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The Resolution of Private Disputes

CHAPTER 2

“In case of dissension, never dare to judge till you have heard the other side.”

Euripides

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Learning Objectives 1

2-1 Describe the basic structures of state court systems and the federal court system.

2-2 Explain the difference between subject matter jurisdiction and in personam jurisdiction.

2-3 Identify the major legal issues courts must resolve when deciding whether in personam jurisdiction exists.

2-4 Explain what is necessary in order for a federal court to have subject matter jurisdiction over a civil case.

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Learning Objectives 2

2-5 Identify the major steps in a civil lawsuit’s progression from beginning to end.

2-6 Describe the different forms of discovery available to parties in civil cases.

2-7 Explain the differences among the major forms of alternative dispute resolution.

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State Courts and Their Jurisdiction 1

The United States has 52 court systems - a federal court system (including DC), and one for each state.

Jurisdiction (the power to hear and speak) may be original (trial) or appellate (reviews trial court).

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State Courts and Their Jurisdiction 2

Courts of Limited jurisdiction courts hear specialized types of cases; appeals from decisions often require a new trial in general jurisdiction court.

Examples: traffic court, tax court, family court.

Often not courts ‘of record.’

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State Courts and Their Jurisdiction 3

Trial Courts. Courts of general jurisdiction that hear most types of cases.

Levels generally classified according to dollar amount of damages or location.

Examples: county courts, district courts.

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State Courts and Their Jurisdiction 4

Appellate Courts.

Generally decide only legal questions, not questions of fact.

Review the record of the trial court proceedings and correct legal errors (reversal) or accept the trial court’s legal procedures.

May also hear appeals from state agencies.

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Jurisdiction and Venue 1

Plaintiff (party suing) files the lawsuit, against defendant (party being sued) in appropriate court to issue binding decision.

Appropriate court has jurisdiction and is the correct venue.

Jurisdiction is a court’s power to hear a case and to issue a decision binding on the parties.

Courts must have both subject-matter and in personam jurisdiction.

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Jurisdiction and Venue 2

Subject-matter jurisdiction refers to a court’s authority to hear a particular type of dispute.

Courts of criminal jurisdiction (offenses against the public at large) hear trials of crimes and misdemeanors.

Courts of civil jurisdiction hear and decide issues concerning private rights and duties (e.g., contracts, torts), and non-criminal public matters (e.g., zoning, probate).

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Jurisdiction and Venue 3

In addition to subject-matter jurisdiction, a court must have either in personam or in rem jurisdiction.

In personam jurisdiction requires the defendant to be a resident of - or located within - the state, or have committed acts within the state’s borders.

Long-arm statutes. Abdouche v Lopez case.

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Jurisdiction: Abdouch v. Lopez

The plaintiff failed to establish that Lopez and KLB expressly aimed their tortious conduct at the forum state (Nebraska).

Lopez and KLB could not have anticipated being haled into a Nebraska court for their online advertising.

Trial court’s decision was affirmed for lack of in personam jurisdiction.

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Jurisdiction and Venue 4

In rem jurisdiction applies when property that is the subject of a dispute is located within the physical boundaries of a court’s authority.

Quasi in rem (attachment) jurisdiction. Similar to in rem but does not address rights in the property itself.

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Jurisdiction and Venue 5

Venue: assuming jurisdiction is established, venue is the ‘fair and convenient’ place for the trial to be held (usually the county).

Venue requirements are set by state statute.

Defendant may file a motion for change of venue.

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Forum Selection Clauses

Contracts may contain a forum selection clause:

May address both jurisdiction and venue.

If on the internet, a forum selection clause may be contained in the website’s terms and conditions, perhaps listed as e.g., “Applicable Law.”

Generally enforced unless they are unreasonable under the circumstances.

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Federal Courts and Their Jurisdiction 1

Federal courts must have jurisdiction based on diversity or federal question.

Diversity jurisdiction exists when the dispute is between citizens of different states and amount in controversy exceeds $75,000. Hertz case.

Federal question jurisdiction exists when the dispute arises under the Constitution, laws, or treaties of the United States.

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Federal Courts and Their Jurisdiction 2

U.S. District Courts can have jurisdiction based on either diversity or a federal question (forms of subject matter jurisdiction).

