BUS-206 Case Study One PDF

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1 BUS-206 Milestone One: Case Study One

BUS-206 Milestone One: Case Study One Sylvia Siu Southern New Hampshire University

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In the case Margolin & Margolin Empire Inc. vs. Funny Face, Novelty Now, Chris, Matt, and Ian, there are several factors that would determine the appropriate court that’ll be used for this lawsuit. Prior to determining which court this case would appoint to, there are three important considerations to be made, personal jurisdiction, subject matter of jurisdiction, and minimum contacts (Kubasek, 2012). Personal jurisdiction is when the court has the power to make decision regarding about the parties being sued and must have personal jurisdiction over all people or businesses in that state. According to this case, Donald Margolin, a consumer, is filing a lawsuit against Funny Face, Chris, Matt, Ian and Novelty Now Inc. Donald Margolin, whom lives in New York, purchased Funny Face’s product online and files a lawsuit in the state of New York. Meanwhile, Novelty Now Inc. is located in Florida and Chris, Matt, and Ian resides in California. Due to the defendants and business being in different states outside of New York, a personal jurisdiction would be hard to achieve unless with “minimum contacts.” Minimum contact is a procedure used in the United States to determine when and if it is appropriate for the court, in this case state of New York, to assert personal jurisdiction over a defendant(s) from another state, Funny Face, Chris, Matt, Ian, and Novelty Now Inc. A subject-matter jurisdiction is the power the court has to determine whether state or federal can hear specific types of cases (Kubasek, 2012). For example, federal jurisdictions in federal courts would have cases such as regarding about bankruptcy, copyrights, trademarks, and/or infringements claims. On the other hand, state jurisdiction would have the remaining cases that does not require such high levels of formality or meet the requirements of federal jurisdictions. According to Margolin’s lawsuit, there will be no need for federal jurisdictions, as for there’s no matter of bankruptcy, copyrights, trademarks, or infringement claims. The case would be held in the state jurisdictions and since the business and defendants are not located in

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the state of New York but have been selling products over the internet, they are reliable for personal jurisdiction under the term minimum contracts. However, there are alternative dispute resolution methods that may help resolve this dispute. Alternative dispute resolution, also known as ADR, consists of many methods such as neutral evaluation, negotiation, conciliation, mediation and arbitration as another way to dispute the lawsuit rather than through litigation (Kubasek, 2012). Using this method to dispute claims is quicker, cost-efficient, and has more flexibility than litigation, as both parties are trying to resolve the claim together in both their best interests. In addition to selecting the ADR, both parties may keep the case confidential, as well as, continuing to preserve friendly relations between both parties. According to this case, it may be in both parties’ interest to use the arbitration ADR method. The arbitration method allows both parties to be involved in the process as well as decision outcome. In using this method, Funny Face, Novelty Now, Chris, Matt, and Ian benefit in keeping the lawsuit away from the public press in order to maintain business reputation as well as relationship and business with current customers. On the other hand, Donald Margolin would benefit when all medical bill and damages are paid. However, if the arbitrator cannot come to a conclusion to dispute the claim, where both parties may agree upon, the lawsuit costs may add up and both parties may end up having to choose other methods to resolve the claim and later end up going through the litigation process anyways. Additional disadvantages to the arbitration method are the possibly of one or both parties feeling over-powered by the other. For example, Donald Margolin may feel that in using an arbitrator, Funny Face and their team may have more beneficial outcome to the claim, because of the opportunity to maintain keeping the claim away from public press, Mr. Margolin may feel

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that customers purchasing Funny Face’s product should know the ingredients, that are not FDA approved, are used in the aftershave lotion. Another method of ADR, similar to arbitration, would be mediation. Mediation is a dynamic, interactive process where both parties agree to a mediator. The mediator plays as a third party in assisting both parties in disputing their claims through communication and negotiation techniques to reach an agreement where both parties have sacrificed and benefited from the decision outcome. A benefit from the mediation method in this case, would be that Funny Face and their team remains private and away from the public press that could potentially hurt the company’s reputation, as for Mr. Margolin, should have all medical, damages, and inconvenience fee paid due to the result of Funny Face’s decision on using a non-FDA approved product without listing in the ingredients. Funny Face and their team could be subjected to corporate criminal liability due to Chris’s decision on misrepresenting their aftershave lotion. As Chris flew back and forth from California to Florida to meet with Novelty Now and directs Novelty to substitute one of their original formula to use PYR, a low-cost chemical emulsifier, in order to increase the profit margin, is a potential criminal act of fraud. Fraud is an intentional wrongful or criminal act that result in financial or personal gain. In this case, Funny Face, Chris, and Novelty Now would be charged for the criminal liability and convicted of fraud due to Chris’s intensions to increase the business profit margin by substituting their original formula with the use of PYR and not listing the ingredient on the product. Although Novelty Now is only the manufacturer and distributor for Funny Face, they hold the same account of liability as it was Novelty’s decision to follow through with Chris’s order on substituting with a non-FDA approved chemical emulsifier. Funny Face, Chris, and Novelty Now would be held accountable for misrepresentation of the product

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and false advertising. Matt and Ian would be held accountable as well, as they are the CEO’s of the company, unless proven otherwise, such as ignorant of Chris’s decision. Prior to a conclusion, there are three key elements that are essentials in an ethical process of decision-making. The key elements for the process of ethical decision making are, Who (Stakeholders), Purpose (Values), and How (Guidelines) (Kubasek, 2012). In this case, the stakeholders would be Mr. Margolin and other consumers who purchase Funny Face’s aftershave lotion. Mr. Margolin and potentially other consumers were affected by the non-FDA approved chemical emulsifier that was tested as an ingredient to the aftershave lotion. The purpose, according to this case, would be the intension and/or security of Funny Face’s profiting margin. Chris made the decision to substitute ingredients from the original recipe in order to save money on materials as a result to increase their business profit. In addition to Chris’s actions to change ingredients in the aftershave lotion with the knowledge of knowing it’s a non-FDA approved ingredient, resulted to Mr. Margolin’s reaction towards that chemical that left Mr. Margolin’s face turning to a permanent shade of blue. In conclusion, resulted to lawsuits against Funny Face, Novelty Now, Chris, Matt, and Ian.

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References Kubasek, N. K. (2012). Dynamic business law. New York: McGraw-Hill/Irwin...