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Business Law Chapter02

Business Law Chapter02

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Business Law:Legal, E-Commerce, Ethical and International Environments 
, Fifth Edition, by Henry R. Cheeseman. Published by Prentice-Hall. Copyright ©2004by Pearson Education, Inc.
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C
HAPTER 
2
21
 I was never ruined but twice;once when I lost alawsuit,and once when I won one.
—Voltaire
 Judicial and AlternativeDispute Resolution
Chapter Objectives
 After studying this chapter,you should be able to:
1.
Describe and compare the state court systems and thefederal court system.
2.
Apply a cost-benefit analysis for bringing and defendinga lawsuit.
3.
Explain how a justice is chosen for the U.S.SupremeCourt.
4.
Explain subject matter jurisdiction and venue of federaland state courts.
5.
Describe how jurisdiction of courts applies to Web siteoperators.
6.
Describe the pretrial litigation process.
7.
Describe how e-filings are used in court.
8.
Describe how a case proceeds through trial and how atrial court decision is appealed.
9.
Compare the Japanese and American legal systems.
10.
Explain the use of arbitration and other nonjudicialmethods of alternative dispute resolution.
Chapter Contents
The State Court Systems
Entrepreneur and the Law
Specialized Courts Hear Commercial Disputes
The Federal Court System
Contemporary Business Environment
I'll Take You to the U.S.Supreme Court!–NOT!
Landmark Law
The Process of Choosing a Supreme Court  Justice
The Jurisdiction of Courts
Case 2.1 •
Carnival Cruise Lines,Inc.v.Shute (U.S.)
E-Commerce & Information Technology Law
Obtaining Personal Jurisdiction in Cyberspace
Entrepreneur and the Law
Cost-Benefit Analysis of a Lawsuit 
The Pretrial Litigation Process
Case 2.2 •
Swierkiewicz v.Sorema N.A.(U.S.)
E-Commerce & Information Technology Law
E-Filings in Court 
Case 2.3 •
Norgart v.The Upjohn Company (CA)
Business Ethics
Calendars Ordered into the Daylight 
Contemporary Business Environment
Ford Explorer SUV Rollover Lawsuit Settled for $22 Million
The Trial
The Appeal
Case 2.4 •
Weisgram v.Marley Company (U.S.)
Alternative Dispute Resolution
Landmark Law
The Federal Arbitration Act 
Case 2.5 •
Circuit City Stores,Inc.v.Adams (U.S.)
International Law
Comparison of the Japanese and AmericanLegal Systems
End-of-Chapter Internet Exercisesand Case Questions
Working the Web Internet ExercisesCritical Legal Thinking CasesBusiness Ethics CasesBriefing the Case Writing Assignment
 
Business Law:Legal, E-Commerce, Ethical and International Environments 
, Fifth Edition, by Henry R. Cheeseman. Published by Prentice-Hall. Copyright ©2004by Pearson Education, Inc.
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22
U
NIT
I
 T
HE
L
EGAL
E
NVIRONMENTOF 
D
OMESTICAND
I
NTERNATIONAL
L
AW 
We're the jury,dread our fury! 
 William S.Gilbert
Trial by Jury
limited-jurisdictiontrial court
A court that hears matters of aspecialized or limited nature.
small claims court
A court that hears civil casesinvolving small dollar amounts.
general-jurisdictiontrial court
A court that hears cases of ageneral nature that are not withinthe jurisdiction of limited- jurisdiction trial courts.Testimonyand evidence at trial are recordedand stored for future reference.
Courthouse,St.Louis Missouri.
State Courts hear and decide the majority ofcasesin this country.The law,wherein,as in amagic mirror,we see reflected,not only our own lives,but the lives ofall men that have been! When I think on this majestic theme,my eyes dazzle.
Oliver Wendell Holmes
The Law,Speeches 17 (1913)
 There are two major court systems in the United States:(1) the federal court system and(2) the court systems of the 50 states and the District of Columbia.Each of these systemshas jurisdiction to hear different types of lawsuits.The process of bringing,maintaining,anddefending a lawsuit is called
 litigation
.Litigation is a difficult,time-consuming,and costly process that must comply with complex procedural rules.Although it is not required,mostparties employ a lawyer to represent them when they are involved in a lawsuit.Several forms of 
nonjudicial 
dispute resolution have developed in response to theexpense and difficulty of bringing a lawsuit.These methods,collectively called
alternativedispute resolution
,are being used more and more often to resolve commercial disputes. This chapter discusses the various court systems,the jurisdiction of courts to hear anddecide cases,the litigation process,and alternative dispute resolution.
The State Court Systems
Eachstate and the District of Columbia has a separate court system.Most state court sys-tems include the following:
limited-jurisdiction trial courts,general-jurisdiction trial courts,intermediate appellate courts
,and a
supreme court 
.
Limited-Jurisdiction Trial Court
State
 limited-jurisdiction trial courts
,which are sometimes referred to as
inferior trialcourts
,hear matters of a specialized or limited nature.In many states,traffic courts,juvenilecourts,justice-of-the-peace courts,probate courts,family law courts,and courts that hear mis-demeanor criminal law cases and civil cases involving lawsuits under a certain dollar amountare examples of such courts.Because these courts are trial courts,evidence can be introducedand testimony given.Most limited-jurisdiction courts keep a record of their proceedings. Their decisions usually can be appealed to a general-jurisdiction court or an appellate court.Many states have also created
small claims courts
to hear civil cases involving smalldollar amounts (e.g.,$5,000 or less).Generally,the parties must appear individually andcannot have a lawyer represent them.The decisions of small claims courts are often appeal-able to general-jurisdiction trial courts or appellate courts.
General-Jurisdiction Trial Court
Every state has a
general-jurisdiction trial court
.These courts are often referred to as
courts of record
because the testimony and evidence at trial are recorded and stored forfuture reference.They hear cases that are not within the jurisdiction of limited-jurisdictiontrial courts,such as felonies,civil cases over a certain dollar amount,and so on.Some statesdivide their general-jurisdiction courts into two divisions,one for criminal cases andanother for civil cases.Evidence and testimony are given at general-jurisdiction trial
 
Business Law:Legal, E-Commerce, Ethical and International Environments 
, Fifth Edition, by Henry R. Cheeseman. Published by Prentice-Hall. Copyright ©2004by Pearson Education, Inc.
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C
HAPTER
2
 J
UDICIALAND
A
LTERNATIVE
D
ISPUTE
ESOLUTION
23
intermediate appellatecourt
An intermediate court that hearsappeals from trial courts.
state supreme court
 The highest court in a state court system; it hears appeals fromintermediate state courts andcertain trial courts.
courts.The decisions handed down by these courts are appealable to an intermediateappellate court or the state supreme court,depending on the circumstances.
Intermediate Appellate Court
In many states,
intermediate appellate courts
(also called
appellate courts
or courts of appeal) hear appeals from trial courts.They review the trial court record to determine if therehave been any errors at trial that would require reversal or modification of the trial court'sdecision.Thus,the appellate court reviews either pertinent parts or the whole trial courtrecord from the lower court.No new evidence or testimony is permitted.The parties usually file legal
briefs
 with the appellate court stating the law and facts that support their positions.Appellate courts usually grant a brief oral hearing to the parties.Appellate court decisions areappealable to the state's highest court.In less populated states that do not have an intermedi-ate appellate court,trial court decisions can be appealed directly to the state's highest court.
Highest State Court
Each state has a highest court in its court system.Most states call this highest court the
supreme court
.The function of a state supreme court is to hear appeals from intermediate statecourts and certain trial courts.No new evidence or testimony is heard.The parties usually sub-mit pertinent parts of or the entire lower court record for review.The parties also submit legalbriefs to the court and are usually granted a brief oral hearing.Decisions of state supreme courtsare final,unless a question of law is involved that is appealable to the U.S.Supreme Court.Exhibit 2.1portrays a typical state court system.
U.S. Supreme CourtAppeal toCriminalDivisionCivilDivisionProbateDivisionDomesticRelationsDivisionJuvenileDivisionSmallClaimsCourtsMunicipalCourtsJusticeof thePeaceCourts
StateSupremeCourtStateAppealsCourtsStateTrial Courtsof GeneralJurisdiction(one per county)
EXHIBIT 2.1
A Typical State Court System

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