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On pages 209 through 213, your textbook has a series of cases and problems, most of which have been taken from real cases in the United States...
On pages 209 through 213, your textbook has a series of cases and problems, most of which have been taken from real cases in the United States regulatory world of business. Each case has a unique feature to it, and provides future business leaders with guidance about the landmines which await when the government gets in line to attempt to regulate your business. Every day, profitable businesses meet hurdles of regulation which happen seemingly "out of the blue." Yet, under the Administrative Procedures Act (which exists at the federal level as well as in many if not most states, which have their own acts), rules of publication and due process do come into play. Savvy business leaders stay in front of these new and proposed regulations through many avenues, which we will explore and discuss this week, along with a fact scenario.As way of background, let us take you through a few of the cases in the book. First, problem seven, page 211, Chapter 6: In 1994, the company which owned Hooked on Phonics, Gateway Educational Products, Inc., entered into an agreed settlement with the FTC whereby they agreed not to make claims about how their product assisted young readers without proof from extensive research which supported their advertising claims. This was despite results from a yearlong study of several first-grade classrooms which showed vast improvement in students' reading skills. (Nathans, 1994)The FDA regulates new drugs and medical procedures for the U.S., as discussed in your textbook problem number eight, page 211, Chapter 6. However, the FDA's control is limited by law. The U.S. Dept of Health and Human Services is the federal dept to which the FDA reports. You can review the FDA's role in Lasik surgery on their very extensive website found at http://www.fda.gov (FDA role page: http://www.fda.gov/MedicalDevices/ProductsandMedicalProcedures/SurgeryandLifeSupport/LASIK/ucm061319.htm) On their website, you will find a plethora of information about the reach of this federal agency.The FAA is the agency within the U.S. Department of Transportation which regulates flight in the U.S. In 1988, the FAA stated that parachuting would be illegal in the San Diego Terminal Control Area and the courts ruled that the FAA had failed to comply with the Administrative Procedures Act when making the regulation, and overruled the FAA order. (See: http://law.justia.com/cases/federal/appellate-courts/F2/887/966/342988/) After reviewing the case, you will see that the court was not concerned so much with the substance of the order, but how it was created.In 1992, the Wall Street Journal ran an article about how much regulation on circuses was causing them to shut down, disappoint their audiences, and putting them out of business. Along with federal regulations, each state, county, and city had significant numbers of regulations which caused much difficulty in moving from state to state with animals, performers young, old, and foreign. We know most of you won't start circuses on your own - but what you learn from this exercise can be applied to nearly every business you can imagine, whether existing or startup.For our thread this week, we will cover administrative business regulations in a research mode. Taking the example of how complicated it can be to run a circus across state lines, we are going to become the GM520 Travelling Circus this week. As a team, we will research and overcome multiple regulatory hurdles to running, owning and travelling with our circus. The head ringleader, your Professor, will provide you with multiple changes and questions throughout the week, as the circus travesty unfolds. Along with questions about the circus, you will also be looking at other government regulations which are current in the news, and discussing them here. Let's get started with this question. Our circus is incorporated in the state of Maine, and operates with 52 full time employees who travel throughout the sites together in motor homes and trailer truck rigs. The ages of the workers range from 5 to 85 and we have a number of live animals which travel with us: 3 white tigers, 2 male and 2 female elephants, one of whom is pregnant, and one baby elephant, 40 dogs, 10 horses, and one lion. Our lion tamer is from Africa, and she is neither a U.S. citizen, nor does she have a green card. (oops). We serve food at all circuses, but we utilize local vendors for that. In Springfield, one of the vendors serves beer, although none of our other locations serve alcohol. We bought an old cruise ship for our trip to London. Our captain is an independent contractor hired specifically for our crossings.We will perform this year in 4 places: Atlanta Georgia; Springfield IL; Bangor Maine; and London England (TCO I).What laws, administrative and municipal rules, agencies, permits, town rules, administrative and federal bodies, etc will we have to appease to be able to take our circus to each place? Child labor laws? Do they apply if all of our workers are children of other employees? What if they are children of the owners? Can they be trapeze artists? What regulatory hurdles will we have to overcome to transport our animals from state to state and overseas?Will International laws apply to us?We'll try to find every regulation and permit requirement we will have for our circus and then decide if there are too many regs or not... Pick one of the listed towns or places, a state or country, and try to find at least one permit we'll need or regulation we'll be subject to. Using Web Research or even your telephone, bring the link or information back here and tell us about it...how much do you think it will cost and how do we comply? Remember - we'll need to review the local, municipal, state and federal laws as they will all apply!Throughout the week, your Professor will add to this - have fun! Let's get started!References:Marsh, B (8/31/92) Bunting & red tape: The modern circus walks a high wire The Wall Street Journal, pp. A1, A4. (An excerpt from this article was reprinted by permission in the 8th edition of Marianne Jennings textbook - but removed from our 9th ed.)Nathans, A. (12/15/94) Hooked on Phonics settles with FTC on advertising claims. Los Angeles Times. Accessed at: http://articles.latimes.com/1994-12-15/news/mn-9369_1_hooked-on-phonics-program on April 6, 2012.Note - we have turned off the links in this page. You can copy and paste them into your web browser to see the page. If the link is no longer functioning, please notify your instructor in Q&A.
