1. FIN 331 Text * Chapter 1

2. Learning Objectives Types and sources of law Important legal doctrines Classification of law Jurisprudence and legal reasoning Statutory interpretation Limitations on judicial power 1 - 2

3. Types or Sources of Law Federal, state, and tribal level: –Constitution: establishes governmental structure, specific rights and duties Example: U.S. ConstitutionU.S. Constitution –Statute: enacted by legislative body to regulate conduct Example: Clean Air Act, 42 U.S.C. §§ 7401 et seq. (1970)Clean Air Act Counties and municipalities enact “ordinances” (e.g., zoning ordinance) 1 - 3

4. Types or Sources of Law Federal, state, and tribal level: –Common Law: case law (judge-made) Example: Gribben v. Wal-Mart Stores, Inc.Gribben v. Wal-Mart Stores, Inc. –Administrative Law: agency rules to implement enforcement of statutes Example: U.S. Environmental Protection Agency’s Identification and Listing of Hazardous Waste Rule, 40CFR26140CFR261 1 - 4

5. Types or Sources of Law Issued at the chief executive level: –Executive Order: under limited powers Examples: http://www.whitehouse.gov/news/orders/ http://www.whitehouse.gov/news/orders/ –Treaty: with other nations, by the U.S. president on behalf of the nation, ratified by the U.S. Senate Example: The Moscow Treaty, No. 107-8 (2002)The Moscow Treaty, No. 107-8 (2002) 1 - 5

6. Important Doctrines Stare Decisis (let the decision stand) –Doctrine of precedent applied in common law Example: in Gribben v. Wal-Mart Stores, the Indiana Supreme Court cited Cahoon v. Cummings for a well-established rule about intentional first-party spoliation of evidence Equity –Applied by the judiciary to achieve justice when legal rules would produce unfair results Examples: injunction or specific performance 1 - 6

7. Important Doctrines Federal supremacy: a rule of priority for conflicts between laws that holds the U.S. Constitution is the supreme law of the land –Supremacy Clause, Article VI, Section 2, of the U.S. Constitution –Practical meaning: Federal law defeats state law A state constitution defeats state legislation A statute defeats an administrative regulation A statute or regulation defeats common law 1 - 7

8. Classification of Law Criminal law establishes duties to society –Government charges and prosecutes defendant, who is found guilty or innocent –A convicted defendant will be imprisoned or fined 1 - 8

9. Classification of Law Civil law establishes duties between private parties –Plaintiff sues defendant for monetary damages or equitable relief –A defendant will be held liable or not liable 1 - 9

10. Classification of Law Substantive law establishes rights and duties of people in society –Example: The act of murder is a crime Procedural law establishes how to enforce those rights and duties –Example: A defendant charged with murder has the right to a jury trial 1 - 10

11. Classification of Law Public law refers to the relationship between governments and private parties –Examples: constitutional, statutory, and administrative law Private law refers to the regulation of conduct between private parties –Examples: contract, tort, and property laws 1 - 11

12. Jurisprudence Jurisprudence refers to the philosophy of law as well as the collection of laws Legal positivism: law is the command of a recognized political authority –Just or unjust, law must be obeyed Natural law: universal moral rules bind all people whether written or unwritten –Unjust positive laws are invalid 1 - 12

13. U.S. v. Lynch Facts & Procedural History: –Trial court issued injunction to prohibit defendants from further violations of a statute –Defendants moved to amend order based on natural law argument that the statute was invalid –Trial court denied amendment, defendants appealed Issue: Did the district court fully address and deny defendants’ natural law defense? Holding: Natural law is not a valid defense. Trial court decision affirmed. 1 - 13

14. Jurisprudence Legal realism defines law as the behavior of the judiciary as they rule on matters within the legal system –Thus law in action dominates positive law Sociological jurisprudence unites theories that examine law within its social context 1 - 14

15. Legal Reasoning Basically deductive, with the legal rule as the major premise and facts as the minor premise –Result is product of the two Court may stand on precedent or distinguish prior case from current case –If precedent inapplicable, new rule developed 1 - 15

16. Hagan v. Coca-Cola Bottling Co. Facts & Procedural History: –Florida plaintiffs drank from bottle of Coke, found foreign object, suffered emotional distress, and brought suit for negligence –Jury returned verdict for plaintiffs, judge reduced jury award, and both parties appealed –Certified question sent to Florida Supreme Court Question: Should the impact rule (physical injury required to state a claim) be abolished or amended in Florida? 1 - 16

17. Hagan v. Coca-Cola Bottling Co. Court’s Reasoning: –Reviewed facts and arguments of parties –Reviewed application of impact rule within Florida, including modifications to the rule –Discussed public policy recognized by the Florida Supreme Court in Doyle v. Pillsbury Co. –Noted court decisions in other states Holding: Impact rule does not apply where emotional damages are caused by conduct that is a freestanding tort (e.g., contaminated food) 1 - 17

18. Statutory Interpretation Plain meaning rule: court applies statute according to usual meaning of the words –Example: Hyatt v. Anoka Police Department A court examines legislative history and purpose when plain meaning rule is inadequate –Example: What is meant by a prohibition against discrimination “because of an individual’s age?” 1 - 18

19. General Dynamics Land Systems, Inc. v. Cline Facts: –Collective bargaining agreement discriminated against workers under 50 years of age; plaintiffs over 40 and under 50 filed a claim under the Age Discrimination in Employment Act (ADEA) Issue: Does the ADEA forbid “favoring the old over the young?” Reasoning: Plain meaning of “age” within the statute not clear, but legislative history makes clear that an employer may favor an older employee over a younger one Holding: judgment reversed in favor of employer 1 - 19

20. Statutory Interpretation Courts may interpret a statute in light of a general public purpose or public policy Courts follow prior interpretation of a statute (precedent) to promote consistency Maxims may be used to assist in statutory interpretation –Example: ejusdem generis (things of the same type); when general words follow specific words, the general words are limited to the same things as specific words “Automobiles and other vehicles” does not include airplanes 1 - 20

21. Limitations on Judicial Power Courts limited to deciding existing cases or controversies –In other words, the dispute must be current and not yet resolved –However, a declaratory judgment allows parties to determine rights and duties prior to harm occurring 1 - 21

22. Limitations on Judicial Power Parties must have standing (direct interest in the outcome) to sue –Whales, for example, do not have standing The Cetacean Community v. Bush, 386 F.3d 1169 (9th Cir. 2004) 1 - 22

23. Global Business Environment Courts may faced with treaty interpretation The U.S. Supreme Court interpreted The Warsaw Convention in Olympic Airways v. HusainOlympic Airways v. Husain How would you have interpreted the treaty language? 1 - 23 “The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of the operations of embarking or disembarking.” Warsaw Convention, Art. 17