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L203 ? Business Law


Applied Learning Assignment ? Agency and Employment


This assignment is required.


Maximum Possible Points: The maximum number of points you may earn for this


assignment is 50.


You are to work on this assignment alone without assistance from others; however, you may


use your text, class lectures and your notes in completing the assignment.


Points earned from this assignment will be added to your total point score for the semester.


(See the course syllabus for the course grading scale.)


Due Date See the Course Schedule for this Class: This is an out-of-class assignment


and is to be turned in no later than the beginning of class on the due date.


The Assignment: Read the news articles and the federal regulations that follow. Answer the


questions about potential claims. Please note: Your answers are to be marked on the Assignment. Mark clearly to show which answer


you have selected. Write your name on the Assignment Sheet. Submit a hard copy of the entire Assignment


Sheet. NTSB Press Release


National Transportation Safety Board Office of Public Affairs


NTSB Determines Engineer's Failure to Observe and Respond to Red Signal


Caused 2008 Chatsworth Accident; Use of Cell Phone Was Contributing Factor




The National Transportation Safety Board determined today that the 2008 rail accident in Chatsworth, California,


involving a Metrolink commuter train and a Union Pacific freight train, was caused by the Metrolink engineer's


prohibited use of a wireless device while he was operating the train. The engineer failed to respond appropriately to a


red signal at Control Point Topanga because he was engaged in text messaging at the time, the NTSB said. A


dispatcher had given the Union Pacific train the right of way.


According to records from the wireless provider, on the day of the accident, while on duty, both the Metrolink engineer


and the Union Pacific conductor used wireless devices to send and receive text messages. The Metrolink engineer,


Robert M. Sanchez, 46, also made non-business voice calls while on duty. "For the transportation industry, this


accident demonstrates that we must find a way to wrap our arms around the pervasive problem of transportation


operators using wireless devices while on the job, whether that job is driving a bus, flying an airplane, or operating a


train," NTSB Chairman Deborah A. P. Hersman said.


Although Metrolink prohibits its engineers from using wireless devices while operating a train, the privacy afforded by


the locomotive cab, once the train leaves a station, makes it difficult for violations of operating rules to be discovered


through ordinary management supervision or efficiency testing, the NTSB noted. On previous occasions, Sanchez


had been reprimanded for using a cell phone to text co-workers while operating the train. He was also reprimanded for


allowing unauthorized persons to join him in the locomotive cab and even operate the train.


The September 12, 2008 head-on collision resulted in 25 fatalities and more than 100 injuries. One of the injured


subsequently died of his injuries bringing the death total to 26. As a result of its findings, the NTSB recommended that


the Federal government require audio and image recorders in the cabs of all locomotives and in cab car operating




With the completion of this accident investigation, the NTSB made two recommendations to the Federal Railroad




1. Require the installation of crash- and fire-protected inward- and outward-facing audio and image recorders capable of providing recordings to verify that train crew actions are in accordance with rules and procedures that are


essential to safety as well as train operating conditions.


2. Require that railroads regularly review and use audio and image recordings, in conjunction with other performance data, to verify that train crew actions are in accordance with rules and procedures that are essential to




The Board's full report will be available on the website in several weeks. THE NEW YORK TIMES In California Train Crash, Riders Had Destinations and Death in Common




Published: September 14, 2008 SIMI VALLEY, Calif. ? Of the 25 people who were killed when a Metrolink commuter train collided


with a freight locomotive on Friday afternoon in the Chatsworth area northwest of downtown Los


Angeles, at least eight were from Simi Valley, a quiet community a few miles west of the wreck site


known for its horse ranches. Simi Valley and the surrounding Ventura County towns reflect the


diversity and expansiveness of Southern California, a stretch of coastal land that on Sunday was


dotted with grief and shock.


Among the victims:


Walter Fuller, 47, was a pastor at Cornerstone Christian Church who volunteered his time at a


homeless shelter in Los Angeles. Fuller was on his way home with Ojai Guangye, an exchange student


from Africa who often helped with the church?s musical worship. Guangye survived the crash but


suffered a brain injury and is in a coma.


Yi Chao, 71, was on his way home from an appointment with an eye doctor. The family emigrated from


Cambodia in 1982, said Chao?s son Lo. His father dreamed of traveling back to Cambodia and China.


Atul Vyas, 20, was a pre-med student in Los Angeles. Atul had taken his 12-year-old cousin Ruchi


Agarwal to Los Angeles to see what college was like. Both died in the train crash; neither got a chance


to earn a college degree.


Spree Desha, 35, was a Los Angeles police officer, recently assigned to the Office of Operations at the


department?s headquarters downtown from her beat in Hollywood. Ms. Desha was known to seize the


initiative, organizing a cancer fund-raiser in the office, for which she and other officers shaved their


heads for donations.


Denana Ramirez and her three children were riding in the first car of the train. She commuted to Los


Angeles regularly to clean houses while Ivan, 4, Maria, 3, and 11-month old Obet stayed with a


relative. All of them died.


Paul Long, 56, was a high school English teacher in nearby Moorpark. He was on the train after a long


flight from South Carolina, where he had attended his mother?s funeral. His family was forced to make


the difficult decision to take Mr. Long off life support on Saturday.


Maria Elena Villalobos, 18, was a student at a fashion design school in downtown Los Angeles. Ms.


