It should be emphasized that Laura serves as the general counsel for MoreHome Mortgage Company, with her primary allegiance being to the corporation itself, not to any of its executives or employees. While her role necessitates communication with company personnel, including Eric, the Chief Executive Officer, such interactions must strictly adhere to professional legal ethics. A challenge arises when the interest of the company is inconsistent with the interests of individuals within the company.

Duty of loyalty

As discussed above, the lawyer's client is MoreHome, which means she needs to maintain loyalty solely to the company, and to avoid conflicts of interest. When Eric approached Laura, if there had been an inconsistency between Eric's interests and those of the company, it would have been appropriate for Laura to advise Eric to seek independent counsel. However, since Eric was not personally implicated in the document falsification, her interests appeared to be aligned with the company's. Under these circumstances, Laura could represent both the company and Eric concurrently. Hence, even if Laura had offered legal advice to Eric, which she did not, it would not have been a breach of professional ethics.

A conflict of interest arises when Eric instructs Laura not to disclose information to others. At this point, Laura can no longer act according to Eric's instructions. The more appropriate course of action would have been for Laura to inform Eric that he is not her client and that her actions will be guided by the best interests of the company, not Eric's personal preferences. This clarification could have helped to set the right expectations and uphold the professional boundaries between Laura and Eric while ensuring that the company's interests remained the primary focus of Laura's actions.

The conflict of interest extends to the confidentiality obligations Laura may have towards Eric, if any. It should have been made clear at the beginning that any communication between Laura and Eric would not be kept confidential from the company, given that Eric is not her client, or at best, is a joint client with the company. Therefore, when Eric instructed Laura not to disclose information to the company, Laura should have promptly declined.

Duty of honesty

An attorney's appearance should reflect honesty, not only towards their client but also towards the public. Regardless of whether Eric was her client, Laura should have candidly informed him that any communication between them would not be confidential, instead of saying she would "think about it" and then immediately disclosing the information shared by him to the CEO. Laura might argue that she did not agree to confidentiality and stating "think about it" was a way to avoid an awkward refusal, thereby leaving some room for contemplation. However, considering the above discussion regarding the notification of conflict of interest, the State Bar might find it more appropriate if Laura had informed Eric at the beginning that their communication would not be confidential.

Duty to report internally

Laura bears an absolute duty to report the discovered misconduct within the company to its highest levels. Disclosing such matters to the CEO does not violate any professional ethics; on the contrary, professional ethics explicitly mandate Laura to take such action, even in the face of opposition from Eric. However, when the CEO showed indifference towards the disclosed misconduct, it was necessary for Laura to take the matter to higher authorities within the company. Typically, a corporation would have a board of directors representing its highest governing authority. Hence, Laura's failure to disclose the misconduct to the board of directors might constitute a violation of professional ethics.

Duty of confidentiality

An attorney is obligated to maintain confidentiality regarding client information, which means, generally, Laura should not disclose MoreHome's alleged misconduct to external parties. However, an exception to this rule exists when an attorney seeks advice on how to comply with professional ethics, permitting limited disclosure to outside counsel. Therefore, Laura's action of sharing some confidential information while consulting with an external attorney did not violate the duty of confidentiality. This step was taken in an effort to ascertain the correct ethical path forward, demonstrating a prudent approach towards adhering to professional ethics while navigating a complex situation.

Duty to report externally

An attorney typically does not have a duty to report externally. If Laura chose not to report outside the company, she would not be violating any professional ethics. However, her decision to report externally could potentially cross ethical lines. As previously mentioned, Laura should have first reported to the Board of Directors, and only considered external reporting if the Board remained indifferent.

Assuming that the CEO is the highest governing authority within the company, or that the CEO has control over the Board making reporting to them futile, whether Laura's external reporting breaches professional ethics may depend on whether the ABA or California's professional ethics standards are applied. Under the ABA guidelines, an attorney may report externally if the company is involved in 1. clear violation of law and 2. actions detrimental to the company's interest. California, on the other hand, only permits external reporting if the actions could result in death or serious bodily harm. Here, the company employees' actions of falsifying financial records clearly violate the law and are detrimental to the company's interests, but do not rise to the level of causing bodily harm or death. Therefore, under the ABA guidelines, Laura's action of reporting externally may not violate professional ethics, contrasting with California's more restrictive rules which might view Laura's actions as a breach of professional ethics.

In conclusion, Laura violated professional ethics when she failed to immediately inform Eric about the existence of a conflict of interest and the absence of confidentiality obligations between them. Furthermore, Laura might have breached professional ethics by not reporting to a higher authority within the company, if any. Lastly, the act of reporting externally could potentially contravene professional ethics if California rules are applied. But since her decision was made post consultation with external counsel, even if found in violation, the State Bar might consider Laura's honest belief that she was adhering to professional ethics, which could mitigate any disciplinary actions.

Battery

The claim of battery typically requires the proof of intent. Intent in a battery claim is often defined as having a substantial certainty that the action will cause harm to the plaintiff. In this case, there is not evidence presented to suggest that DishWay had the substantial certainty that their product would cause harm, especially since they were unaware of the residue issue with aluminum. Therefore, a claim of battery may not be supported in this scenario.

