Business Law And the Legal Environment Standard Edition 6th Edition by Jeffrey F. Beatty - Test Bank

Business Law And the Legal Environment Standard Edition 6th Edition by Jeffrey F. Beatty – Test Bank

 

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Sample Questions Are Posted Below

 

CHAPTER 4 – COMMON LAW, STATUTORY LAW, AND ADMINISTRATIVE LAW

 

TRUE/FALSE

 

1. The doctrine of stare decisis, though vital to the creation of the common law when this country was settled, is not important to our modern, complex society.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

2. While at the park, Tasha saw a small child fall into the lake. Tasha did not know the child. Under the common law of most states, Tasha has a legal duty to take reasonable steps to assist the child if Tasha is able to help and such help will not jeopardize Tasha’s well being.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

3. The largest source of new law is court decisions.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

4. The majority of work done by legislative bodies is performed in committees.

 

ANS:  T                    PTS:   1                    MSC:  AACSB Analytic

 

5. Even if a statute’s words have ordinary, everyday significance, the court will look at the legislative history of the law and public policy in order to interpret the statute.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

6. If the President vetoes a bill and if both the House and Senate repass the bill by a two-thirds margin, the bill becomes law.

 

ANS:  T                    PTS:   1                    MSC:  AACSB Analytic

 

7. The Federal Trade Commission promulgated Telemarketing Sales Rules regulating the activities of telemarketers. One of the rules prohibits telemarketers from calling a person’s residence at any time other than between 8:00 a.m. and 9:00 p.m. This legislative rule has the effect of a statute.

 

ANS:  T                    PTS:   1                    MSC:  AACSB Analytic

 

8. The Civil Rights Act of 1964, a federal statute, forbids discrimination on the basis of national origin in employment. The Equal Employment Opportunity Commission (EEOC) is the administrative agency that oversees the law. The EEOC issued Guidelines on Discrimination because of National Origin. According to one of the guidelines, the EEOC will presume a violation of the law if an employer sets a work requirement that employees must speak only English in the workplace. This is an interpretive rule because it interprets the Civil Rights Act.

 

ANS:  T                    PTS:   1                    MSC:  AACSB Analytic

 

9. The Occupational Safety and Health Administration (OSHA) has proposed rules aimed at reducing repetitive-stress injuries. ATC, Inc. disagrees with the proposed rules. ATC, Inc. should challenge the proposed rules in court to prevent them from becoming final rules.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

10. From tax returns, the Internal Revenue Service (IRS) has information concerning Elizabeth Jones. Generally, the IRS may not divulge this information to the Federal Bureau of Investigation unless Elizabeth has given written consent.

 

ANS:  T                    PTS:   1                    MSC:  AACSB Analytic

 

11. Administrative agencies exist at the federal, state, and local levels.

 

ANS:  T                    PTS:   1                    MSC:  AACSB Analytic

 

12. Because of the concept of stare decisis, the U. S. Supreme Court, in interpreting a statute in 2009, will necessarily interpret certain statutory language in the same way as the U. S. Supreme Court interpreted the same statutory language in 1971.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

13. The President has the power to remove the chairperson of the Consumer Product Safety Commission, an independent federal administrative agency, if the President disagrees with the chairperson’s actions.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

14. Common law, like statutory law, is prospective.

 

ANS:  F                    PTS:   1                    MSC:  AACSB Analytic

 

15. Actual hearings are required in formal administrative agency rulemaking.

 

ANS:  T                    PTS:   1                    MSC:  AACSB Analytic

 

MULTIPLE CHOICE

 

1. The concept of stare decisis focuses most on:

a.	predictability.
b.	flexibility.
c.	legislative intent.
d.	change.

 

 

ANS:  A                    PTS:   1                    MSC:  AACSB Analytic

 

2. Karen is a strong swimmer. One afternoon she is having a picnic at a lake and sees a man she does not know drowning. Generally, Karen:

a.	has a legal duty to rescue the man.
b.	has a legal duty to rescue the man, but only if her efforts will not pose a serious threat to her own safety.
c.	has a legal duty to rescue the man since, as a strong swimmer, she is treated as a “special class” of persons who must get involved in such situations.
d.	has no legal duty to rescue the man.

 

 

ANS:  D                    PTS:   1                    MSC:  AACSB Analytic

 

3. The U.S. Supreme Court was asked to decide whether same-sex sexual harassment is a violation of Title VII of the Civil Rights Act. This law forbids discrimination in employment on the basis of sex. In interpreting statutes, the court may use which of the following?

a.	The plain meaning rule.
b.	Legislative history.
c.	Public policy.
d.	All of the above.

