Business Law - Chapter 2 Course Knowledge

Requests for Other Information

A re¬quest for an admission is a re¬quest that a party admit the truth of a matter. A request for documents, objects, and entry on land is a re¬quest to inspect these items. A request for a physical or mental examination will be granted only if the court decides that the need for the information outweighs the examinee's right of privacy.

THE APPEAL-Appellate Court Decisions:

Affirm - accepts the lower court's judgment. Modify - grants an alternative remedy; usually does so when they find that the lower court was correct but the remedy was not. Reverse - overturns the judgment of the lower court, concluding that the lower court was incorrect and its verdict cannot stand. Remand - returns the case to the trial court for a new trial or a limited hearing on a specific subject matter. Usually done when the court decides that an error was committed that may have accepted the outcome of the case.

PRETRIAL CONFERENCE

After discovery, a pretrial hearing is held.

Closing Arguments

After the plaintiff's challenges to the defendant's case, the attorneys present their closing arguments. The jury is instructed in the law that applies and retires to consider a verdict.

PRETRIAL MOTIONS

After the pleadings are filed, either party can file a motion for judgment on the pleadings or a motion for summary judgment. A trial might be avoided if no facts are in dispute and only questions of law are at issue. In ruling on a motion for summary judgment, a court can consider evidence outside the pleadings.

POSTTRIAL MOTIONS

After the verdict, the losing party can move for a new trial or for a judgment notwithstanding the verdict (judgment n.o.v.). If these motions are denied, he or she can appeal.

The Defendant's Answer

An answer admits or denies the allegations in the complaint and sets out any defenses and counterclaims (the plaintiff can file a reply to any counterclaim).

STANDING TO SUE

Before a person can bring a lawsuit before a court, the party must have standing. The party must have suffered a harm, or been threatened a harm, by the action about which he or she is complaining. The controversy at issue must also be justifiable (real and substantial, as opposed to hypothetical or academic).

Original and Appellate Jurisdiction

Courts of original jurisdiction are trial courts; courts of appellate jurisdiction are reviewing courts.

JURY SELECTION

1. If the right to a jury trial has been requested, the jury is selected. Prospective jurors undergo voir dire (questioning by the attorneys to determine impartiality). 2. Peremptory Challenges allow a party to challenge a certain number of potential jurors without giving a reason.

Corporate Contacts

A corporation is subject to the jurisdiction of the courts in any state in which it is incorporated, in which it has its main office, or in which it does business.

The Issue of Arbitrability

A court can consider whether the parties to an arbitration clause agreed to submit a particular dispute to arbitration. The court may also consider whether the rules and procedures that the parties agreed to are fair.

VENUE

A court that has jurisdiction may not have venue. Venue refers to the most appropriate location for a trial. Essentially, the court that tries a case should be in the geographic area in which the incident occurred or the par¬ties reside.

Depositions and Interrogatories

A deposition is a record of the answers of a party or witness to questions asked by the attorneys of both plaintiff and defendant. Interrogatories are written questions asked of a party, who responds in writing.

PROVIDERS OF ADR SERVICES

A major provider of ADR services is the American Arbitration Association (AAA). Most of the largest law firms in the nation are members of this nonprofit association. For-profit firms around the country also provide dispute-resolution services.

ARBITRATION

A more formal method of ADR is arbitration, in which a neutral third party or a panel of experts hears a dispute and renders a decision. The decision can be legally binding. Formal arbitration resembles a trial. The parties may appeal, but a court's review of an arbitration proceeding is more restricted than a review of a lower court's proceeding. An arbitrator's award will be set aside only if the arbitrator's conduct or "bad faith" substantially prejudiced the rights of a party, if the award violates public policy, or if the arbitrator exceeded his or her powers.

Motion to Dismiss

A motion to dismiss may be based on any of several grounds. A motion to dismiss for failure to state a claim on which relief can be granted alleges that according to the law, even if the facts in the complaint are true, the defendant is not liable.

Expert Witnesses

A party can present the testimony of an expert witness—one who, by virtue of education, training, skill, or experience, has scientific, technical, or other knowledge beyond that of an average person. Unlike other witnesses, experts can offer opinions and conclusions about evidence in their areas of expertise.

Appeals to the Supreme Court

A party may ask the Supreme Court to issue a writ of certiorari, but the Court may deny the petition. Denying a petition is not a decision on the merits of the case. Most petitions are denied.

Long Arm Statutes

Generally, a court's power is limited to the territorial boundaries of the state in which it is located, but in some cases, a state's long arm statute gives a court jurisdiction over a nonresident.

