1. THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-1 The Legal Environment of Business A Critical Thinking Approach 5 th Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne

2. THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-2 CHAPTER 3 The American Legal System

3. THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-3 Jurisdiction Definition: The power of a court to hear a case and render a binding decision on the parties. THE LEGAL ENVIRONMENT OF BUSINESS

4. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-4 Classifications of Jurisdiction Original: Trial level court – has the power to initially hear and try the case Appellate: Reviewing court – has the power to review a previously made decision ------------------------------------------- ------------------------------------------- In Personam: Court power over a person In Rem: Jurisdiction over property of the defendant Subject Matter Jurisdiction: Power to hear certain types of cases THE LEGAL ENVIRONMENT OF BUSINESS

5. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-5 Service of Process Methods of Service:  Personal  On responsible person at home  By mail  On agent for service THE LEGAL ENVIRONMENT OF BUSINESS Definition: Procedures for providing a defendant with a notice and opportunity to be heard via a copy of a summons and complaint.

6. THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-6 Case 3-1: 3-1: Volkswagen v. Woodson  Long-arm jurisdiction: In-state court’s jurisdiction over nonresident defendant  Limits imposed by the Due Process Clause  “Minimum Contacts” Test  Protects against suits in distant states  Limits state courts’ powers THE LEGAL ENVIRONMENT OF BUSINESS

7. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-7 State v. Federal Jurisdiction State Courts Extensive jurisdiction over cases not exclusive to federal courts Federal Courts Limited jurisdiction under federal statutes or diversity cases Concurrent Jurisdiction Both state and federal courts can hear these cases under federal question or diversity THE LEGAL ENVIRONMENT OF BUSINESS

8. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-8 Federal Question  Jurisdiction is based on a federal statute, U.S. Constitution, or federal treaty Diversity Jurisdiction  Complete diversity of citizenship  Amount in controversy must exceed $75,000 THE LEGAL ENVIRONMENT OF BUSINESS

9. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-9 Venue  Not the same as jurisdiction  Concerned with geographic location of the court  Motions for change of venue  Forum non conveniens – location of the trial court is inconvenient  Unlike removal, granting of motion for change of venue is discretionary with trial judge THE LEGAL ENVIRONMENT OF BUSINESS

10. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-10 The Court System Federal Courts:  Trial Court: U.S. District Court  Appellate: U.S. Circuit Courts of Appeals  Court of Last Resort: U.S. Supreme Court State Courts: Similar Structure and Function State Courts: Similar Structure and Function SupremeTrialAppellate THE LEGAL ENVIRONMENT OF BUSINESS

11. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-11 U. S. Supreme Court Justices  John Roberts  John Paul Stevens  Antonin Scalia  Anthony Kennedy  David Souter  Clarence Thomas  Ruth Bader Ginsburg  Stephen Breyer  Samuel Alito

12. THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-12 Who’s Who in the Legal System?  The Attorney -  Legal Assistants  Investigators  Process Servers  The Judge  Clerks  Bailiffs  The Jury  The Parties THE LEGAL ENVIRONMENT OF BUSINESS

13. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-13 The Adversary Process  Based on medieval concept of trial by combat  Each party vigorously advocates its position, presenting facts and law in support  The fact finder (judge or jury) determines the facts  The court applies the law and renders a decision  The judge ensures that the rules are followed, but does not dictate the outcome THE LEGAL ENVIRONMENT OF BUSINESS

14. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-14 Pretrial  Negotiations  Service of Process  Pleadings  Complaint  Answer  Affirmative Defenses  Counterclaims  Discovery: Interrogatories, Depositions  Motions Civil Litigation 1 THE LEGAL ENVIRONMENT OF BUSINESS

15. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-15 The Trial  Jury Selection: Voir Dire  Opening Statements  Direct and Cross-Examination  Jury Instructions  Closing Arguments  Post trial Motions Civil Litigation 2 THE LEGAL ENVIRONMENT OF BUSINESS

16. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-16 Case 3-3: J.E.B. v. Alabama, ex rel. T.B.  Paternity suit: All female jury finds against male defendant  State appellate court found no violation of Equal Protection Clause in jury selection process  Equal protection clause restricts ability of state actors to exercise peremptory jury challenges on the basis of gender  Dissent: decision undermines peremptory right to strike THE LEGAL ENVIRONMENT OF BUSINESS

17. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-17 Appellate Procedure  Assignment of error  Filing the appeal  Remedies: Affirm, Modify, Reverse, Remand  Practical Issues: Costs, Time, Value as Precedent  Appeals to State Supreme Court  Appeals to U.S. Supreme Court: Discretionary Civil Litigation 3 THE LEGAL ENVIRONMENT OF BUSINESS

18. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-18 Class Action Cases  Involve multiple parties  Class must be certified by the court  Often used in defective product cases where there are many injured plaintiffs, each with small claims  Also used in discrimination cases  Often results in negotiated settlements of all claims THE LEGAL ENVIRONMENT OF BUSINESS

19. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-19 Class Action Fairness Act  Intended to reduce large legal fees  Greater access to Federal Courts  Protect interest of individual class members  Changes requirements for Diversity of Citizenship in Class Action cases and general requirements for Federal jurisdiction

20. THE LEGAL ENVIRONMENT OF BUSINESS © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-20 Global Dimensions  Increasing global trade will generate more international disputes  Legal systems, procedures, rights and remedies differ widely from country to country  Choice of jurisdiction, law, venue, forum, and method of dispute resolution common in international contracts THE LEGAL ENVIRONMENT OF BUSINESS

21. © 2009 Pearson Education, Inc. publishing as Prentice HallCh. 3-21 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall