Business Law Chapter 3 The U.S. Legal System and Court Jurisdiction

International Shoe Co. v. State of Washington gives the rule that in order to determine personal jurisdiction, the defendant must have the minimum amount in controversy.

False

In the United States, we have both state and federal courts that hear and decided cases and controversies.

True

Ko, a resident of Oklahoma, was seriously injured by a product manufactured by Ultran, Inc. Ko's medical expenses alone have exceeded $100,000. The product which caused the injuries contained component parts manufactured by Quent Company. Ultran is incorporated and has its headquarters in Oklahoma City, Oklahoma. Quent Company is an Oklahoma business with its headquarters in Tulsa, Oklahoma. Ko has decided to bring one lawsuit against both Ultran and Quent for $500,000. Ko's lawsuit can be heard in federal court based on diversity of citizenship.

False

Malik is a California resident. While driving to work, Malik was side-swiped by Daveed, who is also a California resident. Malik wants to sue Daveed in Hawaii because he figures if he has to go to court, it might as well be in a fun place. Hawaii is likely to have personal jurisdiction over this case.

False

Moot cases present actual controversy.

False

The impact of the U.S. Supreme Court justices is particularly marginal.

False

The power of the purse refers to the control over armed forces in the executive branch.

False

The principle of federal preemption means that federal courts can decide if they want personal or subject matter jurisdiction over a case and the state court must follow whatever they decide.

False

Jurisdiction refers to the legal power of a court to affect legal relationships.

True

Lago has never been to Illinois, has never done business in Illinois, and has no contacts with llinois. Paula sued Lago over a contract dispute. She filed suit in an Illinois state court. If Lago objects, the Illinois state court will not be able to decide the case because it does not have jurisdiction.

True

On January 1 of this year, Tova signed a contract with Shoshanna under which Tova transported a shipment of radar detectors from New York to New Jersey. On March 1, Congress enacted a statute making it a crime to enter into any contract to transport radar detectors across state lines. On June 1, Tova is indicted for violating this statute. Tova will not be convicted, because the statute is an ex post facto law.

True

Only persons who can assert that they have actually been harmed or injured have standing to sue.

True

The Constitution of the United States is a unique document for two reasons: It is the oldest written national constitution, and it was the first to include a government based on the concept of a separation of powers.

True

The U.S. Constitution, Article II, creates the executive branch of government by establishing the offices of President and Vice-President.

True

The famous landmark case, Marbury v. Madison established the power of judicial review.

True

The original Constitution was signed on September 17, 1787.

True

Tzu Ling, a private employer, pays her employees less than federal minimum wage laws allow. Jamal, who works for a different private employer (and receives a salary well above the minimum wage), files a lawsuit in federal court against Tzu Ling for violating the minimum wage laws. This lawsuit will be dismissed, because Jamal does not have standing to bring it.

True

Why are there some types of issues, such as bankruptcy, where they are handled solely and exclusively in federal court?

. This relates somewhat to the Supremacy Clause of the Constitution. There are certain powers that Congress or other parts of the federal government have exclusive authority over. Bankruptcy, federal statutes, patents, and copyright are examples. Congress has authority to regulate in these areas and has maintained that authority exclusively. Thus, these areas will be governed exclusively by federal law, which means there is federal question jurisdiction over them, and thus the federal courts handle them exclusively.

Under Section 2 of Article III, generally the federal courts may only hear and decide cases or controversies, claims brought before the court in regular proceedings to protect or enforce rights or to prevent or punish wrongs.

True

Venue refers to the power of a court to hear certain kinds of legal questions.

True

Whether the lawsuit takes place in federal court or state court, if the trial is appealed, the appellate court that hears the grievance has the same job, which is to determine whether there were any matters of law that were decided improperly at the trial level.

True

Pasada, Inc. is incorporated in Delaware with its headquarters in Michigan. Pasada registered as a foreign corporation in Hawai*i. Will Hawaiian courts have in personam jurisdiction over Pasada?

Yes, Hawaiian courts will have in personam jurisdiction over Pasada because it is registered in Hawaii as a foreign corporation.

If Congress enacted a statute that says: "Because of his numerous illegal, immoral, and offensive acts that have disrupted interstate commerce over many years, Daniel V. Davidson is hereby declared a felon. He shall be imprisoned for a term of no less than ten years, and his property shall be confiscated." This statute will be unconstitutional. Why?