Diversity jurisdiction exists when the dispute is between citizens of different states and amount in controversy exceeds $75,000.

Federal question jurisdiction exists when the dispute arises under the Constitution, laws, or treaties of the United States.

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Federal Courts and Their Jurisdiction 3

Concurrent jurisdiction and Removal.

Federal courts have exclusive jurisdiction over some matters, e.g., patent cases.

Federal courts have concurrent jurisdiction with state courts over other matters, e.g., where parties are from different states and the amount of damages is over $75,000.

In concurrent jurisdiction cases, if the matter is filed in a state court, defendant may have the option to REMOVE the case from state court to federal court.

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Federal Courts: Hertz Corp. v Friend

Lower courts have interpreted principle place of business differently, but the best interpretation is the “nerve center” approach, meaning the place where a corporation’s officers direct, control, and coordinate the corporation’s activities

Since Hertz’s ‘nerve center’ is in New Jersey, true federal diversity exists.

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Federal Courts and Their Jurisdiction 4

Specialized Federal Courts.

Examples: Court of Federal Claims, Court of International Trade, Bankruptcy Courts, and Tax Courts.

Federal Courts of Appeals.

13 Federal Circuits.

Hear decisions from U.S. District courts (trial courts) as well as Bankruptcy Courts.

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Federal Courts and Their Jurisdiction 5

The United States Supreme Court.

Hears all appeals from lower courts.

Original and exclusive jurisdiction over all controversies between more states.

Original, but not exclusive, jurisdiction over cases involving foreign ambassadors, etc.

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Civil Procedure 1

A set of rules establishing how a lawsuit proceeds from beginning to end.

In an adversarial system, the plaintiff bears the burden of proof to prove his/her case by a preponderance of the evidence.

Once the plaintiff has made a prima facie case (i.e., proved the basic case), the burden of proof may shift to the defendant.

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Civil Procedure 2

In a civil suit, the burden of proof is by a ‘preponderance’ of the evidence.

Requires the plaintiff to convince the fact-finder (usually the jury) that the existence of each element is more probable than its nonexistence.

(NOTE: In a criminal case, the burden of proof is beyond a reasonable doubt.)

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Civil Procedure 3

Service of the Summons.

Notifies the defendant that she is being sued and the deadline to ‘enter an appearance.’ Usually accompanied by a copy of the complaint.

Under long-arm statutes service may be accomplished on out-of-state defendants via registered mail.

Corporations are served via their registered agents.

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Civil Procedure 4

The Pleadings. Plaintiff’s complaint or petition plus the defendant’s answer or response.

Complaint. Filed by injured party, known as plaintiff.

Answer. From defendant may contain an affirmative defense and/or a counterclaim. If so, plaintiff submits a reply.

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Civil Procedure 5

Motions. Some motions ask the judge to decide the result before trial.

Motion to dismiss (or demurrer).

Motion for judgment on the pleadings.

Motions should NOT be taken lightly!

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Civil Procedure 6

Discovery: Obtaining evidence from other party through:

Depositions.

Interrogatories.

Requests for admissions.

Request for production of documents.

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Civil Procedure 7

Discovery: Obtaining evidence from other party through:

Depositions.

Interrogatories.

Requests for admissions.

Request for production of documents.

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Civil Procedure 8

Summary Judgment. To prevail, the party must show: (1) there is no genuine issue of material fact and (2) she is entitled to judgment as a matter of law.

Pretrial Conference: Where judge will hear and rule on many evidentiary issues, discovery disputes, and other concerns.

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Civil Procedure 9

The Trial.

Jury Selection. Voire Dire. Parties use peremptory challenges.

Opening Statement from each party.

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Civil Procedure 10

The Trial.

Trier of Fact (judge or jury) sees material evidence (physical objects, documents), hears testimony of witnesses, and decides outcome of the case based on facts.

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Civil Procedure 11

The Trial.

Matters of law are issues not of fact, but of law; matters of law decided by a judge,. e.g., whether a statute means X or Y, or one law or another applies to the facts

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Civil Procedure 12

The Trial.

Plaintiff’s case through direct examination of witnesses (defendant performs cross-examination) and defendant’s case through direct examination (and plaintiff’s cross-examination).

