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Discussion problem MC

Discussion problem MC

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Published by George W. Conk
Business Torts
Discussion Problem MC
drafted by Prof. Jay Feinman
Business Torts
Discussion Problem MC
drafted by Prof. Jay Feinman

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Published by: George W. Conk on Apr 11, 2011
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04/11/2011

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Business TortsDiscussion Problemby Prof. Jay Feinman
Problem: MC
A relatively new environmental problem is “e-waste”—the disposal in environmentallyunsound ways of personal computers and consumer electronics containing toxic substances suchas lead, mercury, cadmium, and tortium. Campaigns are underway to have consumers andbusinesses submit such products for appropriate disposal, rather than disposing of them in thetrash, which leads to toxic substances leaching into the environment when the disposed productsare landfilled. Products which are collected are then subjected to various processes to extract thetoxic substances and either dispose of them safely or recycle them.Metals Corp. (“MC”) is a company that engages in treatment and recycling of computers.One of its principal activities is to process certain computer parts to extract tortium, which isthen sold for reuse. This can be accomplished through various chemical processes, such asheating the parts in certain ways and subjecting them to chemical processes.MC purchased a special furnace from Thermo, Inc. for use in tortium recycling. Thefurnace was not sufficiently effective at separating out the tortium until MC made a number of modifications in the design and operation of the furnace, particularly in what is known as theprocess of high-heat extraction. Both the scientific principles underlying high-heat extraction andthe way in which the principles are implemented in furnace operation are well-known in thetrade, but MC’s modifications to the process were novel.With the modifications, MC was able to use the furnace to extract a purer grade of tortium than many of its competitors. This result became a major promotional point for MC,which it touted to prospective purchasers of the tortium it extracted, and which was noted in atrade publication.Because of its success with the modified furnace, MC desired to expand its operation.Instead of buying a standard furnace and modifying it after the furnace was delivered, MCdecided to have the furnace manufacturer incorporate a number of the modifications at the timeof manufacture. Thermo’s furnace was relatively expensive, so MC approached Conco, another furnace manufacturer. MC explained the modifications it needed, but Conco was unwilling tomake the modified furnace because it did not think it could do so at a competitive price.Therefore, MC went back to Thermo, explained the modifications it needed, and purchased asecond furnace from Thermo, this time with the modifications incorporated.MC also entered into an agreement with Metall AG, a German firm, under which MCprovided its modifications to Metall for use by Metall in its recycling operations in Europe.About a year later, for reasons unrelated to this problem, Thermo went bankrupt. Tom,Dick, and Harry, three of Thermo’s key employees, formed a new furnace manufacturing

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