A day at the spa.(Instructor's Note)

Rymsza, Leonard ; Johnson, Gordon ; Saunders, Kurt 等

INSTRUCTORS' NOTES

CASE DESCRIPTION

The primary subject matter of this case concerns business law and statistical analysis. Secondary issues involve negligence vs. negligence per se; duty; breach of duty; causation; contributory vs. comparative negligence; and statistical concepts involving linear regression analysis, probability and expected value. The case also presents strategic thinking and ethical issues related to business conduct and their affects on consumers.

The case has a difficulty of level three, appropriate for junior level courses. The case is intended to be taught in three class hours, including a class presentation by student teams. The case is expected to require a minimum of three hours of outside preparation by student teams that present a report.

This case is designed for use in an upper division inter-disciplinary business course. The purpose of the course is to enable students to utilize the knowledge they have gained in their lower division core business courses that include one business law course and one statistics course. However, the case can be easily modified for use as an in class or take-home assignment in an introductory business law course by eliminating the Case A Questions on statistics.

CASE SYNOPSIS

Students are faced with a factual setting that presents practical business and ethical issues. After learning from his doctor that he was a prime candidate for a heart attack, the victim in this case considers a regimen of diet and exercise. The exercise aspect of the plan involved possible membership at a local gym, of which his wife was already a member. Following a discussion with his wife, it was decided that the victim would drive his wife to the gym and return to pick her up when her exercise session was completed. When the victim returned to the gym to pick up his wife, he waited for her in the gym lobby. While waiting for his wife, the victim suffered a cardiac arrest. Although medical assistance was immediately administered by a gym employee, and later by emergency medical technicians and trauma center personnel, the victim did not survive.

Following the victim's death, it was learned that he had suffered a sudden cardiac arrest. Individuals who suffer a sudden cardiac arrest generally survive if heart rhythm is restored using a defibrillator. The gym did not have a defibrillator on the premises. Was the gym negligent in failing to have a defibrillator on the premises? If the gym had had a defibrillator on the premises would the victim have survived? Since the victim was a prime candidate for a heart attack did the victim contribute to his own death?

In answering these questions, the case is divided into three major parts. The first part of the case requires students to utilize their understanding of several statistical issues. They are required to: use linear regression to predict age at death given a specific cholesterol level; determine the expected cost of owning a defibrillator; calculate the age at which the average person will experience their first cardiac incident; and estimate the number of lives that are saved if a defibrillator is available for use.

The second part requires students to analyze a possible negligence claim against the gym with respect to its failure to have a defibrillator on the premises. Students are required to address the following negligence concepts: duty; breach of duty; negligence per se; actual (cause in fact) causation; damages; and defenses to negligence (i.e., contributory vs. comparative negligence).

The last part of the case enables the students to propose strategies regarding settlement and ethical issues raised by the gym's refusal to assume responsibility for its actions.

RECOMMENDATIONS FOR TEACHING APPROACHES

This case is designed for use in an upper division inter-disciplinary business course. The purpose of the course is to enable students to utilize knowledge they have gained in their lower division core business courses. In addition, the course also aims to improve a student's communication, written and oral, and teamwork skills. Student teams prepare the answers to questions presented in the case with coaching from faculty. The faculty coaching is intended to provide answers to team questions. All teams submit a formal written business report containing an analysis of the issues presented in the case. One team of students formally presents their case solution to the class. A second team of students acts as a "discussion team" by asking the presenting team for further explanation or clarification of its case solution. Following the discussion team's exchange with the presenters, the entire class is welcome to participate in an active question and answer session.

Although this case is designed to be used in an upper division inter-disciplinary business course, the case can be easily modified for use as an in-class or take-home assignment in an introductory business law course by eliminating the Case A Questions on statistics.

CASE A QUESTIONS--STATISTICAL

1. Using the data set in Table 1, use linear regression to obtain an equation to predict age at death given a specific cholesterol level. Predict the age at which Tommy will die given his cholesterol level is 290 mg/dL. Interpret the slope in the context of this problem. Interpret the coefficient of determination.

