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BADM 350- Lesson 2: The courts and alternative dispute resol
Transcript of BADM 350- Lesson 2: The courts and alternative dispute resol
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D. International jurisdiction-based on min. contacts as well, I.E., businesses in U.S. offering products for sale in foreign countries must comply with laws of any juris./nation in which it sells; E.G., yahoo's nazi memorabilia in France.
G. Pretrial procedures - Litigation:
APPLICATION: The FAA preempts all otherwise inconsistent state laws under the supremacy clause of the U.S. Const
CONCLUSION: The appellate Tx. Ct. reversed the trial Ct. holding the FAA preempts the Tx Statute.
1. Explain Fed. and State Judicial Process
2. Define who the parties are, in the judicial system
3. What is jurisdiction and how is it exercised
4. How are the Fed. and state judicial systems structured
5. How does ADR work?
A. General Judicial Procedure:
1. 53 Court systems, 50 states, 1 DC, 1 PR, 1 Fed. system
2. Every business will face a court suit sometime in their existence
3. Power of judicial review: if two laws conflict, it is the duty of the judicial branch to decide the issues in conflict.
4. The judicial branch determines constitutionality of laws, and serves as a check in our check and balance system on the other two branches of Govt.
What does check and balance mean?
B. What does Juris mean?
What does diction mean?
C. What is venue and jurisdiction?
- Site/location of a case or hearing and authority to hear and decide a case
1. Types of jurisdiction - Fed. and State:
A. In Personam - Authority over persons or businesses based on:
1. Ownership of property in state - e.g. land or a store
2. Voluntary Juris. - Parties agree to it - e.g. divorce
3. Minimum contracts rule in state:
A. State long-arm statute: State law authorizing state to take jurisdiction over out-of-state defendants who meet minimum contacts rule, e.g., Land's End, Intermountain Express
B. Are corporations legal persons?
C. Corp. Incorporated in state, or doing business in state, or
D. Advertises or sells its products within a state,
E. Or places its goods into stream of commerce with intent that goods be sold in state
Introduce Firac: Facts, issue, rule, application, conclusion - see appendix A
Case: Southern prestige industries INC. V. Independence plating Corp., N.C. CT. of appeals (2010)
FACTS: Independence plating is a N.J. Corp. that provides metal-coating devices. It is engaged in 32 purchase orders from southern prestige industries, INC., of N.C. with invoices totaling $21,018.70. While they engage in these transactions over the period of a year, southern prestige eventually filed an action in N.C. alleging defects in the metal-plating process carried out by independence which filed a motion to dismiss for lack of personal jurisdiction.
ISSUE: Is there sufficient minimum contracts by independence plating with southern prestige to establish in personem jurisdiction in North Carolina?
RULE OF LAW: Minimum contacts are determined by:
1. The quantity of contacts
2. The nature and quality of contacts
3. The source and connection of the cause of action to the contacts
4. The interest of the forum state
5. The convenience to the parties
APPLICATION: Based on the number of transactions, amount invoiced, and because the machined parts were shipped from N.C. to defendant in N.J. and shipped back to N.C. were defective, minimum contacts are established
CONCLUSION: Trial court affirmed. Defendant purposely availed itself of the benefits of doing business in N.C. and should reasonably anticipate being haled into a N.C. Court
B. General Vs. Limited jurisdiction: courts of general jurisdiction exercise authority over array of legal issues whereas courts of limited juris. exercise authority over a specific legal topic, E.G., probate courts, bankruptcy courts.
C. Concurrent V. Exclusive jurisdiction - Concurrent is when both state and Fed. CTS have juris; exclusive is when only one has juris., E.G., S.D. Law that out of state corps. cannot own farms.
D. Cyberspace juris. - State and Fed. CTS. identified 3 types of internet business contacts:
1. Substantial business conducted over the internet (W/K's, Sales, ETC.) Juris. Will attach;
2. Some interactivity through a website may/may not provide juris. depending on facts; E.G., paypal;
3. Passive advertising will not attach juris., E.G., website
CASE: Gucci America, INC. V. Wang Huoqing, U.S. Dist. CT., B. Calif. (2011) FIRAC!
FACTS: Gucci has 21 federally registered trademarks operates a number of boutiques, some located in Calif. Gucci discovered that Wang Huoquing operates a number of interactice websites in PRC selling counterfeit goods with the Gucci label. Gucci filed a trademark action against Wang in Fed. Dist. Ct. in Calif. Notifying Wang via email of the suit. Wang did not appear in court and default order was requested by Gucci.
ISSUE: Have sufficient minimum contacts been established by Wang in Calif. To warrant exercise of jurisdiction?
RULE: To establish minimum contacts:
1. The defendant must do some act or consummate some transaction with the forum or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum
2. The claim must be one that arises from the defendant's activity in the forum
3. Exercise of jurisdiction must be reasonable
APPLICATION: Gucci's agent, a hired private investigator purchased one item from defendant and proof of this sale was presented by plaintiff Gucci. Evidence was also presented in the form of copies of web pages showing that the websites are interactive, not passive advertising.
