.ApplicationThe second three are higher-order thinkingskills.4.Analysis5.SynthesisThe last four steps help useevvaalluuaatteelegalarguments.5.Does the legal argument containsignificant ambiguity?6.What ethical norms are fundamental tothe court’sreasoning?7.How appropriate are the legal analogies?8.Is there relevant missing information?6.Evaluation

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The Legal Environment of Business: A Critical Thinking Approach1-4It will be worth the time to study Chapter One more than instructors might have originallyplanned. Instructors might want to choose an additional case and work on the case in class the waythe text authors worked with the critical thinking model using theStewartcase.Topic OutlineI. The Importance of Critical ThinkingII. A Critical Thinking Model1.United States of America v. Martha Stewart and Peter BacanovicIII. The Critical Thinking StepsA. FactsB. IssueC. Reasons and ConclusionD. Rules of LawE. AmbiguityF. Ethical NormsG. AnalogiesH. Missing InformationIII. Using Critical Thinking to Make Legal Reasoning Come AliveA. Legal ReasoningIV. Applying the Critical Thinking ApproachSummaryTo extend the critical thinking model to essays, instructors would ask:What Is the Issue?What Are the Reasons and Conclusion?Does the Argument Contain Significant Ambiguity?What Ethical Norms Are Fundamental to theAuthor’sReasoning?How Appropriate Are the Analogies? (This step will not always be relevant.)Is There Relevant Missing Information?Remember: An instructor’s goal will be to first understand an argument, then decide whether it canaccept theauthor’sconclusion given the evidence and reasoning the author provides.Case Summary—United States of America v. Martha Stewart and Peter BacanovicDefendants Martha Stewart and Peter Bacanovic were both convicted of conspiracy, makingfalse statements, and obstruction of an agency proceeding, following Stewart’s sale of 3,928 sharesof ImClone stock on December 27, 2001. Stewart sold all of her ImClone stock after Bacanovic,

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The Legal Environment of Business: A Critical Thinking Approach1-5Stewart’s stockbroker at Merrill Lynch, informed Stewart that the CEO of ImClone, Samuel Waksal,was trying to sell his company stock. On December 28, 2001, ImClone announced that the Food andDrug Administration (FDA) had not approved the company’s cancer-fighting drug Erbitux.Thereafter, the Securities and Exchange Commission (SEC) and the United States Attorney’s Officefor the Southern District of New York began investigations into the trading of ImClone stock,including investigations of Stewart and Bacanovic. The court found in favor of the United States ofAmerica based on the facts presented in this case.

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The Legal Environment of Business: A Critical Thinking Approach2-1Chapter 2Introduction to Law and the Legal Environmentof BusinessIntroductionTo promote an environment in which instructors and the students have a question-askingattitude, instructors should present each chapter as one that address several questions.Chapter Two addresses these questions:How can the legal environment of business be defined?How can law and jurisprudence be defined? Do alternative definitions of law exist?Where does law come from?What are the classifications of law?What are the global dimensions of the legal environment of business?Chapter Two is significant because it provides background information that influences theway students think about cases and legal ideas. When instructors teach this chapter, they shouldemphasize the significance of considering alternative perspectives.Achieving Teaching ExcellenceCreating a Student-Centered Classroom That Promotes Students’Intellectual DevelopmentInstructors probably chose this textbook over others in part because they wanted toencourage students to engage in critical thinking about the law. This goal is important. Toachieve this goal, instructors will want students and their intellectual development to be thefocus of what happens in class.First, this section explains alternative perspectives on how to conduct class. Second, thissection will explain why a specific type of student-centered classroom is likely to helpinstructors achieve their goal of encouraging their students to engage in critical thinking.InThe University Teacher as Artist, Joseph Axelrod describes different teaching styles.Axelrod classifies these teaching styles. One major category includes didactic styles. Didacticteaching styles do not encourage inquiry by the student. The other category includes evocativestyles. These styles require student inquiry when completing the tasks the instructor has

