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Business Law
Principles
and Practices 8e
Arnold J. Goldman William D. Sigismond
Chapter 2: The Legal System in the United States and Its Constitutional Foundation
The Role of the Judiciary in the United States
Judicial Branch of the US government settles disputes by interpreting and enforcing law.
Courts impose punishment (criminal cases) or award damages to the injured party (civil cases).
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Structure of the U.S. Judiciary
Federal court system established by the U.S. Constitution and Congress.
State and local court system established in each state under state law.
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Levels of Courts
Trial courts.
Intermediate courts.
Courts of last resort.
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Jurisdiction
Jurisdiction: the power to hear and decide a case.
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Standing to Sue
Standing to sue: a person has legitimate issues giving him or her the legal right to bring a lawsuit.
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Appellate Courts
Appellate courts: courts that hear appeals of lower court decisions.
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Subject Matter Jurisdiction
General jurisdiction: a court can hear almost any case brought before it.
Limited jurisdiction: a court can hear only certain kinds of cases.
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Personal Jurisdiction
Jurisdiction over the person: a court can hear and decide a case because it has authority over the parties in the case, generally in a geographic area.
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Jurisdiction in Cyberspace
Long-arm statutes.
“Minimum contact” rule.
Cybercommunities.
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Federal and State System
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The State Court System
Established by state constitution and legislation.
Each system includes trial courts of both limited and general jurisdiction, sometimes intermediate appellate courts, and courts of last resort.
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Trial Courts of Limited Jurisdiction
Traffic cases.
Minor civil and criminal cases.
Often called justice court, magistrate’s court, and municipal court.
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Small Claims Court
Small claims court: a court that hears minor civil cases involving small amounts of money.
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Small Claims Court
Advantages: technical rules of evidence and procedure are not followed, legal representation is not required, and court action is generally economically feasible because it does not involve attorney’s fees.
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Small Claims Court
Claim limitations up to $15,000.
Filing a claim is simple and can sometimes be done online.
Court procedures are informal but are still based on law.
Appeal rules depend on the State.
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Commercial Claims Court
Commercial claims court: special lower court similar to small claims court, that allows businesses to sue debtors up to a certain limit.
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Other Trial Courts of Limited Jurisdiction
Can hear civil cases involving large sums of money.
Criminal cases involving felonies.
May have appellate jurisdiction.
Probate court.
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Trial Courts of General Jurisdiction
Broad authority to hear any case, civil or criminal.
Petty claims are discouraged.
Sometimes called superior court, court of common pleas, circuit court, or district court.
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Intermediate Appellate Courts and the Court of Final Resort
Appellate = Review.
Mistakes of law?
Arguments generally made by written brief.
Opportunities for successful appeal are limited and very costly.
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Drug Courts
Drug Courts: courts that handle drug-related crimes.
Intended to substitute mandatory treatment for incarceration.
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Mental Health Courts
Defendant is sentenced to treatment rather than jail.
Appearance in this court is strictly voluntary.
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Federal and State System
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The Federal Court System
Article III (Section 1) of the U.S. Constitution created the Supreme Court and gave Congress the power to create inferior federal courts and to determine their jurisdiction.
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Federal Court Structure
U.S. Supreme Court is the highest court in the federal judiciary.
Trial courts and appellate courts are under it.
Under those are the specialized courts with limited jurisdiction.
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Federal Trial Courts
U.S. District Courts.
Both general and original jurisdiction.
Each state has at least one district court, including bankruptcy court.
Federal issues and diversity of citizenship.
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Intermediate Courts of Appeal
The U.S. is divided into 12 circuits, each with a court of appeals.
Circuits include three or more states.
13th district is authorized to hear appeals from federal courts of any district.
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U.S. Districts
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Supreme Court
Highest court in the land.
Findings are virtually final
Writ of certiorari: grants permission for a case to be heard by the U.S. Supreme Court.
There is no absolute right of appeal to this court.
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Routes to the Supreme Court
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Participants in the Legal System
Attorney: advocate for client, draft legal documents.
Judge: rules on and instructs the jury on points of law in trials.
Jury: a body of citizens that decides what really happened in the dispute.
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Constitutional Framework of the U.S. Legal System
The legal system of the United States is unique. It combines elements almost unknown in other countries.
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Separation of Powers
The concept of independent branches of government.
Legislative: makes laws.
Executive: enforces laws.
Judicial: interprets laws.
Courts often “make law” by interpreting it.
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Judicial Review
The power of a court to review the decisions of a lower court.
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Accommodation of Interests
Acknowledgment of the equitable consideration of parties involved in a dispute.
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Litigation
Our legal system operates almost exclusively within the framework of litigation: a lawsuit or legal action.
Courts may only answer questions brought before them in lawsuits.
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Bill of Rights
The first ten amendments to the U.S. Constitution.
With a few exceptions, the fourteenth amendment applies the Bill of Rights to the states.
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