Business Law Chapter 2 - Doral Academy Preparatory

Report
Learning Objectives
1. What is judicial review? How and
when was the power of judicial
review established?
2. Before a court can hear a case, it
must have jurisdiction. Over what
must it have jurisdiction? How are
the courts applying traditional
jurisdictional concepts to cases
involving Internet transactions?
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Learning Objectives
3. What is the difference between a
trial court and an appellate court?
4. What is discovery, and how does
electronic discovery differ from
traditional discovery?
5. What are three alternative methods
of resolving disputes?
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The Judiciary’s Role in
American Government
 Judicial Review was 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….”
 Today, judicial review is exercise by
both federal and state courts.
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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.
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Basic Judicial Requirements
 Jurisdiction.
– Jurisdiction over Persons or Property.
• Court can exercise personal jurisdiction (in
personam).
• Long-Arm Statutes: Courts exercise jurisdiction
over non-resident defendants based on
“minimum contacts” with state. 
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Basic Judicial Requirements
 Jurisdiction.
– Long-Arm Statutes.
• Corporate Contacts: does the firm do business or
advertise within the state?
• CASE 2.1 SOUTHERN PRESTIGE
INDUSTRIES, INC. INDEPENDENCE PLATING
CORP. (2010). Did the New Jersey firm have
minimum contacts with North Carolina?
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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).
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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.
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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.
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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.
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Basic Judicial Requirements
 Jurisdiction in Cyberspace.
– Sliding Scale Standard to determine
whether a court has jurisdiction.
Passive
Website
Some
Interaction
No
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Yes
Substantial
Business
Interaction
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Basic Judicial Requirements
 Jurisdiction in Cyberspace.
– International Jurisdiction Issues.
– CASE 2.2 GUCCI AMERICA, INC. V WANG
HUOQING (2011). What factors did the
court consider in its decision to assert
jurisdiction over the defendant?
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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.
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State and Federal Court Systems
Federal Courts
Texas Courts
Ct. Criminal
Appeals
Supreme
Court
Court of
Appeals
District Court
County Court
Municipal
Court
Justice
Court
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U.S. Supreme
Court
Circuit
Courts of
Appeals
U.S. District
Court
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State and Federal Court Systems
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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).
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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.
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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.
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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. 
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State and Federal Court Systems
 The 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. 
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Federal Court System:
U.S. Courts of Appeal
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State and Federal Court Systems
 The Federal Court
System.
– The U.S. Supreme Court.
• Final arbiter of U.S.
Constitution.
• Petition for Court to hear
case by Writ of Certiorari.
– www.supremecourt.gov
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Following a State Court Case
 The Pleadings.
– The Plaintiff’s Complaint. 
– The Defendant’s Answer. 
– Motion to Dismiss. 
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Following a State Court Case
 The Pleadings.
– Plaintiff’s Complaint.
• Court acquires jurisdiction over subject matter
and Plaintiff.
• Facts: What happened.
• Prayer: Court relief.
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Following a State Court Case
 The Pleadings.
– Defendant’s Answer:
• Makes General Denial.
• May move for Change of Venue.
• May allege Affirmative Defenses.
• May assert Counterclaims against Plaintiff.
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Following a State Court Case
 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.
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Following a State Court Case
 Pretrial 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.
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Following a State Court Case
 Discovery: process by which parties
obtain information from the opposing
party prior to trial.
– Depositions and Interrogatories.
• Sworn testimony recorded and transcribed by
court official (court reporter).
• Written questions and answers under oath. 
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Following a State Court Case
 Discovery.
– Requests for Other Information.
– Electronic Discovery.
• FRCP deals specifically with preservation,
retrieval, and production of electronic data.
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Following a State Court Case
 Pretrial Conference.
 Jury Selection.
– Voir Dire.
– Jurors can be dismissed peremptorily (no
reason or for cause (bias).
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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).
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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.
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Following a State Court Case
 The Trial.
– Expert Witnesses. Provide specialized
knowledge and opinions that help jurors
decide issues.
• CASE 2.3 DOWNEY V. BOB’S DISCOUNT FURNITURE
HOLDINGS, INC. (2011). Why did the trial court
abuse its discretion?
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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.
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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.
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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). 
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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.
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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.
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Courts Adapt to the Online World
 Electronic Filing.
 Courts Online (websites, court
dockets).
 Cyber Courts and Proceedings.
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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. 
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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.
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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.
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Alternative Dispute Resolution
 Arbitration.
– Many employment contracts have binding
arbitration clauses.
– Settling of a dispute by a neutral 3rd party
(arbitrator) who renders a legally-binding
decision; usually an expert or wellrespected government official.
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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.
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Alternative Dispute Resolution
 Other Types of ADR.
 Providers of ADR Services.
– Non-profit organizations:
• American Arbitration Association.
• Better Business Bureau.
– For Profit:
• JAMS-ADR.com(Flash enabled).
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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 .
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