chapter 2 – the resolution of private disputes
DESCRIPTION
Powerpoint from textbook Business Law - the ethical, global, and e-commerce environment to accompany BA 330 course at the University of Alaska Fairbanks.TRANSCRIPT
The Nature of LawThe Resolution of Private Disputes
Business and The ConstitutionBusiness Ethics, Corporate Social
Responsibility, Corporate Governance, and Critical Thinking
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.
The Resolution of Private Disputes
In case of dissension, never dare to judge till you have heard the other side.
Euripides
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
State courts and their jurisdictionFederal courts and their
jurisdictionCivil ProcedureAlternative Dispute Resolution
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The United States has a federal court system and each state has a court system
A Court is established by a government to hear and decide matters before it and redress past or prevent future wrongs
Jurisdiction (the power to hear and speak) may be original (trial) or appellate (reviews trial court)
The U.S. Judicial System
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Federal Court Hierarchy
U.S. Supreme Court (appellate jurisdiction; final review and final decision)
Courts of Appeals (appellate jurisdiction)
District Courts (trial courts; original jurisdiction) or Statutory Courts (original limited jurisdiction), such as Tax Court, Court of Int’l Trade, Court of Federal Claims, etc.
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State Supreme Court (final appellate) State Civil or Criminal Courts of Appeals District Courts (trial courts for civil matters
over certain $ amount) and Criminal Courts County Courts (civil trial courts for matters
under certain $ amount) Justice of the Peace Courts (small claims
and misdemeanor courts) Limited Jurisdiction Courts (e.g., family, traffic)
State Court Hierarchy
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General jurisdiction courts (i.e., trial courts) hear most types of cases Levels generally classified according to dollar
amount of damages or location Examples: county courts, district courts
Limited jurisdiction courts hear specialized types of cases; appeals from decisions often require new trial in general jurisdiction court Examples: traffic court, tax court, family court
General vs. Limited Jurisdiction
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Subject-matter jurisdiction refers to a court’s authority to hear a particular type of dispute
Courts of criminal jurisdiction hear trials of crimes and misdemeanors Offenses against the public at large
Courts of civil jurisdiction hear and decide issues concerning private rights and duties (e.g., contracts, torts), and non-criminal public matters (e.g., zoning, probate)
Subject-Matter Jurisdiction
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In addition to subject-matter jurisdiction, a court must have either in personam or in rem jurisdiction
In personam jurisdiction requires that the defendant be a resident of, located within, or have committed acts within the physical boundaries of the court’s authority
In Personam or In Rem Jurisdiction
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In rem jurisdiction applies when property that is the subject of the dispute is located within physical boundaries of the court’s authority Example: a dispute over a house sale
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In Personam or In Rem Jurisdiction
Bombliss v. Cornelsen
Facts & Procedural History: Illinois residents sued Oklahoma residents
in Illinois court and the Oklahoma defendants moved to dismiss for lack of in personam jurisdiction
Trial court dismissed complaint and Plaintiffs appealed
Issue: Does the Illinois long-arm statute permit state courts to exercise jurisdiction over Oklahoma defendants?
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Bombliss v. Cornelsen
Analysis and Application to Facts: Defendant must purposefully avail self of
privilege of conducting activities within the state so he would reasonably anticipate being haled into state’s court
Where a contract exists, minimum contacts shown by negotiations between parties, course of dealing between parties, and foreseeable consequences
Existence of a contract, defendants’ interactive website, and contact with potential customers of plaintiffs equate to minimum contacts
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Bombliss v. Cornelsen
Holding: In personam jurisdiction exists. Trial court
decision reversed and case remanded.
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Federal courts must have jurisdiction based on diversity or federal question
Diversity jurisdiction exists when the dispute is between citizens of different states and amount in controversy exceeds $75,000
Federal question jurisdiction exists when the dispute arises under the Constitution, laws, or treaties of the United States
Federal Court Jurisdiction
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Internet Solutions Corp. v. Marshall
Issue for Motion to Dismiss: Whether court has subject matter jurisdiction
and whether court can exercise in personam jurisdiction
Reasoning: Subject matter jurisdiction proper in federal
court when there is a matter in controversy over $75,000 between citizens of different states In this case, subject matter jurisdiction exists
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Internet Solutions Corp. v. Marshall
Reasoning and Holding: In personam jurisdiction has two parts: does
Florida have a long-arm statute and is defendant afforded protection of the Due Process Clause of the U.S. Constitution Florida’s long-arm statute grants such jurisdiction Due process requires that defendant have
“sufficient minimum contacts” with the state (purposeful availment) Marshall’s website that may be viewed by Florida
residents doesn’t meet minimum contacts standard Motion to dismiss granted
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Civil Procedure
A set of rules establishing how a lawsuit proceeds from beginning to end
In an adversarial system, the plaintiff bears the burden of proof to prove his/her case by a preponderance of the evidence
Once the plaintiff has made a prima facie case (i.e., proved the basic case), the burden of proof may shift to the defendant
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Civil Pre-Trial Procedure
Action or event occurs allegedly causes harm
Injured party, known as Plaintiff, files a Petition or Complaint
Sheriff serves process (writ, notice, summons) on Defendant
Defendant Answers Complaint Case proceeds to trial or settlement
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Plaintiff’s complaint or petition plus the defendant’s answer or response are known as the pleadings
Defendant may enter a counterclaim against the plaintiff or a cross-complaint against a third party
Other parties may enter the case
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Civil Pre-Trial Procedure
Motion Practice: some motions ask the judge to decide the result before trial Motion to dismiss (or demurrer) Motion for judgment on the pleadings Motion for summary judgment
Motions should NOT be taken lightly!
