Scenario

You are a new attorney, and you have been tasked with writing a legal memorandum for Funny Face's case. The senior attorney, Katie O'Connor, has asked that you prepare a legal memo that frames the context of the situation and discusses alternative dispute resolution and business impacts to inform the business owners. Your memo should advise the senior attorney on the best option for Funny Face.

About the Company

Chris, Matt, and Ian, who live in California, 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.

Product Information

Chris frequently meets with a representative from Novelty Now to design the product and 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.

Case Information

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 files a 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.

Applicable Legislation

The FDA is in charge of carrying out the statutes' mandates to protect consumers from harm. Imagine that the following statute is in place related to cosmetics:

Harmful Products: A product will be deemed to be harmful in the following situations:

• If it contains elements that are poisonous substances that may render the product harmful to one's health
• If it is stored under unsanitary conditions where the product may have become contaminated and unhealthy

QUESTIONS AND DIRECTIONS

• Explain whichbranches of the U.S. legal systemwould likely be involved in this case, and describe the branches' relationship to one another. In your response, consider the following:

What impacts or involvement would each branch have, including the impacts of relevant laws? Are there any branches of the U.S. legal system that would not be involved in this case. Why?

• Describe therules of jurisdictionto the facts of this case and determine what jurisdiction(s) would be appropriate for Margolin's lawsuit against Funny Face and Novelty Now, respectively. Include in your description applicable rules and jurisdiction related to federal and state court, including subject matter jurisdiction.

Describe the role ofstate and local court systemsin passing and enforcing the legislation associated with the company's case. Compare the roles of federal, state, and local court systems for their roles in hearing cases. In your response, consider the following:

• What laws and regulations are determined by state and local court systems, and what impacts would these have on the case?