Statistical linear regression analysis provides an algebraic relationship between two variables: x = independent variable, y = dependent variable = a + bx, where a = y-intercept and b = slope = change in y/change in x. If positive correlation, b is positive, so y increases when x increases. In this case, y DECREASES when x increases because x = high cholesterol is associated with low values of y, death at earlier age. This is negative correlation, and b is negative. You forecast y given x by substituting x value into the equation.

The coefficient of determination is explained variation/total variation, where explained variation is variation in y explained by variation in x. Total variation is total variation in y. If coefficient = 0, x explains nothing. If coefficient = 1, variation in x explains all the variation in y.

Excel software provides linear regression equation y = 96.89-.16x, where x = cholesterol and y = age at death. To forecast age at death if cholesterol = 290, y' = 96.89-.16(290) = 50.5 years old. To interpret the slope, if A's cholesterol is 10 points higher than B's, A's life expectancy is 1.6 years lower than B's. To interpret coefficient of determination, 30% of total variation in age at death is explained by variation in cholesterol. 70% of variation would be due to other variables (ex: blood pressure, weight, etc).

2. Suppose it costs $10,000 to buy a defibrillator. Find the expected value of owning a defibrillator if there is a .03 probability that Silver's will lose a lawsuit regarding its operation, with each lawsuit resulting in Silver's being liable in the amount of $900,000.

Expected value of a random variable is a forecast of a future value using probabilities. E(x) = x1P(x1) + x2P(x2) + ... + xnP(xn). Expected value is a long run average. In this case there is a fixed cost = $10,000 plus a variable cost, which is E(x). If there is a lawsuit, x1 = 900000, P(x1) = .03. If no suit, x2 =0, P(x2) = 1-.03 = .97. The expected cost of ownership = 10000 + expected cost of lawsuits = 10000 + E(x) = 10000 + [SIGMA]xP(x) = 10000 + 900000(.03) + 0(.97) = 10000 + 27000 = $37,000

3. If the age of an initial cardiac incident (heart attack or sudden cardiac arrest) is normally distributed with a population standard deviation = 15 years, find the age at which the average person will experience their first cardiac incident, given that 5% of all initial cardiac incident victims are younger than 45.

If a random variable x has a normal distribution, probabilities can be obtained from the Z Table, where Z is the standard normal random variable. In this case algebra can be used to calculate the mean (Greek letter mu) since Z is indirectly given. If Z = 1.65, the Z Table indicates that 5% of the area under the bell curve is in the tail to the right of Z =1.65. However, the word "younger" implies the left tail of the bell curve, so Z = -1.65. The Greek letter sigma is used for the population standard deviation = 15.

Let x = age at first incident = 45, with [sigma] = 15. From normal table, P(Z <-1.65) = .05, so Z = (x-[mu])/[sigma] = (45-[micro])/15 = -1.65, so [micro] = 45 + 1.65(15) = 69.8, shortly before 70th birthday.

4. Suppose that over the next several years, there will be 100 cardiac incidents at Silver's. Without a defibrillator, 30 victims will die before paramedics arrive. With a defibrillator, there is a .80 probability of saving a victim who would die without it. However, there is a .03 probability that improper use of the defibrillator will kill a victim who would have otherwise lived. Find the expected number of lives saved by the defibrillator.

Case 1: No defibrillator: 30 die, 70 live. Case 2: With defibrillator 80% of the 30 who died in case 1 live, but 3% of the 70 who would have lived are mistakenly killed. Answer = .80(30)-.03(70) = 21.9

CASE B QUESTIONS--LEGAL ISSUES--NEGLIGENCE

5. Was Silver's Gym negligent in failing to have an AED on the premises? (In answering this question assume that Gould Health & Safety Code [section]204 and [section]205 and Gould Evidence Code [section]966 in the Case Library WERE NOT in force at the time of Tommy's death.)

