Ch. 5: Civil Litigation

the FAA also identifies the following four grounds when courts may set aside the award of an arbitrator

-The arbitration involves some degree of corruption or fraud. -The arbitrator has exhibited inappropriate bias. -The arbitrator has committed some gross procedural error (such as refusing to hear relevant evidence) that prejudices the rights of one party. -The arbitrator has exceeded her explicit powers or failed to use them to make an appropriate final award.

mini-trial

A private proceeding in which each party to a dispute argues its position before the other side and vice versa. A neutral third party may be present and act as an adviser if the parties fail to reach an agreement.

closing argument

An argument made after the plaintiff and defendant have rested their cases. These are made prior to the jury charges.

counterclaim

If the defendant believes that the plaintiff has caused her damages arising out of the very same set of facts as articulated in the complaint, the defendant files both an answer and this

Standing

In order for one party to maintain a lawsuit against another party, she must have this to sue. This means that the party asserting the claim: (1) must have suffered an injury in fact; (2) suffered harm that is direct, concrete, and individualized; and (3) articulates what legal redress exists to compensate for the injury. In a business context, most lawsuits involve economic interests and, therefore, most parties in commercial litigation have no trouble meeting the requirements for this.

class action

In some cases, a court will allow many plaintiffs with the same injury to sue together

hybrid of mediation and arbitration

In some cases, parties to a dispute want to have the opportunity to settle the case through mediation, but they also want some degree of certainty in the event the mediation fails to produce a settlement. , both parties first submit to mediation for a set period of time (perhaps two business days). If the mediation fails, the process then moves to binding arbitration. The goal is to reach an agreement with the least amount of formality possible.

bench trial

In some cases, the judge will act as both the finder of fact and the finder of law at the same time.

voir dire

Jury selection process of questioning prospective jurors, to ascertain their qualifications and determine any basis for challenge.

Another common form of ADR is

Mediation, which is becoming increasingly common as a cost-efficient form of dispute resolution primarily because mediation is relatively informal and does not require as much time or preparation as arbitration.

pretrial conference

Several weeks before trial, the parties typically will attend this with the judge. The conference is generally held between the attorneys for the parties and the judge in the case, with no court reporter present. This is designed to accomplish two primary objectives. The first objective is to encourage settlement. A judge often can give a neutral, face value view of the case and facilitate some negotiations between the two sides or eliminate any obstacles that have blocked negotiations, such as one party's refusal to discuss settlement. The second objective is for the court to resolve any outstanding motions, confirm that discovery is proceeding smoothly, and dispose of any procedural issues that have arisen during the pleadings or discovery stages.

cross-claim

The defendant also may file this to bring in a third party to the litigation. This is filed when the defendant believes that a third party is either partially or fully liable for the damages that the plaintiff has suffered and, therefore, should be involved as an indispensable party in the trial

American Arbitration Association (AAA)

When the AAA receives an application for arbitration, it appoints a tribunal administrator, who coordinates the case and informs the parties of the procedures and rules of arbitration.

private arbitration

When the parties agree to an arbitration clause in a contract

"pleading"

a document containing factual allegations that each party is required to file in a lawsuit. The specific format, deadlines, and requirements of each pleading are set forth in court rules known as the Rules of Civil Procedure

the finder of law

a judge, who determines what evidence will be admitted, what witnesses may testify, what the jury will hear and not hear, and even what legal arguments the attorneys may present to the jury.

default judgement

a judgement entered by a court against a defendant who has failed to appear in court to answer or defend against the plaintiff's claim

cross-examination

after direct examination, the defendant's attorney may then conduct this. Is composed of questions limited to issues that were brought out on direct examination. The same process is repeated for the defendant's witnesses.

One of the most common forms of ADR is

arbitration. During arbitration, an individual arbitrator (or a panel of arbitrators) conducts a hearing between the parties in the dispute. The hearing is similar to a court setting but is less formal, since there is no discovery and the rules of evidence do not apply. Parties seeking arbitration typically apply for an arbitrator through an ADR agency. The largest arbitration provider in the United States is the American Arbitration Association (AAA). Next, an arbitrator who is mutually agreed upon by the parties is appointed to the case. The arbitrator functions much like a judge would in a standard trial and in some states even has the power of subpoena (the ability to demand certain documents or witnesses). For arbitration cases, although an attorney is not required, parties in a business dispute often opt to be represented by counsel. An arbitration hearing resembles a trial in that there are opening statements, both parties present limited evidence and call a predetermined number of witnesses, both parties have the right of cross-examination, and both parties make closing arguments. Unless already mandated in a contract, at the beginning of the arbitration both parties agree to either binding or nonbinding arbitration. If binding, the arbitrator's decision is final unless both parties agree to have the case reopened.

Requests for production

are aimed at producing specific items to help one party discover some important fact in the case. It is usually very wide in scope and might cover all documents, memoranda, reports, notes, calendars, videotape, audiotape, e-mail, computer hard drives, and so on. In a complex securities or banking fraud case, or one where many documents are involved, it is not uncommon for the parties to send a truckload of boxes containing materials that were requested by the other side.

Requests for admissions

are attempts to obtain information that furthers the objective of determining which facts are in dispute (and, thus, must be proved at trial) and which facts both parties accept as true. For example, one party may request that the other party admit the existence and date of a certain contract. If the other party refuses to admit those facts, witnesses must be called at trial to prove the existence and date of the contract.

