The Nature of Law
The Resolution of Private Disputes
Business and The Constitution
Business Ethics, Corporate Social
Responsibility, Corporate Governance, and
Critical Thinking
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.
The Resolution of
Private Disputes
In case of dissension,
never dare to judge till
you have heard the
other side.
Euripides
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
State courts and their jurisdiction
Federal courts and their jurisdiction
Civil Procedure
Alternative Dispute Resolution
2-3
The U.S. Judicial System
The United States has a federal court system
and each state has a court system
A Court is established by a government to
hear and decide matters before it and redress
past or prevent future wrongs
Jurisdiction (the power to hear and speak)
may be original (trial) or appellate (reviews
trial court)
2-4
General vs. Limited Jurisdiction
General jurisdiction courts (i.e., trial courts)
hear most types of cases
Levels generally classified according to dollar
amount of damages or location
Examples: county courts, district courts
Limited jurisdiction courts hear specialized
types of cases; appeals from decisions often
require new trial in general jurisdiction court
Examples: traffic court, tax court, family court
2-5
Subject-Matter Jurisdiction
Subject-matter jurisdiction refers to a court’s
authority to hear a particular type of dispute
Courts of criminal jurisdiction hear trials of
crimes and misdemeanors
Offenses against the public at large
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)
2-6
In Personam or In Rem
Jurisdiction
Besides subject-matter jurisdiction, court must
have either in personam or in rem jurisdiction
In personam jurisdiction requires that defendant
be resident of, located within, or acted within
physical boundaries of the court’s authority
In rem jurisdiction applies when property that is
the subject of the dispute is located within
physical boundaries of the court’s authority
2-7
Federal Court Jurisdiction
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
Federal question jurisdiction exists when the
dispute arises under the Constitution, laws,
or treaties of the United States
2-8
Civil Procedure
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
2-9
Civil Pre-Trial Procedure
Plaintiff’s complaint or petition plus the
defendant’s answer or response are known
as the pleadings
Defendant may enter a counterclaim against
plaintiff or cross-complaint against 3rd party
Other parties may enter the case
Motion practice begins
2 - 10
Civil Pre-Trial Procedure
Discovery: Obtaining evidence from other
party through interrogatories, requests for
admissions, requests for documents, and
depositions
Discovery process can be a battleground
See Allstate Indemnity Co. v. Ruiz
Pretrial Conference: Where judge will hear
and rule on many evidentiary issues,
discovery disputes, and other concerns
2 - 11
Civil Trial Procedure
Jury Selection
Voir Dire or Jury
Questioning
Opening Statement
from each party
2 - 12
Civil Trial Procedure
Plaintiff’s case through direct examination of
witnesses (defendant performs cross-
examination) and defendant’s case through
direct examination (and plaintiff’s cross-
examination)
Closing argument or summation from each
party
Jury verdict
2 - 13
Civil Trial Procedure
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)
2 - 14
Civil Trial Procedure
Trier of Fact sees material evidence (physical
objects, documents), hears testimony of
witnesses (who provide factual evidence),
and decides outcome of the case based on
facts; trier of fact may be judge or jury
Matters of law are issues not of fact, but of
law; matters of law decided only by a judge
E.g., whether a statute means X or Y, or one law
or another applies to the facts
2 - 15
Civil Post-Trial Procedure
After jury verdict, a party may make a motion
for new trial, judgment non obstanto verdicto
(notwithstanding the verdict) or remittitur
(defendant requests judge to reduce amount of
damages the jury recommended)
After a judgment has been entered:
Losing party may appeal decision to higher court
Winning party must have the judgment executed
(carried out) to obtain money, property, or action
ordered by the court
2 - 16
Alternate Dispute Resolution
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
2 - 17
