MGMT 265 Columbia College Criminal Law and Jurisdiction Discussion

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Business Finance

MGMT 265

Columbia College

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I need an explanation for this Business Law question to help me study.

Larry London (LL) has a sad story. LL lives in Missouri, but he recently visited Los Angeles for a business trip. LL rented a car, and was out with clients having drinks one night. After he had consumed several drinks, he went to the parking lot, looking for his rental. He believed he had found his car, but inadvertently got into a very similar car that worked with his key.

LL was in a minor accident, and damaged the car he was driving. The owner of the car contacted the police, and the police arrested LL. The rightful owner was a powerful L.A. movie producer, Stephan Siegel (SS), who threatened to take LL “all the way to the Supreme Court.” The police also want to investigate LL’s mishaps.

Pretend you are a lawyer, representing LL, and that you must advise LL involved in this scenario. 

Here are some questions to consider as you create your advice: Where would the owner of the damaged car file a civil lawsuit? Where would criminal charges be filed? With what crimes might Larry be charged? What is the likelihood of the criminal case ending up in a plea bargain and what are possible sentences in students’ respective jurisdictions? What are the alternatives to litigation on the civil claims?

Keep the focus on criminal law and jurisdiction rather than tort law. Most importantly, make a case for why your client should win at trial.

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CHAPTER 5 DISPUTE RESOLUTION Tony Caruso had not returned for dinner, and his wife, Karen, was nervous. She put on some sandals and hurried across the dunes to the ocean shore a half mile away. She soon came upon Tony’s dog, Blue, tied to an old picket fence. Tony’s shoes and clothing were piled neatly nearby. Karen and friends searched frantically throughout the evening. A little past midnight, Tony’s body washed ashore, his lungs filled with water. A local doctor concluded he had accidentally drowned. A little past midnight, Tony’s body washed ashore, his lungs filled with water. Karen and her friends were not the only ones distraught. Tony had been partners with Beth Smiles in an environmental consulting business, Enviro-Vision. They were good friends, and Beth was emotionally devastated. When she was able to focus on business issues, Beth filed an insurance claim with the Coastal Insurance Group. Beth hated to think about Tony’s death in financial terms, but she was relieved that the struggling business would receive $2 million on the life insurance policy. Several months after filing the claim, Beth received this reply from Coastal: “Under the policy issued to Enviro-Vision, we are liable in the amount of $1 million in the event of Mr. Caruso’s death. If his death is accidental, we are liable to pay double indemnity of $2 million. But pursuant to section H(5), death by suicide is not covered. After a thorough investigation, we have concluded that Anthony Caruso’s death was an act of suicide. Your claim is denied in its entirety.” Beth was furious. She was convinced Tony was incapable of suicide. And her company could not afford the $2 million loss. She decided to consult her lawyer, Chris Pruitt. This case is a fictionalized version of several real cases based on double indemnity insurance policies. In this chapter, we follow Beth’s dispute with Coastal from initial interview through appeal, using it to examine three fundamental areas of law: the structure of our court systems, litigation, and alternative dispute resolution (ADR). When Beth Smiles meets with her lawyer, Chris Pruitt brings a second attorney from his firm, Janet Booker, who is an experienced litigator; that is, a lawyer who handles court cases. If they file a lawsuit, Janet will be in charge, so Chris wants her there for the first meeting. Janet probes about Tony’s home life, the status of the business, his personal finances, everything. Beth becomes upset that Janet doesn’t seem sympathetic, but Chris explains that Janet is doing her job: She needs all the information, good and bad. Janet starts thinking about the two methods of dispute resolution: litigation and alternative dispute resolution. Litigation refers to lawsuits, the process of filing claims in court, trying the case, and living with the court’s ruling. Alternative dispute resolution is any other formal or informal process used to settle disputes without resorting to a trial. It is increasingly popular with corporations and individuals alike because it is generally cheaper and faster than litigation. Litigation The process of resolving disputes in court Alternative dispute resolution Resolving disputes out of court, through formal or informal processes 5-1 COURT SYSTEMS The United States has more than 50 systems of courts. One nationwide system of federal courts serves the entire country. In addition, each individual state—such as Texas, California, and Florida—has its own court system. The state and federal courts are in different buildings, have different judges, and hear different kinds of cases. Each has special powers and certain limitations. 5-1a State Courts The typical state court system forms a pyramid, as Exhibit 5.1 shows. Trial Courts Almost all cases start in trial courts, the ones commonly portrayed on television and in film. There is one judge, and there will often (but not always) be a jury. This is the only court to hear testimony from witnesses and receive evidence. Trial courts determine the facts of a particular dispute and apply to those facts the law given by earlier appellate court decisions. Trial First level of courts to hear disputes courts In the Enviro-Vision dispute, the trial court will decide all important facts that are in dispute. How did Tony Caruso die? Did he drown? Assuming he drowned, was his death an accident or a suicide? Once the jury has decided the facts, it will apply the law to those facts. If Tony Caruso died accidentally, contract law provides that Beth Smiles is entitled to double indemnity benefits. If the jury decides he killed himself, Beth gets nothing. Jurisdiction refers to a court’s power to hear a case. A plaintiff may start a lawsuit only in a court that has jurisdiction over that kind of case. Some state trial courts have very limited jurisdiction, while others have the power to hear almost any case. In Exhibit 5.1, notice that some courts have power only to hear cases of small claims, domestic relations, and so forth. Courts must have two types of jurisdiction. Jurisdiction A court’s power to hear a case and bind the parties to its determination Subject-matter jurisdiction means that a court has the authority to hear a particular type of case. In addition to subject-matter jurisdiction, courts must also have personal jurisdiction over the defendant. Personal jurisdiction is the legal authority to require the defendant to stand trial, pay judgments, and the like. Personal jurisdiction generally exists if: • • • • The defendant is a resident of the state in which a lawsuit is filed; or The defendant files documents in court, such as an answer to the complaint; or A summons is served on a defendant. A summons is the court’s written notice that a lawsuit has been filed against the defendant. The summons must be delivered to the defendant when she is physically within the state in which the lawsuit is filed; or A long-arm statute applies. These statutes typically claim jurisdiction over someone who does not live in a state but commits a tort, signs a contract, causes foreseeable harm, or conducts “regular business activities” there. Under the Due Process Clause of the Constitution, courts can use long-arm statutes only if a defendant has had minimum contacts with a state. In other words, it is unfair to require a defendant to stand trial in another state if he has had no meaningful interaction with that state. Summons The court’s written notice that a lawsuit has been filed Long-arm Statutes that may broaden a state court’s jurisdiction statute EXHIBIT 5.1 A trial court determines facts, while an appeals court ensures that the lower court correctly applied the law to those facts. In the following Landmark Case, the Supreme Court explains its views on this important constitutional issue. Landmark Case International Shoe Co. v. State of Washington 326 U.S. 310 United States Supreme Court, 1945 CASE SUMMARY Facts: Although International Shoe manufactured footwear only in St. Louis, Missouri, it sold its products nationwide. It did not have offices or warehouses in the state of Washington, but it did send about a dozen salespeople there. The salespeople rented space in hotels and businesses, displayed sample products, and took orders. They were not authorized to collect payment from customers. When the State of Washington sought contributions to the state’s unemployment fund, International Shoe refused to pay. Washington sued. The company argued that it was not engaged in business in the state and, therefore, that Washington courts had no jurisdiction over it. The Supreme Court of Washington ruled that International Shoe did have sufficient contacts with the state to justify a lawsuit there. International Shoe appealed to the U.S. Supreme Court. Issue: Did International Shoe have sufficient minimum contacts in the state of Washington to permit jurisdiction there? Decision: Yes, the company had minimum contacts with the state. Reasoning: Agents for International Shoe have operated continuously in Washington for many years. Their presence has been more than occasional or casual. And the agents’ activities have generated a significant number of sales for the company. Washington’s collection action is directly related to commercially valuable activities that took place within the state’s borders. Due process merely requires reasonable fairness. International Shoe has benefitted greatly from activities in Washington, and it faces no injustice if this suit proceeds. The minimum contacts doctrine is satisfied. Affirmed. Appellate Courts Appellate courts are entirely different from trial courts. Three or more judges hear the case. There are no juries, ever. These courts do not hear witnesses or take new evidence. They hear appeals of cases already tried below. Appellate courts generally accept the facts given to them by trial courts and review the trial record to see if the court made errors of law. Appellate courts Higher courts, which generally accept the facts provided by trial courts and review the record for legal errors An appellate court reviews the trial record to make sure that the lower court correctly applied the law to the facts. If the trial court made an error of law, the appeal court may require a new trial. Suppose the jury concludes that Tony Caruso committed suicide but votes to award Enviro-Vision $1 million because it feels sorry for Beth Smiles. That is an error of law; if Tony committed suicide, Beth is entitled to nothing. An appellate court will reverse the decision, declaring Coastal the victor. The party that loses at the trial court generally is entitled to be heard at the intermediate court of appeals. The party filing the appeal is the appellant. The party opposing the appeal (because it won at trial) is the appellee. A party that loses at the court of appeals may ask the state supreme court to hear an appeal, but the state’s highest court may choose not to accept the case. Appellant The party filing an appeal of a trial verdict Appellee The party opposing an appeal 5-1b Federal Courts As discussed in Chapter 1, federal courts are established by the U.S. Constitution, which limits what kinds of cases can be brought in any federal court. For our purposes, two kinds of civil lawsuits are permitted in federal court: federal question cases