Mandatory Arbitration in the Employment Context

Generally, mandatory arbitration clauses in employment contracts are enforceable.

THE APPEAL-Appeal to a Higher Appellate Court

If this court is an intermediate appellate court, the losing party can file a petition for leave to appeal to a higher court. If the petition is granted, the appeal process is repeated.

Highest State Courts

In all states, there is a higher court, usually called the state supreme court. The decisions of this highest court on all questions of state law are final. If a federal constitutional issue is involved in the state supreme court's decision, the decision may be appealed to the United States Supreme Court.

THE FEDERAL COURT SYSTEM

The federal court system is also three-tiered with a level of trial courts and two levels of appellate courts, including the United States Supreme Court.

THE TRIAL

Once a jury is chosen, the trial begins with the attorneys' opening statements. Because the plaintiff has the burden of proving his or her case, the plaintiff's attorney presents the plaintiff's evidence and witnesses. The defendant's attorney challenges the evidence and cross-examines the witnesses. After the plain¬tiff's case, the defendant can move for a directed verdict (or judgment as a matter of law). If this motion is denied, the defendant's attorney presents the defendant's case.

NEGOTIATION

One form of ADR is negotiation, in which the parties attempt to settle their dispute informally, with or without attorneys. They try to reach a resolution without the involvement of a third party.

Jurisdiction over Persons or Property

Power over the person is referred to as in personam jurisdiction; power over property is referred to as in rem jurisdiction.

Jurisdiction over Subject Matter

Subject-matter jurisdiction involves limitations on the types of cases a court can hear—a court of general jurisdiction can hear virtually any type of case, except a case that is appropriate for a court of limited jurisdiction. Courts of original jurisdiction are trial courts; courts of appellate jurisdiction are reviewing courts.

The "Sliding Scale" Method

To date, the answer has generally been no. One approach is the sliding scale, according to which a passive ad is not enough on which to base jurisdiction while doing considerable business online is. Some of the controversy involves cases in which the contact is more than an ad but less than a lot of activity. A firm should attempt to comply with the laws of any jurisdiction in which it targets customers. To exclude customers, however, there are technical problems that need to be solved.

DISCOVERY

To prepare for trial, parties obtain information from each other and from witnesses through the process of discovery.

Trial Courts

Trial courts with limited jurisdiction include local municipal courts (which handle mainly traffic cases), small claims courts, and domestic relations courts. Trial courts with general jurisdiction include county, district, and superior courts. At trial, the parties may dispute the facts, what law applies, and how that law should be applied.

Petitions Granted by the Court

Typically, the Court grants petitions only in cases that at least four of the justices view as involving important constitutional questions.

U.S. Courts of Appeals

U.S. courts of appeal, or circuit courts of appeal, hear appeals from the decisions of the district courts located within their respective circuits. The decision of a court of appeals is binding on federal courts only in that circuit.

THE APPEAL-Appeals to the Supreme Court

The Supreme Court hears on average 80 - 90 cases per year. The court will issue a writ of certiorari - an order for the lower court to send all of the records for the appealed case. Situations under which the Supreme Court will agree to hear a case usually fall under four cases: a. The case presents a substantial federal question that the court has not yet addressed. b. Multiple circuit courts have decided the issue in different ways. c. A state court of last resort has ruled that a federal law is invalid or has upheld a state law that may violate federal law. d. A federal court has ruled that an act of Congress is unconstitutional.

Alternative Dispute Resolution

The advantage of alternative dispute resolution (ADR) is its flexibility. Normally, the parties them¬selves can control how the dispute will be settled, what procedures will be used, and whether the decision reached (either by themselves or by a neutral third party) will be legally binding or nonbinding. Approximately 95 percent of cases are settled before trial through some form of ADR.

JURISDICTION IN CYBERSPACE

The basic question is whether there are sufficient minimum contacts in a jurisdiction if the only connection to it is an ad on the Web originating from a remote location

Following a State Court Case

The common law system is an adversary system. Each adversary is entitled to present his or her version of the facts through an advocate. An attorney is the client's advocate. A judge assumes an unbiased role, but this role is not entirely passive. A judge is responsible for the appropriate application of the law and does not have to accept the adversaries' arguments. There are rules of procedure to govern the way in which disputes are handled in courts. These rules differ from court to court, but there are similarities.

THE PLEADINGS

The complaint (or petition or declaration) is filed with the clerk of the trial court. It contains a statement alleging jurisdictional facts; a statement of facts entitling the complainant to re¬lief; and a statement asking for a specific remedy. A copy of the complaint and a summons is served on the party against whom the complaint is made. The summons notifies the defendant of his or her options—file a motion to dismiss, file an answer, or default.

