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Summary BUS 206 Module Seven Assignment.docx BUS 206 Business Law I Southern New Hampshire University Final Project Submission: Case Study Analyses Case Study One Chris, Matt, and Ian, who live in California, have decided to start a business selling an $7.49
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Summary BUS 206 Module Seven Assignment.docx BUS 206 Business Law I Southern New Hampshire University Final Project Submission: Case Study Analyses Case Study One Chris, Matt, and Ian, who live in California, have decided to start a business selling an
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BUS 206 Module Seven A BUS 206 Business Law I Southern New Hampshire University Final Project Submission: Case Study Analyses Case Study One Chris, Matt, and Ian, who live in California, have decided to start a business selling an aftershave lotion called Funny Face over the internet. The...
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BUS 206
Business Law I
Southern New Hampshire University
Final Project Submission: Case Study
Analyses
Case Study One
Chris, Matt, and Ian, who live in California, have decided to start a business selling an aftershave
lotion called Funny Face over the internet. They contract with Novelty Now Inc., a company
based in Florida, to manufacture and distribute the product. Chris frequently meets with a
representative from Novelty Now to design the product and to plan marketing and distribution
strategies. In fact, to increase the profit margin, Chris directs Novelty Now to substitute PYR (a
lowcost chemical emulsifier) for the compound in Novelty Now’s original formula. PYR is not
FDA approved. Funny Face is marketed nationally on the radio and in newspapers, as well as on
the web and Facebook. Donald Margolin, a successful CEO and public speaker, buys one bottle
of Funny Face over the internet. After he uses it once, his face turns a permanent shade of blue.
Donald Margolin and his company, Donald Margolin Empire Inc., file suit in the state of New
York against Novelty Now Inc. and Chris, Matt, and Ian, alleging negligence and seeking
medical costs and compensation for the damage to his face and business reputation. It is
discovered that PYR caused Margolin’s skin discoloration. The website for Funny Face states
that anyone buying their product cannot take Chris, Matt, and Ian to court. Novelty Now’s
contract with the three men states that all disputes must be brought in the state of Florida.
,Introduction:
In this first case study, we see where a chemical in a product was substituted for
something else that may have been cheaper, and the chemical turned a customer’s face blue.
Chris, Matt and Ian live in California and are selling the aftershave lotion, called Funny Face,
online, which is manufactured and distributed by Novelty Now Inc., who is based out of Florida.
The customer wanted to sue Chris, Matt and Ian as well as Novelty Now Inc. in his home state of
New York, without the four of them possibly having any legal jurisdiction in doing so. When it
comes to legal battles, it is important to know right from wrong and also what can be considered
a crime, and who can be tried where, based on business proceedings. In this report, we will look
into some of the facts, go over jurisdictions, alternative dispute resolutions, any criminal liability
and the ethical decision-making process.
Rules of Jurisdiction:
There are a few different types of jurisdiction that could be handled in this case between
Donald Margolin and Donald Margolin Empire Inc. vs. Novelty Now Inc. and Chris, Matt, and
Ian. The first type of jurisdiction is Personal Jurisdiction, and this is when the judge has the
power or authority to make decisions that affect a person (2019). The next type of jurisdiction is
Subject Matter Jurisdiction, and this determines whether not each court has the authority or
power over certain types of legal disagreements. The minimum contacts concept is a term used in
the United States law of civil procedure to determine when it is appropriate for a court in one
state to assert personal jurisdiction over a defendant from another state.
With the personal jurisdiction, since the company’s product did make Mr. Donald’s face
blue, a judge should have the right to make the decision on whether not to find Novelty Now
Inc., Chris, Matt and Ian guilty for negligence and medical costs since Chris, Matt and Ian
decided they wanted to make a larger profit by substituting PYR for the compound used in the
, original formula. Since Chris, Matt and Ian sell this product online, it was not intended to
directly impact the people in New York State. However, the state of New York does have a
long- arm statute in which if a transaction is made in New York, it may be sufficient to therefore
invoke jurisdiction in the state even though the defendant never steps foot in the state. Funny
Face is marketed nationally over the radio, in newspapers, on Facebook and on the web. Donald
Margolin made the purchase of the aftershave lotion online, while in New York.
In regards to Subject Matter Jurisdiction, where it is determined if a court can or cannot
have the power over certain types of legal disagreements, in the case the court should have the
power over the disagreement. If a mediation session does not make either party agree to a
resolution, it should be up to the court. Donald Margolin’s reputation has been hit negatively and
the trust of Chris, Matt and Ian as business partners has slowly disappeared without realizing any
side effects with altering the shaving cream formula. Also, Novelty Now Inc. should be to blame
as they are the manufacturer and should know the ‘what can happens’ by changing the original
formula they were using prior to substituting in PYR. In this case, concurrent federal jurisdiction
in New York, as well as in Florida, should take place. Since the formula was made in Florida
without the approval of the FDA, and the happenings to Mr. Donald Margolin taking place in
New York, Novelty Now and Funny Face can be tried in both states.
Since all parties in this case are from different states, the minimum contacts concept will
have to be involved. Since the Defendant in this case is Chris, Matt, Ian and Novelty Now Inc.,
and they are not located in the state of New York, it would need to be decided whether not they
can have personal jurisdiction privileges. In this case, there would need to be a civil discussion as
to whether not Novelty Now Inc., Chris, Matt and Ian can be tried in the state of New York,
which could very well happen with the circumstances. Although there was no purposeful intent
for selling the shaving cream to the state of New York, the civil grounds may be initiated and the
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