 

 

ANS:  D                    PTS:   1                    MSC:  AACSB Analytic

 

4. Statutory law is to legislative bodies as common law is to:

a.	England.
b.	precedent.
c.	courts.
d.	administrative regulations.

 

 

ANS:  C                    PTS:   1                    MSC:  AACSB Analytic

 

5. The power of federal agencies is limited by:

a.	statutory control in the enabling legislation and the Administrative Procedures Act.
b.	political control by Congress and the President.
c.	judicial review.
d.	All of the above.

 

 

ANS:  D                    PTS:   1                    MSC:  AACSB Analytic

 

6. Psychologist Holtz is working with a patient, Rebecca, who has expressed the intention to seriously harm two of her acquaintances. If you apply the principle set forth by the Supreme Court of California in the Tarasoff v. Regents of the University of California case, Psychologist Holtz:

a.	has, because of the bystander rule, no duty to warn the foreseeable victims about Rebecca’s expressed intention to harm them.
b.	has a duty to exercise reasonable care to protect foreseeable victims of Rebecca’s violence.
c.	is in a special relationship with patients, and this relationship creates a privilege of confidentiality between the communicants.
d.	will be held to a strict duty of care and will be held liable for any victim’s injuries if Holtz failed to warn a them of Rebecca’s potential violence toward them.

 

 

ANS:  B                    PTS:   1                    MSC:  AACSB Reflective Thinking

 

7. The Environmental Protection Agency was investigating whether Exgrow, Inc. violated the Clean Air Act. Exgrow refused to give the EPA its computerized reports concerning pollution. To get the reports, EPA should use:

a.	a stare decisis.
b.	a de novo.
c.	an excaliber.
d.	a subpoena duces tecum.

 

 

ANS:  D                    PTS:   1                    MSC:  AACSB Reflective Thinking

 

8. Assume that in December 2006, the Environmental Protection Agency (EPA) filed an administrative complaint against Marlin Firearms Co. alleging that the company exceeded chromium emissions limits. The EPA proposed a $257,162 fine. Which statement is correct concerning the administrative agency adjudication?

a.	A jury decides the matter.
b.	The Federal Rules of Criminal Procedure govern the admissibility of evidence.
c.	The losing party has a right to appeal.
d.	The parties are not represented by attorneys.

 

 

ANS:  C                    PTS:   1                    MSC:  AACSB Reflective Thinking

 

9. If in 1900 the Minnesota Supreme Court ruled that a minor can void a contract at any time during minority and in 2008 the courts in Minnesota still follow this ruling, this is an example of:

a.	stare decisis.
b.	the bystander rule.
c.	statutory law.
d.	enabling legislation.

 

 

ANS:  A                    PTS:   1                    MSC:  AACSB Analytic

 

10. The last protected trait added by Congressman Smith of Virginia to the bill which became Title VII of the Civil Rights Act of 1964 was:

a.	sex (gender).
b.	sexual orientation.
c.	national origin.
d.	race.

 

 

ANS:  A                    PTS:   1                    MSC:  AACSB Analytic

 

11. What is the major distinction between executive and independent agencies?

a.	Executive agencies govern business issues while independent agencies regulate individual matters.
b.	The President has greater control over executive agencies.
c.	The Administrative Procedure Act regulates independent agencies but not executive agencies.
d.	Subpoenas may be issued by independent agencies; executive agencies do not have subpoena power.

 

 

ANS:  B                    PTS:   1                    MSC:  AACSB Analytic

 

12. The Administrative Procedure Act:

a.	applies to all federal agencies.
b.	applies to executive branch agencies but not to independent agencies.
c.	applies to independent agencies but not to executive branch agencies.
d.	does not apply to federal agencies.

 

 

ANS:  A                    PTS:   1                    MSC:  AACSB Analytic

 

13. Administrative agency rules consist of:

a.	executive and independent rules.
b.	legislative and interpretive rules.
c.	informal and “notice and comment” rules.
d.	promulgated and unpromulgated rules.

 

 

ANS:  B                    PTS:   1                    MSC:  AACSB Analytic

 

14. The U.S. Supreme Court’s holding in Ward’s Cove Packing v. Atonio:

a.	differed from the holding in Griggs v. Duke Power Co. partly because the Court was more conservative at the time Ward’s Cove was decided.
b.	upheld the ruling in Griggs v. Duke Power Co.
c.	found that overt racial discrimination existed.
d.	set forth a “business necessity” requirement for employment hiring practices.