and diversity cases. Federal Question Cases A claim based on the U.S. Constitution, a federal statute, or a federal treaty is called a federal question case. Federal courts have jurisdiction over these cases. If the Environmental Protection Agency (EPA), a part of the federal government, orders Logging Company not to cut in a particular forest, and Logging Company claims that the agency has wrongly deprived it of its property, that suit is based on a federal statute (a law passed by Congress) and is thus a federal question. EnviroVision’s potential suit merely concerns an insurance contract. The federal district court has no federal question jurisdiction over the case. Federal question A claim based on the U.S. Constitution, a federal statute, or a federal treaty case Diversity Cases Even if no federal law is at issue, federal courts have jurisdiction when (1) the plaintiff and defendant are citizens of different states and (2) the amount in dispute exceeds $75,000. The theory behind diversity jurisdiction is that courts of one state might be biased against citizens of another state. To ensure fairness, the parties have the option to use a federal court as a neutral playing field. Enviro-Vision is located in Oregon, and Coastal Insurance is incorporated in Georgia. They are citizens of different states and the amount in dispute far exceeds $75,000. Janet could file this case in U.S. District Court based on diversity jurisdiction. Diversity case A lawsuit in which the plaintiff and defendant are citizens of different states and the amount in dispute exceeds $75,000 Trial Courts U.S. District Courts are the primary trial courts in the federal system. The nation is divided into about 94 districts, and each has a district court. States with smaller populations have one district, while those with larger populations have several. There are also specialized trial courts such as Bankruptcy Court, Tax Court, and others, which are, you will be happy to know, beyond the scope of this book. Appellate Courts United States Courts of Appeals. These are the intermediate courts of appeals. They are divided into “circuits,” most of which are geographical areas. For example, an appeal from the Northern District of Illinois would go to the Court of Appeals for the Seventh Circuit. United States Supreme Court. This is the highest court in the country. There are nine justices on the Court. One justice is the chief justice, and the other eight are associate justices. When they decide a case, each justice casts an equal vote. EXAMStrategy Question: Mark has sued Janelle based on the state common law of negligence. He is testifying in court, explaining how Janelle backed a rented truck out of her driveway and slammed into his Lamborghini, doing $82,000 in damages. Where would this trial take place? A. State appeals court B. U.S. Court of Appeals C. State trial court D. Federal district court E. Either state trial court or federal district court Strategy: The question asks about trial and appellate courts, and also about state versus federal courts. One issue at a time, please. What are the different functions of trial and appellate courts? Trial courts use witnesses, and often juries, to resolve factual disputes. Appellate courts never hear witnesses and never have juries. Applying that distinction to these facts tells us whether we are in a trial or appeals court. State trial courts may hear lawsuits on virtually any issue. Federal district courts may only hear two kinds of cases: federal question (those involving a statute or constitutional provision); or diversity (where the parties are from different states and the amount at issue is $75,000 or higher). Apply what we know to the facts here. Result: We are in a trial court because Mark is testifying. Could we be in federal district court? No. The suit is based on state common law. This is not a diversity case because the parties live in the same state, and this is not an appeal of a previous trial, so this is not an appeals court. Janet Booker decides to file the Enviro-Vision suit in the Oregon trial court. She thinks that a state court judge may take the issue more seriously than a federal district court judge. 5-2 LITIGATION 5-2a Pleadings The documents that begin a lawsuit are called the pleadings. The most important are the complaint and the answer. Pleadings The documents that begin a lawsuit, consisting of a complaint, the answer, and sometimes a reply Complaint The plaintiff files in court a complaint, which is a short, plain statement of the facts she is alleging and the legal claims she is making. The purpose of the complaint is to inform the defendant of the general nature of the claims and the need to come into court and protect his interests. Complaint The pleading that starts a lawsuit, this is a short statement of the facts alleged by the plaintiff and his or her legal claims Janet Booker files the complaint, as shown below. Because Enviro-Vision is a partnership, she files the suit on behalf of Beth, personally. STATE OF OREGON CIRCUIT COURT Multnomah County Civil Action No. ___________ Elizabeth Smiles, Plaintiff No. _______________ JURY TRIAL DEMANDED v. Coastal Insurance Company, Inc., Defendant _______________ COMPLAINT Plaintiff Elizabeth Smiles states that: 1. She is a citizen of Multnomah County, Oregon. 2. Defendant Coastal Insurance Company, Inc., is incorporated under the laws of Georgia and has as its usual place of business 148 Thrift Street, Savannah, Georgia. 3. On or about July 5, 2018, plaintiff Smiles (“Smiles”), Defendant Coastal Insurance Co, Inc. (“Coastal”) and Anthony Caruso entered into an insurance contract (“the contract”), a copy of which is annexed hereto as Exhibit “A.” This contract was signed by all parties or their authorized agents, in Multnomah County, Oregon. 4. The contract obligates Coastal to pay to Smiles the sum of two million dollars ($2 million) if Anthony Caruso should die accidentally. 5. On or about September 15, 2018, Anthony Caruso accidentally drowned and died while swimming. 6. Coastal has refused to pay any sum pursuant to the contract. 7. Coastal has knowingly, willingly and unreasonably refused to honor its obligations under the contract. WHEREFORE, plaintiff Elizabeth Smiles demands judgment against defendant Coastal for all monies due under the contract; demands triple damages for Coastal’s knowing, willing, and unreasonable refusal to honor its obligations; and demands all costs and attorney’s fees, with interest. ELIZABETH SMILES, By her attorney, [Signed] Janet Booker Pruitt, Booker & Bother 983 Joy Avenue Portland, OR October 18, 2018 Answer Coastal has 20 days in which to file an answer. Coastal’s answer is a brief reply to each of the allegations in the complaint. The answer tells the court and the plaintiff exactly what issues are in dispute. Since Coastal admits that the parties entered into the contract that Beth claims they did, there is no need for her to prove that in court. The court can focus its attention on the issue that Coastal disputes: whether Tony Caruso died accidentally. Answer The defendant’s response to the complaint If the defendant fails to answer in time, the plaintiff will ask for a default judgment, meaning a decision that the plaintiff wins without a trial. Two men sued Pepsi, claiming that the company stole the idea for Aquafina water from them. They argued that they should receive a portion of the profits for every bottle of Aquafina ever sold. Default A decision that the plaintiff in a case wins without going to trial judgment Pepsi failed to file a timely answer, and the judge entered a default judgment in the amount of $1.26 billion. On appeal, the default judgment was overturned, and Pepsi was able to escape paying the massive sum, but other defendants are sometimes not so lucky. It is important to respond to courts on time. Class Actions Suppose Janet uncovers evidence that Coastal denies 80 percent of all life insurance claims, calling them suicide. She could ask the court to permit a class action. If the court granted her request, she would represent the entire group of plaintiffs, including those who are unaware of the lawsuit or even unaware they were harmed. Class actions can give the plaintiffs much greater leverage, since the defendant’s potential liability is vastly increased. Because Janet has no such evidence, she decides not to pursue a class action. Class A suit filed by a group of plaintiffs with related claims Motion to Dismiss action A party can ask the court for a judgment based simply on the pleadings themselves, by filing a motion to dismiss. A motion is a formal request to the court that it take some step or issue some order. During a lawsuit, the parties file many motions. A motion to dismiss is a request that the court terminate a case without permitting it to go further. It asks the court to decide, assuming the facts in the complaint are true, if the law offers a legal remedy for the plaintiff’s problem. Motion A formal request to the court that it take some step or issue some order Motion to dismiss A request that the court terminate a case because the law does not offer a legal remedy for the plaintiff’s problem In short, not every case continues past the pleadings process. Judges have the right to dismiss cases before trial if the plaintiff is unlikely to win. To allow such cases to continue would be a waste of resources. The following Supreme Court case tells us how much information a plaintiff has to present to survive a motion to dismiss. Ashcroft v. Iqbal 556 U.S. 662 United States Supreme Court, 2009 CASE SUMMARY Facts: In the months after the 9/11 attacks, the FBI arrested many suspected terrorists, most of whom were Arab Muslim men. Javaid Iqbal, a Pakistani Muslim, was one of them. While he was in prison, guards confined him to his cell 23 hours a day, kicked and punched him, and refused to let him pray. After his release, Iqbal filed a discrimination lawsuit against John Ashcroft, the former Attorney General who was in charge of the antiterrorism investigation. Iqbal’s pleadings contained the following information: (1) Most of the 9/11 detainees were Arab Muslim men; (2) detainees like Iqbal suffered harsh treatment in prison; and (3) Ashcroft approved the detainment policy. These three facts led Iqbal to conclude that Ashcroft illegally discriminated against the detainees because they were Arab Muslims. Ashcroft moved to dismiss the suit. He argued that Iqbal’s pleading did not contain enough information to show that discrimination was the cause of the detainment. Issue: Did Iqbal’s pleadings contain enough information to go forward? Decision: No. Iqbal did not make a plausible claim, so the suit was dismissed. Reasoning: A pleading must contain enough facts to show that the claim is plausible. The sheer possibility that a defendant has acted unlawfully is not enough. There is an important difference between possible and plausible. Possible means that the illegal activity could have happened; plausible means that there is a credible basis for believing that it did. Iqbal’s complaint only suggests that the Ashcroft, in the aftermath of a devastating terrorist attack, detained suspected terrorists under the tightest security. He offers no facts to support that this was done to discriminate against Arab Muslims. Iqbal would need to add more information to nudge his claim across the line from possible to plausible. Iqbal’s lawsuit is dismissed. Iqbal tells us that a valid complaint must show the court that the plaintiff’s claims are plausible, not just possible. Critics argue that this rule may deny a day in court to plaintiffs who could, in fact, discover sufficient evidence if they were allowed to proceed with the pre-trial process of discovery. Others applaud the strict standard because it reduces pointless trials. 