It is a bill of attainder

The Constitution of the United States is a unique document for two reasons:

It is the oldest written national constitution; 2. and it was the first to include a government based on the concept of a separation of powers.

Vop, Inc. is a regional grocery store with stores located throughout the upper Midwest. While on vacation in Minnesota, Ashley slipped and fell in a Vop store. Ashley is a resident of Florida. Ashley would have liked to sue Vop in Florida, but Florida did not have in personam jurisdiction. Consequently, Ashley sued Vop in Minnesota state court. Ashley won, however, Vop failed to pay the judgment. Vop owns property in Florida. May Ashley sue in Florida state court to recover Vop's Florida property to help execute the judgment?

Yes, because the court has quasi in rem jurisdiction over Vop's Florida property.

Roderick's of Burbank, Inc., is a corporation selling lingerie. Roderick's is incorporated in the State of Delaware; it has its headquarters in the State of California; it is registered to do business in Nevada, New Jersey, and Indiana. Roderick's has repeatedly sent sales representatives into the states of Georgia, Alabama, and Mississippi. It has also, on one occasion, published newspaper advertisements in Rhode Island and Massachusetts. In which states will Roderick's be subject to in personam jurisdiction?

A defendant can be subject to the in personam jurisdiction of the state courts by: registering with the state as a foreign corporation, having a domicile in a state, doing business in a state, and coming within the terms of the long-arm statute of a state. A corporation has two domiciles: Its place of incorporation and its headquarters. Roderick's will certainly be subject to the jurisdiction of the courts of its domiciles (Delaware and California), and also in those states where it is registered to do business (Nevada, New Jersey, and Indiana). It is probably also "doing business" in the states where it is repeatedly sending sales representatives (Georgia, Alabama, and Mississippi), because those actions are more than merely soliciting offers, but instead, substantial business activities. Also, they were repeated occurrences. In the two states where it has merely run newspaper ads, Roderick's is probably not subject to personal jurisdiction. First, it cannot be said to be "doing business" in those states because it merely solicited offers once. Secondly, although a state long-arm statute might cover this action, such a statute might violate International Shoe, because running one newspaper advertisement hardly seems to be sufficient "minimum contacts."

If the 9th Circuit ruled that drinking kombucha and driving is considered driving under the influence as a matter of law, the ruling will be binding on

All district courts in the 9th circuit

Assume that the North Carolina legislature has completed an apportionment of districts for its state legislature. A plaintiff (whom we shall assume does have standing) files a lawsuit in federal court to have the apportionment declared invalid, on the grounds that it violates the Fourteenth Amendment of the U.S. Constitution. Can the court decide this case?

Yes, because the question is the consistency of state action with the federal Constitution.

Only persons who can demonstrate that they have actually been harmed or injured have _________ to sue.

standing

Marino and Adelstein live in Wayne County, Michigan. While in Wayne County, Marino and Adelstein enter into a contract for the sale of a car. Adelstein fails to fulfill his end of the bargain. Marino sues Adelstein in the Circuit Court (the trial court of general jurisdiction in Michigan) in Kalamazoo County, Michigan. Kalamazoo County is about 150 miles from Wayne County. The lawsuit alleges violation of Michigan state contract law. Assuming that Michigan has a statute which requires lawsuits involving contracts to be filed in the county where the contract was entered into, the Kalamazoo County court will probably not hear this case because:

venue is not proper in Kalamazoo County.

The process of getting approved for the Supreme Court to hear your case is called:

Certiorari

When the U.S. Supreme Court grants a writ of ______________ it means the Supreme Court wishes to hear the case.

Certiorari

______________ courts are the intermediate appellate level of court in the federal system.

Circuit

The U.S. Constitution vests federal judicial power in one Supreme Court and in such other inferior courts as Congress may create. Discuss the courts that Congress has created.

Congress has created courts of limited jurisdiction. These courts include, the court of military appeals, the court of international trade, and the tax court. Congress created the federal district courts, which are the trial courts of the federal court system. Each state has at least one district court and some states have several. All of the district courts are grouped into circuits. Currently there are 13 circuits. Each circuit has a court of appeals, which does not retry cases, but it reviews the record to determine whether the trial court made errors of law. Generally, a panel of three judges from the circuit hears appeals. Decisions of the court of appeals establish precedents for all district courts in the circuit. For the most part, decisions of the circuit courts of appeals are final, although in a few cases an appeal may be made to the U.S. Supreme Court.