1. Trial courts
- Place where case begins - Plaintiffs-, Allege violation of some right by defendant, party named in suit for recovery
A. Jury - choice of defendant
B. Single Judge
CONCLUSION: Such commercial activity in the forum amounts of a purposeful availment of the privilege of conducting activities within the forum. Personal jurisdiction is found and a default judgment was entered against Wang.
How does the plaintiff collect/enforce the judgment against defendant Wang?
E. What is standing to sue?
F. What is justiciable controversy
To have standing, plaintiff must have a legally protected and tangible interest at stake in the litigation, I.E., injured party
A controversy that is real and substantial, not hypothetical
C. State court judicial system:
i. State trial courts - superior, circuit, district or county Cts.; in S.D. they are circuit cts.
ii. Some states have inferior cts that handle specialized issues - small claims (in SD up to $4000), justice of the peace (SD-magistrate cts), traffic cts, probate cts
iii. State appellate cts (none in SD or ND)
iv. State Sup. cts (SD & ND hear all appeals from circuit cts)
D. Federal courts:
1. Fed. Dist. Ct. is the general trial court
2. Subject matter jurisdiction - Auth. to hear what types of cases:
A. When the U.S. Govt. is a party
B. When there is a federal question of Fed. Law, E.G., statutes, U.S. Const, or Fed. Crimes
C. Diversity of citizenship - when plaintiff and defendant are from different state AND damage claims in excess of $75,000
3. There is no Fed. common law, so Fed Cts look to state law in civil actions, E.G., contract law or torts law in Badlands National Park
4. Opinions found in Fed. Supp., 135 F. Supp .2D 690 (E.D.Mich. 2001)
E. Fed districts - at least one per state and D.C. and P.R.
F. Specialized courts -
1. U.S. Tax ct.
2. U.S. Bankruptcy Cts
3. Military courts-courts-martial, U.S. court of appeals for armed forces
4. U.S. Court of international trade
5. U.S. Court of appeals:
A. 13 Circuits that contain various dist. cts. (P.42)
- note S.D. is in the 8th Cir. in St. Louis, MO.
B. Panels of 3 judges hear appeals
C. In special cases entire ct. may hear a single case, called an en banc hearing
D. Opinions found in federal reporter, 239 F.3D 695 (9th Cir. 2001)
6. Supreme Ct. of U.S.:
A. Discretionary review - Writs of certiorari, rule of 4
B. Hears appeals from cts. of appeals
And appeals from state Sup. Cts. involving Fed. Law or U.S. Const.
States supreme in interpretation of their own consts. and statutes, unless it interferes w/ a U.S. Const. right, e.g., abortion
C. Original jurisdiction only in:
1. Disputes between/among states
2. Charges against ambassadors and foreign consuls
D. Opinions found in Sup. Ct Reporter, cited as 531 U.S. 98 (2000)
1. Civil lawsuits initiated by people -
A. Based on a violation of a claim of right
B. Lawsuits are EFFORTS BY INDIVIDUALS to enforce rights
C. Pleadings - complaint is a petition to a court:
1. Filed within time limit from cause of action (Statute of Lims)-
A. Failure to file within stat/lims bars further action regardless of gravity of claim
B. Stat/lims vary from state to state; Fed. Stat/lims is 2 years
2. Complaint is general statement of claim: Declaration of War!
A. Describing actions leading to claim
B. Money Damages sought or
C. Equitable remedies sought, E.G., specific perf. or injunction
D. Must establish jurisdiction and venue of Ct. in which filed
3. Class actions are often filed against businesses for:
A. Plaintiffs to pool costs
B. Defendant need try case only once
C. Plaintiffs must have same claim; e.g., BP Oil Spill
D. Summons accompanies complaint and is served by process server on defendant. It explains:
1. Defendant's rights
2. Where to defend
3. How long to respond to complaint w/ answer 20-30 days
4. Effect of not defending the suit
5. Statutory agents can accept for corp.
6. Leaving summons and complaint at residence is often acceptable; process server completes affidavit testifying to service of process
A. Second part of pleadings process
B. Opportunity to answer plaintiff's claim
C. Can make counterclaims
D. Failure to answer within prescribed time, usually 20-30 days, results in default
E. Answer content:
i. Can admit allegations in complaint are true
ii. Deny allegations
iii. Can counterclaim, sue plaintiff for damages
G. What are motions?
They are formal requests for court action.
