PowerPoint Slides to Accompany
ESSENTIALS OF BUSINESS AND
ONLINE COMMERCE LAW
1st Edition
by Henry R. Cheeseman
Chapter 3
Traditional, Alternative, and
E-Commerce Dispute Resolution
Slides developed by
Les Wiletzky
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 2
Dispute Resolution

Litigation
The process of bringing,
maintaining, and defending
a lawsuit
 difficult
 time-consuming
 costly
 complex procedural rules


Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
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
03 - 3
The State Court Systems (1 of 4)
1. LimitedJurisdiction
Trial Courts
2. GeneralJurisdiction
Trial Courts
3. Intermediate
Appellate Courts
4. Supreme Court
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 4
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
courts
Probate courts



Family law courts
Small claims courts
Courts that hear
misdemeanor criminal
law cases and civil
lawsuits under a certain
dollar amount
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 5
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 6
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 7
A Typical State Court System
Appeal to U.S. Supreme Court
State
Supreme
Court
State
Appeals
Courts
State Trial
Courts of
General
Jurisdiction
Civil
Division
Probate
Division
Criminal
Division
Small
Claims
Courts
Municipal
Courts
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
Domestic
Relations
Division
Juvenile
Division
Justice of
the Peace
Courts
03 - 8
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 10
The Federal Court System (1 of 9)
1. Special
Federal Courts
2. U.S. District
Courts
3. U.S. Courts
of Appeals
4. U.S. Supreme
Court
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 11
The Federal Court System (2 of 9)

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 Court
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 12
The Federal Court System (3 of 9)

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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 13
The Federal Court System (4 of 9)

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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 14
The Federal Court System (5 of 9)

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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 15
The Federal Court System (6 of 9)

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.
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 16
The Federal Court System (7 of 9)

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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 17
The Federal Court System (8 of 9)

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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 18
The Federal Court System (9 of 9)
U.S.
Supreme
Court
U.S. Court of Appeals
U.S. Court of
Appeals for the
Federal Circuit
(11 Territorial Circuits &
D.C. Circuit)
Many
Federal
Administrative
Agencies
U.S.
District
Courts
(96
Districts
U.S.
U.S.
Tax
Claims
Court
Court
U.S. Court of
International
Trade
U.S. Patent
and
Trademark
Office
U.S.
Bankruptcy
Courts
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 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

Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
Writ of Certiorai
An official notice that
the Supreme Court will
review one’s case
03 - 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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 21
Jurisdiction of Federal and State Courts
Exclusive Federal
Exclusive State
Jurisdiction
Jurisdiction
Concurrent
1.
Admiralty
Jurisdiction
2.
Antitrust
3.
Bankruptcy
4.
Copyright
5.
Federal Crimes
6.
Patents
7.
Suits against the
U.S.
8.
Other specified
federal statutes
1.
Federal
questions
2.
Diversity of
citizenship
cases
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
Matters not subject to
federal jurisdiction
03 - 22
The Jurisdiction and Venue of Courts
(1 of 2)




Not every court has the authority to hear all
types of cases
To bring a lawsuit in a court the plaintiff must
have standing to sue
The court must have jurisdiction to hear the
case
The case must be brought in the proper
venue
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 23
The Jurisdiction and Venue of Courts
(2 of 2)
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. Forum selection
clause
8. Venue
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 24
The Pretrial Litigation Process
1. Pleadings
2. Discovery
3. Dismissals and
Pretrial Discovery
4. Settlement
Conference
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 25
Statute of Limitations



Establishes the period during which a plaintiff
must bring a lawsuit against a defendant
If a lawsuit is not filed within this time period,
the plaintiff loses his or her right to sue
A statute of limitations begins to “run” at the
time the plaintiff first has the right to sue the
defendant
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 26
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 27
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 28
The Appeal

In a civil case,



In a criminal case,


either party can appeal the trial court’s decision,
once a final judgment is entered
only the defendant can appeal
Notice of appeal must be filed within a prescribed
time after judgment is entered to the appropriate
appellate court
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 29
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 30
Types of ADR
Arbitration
Mediation
Minitrial
Conciliation
Fact-Finding
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
Judicial Referee
03 - 31
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
Copyright © 2006 by Pearson Prentice-Hall. All rights reserved.
03 - 32