Villalobos? father, Gonzalo Villalobos Cedillo, described Maria, ?She would get up at 5 a.m. and take


the train from Moorpark to Los Angeles,? he said. ?That takes a lot of dedication.? Standing in front of


his home greeting family members who had come to offer their condolences, Mr. Villalobos said out


loud to himself in Spanish, ?Her car is still at the train station, just parked there.?


Christopher Aiken, who lived in nearby Thousand Oaks, worked at a food service company in Glendale,


and rode Metrolink daily to and from work. On Friday, he took an earlier-than-usual train home so he


could prepare for the rehearsal dinner for his wedding. He was to be married to fianc?e Alise Frankel


on Saturday afternoon. U.S. Department of Transportation


Federal Railroad Administration


(excerpts from Rail Operator Regulations)


?395 Rail operator employee conduct


? 395.3 Wireless electronic device prohibition.


(a) No rail operator shall require or permit an employee to use a wireless electronic device while


operating a moving train. This includes but is not limited to a device issued to the employee and


owned by the rail operator and a personal device owned and/or possessed by the employee.


? 395.8 Driver's record of duty status.


(1) Every person who operates a moving train shall record his/her duty status, in duplicate, for


each 24-hour period.


(2) Every driver who operates a moving train shall record his/her duty status by using an automatic


on-board recording device that meets the requirements of (FRA rules).


(d) The following information must be included on the status reports:


(1) Date;


(2) Starting hour and ending hour;


(2) Total miles operated;


(3) Train number;


(4) Remarks;


(5) Certification of compliance with FRA rules;


(5) Driver's signature/certification


(e) Failure to comply with (the above sections) or the making of false reports in connection with


such duty activities shall make the driver liable to criminal prosecution.


?395.17 Rail operator certification of driver?s duty status.


(1) A rail operator is responsible for enforcing FRA rules with its employees.


(2) A rail operator shall review the duty status reports of its drivers and shall certify to the best of its


knowledge and belief the drivers? compliance with FRA rules.


(a) Failure to comply with (the above sections) or the making of false reports in connection with


such duty status shall make the rail operator liable to criminal prosecution. L203 ? Business Law


Applied Learning Assignment #5








Entering my name certifies that this assignment has been completed in compliance


with the Honor Code of the Kelley School of Business - Indianapolis * For purposes of this section of the assignment, assume that the questions refer to


potential civil claims arising out of this accident.


1. (2 points) Given the facts in the articles and what you have learned in this class, which kind


of case is most probable as a result of the accident?


a. tort


b. contract


2. (5 points) Name or describe five potential individual plaintiff(s) who could bring a civil lawsuit


resulting from the accident:












3. (2 points) Name the two potential defendants with obvious liability for this accident:


a. Defendant 1:


b. Defendant 2:


4. Assume the civil case was filed in California state court. Describe how the court would have


jurisdiction over the parties in the case.


(3 points) Personal jurisdiction over each of the plaintiffs named above: (3 points) Personal jurisdiction over Defendant 1 named above: (3 points) Personal jurisdiction over Defendant 2 named above: 5. Assume the engineer on the train was an employee of Metrolink (the rail operator).


(1 points) Under agency law, who is primarily liable for the damages caused by this accident? (1 point) Name the legal term for this type of liability. (2 points) Would Metrolink owe a duty to indemnify the employee engineer? Explain. 6. Assume the engineer of the train was an independent contractor with Metrolink.


(1 points) Under agency law, who is primarily liable for damages caused by this accident? (1 point) Explain why both parties might be liable. (2 points) Would Metrolink owe a duty to indemnify the contractor/engineer? Explain. 7. (4 points) Would the engineer be entitled to Workers? Compensation benefits for injury as a


result of this accident? Explain. 8. (1 points) Assume that all of the plaintiffs listed in Question 2 above sue both of the


defendants in Question 3 above. Also assume the jury finds that both parties are


responsible and awards a large judgment to the plaintiffs. If the court does not specify how


much each defendant will pay, which one of the following would apply?


a. The plaintiffs can collect the entire judgment from either defendant.


b. Each of the defendants is responsible for half of the judgment.


c. The plaintiffs can collect the entire judgment from both defendants thereby getting twice as




9. (6 points) In class, we have learned there are two circumstances under which a court will


allow a jury to consider whether punitive damages are in order. Identify the circumstances


and explain whether each would apply to each of the defendants in this case.


First Circumstance:


Defendant 1:


Defendant 2:


Second Circumstance:


Defendant 1:


Defendant 2: 10. (1 points) Assume the state where this accident occurred has a law similar to the one in


Indiana regarding punitive damages. If punitive damages were awarded to the plaintiffs in


this case, which one of the following is true?


a. The plaintiffs would divide the punitive damages among themselves.


b. The lawyers would take most of the punitive damages as fees. c. Some of the punitive damages would be paid to the plaintiffs and the remainder would be


paid over to the state. * For purposes of this section of the assignment, assume that the questions refer to


potential criminal matters arising out of this accident.


11. For each of the defendants you named in Question 3 above, are criminal charges possible?


a. (2 points) Defendant 1: yes / no (4 points) Explain why/why not. b. (2 points) Defendant 2: yes / no (4 points) Explain why/why not.


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