business law 4320 fiu chapter 3 courts and alternative disputes

US court rankings

(1) trial courts of limited jurisdiction (2) trial courts of general jurisdiction (3) appellate courts/US circuit courts of appeal (4) the state's highest court (often called the state supreme court) (5) US federal supreme court (if question on fed law) Federal- (1) U.S. district courts (trial courts of general juris- diction) and various courts of limited jurisdiction (2) U.S. courts of appeals (intermediate courts of appeals), (3) the United States Supreme Court.

litigation

(the process of working a lawsuit through the court system)

The "Sliding-Scale" Standard

1. When the defendant conducts substantial business over the Internet (such as contracts and sales), jurisdiction is proper. This is true whether the business is conducted with traditional computers, smartphones, or other means of Internet access. 2. When there is some interactivity through a Web site, jurisdiction may be proper, depending on the circumstances. Even a single contact can be sufficient to satisfy the minimum-contacts requirement in certain situations. 3. When a defendant merely engages in passive advertising on the Web, jurisdiction is never proper. ex 1 - A Louisiana resident, Daniel Crummey, purchased a used recreational vehicle (RV) from sellers in Texas after viewing photos of it on eBay. The sellers' statements on eBay claimed that "everything works great on this RV and will provide comfort and depend- ability for years to come. This RV will go to Alaska and back without problems!" Crummey picked up the RV in Texas, but on the drive home, the RV quit working. He filed a suit in Louisiana against the sellers alleging that the vehicle was defective, but the sellers claimed that the Louisiana court lacked jurisdiction. Because the sellers regularly used eBay to market and sell vehicles to remote parties and had sold this RV to a Louisiana buyer, the court found that jurisdiction was proper.

state court procedure:

1. pleadings 2. pretrial motions 3. discovery 4. pretrial conference 6. post trial motions 7. appeal

Writ of Certiorari

A writ from a higher court asking a lower court for the record of a case

Jurisdiction of the Federal Courts

Federal Questions - whenever a plaintiff's cause of action is based, at least in part, on the U.S. Constitution, a treaty, or a federal law, Diversity of Citizenship. - 1. The plaintiff and defendant must be residents of different states. 2. The dollar amount in controversy must exceed $75,000. Note that in a case based on a federal question, a federal court will apply federal law.

Jurisdiction over Subject Matter

In both the federal and state court systems, there are courts of general (unlimited) jurisdiction and courts of limited jurisdiction. An example of a court of general jurisdiction is a state trial court or a federal district court. An example of a state court of limited jurisdiction is a probate court and bankruptcy court.

businesses include an arbitration clause in a contract.

The clause provides that any dispute that arises under the contract will be resolved through arbitration rather than through the court system. ex 1- Buckeye Check Cashing, Inc., cashes personal checks for consumers in Florida. Buckeye would agree to delay submitting a consumer's check for payment if the con- sumer paid a "finance charge." For each transaction, the consumer signed an agreement that included an arbitration clause. A group of consumers filed a lawsuit claiming that Buckeye was charging an illegally high rate of interest in violation of state law. Buckeye filed a motion to compel arbitration, which the trial court denied, and the case was appealed. The plaintiffs argued that the entire contract—including the arbitration clause—was illegal and therefore arbitration was not required. The United States Supreme Court found that the arbitration provision was severable, or capable of being separated, from the rest of the contract. The Court held that when the challenge is to the validity of a contract as a whole, and not specifically to an arbitration clause within the contract, an arbitrator must resolve the dispute. Even if the contract itself later proves to be unenforceable, arbitration will still be required because the FAA established a national policy favoring arbitration and that policy extends to both federal and state courts.2 ex 2- In a landmark decision, Gilmer v. Interstate/Johnson Lane Corp.,23 the Supreme Court held that a claim brought under a federal statute prohibiting age discrimina- tion could be subject to arbitration. The Court concluded that the employee had waived his right to sue when he agreed, as part of a required registration application to be a securities representative with the New York Stock Exchange, to arbitrate "any dispute, claim, or contro- versy" relating to his employment. n Since the Gilmer decision, some courts have refused to enforce one-sided arbitration clauses. Employment-related agreements often require the parties to split the costs of arbi- tration, but some courts have overturned those provisions when an individual worker lacked the ability to pay.24 In the following case, the court considered the effect of an arbitration clause included in an employment application.