5-2b The Discovery Process Discovery is the critical, pre-trial opportunity for both parties to learn the strengths and weaknesses of the opponent’s case. Discovery The pre-trial opportunity for both parties to gather information relevant to the case The theory behind civil litigation is that the best outcome is a negotiated settlement and that parties will move toward agreement if they understand the opponent’s case. That is likeliest to occur if both sides have an opportunity to examine the evidence their opponent will bring to trial. Further, if a case does go all the way to trial, efficient and fair litigation cannot take place in a courtroom filled with surprises. On television dramas, witnesses say astonishing things that amaze the courtroom. In real trials, the lawyers know in advance the answers to practically all questions asked because discovery has allowed them to see the opponent’s documents and question its witnesses. The following are the most important forms of discovery. Interrogatories These are written questions that the opposing party must answer, in writing, under oath. Depositions These provide a chance for one party’s lawyer to question the other party, or a potential witness, under oath. The person being questioned is the deponent. Lawyers for both parties are present. Deponent The person being questioned in a deposition Production of Documents and Materials Each side may ask the other side to produce relevant documents for inspection and copying; to produce physical objects, such as part of a car alleged to be defective; and for permission to enter on land to make an inspection, for example, at the scene of an accident. Physical and Mental Examination A party may ask the court to order an examination of the other party, if his physical or mental condition is relevant, for example, in a case of medical malpractice. Janet Booker begins her discovery with interrogatories. Her goal is to learn Coastal’s basic position and factual evidence and then follow up with more detailed questioning during depositions. Her interrogatories ask for every fact Coastal relied on in denying the claim. She asks for the names of all witnesses, the identity of all documents, the description of all things or objects that they considered. She requests the names of all corporate officers who played any role in the decision and of any expert witnesses Coastal plans to call. Coastal has 30 days to answer Janet’s interrogatories. Before it responds, Coastal mails to Janet a notice of deposition, stating its intention to depose Beth Smiles. Beth and Janet will go to the office of Coastal’s lawyer, and Beth will answer questions under oath. But at the same time Coastal sends this notice, it sends 25 other notices of deposition. It will depose Karen Caruso as soon as Beth’s deposition is over. Coastal also plans to depose all seven employees of EnviroVision; three neighbors who lived near Tony and Karen’s beach house; two policemen who participated in the search; the doctor and two nurses involved in the case; Tony’s physician; Jerry Johnson, Tony’s tennis partner; Craig Bergson, a college roommate; a couple who had dinner with Tony and Karen a week before his death; and several other people. Rich, the Coastal lawyer, proceeds to take Beth’s deposition. It takes two full days. He asks about Enviro-Vision’s past and present. He learns that Tony appeared to have won their biggest contract ever from Rapid City, Oregon, but that he then lost it when he had a fight with Rapid City’s mayor. He inquires into Tony’s mood, learns that he was depressed, and probes in every direction he can to find evidence of suicidal motivation. Janet and Rich argue frequently over questions and whether Beth should have to answer them. At times, Janet is persuaded and permits Beth to answer; other times, she instructs Beth not to answer. For example, toward the end of the second day, Rich asks Beth whether she and Tony had been sexually involved. Janet instructs Beth not to answer. This fight necessitates a trip into court. As both lawyers know, the parties are entitled to discover anything that could reasonably lead to valid evidence. Rich wants his questions answered, so he files a motion to compel discovery. The judge will have to decide whether Rich’s questions are reasonable. A motion is a formal request to the court. Before, during, and after trial, both parties will file many motions. A motion to compel discovery is a request to the court for an order requiring the other side to answer discovery. The judge rules that Beth must discuss Tony’s romantic life only if Coastal has evidence that he was involved with someone outside his marriage. Because the company lacks any such evidence, the judge denies Coastal’s motion. At the same time, the judge hears one of Beth’s motions for a protective order. Beth claims that Rich has scheduled too many depositions; the time and expense are a huge burden to a small company. The judge limits Rich to ten depositions. Rich cancels several depositions, including that of Craig Bergson, Tony’s old roommate. As we will see, Craig knows crucial facts about this case, and Rich’s decision not to depose him will have major consequences. E-Discovery The internet age changed discovery. Companies send hundreds, thousands, or even millions of emails every day. Many have attachments that are sometimes hundreds of pages long. In addition, businesses large and small have vast amounts of data stored electronically. All this information is potentially subject to discovery. It is enormously time-consuming and expensive for companies to locate all the relevant material, separate it from irrelevant or confidential matter, and furnish it. A firm may be obligated to furnish millions of emails to the opposing party. Who is to say what must be supplied? What if an email string contains individual emails that are clearly privileged (meaning a party need not divulge them), but others that are not privileged? May a company refuse to furnish the entire string? Many will try. However, some courts have ruled that companies seeking to protect email strings must create a log describing every individual email and allow the court to determine which are privileged. Social media further complicates discovery. When a Facebook profile or Twitter account is public, opposing parties are free to rummage through the treasure trove of personal information. But what about access to a private social media profile? To protect people’s privacy, courts require parties to show that the discovery request will to lead to relevant and admissible evidence. But that standard means that private accounts are not really private. Both sides in litigation sometimes use gamesmanship during discovery. Thus, if an individual sues a large corporation, the company may deliberately make discovery so expensive that the plaintiff cannot afford the legal fees. And if a plaintiff has a poor case, he might intentionally try to make the discovery process more expensive for the defendant than a reasonable settlement offer. 5-2c Summary Judgment When discovery is completed, both sides may consider seeking summary judgment. Summary judgment is a ruling by the court that no trial is necessary because some essential facts are not in dispute. The purpose of a trial is to determine the facts of the case; that is, to decide who did what to whom, why, when, and with what consequences. If relevant facts are not in dispute, then there is no need for a trial. Summary A ruling that no trial is necessary because essential facts are not in dispute judgment In the following case, the defendant won summary judgment, meaning that the case never went to trial. That was good news for the defendant, who happened to be the president of the United States at the time. Jones v. Clinton 990 F. Supp. 657 United States District Court for the Eastern District of Arkansas, 1998 CASE SUMMARY Facts: In 1991, Bill Clinton was governor of Arkansas. Paula Jones worked for a state agency, the Arkansas Industrial Development Commission (AIDC). When Clinton became president, Jones sued him, claiming that he had sexually harassed her. She alleged that in May 1991, the governor arranged for her to meet him in a hotel room in Little Rock, Arkansas. When they were alone, he put his hand on her leg and slid it toward her pelvis. She escaped from his grasp, exclaimed, “What are you doing?” and said she was “not that kind of girl.” Upset and confused, she sat on a sofa near the door. She claimed that Clinton approached her, “lowered his trousers and underwear, exposed his penis, and told her to kiss it.” Jones was horrified, jumped up, and said she had to leave. Clinton responded by saying, “Well, I don’t want to make you do anything you don’t want to do,” and pulled his pants up. He added that if she got in trouble for leaving work, Jones should “have Dave call me immediately and I’ll take care of it.” He also said, “You are smart. Let’s keep this between ourselves.” Jones remained at AIDC until February 1993, when she moved to California because of her husband’s job transfer. President Clinton denied all the allegations. He also filed for summary judgment, claiming that Jones had not alleged facts that justified a trial. Jones opposed the motion for summary judgment. Issue: Was Clinton entitled to summary judgment, or was Jones entitled to a trial? Decision: Jones failed to make out a claim of sexual harassment. Summary judgment was granted for the President. Reasoning: To establish this type of sexual harassment case, a plaintiff must show that her refusal to submit to unwelcome sexual advances resulted in specific harm to her job. Jones received every merit increase and cost-of-living allowance for which she was eligible. Her only job transfer involved a minor change in working conditions, with no reduction in pay or benefits. Jones claims that she was obligated to sit in a less private area, often with no work to do, and was the only female employee not to receive flowers on Secretary’s Day. However, even if these allegations are true, all are trivial and none is sufficient to create a sexual harassment suit. Jones has demonstrated no specific harm to her job. In other words, the court acknowledged that there were factual disputes but concluded that even if Jones proved each of her allegations, she would still lose the case because her allegations fell short of a legitimate case of sexual harassment. Jones appealed the case. Later the same year, as the appeal was pending and the House of Representatives was considering whether to impeach President Clinton, the parties settled the dispute. Clinton, without acknowledging any of the allegations, agreed to pay Jones $850,000 to drop the suit. Janet and Rich each consider moving for summary judgment, but both correctly decide that they would lose. There is one major fact in dispute: Did Tony Caruso commit suicide? Only a jury may decide that issue. As long as there is some evidence supporting each side of a key factual dispute, the court may not grant summary judgment. More than 90 percent of all lawsuits are settled before trial. But the parties in the EnviroVision dispute are unable to compromise and are headed for trial. More than 90 percent of all lawsuits are settled before trial. EXAMStrategy Question: You are a judge. Mel has sued Kevin claiming that, while Kevin was drunk, he negligently drove his car into Mel’s property, destroying his rare trees. Mel’s complaint stated that three witnesses, at a bar, saw Kevin take at least eight drinks right before the damage was done. In Kevin’s answer, he denied being in the bar that night and causing the damage. Kevin’s lawyer has moved for summary judgment. He proves that three weeks before the alleged accident, Mel sold the lot to Tatiana. Mel’s lawyer opposes summary judgment. He produces a security camera tape proving that Kevin was at the bar, drinking beer, 34 minutes before the damage was done. He produces a signed statement from Sandy, Mel’s neighbor. Sandy states that she heard a crash, hurried to the window, and saw Kevin’s car weaving away from the damaged trees. Sandy is a landscape gardener and estimates the tree damage at $30,000 to $40,000. How should you rule on the motion? Strategy: Do not be fooled by red herrings about Kevin’s drinking or the value of the trees. Stick to the question: Should you grant summary judgment? Trials are necessary to resolve disputes about essential factual issues. Summary judgment is appropriate when some essential facts are not disputed. Is there an essential fact not in dispute? Find it. Apply the rule. Being a judge is easy! Result: It makes no difference whether Kevin was drunk or sober, whether he caused the harm, or whether he was at home in bed. Mel did not own the property at the time of the accident. He cannot win. You should grant Kevin’s summary judgment motion. 