The United States Supreme Court

The court at the top of the three federal tiers is the United States Supreme Court to which further appeal is not mandatory but may be possible.

THE APPEAL-Appellate Review

The court reviews these records, the attorneys present oral arguments. The court only reviews the records and procedures; they not evaluate the evidence or the judgment rendered by the judge/jury.

Arbitration Clauses and Statutes

Virtually any commercial matter can be submitted to arbitration. Often, parties include an arbitration clause in a contract. Parties can also agree to arbitrate a dispute after it arises. Most states have statutes (often based on the Uniform Arbitration Act of 1955) under which arbitration clauses are enforced, and some state statutes compel arbitration of certain types of disputes. At the federal level, the Federal Arbitration Act (FAA), enacted in 1925, en¬forces arbitration clauses in contracts involving maritime activity and interstate commerce.

Exclusive versus Concurrent Jurisdiction

When both state and federal courts have the power to hear a case, concurrent jurisdiction exists. When a case can be heard only in federal courts or only in state courts, exclusive jurisdiction exists. Federal courts have exclusive jurisdiction in cases involving federal crimes, bankruptcy, patents, and copyrights; in suits against the United States; and in some areas of admiralty law. States have exclusive jurisdiction in certain subject matters also—for example, in divorce and in adoptions.

THE APPEAL-Filing the Appeal

Either party may file an appeal to the judge's decisions on postrial motions or on her/his final judgment. Appeal courts reverse only 1 out of 10 trial court decisions. To appeal, the appellant files the record on appeal, which contains the pleadings, a trial transcript, copies of the exhibits, the judge's rulings, arguments of counsel, jury instructions, the verdict, postrial motions, and the judgment order from the case below. The appellant files a brief, which contains statements of facts, issues, applicable law, and grounds for reversal. The appellee files an answering brief.

Jurisdiction of the Federal Courts

Federal Questions A suit can be brought in a federal court whenever it involves a question arising under the Constitution, a treaty, or a federal law. b. Diversity of Citizenship A suit can be brought in a federal court whenever it involves citizens of different states. Congress has set an additional requirement—the amount in controversy must be more than $75,000. For diversity-of-citizenship purposes, a corporation is a citizen of the state in which it is incorporated and of the state in which it has its principal place of business.

U.S. District Courts

Federal trial courts of general jurisdiction are district courts. Federal trial courts of limited jurisdiction include U.S. Tax Courts and U.S. Bankruptcy Courts. Federal district courts have original jurisdiction in federal matters. Some administrative agencies with judicial power also have original jurisdiction.

OTHER TYPES OF ADR

In early neutral case evaluation, the parties select a neutral third party (generally an ex¬pert in the subject of the dispute) to evaluate their positions. This forms the basis for negotiations. • In a mini-trial, each party's attorney argues the party's case. Typically, a neutral third party (often an expert in the disputed subject) acts as an adviser. If the parties fail to reach an agreement, the adviser renders an opinion as to how a court would likely decide the issue. In binding mediation, the mediator can make a legally binding decision. • In mediation-arbitration (med-arb), if mediation is unsuccessful, arbitration is applied. • A form of ADR used in the federal system is the summary jury trial (SJT). The litigants present their arguments and evidence, and a jury renders a nonbinding verdict. Mandatory negotiations follow.

MEDIATION

In mediation, the parties attempt to negotiate an agreement with the assistance of a neutral third party, a mediator. Mediation is essentially a form of "assisted negotiation." The mediator takes an active role in resolving the dispute but does not make a decision on the matter being disputed.

Appellate, or Reviewing, Courts

In most states, after a case is tried, there is a right to at least one appeal. Few cases are re¬tried on appeal. An appellate court examines the record of a case, looking at questions of law and procedure for errors by the court below. In about half of the states, there is an intermediate level of appellate courts.

Electronic Discovery

Information stored electronically, such as e-mail and other computer data, can be the object of a discovery request. This may include data that was not intentionally saved by a user, such as concealed notes and earlier versions. The Federal Rules of Civil Procedure deal with the preservation, retrieval, and production of electronic data.

JURISDICTION

Jurisdiction is the power to hear and decide a case. Before a court can hear a case, it must have jurisdiction over both the person against whom the suit is brought or the property involved in the suit and the subject matter of the case.

STATE COURT SYSTEMS

Many state court systems have several tiers—a level of trial courts and two levels of appellate courts.

International Jurisdictional Issues

The minimum-contact standard can apply in an international context. As in cyberspace, a firm should attempt to comply with the laws of any jurisdiction in which it targets customers.