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The Legal Environment of Business: A Critical Thinking Approach2-2assigned.Axelrod explains that didactic teaching styles stress either knowledge acquired bymemorization, or skill mastery through repetition and practice. Evocative modes stress studentinquiry and discovery. A teaching style that encourages critical thinking is an evocative style.Within the category of evocative styles, different teaching styles emphasize differentcomponents. Some styles focus on the teacher, some on the learner, and some on the subjectmatter. A teaching style that stresses critical thinking is an evocative style that focuses on thelearner and his or her understanding of course material. Axelrod would call this style a student-centered style rather than an instructor-centered style. A critical thinking approach assumes theteacher will create a classroom environment in which the students’intellectual development isthe focus of classroom attention. A teacher who uses this approach would be likely to say what aprofessor in Axelrod’s book says,“I train minds.”Promoting critical thinking is one way to trainstudents’minds.Now the question arises as to how instructors will know whether they have created astudent-centered classroom that emphasizes intellectual development. First, they will be talkingless and listening to their students more. Second, they will be emphasizing on higher-orderthinking skills rather than asking their students to recite principles and facts. Third, instructorswill be observing how students are doing at grasping the critical thinking model. They should notbe watching instructors to see what a good critical thinker they are. Fourth, class time will bespent working with the material, rather than making sure they have“covered”everything.Reference:Joseph Axelrod,The University Teacher as Artist(Jossey-Bass, Inc., Publishers 1973).Chapter Overview, Topic Outline, and Discussion QuestionsChapter OverviewThis book is about the legal environment in which the business community operates today.Although the book concentrates on law and the legal variables that help shape businessdecisions, it has not overlooked the ethical, political, and economic questions that often arise inbusiness decision making. This chapter is especially concerned with legal variables in thecontext of critical thinking. In addition, it examines the international dimensions of several areasof law.Instructors who want to encourage students to work with the material in class sometimesrealize they cannot always“cover”all the material in the book. After several years of not

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The Legal Environment of Business: A Critical Thinking Approach2-3covering everything, instructors should be comfortable knowing that the material actuallyencourages students to work in class and is understood by most of them. Instructors can chooseparts of each chapter that are especially challenging or confusing. This is the material thatdeserves the most attention in class. Some chapter material is easy, and students pick it up wellon their own.In Chapter Two, the material that is the most challenging or confusing falls into thesesubsections:Definition of Law and JurisprudenceClassifications of LawAfter presenting a topic outline for Chapter Two, this section provides discussion questionsthat help students increase their understanding of the material presented in the two sections listedabove.Topic OutlineI. Definition of the Legal Environment of BusinessII. Definition of Law and JurisprudenceA. Natural Law SchoolB. Positivist SchoolC. Sociological SchoolD. American Realist SchoolE. Critical Legal Studies SchoolF. Feminist SchoolG. Law and Economics SchoolIII. Sources of LawA. The Legislature as a Source of Statutory Law1. Steps in the Legislative ProcessB. The Judicial Branch as a Source of Case Law1. Case Law Precedents and the InternetC. The Executive Branch as a Source of Law1. Treaty Making2. Executive OrdersD. Administrative Agencies as a Source of LawIV. Classifications of LawA. Criminal Law and Civil LawB. Public and Private LawC. Substantive and Procedural LawD. CyberlawV. Global Dimensions of the Legal Environment of Business

