Business Law - Chapter 2

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Courts and Jurisdiction

Limited-Jurisdiction Trial Courts

Sometimes referred to as "inferior trial courts." They hear matters of limited or specialized nature. Evidence can be introduced, records are kept, and decisions can be appealed to a general jurisdiction court or appellate court.

Small Claims Courts

A division of Limited-Jurisdiction courts that hear CIVIL cases involving small dollar amounts (e.g. $5,000 or less)

General-Jurisdiction Trial Courts

Referred to as "Courts of Record" because testimonies and evidence at trial are recorded and stored for future reference. Hear cases not within Limited Jurisdiction trail courts such as felonies, civil cases more than a certain dollar amount, and so on. Usually divided into civil and criminal divisions.

Intermediate Appellate Courts

Also called "Courts of Appeals" because they hear appeals from lower courts. No new evidence or testimony is permitted. They review the trial court record for errors that would have reversed the courts decision.

Legal Briefs

The document filed by both parties to an appellate court stating the law and facts that support their positions.

State Supreme Courts

Function is to hear appeals from intermediate appellate state courts and certain trial courts. All decision are final unless the question of law is appealable to the US Supreme Court.

Delaware Court of Chancery

A state court specializing in corporate governance, fiduciary duties of corporate officers, mergers and acquisitions, and other business issues. Have expertise in handling and deciding corporate issues.

Article III of the US Constitution

States that the federal government's judicial power is vested in one "Supreme Court." Allows congress to establish inferior courts

US District Courts

Similar to that of General-Jurisdiction Courts (fact-finding courts)

US Court of Appeals

The federal court systems intermediate appellate courts. There are 13 circuits of these courts. Usually heard by a panel of 3 judges (error finding courts)

Circuit

The area served by a US court of Appeals.

Court of Appeals for the Federal Circuit

This court has special appellate jurisdiction to review the decision of the Court of Federal Claims, the Patent and Trademark Office, and the Court of International Trade.

en banc review

When a petitioner asks that instead of just three appellate judges making a decision that the entire appellate court decide.

US Supreme Court

Highest court of the land. Composed of nine justices who serve for life or retirement. Nominated by president and confirmed by the Senate. They decide which cases they will hear.

Petition for Certiorari

What a petitioner must file asking the Supreme Court to hear their case.

Writ of certiorari

If the Supreme Court decides to view a case they will issue this.

Types of Decisions made by the Supreme Court:

1) Unanimous Decision
2) Majority Decision
3) Plurality Decision
4) Tie Decision

Unanimous Decision

A Supreme Court decision where all justices agree to the outcome AND reasoning. They are precedent for later cases.

Majority Decision

A majority of the justices agree to the outcome AND reasoning used to decide a case. Precedent for later cases.

Plurality Decision

The majority of the justices agree to the outcome of the case, but differ on the reason why. Settles the case but is not precedent for later cases.

Tie Decision

If one justice cannot make it then this happens. The lower courts decision is upheld and is not precedent for later cases.

concurring opinion

A document written by one or more justices when they agree to the outcome of a case but not the reason for the outcome.

Dissenting Opinion

A document written by a supreme court justice when they do not agree on a decision and gives their reasoning why.

Federal Question

Cases arising under the US Constitution, treaties, federal statutes, and regulations. No dollar amount limit.

Diversity of Citizenship

Lawsuits involving (1) citizens of different states or (2) citizen of a state and a citizen or subject of a foreign country. The plaintiff may bring the case to a state court or federal court but the defendant can take it to federal court.

Rule of Four

Four of the Supreme Court Justices must consider your case worth listening to to heard.

In order to get to Federal Court:

1) Diversity of Jurisdiction
a) People of two different states or of another country
b) Over $75,000 of damages
2) Federal Question

Which cases are required to go to Federal Court?

1) Intellectual Property Cases
2) Federal Crimes
3) Admirality (also other military courts)
4) Bankruptcy
5) Anti-trust
6) Cases against America (so and so vs. US)

Three criteria for a case to be brought to court:

1) Standing to Sue
2) In Personam Jurisdiction
3) Proper Venue

Standing to Sue

The plaintiff must have some stake in the outcome of the case. Must also be a real case and not a hypothetical case.

In Personam Jurisdiction

A court's jurisdiction over a person. The court must have jurisdiction over the plaintiff and the defendant.

Long-Arm Statute

State courts are allowed to obtain jurisdiction in a CIVIL lawsuit over persons and businesses located in another state or country as long as there has been "minimum contact." Usually ok with nonresidents who have:
1) committed torts with in the state
2) entered into a contract either in the stat or the affects the state
3)transacted other business in the state that allegedly caused injury to another person
The maintenance of that lawsuit in that state must not offend traditional notions of fair play and substantial justice.

International Shoe Company vs. State of Washington

Established the rules for knowing when a state has the "long arm statute" for a defendant. Said that International Shoe Company's activities were neither irregular or casual. Established the notions of "minimum contacts" test and "traditional notions of fair play and substantial justice."

In Rem Jurisdiction

Courts may have jurisdiction to hear cases because they have jurisdiction over the property of the case.

Quasi In Rem Jurisdiction

Called Attachment jurisdiction, of a plaintiff sues a defendant for property they possess in another state.

Full Faith and Credit Clause

In the US Constitution it says that a judgment of a court of one state must be given full credit by the courts of another state.

Venue

Must be heard by a court with jurisdiction that is nearest the location in which the incident occurred or where the parties reside.

Change of Venue

Can be requested so that a more impartial jury may be found.

Forum Shopping

Looking for a favorable court without valid reason. Is frowned upon.

Choice of Forum or Choice of Law Clauses

Clauses in legal documents where parties may agree that if litigation were to take place, they decide together where it must be handled and by which laws.

Manufacturing Company vs. Zippo Dot Com, Inc

An important case that established a test for determining when a court has jurisdiction over the owner or operator of an interactive, semi-interactive, or passive website.

Chanel Inc. vs. Banks

A case where a woman with a website working in another state was sued by Chanel for selling knockoffs of their products. Because her site was highly interactive and provided a platform for commercial exchange of information, goods, and funds, it was upheld that the state of Maryland had personal jurisdiction over her.

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