For a court to be able to decide a case, it has to have jurisdiction over the person or business. Jurisdiction over the person or business is called personal jurisdiction. Regarding this case for the fact that this lawsuit takes place over several different states. Each state has independent rights over those involved within its territory but not on people outside of its territory. Funny Faces is contracted through Novelty Now, Inc. who is responsible for the distribution and manufacturing of any Funny Faces product. This generally leaves Novelty Now responsible for Funny Faces products as they are the ones producing and shipping it out. In the case study, Chris frequently meets with representatives of Novelty Now, Inc., who are based out of Florida. If the lawsuit were to be filed in Florida, instead of New York, this could put Chris under personal jurisdiction of the Florida government even though it is stated on the Funny Face’s website that he cannot be taken to court. Previously stated was solely regarding Chris under the fact of personal jurisdiction, since Matt and Ian both reside in California and the lawsuit is not filed within that territory that protects them from coming under this specific jurisdiction. However, there is the long-arm jurisdiction that allows states to reach out and serve defendants outside of their typical jurisdiction, providing there is sufficient evidence to prove the defendants have minimum contacts within the state. This still only would apply if the lawsuit was in Florida, as the three men have contacts with the company and representatives there, however they do not have any contacts in the state of New York. The lawsuit is also suing Novelty Now, Inc. as a corporation, and when regarding a corporation as the defendant (rather than an actual person) the laws are slightly different. The corporation can be subject to in personal jurisdiction in three different locations: the state of their incorporation, the location of their main offices, and the geographic areas in which they conduct business. (Kubasek 42). Subject matter jurisdiction determines which court system can hear a case either state or federal. Cases may fall under state jurisdiction, exclusive federal jurisdiction or concurrent jurisdiction. With the lawsuit being filed in New York this would eliminate being able to sue the three men from Funny Face but would still leave the ability for Margolin v. Novelty Now, Inc. Unless the case fell under exclusive Federal Jurisdiction, but based on the description of the case it is a simple negligence and personal damage claim, based on the information provided this case would not likely be server enough to be held in Federal Jurisdiction
Minimum contacts mean that the defendant has to have taken actions that were purposefully directed toward that state, such as selling products in the state, advertising in that state, being incorporated in the state, or bringing property in the state. In this case, the case was brought up in the state of NY. Since Novelty Now has a contract with Funny Face setting disputes must be brought to Florida. Novelty Now is able to do this through the states long – arm statutes allowing the court to serve defendants outside the state as long as the defendants has sufficient minimum contact within the state. In regard to this case, since funny face allowed novelty now to manufacture and distribute products this gives the courts enough information to meet the minimum contacts.
Alternative dispute resolution (ADR) may be an option to resolve this dispute. ADR referes to multiple processes that helps parties resolve disputes without a trial. Those processes include mediation, arbitration, nuetual evaluation, and collaborate law. ( Kubasek, p.69) In regards to this case since there is multiple ways of protecting Funny Face from going to trail ADR is another possible way to settle the dispute between them and Margolin.
Language on the Funny Face website appears to limit any claim filed to arbitration as a means of resolving the dispute. Although this does not limit Margolin to settling the dispute through arbitration. On the positive side of things arbitration is more efficient and less expensive than litigation. The parties involved can choose an arbitrator that has expertise in the case allowing for more control and flexibility. Although, there are some cons associated for example, when panels are use this can create a lengthy and costly outcome due to efficiency. Also, appealing an arbitration award is very difficult so people think that injustices are more likely to happen. There is also the worry of a party being unaware of certain obligations when an agreement is reached potentially waiving one’s civil rights. In addition, that there are major privacy concerns, these alternative ways of settling allow for companies to keep disputes private which ultimately would be bad for the public since they would be unaware of the potentially risk the companies exposed consumer to. (Kubasek, 2012, p. 69) Arbitration would be a route that Funny Face and Novelty Now, Inc would want to go down because it would be better for the businesses to be able to achieve an agreement without the general public finding out what is being disputed. Potentially giving the company a bad reputation resulting in loss of profits.
Mediation is when the disputing parties select a neutral party to help facilitate communication along with finding ways for the parties to solve a dispute. There would be a neutral third party to help that usually had expertise in the matter. Once both parties reach a solution there is a form of contract signed. For this case mediation might not be the best route for Mr. Margolin mediation can lead to one party having more power than the other, the agreement of equality can be misleading and there is a potential for abusing the process in attempt to simple draw out the dispute
Chris, Matt and Ian could be subject to corporate criminal liability. The primary crime that exists in this case is that of fraud. Fraud An intentional deception that causes harm to another and a variety of offenses involving dishonesty. Funny Face would be held responsible for fraud in this case because Chris directed Novelty Now Inc. to substitute an ingredient in the formula to make the product cheaper to produce. Chris insited on changing the Noveltys formula in order to shrink the price margin. Novelty Now Inc. would also be liable for fraud because they agreed to change their formula and produce the product with the substituted non FDA approved ingredient. PYR the substituded ingreadiant is what ultimately caused Donald’s face to turn blue. All involved should be held responsible assuming they signed off on the change of the formula. The parties could potientally be subject to health care fraud or concealment fraud from not informing consumers about the non approved ingredient and warming of the risks.
The ethical process of decision-making involves consideration of three key elements. First you must consider, Whom will this decision affect? Second, what is the purpose? Third, how do you make an ethical decision? Whom applies in this case to Mr. Margolin, but as well the outcome with affect Novelty and the owner of Funny Face. If the outcome turns bad these three men could end up having a bad reputation for their product in turn losing business as well as Novelty Now. Purpose of this decision is justice and compensation for Mr. Margolin and the fact that the ingredient used in the product was not listed and caused damage to the consumer costing him time away from his career and loss of money. Lastly, the how is that the producers of the product must publicly disclose what is in their product so that future issues do no arise. A way to determine this the golden rule.