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TCO D. 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 barcodes 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 attorneys fees,
and for punitive damages. List any defences Casings, Inc., would have under
contract theory ONLY for the damages caused by the explosives in their drugs,
overand above the cost of the capsule shells.
(Points:15). (Short answer question)
Set 3 Questions:
List any bases Robins & Robins could sue
Casings, Inc., under contracttheory ONLY for the damages caused by the
explosives in their drugs, overand above the cost of the capsule shells. (short
answer question)
