BUSINESS LAW TODAY Essentials 9th Ed Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A Jentz - University of Texas at Austin, Emeritus Chapter Courts and Alternative Dispute Resolution © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Learning Objectives      What is judicial review? How and when was the power of judicial review established? Before a court can hear a case, it must have jurisdiction Over what must it have jurisdiction? How are the courts applying traditional jurisdictional concepts to cases involving Internet transactions? What is the difference between a trial court and an appellate court? What is discovery, and how does electronic discovery differ? What are three alternative methods of resolving disputes? © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use The Judiciary’s Role in American Government  Judicial Review was established by the U.S Supreme Court in Marbury v Madison (1803) where Chief Justice Marshall wrote: • “It is emphatically the province and duty of the judiciary to say what the law is….” © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Jurisdiction  Jurisdiction: “Juris” (law) “diction” (to speak) is the power of a court to hear a dispute and to “speak the law” into a controversy and render a verdict that is legally binding on the parties to the dispute © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Jurisdiction Over Persons  Also called “in personam” jurisdiction  Power of a court to compel the presence of the parties (including corporations) to a dispute to appear before the court and litigate © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Jurisdiction Over Property  Also called “in rem” jurisdiction  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 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Long-Arm Statutes  Courts use long-arm statutes for nonresident parties based on “minimum contacts” with state See International Shoe Co v State of Washington (1945)  “Corporate Contacts”: usually jurisdiction in the state it was incorporated, principal place of business, places goods in stream of commerce or actively advertises © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Jurisdiction over Subject Matter  This is a limitation on the types of cases a court can hear, usually determined by federal or state statutes  For example, bankruptcy, family or criminal cases  General (unlimited) jurisdiction  Limited jurisdiction © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Original and Appellate Jurisdiction  Courts of original jurisdiction is where the case started (trial)  Courts of appellate jurisdiction have the power to hear an appeal from another court © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use Jurisdiction of Federal Courts  “Federal Question” cases in which the rights or obligations of a party are created or defined by some federal law  “Diversity” cases where: The parties are not from the same state, and The amount in controversy is greater than $75,000 © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 10 Following a State Court Case  Pleadings Plaintiff’s Complaint Service and Summons Defendant’s Answer /Motion to Dismiss  Pre-Trial Motions Motion for Judgment on the Pleadings Motion for Summary Judgment © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 21 Following a State Court Case  Discovery Depositions and Interrogatories Requests for Documents Requests for Admission Electronic Discovery  Pre-Trial Conference  Jury Selection (Voir Dire) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 22 Following a State Court Case  At the Trial  Opening arguments  Plaintiff’s Case in Chief • Defense cross-examines Plaintiff’s witnesses  Defense Case in Chief • Plaintiff cross-examines Defense witnesses  Closing Arguments  Motion for a Directed Verdict  Post-Trial Motions  Motion for J.N.O.V  Motion for New Trial © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 23 Following a State Court Case  The Appeal  Filing the Appeal • Briefs pointing out reversible error that require reversal of the trial court’s verdict  Appellate Review • Courts not consider new evidence Only consider briefs and evidence presented at trial  CASE 3.2 Evans v Eaton Corp (2008) Appellate court must give deference to findings of fact made by trial court even if a “better decision-maker” should have been used © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 24 Courts Adapt to the Online World     Electronic Filing Courts Online (websites, court dockets) Cyber Courts and Online Dispute Resolution (Michigan legislation) Online Dispute Resolution (ODR)  Negotiation  Mediation  Arbitration (employment contracts) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 25 Alternative Dispute Resolution  Trials are a means of dispute resolution that are very expensive and sometimes take many months to resolve  There are “alternative dispute resolution” (ADR) methods to resolve disputes that are inexpensive, relatively quick and leave more control with the parties involved © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 26 ADR  ADR describes any procedure or device for resolving disputes other than the traditional judicial process  Unless court-ordered, there is no record which is an important factor in commercial litigation due to trade secrets  Most common: negotiation, mediation, arbitration © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 27 Negotiation  Less than 10% of cases reach trial  Negotiation is informal discussion of the parties, sometimes without attorneys, where differences are aired with the goal of coming to a “meeting of the minds” in resolving the case  Successful negotiation involves thorough preparation, from a position of strength © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 28 Mediation  Involves a neutral 3rd party (mediator)  Mediator talks face-to-face with parties (who typically are in different adjoining rooms) to determine “common ground.” Advantages: few rules, customize process, parties control results (win-win) Disadvantages: mediator fees, no sanctions or deadlines © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 29 Arbitration  Many employment contracts have binding arbitration clauses  Settling of a dispute by a neutral 3rd party (arbitrator) who renders a legally-binding decision; usually an expert or wellrespected government official © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 30 Arbitration  Arbitration Clauses and Statutes Uniform Arbitration Act of 1955 Federal Arbitration Act  Issue of Arbitrability  CASE 3.3 NCR Corp v Korala Associates, Ltd (2008) The arbitration clause in the contract regarding software development mandated arbitration of copyright infringement claim © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 31 Arbitration Issues  Mandatory Employment Arbitration Generally clauses are enforceable  Results may be unpredictable because arbitrators not have to follow precedent or rules of procedure or evidence  Arbitrators not have to issue written opinions  Generally, no discovery available © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 32 Other Types of ADR  Mini-Trial: Attorneys for each side informally present their case before a mutually agreed-upon neutral 3rd party (e.g., a retired judge) who renders a non-binding “verdict.” This facilitates further discussion and settlement  Expert evaluations  Conciliation: 3rd party assists in reconciling differences © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 33 Providers of ADR Services  Non-profit organizations: American Arbitration Association Better Business Bureau  For Profit: JAMS-ADR.com(Flash enabled) © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 34 Online Dispute Resolution  Also called ODR  Uses the Internet to resolve disputes  Still in its infancy but is gaining momentum  See, e.g., www.cybersettle.com © 2011 Cengage Learning All Rights Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use 35 ... Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected... Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected... Reserved May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected