© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole...

Essentials of Business Law -- 4th Edition3

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.



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Quote of the Day

Facts are ventriloquists’ dummies. Sitting on a wise man’s knee they may

be made to utter words of wisdom; elsewhere, they say nothing, or talk

nonsense or indulge in sheer diabolism.”Aldus Huxley, British Author



Litigation vs.

Alternative Dispute Resolution

p Litigation refers to lawsuits; the process of filing claims in court, and ultimately going to trial.

p Alternative Dispute Resolution is any other formal or informal process for settling disputes without going to trial.



Alternative Dispute Resolution(most common forms)

p Negotiation• Parties make settlement offers and counter-offers.• May be face-to-face or working through lawyers.

p Mediation• Neutral person (mediator) attempts to get parties to

reach a voluntary settlement.• Mediation may be ordered by a judge.• Mediator does not render a decision.

p Arbitration• Neutral person (arbitrator) is involved.• Arbitrator does render a binding decision.• Arbitration may be mandatory, if chosen in advance

as the method for dispute resolution.



State Court System

Trial Courts of General Jurisdiction

State Supreme Court (Highest Appeals Court)

Lower Appeals Courts

General Civil

Division

General Criminal Division

Small Claims

Division

Municipal Division

Juvenile Division

Probate Division

Land Division

Domestic Relations Division

One judge; may have jury

One judge; may have jury

Three judges; never a jury

Usually 7 Justices; may refuse to hear a case; final authority

Click on any box below for a definition of the jurisdiction of that trial court.

Trial Courts of Limited (or Specific) Jurisdiction



Federal Courts -- Two kinds of civil lawsuits permitted

p Federal Question Cases• A claim based on the US Constitution, a

federal statute, or a federal treaty

p Diversity Cases• When the plaintiff and defendant are

citizens of two different states, AND• the amount in dispute is greater than

$75,000



Primary Trial Court

Trial Courts of Limited (Specific) Jurisdiction

United StatesSupreme Court

(Highest Appeals Court)

Lower Appeals Courts

U.S. District Courts

U.S. Bankruptcy

Courts

U.S. Tax Courts

Various Federal

Agencies

U.S. Court of International

Trade

U.S. Claims Court

U.S. Patent & Trademark

Office

Trial Courts of Limited (Specific)

Jurisdiction

Three judges hear each case, brought up from

the District Courts.

Nine Justices; appointed for life; may refuse to hear a case; final authority

Click on any box below for a definition of the jurisdiction of that trial court.

U.S. Courts of Appeals (12

Circuits)

U.S. Court of Appeals for the Federal Circuit

Hears appeals from specialized trial courts.

*Click here to see a map of the 12 Circuits of the U.S. Courts of Appeals.

The Federal Court System



Steps in Beginning Litigationp Pleadings: Papers that begin a lawsuit

1. Complaint -- Short, plain statement of the allegations and the legal claims.

This is “served” or delivered with a summons.

2. Answer -- A brief reply to the allegations.

3. Counter-Claim -- Sometimes the accused party will initiate a second suit in response to the first.

4. Reply -- A brief reply to the counter-claim.



Possible Variations on Pleadingsp Counter-claim

• If the accused party thinks the accusing party has contributed to the problem or has wronged them, they may file a second suit, in reverse of the first.

p Class Actions• If the plaintiff has evidence that the wrong in question

has affected a large number of unrelated persons, the suit may become a class-action suit, with the plaintiff representing an entire class of plaintiffs.

p Judgment on the Pleadings• Either party can ask the court for a judgment based on

the initial complaint and answer, but few cases are dismissed at this point.



Discovery -- next step after pleadings

p Interrogatories -- written questions that the other party must answer, under oath

p Depositions -- interview (under oath) of other party or potential witnesses; done by opposing lawyer

p Production of Evidence -- each side may request to see the other side’s evidence

p Requests for Admission -- each side may request that undisputed facts be admitted or denied, to avoid wasting time on them

Discovery allows both sides to uncover evidence, encouraging a settlement without trial or ensuring few surprises during a trial.



Other Steps Before Trial

p Summary Judgment -- a ruling by the court that no trial is necessary because there are no essential facts in dispute; may be requested by either side.

p Final Preparation -- if the case is to proceed to trial, both sides make a list of witnesses and rehearse questions with their own witnesses. Preparation is allowed, but telling the witnesses how to answer is not legal or ethical.



Beginning a Trialp Jury Selection: Process called voir dire

1. Questioning -- Each potential juror is questioned, to uncover biases.

If both sides agree, they may waive their right to a jury.

2. Challenges for Cause -- Each side can claim any juror shows significant bias.

3. Peremptory Challenges -- Each lawyer can dismiss a limited number of jurors without stating a reason.

4. Jury Chosen -- 12 jurors and 2 alternates



Procedural Rules for a Trial

p Burden of Proof• The plaintiff must convince the jury that its version of

the case is correct.• In a civil case, the proof needs to be by a

preponderance of evidence (meaning at least slightly more likely to be true).

• In a criminal case, the proof required is higher; it must be beyond a reasonable doubt.

p Rules of Evidence• Lawyers are allowed to ask only questions that are

relevant to the case.



The Plaintiff’s Casep First, Opening Arguments

• This is a brief summary, given by each side, of the facts they hope to demonstrate.

p Plaintiff Calls Witnesses• Questions to own witnesses is direct examination.• Lawyer only asks questions with helpful answers.

p Defendant Questions Witnesses• Questions to opposing witnesses is cross

examination.• Again, lawyer asks questions with helpful answers.

p Defendant Moves for Directed Verdict• This is asking the judge to decide that the plaintiff has

no case worth proceeding with.



The Defendant’s Casep Opening Arguments

• Defendant’s opening arguments were presented earlier, before the plaintiff presented its case.

p Defendant Calls Witnesses• Questions to own witnesses is direct examination.• Lawyer only asks questions with helpful answers.

p Plaintiff Questions Witnesses• Questions to opposing witnesses is cross

examination.• Again, lawyer asks questions with helpful answers.

p Closing Arguments• Brief summary, by both sides, urging the jury to

believe their side of the case.



After Both Sides Rest (Finish)

p Jury Instructions• The judge instructs the jury to evaluate the case

solely on the facts of the evidence presented.• If the case is influenced by a certain legal

presumption, the judge will summarize that for the jury.

p Deliberation and Verdict• The jury discusses the case for as long as needed

(anywhere from less than an hour to several weeks).• Sometimes the jury must be unanimous; other times

only a majority (at least 7) or a 10-2 vote is required.



The Trial is Over… or is it?p Motions after the Verdict

• The loser might request a judgment n.o.v., asking the judge to overturn the verdict on a legal technicality or on a claim that the jury ignored the evidence.

• If the judgment n.o.v. is denied, the losing side may request a new trial, on the same claims.

p Appeal• The next recourse for the loser is to file an appeal, a

request for a higher court to examine the facts.• The appeals court may affirm the verdict, modify the

award, reverse and remand (send it back to trial) or simply reverse (overturn) the lower court’s verdict.

p Settlement• At any point, either side may offer to settle the case, even

between the verdict and the beginning of an appeal.



The process of litigation, with its potential for errors or biases, may influence the outcome of a dispute as strongly as the law itself. That is

all the more reason to prevent disputes if possible, or to use alternative methods of dispute

resolution.

© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole...

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