Legal and Ethical Environment (test 2)
What best describes the court system in the US?
Two separate court systems (federal and state) operating mostly in parallel (state courts hear criminal cases too)
Federal Questions can be...
US constitution, federal law, treaty
Binding and Non-Binding Arbitration
Usually parties will agree on binding arbitration, however court-mandated arbitration is usually non-binding. This means that the parties may continue towards a lawsuit if they do not agree with the Arbitrator's decision.
Voluntary ADR vs Court-Annexed ADR
Voluntary- PARTIES agree to use ADR in their contract instead of court Courts-Annexed ADR- COURT requires parties to try some form of ADR In NC: Parties to a civil case (e.g., a business dispute) in NC Superior Ct can be ordered to TRY MEDIATION before proceeding to trial.
Can e-evidence be discovered?
Yes
International contracts should include...
a choice of law (what law applies? NC or CA?), forum (where will disputes be litigated? NC or CA?) , and dispute resolution clause (What method will be used? Court or ADR?)
To bring a lawsuit (successfully), the plaintiff, whether an individual or business, must have "standing" to sue, meaning:
a sufficient stake in a matter to justify seeking relief through the court system. Standing means that the party that filed the action in court has a legally protected interest at stake in the litigation. A personal stake. (Directly injured, or direct threat).
Writ of execution
an order directing the sheriff to seize and sell the defendant's nonexempt asset, or property. Sometimes the nonexempt property itself will be rewarded to the plaintiff Occurs when the D does not have the funds to pay for the judgement, the plaintiff can go back to court and request an issue of one.
Pretrial conference
at the request of either party or the court, to identify the matters in dispute after discovery has taken place and to explore the possibility of settling the dispute without a trial. If no settlement is possible, the parties plan the course of the trial
Diversity of Citizenship requirements
can be state law civil claims (eg. contract, tort). Involves 1. Ps and Ds who are residents of different states 2. $75,000 minimum claim
Venue
concerned with the most appropriate location for a trial. a court trying a case should be near (county) where the incident took place or where the parties reside. In a civil case, its where the D resides or does business In a criminal, it's where the crime occurred
North Carolina Mediated Settlement Conference Program:
judge may require parties to a civil case in NC Superior Court (e.g., business disputes) to try mediation before proceeding to trial
Arbitrator's award/decision...
may be appealed to a court BUT court's review of arbitral award/decision will be much more limited than the court's review of a trial court decision. An arbitrator's MISTAKEN findings of fact and/or MISTAKEN conclusions of law are generally FINAL. (i.e., parties are stuck with them--- remember that the parties agreed to arbitrate and had control over choice of arbitrators, etc.).
Motion for JNOV (Judgement notwithstanding the verdict)
only granted if jury's verdict is unreasonable
3 stages of litigation
pretrial, trial, post-trial
See Case Analysis 3.1 (p.55) for an example of a forum selection and choice of law clause in a contract:
the clause is at the top left on p.55. The italicized language in the middle column on p. 55 explains why court's will presume these clauses are valid and thus generally enforce them.
For a court to have personal jurisdiction over an out-of-state defendant...
the court will apply the Minimum Contacts test (p.27) to determine if jurisdiction is fair. When the defendant's only contacts with a state are through a Web site (e.g., a Web-based seller), the court uses a Sliding Scale standard (p.30) to determine if there are sufficient minimum contacts.
When a party is granted a "motion for summary judgment,"...
the judge decides in their favor without a trial. A judge will only grant summary judgement if no material facts are in dispute. (Only in matters of law).
What are the different types of Discovery?
1. Depositions- sworn testimony recorded by a court reporter or tape, of parties and other key witnesses 2. Interrogatories- written questions and answers 3. Documents (including electronic)- email, voicemail, stored data 4. Mental/ Physical Exams 5. Admissions
Legal Fees
1. Fixed Fees- may be charged for the performance of such services as drafting a will 2.Hourly Fees- may be charged for matters that will involve an indeterminate period of time. 3.Contingency Fees- are fixed as a percentage (usually 33%) of a client's recovery in certain types of lawsuits (e.g personal injuries lawsuit). If the lawsuit is unsuccessful, the attorney receives no fee, but the client will have to reimburse the attorney for all out-of-pocket costs incurred.
