Legal Environment of Business
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17e-PPT-Ch03r.pptxMcGraw-Hill
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The Legal & Regulatory Environment of Business 17e
Chapter 3
The Court System
Pagnattaro Cahoy Magid Reed Shedd
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Learning Objectives
To recognize the role of key personnel associated with the courts
To know the organization of the state and federal court systems
To understand the power of judicial review and the philosophies of judicial restraint and judicial activism
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Chapter seeks to do the following:
Understand the role of key personnel associated with the court system.
Learn how the state and federal court systems are organized.
Learn about the power of judicial review and the philosophies of judicial restraint and judicial activism.
Learning Objectives
To appreciate and contrast the background and judicial alignment of the justices of the U.S. Supreme Court
To analyze a sample case from the U.S. Supreme Court, including the majority, concurring, and dissenting opinions
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Chapter seeks to do the following:
Appreciate and contrast the background and judicial alignment of the justices of the U.S. Supreme Court.
Analyze a Supreme Court decision including the majority, concurring and dissenting opinion.
Judges and Justices
Individuals who operate courts
Judges - Trial court persons
Determines the rules of law for case
Justices - Reviewing court persons
Decide an appeal and provide reasons for their decisions
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Judges are the public officials designated to operate the court system and decide cases and rule upon issue of law in matters before it. Trial judges oversee the initial trial of a case where facts are found and initially ruled upon. A trial judge serves several functions:
Determines rules of law
Serves as finder of the facts
Renders a decision
Judges who decide cases that have been appealed from a trial judge are called justices and they do not deal with deciding factual questions but only deal with issues of law—was the law properly applied—rendering decisions that provide legal precedent for future cases.
Jurors
Fact-finding body
Trial by jury is guaranteed by the Bill of Rights
Petit Jury: Trial jury that returns a verdict in criminal and civil situations
Consist of 12 persons
Smaller juries are acceptable
Decision must be unanimous
Reason is not provided
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Our constitutional right to a trial by jury is carried out in the court system by jurors. Juries are the courts fact-finding body, deciding issues of fact. The jurors will hear all the evidence and then make decisions for the court as to what are the facts of the case. While historically it consisted of 12 persons, some provisions now allow for smaller juries.
Lawyers
Serve as representative advocates in court system
Present evidence, points of law, and arguments
Help juries and judges in making decisions
Primary duty is to the administration of justice
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Lawyers are officers of the court tasked with the multiple roles of being a counselor or advisor to a client, an advocate for persons and organizations coming before the court, and also being bound to a duty to the administration of justice as a public servant to the court. Lawyer’s duties to client require the highest degree of:
Fidelity
Loyalty
Integrity
Lawyers
Serve as Counselor, Advocate, and Public Servant
Rules of evidence provide confidential communications to a lawyer
Attorney-client “privilege”
Forbids a lawyer to reveal confidential facts and testify against a client
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Lawyer is actively involved in the personal decisions of clients, ranging from their business affairs and family matters. Lawyer must meet the highest standards of professional and ethical conduct.
Organization of the Court System
Trial Courts
Appellate Courts
Supreme Courts
Subject Matter
Jurisdiction –
Power over
Particular
Issues
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Federal courts and the 50 state courts are major courts systems in the U.S.
Levels of court system
Trial courts
Courts of appeals
Supreme courts
Lawsuits begin at the trial court level, and the results may be reviewed at one or more of the other two appellate court levels.
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Is the state Supreme Court
always the state’s highest court?
Yes
No
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Answer: No. New York’s highest state court is the New York Court of Appeals.
Subject Matter Jurisdiction
Power over the issues involved in the case
Jurisdiction can be limited to a subject matter or area in which the parties live
Probate Courts - Deal with wills and estates of deceased persons
Traffic Courts - Deal with traffic violations
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Courts of different scope and subject matter jurisdiction help create order and efficiency. Juvenile courts with juvenile crime and dependent children, criminal and police courts with violators of state laws and municipal ordinance.
State Courts
Sources that create and govern state court systems
State Constitutions
State Legislature
Other legislation
Trial Courts: Initial level for filing lawsuits
Referred as superior or circuit or district court
Responsible for determining the facts and law in the case
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State constitutions provide the general framework for the court system. State legislature enacts statutes that add body to the framework. Other legislation may establish the general rules of procedure to be used by the courts. The process of the court system starts in the trial court where a complaint is filed to begin the case. The trial is used to make determinations as to what the facts of the case are and how the law is applied to those facts.
State Courts
Appellate courts: Review the results of lower courts
Some states have one appellate court
Certain states have two levels of review
Courts of Appeal: Intermediate courts
Supreme Court: Highest court
Writ of certiorari: Procedure for requesting a second review
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Intermediate courts of review consist of three to five judges. State supreme court has seven to nine judges. Small-claims court: Handles much of the litigation between businesses and its customers. Appellate courts later focus on reviewing the trial courts legal determinations by addressing questions of law. Appellate courts typically consist of panels of 3-9 judges.
Figure 3.1 - State Court System
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Figure indicates the hierarchy of the federal court system.
Federal Courts
Federal
Jurisdiction
Article III of United States Constitution
Reviews:
Questions of
Federal Law
U.S. As Party
State Disagreements
Suits Between
Citizens Of
Different States
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Constitution provides that judicial power to the Supreme Court and lower courts
Subject matter jurisdiction over federal question and diversity of citizenship cases
Federal question cases: Arise out of the U.S. Constitution or federal statutes.