THE PRIMA FACIE CASE IN NEGLIGENCE

In order to prevail in a claim for negligence, a plaintiff must establish several points. These elements combined are referred to as the prima facie case. The prima facie case in negligence consists of the following: (1) conduct; (2) duty; (3) breach of duty; (4) actual cause; (5) proximate cause; and (6) damage. (Note: some textbooks do not include conduct as a specific point in the prima facie case, and some may include actual and proximate cause as a single causation element.)

In a negligence case against Silver's Gym some of the elements (conduct and proximate cause) can be easily established, while the remaining elements may be more difficult to prove.

CONDUCT

Conduct includes acting affirmatively (doing something) or failing to act (an omission). What is Silver's conduct? The conduct leading to the claim of negligence in this case is a failure to act, an omission on the part of Silver's--failure to have an AED on the premises.

DUTY

"A duty, in negligence cases, may be defined as an obligation, to which the law will give recognition and effect, to conform to a particular standard of conduct toward another." (Prosser and Keeton on Torts, 5th ed. Page 356) In light of this definition, duty has two aspects. First, there is an obligation to conform to a particular standard of conduct. Second, the conformity is directed toward another. These two aspects of duty give rise to two questions. First, what is the particular standard of conduct that must be exercised by the defendant? Second, to whom is the standard of care owed?

Standard of Care--Traditional Approach

With respect to the standard of care, in very general terms one must

act in such a way as to not expose another to an unreasonable risk of injury. Stated differently, one must act as a reasonable person of ordinary prudence would act under the same or similar circumstances. In this particular case it can be said that Silver's must act in a way that we would expect an operator of a gym to act under the circumstances. The standard of care is usually described in very broad terms. It is not possible to describe in very specific terms exactly how one is expected to act under every type of circumstance that may arise. For example, homeowners, landlords and merchants have a duty to act in such a way that each of their premises is reasonably safe for individuals who may come on to their property. Here, the duty is described in very broad terms: property owners owe a duty to others to maintain their premises in reasonably safe conditions. In very general terms, Silver's must be concerned with protecting, at a minimum, the health and safety of its members when they are at the gym. Whether Silver's must also be concerned with the health and safety of non-members who come on its premises is the focus of the next section of this discussion.

The standard of care may be determined several ways. For example, custom in the exercise industry may be an indication of how Silver's should act under the circumstances. Without specific custom or usage evidence, students may merely arrive at a conclusion that they would feel is reasonable under the circumstances.

It is important at this point, however, for students to be careful how they define Silver's duty. Stating the duty in broad terms is to be encouraged. As stated earlier, Silver's duty can be simply stated as the duty to protect the health and safety of its members. Of course, the question that really needs to be answered is whether Silver's should have had an AED on the premises. However, to define the duty in specific terms, for example, all employees must be trained in CPR, or at least one AED must be present on the premises; or the exercise machines need to be inspected at least once every three days, leads to a very restrictive idea of duty and the standard of care that is expected of the defendant. The specific question as to whether Silver's should have had an AED on the premises is one that will be answered when the breach of duty element is considered.

To Whom Is The Duty Owed?

Given that Silver's has a duty to maintain a healthy and safe environment, the next issue then is to whom does Silver's owe this duty? If Tommy were a member of the gym, all would agree that Silver's would owe him a duty to provide a healthy and safe environment within which to exercise. However, Tommy is not a member of the gym. In spite of not being a member of the gym, does Silver's still owe a duty to Tommy?

Duty is not owed to the world at large. The idea of "negligence in the air" is not sufficient. No action will lie following a finding of a breach of a duty owed only to some person other than the plaintiff. The plaintiff must establish that the duty was owed to him or her and not to some other person.

There is a certainly a large number of cases available for class discussion that can be used by the instructor to introduce students to the various ways courts resolve the issue of whether or not one owes a duty to another. [See, Palsgraf v. Long Island Railroad Co., 248 N.Y. 339, 162 N.E. 99 (Court of Appeals of New York, 1928); Biakanja v. Irving, 49 Cal.2d 647, 320 P.2d 16 (Cal. 1958); Rowland v. Christian, 69 Cal.2d 108, 443 P.2d 561 (Cal. 1968); Tarasoff v. Regents of the University of California, 17 Cal.3d 425, 551 P.2d 334 (Cal. 1976).] Three factors that can be considered in determining whether a defendant owes a duty to the plaintiff are: (1) the nature of the relationship between the plaintiff and the defendant; (2) the foreseeability of harm to the plaintiff as a result of defendant's conduct; and (3) public policy concerns. Satisfying any one of the three factors alone would be sufficient for the court to impose a duty on the defendant. For example, there may not be any relationship between the plaintiff and defendant (merchant customer, e.g.) and the harm may not be foreseeable and the court still conclude that because of public policy concerns a duty should be imposed on the defendant.

The report should look at each of the three factors and come to a conclusion regarding whether a duty would be owed to Tommy. There is certainly no contractual relationship between Silver's and Tommy. Tommy is not a member of the gym. Therefore, Silver's would argue that no duty was owed to him.

However, does Silver's owe a duty to anyone (members, prospective members, nonmembers) who might visit the gym? Of the three factors, the reasonable foreseeability of harm to the plaintiff is generally considered the most important factor. The precise nature of the relationship of Tommy to Silver's is not as important as is the foreseeability of his presence at the gym. It might be argued that although Tommy's presence is foreseeable, Silver's was not involved in any affirmative activity that rendered the premises unsafe. However, the counter argument would be that the gym was unsafe because of a failure to have AEDs at the gym.

Lastly, what about public policy concerns? Several points can be considered from a public policy perspective. Among the points to consider are: the moral blame to be attached to the defendant's conduct; the extent of the burden to the defendant and consequences to the community of imposing a duty on the defendant; the policy of preventing future harm; and the availability, cost and prevalence of insurance for the risk involved. There is no right answer to the question raised regarding to whom Silver's owes a duty. What is expected, however, is that the reports should at least recognize the factors and make an attempt to evaluate each of the factors in light of the specific facts of the case and come to a conclusion.

BREACH OF DUTY

Whether the duty to provide for the health and safety of customers, members, prospective members or merely individuals who may be at the spa includes having an AED on the premises is a matter of breach of duty. One method used by the courts in determining if the defendant has breach the duty owed to the plaintiff is to calculate the risk to which the plaintiff is exposed. This calculus of risk approach (benefit vs. cost analysis) was first espoused by Judge Learned Hand in the case of United States v. Carroll Towing Company, 159 F.2d 169 (Second Circuit, 1947), weighs the chances and severity of harm against the cost of prevention and the value of the nature of defendants conduct. One thing to keep in mind is that, although Judge Hand, for purposes of illustration, stated the calculus as a mathematical formula, the weights given to the various elements of the formula are not exact. The formula was stated to illustrate one way to determine if the defendant has breached a duty owed to the plaintiff.

In light of the facts of this case what are the chances and severity of the harm that might be suffered by the plaintiff in light of there being no AED on the premises? The case provides several statistics that may be analyzed. For example, the case states that 250,000 people die in the United States each year from sudden cardiac arrest (SCA). If the population in the United States is 300 million people, one should be able to determine the percentage of the population that will experience a SCA every year. The case also states that in a survey of 65 randomly selected Gould health clubs, 17 % of the clubs reported a club member having a sudden cardiac arrest or heart attack during a five--year period. The report might question the value of this statistic since it includes death from either SCA or heart attack. Would this statistic be mixing apples with oranges? The point here is that the report should attempt to determine the chances of suffering a SCA. The severity of the harm is addressed throughout the case. Death is almost certain if medical assistance is not almost immediate. For every minute of delay before defibrillation is used a victim's chances of survival decrease by 10 percent. If the average response time for emergency medical personnel to arrive on the scene is ten minutes, by the time help arrives the victim's chances of survival are zero. On one side of the scale the chances of harm (suffering a SCA) may be low but the severity of the harm (death) is high without immediate defibrillation.

The other side of the scale primarily weighs the cost of adequate prevention. How much will it cost Silver's to prevent a death from SCA. Here again, the case has information regarding various costs associated with AEDs. Information is given regarding the cost of AED units, the cost of maintenance and testing of the units, education and training costs for employees, litigation costs, etc. Some of the costs are precise (cost per unit) and others are somewhat speculative (litigation costs). The report might make reference to the answer reached in Question 2 regarding the expected value of owning an AED.

