By Richard A. Mann & Barry S. Roberts Business Law and the Regulation of Business Chapter 3: Civil Dispute Resolution By Richard A. Mann & Barry S. Roberts

Topics Covered in this Chapter I. The Court System A. The Federal Courts B. State Courts II. Jurisdiction A. Subject Matter Jurisdiction B. Jurisdiction over the Parties III. Civil Dispute Resolution A. Civil Procedure B. Alternative Dispute Resolution

The Court System – Federal District Courts – trial courts of general jurisdiction that can hear and decide most legal controversies. Courts of Appeals – hear appeals from district courts and review orders of certain administrative agencies. The Supreme Court – nation's highest court, whose principal function is to review decisions of the Federal Courts of Appeals and the highest State courts. Special Courts – have jurisdiction over cases in a particular area of Federal law. Includes the U.S. Court of Federal Claims, the U.S. Tax Court, the U.S. Bankruptcy Courts, and the U.S. Court of Appeals for the Federal Circuit.

Federal Judicial System U.S. Supreme Court Highest State Courts U.S. Court of Appeals for the Federal Circuit U.S. Courts of Appeals U.S. District Courts Tax Court Bankruptcy Court U.S. Claims Court Patent and Trademark Office Court of International Trade Many Administrative Agencies

Circuit Courts of the United States Puerto Rico is part of Circuit 1 1 2 8 3 9  Virgin Islands are part of Circuit 3 7 6 10  4 11 D.C. Circuit Washington, D.C. 5 Northern Marianna Islands are part of Circuit 9 (along with Alaska and Hawaii.) Federal Circuit Washington, D.C. Source: Administrative Office of the United States Courts, January 1983

State Courts Inferior Trial Courts – hear minor criminal cases, such as traffic offenses, and civil cases involving small amounts of money; conduct preliminary hearings in more serious criminal cases. Trial Courts – have general jurisdiction over civil and criminal cases. Special Courts – trial courts, such as probate courts and family courts, having jurisdiction over a particular area of State law. Appellate Courts – include one or two levels; the highest court's decisions are final except in those cases reviewed by the U.S. Supreme Court.

Intermediate Appellate Court State Court System State Supreme Court Intermediate Appellate Court Trial Courts Special Courts Inferior Trail Courts

Jurisdiction Subject Matter Jurisdiction – authority of a court to decide a particular kind of case. Jurisdiction over the Parties – the power of a court to bind the parties to a suit .

Federal and State Jurisdiction 1. Federal crimes 2. Bankruptcy 3. Patents 4. Copyright and trademarks 5. Admiralty 6. Antitrust 7. Suits against the United States 8. Specified federal statutes Exclusive Federal Jurisdiction Exclusive State Jurisdiction All other matters Concurrent Jurisdiction 1. Federal questions 2. Diversity of citizenship

Subject Matter Jurisdiction Exclusive Federal Jurisdiction – Federal crimes, bankruptcy, antitrust, patent, trademark, copyright, and other specified cases. Concurrent Federal Jurisdiction – authority of more than one court to hear the same case. State and Federal courts have concurrent jurisdiction over (1) Federal question cases (cases arising under the Constitution, statutes, or treaties of the United States) that do not involve exclusive Federal jurisdiction and (2) diversity of citizenship cases involving more than $75,000. State Jurisdiction – State courts have exclusive jurisdiction over all matters to which the Federal judicial power does not reach.

Jurisdiction over the Parties In Personam Jurisdiction – jurisdiction based upon claims against a person, in contrast to jurisdiction over the person's property. In Rem Jurisdiction – jurisdiction based on claims against property. Attachment Jurisdiction – jurisdiction over a defendant's property to obtain payment of a claim not related to the property.

Jurisdiction Type of Jurisdiction Parties -- Courts must have authority over the parties to the case. This may be: Subject Matter-- some courts have all authority over certain types of cases. Jurisdiction can be: Quasi in rem In rem Personal State Federal Concurrent Defendant resident Long-arm statute

Stare Decisis in the Dual Court System U.S. Supreme Court U.S. Circuit Court of Appeals State Supreme Court State Intermediate Appellate Court U.S. District Court in that Circuit State Trial Court Binding on questions of federal law Binding on questions of state law

Civil Procedure The Pleadings – a series of statements that give notice and establish the issues of fact and law presented and disputed. Complaint – initial pleading by the plaintiff stating his case. Summons – notice given to inform a person of a lawsuit against her. Answer – defendant's pleading in response to the plaintiff's complaint. Reply – plaintiff's pleading in response to the defendant's answer.

Pretrial Procedure Process requiring the parties to disclose what evidence is available to prove the disputed facts; designed to encourage settlement of cases or to make the trial more efficient. Judgment on Pleadings – a final ruling in favor of one party by the judge based on the pleadings. Discovery – right of each party to obtain evidence from the other party. Pretrial Conference – a conference between the judge and the attorneys to simplify the issues in dispute and to attempt to settle the dispute without trial. Summary Judgment – final ruling by the judge in favor of one party based on the evidence disclosed by discovery.

Trial Determines facts and the outcome of the case. Jury Selection – each party has an unlimited number of challenges for cause and a limited number of peremptory challenges. Conduct of Trial – consists of opening statements by attorneys, direct and cross-examination of witnesses, and closing arguments. Jury Instructions – judge gives the jury the particular rules of law that apply to the case. Verdict – the jury's decision based on those facts the jury determines the evidence proves.

After the Trial Motions Challenging the Verdict – include motions for a new trial and a motion for judgment notwithstanding the verdict. Appeal – determines whether the trial court committed prejudicial error. Enforcement – plaintiff with an unpaid judgment may resort to a writ of execution to have the sheriff seize property of the defendants and to garnishment to collect money owed to the defendant by a third party.

Stages in Civil Procedure Determine what facts are in dispute Pleadings Complaint, Answer, Reply Discover, Conference, Summary Judgment Discover what evidence there is to prove the facts in dispute Pretrial Jury Selection Opening Statements Introduction of Evidence Closing Arguments Judgment on Verdict Determine what facts are provided by the evidence Trial Review the lower court’s actions for prejudicial error Appeal Briefs and Transcript Oral Argument, Decision Implement the court’s judgment Enforcement Execution, Garnishment

Alternative Dispute Resolution Arbitration – a nonjudicial proceeding in which a neutral party selected by the disputants renders a binding decision (award). Conciliation – a nonbinding process in which a third party acts as an intermediary between the disputing parties. Mediation – a nonbinding process in which a third party acts as an intermediary between the disputing parties and proposes solutions for them to consider.

Alternative Dispute Resolution Mini-Trial – a nonbinding process in which attorneys for the disputing parties (typically corporations) present evidence to managers of the disputing parties and a neutral third party, after which the managers attempt to negotiate a settlement in consultation with the third party. Summary Jury Trial – mock trial followed by negotiations. Negotiation – consensual bargaining process in which the parties attempt to reach an agreement resolving their dispute without the involvement of third parties.

Comparison of Adjudication, Arbitration, and Mediation/Conciliation Court Adjudication Arbitration Mediation/ Conciliation Advantages Binding Public norms Precedents Uniformity Publicly funded Compels participation Parties control process Privacy Special expertise Speedy resolution Preserves relations Flexible Disadvantages Expensive Time-consuming Long delays Limited remedies Lacks special expertise No compromise Disrupts relationships Publicity No public norms No precedent No uniformity Not binding Lacks finality No compelled participation *Source: Adapted from Table 4 of Report of the Ad Hoc Panel on Dispute Resolution and Public Policy , prepared by the National Institute for Dispute Resolution.