Hines Cosmetic Co. sold beauty preparations nationally to beauty shops at a stan

Question

Hines Cosmetic Co. sold beauty preparations nationally to beauty shops at a standard or fixed- price schedule. Some of the shops were also supplied with a free demonstrator and free advertising materials. The shops that were not supplied with them claimed that giving the free services and materials constituted unlawful price discrimination. Hines replied that there was no price discrimination because it charged everyone the same. What it was giving free was merely a promotional campaign that was not intended to discriminate against those who were not given anything free. Was Hines guilty of unlawful price discrimination? Explain.

The Endangered Species Act (ESA) charges the National Marine Fisheries Service (a federal agency) with the duty to “ensure” that any proposed action by the Council does not “jeopardize” any threatened or endangered species. The Steller sea lion is on the list of endangered species. The agency developed a North Pacific marine fishery plan that permitted significant harvest of fish by commercial fisheries in the area. Greenpeace, an environmental group, challenged the agency on the grounds that the plan was not based on a sufficient number of biological studies on the impact of the allowed fishing on the Steller sea lion. Greenpeace’s biologic opinion concluded that the fishery plan would reduce the level of food for the sea lions by about 40 percent to 60 percent, if the juvenile fish were not counted in that figure. Greenpeace’s expert maintained that counting juvenile fish was misleading because they were not capable of reproducing and the government agency’s figurewas,asaresult,much lower at 22 percent. What would Greenpeace need to show to be successful in challenging the agency’s fishery plan? [Greenpeace, American Oceans Campaign v. National Marine Fisheries Service, 237 F. Supp. 2d 1181 (W.D. Wash.)]

Dr. Doyle E. Campbell, an ophthalmologist, established his practice in southern Ohio in 1971. Many of Dr. Campbell’s patients are elderly people who qualify for federal Medicare benefits and state Medicaid benefits. Under the existing financing system, a doctor who treats a Medicare patient is required to submit a “Medicare Health Insurance Claim Form” (HCFA Form 1500). The doctor is required to certify that “the services shown on this form were medically indicated and necessary for the health of the patient and were personally rendered by me or were rendered incident to my professional service by my employees.” Claims Dr. Campbell submitted for his elderly patients ranged from $900 to $950, of which $530 to $680 were covered by the Medicare program. The government alleged that Dr. Campbell billed Medicare for several treatments that were either not performed or not necessary. Dr. Campbell was charged with fraud for the paperwork he submitted. Has he committed a crime? [United States v. Campbell, 845 F.2d 1374 (6th Cir.)]

Explanation / Answer

1) No. Hines was not guilty of unlawful price discrimination.

Unlawful price discrimination means, selling the products at a lower price to some preferred customers where as for higher prices for others when selling them the same or similar product, at around the same time.

Here, Hines gave away promotional material to some shops and could not give them to few others. The reason could be - may be the shops to whom he offered the promotional material gives Hines more sales, or Hines might have had a limited edition and that might have got finished after sending it to few preferred and main customers.

Hines did not break the law of giving few preferred customers at one rate and for others at a higher rate. So, Hines is not guilty of unlawful price discrimination.

3) Yes. Dr Campbell has committed the fraud. He misled the government and the elderly people by billing for unnecessary treatments, and for the treatments which were not performed at all. This is the fraud done by Dr.Campbell which is a crime and he is liable to be charged with the fraud.

2) Greenpeace should show that the juvenile fish are not capable of reproducing. Hence this reduces the food for the endangered species - Stellar sea lion. If it does not get the enough food how could they survive? They'll become extinct.

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