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Civil Procedure 13

The Trial.

Closing argument or summation from each party.

Jury instructions.

Verdict.

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Civil Procedure 14

Trial.

Trial motions include: motions in limine (motion to limit evidence), voluntary non-suit or dismissal (drop the case), motion for compulsory non-suit or summary judgment.

After summation or closing argument, a party may move for a mistrial (injustice or overwhelming prejudice) or directed verdict (weight of evidence leads to only one conclusion).

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Civil Procedure 15

Trial.

After the jury verdict, a party may make a motion for new trial, judgment non obstanto verdicto (notwithstanding the verdict; JNOV) or remittitur (defendant’s request for the judge to reduce the amount of damages the jury recommended; very common).

Motion for a New Trial. (Based on ‘legal error.’)

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Civil Procedure 16

Appeal:

After a judgment has been entered, losing party may appeal decision to a higher court.

Enforcing a Judgment:

After a judgment, winning party must have the judgment executed (carried out) to obtain money, property, or action ordered by the court.

Bottom line: a judgment is issued and enforcement of the judgment begins.

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Civil Procedure 17

Class Actions. The usual justifications for the class action are that:

(1) it allows legal wrongs causing losses to a large number of widely dispersed parties to be fully compensated, and (2) it promotes economy of judicial effort by combining many similar claims into one suit.

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Class Actions: Tyson Foods Inc v. Bouaphakeao

Employees’ introduction of a representative sample to fill an evidentiary gap created by Tyson’s failure to keep adequate records was permissible.

The Court found for the employees, holding that once a trial court finds evidence to be admissible, its persuasiveness is a matter for the jury.

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Alternate Dispute Resolution 1

Not all dispute resolution mechanisms in the legal system are heard by a judge.

Disputes with government often resolved by the relevant administrative agency.

Administrative agencies generally have a unique dispute resolution process (hearings, appeals).

Also, disputants may choose alternative dispute resolution.

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Alternate Dispute Resolution 2

ADR is less costly and quicker, in general.

ADR may be more appropriate method of resolution for certain types of cases.

Example: family law disputes, real estate disputes between neighbors, high-tech or trade-secret disputes.

ADR may be required by clause in contract.

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Alternate Dispute Resolution 3

Arbitration: dispute settled by one or more arbitrators selected by the parties to a dispute; relatively formal; Uniform or Federal Arbitration acts typically used.

Mediation: parties choose neutral party to aid resolution of dispute.

Reference to Third Party: dispute resolution by rent-a-judge, minitrial, summary jury trial, or association tribunal.

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ADR: AT&T Mobility v. Concepcion

The Concepcions filed fraud and false advertising lawsuit based on their AT&T cell phone contract, which had arbitration clause that prohibited class action claims; AT&T filed motion to compel arbitration.

The Supreme Court held that the FAA makes arbitration agreements enforceable unless their they are revocable in law or equity.

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Test Your Knowledge 1

True A, False B

A trial court has original jurisdiction and an appellate court has appellate jurisdiction

The difference between general jurisdiction and limited jurisdiction is based on the amount in controversy (the damages amount)

Subject-matter jurisdiction refers to a court’s authority to hear a particular type of dispute

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Test Your Knowledge 2

True A, False B

In personam jurisdiction refers to the court’s jurisdiction over the defendant, but in rem jurisdiction refers to the court’s jurisdiction over the property in dispute.

The burden of proof solely rests on the plaintiff.

Matters of law are determined by either the jury or the judge.

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Test Your Knowledge 3

Multiple Choice

Diversity jurisdiction refers to:

a jury pool that reflects the ethnic makeup of the city.

a citizen’s lawsuit against the government.

a lawsuit by a citizen of one state against a citizen of a different state.

Methods of alternative dispute resolution:

Mediation.

Arbitration.

Summary jury trial.

All of the above.

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Test Your Knowledge 4

Multiple Choice

Discovery refers to:

the discovery that a dispute exists.

the pre-trial process involving interrogatories, requests for admissions, and requests for documents.

the analysis of fault in a dispute.

After the verdict:

Either party may make post-verdict motions.

The trial must end.

The trial begins.

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Test Your Knowledge 5

If you were served with a lawsuit, what would you do about it?

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