MGMT 520 Final Exam

Name: MGMT 520 Final Exam
Brand: DeVry University
Price: 2 USD
Availability: InStock
Author: Isaac Ross

A comprehensive final exam on advanced management concepts.

Isaac Ross

Contributor

4.8

28 days ago

Preview (5 of 15)

MGMT 520 FINAL EXAM
(TCO D) Short Answer Question and Facts for Page 1 Questions:
A well-known pharmaceutical company, Robins & Robins, is working through a public scandal.
Three popular medications that they sell over the counter have been determined to be tainted
with small particles of plastic explosive. The plastic explosives came from a Robins & Robins
supplier named Casings, Inc., that supplies the capsule casings for the medication pills. Casings,
Inc. also sells shell casings for ammunition. Over $8 million in inventory is impacted. The
inventory is located throughout the Western United States, and it is possible that it has also made
its way into parts of Canada.
Last fall, the FDA had promulgated an administrative proposed rule that would have required all
pharmaceutical companies that sold over-the-counter medications to incorporate a special
tracking bar code (i.e., UPC bars) on their packaging to ensure that recalls could be done with
very little trouble. The bar codes cost about 35 cents per package.
Robins & Robins lobbied hard against this rule and managed to get it stopped in the public
comments period. They utilized multiple arguments, including the cost (which would be passed
on to consumers). They also raised “privacy” concerns, which they discussed simply to get
public interest groups upset. (One of the drugs impacted is used for assisting with alcoholism
treatment – specifically for withdrawal symptoms – and many alcoholics were afraid their use of
the drug could be tracked back to them.) Robins & Robins argued that people would be
concerned about purchasing the medication with a tracking mechanism included with the
packaging and managed to get enough public interest groups against the rule. The FDA decided
not to impose the rule.
Robins & Robins' contract with Casings, Inc., states, in section 14 B.2.a., "The remedy for
defects in supplies shall be limited to the cost of the parts supplied." Casings, Inc. had negotiated
that clause into the contract after a lawsuit from a person who was shot by a gun resulted in a
partial judgment against Casings for contributory negligence.
Robins & Robins sues Casings, Inc., for indemnification from suits by injured victims from the
medication, for the cost of the capsule shells, for attorney's fees, and for punitive damages. List
any defenses Casings, Inc., would have under contract theory ONLY. (short answer question)
Answer: The contract between Casings, Inc. and Robins & Robins indicated a contractual
limitation that Casing Inc.’s obligation to provide remedies for defects would be limited to the
costs of the parts supplied. Although warranty still applied, the contractual limitation that is
stated in the contract would limit the recoveries and damages that can be filed against or claimed
from Casings, Inc. As such, although Robins & Robins might be able to recover some of the
damages from Casings by reason of contributory damages, Robins & Robins’ major role in the
distribution of the medicines, together with their stand against tracking, would also make them
liable for the defective product.
2. (TCO B) The FDA decides to require all pharmaceutical companies to immediately
implement the tracking bars (UPC) as a result of the disaster with Robins & Robins. Robins &
Robins decides not to challenge this and begins the process of adding them to all of their
products. However, McFadden, Inc., a New York pharmaceutical company, realizes that this new
requirement is going to bankrupt them immediately. McFadden did not participate in the original

public comment period. However, this rule is different from the rule that went through that
public comment period in that it specifically names four companies as being impacted: Robins &
Robins, McFadden, Inc., Bayer, and Johnson & Johnson. On what bases can McFadden
challenge this requirement imposed by the FDA, and can they be successful? Provide at least two
bases under the Administrative Procedures Act and justify your answer. (Points: 30)
Answer - Two ways in which McFadden can contest the FDA ruling, and challenge the
requirement that is imposed by the FDA are discussed below
1. Substantial Evidence Test - Given that the rule specifically states four companies that have
been impacted, there is no evidence that the three other companies apart from Robins & Robins
have been impacted. Due to this, the FDA would need to provide more evidence and data points
to support its claim that McFadden was one of the companies impacted by not having
implemented the tracking.
2. Failure to comply with APA - The FDA should have followed the right process and ensured
that there is proper public notice, publication of the rule and period for public comment before
the rule is passed. As the FDA had not followed this procedure and wanted to immediately
implement the rule, McFadden can contest saying that the rule implementation was not in
compliance with the APA, and hence would not be able to put a law practice without it going
through the public notice and comment period.
Based on the above two points, McFadden would be able to stop the rule from being applied
immediately, and it could be decided that the FDA meet the above two points before it can
execute the ruling.
Answer: The two ways by which McFadden can contest the FDA ruling are through the
Substantial Evidence Test and through a claim against the FDA’s failure to comply with the
APA guidelines. With the Substantial Evidence Test, it can be noted that the rule specifically
indicated that four companies would be affected by the new policy. However, aside from Robins
& Robins, no substantial evidence has been provided to justify why the new ruling also has to
affect the three companies. In this regard, the FDA has to provide more evidence and data points
to support its claims that the three other companies – aside from Robins & Robins – were also
negatively affected by the absence of the tracking code in their products.
Similarly, McFadden can claim that the FDA failed to comply with the APA guidelines in that
the FDA did not follow the correct procedure for ensuring that a proper public notice has been
issued or that the publication of the rule and the period for public comment has been made prior
to the rule being passed. Because the FDA failed to follow this procedure due to its haste in
implementing the rule, McFadden can contest the FDA’s initiative for the new ruling, that is,
McFadden can claim that the process that the FDA used for implementing the rule was not in
conformance to the APA guidelines. In this regard, the rule cannot be implemented.

