Business Law and the
Regulation of Business
Chapter 3: Civil Dispute Resolution
By
Richard A. Mann
&
Barry S. Roberts
Topics Covered in this Chapter
I. The Court System
A. The Federal Courts
B. State Courts
II. Jurisdiction
A. Subject Matter Jurisdiction
B. Jurisdiction over the Parties
III.Civil Dispute Resolution
A. Civil Procedure
B. Alternative Dispute Resolution
The Court System – Federal




District Courts – trial courts of general jurisdiction
that can hear and decide most legal controversies.
Courts of Appeals – hear appeals from district
courts and review orders of certain administrative
agencies.
The Supreme Court – nation's highest court, whose
principal function is to review decisions of the Federal
Courts of Appeals and the highest State courts.
Special Courts – have jurisdiction over cases in a
particular area of Federal law.
– Includes the U.S. Court of Federal Claims, the U.S. Tax
Court, the U.S. Bankruptcy Courts, and the U.S. Court of
Appeals for the Federal Circuit.
Federal Judicial System
U.S. Supreme Court
U.S. Court of
Appeals for the
Federal Circuit
U.S. Claims Court
Patent and
Trademark Office
Court of
International
Trade
Highest State
Courts
U.S. Courts of Appeals
U.S. District Courts
Tax Court
Bankruptcy Court
Many
Administrative
Agencies
Circuit Courts of the United States
Puerto Rico is
part of Circuit 1
2
8

9

10
7
6
3
Virgin Islands
are part of
Circuit 3
4
11
Northern Marianna Islands are part of
Circuit 9 (along with Alaska and Hawaii.)
1
5
D.C. Circuit
Washington, D.C.
Federal Circuit
Washington, D.C.
Source: Administrative Office of the United
States Courts, January 1983
State Courts




Inferior Trial Courts – hear minor criminal cases,
such as traffic offenses, and civil cases involving
small amounts of money; conduct preliminary
hearings in more serious criminal cases.
Trial Courts – have general jurisdiction over civil and
criminal cases.
Special Courts – trial courts, such as probate courts
and family courts, having jurisdiction over a particular
area of State law.
Appellate Courts – include one or two levels; the
highest court's decisions are final except in those
cases reviewed by the U.S. Supreme Court.
State Court System
State Supreme
Court
Intermediate
Appellate Court
Trial
Courts
Inferior
Trail Courts
Special
Courts
Jurisdiction
Subject Matter Jurisdiction – authority
of a court to decide a particular kind of
case.
 Jurisdiction over the Parties – the
power of a court to bind the parties to a
suit .

Federal and State Jurisdiction
Exclusive
State
Jurisdiction
All other
matters
Exclusive Federal
Jurisdiction
1.
2.
3.
4.
5.
6.
7.
8.
Federal crimes
Bankruptcy
Patents
Copyright and trademarks
Admiralty
Antitrust
Suits against the United States
Specified federal statutes
Concurrent Jurisdiction
1. Federal questions
2. Diversity of citizenship
Subject Matter Jurisdiction


Exclusive Federal Jurisdiction – Federal crimes,
bankruptcy, antitrust, patent, trademark, copyright,
and other specified cases.
Concurrent Federal Jurisdiction – authority of
more than one court to hear the same case.
– State and Federal courts have concurrent jurisdiction over
(1) Federal question cases (cases arising under the
Constitution, statutes, or treaties of the United States) that
do not involve exclusive Federal jurisdiction and (2) diversity
of citizenship cases involving more than $75,000.

State Jurisdiction – State courts have exclusive
jurisdiction over all matters to which the Federal
judicial power does not reach.
Jurisdiction over the Parties



In Personam Jurisdiction – jurisdiction
based upon claims against a person, in
contrast to jurisdiction over the person's
property.
In Rem Jurisdiction – jurisdiction based on
claims against property.
Attachment Jurisdiction – jurisdiction over
a defendant's property to obtain payment of
a claim not related to the property.
Jurisdiction
Type of Jurisdiction
In rem
Parties --
Subject Matter--
Courts must have
authority over the
parties to the case.
This may be:
some courts have all
authority over certain
types of cases.
Jurisdiction can be:
Personal
Quasi in
rem
State
Federal
Concurrent
Defendant
resident
Long-arm
statute
Stare Decisis
in the Dual Court System
U.S. Supreme Court
U.S. Circuit
Court of Appeals
State Supreme Court
State Intermediate
Appellate Court
U.S. District Court
in that Circuit
State Trial Court
Binding on questions of federal law
Binding on questions of state law
Civil Procedure