Standing to Sue

The legal requirement that an individual must have a sufficient stake in a controversy before he or she can bring a lawsuit.

concurrent jurisdiction

When both federal and state courts have the power to hear a case, as is true in lawsuits involving diversity of citizenship,

exclusive jurisdiction

When cases can be tried only in federal courts or only in state courts, exclusive jurisdiction exists.

Justiciable controversy—

a controversy that is real and substantial, as opposed to hypothetical or academic. ex 1- Harold Wagner obtained a loan through M.S.T. Mortgage Group to buy a house in Texas. After the sale, M.S.T. transferred its interest in the loan to another lender, which assigned it to another lender, as is common in the mortgage industry. Eventually, when Wagner failed to make the loan payments, CitiMortgage, Inc., notified him that it was going to foreclose on the property and sell the house. Wagner filed a lawsuit claiming that the lenders had improperly assigned the mortgage loan. In 2014, a federal district court ruled that Wagner lacked standing to contest the assignment. Under Texas law, only the parties directly involved in an assignment can challenge its validity. In this case, the assignment was between two lend- ers and did not directly involve Wagner.

Long Arm Statutes

a court can exercise personal jurisdiction over certain out-of-state defendants based on activities that took place within the state. however, the court must be convinced that the defendant had sufficient contacts, or minimum contacts, with the state to justify the jurisdiction. The minimum-contacts requirement is usually met if the corporation advertises or sells its products within the state, or places its goods into the "stream of commerce" with the intent that the goods be sold in the state. ex 1- If an out-of-state defendant caused an automobile accident or sold defective goods within the state, for instance, a court will usually find that minimum contacts exist to exercise juris- diction over that defendant. ex 2-After an Xbox game system caught fire in Bonnie Broquet's home in Texas and caused substantial personal injuries, Broquet filed a law- suit in a Texas court against Ji-Haw Industrial Company, a nonresident company that made the Xbox components. Broquet alleged that Ji-Haw's components were defective and had caused the fire. Ji-Haw argued that the Texas court lacked jurisdiction over it, but a state appellate court held that the Texas long arm statute authorized the exercise of jurisdiction over the out-of- state defendant. ex 3- Independence Plating Corporation is a New Jersey corporation that provides metal-coating services. Its only office and all of its personnel are located in New Jersey, and it does not advertise out of state. Independence had a long-standing business relationship with Southern Prestige Industries, Inc., a North Carolina company. Eventually, Southern Prestige filed suit in North Carolina against Independence for defective workman- ship. Independence argued that North Carolina did not have jurisdiction over it, but the court held that Independence had sufficient minimum contacts with the state to justify jurisdiction. The two parties had exchanged thirty-two separate purchase orders in a period of less than twelve months.

mediation

a neutral third party acts as a mediator and works with both sides in the dis- pute to facilitate a resolution.

arbitration

an arbitrator (a neutral third party or a panel of experts) hears a dispute and imposes a resolution on the parties. Arbitration differs from other forms of ADR in that the third party hearing the dispute makes a decision for the parties. resolution on the parties that may be either binding or nonbinding. Arbitration that is mandated by the courts often is nonbinding. In nonbinding arbitration, the parties can go forward with a lawsuit if they do not agree with the arbitrator's decision.

procedural law

establishes the rules and standards for determining disputes in courts.

rule of four,

the Court will not issue a writ unless at least four of the nine justices approve

Negotiation

the parties attempt to settle their dispute informally, with or without attorneys to represent them. Attorneys frequently advise their clients to negotiate a settlement voluntarily before they proceed to trial. Parties may even try to negotiate a settlement during a trial or after the trial but before an appeal. Negotiation tra- ditionally involves just the parties themselves and (typically) their attorneys. The attorneys, though, are advocates—they are obligated to put their clients' interests first.