Summary jury trials

are used primarily in federal courts but have occasionally been used by state courts when there are complex issues to be litigated. No live expert testimony is presented, and the attorneys primarily conduct the proceeding through oral argument. Typically, no record is kept.

Interrogatories

are written questions to be answered by one of the litigants ( plaintiffs or defendants) involved in the case. involve questions about which the litigant does not have readily available knowledge. The litigant may need to review files, memoranda, transcripts, and so forth in order to properly answer the questions.

dismiss a case

because of a procedural defect such as a court's lack of jurisdiction or failure to state a recognized legal theory in the complaint

In a business context, ADR is invoked either via

contract or by mutual agreement

If the defendant does not respond to the complaint in time, she is said to

default and generally will automatically lose the case without the benefit of trial.

After the opening statements, the plaintiff's attorney asks questions of the witnesses on the plaintiff's list called

direct examination

What is the key advantage of legally mandated arbitration

each side is able to present the case to a neutral party and the arbitrator's decision can be used as a starting point for settlement negotiations.

What sets the pleading stage in motion?

if informal attempts at resolution fail, the formal action begins when the plaintiff initiates a lawsuit by filing a complain with the local clerk of courts. Both sides file documents that set out the facts of the case, theories of liability, and any available defenses. At the same time, the plaintiff is typically required to arrange for service of the defendant with a summons along with a copy of the plaintiff's complaint.

Dispute resolution

is a crucial part of business planning and strategy that requires a thoughtful cost-benefit analysis; that is, it is not a technical or purely legal matter to be delegated to attorneys

A motion

is a document filed by one party that requests court action in a matter pertaining to the litigation.

The Federal Arbitration Act (FAA)

is a statute that requires state and federal courts to enforce arbitration awards.

The summons

is formal notification to the defendant that she has been named in a lawsuit and that an answer must be fled within a certain period of time. In some cases, the summons and complaint may be served by certified mail to the defendant. In other cases, a deputy sheriff or process server must deliver the documents in person.

The mediator's task

is to facilitate discussion, listening to each party's grievances and arguments and ensuring communication between the parties. The mediator's goal is to defuse any antagonism between the two parties and focus on working toward a mutually beneficial solution.

Trade secrets

legally protected business information that the opposing party obtains when attempting to gather context during the discovery stage. This is an important limit to discovery.

Is a final decision rendered in mediations?

no, so if the parties are unable to reach an agreement, they must resolve their dispute using another method

Informal ADR

often involves the parties negotiating face-to-face or through intermediaries to arrive at a mutually agreeable solution without the use of a formal process. It can take the form of (1) a settlement agreement, whereby one party agrees to a payment in exchange for the other party's promise not to sue, or (2) an agreement to cancel a contract or to revise an existing contract to better reflect the parties' obligations and needs. However, even when the parties agree to settle a case among themselves, courts still maintain oversight to ensure the integrity of the process.

discovery stage

once the initial pleadings are filed, most lawsuits move into this stage, in which parties attempt to collect evidence for trial. It is the legal process for the orderly exchange of evidence. Each side has the right to know and examine the evidence that the other side has, including evidence that is both inculpatory and exculpatory.

depostions

oral questions asked of a witness in the case. This can be taken at a courthouse but is more commonly taken in the setting of a conference room at a law firm. Although there is a court reporter present to create a written record and the witnesses are under oath, no judge is present. These may be taken from the plaintiff, the defendant, or any other witness in the case.

Court procedures

prescribe how the complaint should be served upon the defendant to ensure timely notice of the claims asserted by the plaintiff.

Once the defendant is served with the complaint, she must

provide a formal answer within a prescribed time frame (normally within 20 days). The answer responds to each paragraph of the complaint. Often, the answer is simply a device for the parties to understand what issues they agree on and what issues will be in dispute at trial.

Civil litigation

refers to dispute resolution processes of civil (noncriminal) cases in public courts of law. (The term litigation is sometimes used as a synonym for trial, but in reality the scope of litigation is much broader and includes pretrial as well as post trial events.)

Alternative dispute resolution (ADR)

refers to nonjudicial methods by which disputes involving individuals or businesses are resolved outside of the federal or state court system through the help of third parties. The main methods of this include mediation and arbitration.

opening statements

statements by opposing attorneys that tell the jury what their cases will prove. Happens after the jury has been selected.

litigants

the adverse parties involved in litigation

the finder of fact

the jury, who determines whose version of the facts is more believable by examining the evidence and listening to the testimony of witnesses.

nonbinding

the losing party has the right of automatic appeal to the trial court

contractual agreement

the parties enter into a contract that contains a clause requiring the parties to submit any disputes to a specific alternative dispute resolution process (usually binding arbitration). Are commonly contained in contracts relating to employment, sale of goods, brokerage agreements (such as a stockbroker or online trading account), financing, and licenses to use software.

summary judgement

to enter judgement in the requesting party's favor without a trial because no issues of fact are presented in the case and thus, no jury trial is needed. The requesting party believes it should win as a matter of law.

compel discovery

to issue a court order demanding that a party comply with a lawful discovery request

judgement as a matter of law

to reverse the verdict of the jury because no reasonable jury could have heard the evidence presented at trial and rendered such a verdict.

dismiss for mistrial

to stop the trial in progress and dismiss it because of some extraordinary circumstance resulting in prejudice against one side or the other (rare in civil litigation).