Under Article I of the Constitution, list six powers given to Congress.

Congress has the power to levy and collect taxes, pay debts, and pass all laws with respect to certain enumerated powers, such as providing for the common defense and general welfare, regulating commerce, borrowing and coining money, establishing post offices and building highways, promoting science and the arts, and creating courts inferior to the U.S. Supreme Court.

The issue of a moot case was addressed in:

DeFunis v. Odegaard.

Ex post facto laws apply to both civil and criminal law.

False

Federal courts have general jurisdiction, which means that they can hear cases of any kind originating out of any law.

False

If a court has the proper in personam jurisdiction to hear a case, then it does not need to have subject matter jurisdiction.

False

If you are convicted of robbery but you still contend that the man in the video is not you, you have an automatic right to appeal this issue to the U.S. Supreme Court.

False

In a court case, a judge's role is to decide the law but a judge will never have the role of deciding fact.

False

In a jury trial, the judge decides which evidence is more believable and whether a party has produced sufficient credible evidence to win.

False

In rem jurisdiction involves jurisdiction over a particular person.

False

Felicitas works at the State Health Administration, a government agency. Felicitas was passed over for the latest promotion. She believes that she didn't receive the promotion because she is a female so she sues in federal. The court will likely

Dismiss the case due to lack of diversity jurisdiction because Felicitas' raise she would have received is far less than $75,000.

Administrative agencies also wield power under the executive branch of government, even though they are not discussed in the U.S. Constitution. The statute that creates the agency is called the ______________and it specifies the power and authority of the agency.

Enabling statute

Julio Fine Jewelry, Co. wants to file for bankruptcy under Chapter 7 of the federal bankruptcy code. Therefore, the federal bankruptcy court has _______________ jurisdiction over its case.

Exclusive

Which branch of the government has the power to make treaties?

Executive

According to the U.S. Constitution, only federal courts have the authority to hear and decide political questions.

False

An advisory opinion falls within the definition of a case or controversy, and is therefore a valid basis for a judicial proceeding.

False

Article I of the Constitution creates a Congress consisting of two houses: the Senate and the House of Commons.

False

Cases or controversies can be defined as matters that are appropriate for administrative determination.

False

Certiorari means the proper geographical area or district where a suit can be brought.

False

______________ is the name given to a variety of writs issued to bring a party before a court or judge.

Habeas corpus

Tham, Inc. was interested in buying 100,000 novelty hats from Party! Distributors. Party! Distributors forwarded a contract to Tham for its signature. The contract included the following provision: Any controversies arising out of the validity or performance of this contract will be resolved by the courts in New York. Tham is incorporated and has its headquarters in Connecticut. Tham does not conduct business in New York. Discuss the significance of the above contract provision to Tham.

If Tham signs the contract, it is consenting to having any contract disputes over the novelty hats resolved by a court in New York. Without the contract provision, Tham probably cannot be sued in New York. A corporation can be sued where it is domiciled and in all states in which it does business. Tham is domiciled in Connecticut and does not do business in the State of New York. Consequently, Tham should only sign the agreement if it is willing to defend a lawsuit in New York.

Diana Rose wishes to file a lawsuit against Benjamin for copyright infringement. Where can she file her lawsuit?

In federal court, because the federal courts have exclusive jurisdiction over copyright.

_______________ jurisdiction allows the courts to have jurisdiction over you based upon the location of property that you own.

In rem

A federal district court may hear any lawsuit in which there is a bona fide question of federal law.

True

An advisory opinion is one in which the executive branch or an interested party refers a question to the judicial branch for a nonbinding opinion.

True

An ex post facto law is a law passed after an occurrence or act, which retrospectively changes the legal consequences of such act.

True

Jane's brother John was involved in a car accident. John was terribly hurt and incurred thousands of dollars of unpaid medical bills. John, however, chose not to take any legal action against the bad driver. Instead, Jane filed suit against the bad driver who hit her brother to collect money to pay John's medical bills. When Jane appeared in court, the case was thrown out due to:

Jane's lack of standing in the case.

Jose and Katarina both live in Texas. Jose wants to sue Katarina in federal court. Assuming that the court has in personam jurisdiction over Katarina, in which case(s) below would the federal court have subject matter jurisdiction over the dispute?

Jose sues Katarina for violating federal antitrust laws, alleging $35,000 in damages.

Terrance took the driver's license exam, passed the exam, paid the fees, and fulfilled all of the requirements to obtain a driver's license, but the DMV worker would not give him a license. Terrance came back the next day and a different DMV worker did give him his license. Terrance is upset that the first DMV worker wouldn't give him the license so he sues the DMV for five hundred dollars, the amount he believes he was inconvenienced. A federal court would likely dismiss this case due to

Lack of subject matter jurisdiction

Statutes that allow courts to exercise personal jurisdiction over defendants who are not domiciliaries of the state based upon minimum contacts are called:

Long-arm statutes

____________ are those cases in which the matter has already been resolved or those cases in which any attempt at a resolution would have no practical effect.

Moot cases

If a person simply posts information on an Internet website, can a foreign jurisdiction exercise personal jurisdiction over that person?

No, because such passive websites where posting is done does no more than make information available

Cases or controversies can be defined as matters that are appropriate for judicial determination.

True

Cases that are moot or lack standing are not considered cases or controversies

True

Raven lives in Wyoming. Gaines lives in New Mexico. They negotiated a contract while they were both in Ohio. The contract contains a clause saying, "This contract shall be governed by, and interpreted according to, the laws of the State of Wyoming." While they were both in Kentucky, Gaines (allegedly) breached the contract. Raven decides to sue Gaines in New Mexico state court. Which state's law will probably be used to determine procedural law issues in this case?

New Mexico

There is a massive accident in Dallas! A big rig lost control and struck and completely damaged and totaled 10 cars. Your car was caught in the mix. Thankfully nobody was seriously injured, but there is a lot to litigate over such as who is at fault. The 10 car owners, all Dallas residents, join together as plaintiffs and sue the big rig company, which is headquartered in Houston. Can a federal court here this case?

No because while the minimum amount in controversy is likely met, the complete diversity requirement is not met.

Constitutional law can have a practical effect on one's business.

True

Courts always have in personam jurisdiction over plaintiffs because a plaintiff implicitly consents to the court's jurisdiction by filing the lawsuit.

True

The power of judicial review:

was created by the U.S. Supreme Court.

________________ service is the best type of service because it provides actual notice of a lawsuit.

Personal

If federal subject matter jurisdiction exists, even if a plaintiff files a case in state court, the defendant has the right to move the case into federal court.

True

The only court created in the U.S. Constitution is the U.S.:

Supreme Court.

Which scenario is likely one where the Supreme Court would serve as a court of original jurisdiction.

The State of Illinois bringing criminal charges against its former governor for corruption.

Explain the doctrine of judicial review and its importance to the American legal system.

The U.S. Constitution is the fundamental law of the land. As such, the Constitution must control other types and other areas of law in the nation. The Constitution designates one court, the U.S. Supreme Court, and such inferior courts as Congress creates. The Supreme Court, in Marbury v. Madison, created the power of judicial review. In the words of the Court, "It is emphatically the province and duty of the judicial department to say what the law is." The judicial department says "what the law is" by reviewing legislation, and comparing that legislation to the Constitution for consistency. If the legislation in question is not consistent with the Constitution, the Supreme Court declares that the legislation is void. This doctrine gives courts the power to declare actions unconstitutional and unenforceable. Thus, judicial review means that the Supreme Court decides the constitutionality and hence the validity of legislation. The Court also has the power to decide where and how the executive branch of government may properly exercise its powers.

The State of Minnesota passed a statute regulating cigarette advertising. SignAge, Inc. sued Minnesota alleging that the statute violates the First Amendment to the U.S. Constitution. Which statement is correct concerning the U.S. Supreme Court's power in this controversy?

The U.S. Supreme Court has the power to invalidate the law because of the supremacy clause in the U.S. Constitution

Why does the Supreme Court have original jurisdiction over certain types of cases?

There are many reasons. First the Supreme Court has original jurisdiction over cases dealing with ambassadors, certain public officials, and cases where a state is a party. Here, we are dealing with rights of individuals or entities that potentially have some amount of sovereignty of their own. An ambassador, for instance, may be exempt from some of our normal laws based upon treaties. We want the Supreme Court to hear these cases to further reduce any appearances of impropriety or bias. For instance, if California were to sue Oregon in California court, with California jury members, it will probably be a very biased trial or look very biased at the lease. Moving it to the Supreme Court takes away some of that bias fear.

