Case Briefing and Problem Solving Essay

Words: 6637
Pages: 27

Issue Spotters Delta Tools, Inc., markets a product that under some circumstances is capable of seriously injuring consumers. Does Delta owe an ethical duty to remove this product from the market, even if the injuries result only from misuse? Why or why not?
I think Delta Tools, Inc. doesn't owe an ethical duty to remove the product from the market unless the company doesn't warn its customers of the danger they can meet upon misuse of the product. If the company takes all the measures to warn their customers of the danger of the product once it's misused, customers have knowledge of the risk and voluntarily assume it. For example, the use of any antibiotics with the alcohol can lead to many harmful processes and activities.
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S. C. §§ 78j (b), 78n (e), and 78t (a), and Rules 10b-5 and 14e 3, 17 C.F.R. §§ 240.10b-5 and 240.14e-3, promulgated thereunder by the Securities Exchange Commission (“SEC”)
² Rule 10b-5 and Section 14(e)

Full case:

Jules BRODY; Joyce T. Crawford, Plaintiffs-Appellants, v. TRANSITIONAL HOSPITALS CORPORATION; Wendy L. Simpson; Richard L. Conte, Defendants-Appellees.
No. 99-15672.
Argued and Submitted July 11, 2001. -- February 07, 2002

Before: HALL, WARDLAW and BERZON, Circuit Judges.
Jeffrey S. Abraham, New York, NY, for the plaintiffs-appellants.Mark R. McDonald, Morrison & Foerster, Los Angeles, CA, for the defendants-appellees.
In this case we address several securities fraud issues, centering on whether a plaintiff must have traded at about the same time as the insider it allege violated securities laws. Jules Brody and Joyce T. Crawford brought suit against Transitional Hospital Corporation (“THC” or “the company”) and its officers claiming violations of the Securities and Exchange Act of 1934 (“Exchange Act”) and state law because the defendants both traded in reliance on inside information and released misleading public information. The district court granted the defendant's motion to dismiss for failure to state a claim. Brody and Crawford now appeal the district court's order on several