Negligence

To establish a product negligence case against DishWay, the following four elements must be closely examined: duty, breach, causation, and damage.

Duty

The initial step is to ascertain whether DishWay owed a duty of care to Paul. It is a general principle that manufacturers have a duty to ensure the safety of their products for consumers. However, the extent of this duty may be contingent on what a reasonable business would do under similar circumstances. Whether a reasonable business would test for residue on aluminum in this situation might require more information and would likely be a matter for a jury to decide.

Breach

If a jury determines that a reasonable business would test a dishwasher agent for residue on various surfaces, especially given the knowledge that residue can vary across different materials, then DishWay's duty to ensure the safety of UltraKlean would extends to such testing to identify and mitigate potential risks associated with residue left on common materials. If that is the case, DishWay may have breached its duty by failing to test UltraKlean on aluminum cookware, a common material.

On the other hand, the doctrine of res ipsa loquitur could be particularly relevant in this case. This legal principle allows an inference of negligence to be drawn from the very nature of an accident or injury, under the assumption that certain events ordinarily do not occur in the absence of negligence. Here, the mere fact of UltraKlean leaving a potentially dangerous residue on aluminum cookware could, in itself, be indicative of negligence. This could shift the burden of proof to DishWay, compelling them to demonstrate that there was no negligence in their testing or manufacturing process.

Causation

Causation requires showing that "but for" the defendant's breach of duty, the plaintiff would not have been harmed. In this scenario, there seems to be a clear causal link between DishWay's failure to test UltraKlean on aluminum and Paul's injuries. The laboratory test results confirmed that the cleaning agent in UltraKlean caused Paul's stomach pain.

In addition to the factual causation linking DishWay's breach to Paul's injuries, the foreseeability of the harm is also a crucial aspect of causation. DishWay could argue that while it is known that the agent in UltraKlean could cause severe stomach pain if ingested, this is a common characteristic of all detergent products, and thus they had no reason to foresee that their product would behave differently on aluminum. They might also contend that they could not have foreseen that the residue on aluminum would exceed safe levels, as there was no indication that UltraKlean would react differently with aluminum compared to other materials. However, this argument is likely to fail given that it is not unusual for dishwasher powders to leave a harmless amount of residue on different surfaces. The commonality of residue left by dishwasher powders could establish a basis for foreseeability, implying that DishWay should have anticipated and tested for varying levels of residue on different materials including aluminum, to ensure the safety of UltraKlean for all users.

Damage

Finally, the damage element requires showing that the plaintiff suffered actual harm or loss suffered by the plaintiff as a result of the defendant's breach or the product's defect. It is important to note that pure economic loss is generally not recoverable in product liability claims. Here, Paul encountered severe stomach pain necessitating hospitalization due to the UltraKlean residue on his aluminum cookware, thereby substantiating the element of damage.

Based on these elements, there could be a strong argument for negligence on DishWay's part. The potential success of DishWay in defending against a negligence claim might hinge on convincing the jury that they fulfilled the duty of a reasonable business, and that the unique residue issue with aluminum was unforeseeable.

Strict Liablity

In a strict product liability claim, the plaintiff needs to establish four key elements: 1) that the defendant is a merchant, 2) that the product sold or produced by the defendant was defective, 3) causation and 4) damages.

DishWay is clearly a merchant specifically involved in the creation and/or distribution of dishwasher products like UltraKlean.

The focus is on whether the product was defective, and a defect is often assessed based on whether the product meets the reasonable expectations of the consumer. In this scenario, Paul used UltraKlean on a very common material, aluminum, and suffered severe health consequences as a result, which clearly falls short of the reasonable expectations for the product's performance and safety. Therefore, it could be strongly argued that UltraKlean was defective.

A common defense against a claim of defectiveness is the argument that a product could not have been made safer, given the existing level of technology and practical constraints at the time of manufacture. However, in this case, that argument appears to be weak. Other similar products do not have this issue, and a simple, low-cost test on aluminum by DishWay could have potentially identified and resolved the residue problem, indicating that there was room for improvement to make UltraKlean safer.

Upon establishing a defect in strict liability claims, it is also essential to establish causation and damage. As discussed in the negligence part, these two elements may be relatively easier to prove.

Breach of Warranty

Express warranties are affirmations of fact or promises made by the seller to the buyer which relate to the goods and become part of the basis of the bargain. Here, DishWay's advertisement of UltraKlean as a "safe product" can indeed simplifies matters because regardless of whether there was negligence on the part of DishWay or if UltraKlean was defective, DishWay clearly contradicted their advertisement promise by labeling UltraKlean as a "safe product." This contradiction constitutes a breach of express warranty, which is a straightforward claim

Furthermore, even in the absence of an express warranty, there could still be a case for breach of implied warranty. Implied warranties are unspoken, unwritten promises created by law, which assure that the product will function as expected, including a basic level of safety which is a fundamental expectation for a dishwasher detergent.

To conclude, battery claims seem less likely, while negligence, strict liability and breach of warranty claims present stronger avenues for pursuing liability against DishWay, regardless of their advertising assertions on safety.