PowerPoint Slides to Accompany
CONTEMPORARY BUSINESS AND
ONLINE COMMERCE LAW
5th Edition
by Henry R. Cheeseman
Chapter 3
Traditional, Alternative, and ECommerce Dispute Resolution
Slides developed by
Les Wiletzky
Wiletzky and Associates
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
There are two major court systems
in the U.S.:
1. The federal court system
2. The court systems of the 50 states and
the District of Columbia
 Each of these systems has jurisdiction
to hear different types of lawsuits
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Dispute Resolution
Litigation
 The process of bringing,
maintaining, and
defending a lawsuit




difficult
time-consuming
costly
complex procedural rules
Alternative Dispute
Resolution
 Nonjudicial dispute
resolution developed in
response to the expense
and difficulty of bringing a
lawsuit
 Being used more often to
resolve commercial and ecommerce disputes
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3-3
The State Court Systems (1 of 4)
1. LimitedJurisdiction
Trial Courts
2. GeneralJurisdiction
Trial Courts
4. State Supreme
Court
3. Intermediate
Appellate Courts
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The State Court Systems (2 of 4)
Limited – Jurisdiction Trial Court
 Hears matters of a specialized or limited nature
 Traffic courts
 Juvenile courts
 Justice-of-the-peace
 Family law courts
 Small claims courts
 Courts that hear
courts
 Probate courts
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misdemeanor
criminal law cases
and civil lawsuits
under a certain dollar
amount
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The State Court Systems (3 of 4)
General – Jurisdiction
Trial Court
 Hears cases of a general
nature that are not within
the jurisdiction of limitedjurisdiction courts
 Testimony and evidence at
trial are recorded and
stored for future reference
Intermediate Appellate
Court
 An intermediate court that
hears appeals from trial
courts
 Reviews the trial court
record to determine if there
have been any errors at
trial that would require
reversal or modification of
the decision
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The State Court Systems (4 of 4)
 State Supreme Court
 The highest court in a state court system
 Hears appeals from intermediate state courts
and certain trial courts
 No new evidence or testimony is heard
 Decisions of state supreme courts are final,
unless a question of law is involved that is
appealable to the U.S. Supreme Court
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3-7
Appeal to
U.S. Supreme Court
State
Supreme
Court
A Typical State
Court System
State
Appeals
Courts
State Trial
Courts of
General
Jurisdiction
Civil
Division
Criminal
Division
Small
Claims
Courts
Probate
Division
Municipal
Courts
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Domestic
Relations
Division
Juvenile
Division
Justice
of the
Peace
Courts
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Factors to consider in deciding to
bring or settle a lawsuit: (1 of 2)
 The probability of winning or losing
 The amount of money to be won or lost
 Lawyers’ fees and other costs of litigation
 Loss of time by managers and other personnel
 The long-term effects on the relationship and
reputation of the parties
 The amount of prejudgment interest provided by
law
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3-9
Factors to consider in deciding to
bring or settle a lawsuit: (2 of 2)
 The aggravation and psychological costs
associated with a lawsuit
 The unpredictability of the legal system and the
possibility of error
 Other factors peculiar to the parties and lawsuit
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3 - 10
The Federal Court System (1 of 8)
1. Special
Federal Courts
2. U.S. District
Courts
4. U.S. Supreme
Court
3. U.S. Courts
Of Appeals
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3 - 11
The Federal Court System (2 of 8)
 Special Federal Courts
 Federal courts that hear matters of
specialized or limited jurisdiction
 They include:




U.S. Tax Court
U.S. Claims Court
U.S. Court of International Trade
U.S. Bankruptcy Courts
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3 - 12
The Federal Court System (3 of 8)
 U.S. District Courts
 The federal court system’s trial courts of
general jurisdiction
 They are empowered to:





Impanel juries
Receive evidence
Hear testimony
Decide cases
Most federal cases originate in federal district
court
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3 - 13
The Federal Court System (4 of 8)
 U.S. Courts of Appeals

The federal court system’s intermediate
appellate courts

These courts hear appeals from the district
courts located in their circuit
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3 - 14
The Federal Court System (5 of 8)
 U.S. Courts of Appeals (continued)
These courts review the record of the lower
court or administrative agency proceedings to
determine if there has been any error that
would warrant reversal or modification of the
lower court decision
 No new evidence or testimony is heard

