Business Law Chapter Two

Standing can be broken down into three elements:

1. Harm 2. Causation 3. Remedy

A court will set aside an award only in the event of one of the following:

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 The arbitrator exceeded her or his powers -- that is, arbitrated issues that the parties did not agree to submit to arbitration.

in both federal and the state court system, a court's subject-matter jurisdiction can be limited by any of the following (4)

1. the subject of the lawsuit 2. the sum in controversy 3. whether the case involves a felony or misdemeanor 4. whether the proceeding is a trial or an appeal

State courts may include

1. trial courts of limited jurisdiction 2. trial courts of general jurisdiction 3. appellate courts 4. states highest court (often called state supreme court)

The sliding-scale standard identifies three types of Internet business contacts and outlines the following rules for jurisdiction:

1. when the defendant conducts substantial business over the internet, jurisdiction is proper 2. when there is some interactivity through a web site, jurisdiction may be proper, depending on the circumstances 3. when a defendant merely engages in passive advertising on the web, jurisdiction is never proper

How many court systems are in the US?

52

Diversity of Citizenship

A basis for federal court jurisdiction over a lawsuit between citizens of different states and countries.

U.S. Court of Appeals

A court within the second tier of the three-tiered federal court system, to which decisions of the district courts and federal agencies may be appealed for review. Referred to as US circuit courts of appeals decisions of the circuit courts of appeals are binding on al courts within the circuit court's jurisdiction

Arbitrability

A court's determination on whether an issue must be resolved through arbitration.

Bankruptcy Court

A federal court of limited jurisdiction that handles only bankruptcy proceedings, which are governed by federal bankruptcy law.

Federal Question

A question that has to do with the U.S. Constitution, acts of Congress, or treaties. A federal question provides a basis for federal jurisdiction.

probate courts

A state court of limited jurisdiction that conducts proceedings relating to the settlement of a deceased person's estate.

long arm statute

A state statute that permits a state to exercise jurisdiction over nonresident defendants. courts use long-arm statutes based on "minimum contacts" with state. this means defendant had some connection with forum state. the defendant must have had sufficient contacts, or minimum contacts, with that state to justify the jurisdiction

writ of certiorari (cert)

An order by a higher court directing a lower court to send up a case for review

Providers of ADR Services

Both government agencies and private organizations provide ADR services A major provider is the American Arbitration Association (AAA)

Gucci America, Inc. v. Wang Huoqing (2011)

Gucci filed a trademark infringement lawsuit against Wang Huoqing in a federal district court seeking damages and an injunction to prevent further infringement Wang did not appear for court Gucci asked to file a default judgement the court had to determine whether it had personal jurisdiction based on the internet sale Verdict: they did have personal jurisdiction and could charge him

trial courts (federal court)

The Federal district court is the equivalent of the state trial court. Federal courts of limited jurisdiction include the bankruptcy court and others

Jurisdiction

The authority of a court to hear a case

appellate jurisdiction

The authority of a court to review decisions made by lower courts

Cyberspace Jurisdiction

The courts have developed a sliding-scale standard to use in determining when jurisdiction over a Web site owner or operator in another state is proper.

litigation

The process of resolving a dispute through the court system.

Online Dispute Resolution (ODR)

The resolution of disputes with the assistance of organizations that offer dispute-resolution services via the Internet.

Federal Court System

The three-tiered structure of federal courts, comprising U.S. district courts (trial courts of general jurisdiction) and various courts of limited jurisdiction, U.S. courts of appeal (intermediate courts of appeals), and the U.S. Supreme Court.

Forum-Selection and Choice-of-Law Clauses

These clauses designate the jurisdiction (court or country) where any dispute arising under the contract will be litigated and which nation's law will be applied

sliding scale standard

To determine when they can exercise personal jurisdiction over an out-of-state defendant based on the defendant's Web activities.

diversity jurisdiction for corporations

a corporation is a citizen of both the state in which it is incorporated and the state in which its principle place of business is located

Mediation

a neutral third party (not necessarily a lawyer) acts as a mediator and works with both sides in the dispute to facilitate a resolution Who decides the resolution? The parties, but the mediator may suggest or propose a resolution

When concurrent jurisdiction exists

a party may choose to bring a suit in either a federal court or a state court (many factors can affect a party's decision)

court of limited jurisdiction

a specialty court that can hear only cases of a certain type

To bring a case before a supreme court, a party requests the Court to issue

a writ of certiorari (cert) (most petitions are denied)

a state's highest court has jurisdictional authority over

all residents within the state

arbitration clauses

almost any commercial matter can be submitted to arbitration usually this is done with an arbitration clause in a contract

Arbitration

an arbitrator hears a dispute and imposes a resolution on the parties usually the parties in arbitration agree that the third party's decision will be LEGALLY BINDING, but the parties can also agree to NONBINDING arbitrations

Arbitrator's Decision is called...

an award

Federal Court Judges

appointed by the president and confirmed by the senate lifetime appointments

concurrent jurisdiction

authority shared by both federal and state courts to hear a case

court of general jurisdiction

can decide cases involving a broad array of issues

venue

concerned with the most appropriate location for a trial

trial courts

courts of original jurisdiction in which actions are initiated (State Courts - courts of general jurisdiction can hear any case that has not been specifically designated for another court. Courts of limited jurisdiction include, among others, domestic relations courts, probate courts, municipal courts, and small claims courts.) (Federal courts - The federal district court is the equivalent of the state trial court. Federal courts of limited jurisdiction include the bankruptcy courts and others)

Trial Courts (State Court)

couts of general jurisdiction can hear any case that has not been specifically designated for another court. Courts of limited jurisdiction include, among others, domestic relations courts, probate courts, municipal courts, and small claims courts

Question of fact vs. question of law

deals with what really happened in regard to the dispute being tried (such as whether a party actually burned a flag) vs. a question that concerns the application or the interpretation of the law (such as whether flag-burning is a form of speech protected by the 1st Amendment to the Constitution.

(other types of ADR) mini-trial

each party's attorney briefly argues the party's case before the other party and a panel of representatives from each side who have the authority to settle the dispute. If the parties fail to reach an agreement, the adviser renders an opinion as to how a court would likely decide the issue.

(other types of ADR) Early neutral case evaluation

early neutral case evaluation - the parties select a neutral third party (usually an expert in the subject matter) and explain their position.

Judicial Review

enables the judicial branch to act as a check on the other two branches of government (both federal and state courts)

whenever the plaintiff's cause of action is based (all or in part) by the constitution, a treaty, or a federal law, a _____ arises

federal question

federal court jurisdiction

federal question cases and diversity of citizenship cases

international dispute resolution

forum selection and choice-of-law clauses in contracts govern the transaction arbitration clauses are generally incorporated into international contracts

Rule of four (US supreme court)

four justices must want to take the case

Arbitration Clauses

frequently parties include an arbitration clause in a contract specifying that any dispute arising under the contract will be resolved through arbitration rather than through the court system parties can also agree to arbitrate a dispute after it arises

mandatory arbitration in the employment context

generally clauses are enforceable Gilmer decision Arbitrators do not have to follow precedent or rules of procedure or evidence

courts apply the minimum-contacts test to determine

if they can exercise jurisdiction over out-of-state corporations

corporate contacts: when are corporations normally subject to personal jurisdiction

in the state in which they are incorporated, have their principal office, and/or are doing business

a corporation normally is subject to personal jurisdiction in the state in which...

it is incorporated, has its principal office, and/or is doing business

Keys to the Courthouse (the big three)

jurisdiction standing venue

Before a lawsuit can be brought before a court, certain requirements must be met. These requirements relate to:

jurisdiction, venue, and standing to sue

federal courts have

limited jurisdiction

Arbitration Statutes

most states have statutes under which arbitration clauses will be enforced

ADR (Alternative Dispute Resolution)

negotiation, mediation, arbitration

Johnson v. Oxy USA, Inc.

neither the administrative agency that initially ruled on the dispute nor the trial court to which the agency's decision was appealed made a finding on a crucial question of fact (what really happened in regard to the dispute) What should the appellate court do?

Are federal courts superior to state courts?

no

issue of arbitrability

no party will be compelled to arbitration unless a court finds the party CONSENTED, and that they are fair to both parties

exclusive jurisdiction

only one court (state or federal) has the power (jurisdiction) to hear the case

what happens in the trial courts

opening and closing arguments juries selected evidence is introduced witnesses are examined and cross-examined verdicts and judgements are rendered usually have jurisdiction over both civil and criminal cases

negotiation

parties meet informally with or without their attorneys and attempt to agree on a resolution (simplest and least expensive ADR)

(other types of ADR) summary jury trials

parties present their arguments and evidence and the jury renders a verdict their verdict is not binding, but it acts as a guide to both sides in reaching an agreement

before any court can hear a case, it must have jurisdiction over the _____ or over the _____

person (or company) against whom the suit is brought or the property involved in the suit

jurisdiction over persons

power of a court to compel the presence of the parties (including corporations) to a dispute to appear before the court and litigate (court usually has in personam jurisdiction over residents within the jurisdiction)

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)

Subject Matter Jurisdiction

refers to the limitations on the types of cases a court can hear (usually determined by federal or state statutes) general and limited jurisdiction

Arbitration Clauses

require a neutral third party to decide any contrac

disadvantages of arbitration

results unpredictable because arbitrators are not required to follow precedent or rules of procedure or evidence no written opinions generally, no discovery costly for small parties

before a party can bring a lawsuit to court, that party must have ________

standing to sue

original jurisdiction

the authority to hear cases for the first time (usually trial courts/district courts)

Minimum Contacts

the defendant must have sufficient connection to the state for the judge to conclude that it is fair for the state to exercise power over the defendant (relevant in long arm statutes)

U.S. District Courts

the equivalent of a state trial court of general jurisdiction they have original jurisdiction in matters involving a federal question and concurrent jurisdiction with state courts when diversity jurisdiction exists (Federal cases usually originate here) Every state has at least one

The body of American law includes:

the federal and state constitutions, statutes passed by legislative bodies, administrative law, and the case decisions and legal principles that form the common law.

U.S. Supreme Court

the highest court of the United States; it sits at the top of the federal court system Can review any case decided by any of the federal courts of appeals Has appellate authority over cases involving federal questions that have been decided in the state courts

supreme courts

the highest state court ("court of last resort") is that state's supreme court, although it may be called by some other name

the most common type of diversity jurisdiction requires BOTH of the following:

the plaintiff and defendant must be residents of different states the dollar amount in controversy must exceed $75,000

The concept of venue reflects:

the policy that a court trying a case should be in the geographic neighborhood where the incident occurred or where the parties reside

in rem jurisdiction (jurisdiction over the thing)

the power of a court over the property or status of an out-of-state defendant when that property or status is within the court's jurisdiction area

in personam jurisdiction (personal jurisdiction)

the power of the court over persons (or business) within a geographical area

in a case based on diversity of citizenship, a federal court will apply ________

the relevant state law

standing to sue

the requirement that plaintiffs have a serious interest in a case, which depends on whether they have sustained or are likely to sustain a direct and substantial injury from a party or an action of government (can be on behalf of another person as well... like for a minor)

federal question cases

the rights or obligations of a party are created or defined by some federal law (example: title nine)

the power of judicial review comes from

the supreme court's decision in Marbury v. Madison

essential role of the judiciary

to interpret the laws and apply them to specific situations

Highest State Court

usually called the supreme court but may be designated by some other name The decisions of each state's highest court on all questions of state law are final. Only when issues of FEDERAL LAW are involved can the US Supreme Court overrule a decision made by a state's highest court

When does the supreme court grant cert?

usually when cases raise important constitutional questions or when the lower courts have issued conflicting decisions on a significant issue

federal courts have subject-matter jurisdiction in two cases:

when a federal question is involved and when there is diversity of citizenship

Trial Courts/Courts of Original Jurisdiction

"courts of record" have the power to hear and decide cases when they first enter the legal system

Intermediate Appellate Courts

(Reviewing courts) courts that examine allegations concerning uncorrected errors that occurred during trials; usually called courts of appeals in state and federal court systems Usually do not have original jurisdiction about 3/4 of the states have these