Ch 2 - Courts and Alternative Dispute Resolution

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Chapter 2Chapter 2Courts and AlternativeCourts and Alternative

Dispute ResolutionDispute Resolution

BUSINESS LAW: Text Cases !BUSINESS LAW: Text Cases !Le"al# Ethi$al# International# andLe"al# Ethi$al# International# and

E%Co&&er$e Environ&entE%Co&&er$e Environ&ent ''''thth Ed(Ed(

Copyright © 2009 South-Western Legal Studies in Business,

a part of South-Western Cengage Learning.



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§1: The Judiciary’s Role In§1: The Judiciary’s Role In

American Government American Government

Judicial e!ie" "as esta#lished #y theJudicial e!ie" "as esta#lished #y the

$.S. Supre%e Court in$.S. Supre%e Court in Marbury v.Marbury v.

MadisonMadison &'(0)* "here Chief Justice&'(0)* "here Chief Justice+arshall "rote+arshall "rote

t is e%phatically the pro!ince andt is e%phatically the pro!ince and

duty of the /udiciary to say "hat theduty of the /udiciary to say "hat thela" is.1la" is.1



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§2: Basic Judicial Requirements§2: Basic Judicial Requirements

JurisdictionJurisdiction Juris1 &la"* diction1 &to Juris1 &la"* diction1 &to

spea* is the po"er of a court to hear aspea* is the po"er of a court to hear a

dispute and to spea the la"1 into adispute and to spea the la"1 into a

contro!ersy and render a !erdict that iscontro!ersy and render a !erdict that is

legally #inding on the parties to thelegally #inding on the parties to the

dispute.dispute.




Jurisdiction OverJurisdiction Over

ersons or ro!ertyersons or ro!erty

4ersons4ersons po"er of a court to co%pel the po"er of a court to co%pel the

presence of the parties &includingpresence of the parties &including

corporations* to a dispute to appear #eforecorporations* to a dispute to appear #efore

the court and litigate.the court and litigate.

In RemIn Rem po"er to decide issues relating to po"er to decide issues relating to

property, "hether the property is real,property, "hether the property is real,

personal, tangi#le, or intangi#le.personal, tangi#le, or intangi#le. 5 6 court generally has 6 court generally has in remin rem /urisdiction o!er any /urisdiction o!er any

property situated "ithin its geographical #orders.property situated "ithin its geographical #orders.




Long 6r% Statutes courts use long-ar%Long 6r% Statutes courts use long-ar%

statutes for non-resident parties #ased onstatutes for non-resident parties #ased on

%ini%u% contacts1 "ith state. +eans%ini%u% contacts1 "ith state. +eans

defendant had so%e connection "ith foru%defendant had so%e connection "ith foru%

state.state.

Corporate Contacts does #usiness orCorporate Contacts does #usiness or

ad!ertises "ithin state.ad!ertises "ithin state. 5 CASE 2.1CASE 2.1 Mastondrea v. Occidental HotelsMastondrea v. Occidental Hotels

Management S.A.Management S.A. (2007).(2007).

Jurisdiction OverJurisdiction Over

ersons or ro!ertyersons or ro!erty




"u#$ect %atter Jurisdiction"u#$ect %atter Jurisdiction

his is a li%itation on the types of cases ahis is a li%itation on the types of cases a

court can hear, usually deter%ined #ycourt can hear, usually deter%ined #y

federal or state statutes.federal or state statutes.

:or e;a%ple, #anruptcy, fa%ily or:or e;a%ple, #anruptcy, fa%ily or

cri%inal cases.cri%inal cases.

<eneral &unli%ited* /urisdiction.<eneral &unli%ited* /urisdiction. Li%ited /urisdiction.Li%ited /urisdiction.


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Ori&inal and A!!ellateOri&inal and A!!ellate

JurisdictionJurisdiction Courts of original /urisdiction is "here theCourts of original /urisdiction is "here the

case started &trial*.case started &trial*.

Courts of appellate /urisdiction ha!e theCourts of appellate /urisdiction ha!e thepo"er to hear an appeal fro% anotherpo"er to hear an appeal fro% another

court.court.


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'ederal (ourt Jurisdiction'ederal (ourt Jurisdiction

:ederal >uestion1 cases in "hich the:ederal >uestion1 cases in "hich the

rights or o#ligations of a party are createdrights or o#ligations of a party are created

or defined #y so%e federal la".or defined #y so%e federal la".

?i!ersity1 cases "here?i!ersity1 cases "here

5 he parties are not fro% the sa%e state, andhe parties are not fro% the sa%e state, and

5he a%ount in contro!ersy is greater thanhe a%ount in contro!ersy is greater than

@=7,000.@=7,000.




)*clusive vs+)*clusive vs+

(oncurrent Jurisdiction(oncurrent Jurisdiction A;clusi!e only one court &state or federal*A;clusi!e only one court &state or federal*

has the po"er &/urisdiction* to hear thehas the po"er &/urisdiction* to hear the

case.case.

Concurrent %ore than one court can hearConcurrent %ore than one court can hear

the case.the case.



