October 2013 Charles University Law Faculty © Peter Kolker 2013

 Peter Kolker – Attorney at Law, practicing in Washington, D.C., with the law firm of Zuckerman Spaeder, LLP  More than 45 Years’ experience with criminal and civil litigation, arbitration and mediation  Including trials, appeals, arbitration hearings, private mediations in the U.S. and some in Europe (Germany, Sweden, the U.K.)  Special Guest: U.S. Ambassador Norman Eisen, a law firm colleague, and then member of White House Staff of President Obama. Since 2011, Ambassador to C.R Class I2

Purpose of the Class:  Provide information to future Czech Republic attorneys about U.S. legal system to improve commerce between U.S. and Czech Republic.  Understand basis for U.S. decision making, so it is more predictable to a Czech lawyer  Review measures taken in the U.S. to improve transparency and integrity of the judicial system  Will some of these measures be appropriate in the Czech Republic?  What are their “social costs” and are those acceptable in the C.R. ? 2013 – Class I3

How the Class will be Conducted:  Two weeks, one covering each subject  Class participation is encouraged; I will suggest questions and hope/expect you will participate. There are no “right answers”. Your participation and reasoning is what I am looking for.  Readings in English (about 5 – 10 pages for each class)  Class simulation of a dispute between Ford Motor Company and “Czech Tech”, an imaginary company.  Class will take sides: is litigation or arbitration preferred?  Final Paper for credit 2013 Class I4

 Why Should we Study These Topics ?  Your Future Careers May be Improved.  What are your career plans after graduating?  Becoming lawyers?  Government civil servants?  Judges?  Business people?  Will you have business dealings with the U.S. or with U. S. companies?  If there are disputes from these business arrangements, how might U.S. law affect your conduct in resolving them ? 2013 Class I5

6 A. U.S. Dispute Resolution Methods  Fundamentals of U.S. Judicial System: how it works;  Why does this matter to a lawyer or business person in the Czech Republic?  Can U.S. laws affect people outside of the U.S. ?  How disputes are resolved in the U.S. – federal and state court systems; and out-of-court dispute resolution through arbitration and mediation  Advantages and disadvantages of each method: what would be best for a Czech business problem?  How the U.S. Court system operates  Alternatives to the Court System for Dispute Resolution

 Importance of Transparency and Anti- Corruption Measures  Corruption Affects Everyone and Is Harmful to business  WHY? - Business and markets want predictability and fairness  Ethical citizens and business people are at a disadvantage  Orderly resolution of disputes is harmed  Predictability of Outcomes is impaired  Examples? From the class 2013 Class I7

B. Transparency in Government, Corporations and Non-Government Organizations to assure fairness  What good is any dispute resolution system if corruption destroys fairness?  How does the U.S. system assure (or try to assure) fairness?  What measures can assure that the judges, arbitrators, mediators and public prosecutors perform their functions without improper influence?  What role is there for private citizens who become aware of corruption, and what legal procedures are available in the U.S. for exposing corruption or unfairness?  Should any of these be considered for the Czech Republic? 2013 Class I8

We will also discuss:  The role of a free press in exposing corruption  Is there some information the press should not publish?  Effect of social media  Leaking of government secrets to the Press: is it proper?  Should there be limits on election financing of candidates  The purpose of a “Freedom of Information Act” to bring transparency to decision making 2013 Class I9

 The role of the “Whistleblower” in revealing improper conduct within the government or for companies who contract with the government.  A powerful tool, but should it be encouraged as a way of reducing corruption? 2013 Class I10

 The role of an informant: why do we have informants in a legal system?  When is it acceptable, and when is it not?  The role of an informant in exposing corruption:  We will discuss a real case of official corruption exposed by an informant, which would not have come to light otherwise.  But, there are perils to encouraging informants.  What is the proper balance? 2013 Class I11

U.S. Ambassador Eisen – How can we improve the Rule of Law and assure ethical performance by business people, lawyers, judges and prosecutors.  Role of the Public, the Press and of Government Officials in achieving these goals.  Measures taken by President Obama to ensure transparency – that the public could know who was meeting with and trying to influence the President.  Laws restricting public officials from influencing the government after their public service.  The role of an “Inspector General” for agencies of the government 2013 Class I12