The report should attempt to weigh the values on each side of the equation and come to a conclusion. If the chances and severity of the harm outweigh the cost of adequate prevention then Silver's has breached its duty to Tommy. However, if the cost of adequate prevention outweighs the chances and severity of the harm, then Silver's has not breached the duty it owes to Tommy. The important part of this analysis is not whether the report concludes breach or no breach. The important part is that the report makes an effort to use the facts in the case to support whatever conclusion is reached on the breach of duty issue.

ACTUAL (DIRECT) CAUSE

The defendant's action must have caused the legally recognizable damages suffered by the plaintiff. The causation theory could be based upon three possible situations--one would be failure to have an AED available on the premises; two--failure to use an AED that is available or three--improper use of the AED. In this case, the causation element would be based upon Silver's failure to have an AED on the premises.

Generally the issue of actual cause is analyzed using a "but for" question. "But for" the defendant's conduct, the plaintiff would not have suffered a loss. Stated differently, the defendant's conduct led in fact to the plaintiff loss.

Of the six points of the prima facie case, this point is the most difficult for Jipsy to establish. Actual cause requires that there be a direct link between the conduct of the defendant and the harm suffered by the plaintiff. In this case Silver's failure to have an AED on the premises must be the cause of the damage suffered by the plaintiff. So what is the difficulty facing Jipsy in this case?

The emergency response and use of an AED must be very quick--each passing minute decreases chances of survival by 10%. Could Tommy's death have been prevented if the AED was available? Ninety-five percent of cardiac arrest victims die because they either don't have access to defibrillation, or if they do, its administration is delayed by 10 minutes or more (as in this particular case). Cardiac arrest is usually reversible if defibrillation occurs within the first few minutes after collapse. The sooner the shock is delivered, the better. As many as 50 percent of cardiac arrest victims could be resuscitated if they were defibrillated within seven minutes or less. In one study in Las Vegas, survival rates reached 70 percent. (Rapid Defibrillation by Nontraditional Responders: The Casino Project; T.D. Valenzula, et. al, Academic Emergency Medicine; May 1998, Vol. 5/No. 5, pg. 414.) Survival can be as high as 90 percent if a victim is defibrillated during the first minute after collapse. Combining CPR with defibrillation within the first minute after arrest increases the success rate of survival to 95%. Each minute defibrillation is delayed, the chance of a person surviving a cardiac arrest drops 10 percent--even if CPR is started immediately. The success rate of restoring normal heart rhythm through CPR techniques alone is less than 5%. If a sudden cardiac arrest victim isn't defibrillated within 10 minutes, his or her chance of survival is less than 2 percent. The chance of survival will drop even further if CPR isn't begun before the defibrillator arrives. If the heart isn't restarted within the first four to six minutes after the arrest, the victim will most likely sustain irreversible brain damage. Most of this information is included in the magazine and newspaper articles found in the case library.

What is unknown in the case is whether Tommy was still alive when he hit the floor. The facts indicate that Tommy had no pulse, was not breathing, and appeared to be unconscious and unresponsive when assistance was initiated by a Silver's employee. Was Tommy still alive at that time? If not, having ten AEDs on the premises would not have saved Tommy. Assuming Tommy was alive, Jipsy would argue, in light of the statistics noted in the previous paragraph, that if an AED had been present at the gym and used immediately when CPR was begun Tommy would have survived.

PROXIMATE (LEGAL) CAUSE

This point of the prima facie case is easily met. It is important to note that proximate cause has nothing to do with proximity or closeness of the loss to defendant's conduct. Proximate cause is a concept that limits the extent or scope of a defendant's liability for conduct, on the part of the defendant, that has actually (in fact) resulted in a loss to the plaintiff.

Some courts discuss proximate cause as the natural and probable consequences of a defendant's conduct. Cases in which proximate cause is a difficult issue to resolve are those where the plaintiff's loss, although foreseeable, arises as a result of a series of connected, all be it, weird and unforeseeable events.