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Jurisdiction in (y#ers!aceJurisdiction in (y#ers!ace

Courts use a Sliding Scale1 Standard toCourts use a Sliding Scale1 Standard to

deter%ine "hether to e;ercise /urisdiction.deter%ine "hether to e;ercise /urisdiction.

No Yes

Substantial

Business

Interaction

Passive

Website

SomeInteraction



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,enue ,enue

enue is concerned "ith the %ostenue is concerned "ith the %ost

appropriate location for the trial.appropriate location for the trial.

<enerally, proper !enue is "hether the<enerally, proper !enue is "hether thein/ury occurred.in/ury occurred.




"tandin& to "ue"tandin& to "ue

n order to #ring a la"suit, a party %ustn order to #ring a la"suit, a party %ust

ha!e standing1 to sue.ha!e standing1 to sue.

Standing is sufficient stae1 in theStanding is sufficient stae1 in thecontro!ersy party %ust ha!e suffered acontro!ersy party %ust ha!e suffered a

legal in/ury.legal in/ury.



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§-:§-: "tate and 'ederal (ourts"tate and 'ederal (ourts

Ct. Criminal

Appeals

Supreme

Court

Court of

Appeals

District Court County Court

Municipal

CourtJustice

Court

Texas Courts

.S. Supreme

Court

Circuit

Courts of

Appeals

.S. District

Court

Federal Courts




)*hi#it 2+1 "tate and 'ederal (ourts)*hi#it 2+1 "tate and 'ederal (ourts




Trial (ourtsTrial (ourts

Courts of record1-court reporters.Courts of record1-court reporters. Dpening and closing argu%ents.Dpening and closing argu%ents. Juries are selected.Juries are selected. A!idence, such as "itness testi%ony,A!idence, such as "itness testi%ony,

physical o#/ects, docu%ents, andphysical o#/ects, docu%ents, andpictures, is introduced.pictures, is introduced.

Witnesses are e;a%ined and cross-Witnesses are e;a%ined and cross-e;a%ined.e;a%ined.

erdicts and Judg%ents are rendered.erdicts and Judg%ents are rendered.




A!!ellate (ourts A!!ellate (ourts

+iddle le!el of the court syste%s.+iddle le!el of the court syste%s.

e!ie" proceedings conducted in the triale!ie" proceedings conducted in the trial

court to deter%ine "hether the trial "ascourt to deter%ine "hether the trial "asaccording to the procedural andaccording to the procedural and

su#stanti!e rules of la".su#stanti!e rules of la".

<enerally, appellate courts "ill consider<enerally, appellate courts "ill considerEuestions of la"Euestions of la", #ut, #ut not Euestions of factnot Euestions of fact..



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)*hi#it 2+2+ 'ederal (ourts o. A!!eal)*hi#it 2+2+ 'ederal (ourts o. A!!eal



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"u!reme (ourts"u!reme (ourts

6lso no"n as courts of last resort. 6lso no"n as courts of last resort.

he t"o %ost funda%ental "ays to ha!ehe t"o %ost funda%ental "ays to ha!e

your case heard in a supre%e court areyour case heard in a supre%e court are 5 6ppeals of ight. 6ppeals of ight.

5 ByBy Writ of Certiorari Writ of Certiorari ..

See the $.S. Supre%e Court and theSee the $.S. Supre%e Court and thee;as Supre%e Court "e#sites.e;as Supre%e Court "e#sites.




§/: Alternative 0is!ute§/: Alternative 0is!ute

ResolutionResolution

rials are a %eans of dispute resolutionrials are a %eans of dispute resolution

that are !ery e;pensi!e and so%eti%esthat are !ery e;pensi!e and so%eti%es

tae %any %onths to resol!e.tae %any %onths to resol!e.

here are alternati!e dispute resolution1here are alternati!e dispute resolution1

&6?* %ethods to resol!e disputes that&6?* %ethods to resol!e disputes that

are ine;pensi!e, relati!ely Euic and lea!eare ine;pensi!e, relati!ely Euic and lea!e

%ore control "ith the parties in!ol!ed.%ore control "ith the parties in!ol!ed.




A0R A0R

6? descri#es any procedure or de!ice 6? descri#es any procedure or de!ice

for resol!ing disputes other than thefor resol!ing disputes other than the

traditional /udicial process.traditional /udicial process.

$nless court-ordered, there is no record$nless court-ordered, there is no record"hich is an i%portant factor in"hich is an i%portant factor in

co%%ercial litigation due to trade secrets.co%%ercial litigation due to trade secrets.

+ost co%%on+ost co%%on negotiationnegotiation,, %ediation%ediation,,ar#itrationar#itration..



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e&otiatione&otiation

Less than '0F of cases reach trial.Less than '0F of cases reach trial.

Gegotiation is infor%al discussion of theGegotiation is infor%al discussion of the

parties, so%eti%es "ithout attorneys,parties, so%eti%es "ithout attorneys,"here differences are aired "ith the goal"here differences are aired "ith the goal

of co%ing to a %eeting of the %inds1 inof co%ing to a %eeting of the %inds1 in

resol!ing the case.resol!ing the case.