5-3 TRIAL Our system of justice assumes that the best way to bring out the truth is for the two contesting sides to present the strongest case possible to a neutral fact finder. Each side presents its witnesses, and then the opponent has a chance to cross-examine. The adversary system presumes that by putting a witness on the stand and letting both lawyers question her, the truth will emerge. Adversary system A system based on the assumption that if two sides present their best case before a neutral party, the truth will be established The judge runs the trial. Each lawyer sits at a large table near the front. Beth, looking tense and unhappy, sits with Janet. Rich Stewart sits with a Coastal executive. In the back of the courtroom are benches for the public. Today, there are only a few spectators. One is Tony’s old roommate, Craig Bergson, who has a special interest in the trial. 5-3a Right to Jury Trial Not all cases are tried to a jury. As a general rule, both plaintiff and defendant have a right to demand a jury trial when the lawsuit is for money damages. For example, in a typical contract lawsuit, such as Beth’s insurance claim, both plaintiff and defendant have a jury trial right whether they are in state or federal court. Even in such a case, though, the parties may waive the jury right, meaning they agree to try the case to a judge. Also, if the plaintiff is seeking an equitable remedy, such as an injunction (an order not to do something), there is no jury right for either party. Although jury selection for some cases takes many days, in the Enviro-Vision case the first day of the hearing ends with the jury selected. In the hallway outside the court, Rich offers Janet $200,000 to settle. Janet reports the offer to Beth, and they agree to reject it. Craig Bergson drives home, emotionally confused. Only three weeks before his death, Tony had accidentally met his old roommate, and they had had several drinks. Craig believes that what Tony told him answers the riddle of this case. 5-3b Opening Statements The next day, each attorney makes an opening statement to the jury, summarizing the proof he or she expects to offer, with the plaintiff going first. Janet focuses on Tony’s successful life, his business and strong marriage, and the tragedy of his accidental death. Rich works hard to establish a friendly rapport with the jury. If members of the jury like him, they will tend to pay more attention to his presentation of evidence. He expresses regret about the death. Nonetheless, suicide is a clear exclusion from the policy. If insurance companies are forced to pay claims they did not bargain for, everyone’s insurance rates will go up. 5-3c Burden of Proof In civil cases, the plaintiff has the burden of proof. That means that the plaintiff must convince the jury that its version of the case is correct; the defendant is not obligated to disprove the allegations. Burden of The obligation to convince the jury that a party’s version of the case is correct proof The plaintiff’s burden in a civil lawsuit is to prove its case by a preponderance of the evidence. The plaintiff must convince the jury that his or her version of the facts is at least slightly more likely than the defendant’s version. Some courts describe this as a “51–49” persuasion, that is, that plaintiff’s proof must “just tip” credibility in its favor. By contrast, in a criminal case, the prosecution must demonstrate beyond a reasonable doubt that the defendant is guilty. The burden of proof in a criminal case is much tougher because the likely consequences are too. See Exhibit 5.2. Preponderance of The standard of proof required for a civil case Beyond a The government’s burden in a criminal prosecution the reasonable evidence doubt EXHIBIT 5.2 Burden of Proof. In a civil lawsuit, a plaintiff wins with a mere preponderance of the evidence. But the prosecution must persuade a jury beyond a reasonable doubt in order to win a criminal conviction. 5-3d Plaintiff’s Case Since the plaintiff has the burden of proof, Janet puts in her case first. She wants to prove two things. First, that Tony died. That is easy, since the death certificate clearly demonstrates it and since Coastal does not seriously contest it. Second, in order to win double indemnity damages, she must show that the death was accidental. She will do this with the testimony of the witnesses she calls, one after the other. Her first witness is Beth. When a lawyer asks questions of her own witness, it is direct examination. Janet brings out all the evidence she wants the jury to hear: that the business was basically sound, though temporarily troubled, that Tony was a hard worker, why the company took out life insurance policies, and so forth. Direct A lawyer asks questions of his or her own witness. examination Then Rich has a chance to cross-examine Beth, which means to ask questions of an opposing witness. He will try to create doubt in the jury’s mind. He asks Beth only questions for which he is certain of the answers, based on discovery. Rich gets Beth to admit that the firm was not doing well the year of Tony’s death; that Tony had lost the best client the firm ever had; that Beth had reduced salaries; and that Tony had been depressed about business. Cross-examine A lawyer asks questions of an opposing witness. Janet uses her other witnesses, Tony’s friends, family, and coworkers, to fortify the impression that his death was accidental. 5-3e Defendant’s Case Rich now puts in his case, exactly as Janet did, except that he happens to have fewer witnesses. He calls the examining doctor, who admits that Tony could have committed suicide by swimming out too far. On cross-examination, Janet gets the doctor to acknowledge that he has no idea whether Tony intentionally drowned. Rich also questions several neighbors as to how depressed Tony had seemed and how unusual it was that Blue was tied up. Some of the witnesses Rich deposed, such as the tennis partner Jerry Johnson, have nothing that will help Coastal’s case, so he does not call them. Craig Bergson, sitting in the back of the courtroom, thinks how different the trial would have been had he been called as a witness. When he and Tony had the fateful drink, Tony had been distraught: Business was terrible, he was involved in an extramarital affair that he could not end, and he saw no way out of his problems. He had no one to talk to and had been hugely relieved to speak with Craig. Several times Tony had said, “I just can’t go on like this. I don’t want to, anymore.” Craig thought Tony seemed suicidal and urged him to see a therapist Craig knew. Tony had said that it was good advice, but Craig is unsure whether Tony sought any help. This evidence would have affected the case. Had Rich Stewart known of the conversation, he would have deposed Craig and the therapist. Coastal’s case would have been far stronger, perhaps overwhelming. But Craig’s evidence will never be heard. Facts are critical. Rich’s decision to depose other witnesses and omit Craig may influence the verdict more than any rule of law. 5-3f Closing Argument Both lawyers sum up their case to the jury, explaining how they hope the jury will interpret what they have heard. Judge Rowland instructs the jury as to its duty. He tells them that they are to evaluate the case based only on the evidence they heard at trial, relying on their own experience and common sense. He explains the law and the burden of proof, telling the jury that it is Beth’s obligation to prove her case. If Beth has proven that Tony died by means other than suicide but not by accident, she is entitled to $1 million; if she has proven that his death was accidental, she is entitled to $2 million. However, if Coastal has proven suicide, Beth receives nothing. Finally, he states that if they are unable to decide between accidental death and suicide, there is a legal presumption that it was accidental. Rich asks Judge Rowland to rephrase the “legal presumption” part, but the judge declines. 5-3g Verdict The jury deliberates informally, with all jurors entitled to voice their opinion. Some deliberations take two hours; some take two weeks. Many states require a unanimous verdict; others require only, for example, a 10–2 vote in civil cases. This case presents a close call. No one saw Tony die. Yet even though they cannot know with certainty, the jury’s decision will probably be the final word on whether he took his own life. After a day and a half of deliberating, the jury notifies the judge that it has reached a verdict. Rich Stewart quickly makes a new offer: $350,000. The two sides have the right to settle up until the moment when the last appeal is decided. Beth hesitates but turns it down. The judge summons the lawyers to court, and Beth goes as well. The judge asks the foreman if the jury has reached a decision. He states that it has: The jury finds that Tony Caruso drowned accidentally and awards Beth Smiles $2 million. 5-4 APPEALS Two days later, Rich files an appeal to the court of appeal. The same day, he phones Janet and increases his settlement offer to $425,000. Beth is tempted but wants Janet’s advice. Janet says the risks of an appeal are that the court will order a new trial, and they would start all over. But to accept this offer is to forfeit over $1.5 million. Beth is unsure what to do. The firm desperately needs cash now, and appeals may take years. Janet suggests they wait until oral argument, another eight months. Rich files a brief arguing that there were two basic errors at the trial: First, that the jury’s verdict is clearly contrary to the evidence; and second, that the judge gave the wrong instructions to the jury. Janet files a reply brief, opposing Rich on both issues. In her brief, Janet cites many cases that she claims are precedent: earlier decisions by the state supreme court on similar or identical issues. Precedent Earlier decisions by a court on similar or identical issues, on which subsequent court decisions can be based 5-4a Appeal Court Options The court of appeal can affirm the trial court, allowing the decision to stand. The court may modify the decision, for example, by affirming that the plaintiff wins but decreasing the size of the award. (That is unlikely here; Beth is entitled to $2 million or nothing.) The court might reverse and remand, meaning it nullifies the lower court’s decision and returns the case to the trial court for a new trial. Or it could simply reverse, turning the loser (Coastal) into the winner, with no new trial. Affirm To allow a court decision to stand as is Modify To let a court decision stand, but with changes Reverse and To nullify a lower court’s decision and return a case to trial remand Reverse To rule that the loser in a previous case wins, with no new trial Janet and Beth talk. Beth is very anxious and wants to settle. She does not want to wait four or five months only to learn that they must start all over. With Beth’s approval, Janet phones Rich and offers to settle for $1.2 million. Rich snorts, “Yeah, right.” Then he snaps, “$750,000. Take it or leave it. Final offer.” After a short conversation with her client, Janet calls back and accepts the offer. Litigation 1. PLEADINGS Complaint Answer 2. DISCOVERY Interrogatories Depositions Production of documents and things Physical and mental examinations 3. PRE-TRIAL MOTIONS Class action Summary judgment 4. TRIAL Jury selection Opening statements Plaintiff’s case Defendant’s case Closing argument 5. JURY’S ROLE Judge’s instructions Deliberation Verdict 6. APPEALS Affirm Modify Reverse Remand 5-5 ALTERNATIVE DISPUTE RESOLUTION As we have seen in the previous section, trials can be trying. Lawsuits can cause prolonged periods of stress, significant legal bills, and general unpleasantness. Many people and companies prefer to settle cases out of court. Alternative dispute resolution (ADR) provides several semiformal methods of resolving conflicts without litigation. We will look at two different types of ADR: mediation and arbitration. 