Let’s begin with understanding how disputes are resolved in the U.S.: Common types of disputes you will likely encounter A. Civil Disputes  What do we mean by “civil dispute”?  Dispute between companies or individuals 2013 Class I13

Common types of civil disputes:  Contracts : your company agrees with another to ship products but the products don’t arrive on time; or they are not as expected; or not enough of them. As a result, there is a claim of money lost.  Product Liability : the product you purchased explodes and causes injury.  Personal Injury : during a business trip to the U.S., you are injured in a car accident.  Illegal Agreements: To make the business more profitable, your company agrees to limit competition Class I 14

 Intellectual property disputes:  Patents, trademarks and copyrights  Protection of your company’s distinct ideas and reputation is important and can lead to disputes  Apple’s iPhone vs. Samsung Galaxy Phone  Confidentiality of business data: what happens when an employee leaves one company to work for a competitor and takes confidential information with him Class I15

Contract Dispute  Disagreement on interpretation of a contract  What did the contracting parties intend when they signed the contract?  Was the contract performed according to its requirements ?  Was payment made in the right amount when due?  Was there a defect in the product that becomes clear after delivery?  Does the contract chose a dispute-resolution method? 2013 Class I16

 Product Liability : the product you purchased explodes and causes injury 2013 Class I17

B. Criminal Cases – Affecting Fairness of the Judicial System C. Payment to a Government Official - to get or keep a contract with the government, a payment is made to a government official.  Could be a crime in the U.S. as well as in the C.R., if done for a U.S. company, even if the payment happened in the C.R.  Agreement on Prices or on Bids: setting a price among competitors – could be a crime in the U.S. as well as in the C. R. if done for a U.S. company, even if the agreement was made in the C.R., but affected US market Class I18

If Czech business engages in commerce with a U.S. business, which law will apply if there is a dispute?  Could be either. But if U.S. laws apply, you need to know how will the U.S. dispute resolution system work.  Usually, through litigation in the U.S. Courts  Arbitration could also resolve a dispute  Mediation may be used in litigation or arbitration  We will discuss arbitration and mediation later;  Now, we focus on litigation in the U.S Class I19

Let’s start with the U.S. Court System 2013 Class I20

Overview of the U.S. Legal System : What is a Federal System and Why does the US have it ?  A “federal” system:  U.S. Government (“federal” government)  50 state governments  Laws of both the federal and state governments can apply at the same time  Laws include:  Statutes (enacted laws)  Administrative rulings (agencies set detailed rules that apply the law)  Judicial interpretation and “precedent” 2013 Class I21

 An unusual feature of U.S. Law:  Judicial interpretation and precedent – what does it mean and how does it work?  Judicial interpretations of the statutes and regulations are important to provide consistency and predictability of outcome.  Judicial interpretations decide what the statutes and administrative rulings mean, and the courts’ decisions are binding precedent  A decision in one case will be followed in other, similar cases 2013 Class I22

Relation of Federal Laws to State Laws  Some areas are only for the Federal Government  Some areas are only for the States  Some are for both  Where there is a conflict, federal laws prevail  Where the federal courts disagree with the state courts, the federal courts prevail  Which court would a Czech business person select if he/she has a dispute in the U.S. ? 2013 Class I23

How are judges selected in the U.S.?  Judges are first practicing lawyers; there is not a separate career path for judges.  Federal judges are appointed for life.  State judges may be appointed or elected, for a term of years; then they must be re-appointed or re- elected  They campaign for office and sometimes for re- election  Effect on independence  State judges may return to private practice as lawyers or may serve as professional arbitrators and mediators and make more money Class I24

Contrast to the Czech Legal System  Code of laws governs the conduct;  One system throughout the country  Court decisions in one case do not necessarily affect the outcome of the next case, even if similar although this is changing  Judges are selected for long terms and do not come from the group of practicing lawyers  They do not run for office; their incomes and future source of income is fixed The differences in the U.S. and Czech legal systems can make it difficult to decide how to resolve disputes Class I25