Chapter 2
COURT SYSTEMS AND JURISDICITON
When can you take a case to court?
I. Overview
You are standing at the window with a friend and your car gets hit. You see it happen and you want
to sue. Can you and, if so, where? Your friend saw the same accident. Can he sue? Should you go to
Federal Court or State Court and if the latter, which one? For the laymen, these questions might seem
easy but they are not.
Additionally, jurisdiction (the power of a court to hear a case) has been complicated by the computer.
Where does a transaction take place? Where is the computer? Does it matter? These questions, among
others will attempt to be answered in this chapter.
II. Hypothetical Multi-issue Essay Question
Mr. Cav E. At-Emptor is fed up. He has suffered through the ownership of a model XXX Luxmobile
auto since he bought it new from Loud and Obnoxious Motors nine months ago. The car has spent more
time in the repair shop than on the road and is now out of warranty. Mr. At-Emptor still owes over four
years worth of payments on the car and has decided he is tired of paying for the car twice—once to buy it
and once again to repair it. He purchased the car in New York but uses it in Colorado. Can he sue L & O
Motors in Colorado?
III. Outline
State Court Systems
Limited-jurisdiction trial courts
Courts that hear matters of specialized or limited nature
Small claims courts are a good example of this
General-jurisdiction trial court
Courts that hear cases of a general nature that are not within the jurisdiction of limitedjurisdiction trial courts
Intermediate appellate courts
Courts that hear appeals from trial courts
Highest state court
The highest court in a state system
Sample State Court System
U.S. Supreme Court
Created by Article III of the US Constitution
Highest court in the US
Located in Washington, D.C.
Composed of nine justices who are nominated by the President and confirmed by the Senate
Types of decisions:
Unanimous
Majority
Plurality
Tie
Writ of Certiorari is needed for the Supreme Court to hear a case
Special Federal Courts
US Tax Court
US Claims Court
US Court of International Trade
US Bankruptcy Court
US Courts of Appeals
These are the federal court system’s intermediate appellate courts
There are 13 courts of appeals
US District Courts
These are the federal court system’s trial courts of general jurisdiction
Presently, there are 96 district courts
Relevant Court
Terms
Standing
↓
Need a reason to
sue
vs
Jurisdiction
↓
Court’s Power to Hear
Case
Jurisdiction of Federal and
State Courts
Exclusive Federal
↓
Not subject to State jurisdiction
vs
Venue
↓
Place within Jurisdiction where
case is heard
vs Concurrent vs
↓
Shared
Exclusive State
↓
Not subject to Federal
jurisdiction
Types of Jurisdiction
(1) Subject Matter—type of case court can hear
(2) In Personam—power to bring defendant into court  within state done via summons  outside
of state look to long-arm statute defining minimum contacts needed to have jurisdiction 
special problem in Cyberspace
(3) In Rem – power from jurisdiction over the property of a lawsuit
Limited Jurisdiction of Federal Courts
(1) Federal Question
(2) Diversity of Citizenship  amount in question $75,000 or more and all Plaintiffs citizens of
different states than all Defendants
IV. Objective Questions
Terms:
1. The process of bringing, maintaining, and defending a lawsuit is called _______________.
2. An arrangement in which the lawyer receives a percentage of the amount recovered from the client
upon winning or settling the case is called a _______________ _______________
_______________.
3. A plaintiff must have some stake in the outcome of the lawsuit to have _______________
_______________ _______________.
4. The authority of a court to hear a case is called _______________.
5. A summons served within the territorial boundaries of a state is called _______________
_______________ _______________.
6. A statute that extends a state's jurisdiction to nonresidents who were not served a summons within the
state is called a _______________ _______________ _______________.
7. A __________ ____ ___________ is needed for the Supreme Court to hear a case.
8. The_______________ _______________ is the highest court in the U.S.
9. _______________ is the place within a jurisdiction where a case is heard.
10. The amount in question in a diversity case is __________________.
True/False:
1. ____
A corporation is only subject to personal jurisdiction in the state in which it is incorporated.
2. ____
State long-arm statutes require that a nonresident have at least minimum contact
with the state.
3. ____
Courts will freely grant requests for change of venue if one of the parties makes
such a request.
4. ____
In a diversity case, all plaintiffs must be citizens of the same states as the defendants.
5. ____
Federal Tax Court is a court of general jurisdiction.
Multiple Choice:
1. John and Jane have a car accident with Harry. Harry is a friend of John and Jane and decides not to
sue. However Harry's girlfriend, Helga, wants to sue John and Jane. Helga cannot sue because she
does not have:
A. Standing to sue.
B. Personal jurisdiction.
C. Venue.
D. Subject matter jurisdiction.
2. A plaintiff, by filing a lawsuit, automatically becomes subject to this. However, the defendant must
be served a summons to become subject to:
A. Standing.
B. Personal jurisdiction.
C. Venue.
D. Subject matter jurisdiction.
3. State Zeon wishes to extend its jurisdiction over Defendant Darin through use of its long arm statute.
Under what circumstances may Zeon do this?
A. If Darin committed a tort in Zeon.
B. If Darin made a contract in Zeon and then breached it.
C. If Darin transacted business in Zeon that caused injury to another person.
D. All of the above.
4. Plaintiff Pam obtains a judgment in state Zeon against Defendant Debbie, who lives in state Yalut.
Pam tries to collect the judgment by attaching Debbie's property in Yalut. This is known as:
A. In rem jurisdiction.
B. A long-arm statute.
C. Quasi in rem jurisdiction.
D. None of the above.
5. A long are statute helps to define _________________ needed for jurisdiction in some cases:
A. state of citizenship
B. sufficient minimum contacts
C. answers to complaints
D. amount in question
V. Answers to Objective Questions:
Terms:
1. Litigation. Most disputes are, in fact, resolved by nonlitigation processes.
2. Contingency fee arrangement. There continues to be much controversy over this form of fee
arrangement.
3. Standing to sue. An interest in a lawsuit must be more than just secondary or tangential; standing to
sue requires a legally recognized stake in the outcome.
4. Jurisdiction. Jurisdiction can be established in a number of ways--by statute, case law, and the like.
5. Service of process. Process servers have a high-risk job due to the emotionally charged nature of
many court proceedings.
6. Long-arm statute. Without such statutes, state boundaries could be used as moats to avoid legal
proceedings.
7. Writ of certiorari. These are only granted on a selective basis.
8. Supreme Court. The selection process is very important as can be seen from the current political
news.
9. Venue. This is not used for “forum shopping” but it can be changed.
10. $75,000 The amount often changes.
True/False:
1. False. A corporation may be subject to personal jurisdiction in the state where it is incorporated, in
the state where it has its principal office, and in the state where it is doing business.
2. True. Minimum contacts usually includes doing business in the state.
3. False. Courts will usually grant requests for a change of venue if such a change is necessary to avoid
prejudice resulting from publicity or some other influence. Courts will not grant a change of venue if
the parties are merely forum shopping.
4. False. The opposite is true. They cannot be citizens of the same states.
5. False. This is a special federal court.
Multiple Choice:
1. A. Helga cannot sue. To have standing, a party must have a stake in the outcome of a suit. Since
Helga was not involved in the accident, she does not have a stake in the suit and cannot sue on behalf
of Harry. B, C, and D are incorrect because these are elements that the court of the state or region
must satisfy. The plaintiff must bring the suit in a court that satisfies these elements, but they are not
requirements that the plaintiff herself must personally satisfy.
2. B. A defendant must be served a summons to be personally subject to the jurisdiction of a court. A
is incorrect because standing is an issue involving a plaintiff's potential stake in the outcome of a suit.
C and D are incorrect because, although they are both required to properly bring a suit, they are not
established by the defendant being served a summons.
3. D. A, B, and C are all circumstances where a state may extend its jurisdiction through use of a longarm statute.
4. C. Quasi in rem jurisdiction is a means by which a prevailing party in a lawsuit may try to satisfy a
judgment. A is incorrect because in rem jurisdiction is jurisdiction to hear a case because of
jurisdiction over the property of the lawsuit. B is incorrect because a long arm statute is a statute that
extends a state's jurisdiction to nonresidents who were not served a summons within the state.
5. B. These contacts are often defined by reference to sections from the long-arm statute. This is
needed when defendant is out of state. A special problem is created by Cyberspace.
VI. Answers to Essay Question:
If out-of-court methods do not provide an adequate resolution of the problem, Mr. At-Emptor must
initiate a lawsuit in a court having a proper basis for jurisdiction. Here a state court will most likely have
jurisdiction over both the subject matter and the parties. Assuming proper service of process is made on
the defendants, the lawsuit will have begun. This will often depend on the long-are statute and the
amount of contacts L & O has with Colorado.
Once the actual pretrial process has begun, both parties will have their day in court. The defendants
may choose to counterclaim based on the contract amounts still due or make pretrial motions to dismiss.
The actual trial will allow both parties to present their sides of the case to the jury in accordance with
proper procedures as supervised by the judge. In civil cases, a judge retains the ultimate power to enter
the final judgment jury verdict notwithstanding if he or she feels that the jury decision was somehow
based on biased, emotional, or inflamed factors.
Because this is a civil case, either party can appeal the judgment rendered by the trial court.