1. Actg 6100 Legal Issues Chapter 3 Courts and Alternative Dispute Resolution

2. Jurisdiction The power to speak the law. Jurisdiction is the authority that any court must have before it can make a binding decision in a lawsuit.

3. Two types of jurisdiction Personal. A court must have jurisdiction over the defendant – the party against whom the lawsuit is brought. AND Subject Matter. Jurisdiction over the issue.

4. Federal courts and subject matter jurisdiction State courts have subject matter jurisdiction over cases involving questions of state law, such as contracts and torts. Federal courts have exclusive subject matter jurisdiction over cases involving questions of federal law, such as bankruptcy.

5. Federal courts and subject matter jurisdiction Sometimes, the two systems – federal and state – have concurrent subject matter jurisdiction. This occurs when a case presents a question of state law, but there is diversity of citizenship and more than $75,000 in controversy.

6. Personal Jurisdiction Personal Jurisdiction refers to authority over the parties A. Plaintiff: submits by filing action B. Defendant 1. If a resident of that state, the court has authority. 2. Non-residents The state’s long arm statute may authorize the court to exercise authority, but there must be minimum contacts before the long arm statute can be used.

7. Personal Jurisdiction The standard for determining whether a court can exercise personal jurisdiction over an out of state defendant is Minimum Contacts. Examples of minimum contacts: Committing a wrong within the state – car accident Contract formed in that state Physical location in the state Advertising/selling/putting a product into the stream of commerce 2-17

8. Personal Jurisdiction and the Internet Entering into contracts that involve the knowing and repeated transmission of computer files Jurisdiction is proper Interactive sites where a user can exchange information with the host computer Jurisdiction may, or may not be appropriate Simple posting of information which is accessible to users in foreign jurisdictions Jurisdiction is not proper

9. The Federal Judicial System Supreme Court Only Court established by the U.S. Constitution 9 members Courts of Appeal 12 based on geography and 1 on type of case Tn. is in the 6 th Circuit District Court Trial Court – original jurisdiction General Jurisdiction At least one per state

10. The Federal Judicial System The President “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint…Judges.” Article II “The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour.” Article III

11. The Tennessee Judicial System Tennessee Supreme Court 5 members Court of Appeals 12 members Court of Criminal Appeals 12 members Chancery and Circuit - Trial Courts General Sessions – small claims court

12. The Tennessee Judicial System General Sessions and Trial Judges are elected by popular vote Appellate judges are nominated by the Governor, approved by the legislature, and subject to retention elections every 8 years. This is due to an amendment to the Tn. Constitution that was approved by voters in November 2014.

13. Alternative Dispute Resolution (ADR) Parties have the authority to resolve the case: Negotiation Mediation A 3 rd Party is given the authority to resolve: Arbitration 3-1

14. Why choose an alternative method? Time Money Damage to the relationship Goodwill and public relations Unpredictable nature of juries Privacy

15. How ADR is started In conjunction with litigation Pretrial negotiations Court referred use of mediation Independently of litigation Part of a contract – choice of forum clause Agreed upon after dispute arises

16. Negotiation/Settlement The process of submission and consideration of offers until an acceptable offer is made and accepted. Most widely used ADR process Sometimes directly – between the parties Most private No external rules

17. Mediation a/k/a assisted negotiation Third-Party Neutral Facilitator No review by a Court: Effect of successful mediation is that the parties agree to a resolution of their dispute. If the process is not successful, the case may move either to another form of ADR or to litigation. Basic advantage: parties retain control over the process. There are no universally accepted requirements for a mediator. 3-3

18. Arbitration Third -Party Neutral Decision Maker Selection of Arbitrator Expertise No universally accepted requirements One or panel Review of Arbitrator’s Decision Voluntary - no review of the merits Court annexed - de novo review 3-2

19. Enforceability of agreements to arbitrate. The role of the court is limited to interpreting a contract. If the subject matter in controversy is covered by the agreement/contract, then the parties will be compelled to arbitrate. A court will never infer an agreement to arbitrate. U.S. Supreme Court has consistently upheld the validity of arbitration agreements.

20. Scope of Review Much more restricted than an appellate court’s review of a trial court decision. Grounds to set aside: Misconduct Fraud Corruption Abuse of power

21. The Federal Arbitration Act The FAA establishes a strong federal policy favoring arbitration. The FAA has a broad scope. It applies to any arbitration clause in a contract that involves interstate commerce. Since it is federal law, the FAA, by virtue of the Supremacy Clause, preempts state laws.

22. Week Two Assignment Answer Essay Question 1 on page 54. There are 4 parts to the question. For each, explain whether the state or the federal court system has subject matter jurisdiction. For parts b and c also identify the state that has personal jurisdiction over the defendant. Explain your answers. THIS MUST BE SUBMITTED THROUGH THE D2L QUIZ.