Prompt: Imagine yourself as a paralegal working in a law office that has been tasked with reviewing three current cases. You will review the case studies and compose a short report for each, applying your legal knowledge and understanding of the types of business organizations. In each of the three reports, you will focus on areas of law covered in this course. Case Study One focuses on the legal system, criminal law, and ethics.

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 low-cost 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.

Specifically, the following critical elements must be addressed:

A. Apply the rules of jurisdiction to the facts of this case and determine what jurisdiction(s) would be appropriate for Margolin's lawsuit against Funny Face and Novelty Now, respectively. Consider federal court, state court, and long arm principles in your analysis.

B. Assume all parties agree to pursue alternative dispute resolution (ADR). Analyze the advantages and disadvantages of two types of ADR appropriate for this case. Be sure to define the characteristics of each in your answer.

C. Applying what you have learned about ADR, which type would each party (Funny Face, Novelty Now, and Margolin) prefer and why?

D. Apply concepts of criminal law and discuss whether or not corporations and/or corporate officers may be held liable for criminal acts.

E. Identify, per the classification of crimes in the text, any potential criminal acts by Funny Face and/or Novelty Now.

F. Assume the use of the emulsifier PYR, at the direction of Chris, is a criminal offense. Apply concepts of criminal law and discuss the potential criminal liability of Funny Face, Chris, Matt, Ian, and Novelty Now. Include support for your conclusion.

G. Apply at least three guidelines of ethical decision-making to evaluate ethical issues within the case study.

Template

To simplify completing this milestone, utilize this template to help you write your essay. You may use each heading as a starter sentence and then discuss the legal issues presented in the fact pattern, using the following terms. Be sure to explain and elaborate how each term applies to the story. Be sure to incorporate the facts of the case into your explanation and analysis.

Remember that the document you submit should follow the formatting guidelines described in the Milestone One Guidelines and Rubric document.

A. The appropriate court for this lawsuit depends upon several factors. Three important considerations include the following:

1. Personal jurisdiction. Define personal jurisdiction and explain how it applies to the facts of this case.
2. Subject matter jurisdiction. Define subject matter jurisdiction and explain how it applies to the facts of this case.
3. Minimum contacts. Define minimum contacts and explain how it applies to the facts of case.

B. Alternative dispute resolution (ADR) may be an option to resolve this dispute.

1. Define ADR.

C. Language on the Funny Face website appears to limit any claim filed to arbitration as a means of resolving the dispute.

1. Explain the pros and cons of arbitration for at least two parties to the case.
2. Explain mediation and whether it has any benefits in this case.

D., E., and F. Chris, Matt and Ian could be subject to corporate criminal liability. The primary crime that exists in this case is that of fraud.

1. Define fraud and why or why not one or more parties might be held responsible for this crime.
2. Can you identify any other defendants and/or possible crimes in the story? Elaborate and explain.

G. The ethical process of decision-making involves consideration of three key elements.

1. Identify the elements and discuss how they apply to some of the facts of this case.