LAW 10 OUTLINE

CHAPTER 2 - COURTS & ALTERNATIVE DISPUTE RESOLUTION

The key points in this chapter include:

1. The concepts of jurisdiction and venue.

2. The requirements for federal jurisdiction.

3. The basic components of the federal and state court system.

4. The functions of trial courts and appellate courts.

5. The various ways in which disputes can be resolved outside the court system.


This chapter explains which courts have power to hear what disputes and when. The chapter also covers alternative dispute resolution—alternatives to litigation that can be as binding to the parties as a court decree.

I. THE JUDICIARY’S ROLE IN AMERICAN GOVERNMENT
The power of judicial review: the courts can decide whether the laws or actions of the executive branch and the legislative branch are constitutional.

II. BASIC JUDICIAL REQUIREMENTS

A. JURISDICTION
To hear a case, a court must have jurisdiction over (1) the defendant or the property involved and (2) the subject matter.

1. Jurisdiction over Persons or Property
A court has in personam (personal) jurisdiction over state residents. Long arm statutes permit courts to exercise jurisdiction over nonresidents who have minimum contacts with the state (e.g., do business there). A court has in rem jurisdiction over property within its borders.

2. Jurisdiction over Subject Matter
A court of general jurisdiction can decide virtually any type of case. A court's jurisdiction may be limited by the subject of a suit, the amount of money in controversy, or whether a proceeding is a trial or appeal.

3. Jurisdiction of the Federal Courts

a. Federal Questions
Any suit based on the Constitution, a treaty, or a federal law can originate in a federal court.

b. Diversity of Citizenship
Federal jurisdiction covers cases involving (1) citizens of different states, (2) a foreign government and citizens of a state or of different states, or (3) citizens of a state and citizens or subjects of a foreign government. The amount in controversy must be more than $50,000.

4. Exclusive v. Concurrent Jurisdiction
Exclusive: when cases can be tried only in federal courts or only in state courts.
Concurrent: When both federal and state courts can hear a case.

B. VENUE
Venue is concerned with the most appropriate location for a trial.

C. STANDING TO SUE
Standing is the interest (injury or threat) that a plaintiff has in a case. A plaintiff must have standing to bring a suit, and the controversy must be justiciable (real, as opposed to hypothetical or purely academic).

III. THE STATE AND FEDERAL COURT
SYSTEMS

A. STATE COURT SYSTEMS

1. Trial Courts
Trial courts are courts in which trials are held and testimony is taken.

2. Courts of Appeals
Courts that hear appeals from trial courts look at questions of law (what law governs a dispute) but not questions of fact (what occurred in the dispute), unless a trial court’s finding of fact is clearly contrary to the evidence. Decision of a state’s highest court on state law is final.

B. THE FEDERAL COURT SYSTEM

1. U.S. District Courts
The federal equivalent of a state trial court of general jurisdiction. There is at least one federal district court in every state. Other federal trial courts include the U.S. Tax Court and the U.S. Bankruptcy Court.

2. U.S. Courts of Appeals
The U.S. (circuit) courts of appeals for twelve of the circuits hear appeals from the federal district courts located within their respective circuits. The court of appeals for the thirteenth circuit (the federal circuit) has national jurisdiction over certain cases.

3. The United States Supreme Court
The highest level of the federal court system. The Supreme Court can review any case decided by any of the federal courts of appeals, and it has authority over some cases decided in state courts.

4. How Cases Reach the Supreme Court
To appeal a case to the Supreme Court, a party asks for a writ of certiorari. Whether the Court issues the writ is within its discretion.

IV. ALTERNATIVE DISPUTE
RESOLUTION (ADR)

A. NEGOTIATION
Parties come together informally, with or without attorneys, to try to settle or resolve their differences without involving independent third parties. Forms of ADR associated with negotiation include—

1. Mini-Trial
A private proceeding in which attorneys briefly argue each party’s case. A third party indicates how a court would likely decide the issue.

2. Early Neutral Case Evaluation
Parties select a neutral third party (generally an expert) to evaluate their positions, with no hearing and no discovery. The evaluation is a basis for negotiating a settlement.

3. Summary Jury Trial (SJT)
Like a mini-trial, but a jury renders a nonbinding verdict. Negotiations must follow. If no settlement is reached, either side can seek a full trial.

B. MEDIATION
Parties come together informally with a mediator, who may propose solutions for the parties. A mediator is often an expert in a particular field.

C. ARBITRATION
An arbitrator—the third party hearing the dispute—decides the dispute. If the parties agree, the decision may be legally binding.

1. Arbitration Clauses
Disputes are often arbitrated because of an arbitration clause in a contract entered into before the dispute. Courts enforce such clauses.

2. Arbitration Statutes
Most states have statutes under which arbitration clauses are enforced. The Federal Arbitration Act (FAA) enforces arbitration clauses in contracts involving interstate commerce.

3. The Arbitration Process
At an arbitration hearing, the parties make their arguments, present evidence, and call and examine witnesses, and the arbitrator makes a decision. The decision is called an award, even if no money is involved.

D. ADR AND THE COURTS
Many courts require parties to attempt to settle their differences through some form of ADR before going to trial. The arbitrator’s decision is not binding—if either party rejects the award, the case goes to trial.

E. PROVIDERS OF ADR SERVICES
ADR services are provided by government agencies and private organizations, such as the American Arbitration Association and JAMS/Endispute.

. Ron wants to sue Art’s Supply Company for Art’s failure to deliver supplies that Ron needed to prepare his work for an appearance at a local Artists Fair. What must Ron establish before a court will hear the suit?

ANSWER:

Before a court will hear a case, it must be established that the court has subject matter and personal jurisdiction and that the matter at issue is justiciable. The party bringing the suit must also have standing to sue.