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3 - 15
The Federal Court System (6 of 8)
 U.S. Supreme Court

The Supreme Court was created by Article III
of the U.S. Constitution

The Supreme Court is the highest court in the
land and is located in Washington, D.C.
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3 - 16
The Federal Court System (7 of 8)
 U.S. Supreme Court (continued)

The Supreme Court hears appeals from
federal circuit courts of appeals and, under
certain circumstances, from federal district
courts, special federal courts, and the highest
state courts

No new evidence or testimony is heard
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3 - 17
The Federal Court System (8 of 8)
 U.S. Supreme Court (continued)

The lower court record is reviewed to
determine whether there has been an error
that warrants a reversal or modification of the
decision

The Supreme Court’s decision is final
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3 - 18
U.S. Supreme
Court
(Washington, D.C.)
U.S. Court of Appeals
(for 11 Territorial
Circuits and D.C.
Circuit)
Federal
Administrative
Agencies
U.S.
District
Courts
The Federal
Court System
U.S. Court of Appeals
for the Federal Circuit
U.S. Tax
Court
U.S. Claims
Court
U.S. Court
of International
Trade
U.S. Patent
and
Trademark
Office
U.S.
Bankruptcy
Courts
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3 - 19
Decisions by the U.S. Supreme
Court (1 of 2)
Petition for Certiorai
 A petition asking the
Supreme Court to
hear one’s case
Writ of Certiorai
 An official notice that
the Supreme Court
will review one’s case
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3 - 20
Decisions by the U.S. Supreme
Court (2 of 2)
 The Supreme Court can issue the
following types of decisions:
Unanimous decision
 Majority decision
 Plurality decision
 Tie decision

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3 - 21
Jurisdiction of Federal and State
Courts
1.
Exclusive Federal
Jurisdiction
Admiralty
2.
Antitrust
3.
Bankruptcy
4.
Copyright
5.
Federal Crimes
6.
Patents
7.
Suits against
the U.S.
8.
Other specified
federal statutes
Exclusive State
Jurisdiction
Concurrent
Jurisdiction
1.
Federal
questions
2.
Diversity of
citizenship
cases
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Matters not subject to
federal jurisdiction
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The Jurisdiction and Venue of
Courts
1. Standing to sue
2. Subject matter
jurisdiction
3. In personam
jurisdiction (or
personal
jurisdiction)
4. In rem jurisdiction
5. Quasi in rem
jurisdiction
6. Long-arm statutes
7. Venue
8. Forum selection
clause
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3 - 23
The Pretrial Litigation Process
1. Pleadings
2. Discovery
3. Dismissals and
Pretrial Judgments
4. Settlement
Conference
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3 - 24
The Trial
 Pursuant to the Seventh Amendment to the U.S.
Constitution, a party to an action at law is
guaranteed the right to a jury trial in cases in
federal court
 Most state constitutions contain a similar guarantee
for state court actions
 If either party requests a jury, the trial will be by jury
 If both parties waive their right to a jury, the trial will
be without a jury
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3 - 25
Phases of a Trial
1.
2.
3.
4.
5.
6.
7.
8.
9.
Jury Selection
Opening Statements
The Plaintiff’s Case
The Defendant’s Case
Rebuttal and Rejoinder
Closing Arguments
Jury Instructions
Jury Deliberation
Entry of Judgment
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3 - 26
The Appeal
 In a civil case,
 either party can appeal the trial court’s decision,
 once a final judgment is entered
 In a criminal case,
 only the defendant can appeal
 Notice of appeal must be filed within a
prescribed time after judgment is entered to the
appropriate appellate court
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3 - 27
Alternative Dispute Resolution
(ADR)
 Nonjudicial means of resolving legal
disputes
 Developed in response to the expense
and difficulty of bringing a lawsuit
 ADR usually saves time and money of
costly litigation
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3 - 28
Types of ADR
Arbitration
Mediation
Minitrial
Conciliation
Fact-Finding
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Judicial Referee
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Key ADR Legislation
 Federal Arbitration Act
 Arbitration agreements involving commerce
are valid, irrevocable, and enforceable
contracts
 Uniform Arbitration Act
 Adopted by half of the states.
 Promotes the arbitration of disputes at the
state level
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