5-5a Mediation Mediation is the fastest-growing method of dispute resolution in the United States. Here, a neutral person, called a mediator, attempts to guide the two disputing parties toward a voluntary settlement. Mediation A form of ADR in which a neutral third party guides the disputing parties toward a voluntary settlement A mediator does not render a decision in the dispute but uses a variety of skills to move the parties toward agreement. Mediators must earn the trust of both parties, listen closely, defuse anger and fear, explore common ground, cajole the parties into different perspectives, and build the will to settle. Good mediators do not need a law degree, but they must have a sense of humor and low blood pressure. Of all forms of dispute resolution, mediation probably offers the strongest “win-win” potential. Because the goal is voluntary settlement, neither party needs to fear that it will end up the loser. This is in sharp contrast to litigation, where one party is very likely to lose. Removing the fear of defeat often encourages thinking and talking that are more open and realistic than negotiations held in the midst of a lawsuit. Studies show that more than 75 percent of mediated cases do reach a voluntary settlement. 5-5b Arbitration In this form of ADR, the parties agree to bring in a neutral third party, but with a major difference: The arbitrator has the power to impose an award. Arbitration A form of ADR in which a neutral third party has the power to impose a binding decision The arbitrator allows each side equal time to present its case and, after deliberation, issues a binding decision, generally without giving reasons. Unlike mediation, arbitration ensures that there will be a final result, although the parties lose control of the outcome. Arbitration is generally faster and cheaper than litigation. Parties in arbitration give up many rights that litigants retain, including discovery. In arbitration, as already discussed as applied to trials, discovery allows the two sides in a lawsuit to obtain documentary and other evidence from the opponent before the dispute is decided. Arbitration permits both sides to keep secret many files that would have to be divulged in a court case, potentially depriving the opposing side of valuable evidence. A party may have a stronger case than it realizes, and the absence of discovery may permanently deny it that knowledge. Arbitration agreements are contracts in which the parties agree to arbitrate their claims instead of filing a lawsuit. Traditionally, parties signed arbitration agreements after an incident. A car accident would happen first, and then the drivers would agree to arbitration. But today, many parties agree in advance to arbitrate any disputes that may arise in the future. It is a common clause in both employment and consumer agreements. Despite evidence that these clauses are harmful to plaintiffs, courts will generally enforce them if they meet two conditions. First, both parties must promise to submit disputes to arbitration. A unilateral agreement only requiring one party to give up its right to sue is unenforceable. Second, the contract must provide a neutral forum to resolve disputes and adopt reasonable rules to govern proceedings. One party cannot have the exclusive right to choose the arbitrators. Arbitration Contracts in which the parties agree to arbitrate their claims instead of filing a lawsuit agreements CHAPTER CONCLUSION No one will ever know for sure whether Tony took his own life. Craig Bergson’s evidence might have tipped the scales in favor of Coastal. But even that is uncertain, since the jury could have found him unpersuasive. After two years, the case ends with a settlement and uncertainty— both typical lawsuit results. The vaguely unsatisfying feeling about it all is only too common and indicates why litigation is best avoided—by reasonable negotiation. CHAPTER 6 CRIME Crime can take us by surprise. Stacey tucks her nine-year-old daughter, Beth, into bed. Promising her husband, Mark, that she will be home by 11:00 p.m., she jumps into her car and heads back to Be Patient, Inc. When her iPhone connects to the sound system in her $100,000 sedan, she tries to relax by listening to music. Be Patient is a healthcare organization that owns five geriatric facilities. Most of its patients use Medicare, and Stacey supervises all billing to their largest client, the federal government. She parks in a well-lighted spot on the street and walks to her building, failing to notice two men, collars turned up, watching from a parked truck. Once in her office, she goes straight to her computer and works on billing issues. Tonight’s work goes more quickly than she expected, thanks to new software she helped develop. At 10:30 p.m., she emerges from the building with a quick step and a light heart, walks to her car—and finds it missing. A major crime has occurred during the 90 minutes Stacey was at her desk, but she will never report it to the police. A major crime has occurred during the 90 minutes Stacey was at her desk, but she will never report it to the police. It is a crime that costs Americans countless dollars each year, yet Stacey will not even mention it to friends or family. Stacey is the criminal. When we think of crime, we imagine the drug dealers and bank robbers endlessly portrayed on television. We do not picture corporate executives sitting at polished desks. “Street crimes” are indeed serious threats to our security and happiness. They deservedly receive the attention of the public and the law. But when measured only in dollars, street crime takes second place to whitecollar crime, which costs society tens of billions of dollars annually. The hypothetical about Stacey is based on many real cases and is used to illustrate that crime does not always dress the way we expect. Her car was never stolen; it was simply towed. Two parking bureau employees, watching from their truck, saw Stacey park illegally and did their job. It is Stacey who committed a crime—Medicare fraud. Every month, she has billed the government for work that her company has not performed. Stacey’s scheme was quick and profitable—and a distressingly common crime. Crime, whether violent or white-collar, is detrimental to all society. It imposes a huge cost on everyone. Just the fear of crime is expensive—homeowners buy alarm systems, and businesses hire security guards. But the anger and fear that crime engenders sometimes tempt us to forget that not all accused people are guilty. Everyone suspected of a crime should have the protections that you would want yourself. As the English jurist William Blackstone said, “Better that ten guilty persons escape than that one innocent suffer.” Thus, criminal law is a balancing act—between making society safe and protecting us all from false accusations and unfair punishment. 6-1 CRIMINAL PROCEDURE Most of this book focuses on civil law, so we begin with a discussion of the differences between a civil and a criminal case. 6-1a A Civil versus a Criminal Case In civil cases, the wrongdoing has harmed the safety or property of the parties, but it is not so serious that it threatens society as a whole. Conduct becomes criminal when society outlaws it. If a state legislature or Congress concludes that certain behavior harms public safety and welfare, it passes a statute forbidding that activity; in other words, declaring it criminal. Medicare fraud, which Stacey committed, is a crime because Congress has outlawed it. The title of a criminal case is usually the government versus someone: The United States of America v. Simpson or The State of Illinois v. Simpson. This name illustrates a daunting thought— if you are Simpson, the vast power of the government is against you. Because of the government’s great power and the severe penalties it can impose, criminal procedure is designed to protect the accused and ensure that criminal trials are fair. Many of the protections for those accused of a crime are found in the first ten amendments to the United States Constitution, known as the Bill of Rights. Criminal The process by which criminals are investigated, accused, tried, and sentenced procedure Prosecution Suppose the police arrest Roger and accuse him of breaking into a store and stealing 50 computers. The owner of the store has been harmed, so he has the right to sue the thief in civil court to recover money damages. But only the government can prosecute a crime and punish Roger by sending him to prison. The government may also impose a fine on Roger, but it keeps the fine and does not share it with the victim. (However, the court will sometimes order restitution, meaning that the defendant must reimburse the victim for the harm suffered.) Restitution When a guilty defendant must reimburse the victim for the harm suffered Burden of Proof In a civil case, the plaintiff must prove her case only by a preponderance of the evidence. 1 But because the penalties for conviction in a criminal case are so serious, the government has to prove its case beyond a reasonable doubt. In a criminal case, if the jury has any significant doubt at all that Roger stole the computers, it must acquit him. Beyond a reasonable doubt The very high burden of proof in a criminal trial, demanding much more certainty than required in a civil trial Right to a Jury The facts of a case are decided by a judge or jury. A criminal defendant has a right to a trial by jury for any charge that could result in a sentence of six months or longer. The defendant may choose not to have a jury trial, in which case, the judge decides the verdict. When the judge is the fact finder, the proceeding is called a bench trial. Bench There is no jury; the judge reaches a verdict trial Felonies and Misdemeanors A felony is a serious crime, for which a defendant can be sentenced to one year or more in prison. Murder, robbery, rape, wire fraud, and embezzlement are felonies. A misdemeanor is a less serious crime, often punishable by a year or less in a county jail. Public drunkenness, driving without a license, and shoplifting are considered misdemeanors in many states. Felony A serious crime, for which a defendant can be sentenced to one year or more in prison Misdemeanor A less serious crime, often punishable by less than a year in a county jail 6-1b State of Mind Voluntary Act A defendant is not guilty of a crime if she was forced to commit it. In other words, she is not guilty if she acted under duress. However, the defendant bears the burden of proving by a preponderance of the evidence that she did act under duress. In 1974, a terrorist group kidnapped heiress Patricia Hearst from her college apartment. After being tortured for two months, she participated in a bank robbery with the group. Despite opportunities to escape, she stayed with the criminals until her capture by the police a year later. The State of California put on her on trial for bank robbery. One question for the jury was whether she had voluntarily participated in the crime. This was an issue on which many people had strong opinions. Ultimately Hearst was convicted, sent to prison, and