 

 

ANS:  A                    PTS:   1                    MSC:  AACSB Analytic

 

15. A subpoena duces tecum is different from an ordinary subpoena in that a subpoena duces tecum:

a.	can only be given to an expert to require a personal appearance before a court or administrative hearing.
b.	is binding on a person even if it is mailed to the person rather than handed to her by a process server.
c.	allows for privileged or confidential information to be turned over the a court or administrative agency.
d.	requires the person to bring specified documents to the court or administrative hearing.

 

 

ANS:  D                    PTS:   1                    MSC:  AACSB Analytic

 

16. Congresswoman Sloan introduced a bill in the House of Representatives. If the bill is approved by the House committee specializing in that subject, the bill will go to:

a.	a Senate committee specializing in the subject matter of the proposed legislation.
b.	the full House.
c.	a Conference Committee made up of representatives of both the House and Senate.
d.	the voters of her state for approval.

 

 

ANS:  B                    PTS:   1                    MSC:  AACSB Analytic

 

17. Bert had his driver’s license suspended by the state department of transportation. He believes his constitutional due process rights were violated by the administrative agency. Can he immediately file a court action to have agency’s actions reviewed?

a.	Yes. A court has the jurisdiction to immediately review an agency’s alleged unconstitutional action.
b.	Yes. Bert must specifically allege his constitutional rights have been violated and file a court action in federal court – not a state court.
c.	No. Bert must first utilize the administrative agency’s procedures to review the suspension before he seeks judicial review by a court.
d.	No. A court of law does not have jurisdiction to review an administrative agency’s actions.

 

 

ANS:  C                    PTS:   1                    MSC:  AACSB Reflective Thinking

 

18. TECO Coal Corporation mines and ships more than six million tons of coal annually. TECO is comprehensively regulated by the U.S. Bureau of Mines. The U.S. Bureau of Mines may conduct a surprise inspection of one of TECO’s mines:

a.	only if it has a search warrant.
b.	only if it has a subpoena.
c.	only if it has reason to believe a violation of a regulation has occurred.
d.	without a search warrant to ensure safety.

 

 

ANS:  D                    PTS:   1                    MSC:  AACSB Reflective Thinking

 

19. SharCo and Blyron Productions are each applying for a television license. In deciding which applicant is better qualified, the FCC will hold an initial hearing before:

a.	the OSHA.
b.	an administrative law judge.
c.	an administrative mediator.
d.	a House-Senate Conference Committee.

 

 

ANS:  B                    PTS:   1                    MSC:  AACSB Reflective Thinking

 

20. Which statement is correct concerning judicial review of an administrative agency’s action?

a.	Courts usually accept the facts of the case as determined by the agency and often defer to the agency’s interpretation of the law.
b.	Courts conduct a de novo review of the case.
c.	Courts ignore the facts of the case.
d.	Courts substitute their opinion for that of the agency.

 

 

ANS:  A                    PTS:   1                    MSC:  AACSB Analytic

 

21. Tina wishes to learn what records the IRS has about her. Under the Freedom of Information Act (FOIA),

a.	Tina can only obtain copies of declassified information.
b.	Tina is entitled to all information the IRS has about her.
c.	Tina can only obtain information about the IRS, not records concerning herself.
d.	Tina cannot obtain any information since the IRS is exempt from the FOIA.

 

 

ANS:  B                    PTS:   1                    MSC:  AACSB Analytic

 

22. TECO Coal Corporation is interested in the inspections that the U.S. Bureau of Mines has conducted over the past year. To secure this information, TECO should:

a.	issue a subpoena duces tecum.
b.	make a Freedom of Information Act request.
c.	make a de novo request.
d.	assert the substantial evidence rule.

 

 

ANS:  B                    PTS:   1                    MSC:  AACSB Analytic

 

23. The purpose of the Freedom of Information Act (FOIA) is:

a.	to give the government access to information concerning citizens, businesses, and organizations.
b.	to limit the amount of information that the government can collect about its citizens, businesses, and organizations.
c.	to permit warrantless searches and seizures of evidence when necessary to ensure safety.
d.	to give citizens, businesses, and organizations access to information that federal agencies are using.

 

 

ANS:  D                    PTS:   1                    MSC:  AACSB Analytic

 

24. The Consumer Product Safety Commission (CPSC) is an independent federal administrative agency. Which statement is correct about the chairperson?

a.	The chairperson serves at the whim of the President and can be fired at any time.
b.	The chairperson can only be fired by the President for good cause.
c.	The chairperson cannot be fired by the President since the CPSC is an independent agency.
d.	The chairperson has a lifetime appointment and cannot be fired.

 

 

ANS:  C                    PTS:   1                    MSC:  AACSB Analytic

 

25. Which law regulates how federal agencies make rules, conduct investigations, hold meetings and hearings, obtain information, and reach decisions?

a.	The 1964 Civil Rights Act.
b.	The Clean Agency Act.
c.	The Administrative Procedure Act.
d.	The Freedom of Information Act.

 

 

ANS:  C                    PTS:   1                    MSC:  AACSB Analytic

 

ESSAY

 

1. Discuss the four most important limitations on the power of federal administrative agencies.

 

ANS:

The four most important limitations on the power of federal administrative agencies are: statutory control; political control; judicial review; and informational control. Statutory control exists through enabling legislation, which may limit an agency to the use of formal rulemaking or may limit the issues the agency may investigate. The APA also imposes controls. Political control may be exercised by the President or Congress. Control by the President is greatest with executive agencies. Congress controls through funding and through the power to approve presidential nominees to head agencies. Businesses or individuals directly harmed by administrative rules, investigations, or adjudications generally have a right to have such action reviewed in federal court after taking all possible appeals within the agency itself. Informational control has been created by the Freedom of Information Act and the Privacy Act.

 

PTS:   1                    MSC:  AACSB Communication

 

2. Define the common law. Discuss its conflicting goals and the doctrine created to serve one of these goals.

 

ANS:

The common law is judge-made law. It is the total of all the cases decided by appellate courts. Although most new law is statutory, common law predominates in tort, contract, and agency law, and it is very important in property and employment law. The common law attempts to accommodate the conflicting goals of predictability and flexibility. The need for predictability created the doctrine of stare decisis, which means “let the decision stand.” Stare decisis indicates that once a court has decided a particular issue, it will generally apply the same rule in future cases. The law must also be somewhat flexible in order to respond to new problems and changing social mores.

 

PTS:   1                    MSC:  AACSB Communication

 

3. Big Corporation is served with a subpoena to turn over business records to an administrative agency. What are three possible legal grounds the company can raise to avoid producing the requested records?

 

ANS:

The company can argue that the requested records (1) are irrelevant to the investigation, (2) will be unreasonably burdensome to produce, or (3) contain privileged information.

 

PTS:   1                    MSC:  AACSB Communication | AACSB Reflective Thinking

 

4. Discuss the two federal statutes that give Americans the power to acquire or protect personal information.

 

ANS:

Any citizen or executive may make a “FOIA request” to any federal government agency. It is simply a written request that the agency furnish whatever information it has on the subject specified. Two types of data are available under FOIA. Anyone is entitled to information about how the agency operates, how it spends its money, and what statistics and other information it has collected on a given subject. Second, all citizens are entitled to any records the government has about them. You are entitled to information that the Internal Revenue Service, or the Federal Bureau of Investigation, has collected about you.

The statute that protects our personal information is the Privacy Act.  This 1974 statute prohibits federal agencies from giving information about an individual to other agencies or organizations without written consent. There are exceptions, but overall this act has reduced the government’s exchange of information about us “behind our back.”

 

PTS:   1                    MSC:  AACSB Communication

 

5. ATC, Inc. offered health insurance benefits to unmarried same-sex domestic partners but not to unmarried, cohabiting heterosexual couples. Ray, an employee of ATC, Inc., challenged the benefit plan, claiming that it was in violation of Title VII of the Civil Rights Act. Under the Civil Rights Act, an employer may not discriminate against any individual on the basis of sex. Discuss the tools that a court may use in interpreting the Civil Rights Act.

 

ANS:

There are three primary tools that a court may use in interpreting a statute: plain meaning rule; legislative history and intent; and public policy. According to the plain meaning rule, when a statute’s words have ordinary, everyday significance, the court will simply apply the commonsense definition. If the language is unclear, the court must look at the law’s history to determine the intent of the legislature. If the legislative history is unclear, courts will rely on general public policies.

 

PTS:   1                    MSC:  AACSB Communication | AACSB Reflective Thinking