A corporation is normally subject to personal jurisdiction in the states in which it is...
1. Incorporated 2. Has a principal office 3. And/or is doing business
What are the very limited situations in which a court will "set aside" an award?
1. The arbitrator's conduct or "bad faith" substantially prejudiced the rights of one of the parties. 2. The award violates an established public policy 3. The arbitrator exceeded her or his powers- that is, arbitrator issues that the parties did not agree to submit to arbitration.
The federal government has limited powers; federal courts have limited subject matter jurisdiction. What are the 2 general types of cases federal courts may hear? DESCRIBE each briefly.
1. Those that may raise federal questions. (federal statute (affordable care act), or constitutional (first amendment) 2. Diversity of Citizenship (when the plaintiffs and the defendants are from different states).
The three tiers of the Federal Court System
1. Trial courts- "US District Court" (Asheville is in the Western District of NC). 2. US Courts of Appeal (NC is in the "4th Circuit" with SC, WVA, & VA; 3 judges hear each case) 3. US Supreme Court (9 justices) Generally understand writ of certiorari/rule of four (justices must agree to take case)
To have "jurisdiction" to hear a particular case (such as a contract dispute), a court must have BOTH:
1. personal jurisdiction, meaning jurisdiction over the individual or business, or in rem jurisdiction, meaning jurisdiction over the property in dispute (e.g., who owns a boat); AND 2. subject matter jurisdiction, referring to limitations on the types of cases a court can hear. (eg. Federal questions, diversity of citizenship (federal courts))
Requests for documents, objects, and entry upon land
A party can gain access to documents and other items that are not theirs in order to examine them. (e.g. gaining permission to inspect and copy the other party's car repair bills)
Mandatory arbitration clauses (examples of enforcement)
But there are exceptions: e.g., presentation 2-9, p.47 arbitration clause in a nursing home contract was unenforceable because it unreasonably favored the home (it was "unconscionable"). 2017 US Supreme Court decision enforced a nursing home arbitration agreement signed by relative with power of attorney. Citing the FAA, the court said arbitration agreements are on same plane as other contracts---so states/courts can't single out arbitration agreements for disfavored treatment. You don't have to know this but generally understand the supremacy of the Federal Arbitration Act (FAA)
Questions of Fact
Determining what happened Based on hearing witnesses and other evidence (documents, etc). Made by either jury or judge. Only Trial Courts hear witnesses
Motion for Summary Judgement example
EXAMPLE ON P. 57 (Lewis v. 21st Cen. Bean): • Employee alleged age and race discrimination. Employer moved for summary judgment. • Plaintiff did not meet his initial burden of proof: he had no evidence to establish that his work was satisfactory or that the employer's explanation for his firing was not legitimate. • SUMMARY JUDGMENT AWARDED TO EMPLOYER---CASE DISMISSED.
Appeal
Either party may appeal not only the jury's verdict, but also the judge's ruling on any pretrial or post-trial motion. Many of the appellate court cases that appear (in this text) involve appeals of motions for summary judgement or other motions that were denied by trial court judges. Note that a party must have some legitimate grounds to file an appeal (some legal error) and that few trial court decisions are reversed on appeal. It can also be very expensive
What does a typical complaint include?
Establishes Court's subject matter jurisdiction, personal jurisdiction, sets out legal theory (briefly), and sets out remedy sought (eg. monetary damages).
Even if the plaintiff (e.g., in a contract dispute) ultimately wins at trial and/or, if appealed, on appeal, what kind of problems/costs might make it a Pyrrhic victory (i.e., a hollow victory due to the heavy toll inflicted on the victor)?
Expensive, time consuming, emotionally taxing, appeals, may not receive damages right away.
How to tell if a case is Federal or State.
Federal- United States... State- State of (state)
What is the purpose of "service of process," what is delivered, and generally how is it effected? When can email be used?
Formally notifying the defendant of a lawsuit is called service of process. The plaintiff must deliver, or serve, a copy of the summons and complaint. The defendant must file an answer to the complaint within a specified time period or suffer a default judgement. The summons must be hand-delivered or (in some cases) even published in the local newspaper. If they still cannot be reached through the previous methods, in some situations, courts allow service of process via email, as long as it is reasonably calculated to provide notice and an opportunity to respond.