In this case what would be the natural and probable consequences of Silver's actions? Stated differently, are the damages suffered by Jypsy the natural and probable consequences of Silver's failure to have an AED on the premises? The answer is most certainly yes. The events leading to the loss are not weird or unforeseeable. There are no intervening forces at work here. Tommy suffers a SCA, aid is rendered, no AED is available for defibrillation, Tommy dies.

The reports may attempt to place blame on Tommy because of his being overweight, lack of exercise, high blood cholesterol level and high blood pressure. The argument here is that Tommy's failure to exercise good health is an intervening force and the extent of his injury (death in this case) was unforeseeable and thus Silver's should not have any liability. This argument is, however, misplaced. The argument is primarily misplaced because of the "thinskull doctrine." Under this doctrine Silver's takes Tommy as it finds him when he suffers the SCA. How or why Tommy suffers the SCA is irrelevant. What is relevant is that Tommy suffered the cardiac arrest at Silver's gym and if it is determined that Silver's owed a duty to Tommy and breached that duty by failing to have an AED on the premises then Silver's would be liable for the full extent of the damages suffered even if unforeseeable. Silver's would be liable for the damages even if the damages are greater than would be expected due to the fact that Tommy had a pre-existing condition that caused him to sustain a much greater damage than the average victim who have suffered.

DAMAGES

If Jipsy is to recover damages in this case, the damages would be compensatory in nature. The plaintiff is compensated for whatever damages are suffered as a result of the defendants conduct. Compensatory damages include a wide range of losses that are suffered by the plaintiff including: (1) the loss of love, affection, companionship, care, protection, and guidance since the death of the decedent and in the future (generally referred to as loss of consortium); (2) the pain, grief, sorrow, anguish, stress, shock, and mental suffering already experienced, and reasonably probable to be experienced in the future; (3) the income and services that have already been lost as a result of the death, and that are reasonably probable to be lost in the future; (4) the reasonable expenses of funeral and burial; and (5) the reasonable expenses of necessary medical care and services.

In determining the amount of compensatory damages that Jipsy might recover one critical matter that must be considered is Tommy's life expectancy at the time he suffered the SCA. Although Tommy's pre-existing health conditions were not relevant in the proximate cause discussion, they are relevant in determining the extent of damages that may be recovered by Jipsy in her suit against Silver's. The report might make reference to the answer reached in Question 1 which predicted the age at which Tommy would die given his cholesterol level of 290mg/dL.

DEFENSES

In lawsuits based upon a negligence cause of action there are several defenses that may be available to the defendant. If successful, a defense is generally a complete bar to recovery by the plaintiff in spite of having established that the defendant was negligent. This is the result of a successful defense of contributory negligence. If the plaintiff contributes to his loss to any degree, then the plaintiff will recover nothing for the damages suffered as a result of the defendant's negligence.

Most states have abandoned the common law rule of contributory negligence in favor of a comparative negligence system. The comparative negligence rules vary among the states, however, there are basically two different applications. One form is described as "pure" and the other as "mixed" or "limited." Under the "pure" version of comparative negligence, the award of damages to the plaintiff will be reduced in direct proportion to the plaintiff's percentage of fault, regardless of degree. Under the "pure" comparative system the harshness of the contributory negligence is significantly softened. Under the "mixed" or "limited" version of comparative negligence, in order for the plaintiff to receive any damage recovery, the plaintiff must be no more than 50% at fault for the damages suffered. Thus if it is determined that the plaintiff is 51% at fault for the damages suffered the plaintiff would not recover any damages. Under the "pure" version of comparative negligence, however, the plaintiff would recover 49% of the total damages suffered.

The reports may attempt in one way or another to reduce the amount of damages that Silver's must pay. Technically, the argument to reduce the extent of the damage liability arises when determining the compensatory damages as discussed earlier. When determining the damages that Jypsy might recover, Tommy's pre-existing health conditions would be relevant. Although, attempts to reduce Silver's liability by way of a proximate cause or contributory/comparative negligence argument are not technically correct, at least the reports recognize that Tommy's pre-existing health habits are relevant to the case.