Successful negotiation in!ol!es thoroughSuccessful negotiation in!ol!es thorough

preparation, fro% a position of strength.preparation, fro% a position of strength.




Assisted e&otiation Assisted e&otiation

+ini-rial 6ttorneys for each side+ini-rial 6ttorneys for each sideinfor%ally present their case #efore ainfor%ally present their case #efore a%utually agreed-upon neutral )%utually agreed-upon neutral )rdrd partyparty

&&e.g.,e.g., a retired /udge* "ho renders aa retired /udge* "ho renders anon-#inding !erdict.1 his facilitatesnon-#inding !erdict.1 his facilitatesfurther discussion and settle%ent.further discussion and settle%ent.

A;pert e!aluations.A;pert e!aluations. Conciliation )Conciliation )rdrd party assists inparty assists in

reconciling differences.reconciling differences.



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%ediation%ediation

n!ol!es a neutral )n!ol!es a neutral )rdrd party &%ediator*.party &%ediator*.

+ediator tals face-to-face "ith parties+ediator tals face-to-face "ith parties

&"ho typically are in different ad/oining&"ho typically are in different ad/oiningroo%s* to deter%ine co%%on ground.1roo%s* to deter%ine co%%on ground.1

5 6d!antages fe" rules, custo%iHe process, 6d!antages fe" rules, custo%iHe process,

parties control results &"in-"in*.parties control results &"in-"in*.

5 ?isad!antages %ediator fees, no sanctions?isad!antages %ediator fees, no sanctions

or deadlines.or deadlines.




Ar#itration Ar#itration

Settling of a dispute #y a neutral )Settling of a dispute #y a neutral )rdrd partyparty&ar#itrator* "ho renders a legally-#inding&ar#itrator* "ho renders a legally-#indingdecision usually an e;pert or "ell-respecteddecision usually an e;pert or "ell-respected

go!ern%ent official.go!ern%ent official. 5 6r#itration Clauses and Statutes. 6r#itration Clauses and Statutes.

5 6r#itra#ility of the Case. 6r#itra#ility of the Case.

5 CASE 2.2CASE 2.2 Buckeye !eck as!ing" #nc. v.Buckeye !eck as!ing" #nc. v.adegnaadegna (2006).(2006).

+andatory A%ploy%ent 6r#itration.+andatory A%ploy%ent 6r#itration. 5 CASE 2.3CASE 2.3 Morrison v. ircuit ity Stores" #nc.Morrison v. ircuit ity Stores" #nc.

(2003).(2003).




Ar#itration 0isadvanta&es Ar#itration 0isadvanta&es

esults %ay #e unpredicta#le #ecauseesults %ay #e unpredicta#le #ecause

ar#itrators do not ha!e to follo" precedentar#itrators do not ha!e to follo" precedent

or rules of procedure or e!idence.or rules of procedure or e!idence.

6r#itrators do not ha!e to issue "ritten 6r#itrators do not ha!e to issue "ritten

opinions.opinions.

<enerally, no disco!ery a!aila#le.<enerally, no disco!ery a!aila#le.




Ar#itration rocess Ar#itration rocess

Case #egins "ith a su#%ission to anCase #egins "ith a su#%ission to an

ar#itrator. Ge;t co%es the hearing "herear#itrator. Ge;t co%es the hearing "here

parties present e!idence and argu%ents.parties present e!idence and argu%ents.:inally, the ar#itrator renders an a"ard.:inally, the ar#itrator renders an a"ard.

Courts are not in!ol!ed in ar#itrationCourts are not in!ol!ed in ar#itration

unless an ar#itration clause in a contractunless an ar#itration clause in a contractneeds enforce%ent.needs enforce%ent.



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roviders o. A0R "ervicesroviders o. A0R "ervices

Gon-profit organiHationsGon-profit organiHations

5 6%erican 6r#itration 6ssociation. 6%erican 6r#itration 6ssociation.

5Better Business Bureau.Better Business Bureau.




Online 0is!ute ResolutionOnline 0is!ute Resolution

6lso called D?. 6lso called D?.

$ses the nternet to resol!e disputes.$ses the nternet to resol!e disputes.

Still in its infancy #ut is gainingStill in its infancy #ut is gaining%o%entu%.%o%entu%.

See, e.g., esolution :oru%, nc., irtualSee, e.g., esolution :oru%, nc., irtual

+agistrate 4ro/ect.+agistrate 4ro/ect.

§ I i l 0i§ I t ti l 0i t



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§ : International 0is!ute§ : International 0is!ute

ResolutionResolution

:oru% Selection and Choice-of-La":oru% Selection and Choice-of-La"

clauses in contracts go!ern theclauses in contracts go!ern the

transaction.transaction. 6r#itration clauses are generally 6r#itration clauses are generally

incorporated into international contracts.incorporated into international contracts.

Ch 2 - Courts and Alternative Dispute Resolution

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