then later pardoned. Entrapment When the government induces the defendant to break the law, the prosecution must prove beyond a reasonable doubt that the defendant was predisposed to commit the crime. The goal is to separate the cases where the defendant was innocent before the government tempted him from those where the defendant was only too eager to break the law. Kalchinian and Sherman met in the waiting room of a doctor’s office where they were both being treated for drug addiction. After several more meetings, Kalchinian told Sherman that the treatment was not working for him and he was desperate to buy drugs. Could Sherman help him? Sherman repeatedly refused, but ultimately agreed to help end Kalchinian’s suffering by providing him with drugs. Little did Sherman know that Kalchinian was a police informer. Sherman sold drugs to Kalchinian a number of times. Kalchinian rewarded this act of friendship by getting Sherman hooked again and then turning him in to the police. A jury convicted Sherman of drug dealing, but the Supreme Court overturned the conviction on the grounds that Sherman had been entrapped. The Court felt there was not enough evidence that Sherman was predisposed to commit the crime. Conspiracy Jeen and Sunny Han were 22-year-old identical twin sisters with a long history of physical and verbal fights. One day, Jeen and two teen-age boys purchased gloves, twine, tape, Pine Sol, and garbage bags. While Jeen waited outside Sunny’s apartment, the boys forced their way in, tied up Sunny and her roommate, and put them in the bathtub. Luckily, Sunny had a chance to dial 911 as she heard the boys breaking in. When the police arrived, the two boys fled. This case raises several questions: Has Jeen committed a crime? Are the boys guilty of anything more than breaking into Sunny’s apartment? How did this family go so terribly wrong? (Because this is a business law text, we can only answer the first two questions.) If the police discover a plot to commit a crime, they can arrest the defendants before any harm has been done. It is illegal to conspire to commit a crime, even if that crime never actually occurs. A defendant can be convicted of taking part in a conspiracy if: • • • A conspiracy existed, The defendants knew about it, and Some member of the conspiracy voluntarily took a step toward implementing it. In the Han case, the jury convicted Jeen and the two boys of a conspiracy to murder her sister. As the court asked: What was she planning to do with the Pine Sol and plastic bags, given that she did not have a home? She was sentenced to a long prison term. The two boys got lesser (but still substantial) sentences because the judge believed Jeen had masterminded the crime. 6-1c Gathering Evidence: The Fourth Amendment If the police suspect that a crime has been committed, they will need to obtain evidence. The Fourth Amendment to the Constitution prohibits the government from making illegal searches and seizures. This amendment applies to individuals, corporations, and other organizations. The goal of the Fourth Amendment is to protect individuals and businesses from the powerful state. Warrant As a general rule, the police must obtain a warrant before conducting a search. A warrant is written permission from a neutral official, such as a judge or magistrate, to conduct a search.2 Warrant Written permission from a neutral officer to conduct a search The warrant must specify with reasonable precision the place to be searched and the items to be seized. Thus, if the police say they have reason to believe that they will find bloody clothes in the suspect’s car in his garage, they cannot also look through his house and confiscate file folders. Probable Cause The magistrate will issue a warrant only if there is probable cause. Probable cause means that, based on all the information presented, it is likely that evidence of a crime will be found in the place to be searched. Probable It is likely that evidence of a crime will be found in the place to be searched cause Searches without a Warrant There are seven circumstances under which police may search without a warrant. Plain View. When Rashad Walker opened his door in response to a police officer’s knock, he was holding a marijuana joint in his hand. The court held that the police did not need a warrant to make an arrest because evidence of the crime was in plain view. Emergencies. If the police believe that evidence is about to be destroyed, they can search without a warrant. Thus, if they suspect someone is using illegal drugs in an apartment, they can enter without a warrant because, in the time it would take to contact a magistrate, the drugs might be gone. Automobiles. If police have lawfully stopped a car and then observe evidence of other crimes in the car, such as burglary tools, they may search. Lawful Arrest. Police may always search a suspect they have arrested. The goal is to protect the officers and preserve evidence. Consent. Anyone lawfully living in a dwelling can allow the police in to search without a warrant. If your roommate gives the police permission to search your house, that search is legal. Stop and Frisk. None of us wants to live in a world in which police can randomly stop and frisk us on the street anytime they feel like it. The police do have the right to stop and frisk, but only if they have a clear and specific reason to suspect that criminal activity may be afoot and that the person may be armed and dangerous. In the following case, the police had the right to stop the driver, but could they search his car? You Be the Judge Rodriguez v. United States 135 S. Ct. 1609 United States Supreme Court, 2015 Facts: Driving along a highway just after midnight, Dennys Rodriguez briefly swerved onto the highway shoulder, which is a violation of the law. Officer Morgan Struble stopped him, questioned him, ran a records check on the car registration and his driver’s license, and then gave him a warning ticket. After explaining the warning to Rodriguez and returning the documents to him, Struble asked permission to walk his police dog around Rodriguez’s vehicle. Rodriguez said no. On the officer’s orders, Rodriguez exited the car. Then Struble walked his dog twice around the vehicle. The dog signaled the presence of drugs. While searching the car, Struble found methamphetamine, an illegal drug. At trial, Rodriguez argued that the dog sniff was illegal for two reasons. First, Struble had conducted a stop and frisk after the traffic stop was over. Second, for a search to be legal, police must have a good reason to suspect a specific criminal activity, which Struble did not have. Both the trial court and the appellate court disagreed with Rodriguez. The Supreme Court granted certiorari. You Be the Judge: Was the dog sniff legal? Argument for the Government: Officer Struble stopped a car that had swerved onto the shoulder of the highway. Maybe the driver was tired, or drunk, or high on drugs. In any event, Struble had reason to be suspicious. The dog sniff took minutes. That is not an unreasonable burden. Argument for the Defendant: Officer Struble saw Rodriguez driving dangerously. Stopping the car and running a records check are reasonable ways to protect highway safety. A dog sniff is entirely different—its goal is to detect crime. But the officer had no reason to believe that a crime had been committed. Briefly swerving on a highway after midnight is no evidence of wrongdoing. The police should not be allowed to conduct random searches of cars that have been stopped for a trivial traffic offense. No Expectation of Privacy. The police have a right to search any area in which the defendant does not have a reasonable expectation of privacy. For example, Rolando Crowder was staying at his friend Bobo’s apartment. Hearing the police in the hallway, he ran down to the basement. The police found Crowder in the basement with drugs nearby. Crowder argued that the police should have obtained a warrant, but the court ruled that Crowder had no expectation of privacy in Bobo’s basement. Technology and social media have created new challenges in determining what is a reasonable expectation of privacy. For example, police do need a warrant to: • • • • • Search the contents of your cell phone or personal computer, Intercept email in transit, Read private Facebook profiles and postings, Attach a GPS tracking device to your car, or Require a blood test. They do not need a warrant to: • • • • • • Require a DNA test on someone arrested for a serious crime, Require a breathalyzer test, Obtain records from the phone company (such as a phone’s location or a list of numbers called), Find out whom you have emailed or what websites you have visited, Search your internet messages, or Check your public social media profiles or your Twitter posts. Exclusionary Rule Under the exclusionary rule, any evidence the government acquires illegally may not be used at trial. The Supreme Court created the exclusionary rule to prevent governmental misconduct. The theory is simple: If police and prosecutors know in advance that illegally obtained evidence cannot be used in court, they will not be tempted to make improper searches or engage in other illegal behavior. Opponents of the rule argue that a guilty person may go free because one police officer bungled. They are outraged by cases like Coolidge v. New Hampshire. Pamela Mason, a 14-yearold babysitter, was brutally murdered. Because citizens of New Hampshire were so angry and scared, the state’s attorney general personally led the investigation. Police found strong evidence that Edward Coolidge had committed this terrible crime. They took the evidence to the attorney general, who personally issued a search warrant. After a search of Coolidge’s car uncovered incriminating evidence, he was found guilty of murder and sentenced to life in prison. But the Supreme Court reversed the conviction. The warrant had not been issued by a neutral magistrate. A law officer may not lead an investigation and simultaneously decide what searches are permissible. Ultimately, Coolidge pleaded guilty to second degree murder and served many years in prison. Is it reasonable to let a few dangerous criminals go free to discourage improper police behavior? Or is that price too high? 6-1d After Arrest Right to a Lawyer: The Sixth Amendment The Sixth Amendment guarantees the right to a lawyer at all important stages of the criminal process. Because of this right, the government must appoint a lawyer to represent, free of charge, any defendant who cannot afford one. Double Jeopardy The prohibition against double jeopardy means that a defendant may be prosecuted only once for a particular criminal offense. The purpose is to prevent the government from destroying the lives of innocent citizens with repeated prosecutions. Double A criminal defendant may be prosecuted only once for a particular criminal offense. jeopardy Indictment Once the police provide the prosecutor with evidence, he presents this evidence to a grand jury. Only the prosecutor presents evidence, not the defense attorney, because it is better for the defendant to save her evidence for the trial jury. Grand jury A group of ordinary citizens that decides whether there is probable cause the defendant committed the crime with which she is charged If the grand jury determines that there is probable cause that the defendant committed the crime with which she is charged, an indictment is issued. An indictment is the government’s formal charge that the defendant has committed a crime and must stand trial. Because the grand jury never hears the defendant’s evidence, it is relatively easy for prosecutors to obtain an indictment. In short, an indictment is not the same thing as a guilty verdict. Indictment The government’s formal charge that the defendant has committed a crime and must stand trial Arraignment At an arraignment, a clerk reads the formal charges of the indictment. The defendant