Which courts determine questions of fact and question of law?
Generally, only trial courts hear all the evidence (witnesses, documents, etc.) and determine questions of fact (i.e., what happened), as well as questions of law (only judge). Generally, appellate courts decide only errors of law (not a new trial).
Request for examination
If one party's physical or mental condition is in question, the other party can request an examination and then obtain the results of that examination (only if need of info outweighs privacy)
What happens if the defendant doesn't answer the complaint? How much does the plaintiff get?
If the defendant does not respond to the complaint within the specified time, they will suffer a default judgement. Default judgement would favor the plaintiff and they would be awarded the damages alleged in their complaint.
Jury Selection
In a jury trial, the selection of members of the jury from a pool of prospective jurors. During a process known as voir dire, the attorneys for both sides may challenge prospective jurors either for cause or peremptorily (for no cause.
Trial courts have what type of jurisdiction?
In general, trial courts have original jurisdiction (they hear a case for the first time), whereas appellate court (including supreme courts) generally hear only appeals from lower court orders/judgments.
Questions of Law
Interpreting and applying legal principles Only Judges (whether trial or appellate) can determine questions of law (not juries) (Supreme court and appellate use only law)
Unconscionable
It is a term borrowed from moral philosophy and ethics. "an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party."
What is litigation?
Litigation is the process of resolving disputes in the court system. More than 90% of civil lawsuits are settled (resolved) before trial, using some form of Alternative Dispute resolution (ADR).
Arbitration
Most formal ADR Parties or court selects arbitrator or panel Like trial- opening arguments, present witnesses and evidence Arbitrator makes award/decision If parties agreed to BINDING arbitration, the award/decision is GENERALLY FINAL (court will give award only LIMITED review
Arbitration Statutes
Most states have statues under which arbitration clauses will be enforced. (e.g public employee disputes) Federal uses the FAA and enforces arbitration clauses in contracts involving maritime activity and interstate commerce. United States Supreme Court enforces the FAA's policy
Post-trial motions
Motion for a new trial and Motion for Judgement N.O.V.
The 3 basic of forms of ADR are:
Negotiation: the parties informally attempt to resolve their dispute. Mediation: using a neutral third party to facilitate resolution. Arbitration: a neutral third party (or panel) makes a decision for the parties.
Motion for Summary Judgement
One of the parties is asking the Court (Judge) to decide in favor of that party without a trial. • The party seeking summary judgment must show that there are no MATERIAL FACTS in dispute. • The judge looks at facts in the light most favorable to party opposing summary judgment. • Judge decides the case as a matter of LAW: Dismisses case, or Decides in favor of plaintiff or defendant.
Request of Admissions
One party can serve the other party with written request for an admission of the truth of the matters relating to the trial. Will be considered in court as true. (e.g Getting someone to admit their license was suspended during the time of an accident)
Pleadings
P's complaint/D's answer; D's counterclaim/P's answer
Gatekeeping
Personal Jurisdiction (PJ)- over plaintiff and defendant Subject Matter Jurisdiction (SMJ)- over type of case (state vs federal jurisdiction, (State-Broad, Federal-Limited))
Ethics Justice Theory
Rules for creating a good society • Rawl's "thought experiment": imagine yourself in the "original position" characterized by a "veil of ignorance." • Two resulting principles on which society/govt. would be based: 1. Equal Liberty 2. Difference
If a corporation has 2 citizenships...
State in which it has its HQ and state of incorporation. If one or both of the two are in the same state as P/D, does not count as Diversity
Federal Arbitration Act (FAA)
The Federal Arbitration Act (FAA) and state laws enforce voluntary arbitration agreements and awards. Federal law (FAA) preempts (take precedence over) conflicting state law Policy favoring arbitration/ deference to voluntary agreements to arbitrate
Enforcing the judgment (collecting the damages)
The payment of damages is not guaranteed even if P wins.
What is the purpose of discovery, when does it take place, and what are two types of discovery?
The process of obtaining information from the opposing party or from witnesses prior to trial (pre trial) is known as discovery. This includes gaining access to witnesses, documents, records, and other types of evidence. Discovery prevents surprises at trial by giving both parties access to evidence that might otherwise be hidden. It also serves to narrow the issues so that the trial time is spent on the main questions in the case.