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The Legal Environment of Business: A Critical Thinking Approach2-4VI. SummaryDiscussion Questions for Chapter Two1.In answering the question“What is law?”. Why is it appropriate to answer,“It depends?”The question“What is law?”is not as straightforward as it appears. Most people would givean answer that shows their understanding and acceptance of the positivist school ofjurisprudence. However, a person’s answer to the question“What is law?”depends onwhich school of jurisprudence the person prefers. For instance, a positivist thinker might saythat law is a set of rules created by the legislature that people must follow or they will bepunished or fined. A critical legal studies scholar might say law is an institution that protectsthose in power. Students should notice the difference in those two answers. Given the widerange of beliefs about the definition of law, it is wise to say the answer to the questiondepends on the school of jurisprudence a person prefers.2.How would an individual decide which school of jurisprudence a particular judge prefers?This question triggers many reminders. First, a judge, legal scholar, or thinker might agreewith more than one school of jurisprudence, or with some elements of more than one schoolof jurisprudence. For instance, feminist legal scholars and critical legal scholars share somebeliefs. It could be possible to agree with both of those theories to some extent. Second,judges, legal scholars, and thinkers rarely announce their preferred school of jurisprudence.To determine the view a judge prefers, an individual would need to read their legal decisionsand scholarly writings carefully. An individual can infer their views from their writings orwhat they say in public about a particular decision.3.Which schools of jurisprudence probably have the fewest followers within the legalcommunity?Probably, critical legal studies and feminist views of jurisprudence have the fewestfollowers. Both evaluate the legal system in a structural way; they question the verystructure of law as a societal institution. Most followers of these schools are legal scholarsrather than judges or practicing attorneys. People engaged in the daily practice of law mightwant some kind of incremental legal reform, but they are unlikely to question law in astructural way or advocate major changes.4.Create a fact situation that could result in both a civil and a criminal lawsuit.Instructors should encourage students to be creative with this one. For instance, a bankrobber was injured while committing a bank robbery. After collecting the money, itexploded in his pockets because a device attached to the money was poorly designed. The

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The Legal Environment of Business: A Critical Thinking Approach2-5robber would be prosecuted for the crime of bank robbery, and could sue the manufacturerof the exploding device under civil law. (This was a real case. The robber sued themanufacturer from jail, and lost.) A more realistic and common example would be one inwhich someone engaged in driving while under the influence of alcohol, caused a caraccident, and injured someone. The driver would be prosecuted under criminal law, and theinjured parties could sue the driver civilly.5.Explain how a court’s decision (case law) might lead to changes in legislation (statutorylaw). Are there any situations in which this has happened?A legislature (either state or federal) might be so concerned about a judge’s decision that itenacts a law that in effect reverses the judge’s decision. One example is the Civil Rights Actof 1991, which changed several decisions the U.S. Supreme Court had rendered. Congresswas changing the Supreme Court’s decisions by changing statutory law.Answers to Critical Thinking about the Law Questions, Review Questions,Review Problems, and Case ProblemsSuggested Answers to Critical Thinking about the Law Questions1.Learning about relevant laws regarding business helps one understand what the law is, butdoes not help one evaluate legal arguments. The critical thinking questions that help oneevaluate legal arguments are:Does the legal argument contain significant ambiguity?What ethical norms are fundamental to the court’sreasoning?How appropriate are the legal analogies?Is there relevant missing information?The question about ethical norms most clearly addresses the ethical component of the legalenvironment of business. Knowing the ethical norms that are fundamental to a court’sreasoning helps one decide whether to accept or reject the court’s conclusion.2.Knowing the school of thought the judge prefers helps one critically evaluate a judge’sreasoning because one can determine the assumptions the judge makes. For instance, if oneknows the judge prefers the critical legal studies view of jurisprudence, one knows the judgewould favor structural change in the legal system—he or she does not have to tell them. Onewould also know the judge is likely to prefer a definition of justice defined as to treat allhumans identically, regardless of class, race, gender, age, and so on. The critical legalstudies movement strives to point out how the legal system perpetuates inequality.3.One might want to ask the lawyer whether their mutual respect for a particular school ofjurisprudence will bring about the action they want. For instance, mutual respect for natural

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The Legal Environment of Business: A Critical Thinking Approach2-6law might yield interesting discussions between people and their attorney, but it will do littleto help them pursue the landlord. One would also want to ask the lawyer basic questionsabout competence, the lawyer’s area of expertise, whether the lawyer has time to take on acase of this nature, and the lawyer’s fee.Answers to Review Questions2-1.According to the positivist school: a) law is the expression of the will of the legislator orsovereign, which must be followed; b) morals are separate from law and should not beconsidered in making legal decisions; and c) law is a closed logical system in whichcorrect legal decisions are reached solely by logic and the use of precedents. In contrast,the feminist school is based on jurisprudence that reflects a male-dominated executive,legislative,and judicial system in which women’s perspectives areignored and womenare victimized. Most adherents of the feminist school, believing that significant rightshave been denied to women, advocate lobbying legislatures and litigating in courts forchanges in laws to accommodate women’s views.2-2.The critical legal theorist school and the feminist school of jurisprudence are similarbecause both evaluate the legal system. Both find major inadequacies in the legal system.Critical legal theorists think the legal system protects economically privilegedindividuals; feminist scholars think the legal system protects the rights of men.2-3.The federal courts and most state courts make up the judicial branch of government. Theyare charged by their respective constitutions with interpreting the constitution andstatutory law on a case-by-case basis. Most case interpretations are reported in largevolumes called reporters. These constitute a compilation of our federal and state case law,which can serve as precedent for future judicial decisions.2-4.Statutory law is made by legislatures. Case law is made by judges.2-5.If the president vetoes a bill passed by the House and the Senate, the bill can become alaw if two-thirds of the House and Senate membership vote to override the veto.2-6.a.Public law is a classification of law that deals with the relationship of governmentto individual citizens. Private law is generally concerned with the enforcement ofprivate duties.b.In criminal law, a prosecutor aims to prove beyond a reasonable doubt that thedefendant committed a crime and should be punished. In civil law, a privateindividual or business tries to show by the preponderance of the evidence thatanother private individual or business is liable and should have to compensate theplaintiff.c.Felonies are punishable by incarceration in a state penitentiary. Misdemeanors are

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The Legal Environment of Business: A Critical Thinking Approach2-7usually punishable by shorter periods of imprisonment in a county or city jail.Answers to Review Problems2-7.Justice A belongs to the positivist school of jurisprudence. One knows that because thisjustice is unwilling to look beyond statutes and case precedents in interpreting the law.2-8.Justice B is a natural law thinker. One knows that because this justice is willing to ignoreman-made law and rule based upon something higher—the laws of nature.2-9.Justice C is a sociological thinker. This justice bases her decision on contemporarycommunity customs or thought.2-10.A judge who follows the natural law school of thought would hear out the case and,based on the evidence presented, would make his or her decision. These value judgmentswould remain unchanged as there is an absolute source of law. Therefore, the decisionmade in this case would be dependent on the merits of the case.2-11.Precedentrefers to case law courts follow. Judges interpret legislation on a case-by-casebasis. These cases establish a line of authoritative cases on a particular subject that mustbe followed by lower courts. Here, the precedent tells Marshall his legal rights. Theattorney can predict that Marshall will win a lawsuit to collect the reasonable value of hiswork.2-12.No, the California court does not have to follow decisions from North Dakota and Ohio.The California appellate court must listen to higher courts in California, but not highercourts in other states. The California court might consider the North Dakota and Ohiocase law, but it is not required to do so.Answers to Case Problems2-13.Students should note that ethical issues such as the one raised in this case do not getresolved necessarily by exploring the legal issue that brought the case before the court inthe first place. Rather than focusing on whether the practices of Myspace qualify ascopyright infringement, the court concentrated on whether Myspace’s counsel should bedisqualified because of its past association with Universal Music Group. The court ruledthat Myspace’s counsel should not be disqualified as long as it met several conditions. Inthis case, the court focused on which should hold more weight, the current client of thelaw firm, Myspace’s, right to counsel of its choice or the former client, Universal MusicGroup’s, right to maintain its confidentiality. Using a sociological approach, the courtused California Rules of Professional Conduct Rule 3-310 and decided it was mostimportant to preserve the public’s trust in the integrity of California attorneys and the bar.