must enter a plea to the charges. At this stage, most defendants plead not guilty. Plea Bargaining A plea bargain is an agreement between prosecution and defense that the defendant will plead guilty to a reduced charge, and the prosecution will recommend to the judge a relatively lenient sentence. About 97 percent of all federal prosecutions end in a plea bargain. Such a high percentage has led to some concern that innocent people may be pleading guilty to avoid the risk of tough mandatory sentences. A judge need not accept the bargain but usually does. Plea bargain An agreement in which the defendant pleads guilty to a reduced charge, and the prosecution recommends to the judge a relatively lenient sentence In the federal court system, about 97 percent of all prosecutions end in a plea bargain. Self-Incrimination: The Fifth Amendment The Fifth Amendment bars the government from forcing any person to provide evidence against himself. This provision means that an accused cannot be forced to testify at trial. Indeed, many criminal defendants do not. After all, the burden of proof is on the prosecution, so the defendant may not testify if his lawyer feels the prosecution has not proved its case. In addition, this provision means that the police may not use mental or physical coercion to force a confession or any other information out of someone. Society does not want a government that engages in torture. Such abuse might occasionally catch a criminal, but it would injure innocent people and make all citizens fearful of the government that is supposed to represent them. Also, coerced confessions are unreliable because the defendant may confess simply to end the torture. If the police do force a confession, the exclusionary rule prohibits the evidence from being admitted in court. In the following landmark case, the Supreme Court established the requirement that police remind suspects of their right to protection against self-incrimination—with the very same warning that we have all heard so many times on television shows. Landmark Case Miranda v. Arizona 384 U.S. 436 United States Supreme Court, 1966 CASE SUMMARY Facts: Ernesto Miranda was a mentally ill, penniless Mexican immigrant. At a Phoenix police station, a rape victim identified him as her assailant. The police did not tell him that he had a right to have a lawyer present during questioning. After two hours of interrogation, Miranda signed a confession that said that it had been made voluntarily. At Miranda’s trial, the judge admitted this written confession into evidence. The officers testified that Miranda had also made an oral confession during the interrogation. The jury found Miranda guilty of kidnapping and rape. After the Supreme Court of Arizona affirmed the conviction, the U. S. Supreme Court agreed to hear his case. Issue: Was Mirandas confession admissible at trial? Should his conviction be upheld? Decision: Neither his written nor his oral confession was admissible. His conviction was overturned. Reasoning: The Supreme Court had heard a series of cases in which the police had not only engaged in lengthy secret interrogations but had also beaten, hanged, and whipped suspects. The court’s goals in this case were to prevent police wrongdoing, fairly balance state power and individual rights, and respect human dignity. Justice requires that the government, when seeking to punish an individual, must find the evidence itself rather than force him to reveal it from his own mouth. Therefore, once the police deprive a suspect of his freedom, they are required to protect his constitutional right to avoid selfincrimination. To do so, they must warn him that he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney, either hired by him or provided by the government. If the police do not inform the accused of these rights, then nothing he says or writes can be admitted in court. The defendant may waive these rights, provided the waiver is made voluntarily, knowingly, and intelligently. If, however, he indicates in any manner and at any stage of the process that he does not want to be interrogated or wishes to talk with an attorney, then the police cannot question him. The mere fact that he may have volunteered some statements on his own does not deprive him of the right to refrain from answering any further questions until he has consulted with an attorney. Trial and Appeal At trial, it is the prosecution’s job to convince the jury beyond a reasonable doubt that the defendant committed every element of the crime charged. Convicted defendants have a right to appeal. Punishment The Eighth Amendment prohibits cruel and unusual punishment. Courts are generally unsympathetic to claims under this provision. For example, the Supreme Court has ruled that the death penalty is not cruel and unusual as long as it is not imposed in an arbitrary or capricious manner. 6-2 CRIMES THAT HARM BUSINESSES (AND THEIR CUSTOMERS) Businesses must deal with five major crimes: larceny, embezzlement, fraud, arson, and hacking. 6-2a Larceny It is holiday season at the mall, the period of greatest profits—and the most crime. At the Foot Forum, a teenager limps in wearing ragged sneakers and sneaks out wearing Super Sneakers, valued at $145. Sweethearts swipe sweaters, pensioners pocket produce. All are committing larceny. Larceny is the trespassory taking of personal property with the intent to steal it. “Trespas-sory taking” means that someone else originally has the property. The Super Sneakers are personal property (not real estate), they were in the possession of the Foot Forum, and the teenager deliberately left without paying, intending never to return the goods. That is larceny. By contrast, suppose Fast Eddie leaves Blooming-dale’s in New York, descends to the subway system, and jumps over a turnstile without paying. Larceny? No. He has “taken” a service—the train ride— but not personal property. Larceny The trespassory taking of personal property with the intent to steal it 6-2b Embezzlement This crime also involves illegally obtaining property, but with one big difference: The culprit begins with legal possession. Embezzlement is the fraudulent conversion of property already in the defendant’s possession. Embezzlement The fraudulent conversion of property already in the defendant’s possession There is no love in this story: For 15 years, Kristy Watts worked part time as a bookkeeper for romance writer Danielle Steele, handling payroll and accounting. During that time, Watts stole $768,000 despite earning a substantial salary. Watts said that she had been motivated by envy and jealousy. She was sentenced to three years in prison and agreed to pay her former boss almost $1 million. 6-2c Fraud Robert Dorsey owned Bob’s Chrysler in Highland, Illinois. When he bought cars, the First National Bank of Highland paid Chrysler, and Dorsey—supposedly—repaid the bank as he sold the autos. Dorsey, though, began to suffer financial problems, and the bank suspected he was selling cars without repaying his loans. A state investigator notified Dorsey that he planned to review all dealership records. One week later, the dealership burned down. An arson investigator discovered that an electric iron, connected to a timer, had been placed on a pile of financial papers doused with accelerant. Dorsey had committed two crimes that cost businesses billions of dollars annually—fraud (for failing to repay the loans) and arson (for burning down the dealership). Fraud refers to various crimes, all of which have a common element: deception for the purpose of obtaining money or property. Robert Dorsey’s precise violation was bank fraud because he had taken money from the bank even after he knew he could not pay it back. It is bank fraud to use deceit to obtain money, assets, securities, or other property under the control of any financial institution. Fraud Deception for the purpose of obtaining money or property Wire Fraud and Mail Fraud Wire and mail fraud are additional federal crimes involving the use of interstate mail, telegram, telephone, radio, or television to obtain property by deceit. For example, if Marsha makes an interstate phone call to sell land that she does not own, that is wire fraud. Internet Fraud Online scams are common and include the sale of merchandise that is either defective or nonexistent, the so-called Nigerian letter scam,3 billing for “free” services, and romance fraud (you meet someone online who wants to visit you but needs money for travel expenses). Other common forms of internet fraud include the following. Auctions. Internet auctions are the number one source of consumer complaints about online fraud. Wrongdoers either sell goods they do not own, provide defective goods, or offer fakes. Identity Theft. In identity theft, thieves steal the victim’s social security number and other personal information such as bank account numbers and mother’s maiden name, which they use to obtain loans and credit cards. The Identity Theft and Assumption Deterrence Act of 1998 prohibits the use of false identification to commit fraud or other crime, and it also permits the victim to seek restitution in court. The Aggravated Identity Theft statute imposes a mandatory additional sentence of two years on anyone who engages in identity theft during the commission of certain crimes. Also, many states have their own identity theft statutes. Phishing. In this crime, a fraudster sends a message directing the recipient to enter personal information on a website that is an illegal imitation of a legitimate site. The message might be an email telling you that you need to update your email or bank account information, or it might be an online message that appears to be from a friend suggesting that you click on a link to a great article. EXAMStrategy Question: Eric mails glossy brochures to 25,000 people, offering to sell them a one-month timeshare in a stylish apartment in Las Vegas. To reserve a space, customers need only send in a $2,000 deposit. Three hundred people respond, sending in the money. In fact, there is no such building. Eric is planning to flee with the cash. Once arrested, he faces a 20-year sentence. (1) With what crime is Eric charged? (2) Is it a felony or misdemeanor? (3) Does Eric have a right to a jury trial? (4) What is the government’s burden of proof? Strategy: (1) Eric is deceiving people, and that should tell you the type of crime. (2, 3) The potential 20-year sentence determines whether Eric’s crime is a misdemeanor or felony and whether or not he is entitled to a jury trial. (4) We know that the government has the burden of proof in criminal prosecutions—but how high is that burden? Result: Eric has committed fraud. A felony is a crime in which the sentence could be a year or more. The potential penalty here is 20 years, so it is a felony. Eric has a right to a jury trial because the sentence could be six months or longer. The prosecution must prove its case beyond a reasonable doubt, a much higher burden than that in a civil case. 6-2d Arson Robert Dorsey, the Chrysler dealer, committed a second serious crime. Arson is the malicious use of fire or explosives to damage or destroy any real estate or personal property. It is both a federal and a state crime. Dorsey used arson to conceal his bank fraud. Most arsonists hope to collect on insurance policies. Every year, thousands of buildings are burned as owners try to extricate themselves from financial difficulties. Everyone who purchases insurance ends up paying higher premiums because of this wrongdoing. Arson The malicious use of fire or explosives to damage or destroy real estate or personal property 6-2e Hacking During the 2008 presidential campaign, college student David Kernell guessed vice presidential candidate Sarah Palin’s email password, accessed her personal email account, and published the content of some of her emails. To some, his actions seemed like an amusing prank. The joke turned out not to be so