1. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter 3: Courts and Alternative Dispute Resolution © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2. The Judiciary’s Role In American Government  Judicial Review. Established by the U.S. Supreme Court in Marbury v. Madison (1803) where Chief Justice Marshall wrote: “It is emphatically the province and duty of the judiciary to say what the law is….” 2

3. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. “Juris” (law) “diction” (to speak) is the power of a court to hear a dispute and to “speak the law” into a controversy. And render a verdict that is legally binding on the parties to the dispute. 3

4. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. Persons: power of a court to compel the presence of the parties (including corporations) to a dispute to appear before the court and litigate. 4

5. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. In Rem: power to decide issues relating to real or personal property. A court generally has in rem jurisdiction over any property situated within its geographical borders. 5

6. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. Long-Arm Statutes: courts use long-arm statutes for non-resident parties based on “minimum contacts” with state. Defendant must have some substantial connection with forum state.  6

7. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. Long-Arm Statutes. Corporate Contacts: does the firm do business or advertise within the state? CASE 3.1 S OUTHERN P RESTIGE I NDUSTRIES, I NC. V. I NDEPENDENCE P LATING C O. (2010). CASE 3.1 S OUTHERN P RESTIGE I NDUSTRIES, I NC. V. I NDEPENDENCE P LATING C O. (2010). Did the New Jersey firm have minimum contacts with North Carolina? 7

8. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. Jurisdiction Over Subject Matter. General and Limited Jurisdiction: statutory limitation on the types of cases a court can hear (e.g., probate and bankruptcy). Can also be limited to amount in controversy (amount of monetary damages). 8

9. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. Original and Appellate Jurisdiction. Courts of original jurisdiction is where the case started (trial). Courts of appellate jurisdiction have the power to hear an appeal from another court. 9

10. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. Jurisdiction of the Federal Courts. Federal Questions: rights or obligations of a party are created or defined by some federal law. Diversity of Citizenship: parties are not from same state, and amount in controversy must exceed $75,000. 10

11. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction. Exclusive vs. Concurrent Jurisdiction. Exclusive: only one court (state or federal) has the power (jurisdiction) to hear the case. Concurrent: more than one court can hear the case. 11

12. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction in Cyberspace. Sliding Scale Standard to determine whether a court has jurisdiction. No Yes Substantial Business Interaction Passive Website Some Interaction 12

13. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Jurisdiction in Cyberspace. International Jurisdiction Issues. CASE 3.2 G UCCI A MERICA, I NC. V W ANG H UOQING (2011). CASE 3.2 G UCCI A MERICA, I NC. V W ANG H UOQING (2011). What factors did the court consider in its decision to assert jurisdiction over the defendant? 13

14. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Basic Judicial Requirements  Venue. Venue is concerned with the most appropriate location for the trial. Generally, proper venue is whether the injury occurred.  Standing to Sue. A party must have suffered a legal injury and have a sufficient “stake” in the controversy. 14

15. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. State and Federal Court Systems Ct. Criminal Appeals Ct. Criminal Appeals Supreme Court Supreme Court Court of Appeals Court of Appeals District Court County Court Municipal Court Municipal Court Justice Court Justice Court Texas Courts U.S. Supreme Court U.S. Supreme Court Circuit Courts of Appeals Circuit Courts of Appeals U.S. District Court U.S. District Court Federal Courts 15

16. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. State and Federal Court Systems 16

17. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. State and Federal Court Systems  State Court Systems. Trial Courts. “Courts of record”- have court reporters. Small Claims Courts are informal, inferior courts with limited amounts in controversy (usually $5,000). 17

18. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. State and Federal Court Systems  State Court Systems. Appellate or Reviewing Courts. Review trial court proceedings to determine whether the trial complied with procedural and substantive rules of law. Generally, appellate courts will consider questions of law, but not questions of fact. 18

19. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. State and Federal Court Systems  State Court Systems. Highest State Courts. Usually, but not always, called a ‘supreme court.’ Decisions of a state’s highest court on matters of state law are final. The U.S. Supreme Court can overrule a state supreme court when there are federal laws involved. 19

20. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. State and Federal Court Systems  The Federal Court System. Basically a three-tiered system: U.S. District Courts (trial courts of general jurisdiction). U.S. Courts of Appeal.  The U.S. Supreme Court.  20

21. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Federal Court System  U.S. District Courts Courts of original jurisdiction based on federal statutes.  U.S. Courts of Appeal. There are 13 Courts of Appeal representing district courts throughout the country.  21

22. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Federal Court System: U.S. Courts of Appeal 22

23. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Federal Court System  Highest Court in the Land. Final arbiter of U.S. Constitution. Petition for Court to hear case by Writ of Certiorari. www.supremecourt.gov 23

24. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  The Pleadings. The Plaintiff’s Complaint. The Defendant’s Answer. Motion to Dismiss. 24

25. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Pleadings  Plaintiff’s Complaint. Court acquires jurisdiction over subject matter and Plaintiff. Facts: What happened. Prayer: Court relief. 25

26. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Pleadings  Service of Process. Plaintiff serves Defendant with Complaint and Summons.  Default Judgment for Plaintiff if Defendant does not Answer. 26

27. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Pleadings  Defendant’s Answer. The Answer is the Defendant’s response to the allegations stated in the Plaintiff’s Complaint. In the Answer, the Defendant must specifically admit or deny each allegation in the Complaint. 27

28. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Pleadings  Defendant’s Answer: Makes General Denial. May move for Change of Venue. May allege Affirmative Defenses. May assert Counterclaims against Plaintiff. 28

29. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Pleadings  Motion to Dismiss. Many lawsuits never go to trial. Perhaps there is a settlement, or the case was dismissed. Either party (normally defendant) can ask the court to dismiss the case if the pleadings fail to show a legal claim. 29

30. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Pretrial Motions  Motion for Judgment on the Pleadings:  Motion for Judgment on the Pleadings: asks the court to rule on the case, based on the pleadings.  Motion For Summary Judgment. Asks a court to grant a judgment for moving party without a trial. Facts are viewed in the light most favorable to the other party. Admissible evidence is submitted. 30

31. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  Discovery. Process by which parties obtain information from the opposing party prior to trial. Depositions: sworn testimony recorded and transcribed by court official (court reporter). Interrogatories: written questions and answers under oath.  31

32. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  Discovery. Requests for Other Information. Electronic Discovery. FRCP deals specifically with preservation, retrieval, and production of electronic data. 32

33. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  Pretrial Conference.  Jury Selection. Voir Dire. Jurors can be dismissed peremptorily (no reason or for cause (bias). 33

34. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  The Trial. Opening Statements. Rules of Evidence. Judge decides what evidence is admissible for jury’s consideration. Evidence must be relevant to the issues (tends to prove or disprove). 34

35. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  The Trial. Motion for Directed Verdict: at conclusion of plaintiffs’ case, court looks at evidence in most favorable light to defendant. Expert Witnesses. Provide specialized knowledge and opinions that help jurors decide issues. 35

36. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  The Trial. Closing Arguments: each attorney summarizes the facts and evidence and tells her client’s story in the most compelling way possible. Verdict: The verdict specifies the jury’s findings and liability. A jury can award money damages in a civil case. 36

37. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  Posttrial Motions. Motion for J.N.O.V.: granted only if the jury’s verdict was unreasonable and erroneous. Motion for New Trial: after looking at all the evidence, judge will grant the motion IF the jury was in error. 37

38. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  The Appeal. A party may appeal the jury’s verdict or any legal issue, motion or court ruling during the trial. Appellants must have legitimate grounds for appeal (usually legal error). 38

39. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  The Appeal. Appellate Review: the appeals court can affirm (agree with) or reverse (disagree with) the lower court’s decision. Higher Appellate Courts. 39

40. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Following a State Court Case  Enforcing the Judgment. Even if a plaintiff wins a jury award of damages, the defendant may not have sufficient assets or insurance to cover the amount. Usually these factors are considered before a lawsuit is filed. 40

41. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Electronic Filing.  Courts Online (websites, court dockets).  Cyber Courts and Proceedings. Courts Adapt to the Online World 41

42. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Trials are a means of dispute resolution that are very expensive and sometimes take many months to resolve.  There are “alternative dispute resolution” (ADR) methods to resolve disputes that are inexpensive, relatively quick and leave more control with the parties involved. Alternative Dispute Resolution 42

43. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  ADR describes any procedure or device for resolving disputes other than the traditional judicial process.  Unless court-ordered, there is no record which is an important factor in commercial litigation due to trade secrets.  Most common: negotiation, mediation, arbitration. 43

44. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  Negotiation. Negotiation is informal discussion of the parties, sometimes without attorneys, where differences are aired with the goal of coming to a “meeting of the minds” in resolving the case. Successful negotiation involves thorough preparation, from a position of strength. 44

45. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  Mediation. Mediator talks face-to-face with parties (who typically are in different adjoining rooms) to determine “common ground.” Advantages: few rules, customize process, parties control results (win-win). Disadvantages: mediator fees, no sanctions or deadlines. 45

46. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  Arbitration. Many employment contracts have binding arbitration clauses. Settling of a dispute by a neutral 3 rd party (arbitrator) who renders a legally- binding decision; usually an expert or well-respected government official. 46

47. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  Arbitration. Arbitration Clauses and Statutes. Uniform Arbitration Act of 1955. Federal Arbitration Act.  Issue of Arbitrability.  Mandatory Arbitration in the Employment Context. 47

48. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  Arbitration. Arbitration Clauses and Statutes. Uniform Arbitration Act of 1955. Federal Arbitration Act. Issue of Arbitrability. Mandatory Arbitration in the Employment Context: generally mandatory arbitration clauses are enforceable. 48

49. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  Providers of ADR Services. Non-profit organizations: American Arbitration Association. American Arbitration Association Better Business Bureau. Better Business Bureau For Profit: JAMS-ADR.com(Flash enabled). JAMS-ADR.com 49

50. © 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Alternative Dispute Resolution  Online Dispute Resolution. Also called ODR. Uses the Internet to resolve disputes. Still in its infancy but is gaining momentum. See, e.g., www.cybersettle.com.www.cybersettle.com 50