The Pleadings – a series of statements that
give notice and establish the issues of fact
and law presented and disputed.
– Complaint – initial pleading by the plaintiff stating
his case.
– Summons – notice given to inform a person of a
lawsuit against her.
– Answer – defendant's pleading in response to
the plaintiff's complaint.
– Reply – plaintiff's pleading in response to the
defendant's answer.
Pretrial Procedure

Process requiring the parties to disclose what
evidence is available to prove the disputed
facts; designed to encourage settlement of
cases or to make the trial more efficient.
– Judgment on Pleadings – a final ruling in favor of one party
by the judge based on the pleadings.
– Discovery – right of each party to obtain evidence from the
other party.
– Pretrial Conference – a conference between the judge and
the attorneys to simplify the issues in dispute and to attempt
to settle the dispute without trial.
– Summary Judgment – final ruling by the judge in favor of
one party based on the evidence disclosed by discovery.
Trial

Determines facts and the outcome of the
case.
– Jury Selection – each party has an unlimited
number of challenges for cause and a limited
number of peremptory challenges.
– Conduct of Trial – consists of opening statements
by attorneys, direct and cross-examination of
witnesses, and closing arguments.
– Jury Instructions – judge gives the jury the
particular rules of law that apply to the case.
– Verdict – the jury's decision based on those facts
the jury determines the evidence proves.
After the Trial



Motions Challenging the Verdict – include
motions for a new trial and a motion for
judgment notwithstanding the verdict.
Appeal – determines whether the trial court
committed prejudicial error.
Enforcement – plaintiff with an unpaid
judgment may resort to a writ of execution to
have the sheriff seize property of the
defendants and to garnishment to collect
money owed to the defendant by a third party.
Stages in Civil Procedure
Determine what facts are in
dispute
Pleadings
Discover what evidence there
is to prove the facts in dispute
Pretrial
Determine what facts are
provided by the evidence
Review the lower court’s
actions for prejudicial error
Implement the court’s
judgment
Trial
Complaint, Answer, Reply
Discover, Conference,
Summary Judgment
Jury Selection
Opening Statements
Introduction of Evidence
Closing Arguments
Judgment on Verdict
Appeal
Briefs and Transcript
Oral Argument, Decision
Enforcement
Execution, Garnishment
Alternative Dispute Resolution



Arbitration – a nonjudicial proceeding in
which a neutral party selected by the
disputants renders a binding decision
(award).
Conciliation – a nonbinding process in which
a third party acts as an intermediary between
the disputing parties.
Mediation – a nonbinding process in which a
third party acts as an intermediary between
the disputing parties and proposes solutions
for them to consider.
Alternative Dispute Resolution



Mini-Trial – a nonbinding process in which
attorneys for the disputing parties (typically
corporations) present evidence to managers of the
disputing parties and a neutral third party, after
which the managers attempt to negotiate a
settlement in consultation with the third party.
Summary Jury Trial – mock trial followed by
negotiations.
Negotiation – consensual bargaining process in
which the parties attempt to reach an agreement
resolving their dispute without the involvement of
third parties.
Comparison of Adjudication, Arbitration,
and Mediation/Conciliation
Court Adjudication
Advantages
Binding
Public norms
Precedents
Uniformity
Publicly funded
Compels participation
Disadvantages Expensive
Time-consuming
Long delays
Limited remedies
Lacks special expertise
No compromise
Disrupts relationships
Publicity
Arbitration
Mediation/ Conciliation
Binding
Parties control process
Privacy
Special expertise
Speedy resolution
Preserves relations
Parties control process
Privacy
Flexible
No public norms
No precedent
No uniformity
Not binding
Lacks finality
No compelled participation
No precedent
No uniformity
*Source: Adapted from Table 4 of Report of the Ad Hoc Panel on Dispute Resolution and
Public Policy, prepared by the National Institute for Dispute Resolution.