International Business Law

(Images: "Abbott Labs." Bloomberg Business Week. 2008. Web. 09 Dec. 2011. .)

International business law is an extremely large topic. When one uses the term of international business law there is no one specific image that comes to mind. The reason that my group struggled to begin our project with international business law is because not one topic stood out to us. Between our collaboration, you can now read our blog on the topic of international law court case’s and outsourcing. Mr. Witty, an in-house lawyer representing Abbott Laboratories, made a point about international law that holds true in every international business law job; the topic is so broad that you will never be able to understand the entire topic. When Mr. Witty’s visited our classroom, we learned that Abbott Laboratories has undergone massive expansion in the last five years and now has many lawyers around the world to oversee the operations and contracting for their products. The company has to oversee so many different rules and styles of law around the world that they have at least one lawyer for every area their products are being massively distributed. According to Mr. Witty, the work of an international business lawyer “...depends on the job.” He feels that there are people all around the globe who deal with separate areas on international law and international business. In one morning Mr. Witty, “spoke with people in the Philippines (employee conduct issue); China (duties/marketing issue); and Russia (employee evaluation).” For myself, reading the amount of different topics and issues that Mr. Witty deals with daily consequently, made me realize how many different applications there are to law and business around the world. We are not limited to only the parts of the world that we can see. With new applications like online video chatting (skype) we may undergo globalization and open our job market to more lawyers with an international business background.


Below we looked into an important international law court case, to apply how international law and contract law come into play. This case is overseen by the one of The United Nations principle organ (branch) known as The International Court of Justice. Interestingly enough, The International Court of Justice is the only branch of the United Nations that is not held in New York City. I question the intentions of the members of the United Nations in having every operation held in NYC except for the justice court which is held in the Netherlands. I personally did not realize the importance in having the justice courts far away from the entire operations of the United Nations until I discovered through research that the court’s judges should not be impacted in any way by outside impacts in making their court case decisions. In order to read more into the recent and important court cases looks at the case law section.

The other important aspect of international business law lead us to focus our attention on was the highly debatable topic of outsourcing. In that section, you can find a intellectual argument against outsourcing and what the United States needs to begin doing in order for us to regain our worldly power in business over the vastly expanding countries like China. 

International - Case Law

In an oil mining town of Tyumen, Russia a judge rejected two lawsuits brought by Andrew Prokhorov, a minority shareholder in Russia’s third largest oil firm. One lawsuit for 13 billion aimed at BP and the other for 2.8 billion against two BP nominees on the board of operation unit TNK-BP Holding. Mr. Prokhorov has said that TNK-BP suffered financial losses because it had been excluded from a planned alliance between Rosneft and BP.Mr. Prokhorov is planning to appeal this decision saying that he was only given an approximate two hours to state his case and therefore, not enough time to present all the evidence. While BP on the other hand stays firm behind its victory saying that the grounds for the lawsuit were not proven in court.This all started with a misunderstanding between TNK-BP and BP when BP signed a contract with a Russian oil company Rosneft. The contract determined the two companies would search the Kara Sea together for oil. TNK-BP says that BP violated an exclusivity clause where TNK-BP would get th

(Image: "BP Opens Arctic Rosneft Too TNK-BP." Mining News and Journal. Web. 09 Dec. 2011. .)

e first chance at a deal before any other company. Now, because of the lawsuit, Rosneft backed out of the contract with BP and has begun working with an American company ExxonMobil. I believe that TNK-BP has legal rights to sue BP for failing to present them with the opportunity of dealing before they presented it to TNK-BP’s competitors (Rosneft and others). TNK had a exclusivity agreement with BP, before BP engaged in business with other companys in Russia and Eastern Europe. Therefore, they must present the opportunity to TNK-BP first. This contract keeps business going and due to BP violating it, I believe that TNK has its right to sue BP. They should be reimbursed for the money they could have made if they had been offered the opportunity first.

Outsourcing

Since the economic recession began in October of 2009, the international economy has been in shambles. Unemployment rates are similar in numbers to the Great Depression. Furthermore, domestic corporations are moving their factories to developing countries overseas because of the opportunity to give people jobs for lower salaries. In addition, they are still able to make their products without the major taxes that they must pay to make them in United States. However, they may be sacrificing the quality of the product that is being made overseas. Some people argue that outsourcing helps to spread out jobs to developing countries, which would contribute to healthier world economy. However, I believe that outsourcing hurts the world economy more than it helps it. Mr. Peter Witty, an expert in international law, stated that, “In a simplistic way, outsourcing current manufacturing jobs obviously hurts those people who lose their jobs as a result, and their inability to spend as much money during unemployment as they would during their employment hurts the larger economy.” This clearly indicates that the economy cannot afford to make this big of a sacrifice for a long term solution to the recession. Outsourcing jobs forces American consumers to deal with terrible customer service, lead-infused toys for their children, and less jobs for them to choose from. If jobs were to be brought back to the United States, the quality of products would go up dramatically because the United States has strict regulations on how products are made; ensuring dangerous materials don’t get into the clothes, toys and electronics that use. Also, jobs would be created instantly from bringing big corporations jobs back to our shores. In my opinion, the world economy would benefit from the United States’ success because our economy has ties all over the world, if the United States finally carried itself out of the red, then the rest of the world would soon follow. Lastly, I believe that outsourcing is not beneficial to the United States economy because it gives corporations an excuse to leave the country. In this day in age, most corporations are looking for tax breaks/tax incentives to stay in the United States. However, the government has to deal with the old children’s moral, once one gets it everyone will want that same thing. So instead of providing these tax breaks to the greedy corporations, the government is telling them to take their business elsewhere. Clearly, the government doesn’t care where the corporations make their products, as long as the corporations continue to rake in the billions of dollars. All in all, outsourcing jobs is commonly thought to help the world economy because it is stretched the American successes to other developing countries. However, outsourcing has proven to be toxic to the economy because it promotes “quantity is better than quality” logic, which has too many loopholes to work for a long time. To clarify, the supply of the products being made may be plentiful, but if the products are not made well, then the demand will continue to decrease. Consequently, there will be a major surplus on the products being made overseas, forcing the many huge corporations to go back to the drawing board. In the long run, outsourcing jobs is harming our world economy more than it is helping us.