6. Suppose Gould Health & Safety Code [section]204 and [section]205 was in force at the time of Tommy's death. Would your answer to Question 5 change? Why or why not?

NEGLIGENCE PER SE

The answer to this question requires a complete discussion of the negligence per se doctrine. Statutes can clearly specify how a person should behave. Proof of a statutory violation can create a presumption of negligence. The common law doctrine of negligence per se, pursuant to which state statutes and regulations may be used to establish duties and standards of care in negligence actions, presumes the failure of a person to exercise ordinary care if: (1) he violated a state statute or regulation of a public entity; (2) death or injury results from an occurrence of the nature which the state statute or regulation was designed to prevent; and (3) the person suffering the death or the injury to his person or property was one of the class of persons for whose protection the state statute or regulation was adopted. In other words, the statute or regulation defines the duty to be obeyed and violation of the statute establishes the breach of duty.

Does the Gould Health and Safety Code impose duties and standards of care on Silver's and do those duties and standards of care apply to Tommy? The relevant provision of the Health and Safety Code is the requirement that health studios (including gyms) have AEDs. In light of this statutory requirement will the negligence per se doctrine apply?

STATUTE--STANDARD OF CARE OWED TO TOMMY

The Health and Safety Code clearly requires health studios (including Silver's Gym) to have AEDs. The statute defines the standard of care (the duty) that must be exercised by Silver's. Silver's has a duty to have an AED on its premises. Also, it is clear that the statute was enacted in recognition that "the key to survival of sudden cardiac arrest is the timely implementation of a 'chain of survival' including ... the restoration of an effective heart rhythm by defibrillation" using an AED. Tommy died as a result of suffering a sudden cardiac arrest. The statute was designed to prevent Tommy's death by requiring AEDs in health studios.

The next issue is whether under the statute Silver's owes Tommy a duty to have an AED at the gym. Is Tommy a member of the class of persons for whose protection the statute was adopted? Certainly the statute was adopted to promote the health and safety of health studio patrons. However, Tommy was not a patron of Silver's Gym. Might the statute have been adopted to promote the health and safety of a wider category of individuals? The preamble to the statute ([section] 204) indicates that [section] 205 was enacted in order " to promote the health and safety of" the "citizens" of Gould. Presumably, if the legislative intent was for the statute to apply to only members or patrons of the health studios the statute could have used that specific language. The problem that is being dealt with here is one of statutory interpretation. The legislature enacts a statute and the courts are then charged with the responsibility carrying out the intent of the statute. In this regard, courts do the best that can be done in determining the intent of the legislature. Jipsy, of course would argue that the legislature intended the statute to apply to all of the "citizens" of Gould. Silver's would, obviously, contend that, although the statute uses the designation of "citizens," the overall intent of the statute was to apply only to members or patrons of health studios. There is no clear answer to this question.

STATUTE--BREACH OF DUTY

The statute requires Silver's to have an AED on the premises. Silver's did not have an AED and therefore is in violation of the statute. The failure to have the AED is a breach of the duty specified in the statute.

DOES THE ANSWER CHANGE?

If the requirements for negligence per se are met, then one must conclude that Silver's not only owed a duty to Tommy, but also breached that duty by failing to have an AED on the premises. However, it must be remembered that proof of the statutory violation and the subsequent application of the negligence per se doctrine only satisfies two elements of the case for negligence--that of duty and breach of duty. Jipsy must still prove the remaining elements of causation and damage in order to prevail in her negligence lawsuit.

Would the answer to Question 5 change based upon the negligence per se doctrine? The answer to this question is either yes or no, depending upon the conclusion reached in analyzing the negligence per se arguments. There is no doubt that Jipsy has been damaged as a result of Tommy's death. So all the reports should be consistent with this conclusion.