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The Legal Environment of Business: A Critical Thinking Approach2-8The goal of this court was to uphold community customs and assume that the law firmwould act ethically. If another school of thought had been used, such as the natural orpositivist approach, the verdict may have been different. A judge using naturalphilosophy might focus on how it is unreasonable or unnatural for a law firm to representopposing clients, whereas a judge using positivist philosophy might concentrate solely onthe words within the law and not on its affects on the public.2-14.Yes, Vermont’s marriage license law violates same-sex couples’rights under theVermont Constitution. The court ruled that the State had failed to provide a reasonableand just basis for excluding same-sex couples from benefits incident to Vermont’s civilmarriage license.The court indicated that a parallel “domestic partnership” system wouldmeet Vermont’s constitutional guarantee of “the common benefit, protection, and securityof the law.”2-15.The Supreme Court ruled that the Federal Arbitration Act does not permit courts toinvalidate a contractual waiver of class arbitration on the ground that the plaintiff’s costof individually arbitrating a federal statutory claim exceeds the potential recovery.2-16.The Supreme Court ruled in favor of the individual workers. Now, employees have theburden of proof and can therefore argue that there is no “reasonable” factor than ageinvolved in their termination.2-17.A&M Records won. The works at issue in the case were copyrighted, the plaintiffs wouldbe likely to provevicarious infringement, and the “safe harbor” provision of the DigitalMillennium Copyright Act protects A&M.2-18.The court ruled that Roommate.com was immune from the Fair Housing Act charges,because of Section 230 of the Communications Decency Act. Section 230 states that“interactive computer services” acting as “service providers” are not responsible forinformation that has been provided by another “information content provider.” In thiscase, Roommate.com was seen as both a service provider and an information contentprovider, but the court emphasized that in close cases, the ruling should be in favor ofSection 230 immunity. The court could have focused on Roommate.com being a serviceprovider or an information content provider and based on its interpretation, the verdictwould differ. In this case, the court focused on Roommate.com as a service provider andused a broad interpretation of Section 230 immunity. Not all judges would view such aruling as prudent.Thinking Critically about Relevant Legal Issues1.The issue here is framed in a very optimistic, naturalistic way. In an essay, one would focus

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The Legal Environment of Business: A Critical Thinking Approach2-9on the benefits of this type of thinking and the best way to ensure complete objectivity. Theconclusion would contain an account of how many problems and squabbles over objectivitywould cease if the naturalistic approach was taken.2.The author here seems to value justice, defined as moral absolutes that make clear what isgood. The author may also value tradition, as what the author assumes is that what is “good”is what is conventionally right.3.Good here means what is conventionally right. Evil means what is wrong. Both of theseterms are ambiguous and take away from the argument. Again, the author assumes that allpeople are thinking the same way and live in the same environment.4.Students would probably make a more realistic argument, citing differences in areas acrossthe country in culture, religion, and so on. Sometimes absolute, conventional goodis notsynonymous with right.

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The Legal Environment Of Business: A Critical Thinking Approach3-1Chapter 3The American Legal SystemIntroductionChapter Three addresses these questions:How do people know whether a particular court has jurisdiction over a case, or the power tohear the case?How do people know which trial court will hear the case?Who are the major actors in the legal system, what do they do, and how does each actor relateto the business community?What does it mean to say there is an adversary legal system in the United States?What are the steps in the civil litigation process? What role do businesspeople play in thisprocess?What global considerations are relevant when the structure of the American legal system isconsidered?Chapter Three is important because it explains basic principles about the American legal systemthat students will refer to throughout the course. For instance, it is important for them to understandthe nature of an adversary process. If they understand the principles that underlie the adversarysystem, they will understand why lawyers argue zealously for their clients. This chapter alsoprovides important practical information, such as the steps in civil litigation. Business managersneed to recognize these so they will know what is happening when they become involved inlitigation.Achieving Teaching ExcellenceRecitation and DiscussionMost instructors who encourage students to talk in class believe they are promoting classdiscussion. An article by J.D. Dillon is a reminder that it is difficult to engage in class discussion,and that many instructors are not promoting discussion. Instead, they might be encouragingrecitation. This section explains the difference, and shows how instructors know whether they arepromoting discussion. This distinction is important because it relates to higher-and lower-orderthinking skills.Dillon explains thatrecitationmeans that students―recite‖what they know or are coming toknow through questioning. Instructors review, drill, and quiz. Dillon writes thatdiscussionmeans

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