"Service of process" includes the use of both actual notice and constructive notice.

True

A Minnesota state court is deciding a contract dispute between a resident of Minnesota and a resident of Wisconsin. The contract specified that Wisconsin law would govern the validity and performance of the contract. The Minnesota court will follow Minnesota's procedural law.

True

A bill of attainder is a ''legislative trial'' whereby a person is judged a felon or worse by act of the legislature and not by a court of law.

True

List the reasons why the Supreme Court is more likely to hear a case.

Whenever the highest state court declares a federal law invalid; • Whenever the highest state court validates a state law that is challenged based on a federal law; • Whenever a federal court declares a federal statute unconstitutional and the government was a party to the suit; • Whenever a federal appellate court declares a state statute invalid on the grounds that it violates federal law; and • Whenever a federal three-judge court rules in a civil case involving an equitable remedy.

Raven lives in Wyoming. Gaines lives in New Mexico. They negotiated a contract while they were both in Ohio. The contract contains a clause saying, "This contract shall be governed by, and interpreted according to, the laws of the State of Wyoming." While they were both in Kentucky, Gaines (allegedly) breached the contract. Raven decides to sue Gaines in New Mexico state court. Which state's law will probably be used to determine substantive contract law issues in this case?

Wyoming.

Atad, Inc. contracted to buy 100,000 printers from JUD Distributors. The contract, which was signed in California, included the following provision:

Yes, Atad consented to the Texas court's jurisdiction by agreeing to the contract.

Eduardo, a resident of Florida, had to go to California on business. His travel plans involved a two-hour layover in Atlanta, Georgia. While in Georgia, Eduardo was served with process. Does the Georgia court have in personam jurisdiction over Eduardo?

Yes, Eduardo was served with process while in Georgia.

In Latin, habeas corpus literally means, ''__________________."

you have the body

Jamma, Inc. is a regional discount department store with stores located throughout New England. Jamma is incoporated in Delaware with its corporate headquarters in New Hampshire. While on vacation in Maine, Yutaka slipped and fell in a Jamma store. Yutaka is a resident of North Carolina. Yutaka's medical expenses have exceeded $100,000. Yutaka intends to sue Jamma for $200,000. Can Yutaka bring the lawsuit in a federal court?

Yes; Yutaka may bring her case in federal court. Federal courts have jurisdiction under two circumstances: (1) when the case presents a federal question; and (2) when there is diversity of citizenship and the amount in controversy exceeds $75,000. Yutaka's slip-and-fall case does not raise a federal question There are no federal laws at issue. There is, however, diversity of citizenship with more than $75,000 in controversy. For diversity purposes, Jamma is considered a citizen of Delaware and New Hampshire. Yutaka is a citizen of North Carolina. Consequently, the plaintiff and defendant are from different states. In addition, the amount in controversy exceeds $75,000.

A bill of attainder is:

a legislative trial whereby a person is judged a felon or worse by an act of the legislature rather than a court of law.

In the case of DeFunis v. Odegaard, the Supreme Court stated that the question of whether a student should be admitted to a law school was

a moot case

Printers, Inc. has a potential lawsuit against Daily Suppliers Co. and has concurrent jurisdiction over the subject-matter in this case in California, Ohio, and federal court. In which jurisdiction may Printers, Inc. file suit?

a. California b. Ohio c. Federal court *d. Any one of the above

An ________________________is one in which the executive branch or an interested party refers a question to the judicial branch for a nonbinding opinion.

advisory opinion

Jurisdiction based upon property located within a state is:

in rem jurisdiction.

Judicial restraint is the:

judicial policy of refusing to hear and decide certain types of cases.

The term of office for Supreme Court Justices is:

life, as long as their behavior is "good."

A question is ____________ when it presents no actual controversy or where the issues have ceased to exist.

moot

Concurrent jurisdiction means that:

more than one court has the power to hear and decide the controversy

What is not a power of Congress?

power to make treaties

The President is ________________ of the armed forces of the United States.

the commander-in-chief

In the case of Marbury v. Madison, the U.S. Supreme Court created the doctrine of judicial review. The doctrine of judicial review established that:

the courts have the power to decide where and how the legislative and executive branches of government may properly exercise their powers.

Choice of laws is the legal doctrine used to decide:

the law that applies when there is a conflict between two or more jurisdictions

A state court always has in personam jurisdiction over:

the plaintiff.