Legal Environment of Business (Management 518)

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Legal Environment of Business (Management 518)

• Professor Charles H. Smith
• The Court System (Chapter 2)
• Spring 2005

2
The American Court System

• Dual court system in the United States
  federal court system plus each state has its own
  court system.
• Cases generally filed/commenced in trial courts
  District Court in the federal court system
  Superior Court in California.
• Appeal by right from trial courts to intermediate
  appellate courts Court of Appeals (federal 13
  circuits, see map on page 32) Court of Appeal
  (California 6 districts).
• Appeal from intermediate appellate courts to
  supreme courts per discretion United States
  Supreme Court and California Supreme Court.
• Appeal from California Supreme Court to United
  States Supreme Court per only discretion and if
  case involves federal question.

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Chart re American Court System
Federal Court System California State Court System
United States District Court for the region, if any District of state Superior Court for the County of all 58 counties have Superior Court
Court of Appeals for the 1st-11th, D.C. or Fed. Circuit Court of Appeal of the 1st-6th Appellate District
United States Supreme Court California Supreme Court
4
How to Become a Judge?

• Federal courts
• All federal court judges appointed for life
  removal from bench by resignation, death or
  impeachment.
• Appointment of federal judge nomination by
  President and then confirmation by Senate.
• California state courts
• Superior Court appointment by Governor (90) or
  election to all or remaining part of 6-year term
  (10) all judges subject to re-election at end
  of 6-year term.
• Court of Appeal and Supreme Court appointment
  by Governor only to all or remaining part of
  12-year term people vote in confirmation
  election at end of 12-year term.

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Jurisdiction Issues

• Jurisdiction the power of a court to hear a
  certain type of case (subject matter
  jurisdiction) or case against a certain party
  (personal jurisdiction).
• Subject matter jurisdiction
• California state courts are courts of general
  jurisdiction since they can hear almost all types
  of cases.
• Federal courts are courts of limited
  jurisdiction since they hear limited types of
  cases only (federal question and diversity).
• Many types of cases can be heard in state or
  federal court (concurrent jurisdiction), but
  certain cases can be heard in a specific court
  system only (exclusive jurisdiction).
• Personal jurisdiction general and
  specific/limited standards based on due process
  (see next slide).

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Personal Jurisdiction Substantial Justice and
Fair Play

• General standard
• Plaintiff who files lawsuit in court hearing the
  case, or
• Defendant who is domiciled in the same state
  where the court hearing the case is located
  (forum state), or
• Defendants domicile is out of state but
  defendant has substantial relationship or
  continuous or systematic contact with forum
  state.

• Specific/limited standard applies to out of
  state defendants only
• Defendant purposefully directed activities at
  residents of forum state or purposefully
  availed itself of benefits and protections of
  laws of forum state, and
• Lawsuit must arise out of or be a result of
  defendants contact(s) with forum state, and
• Exercise of personal jurisdiction must be
  reasonable.

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Choice of Law, Venue and Forum Non Conveniens

• Choice of law issue arises if more than one state
  has an interest in the case traditionally,
  states law applicable to case determined by
  where contract made or where accident occurred,
  though court may look to which state has more
  significant interest
• Venue usually set by statute (e.g., place where
  accident happened or contract to be performed) or
  contract.
• Forum non conveniens (inconvenient forum) may
  be back-up argument in motion challenging
  personal jurisdiction generally assumes that
  court has personal jurisdiction over defendant,
  who argues that court is not convenient for
  parties, witnesses, evidence, etc.

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Case Studies

• State of Oregon v. Lillard (pp. 42-43) personal
  jurisdiction.
• Erie Railroad Co. v. Tompkins (pp. 47-48) what
  law to use in federal court if no federal law
  applies?
• Hughes v. Wal-Mart Stores, Inc. (pp. 49-50)
  choice of law.
• Burger King v. Rudzewicz (page 56 Case Question
  4) personal jurisdiction based on contract.
• Chambers v. Dakotah Charter (page 57 Case
  Question 7) choice of law.