Diversity of citizenship: Requires all plaintiffs be citizens of different states from all defendants.
U.S.
Constitution
Issues
Federal Statute Issues
No $ Limit
Federal Questions
Federal Question Cases
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Federal question jurisdiction allows for federal courts to have original authority to hear cases, from trial, where there are issues at stake involving interpretation of the United States Constitution, or issues involving application and/or interpretation of federal law or regulation. Unlike some other sources of federal court jurisdiction, there is no monetary limit on the case.
Plaintiffs/ Defendants – Citizens of Different States
Each Claim Must Be $75,000+
Guard Against State Court Bias
Diversity
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Diversity Of Citizenship
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Diversity of citizenship jurisdiction in federal court means that a federal court has jurisdiction to hear cases between citizens of different states. That means that plaintiffs and defendants in a case must be from different states (all plaintiffs must be from different states from all defendants.) Here, however, there is a dollar limit for jurisdiction. Only cases in which there is a claim sought of $75,000 or more can be brought to federal court under a diversity of citizenship basis.
Figure 3.2 - Federal Court System
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Figure shows the hierarchy of the federal court system.
Federal District Courts
Trial courts of the federal judicial system
One court in every state and the District of Columbia
Federal Rules of Civil Procedure: Provide the details concerning procedures to be followed in federal court litigation
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Federal district courts serve as the trial court in the federal system, with similar roles played as a trial court in the state system. District courts have the authority to review lawsuits, receive evidence, evaluate testimony, impanel juries, and resolve disputes.
Federal Appellate Courts
12 Courts of Appeal
Special Court of Appeals hears appeals from
Special courts
Administrative decisions
Other courts have been created to handle special subject matter
Court of Appeals for Armed Forces
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There are twelve federal appellate courts within the federal judiciary and a court of appeals for the federal circuit. In addition, the Court of Appeals for the Federal Circuit sits in Washington, DC and handles federal appeals from special courts, like the US Claims Court and the Court of Military Justice.
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General role of an appellate court
is to:
Review questions of fact
Review questions of fact and law
Review questions of law
Review only constitutional questions
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Answer: c
Decisions by the U.S. Supreme Court
Review by the U.S. Supreme Court requires a petition for a writ of certiorari
Supreme Court resolves cases involving major constitutional issues or interpretation of federal law
Final judgments of the highest state court are reviewed only by the Supreme Court of the United States
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Petition for a writ of certiorari is a request by the losing party in the court of appeals for permission to file an appeal with the U.S. Supreme Court. Four justices must vote yes to grant a petition for a writ of certiorari. Federal district courts and the courts of appeal cannot review, retry, or correct judicial errors charged against a state court.
Power of Judicial Review
Judicial Review: Ultimate power to invalidate actions by the president or the Congress
Judicial Restraint: Power should not be used except in unusual cases
Judicial Activism: Power should be used when the needs of society justify its use
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Judicial review allows the courts to review actions taken by the executive branch and to declare them unconstitutional. Judicial restraint is associated with conservative judges. Judicial activism is linked to liberal judges.
Judicial Restraint
Philosophy is referred as strict constructionism or judicial abstention
Followers favor a very limited role for the courts in system of government
Belief that change in society should result from the political process
Supporters take a pragmatic approach to litigation
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Philosophy of judicial restraint developed naturally from the recognition that, in exercising the power of judicial review, the courts are overseeing coequal branches of government. Judges allow the states and the federal legislative and executive branches wide latitude in finding solutions to the nation’s problems. Judicial restraint jurists have a deep commitment to precedent.
Judicial Activism
Supporters favor a more expansive role for the courts in system of government
Activists are value oriented and policy directed
Courts are more result conscious and place less reliance on precedent
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Belief that courts have a major role to play in correcting wrongs in our society. Activist jurists believe that constitutional issues must be decided within the context of contemporary society and that the meaning of the Constitution is relative to the times in which it is being interpreted.
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Is the power of judicial review
important?
Yes
No
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Answer: A
Judicial review is the most significant power of the courts which enables them to review laws passed by the legislative body and to declare them to be unconstitutional and void.
Case 3.1: Supreme Court’s Influence on Law
Case
National Federation of Independent Business v. Sebelius
567 U.S. __, 132 S. Ct. 2566 (2012)
U.S. Supreme Court
Issue
Plaintiffs challenged the constitutionality of individual mandate and Medicaid expansion of the Affordable Care Act
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Supreme Court upheld the individual mandate as it was enacted pursuant to its Constitutional power to tax and held that the provision that would have allowed the federal government to withhold all Medicaid finds from states not participating in the mandated expansion of Medicaid coverage is unconstitutional.
Will Ruling Provide Justice and Sound Precedent?
Nature of the Judicial Process
Case To Be Decided
Use
Existing
Statutes &
Precedent
Create Law
Where
None Exists
Refuse
To Apply
Case Law or
Find Unconst-
itutional
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Courts can:
Decide a case by use of existing statutes and precedents.
Decline existing case law or declare a statute to be void as unconstitutional.
Resolve a case and create law in the process.
Trade practices supply direction of the law in the area of business. Judicial decisions are in part directed by judge’s viewpoint on the welfare of society.
In reaching a decision, court must consider whether the ruling will provide justice in the particular case and whether it will establish sound precedent for future cases. Justice Oliver Wendell Holmes stated, “the life of the law has not been logic; it has been experience.” Justice Benjamin Cardozo believed that the judge who moulds the law by the method of philosophy is satisfying humanity’s deep-seated desire for certainty.