By using these defenses, McFadden would be able to delay the implementation of the new
ruling. The FDA would first be required to address the defenses presented by McFadden before
they can go ahead with the new rule’s implementation.
3. (TCO C) Robins & Robins immediately issued a massive recall for the tainted medication
upon learning of the situation. Despite the recall, 1,400 children and 350 adults have been
hospitalized after becoming very ill upon taking the tainted medication. Each of them had failed
to note the recall after having already purchased the medication. It is quickly determined that
they will need liver transplants and many of them are on a waiting list. During the wait, to date,
12 children have died. Their families are considering suing for both 402A and negligence. The
attorneys stated that but for the lobbying efforts, the recall process would have been automated
and the people would not have gotten sick or died.
You are the attorney for one of the dead children’s family. List the causes of action (if any) you
would file against Robins & Robins, the FDA, and the bribed FDA member. List the elements of
the causes of action, and set forth the facts that you have that would support a lawsuit against
each of the three named defendants. State any defenses any of the three would have. Analyze the
success of the defenses.
The two major theories that would apply in this case are the Tort Liability (402 A) theory and the
Negligence theory.
For a case against Robins & Robins, the Strict Tort liability under 402A would apply as Robins
& Robins, the seller, has sold a product that has harmed a customer. This liability still stands
even if there were contractual limitations that indemnified the seller and even if the seller took
the necessary measures and precautions. To support this case, it would be necessary to present
the number of people and children who were affected and who died as a result of Robins and
Robins’ defective manufacturing and inadequate testing of the drugs. Because the case against
Robins & Robins would be very strong, they might not have a defense for the complaint filed
against them, although they could make claims of Contributory Negligence against Casings, Inc.
For the part of the FDA, a case of negligence can be filed against them as their actions led to the
people’s exposure to harm as well as to the subsequent loss of life. In particular, the deaths that
occurred would have not happened if the FDA has implemented the ruling on the use of the
tracking code. This then establishes that the deaths have occurred because of the FDA. In
defense, the FDA can assert sovereign immunity, especially if the complainants or plaintiffs are
from outside the county or state. However, they remain accountable to the people within the state
where they operate.
For the case against the bribed FDA member, a case of negligence can be filed against them as
they had breached their duty to care, in turn leading to the deaths of many people. If it is proven
that this FDA member has indeed received a bribe in order to hinder the enactment of the FDA
ruling in favor of Robins & Robins then he or she would be liable for contributory and
comparative negligence.
It should be noted that the Robins & Robins case has sparked the interest of a number of activist
groups, which called for FDA to become liable for the deaths of twelve children. They claim that

the FDA was negligent and at fault for not passing the original tracking bar rule. However, FDA
contends that they are not liable for the victims of the Robins & Robins medicine poisoning.
More particularly, three of the over-the-counter-medicines that were sold by Robins & Robins
were tainted with plastic explosives; thus, leading to the hospitalization of 350 adults and 1400
children. Although Robins & Robins recalled their medicines, the recall was not automatic due to
the absence of the special tracking bar code on the medicine, and this led o many people taking
in the contaminated medicine.
In the previous year, the FDA promulgated an administrative rule that required all
pharmaceutical companies that sold over-the-counter medicines to place a special tracking
barcode on all the packaging in order to enable the automatic recall of these medicines.
However, Robins & Robins lobbied against it, leading to the rule’s discontinuation during the
public comments period.
The FDA was right, though, in discontinuing the bar code rule because of the public’s sentiments
that this would violate people’s privacy and would lead to cost increases among over-the-counter
drugs. In addition, many public interest groups lobbied against the rule. As such, the illnesses
and deaths caused by the contaminated medicines came about because of Robins and Robins’
negligence and not because of any wrongful act by the FDA. The FDA only discontinued the
rule because of the concerns and outcries of public interest groups.
Furthermore, the FDA could use the defense that it was responsible for the creation of the rule
but it had to discontinue the rule’s imposition because of public protests and protests from
interest groups. Moreover, they can assert that Section 402 (a) applies only to food and not to
medicines. On the other hand, since Robins ad Robins was the strongest opponent to the said
rule, the negligence claim should be against them and not against the FDA. In other words, if
Robins & Robins had not lobbied against the rule then the children's lives would have been
spared.
References:
www.fda.gov/ www.fda.gov/Food/default.htm www.accessdata.fda.gov/scripts/cder/drugsatfda/
www.fda.com/ - www.fdanews.com/
Here is a second version of this question
You are the public relations advisor for Robins & Robins, and your boss tells you to write him a
memo that he will use to draft a public announcement. He needs you to explain to him why
Robins & Robins should not be found negligent for these deaths and illnesses. Draft the memo
utilizing the elements of 402A and negligence. Include (and fully explain) any defenses you feel
that Robins & Robins may have. Recall that your boss needs all pertinent information for him to
write an announcement to the public after reading your memo.

Preview Mode

100%

Study Now!

XY-Copilot AI

Unlimited Access

Secure Payment

Instant Access

24/7 Support

Document Chat

Document Details

University

DeVry University

Subject

Business Management

MGMT 520 Final Exam

Study Now!

Document Details

Related Documents

Analysis of Leadership in Monster Inc

Evaluation of Alphabet's Mission, Vision, and 8-29

Boundless Management

Uncovering the Martha Stewart Tax Scandal Insider

Boundless Business

JetBlue Airlines Case Analysis

Effective Speaker Notes Template for BUS 210 Prese

Leading as a Function of Management

McDonald's Q4 Earnings U

Penn State Harrisburg

Company

Explore

Study Tools