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Fact Pattern 18-1 Jean LeFleur, Owner of Happy Feet, a Company That Makes

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Fact Pattern 18-1
Jean LeFleur, owner of Happy Feet, a company that makes environmentally-sensitive foot wear, decided to move operations from Los Angeles to Bozeman, Montana. LeFleur wanted to be in an area noted for environmental quality. He built a new plant that produced oil-based sludge from its production process. The sludge could have been treated at the plant. But LeFleur decided that treatment was too costly, so the company dumped sludge into the Gallatin River, which runs through Happy Feet property. Other sludge was buried in drums in a field at night.
-Refer to Fact Pattern 18-1. When LeFleur builds his new plant he will need to follow the regulations issued under:

Definitions:

Adverse Selection

A situation in insurance and finance where higher-risk individuals are more likely to apply for or select a particular service, leading to potential losses for the insurer or lender.

Hidden Actions

Pertains to situations in principal-agent relationships where agents' specific actions are not observable by the principal, leading to a moral hazard.

Hidden Information

Information that is not known to one party in a transaction, which can lead to an imbalance of power or adverse selection.

Moral Hazard

A situation where one party is more likely to take risks because another party bears the consequences of those risks, often arising in insurance and finance contexts.