A. For judgment on the pleadings- even if everything in complaint is true, no cause of actions exists, E.G., sports injury
B. To dismiss - Can be filed at any time, can be based on lack of jurisdiction or stat/lims
C. For summary judgement:
D. Default Judgment:
i. Where no factual issues in dispute
ii. used to resolve questions of law when parties agree on facts, E.G., combine in accident with car
Results when one party fails to respond or appear in case
H. Lawsuit stages:
a. Discovery - process of gathering evidence for trial - Fed. rules and most state rules require timely disclosure of all evidence
b. Forms of discovery:
i. Request for admissions - Request by one party to another to admit certain facts are true to eliminate proof at trial
ii. Depositions-Statements taken under oath of Wits. at prior informal proceeding; helps predict testimony at trial.
iii. Limitations on discovery-Evidence must be relevant, cannot discover attorney work-product
iv. Requests for production of documents, E.G., Email-Microsoft, do not destroy! E.G., Enron-Arthur Andersen
v. Requests for admission of truth of matters related to trial.
vi. Refusal or destruction thereof may constitute crim. obstruction of justice
vii. Requests for examination-physical or mental exam by independent examiner
viii. Pretrial conference
i. can be judge or jury trial-Defendant's choicel jury trial normally in cases only over $20
ii. Jurors selected from voting and drivers' license lists
iii. Voir Dire - Ask questions of jurors background, bias, other info that may disqualify them from sitting
1. Can be challenged for cause
2. Peremptory - Each side gets a set number (2)
iv. Opening statement - Not evidence, merely summary of what each side hopes to prove and how they fit to prove necessary elements.
v. Plaintiff's case:
1. Present witnesses - direct examination
2. Defendant cross examines each one after direct testimony
3. Post-Plaintiff's case, motion for a directed verdict, plaintiff must have proven evidence addressing all elements of offense, jury excused.
vi. Defendant's case: Same in Reverse:
1. Defendant Directly examines wits
2. Plaintiff cross examines
H. Closing arguments
-Each side summarizes what it believes it has shown, not evidence
I. Jury instructions
-Judge explains elements of law necessary to prove allegations claimed; lawyers have input in helping judge draft, written elements taken by jury with them to deliberate
J. Jury Verdict
-Not all states require unanimous verdict, majority most often, hung jury means they cannot decide
K. Motions post-trial verdict-
1. Motion for judgment not withstanding the verdict - Mass. Babysitter Case.
2. Motion for a new trial if after looking at all evidence judge finds jury in error, but does not want to grant judgment for other side.
L. Enforcing a judgment:
Writ of execution - Sought when judgment unpaid and party seeks to attach nonexempt party's assets to satisfy judgment.
M. Alternative dispute resolution (ADR):
1. What is ADR?
-Any procedure or device for resolving disputes outside the judicial process.
Why would anyone want ADR instead of litigation?
1. Less formality
2. Moves faster than jury trial
3. Handled privately
4. Expert handles cases
5. May be LESS COSTLY than litigation
a. Arbitration is oldest form of ADR:
i. Binding - Decision of arbitrator is final; may not litigate.
ii. Nonbinding - issue may be litigated.
iii. Can be contained in contract or
iv. Parties may later agree to use it to settle dispute.
v. Advantages: Speed and cost
1. American arbitration assn. provides most arbitrators; parties must agree
2. Arbitrator may not have legal training and may not understand legal points
3. Rules of evidence do not apply
B. Federal arbitration act of 1925 passed to curb judicial declaration of arbitration clauses as being invalid; e.g., stock brokerage accounts
-Designed to encourage arbitration except when specifically prohibited
C. ADR Process:
1. Parties may agree when dispute arises or it may be part of K; one party may sue in court to compel arbitration IAW K;
A. AAA can handle proceedings for a fee;
B. Submission is when the demand for arbitration is filed
C. Arbitrator is selected-List sent to parties, they can object within limits;
D. Hearing preparation - Parties gather evidence;
E. Case presented in informal hearing;
F. Arbitrator has 30 days from close of hearing to make decision;
G. Award is made in writing
CASE: Cleveland construction, INC. V. Levco construction, INC., TX. Ct. Appeals (2012)
FACTS: Cleveland construction subcontracted with Levco to perform excavation and grading. Their contract contained an arbitration provision requiring arbitration in Ohio if a dispute arose. When a dispute arose between the parties, Levco filed suit in a Tex. St. Ct. seeking to void this provision under Tx. state law that provided a party may void a contractual provision requiring arbitration outside Texas. A Tx. state ct. granted an emergency motion preventing arbitration.
ISSUE: Does the Fed. Arbitration Act (FAA) compelling arbitration in Ohio supercede the Tex. statute?
RULE: The FAA declares written provisions for arbitration valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
2. Mediation: What is it?
A. Parties use a mediator to negotiate and communicate;
B. Used in international transactions;
C. Mediator can offer suggestions for solution;
D. Not binding
A. Small-scale trial
B. Judge/Jury makes advisory decision
C. Can motivate parties to settle even though results not binding
4.International disputes: International chamber of commerce operated ADR since 1922, Paris, France
A. World bank - Center for settlement of investment disputes
B. Parties free in K to choose which courts or ADR will hear disputes; Standard K Provision
5. Text lists numerous online entities that will assist in resolving disputes for free!
Getting to YES!
e.g., Bush v. Gore