The element of actual causation may be resolved in favor of Jipsy or in favor of Silver's. If the actual causal linkage is not satisfied then Jipsy will not prevail in her lawsuit. Regardless of the conclusion reached in the application of the negligence per se doctrine, Jipsy will not prevail in her case. Why not? Jipsy will not prevail because she was not successful in establishing one of the elements of the prima facie case of negligence. Even though the duty and breach of duty element are proven (either under the approach in Question 5 or by application of negligence per se) the causation element is not met and therefore Jipsy will not prevail. A report that concluded that Jipsy would not prevail because in part she failed to establish a causal connection between Tommy's death and Silver's conduct would arrive at the same conclusion in Question 6 (Jipsy loses), regardless of negligence per se.

If, however, the causal connection is met, the answer to Question 5 may or may not change depending upon the conclusions reached in Question 6 relating to duty and breach of duty and the application of the negligence per se doctrine. To simplify the answer to this question we can make a few assumptions with the understanding that the answer may not cover all of the possible variations that could occur. Remember that at this point we are assuming that the causation and damage elements have been satisfied. If the report has concluded that the duty and breach of duty elements were both satisfied in Questions 5 and 6 (Silver's is liable), then the answer to Question 5 would not change (Silver's is still liable). If the report concluded that the duty and breach of duty elements were not satisfied in Question 5 (Silver's not liable) but were met in Question 6, then the answer to Question 5 would change (Silver's is liable).

7. Regardless of the conclusions reached in Questions 5 and 6, would your firm recommend that Silver's have an AED on its premises in the future? Your answer should consider the statistical and legal issues involved as well as ethical and strategic issues.

The statistical and legal issues should have been discussed fully in the prior sections of the report. At this stage in the report all that would be needed would be a reference to that prior discussion and how it might fit into the ethical issues being raised at this point. Also, the report might recognize that if Health & Safety Code [section]204 and [section]205 are enacted at the time of the report, the ethical and strategic issues are rendered moot in light of the fact that the statutes would require that Silver's Gym have an AED on it premises.

Assuming the statutes are not in force at the time of the report, then the reports would be expected to evaluate Silver's actions in light of the various ethical approaches that might be discussed in class. Silver's Gym has a statement of its mission, core values, and vision. Any conclusion reached regarding the ethical nature of Silver's conduct should take these corporate statements into account. For example, the Google corporate webpage specifies ten things that Google has found to be true. Number six is a statement that "you can make money without doing evil." This finding has been stated several different ways. Two paraphrases state the finding as "Don't Be Evil" or "Do No Evil." Similar to the Hippocratic Oath, "Do No Harm." Students should carefully review the mission, core values and vision statements in an attempt to determine what is the basic philosophy of Silver's Gym with respect to its ethical responsibilities.

There are numerous approaches that are used to determine if one's actions are ethical. The most common of these approaches is the Stakeholder/Utilitarian Theory (maximize the net benefits to society as a whole, i.e., the greatest good to the greatest number). Other theories include the Rights Theory (respecting and protecting individual rights); Justice Theory (fair distribution of benefits and burdens); Categorical Imperative Theory (looking at the results if everyone acted in the same manner); and the Front Page Test (reaction if the decision is reported on the front page of the local newspaper). In order to answer this question instructors must provide students with a framework whereby they can analyze Silver's behavior from an ethical standpoint. Certainly the instructor will prefer that the ethical discussion include the approaches discussed in his or her course.

There are certainly a number of ways to approach the issues of strategy that are raised in the case. One approach is the Liedtka model. This model consists of five elements of strategic thinking--a system perspective; intent-focused; intelligent opportunism; thinking in time; and hypothesis-driven. The primary focus of strategic thinking is concerned with a creative and divergent thought process. Strategic thinking looks to the future. Strategic planning, in contrast, involves a thought process that is utilized to achieve the strategies developed through strategic thinking. In this case, the report should analyze the five elements of strategic thinking in an attempt to develop strategies to deal with legal liabilities that may arise in the future. Once the strategies have been developed then a plan should be developed to carry out or implement the strategies.

Leonard Rymsza, California State University, Northridge

Gordon Johnson, California State University Northridge

Kurt Saunders, California State University Northridge