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Civil Pre-Trial Procedure
Discovery: Obtaining evidence from other party through interrogatories, requests for admissions, requests for documents, and depositions Discovery process can be a battleground See Allstate Indemnity Co. v. Ruiz
Pretrial Conference: Where judge will hear and rule on many evidentiary issues, discovery disputes, and other concerns
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Civil Pre-Trial Procedure
Jury Selection Voir Dire or
Jury Questioning
Opening Statement from each party
Civil Trial Procedure
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Plaintiff’s case through direct examination of witnesses (defendant performs cross-examination) and defendant’s case through direct examination (and plaintiff’s cross-examination)
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Civil Trial Procedure
Closing argument or summation from each party
Jury verdict
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Civil Trial Procedure
Trial motions include: motions in limine (motion to limit evidence), voluntary non-suit or dismissal (drop the case), motion for compulsory non-suit or summary judgment
After summation or closing argument, a party may move for a mistrial (injustice or overwhelming prejudice) or directed verdict (weight of evidence leads to only one conclusion)
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Civil Trial Procedure
Trier of Fact sees material evidence (physical objects, documents), hears testimony of witnesses (who provide factual evidence), and decides outcome of the case based on facts; trier of fact may be judge or jury
Matters of law are issues not of fact, but of law; matters of law decided only by a judge E.g., whether a statute means X or Y, or one
law or another applies to the facts
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Civil Trial Procedure
After the jury verdict, a party may make a motion for new trial, judgment non obstanto verdicto (notwithstanding the verdict; JNOV) or remittitur (defendant’s request for the judge to reduce the amount of damages the jury recommended; very common)
Civil Post-Trial Procedure
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After a judgment has been entered, losing party may appeal decision to a higher court
After a judgment, winning party must have the judgment executed (carried out) to obtain money, property, or action ordered by the court
Bottom line: a judgment is issued and enforcement of the judgment begins
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Civil Post-Trial Procedure
Point of Procedure
Not all dispute resolution mechanisms in the legal system are heard by a judge
Disputes with government often resolved by the relevant administrative agency Administrative agencies generally have a
unique dispute resolution process (hearings, appeals)
Also, disputants may choose alternative dispute resolution
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Alternate Dispute Resolution
Arbitration: dispute settled by one or more arbitrators selected by the parties to a dispute; relatively formal; Uniform or Federal Arbitration acts typically used
Mediation: parties choose neutral party to aid resolution of dispute
Reference to Third Party: dispute resolution by rent-a-judge, minitrial, summary jury trial, or association tribunal
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Less costly, in general May be more appropriate method of
resolution for certain types of cases Example: family law disputes, real
estate disputes between neighbors, high-tech or trade-secret disputes
May be required by clause in contract Example: Preston v. Ferrer
Why Choose ADR?
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Facts and Ruling: Ferrer entered into contract with Preston Preston invoked contract’s arbitration clause Ferrer argued contract was unenforceable
because Preston violated state law U.S. Supreme Court:
When parties agree to arbitrate disputes, FAA controls and dispute must be submitted to arbitration even if state law appears to give initial decision-making authority to a court or an administrative agency
Preston v. Ferrer
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Test Your Knowledge
True=A, False = B A trial court has original jurisdiction and an
appellate court has appellate jurisdiction The difference between general jurisdiction
and limited jurisdiction is based on the amount in controversy (the damages amount)
Subject-matter jurisdiction refers to a court’s authority to hear a particular type of dispute
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Test Your Knowledge
True=A, False = B In personam jurisdiction refers to the
court’s jurisdiction over the defendant, but in rem jurisdiction refers to the court’s jurisdiction over the property in dispute
The burden of proof solely rests on the plaintiff
Matters of law are determined by either the jury or the judge.
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Test Your Knowledge
Multiple Choice Diversity jurisdiction refers to:
(a) a jury pool that reflects the ethnic makeup of the city
(b) a citizen’s lawsuit against the government(c) a lawsuit by a citizen of one state against a
citizen of a different state Methods of alternative dispute resolution:
(a) Mediation(b) Arbitration(c) Summary jury trial(d) All of the above
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Test Your Knowledge
Multiple Choice Discovery refers to:
(a) the discovery that a dispute exists(b) the pre-trial process involving
interrogatories, requests for admissions, and requests for documents
(c) the analysis of fault in a dispute After the verdict:
(a) Either party may make post-verdict motions(b) The trial must end(c) The trial begins
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Thought Question
If you were served with a lawsuit, what would you do about it?
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