2. P A R T P A R T Foundations of American Law The Nature of Law The Resolution of Private Disputes Business and The Constitution Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking 1 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

3. The Resolution of Private Disputes PA E TR HC 2 “In case of dissension, never dare to judge till you have heard the other side.” Euripides

4. Learning Objectives  State courts and their jurisdiction  Federal courts and their jurisdiction  Civil Procedure  Alternative Dispute Resolution 2 - 4

5.  The United States has a federal court system and each state has a court system  Jurisdiction (the power to hear and speak) may be original (trial) or appellate (reviews trial court)  Entry into the Federal court system begins at the District court level and proceeds through appellate courts to U.S. Supreme Court The U.S. Judicial System 2 - 5

6. Court Hierarchy  U.S. Supreme Court   Courts of Appeals   District Courts FEDERAL 2 - 6  Supreme Court   Appeals Courts   District Courts   County Courts   Small Claims Courts STATE Limited Jurisdiction Courts (state or federal)

7.  General jurisdiction courts (i.e., trial courts) hear most types of cases  Limited jurisdiction courts hear specialized types of cases (family, tax, traffic)  Subject-matter jurisdiction refers to a court’s authority to hear a particular type of dispute General vs. Limited Jurisdiction 2 - 7

8.  In addition to subject-matter jurisdiction, a court must have either:  In personam jurisdiction: defendant must be resident of, located within, or committed acts within physical boundaries of court authority  In rem jurisdiction: property that is subject of dispute is located within physical boundaries of court authority In Personam or In Rem Jurisdiction 2 - 8

9.  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 2 - 9

10. Civil Procedure  In an adversarial system, the plaintiff bears the burden of proof to prove his/her case by a preponderance of the evidence  Burden may shift to defendant  Pre-trial process moves through phases: action or omission causes harm, complaint filed, defendant served with summons, defendant files answer, discovery, pre-trial motions 2 - 10

11.  Jury selection  Opening statements  Evidence through witnesses (direct and cross-examination)  Closing arguments  Jury verdict Civil Trial Procedure 2 - 11

12.  Trier of Fact (jury or judge) sees material evidence (physical objects, documents), hears testimony of witnesses (who provide factual evidence), and decides outcome of the case based on facts  Matters of law are issues not of fact, but of law; matters of law decided only by a judge Civil Trial Procedure 2 - 12

13.  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 Civil Trial Post-Trial Procedure 2 - 13

14. 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 2 - 14

15. 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 2 - 15

16. 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. 2 - 16

17. Test Your Knowledge  Multiple Choice  Diversity jurisdiction refers to:  (a) a jury pool reflecting ethnic makeup of 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  After the verdict:  (a) Either party may make post-verdict motions  (b) The trial must end  (c) The trial begins 2 - 17

18. Test Your Knowledge  Multiple Choice  Alternative dispute resolution methods include:  (a) Mediation  (b) Arbitration  (c) Summary jury trial  (d) All of the above 2 - 18

19. 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 2 - 19

20. Thought Question  If you were served with a lawsuit, what would you do about it? 2 - 20