In this project, you will demonstrate your mastery of the following competency:

  • Describe the foundational elements of the U.S. legal system and the relationships among them


You are a new attorney, and you have been tasked with writing a legal memorandum for Funny Face’s case. The senior attorney, K O’C, 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:

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


Funny Face is committed to taking action to continue operations and preserve jobs in the company. In your memo, you will discuss elements of the U.S. legal system and their impacts on business.

  • Context: Katie has asked you to provide background about the legal process that would be important for stakeholders to know.
    • Explain which branches of the U.S. legal system would 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 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. Include in your description applicable rules and jurisdiction related to federal and state court, including subject matter jurisdiction.
    • Describe the role of state and local court systems in 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?
    • Describe the parties involved in the litigation and their roles. Specifically, describe the plaintiff and the defense and their roles in the litigation process.
    • Discuss likely reasoning for the legislation for supporting the Funny Face owners in understanding the legislation and helping them avoid similar cases in the future. Consider the following in your response:
      • What information would help the owners better understand the legislation?
      • How would this information help the company owners make better decisions in the future?
  • Alternative Dispute Resolution: The stakeholders have also asked about alternative dispute resolution (ADR); they are not sure if this an option for them or, if so, what types of options they have available. Katie has asked you to explain and provide recommendations for ADR processes.
    • Analyze the advantages and disadvantages of two types of ADR appropriate for this case. Include the following in your response:
      • What are the characteristics of each type of ADR you analyze, and why are they appropriate for this case?
      • Which type would each party (Funny Face, Novelty Now, and Margolin) prefer and why?
  • Business Impacts: For the final section in your legal memorandum, Katie has asked that you highlight potential business impacts that the case could have:
    • Explain ways the case could positively or negatively impact the business if the lawsuit is successful or unsuccessful. Include the following in your response:
      • What are the potential impacts of both situations?
      • What information would be useful for informing stakeholders of potential impacts?
    • 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. Discuss how the impact would be different if the case were determined to be a civil offense instead.

What to Submit

Every project has a deliverable or deliverables, which are the files that must be submitted before your project can be assessed. For this project, you must submit the following:

Legal Memorandum
In the project for this course, you will take on the role of a junior attorney. Your role in the legal memorandum is to provide context about the legal situation and recommend appropriate legal approaches. You will provide this to the senior attorney, Katie O’Connor. Your legal memorandum must be 3 pages in length.

Be sure to include the following header when you submit your legal memo:

FROM: <Your name>
DATE: <Date submitted>
RE: Funny Face Case

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