Works Cited:

Mariner, Joanne. "UNITED STATES v. INTERNATIONAL BUSINESS MACHINES CORP :: 517 U.S. 843 :: 1996." US Supreme Court Cases from Justia & Oyez. Web. 09 Dec. 2011. .

"Ethics - Guide to the Practice of Law." Lawyers, Attorneys, Law Firms – Find Legal Information. Web. 09 Dec. 2011.

Did Liebeck deserve to win in the coffee case against McDonalds?

In the case Liebeck v. McDonalds, a 79 year old woman named Stella Liebeck was severely burned from a cup of hot coffee after spilling it in her waist area. Accompanying her was her grandson, Chris. When Chris pulled up to the curb and parked the car, Stella Libeck clumsily splilled the extremely hot cup of coffee while trying to put in cream. This sounds like something that Stella had control of the whole time, and it was her fault that she carelessly spilled. After McDonalds denied Libeck's demand of $20,000 for medical bills, which, however, was actually $10,000, she hired Texas Attorney Reed Morgan to take on McDonalds. So just how hot was this coffee that burned Ms. Liebeck?

After hearing McDonald's own quality assurance manager say that the coffee was usually 180-190 degrees, give and take a little, people started to question Mcdonalds. McDonalds then countered with the fact that people like their coffee hot and is requested by the consumers for the great tasting results, then questioned Ms. Liebeck', asking her if she really thought the 180 degree coffee was ready to drink. Since McDonalds lost the lawsuit against Stella Liebeck; McDonalds is now forced to warn their customers about the coffee temperature by labeling each individual cup with the words, caution hot.

In the end of it all Stella Liebeck was awarded $2.7 million in punitive damages based on its finding of reckless, malicious, or wanton conduct. When the jury heard that McDonalds income for coffee was around $1.34 million a day, they came to the conclusion that awarding Liebeck $2.7 million was reasonable. It went from Stella wanting $11,000 to her getting $2.7 million; in fact this trial will end all the other ones involving McDonald's coffee. What other ones are there? Before Stella's case, McDonalds had reported over 700 other people that have been victims of the extremely hot coffee. Many people look at this case as a frivolous lawsuit, meaning for Stella there was no chance of winning, but really she had a strong case that hundreds before her have tried to bring up. I believe that Stella Liebeck deserved to win this case, but any individual winning $2.7 million dollars has crossed the line, when really all she needed was around $11,000.

Ecuador v. Chevron

It's October 15, 2000 and Chevron has just agreed to buy Texaco for the price of $36 billion. By merging together the companies believed they would be able to compete with other major gasoline suppliers. The deal between the companies was swap their stocks for Texaco's. Once the merge was made the company would be renamed Chevron-Texaco. With the combined revenues of the companies estimated at $66.5 billion this sounds like a sweet deal. Because of Texaco's recline in the oil business, the merge would help to boost the company's production. This would also help Chevron from being taken over by the larger companies.

Well eight years later irony strikes. In a sixteen year conflict Chevron is being sued by residents of the Amazon for a sum of $27 billion for the alleged dumping of toxic wastes into the environment. The conflict stems from Texaco's dump of oil into the surrounding rain forests of Ecuador. The Plaintiff claims that polluted water had been dumped into the environment for almost twenty years. The dumping of the toxic waste water amounted to almost 18 billion gallons; and almost 17 million gallons in crude oil. The effects of the pollution have led to cancer, birth defects, and micarriages. This pollution of the Amazon has been dubbed "the rain forest Chernobyl". The suit, since filed in 1993 has seen little improvement in a decade.

In current news the judge ruling over the hearings was accused of bribery by Chevron. Judge Núñez Recusal was secretly taped in conversation saying he believed Texaco guilty. Due to this scandal Chevron asked that the trial be held out of Ecuador's judicial system. This was asked by Chevron accusing the court of breaking a bilateral treaty between the U.S. and Ecuador. As the trial goes on its basically being dragged out so that the trial won't be finished anytime soon.

So basically the people of Ecuador are right to be mad. The pollution of their land was was wrong and they had no right. If they don't want to pay the price for the suit then they shouldn't have done the deed. I'm not saying that Chevron is bad or anything I think it was just a unwise move buying Texaco. Though they did not technically pollute Ecuador, Chevron should still assist the residents of the polluted Amazon. Since they bought Texaco knowing that they had polluted. The responsibility falls on them to aid Ecuador. They should not try to cover this conflict up with petty claims. Chevron should at least create an organization to help the natives, and provide them with clean water. If someone came into your home and started to mess it up wouldn't you want the ones responsible to pay?