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Chapter 2: Courts and Alternative Dispute Resolution

TWELFTH EDITION. Chapter 2: Courts and Alternative Dispute Resolution. Clarkson  Miller  Cross. BUSINESS LAW. TEXT AND CASES. Legal, Ethical, Global, and Corporate Environment. §1: The Judiciary’s Role In American Government.

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Chapter 2: Courts and Alternative Dispute Resolution

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  1. TWELFTH EDITION Chapter 2: Courts and Alternative Dispute Resolution Clarkson Miller  Cross BUSINESS LAW TEXT AND CASES Legal, Ethical, Global, and Corporate Environment

  2. §1: 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….” 2

  3. §2: 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. 3

  4. Jurisdiction Over Persons or Property • Persons: power of a court to compel the presence of the parties (including corporations) to a dispute to appear before the court and litigate. 4

  5. Jurisdiction Over Persons or Property • In Rem: power to decide issues relating to property, whether the property is real, personal, tangible, or intangible. • A court generally has in rem jurisdiction over any property situated within its geographical borders. 5

  6. Jurisdiction Over Persons or Property • Long Arm Statutes: courts use long-arm statutes for non-resident parties based on “minimum contacts” with state. Means defendant had some connection with forum state. 6

  7. Jurisdiction Over Persons or Property • Corporate Contacts: does business or advertises within state. • CASE 2.1 Southern Prestige Industries, Inc. Independence Plating Co. (2010). Did the New Jersey firm have minimum contacts with North Carolina? 7

  8. Subject Matter Jurisdiction • General and Limited Jurisdiction. • Limitation on the types of cases a court can hear, usually determined by federal or state statutes. Example: probate, bankruptcy, criminal. • Usually defined by statute. Can also be limited to amount in controversy (amount of monetary damages). 8

  9. 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. 9

  10. Federal Court Jurisdiction • “Federal Question” cases: • Rights or obligations of a party are created or defined by some federal law. • “Diversity of Citizenship” cases: • Parties are not from the same state, and • The amount in controversy is greater than $75,000. 10

  11. 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. 11

  12. Jurisdiction in Cyberspace • Courts use a “Sliding Scale” Standard to determine whether to exercise jurisdiction. • International Jurisdiction Issues. Some Interaction Substantial Business Interaction No Yes Passive Website 12

  13. Venue • Venue is concerned with the most appropriate location for the trial. • Generally, proper venue is whether the injury occurred. 13

  14. Standing to Sue • A party must have suffered a legal injury and have a sufficient “stake” in the controversy. • CASE 2.2 Oregon v. Legal Services Corp. (2009). Was there a “concrete” injury to the state? 14

  15. Federal Courts Texas Courts Ct. Criminal Appeals Supreme Court U.S. Supreme Court Court of Appeals Circuit Courts of Appeals District Court County Court Justice Court Municipal Court U.S. District Court §3: State and Federal Court Systems 15

  16. State and Federal Court Systems 16

  17. Trial Courts • “Courts of record”-court reporters. • Small Claims Courts are informal, inferior courts with limited amounts in controversy (usually $5,000). • Opening and closing arguments. • Juries are selected. 17

  18. Trial Courts • Evidence presented (witness testimony, physical objects, documents, and pictures.) • Witnesses are examined and cross-examined. • Verdicts and Judgments are rendered. 18

  19. Appellate Courts • Review trial courts proceedings to determine whether the trial was according to the procedural and substantive rules of law. • Generally, appellate courts will consider questions of law, but notquestions of fact. 19

  20. Boundaries of U.S. Courts of Appeal 20

  21. Supreme Courts • The two most fundamental ways to have your case heard in a supreme court are: • Appeals of Right. • By Writ of Certiorari.  21

  22. U.S. Supreme Court www.supremecourt.gov 22

  23. §4: Alternative Dispute Resolution • Trials are very expensive and sometimes take many months to resolve. • Alternative dispute resolution (ADR) methods are inexpensive, relatively quick and leave more control with the parties involved. 23

  24. ADR • Unless court-ordered, there is no record which is an important factor in commercial litigation due to trade secrets. • Most common: negotiation, mediation, arbitration. 24

  25. Negotiation • Informal, sometimes without attorneys, where differences are discussed with the goal of “meeting of the minds” in resolving the case. • Successful negotiation involves thorough preparation, from a position of strength. 25

  26. Mediation • Involves neutral 3rd party ‘mediator’. • Mediator talks face-to-face with parties (in different rooms) to determine “common ground.” • Advantages: few rules, customize process, parties control results (win-win). • Disadvantages: mediator fees, no sanctions or deadlines. 26

  27. Arbitration • Neutral 3rd party renders a legally-binding decision; usually an expert or well-respected government official. 27

  28. Arbitration Disadvantages • Results may be unpredictable because arbitrators do not have to follow precedent or rules of procedure or evidence. • Arbitrators do not have to issue written opinions. • Generally, no discovery available. 28

  29. Arbitration Process • Case begins with a submission to an arbitrator. Next comes the hearing where parties present evidence and arguments. Finally, the arbitrator renders an award. • Courts are not involved in arbitration unless an arbitration clause in a contract needs enforcement. 29

  30. Arbitration • Issue of Arbitrability: a party compels arbitration and a court resolves the issue of whether arbitration is required. • CASE 2.3 NCR Corp. v. Korala Associates, Ltd. (2008). • Mandatory Employment Arbitration in Employment: generally enforceable. 30

  31. Other Types of ADR • Early Neutral Case Evaluation. • Mini-Trial. • Summary Jury Trials. 31

  32. Providers of ADR Services • Non-profit organizations: • American Arbitration Association. • Better Business Bureau. 32

  33. Online Dispute Resolution • Also called ODR. • Uses the Internet to resolve disputes. • Still in its infancy but is gaining momentum. • See, e.g., Resolution Forum, Inc., Virtual Magistrate Project. 33

  34. § 5: International Dispute Resolution • Forum Selection and Choice-of-Law clauses in contracts govern the transaction. • Arbitration clauses are generally incorporated into international contracts. 34

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