Business Law: Chapter 2, The Ethical, Global, and E-Commerce Environment, 14th ed., by Mallor, Barnes, Bowers, Langvardt

The Nature of LawThe Resolution of Private Disputes

Business and The ConstitutionBusiness Ethics, Corporate Social

Responsibility, Corporate Governance, and Critical Thinking

© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

The Resolution of Private Disputes

In case of dissension, never dare to judge till you have heard the other side.

Euripides

© 2010 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives

State courts and their jurisdictionFederal courts and their

jurisdictionCivil ProcedureAlternative Dispute Resolution

2 - 3

The United States has a federal court system and each state has a court system

A Court is established by a government to hear and decide matters before it and redress past or prevent future wrongs

Jurisdiction (the power to hear and speak) may be original (trial) or appellate (reviews trial court)

The U.S. Judicial System

2 - 4

General jurisdiction courts (i.e., trial courts) hear most types of cases Levels generally classified according to dollar

amount of damages or location Examples: county courts, district courts

Limited jurisdiction courts hear specialized types of cases; appeals from decisions often require new trial in general jurisdiction court Examples: traffic court, tax court, family court

General vs. Limited Jurisdiction

2 - 5

Subject-matter jurisdiction refers to a court’s authority to hear a particular type of dispute

Courts of criminal jurisdiction hear trials of crimes and misdemeanors Offenses against the public at large

Courts of civil jurisdiction hear and decide issues concerning private rights and duties (e.g., contracts, torts), and non-criminal public matters (e.g., zoning, probate)

Subject-Matter Jurisdiction

2 - 6

Besides subject-matter jurisdiction, court must have either in personam or in rem jurisdiction

In personam jurisdiction requires that defendant be resident of, located within, or acted within physical boundaries of the court’s authority

In rem jurisdiction applies when property that is the subject of the dispute is located within physical boundaries of the court’s authority

In Personam or In Rem Jurisdiction

2 - 7

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 - 8

Civil Procedure

A set of rules establishing how a lawsuit proceeds from beginning to end

In an adversarial system, the plaintiff bears the burden of proof to prove his/her case by a preponderance of the evidence

Once the plaintiff has made a prima facie case (i.e., proved the basic case), the burden of proof may shift to the defendant

2 - 9

Plaintiff’s complaint or petition plus the defendant’s answer or response are known as the pleadings

Defendant may enter a counterclaim against plaintiff or cross-complaint against 3rd party

Other parties may enter the case Motion practice begins

2 - 10

Civil Pre-Trial Procedure

Discovery: Obtaining evidence from other party through interrogatories, requests for admissions, requests for documents, and depositions Discovery process can be a battleground See Allstate Indemnity Co. v. Ruiz

Pretrial Conference: Where judge will hear and rule on many evidentiary issues, discovery disputes, and other concerns

2 - 11

Civil Pre-Trial Procedure

Jury Selection Voir Dire or

Jury Questioning

Opening Statement from each party

Civil Trial Procedure

2 - 12

Plaintiff’s case through direct examination of witnesses (defendant performs cross-examination) and defendant’s case through direct examination (and plaintiff’s cross-examination)

Closing argument or summation from each party

Jury verdict

2 - 13

Civil Trial Procedure

Trial motions include: motions in limine (motion to limit evidence), voluntary non-suit or dismissal (drop the case), motion for compulsory non-suit or summary judgment

After summation or closing argument, a party may move for a mistrial (injustice or overwhelming prejudice) or directed verdict (weight of evidence leads to only one conclusion)

2 - 14

Civil Trial Procedure

Trier of Fact sees material evidence (physical objects, documents), hears testimony of witnesses (who provide factual evidence), and decides outcome of the case based on facts; trier of fact may be judge or jury

Matters of law are issues not of fact, but of law; matters of law decided only by a judge E.g., whether a statute means X or Y, or one

law or another applies to the facts

2 - 15

Civil Trial Procedure

After jury verdict, a party may make a motion for new trial, judgment non obstanto verdicto (notwithstanding the verdict) or remittitur (defendant requests judge to reduce amount of damages the jury recommended)

After a judgment has been entered: Losing party may appeal decision to higher court Winning party must have the judgment

executed (carried out) to obtain money, property, or action ordered by the court

Civil Post-Trial Procedure

2 - 16

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 - 17