
Judicial Review was established by
the U.S. Supreme Court in Marbury
v. Madison (1803) where Chief
Justice Marshall wrote:

“It is emphatically the province and duty
of the judiciary to say what the law is….”
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
Jurisdiction: “Juris” (law) “diction”
(to speak) is the power of a court
to hear a dispute and to “speak the
law” into a controversy and render
a verdict that is legally binding on
the parties to the dispute.
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
Persons: power of a court to compel
the presence of the parties
(including corporations) to a dispute
to appear before the court and
litigate.
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
In Rem: power to decide issues
relating to property, whether the
property is real, personal, tangible,
or intangible.
 A court generally has in rem jurisdiction
over any property situated within its
geographical borders.
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
Long Arm Statutes: courts use longarm statutes for non-resident
parties based on “minimum
contacts” with state. Means
defendant had some connection
with forum state.
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Corporate Contacts: does business
or advertises within state.
 CASE 2.1 Southern Prestige
Industries, Inc. Independence
Plating Co. (2010). Did the New Jersey

firm have minimum contacts with North
Carolina?
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
General and Limited Jurisdiction.
 Limitation on the types of cases a court
can hear, usually determined by federal
or state statutes. Example: probate,
bankruptcy, criminal.
 Usually defined by statute. Can also be
limited to amount in controversy
(amount of monetary damages).
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Courts of original jurisdiction is
where the case started (trial).
 Courts of appellate jurisdiction have
the power to hear an appeal from
another court.

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
“Federal Question” cases:
 Rights or obligations of a party are
created or defined by some federal law.

“Diversity of Citizenship” cases:
 Parties are not from the same state, and
 The amount in controversy is greater
than $75,000.
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Exclusive: only one court (state or
federal) has the power (jurisdiction)
to hear the case.
 Concurrent: more than one court
can hear the case.

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
Courts use a “Sliding Scale” Standard
to determine whether to exercise
jurisdiction.
Some
Interaction
Passive
Website

No
Yes
Substantial
Business
Interaction
International Jurisdiction Issues.
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Venue is concerned with the most
appropriate location for the trial.
 Generally, proper venue is whether
the injury occurred.

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A party must have suffered a legal
injury and have a sufficient “stake”
in the controversy.
 CASE 2.2 Oregon v. Legal Services
Corp. (2009). Was there a “concrete”

injury to the state?
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Federal Courts
Texas Courts
Ct. Criminal
Appeals
Supreme
Court
Court of
Appeals
District Court
County Court
Municipal
Court
Justice
Court
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U.S. Supreme
Court
Circuit
Courts of
Appeals
U.S. District
Court
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
“Courts of record”-court reporters.
 Small Claims Courts are informal, inferior
courts with limited amounts in
controversy (usually $5,000).
Opening and closing arguments.
 Juries are selected.

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Evidence presented (witness
testimony, physical objects,
documents, and pictures.)
 Witnesses are examined and crossexamined.
 Verdicts and Judgments are
rendered.

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Review trial courts proceedings to
determine whether the trial was
according to the procedural and
substantive rules of law.
 Generally, appellate courts will
consider questions of law, but not
questions of fact.

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
The two most fundamental ways to
have your case heard in a supreme
court are:
 Appeals of Right.
 By Writ of Certiorari.
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
21
www.supremecourt.gov
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Trials are very expensive and
sometimes take many months to
resolve.
 Alternative dispute resolution (ADR)
methods are inexpensive, relatively
quick and leave more control with
the parties involved.

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Unless court-ordered, there is no
record which is an important
factor in commercial litigation due
to trade secrets.
 Most common: negotiation,
mediation, arbitration.

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Informal, sometimes without
attorneys, where differences are
discussed with the goal of “meeting
of the minds” in resolving the case.
 Successful negotiation involves
thorough preparation, from a
position of strength.

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Involves neutral 3rd party ‘mediator’.
 Mediator talks face-to-face with
parties (in different rooms) to
determine “common ground.”

 Advantages: few rules, customize process,
parties control results (win-win).
 Disadvantages: mediator fees, no
sanctions or deadlines.
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
Neutral 3rd party renders a legallybinding decision; usually an expert
or well-respected government
official.
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Results may be unpredictable
because arbitrators do not have to
follow precedent or rules of
procedure or evidence.
 Arbitrators do not have to issue
written opinions.
 Generally, no discovery available.

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Case begins with a submission to an
arbitrator. Next comes the hearing
where parties present evidence and
arguments. Finally, the arbitrator
renders an award.
 Courts are not involved in arbitration
unless an arbitration clause in a
contract needs enforcement.

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
Issue of Arbitrability: a party
compels arbitration and a court
resolves the issue of whether
arbitration is required.


CASE 2.3 NCR Corp. v. Korala Associates,
Ltd. (2008).
Mandatory Employment Arbitration in
Employment: generally enforceable.
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Early Neutral Case Evaluation.
 Mini-Trial.
 Summary Jury Trials.

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
Non-profit organizations:
 American Arbitration Association.
 Better Business Bureau.
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Also called ODR.
 Uses the Internet to resolve
disputes.
 Still in its infancy but is gaining
momentum.
 See, e.g., Resolution Forum, Inc.,
Virtual Magistrate Project.

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Forum Selection and Choice-of-Law
clauses in contracts govern the
transaction.
 Arbitration clauses are generally
incorporated into international
contracts.

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