funny when Kernell was sentenced to one year in prison. Gaining unauthorized access to a computer system is called hacking. It is a crime under the federal Computer Fraud and Abuse Act of 1986 (CFAA). This statute applies to any computer, cell phone, or other equipment attached to the internet. The CFAA prohibits: • • • Accessing a computer without authorization and obtaining information from it, Intentional, reckless, and negligent damage to a computer, and Trafficking in computer passwords. Hacking Gaining unauthorized access to a computer system 6-3 CRIMES COMMITTED BY BUSINESS A corporation can be found guilty of a crime based on the conduct of any of its agents, who include anyone undertaking work on behalf of the corporation. An agent can be a corporate officer, an accountant hired to audit financial statements, a sales clerk, or almost any other person performing a job at the company’s request. If an agent commits a criminal act within the scope of his employment and with the intent to benefit the corporation, the company is liable.4 This means that the agent himself must first be guilty. If the agent is guilty, the corporation is too. Some critics believe that the criminal law has gone too far. They argue that imposing criminal liability on a corporation is unfair to its innocent employees and shareholders, unless high-ranking officers were directly involved in the illegal conduct. Others argue that making companies criminally liable deters wrongdoing and emphasizes the importance of complying with the law. Indeed, they argue that current fines are too small, that they should be large enough to really hurt the companies and deter future criminal acts. 6-3a Making False Statements It is illegal to make false statements or engage in a cover up during any dealings with the U. S. government. Sometimes this provision is used to convict someone who is suspected of committing a complex crime that may itself be difficult to prove. In the most famous case, the government accused Martha Stewart, the celebrity homemaker and entrepreneur, of engaging in insider trading. At trial, that charge was thrown out, but the jury nevertheless convicted her of lying to the officers who had investigated the alleged insider trading. Stewart ultimately served five months in prison. However, the Justice Department recently announced that it would only use this statute against defendants who knew their conduct was illegal. 6-3b RICO The Racketeer Influenced and Corrupt Organizations Act (RICO) is one of the most powerful and controversial statutes ever written. Congress passed the law primarily to prevent gangsters from taking money they earned illegally and investing it in legitimate businesses. But RICO has expanded far beyond the original intentions of Congress and is now used more often against ordinary businesses than against organized criminals. Some regard this wide application as a tremendous advance in law enforcement, but others view it as an oppressive weapon used to club ethical companies into settlements they should never have to make. Racketeer Influenced and Corrupt Organizations Act (RICO) A powerful federal statute, originally aimed at organized crime, now used against many ordinary businesses RICO prohibits using two or more racketeering acts to accomplish any of these goals: (1) investing in or acquiring legitimate businesses with criminal money, (2) maintaining or acquiring businesses through criminal activity, or (3) operating businesses through criminal activity. What does that mean in English? It is a two-step process to prove that a person or an organization has violated RICO: 1. The prosecutor must show that the defendant committed two or more racketeering acts, which are any of a long list of specified crimes: embezzlement, arson, mail fraud, wire fraud, and so forth. Thus, if a gangster ordered a building torched in January and then burned a second building in October, that would be two racketeering acts. If a stockbroker sold a fake stock to two customers, that would be two racketeering acts. Racketeering Any of a long list of specified crimes, such as embezzlement, arson, mail fraud, and wire fraud acts 2. The prosecutor must then show that the defendant used these racketeering acts to accomplish one of the three purposes listed above. If the gangster committed two arsons and then used the insurance payments to buy a dry cleaning business, that would violate RICO. The government may prosecute both individuals and organizations for violating RICO. It may prosecute a mobster, claiming that he has run a heroin ring for years. It may also prosecute a business, claiming that it lied about corporate assets in a stock sale. If the government proves its case, the defendant can be punished with large fines and a prison sentence of up to 20 years. And the court may order a convicted defendant to hand over any property or money used in the criminal acts or derived from them. In addition to criminal penalties, RICO also creates civil law liabilities. The government, organizations, and individuals all have the right to file civil lawsuits seeking damages and, if necessary, injunctions. For example, a physician sued State Farm Insurance, alleging that the company had hired doctors to produce false medical reports that the company used to cut off claims by injured policy holders. As a result of these fake reports, the company refused to pay the plaintiff for legitimate services he performed for the policy holders. RICO is powerful (and for defendants, frightening) in part because a civil plaintiff can recover treble damages, that is, a judgment for three times the harm actually suffered, as well as attorney’s fees. Treble A judgment for three times the harm actually suffered damages 6-3c Money Laundering Money laundering consists of taking the proceeds of certain criminal acts and either (1) using the money to promote crime or (2) attempting to conceal the source of the money. Money laundering Using the proceeds of criminal acts either to promote crime or conceal the source of the money Money laundering is an important part of major criminal enterprises. Successful criminals earn enormous sums, which they must filter back into the flow of commerce in a way that allows their crimes to go undetected. Laundering is an essential part of the corrosive traffic in drugs. Profits, all in cash, may mount so swiftly that dealers struggle to use the money without attracting the government’s attention. Colombian drug cartels set up a sophisticated system in which they shipped money to countries such as Dubai that do not keep records on cash transactions. This money was then transferred to the United States disguised as offshore loans. Prosecution by the U.S. government led to the collapse of some of the banks involved. 6-3d Hiring Illegal Workers It is illegal knowingly to employ unauthorized workers. Thus, employers are required to verify their workers’ eligibility for employment in the United States. Within three days of hiring a worker, the employer must complete an I-9 form, documenting each worker’s eligibility. The government has the right to arrest employees working illegally and to bring charges against the business that hired them. EXAMStrategy Question: Mohawk Industries was one of the largest carpet manufacturers in the United States. Some of its workers alleged that the company routinely hired illegal immigrants and, as a result, the pay of legal workers was lower than it otherwise would have been. If these allegations are true, what laws has the company violated? Strategy: What law prohibits a company from committing two or more illegal acts? What is the illegal act here? Result: It is illegal to employ unauthorized workers. Repeatedly doing so is a RICO violation. 6-3e Foreign Corrupt Practices Act The Foreign Corrupt Practices Act (FCPA) prohibits American companies from paying bribes overseas. Under this statute: • • • It is illegal for any employee or agent of a U.S. company (and some foreign companies) to give anything of value to any foreign official for purposes of influencing an official decision. A facilitating payment for a routine governmental action does not count as a bribe and is legal. Examples of routine governmental action include processing visas or supplying utilities such as phone, power, or water. To be legal, these payments must simply be hastening an inevitable result that does not involve discretionary action. Thus, for example, “paying an official a small amount to have the power turned on at a factory might be a facilitating payment; paying an inspector to ignore the fact that the company does not have a valid permit to operate the factory would not be.”5 All publicly traded companies—whether they engage in international trade or not— must keep accurate and detailed records to prevent hiding or disguising bribes. Punishments for violations of this act can be severe. A company may face large fines and the loss of profits earned as a result of illegal bribes. In 2016, a Dutch telecommunications company paid $795 million in fines for having given bribes to Uzbek officials. In addition to financial penalties, individuals who violate the FCPA can face up to five years in prison. 6-3f Punishing a Corporation Fines The most common punishment for a corporation is a fine. This makes sense, in that a major purpose of a business is to earn a profit, and a fine, theoretically, hurts. But most fines are modest by the present standards of corporate wealth. BP was found guilty of two serious legal violations. In Alaska, company pipelines spilled 200,000 gallons of crude oil onto the tundra. In Texas, a catastrophic explosion at a refinery killed 15 people and injured 170 more. The total fine for both criminal violations was $62 million, which sounds like a large number. But it was not enough, evidently, to change BP’s practices. The company pleaded guilty to criminal charges in connection with a 2010 oil rig explosion in the Gulf of Mexico, which killed 11 workers and caused the largest marine oil spill ever. The rig that exploded had many safety violations. Will that $4.5 billion fine change BP’s business practices? Compliance Programs The Federal Sentencing Guidelines are the detailed rules that judges must follow when sentencing defendants convicted of federal crimes. The guidelines instruct judges to determine whether, at the time of the crime, the corporation had in place a serious compliance program, that is, a plan to prevent and detect criminal conduct at all levels of the company. A company that can point to a detailed, functioning compliance program may benefit from a dramatic reduction in the fine or other punishment. Indeed, a tough compliance program may even convince federal investigators to limit any prosecution to those directly involved rather than attempting to convict high-ranking officers or the company itself. Federal Sentencing Guidelines The detailed rules that judges must follow when sentencing defendants convicted of federal crimes Compliance A plan to prevent and detect improper conduct at all levels of a company program CHAPTER CONCLUSION Crime has an enormous impact on society. Companies are victims of crimes, and sometimes they also commit criminal actions. Successful business leaders are ever vigilant to protect their company from those who wish to harm it, whether from inside or out.
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Advising L.L. Based on the Scenario
As the owner of the car, Stephan Siegel would file a civil lawsuit of the damaged car on a
small claims court. If he wants to pursue the at-fault party for damages to his property (car), he
will take London to small claims court and then file a civil suit for property damages. Small
claims court is a local court established to provide a fast, informal, and inexpensive forum for
resolving certain types of small disputes on civil matters (Goldman and S...

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