Courts, Sources of Law, and Dispute Resolution

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Sources Of American Law

Statutory LawFederalState Local

Case Law andCommon Law Doctrines

Constitutional LawFederalState

Administrative Law

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The Common Law Tradition

King’s Courts. The Common Law originated in medieval England with the creation of the king’s courts and the development of a body of rules that were applied throughout the land.

Year Books Stare decisis. A doctrine under which judges

“stand on decided cases,” or follow the rule of precedent, in deciding cases. This is the cornerstone of the common law tradition.– Brown v. Board of Education (p.47)– Leegin Creative Leather Products (p.47)

Discuss - Why so important to U.S. system? Leegin Belt – Debate Week 7

Constitutional Law

Supreme Law of the Land States have Constitutions

– State constitutions are supreme within state borders to the extent that they do not violate the U.S. Constitution or a federal law.

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Statutory Law

Created by Legislative Bodies. Laws or ordinances created by federal, state, and local legislatures and governing bodies.

Cannot Violate U.S. Constitution. None of these laws can violate the U.S. Constitution or the relevant state constitutions.

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Administrative Law

Federal Administrative Agencies. Federal administrative agencies are created by enabling legislation enacted by the U.S. Congress.

Administrative Law. The rules, orders, regulations, and decisions of federal, state, or local government administrative agencies.

Agency functions include:– Rulemaking– Investigation and enforcement– Adjudication

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Authority HierarchyWhich law wins?

1. US Constitution2. Federal Law3. State Constitution4. State Law5. Case Law

Which source of law takes priority in the following situations, and why?– A federal statute conflicts with the U.S. Constitution.– A federal statute conflicts with a state constitution.– A state statute conflicts with the common law of that state.– A state constitutional amendment conflicts with the U.S.

Constitution.– A federal administrative regulation conflicts with a state

constitution.

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Finding and Analyzing the Law- terminology you will need to know

US Statutes at Large/ USC Federal Case Law (federal reporters based on location) State Statutory and Case Law (see right) Regulatory Law (CFR) Plaintiffs and Defendants Appellants and Appellees Opinions (unanimous, majority, concurring, dissenting)

Case Cite MeaningWilliams v. Dominion Technology

Partners, LLC, 576 S.E.2d 752 (Virginia, 2003).

Williams is the Plaintiff. Dominion Technology is the

Defendant. Case was decided by the

Virginia Supreme Court. Reported in Volume 576, page

752 of the Southeast 2nd Reporter.

Symbols for Plaintiff = π Defendant = Δ8

Classifications of Law

Substantive vs. Procedural law Civil vs. Criminal law Federal vs. State law National vs. International law Private vs. Public law

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Uniform Commercial Code (UCC) – Article 2 = Sales

International Law Defined. A body of written and unwritten laws observed by

independent nations and governing the acts of individuals as well as governments.

Sources of international law include:– National laws– Customs– Treaties– International organizations and

conferences Treaties

– NAFTA– GATT– EU

International Organizations– UN– NATO10

Constitutional Authority to Regulate Business

Article III – Judicial Power, p. 12

Constitutional Basis for Business Regulation

The commerce clause (next slide) The contracts clause Bill of Rights Freedom of Speech (commercial advertising, business lobbying, business

political contributions) Due Process Compensation for a taking (change to MN Law)

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The Constitutional Powers of Government

Constitution limits federal power – Tenth Amendment, p. 23

Federalism – states and federal government share sovereignty

Federal powers enumerated – all other powers left to the states or the people

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The Supremacy ClauseArticle 6, p. 15

Supreme Law. The U.S. Constitution provides that the Constitution, laws, and treaties of the United States are “the supreme law of the land.”

Invalidates State Law. Whenever a state law directly conflicts with a federal law, the state law is rendered invalid.

Preemption occurs when Congress chooses to act exclusively in a concurrent area.

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The Commerce Clause“[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Article 1 Section 8, p. 6

The breadth of the commerce clause:–Gibbons v. Ogden (1824) – ferry between NY and NJ “substantially affected commerce”–Wickard. V. Filburn (farmer) (1942) – farmer growing wheat for own use–Heart of Atlanta Motel v. United States (1964). Local hotel that had 75% out-of-state guests–United States v. Lopez (1995). School gun free zone law. Lopez, a 12th grade student, carried a gun into the school and charged with a federal law. Lopez moved to dismiss based on the law being unconstitutional. 5-4 decision. “Substantially affect or substantially relate to interstate commerce.” –Health Reform – Commerce? Huge part of economy – but is doing nothing (i.e. not buying insurance) commerce? No, ruled the Supreme Court.

Can you think of any businesses in today’s economy that are purely local in charter? Anything the federal government cannot regulate?

Judge Elena Kagan Confirmation Hearings

Extent of Commerce Clause15

Taxing and Spending Powers Article 1, Section 8

The Taxing and Spending Powers. Used to be that the federal government could not tax without a basis, now taxing is seen as a basis to do more.

“Dormant” Commerce Clause

Massachusetts Law for Small Wineries allows direct shipment of wines.

Favors In-State. All in-state wineries are small. Many out-of-state are not.

2015 California Egg Law California voters approved the Prevention of Cruelty to Farm Animals Act, which provided that after January 1, 2015 a “person shall not tether or confine any covered animal, on a farm, for all or the majority of any day, in a manner that prevents such animal from: (a) Lying down, standing up, and fully extending his or her limbs; and (b) Turning around freely.” In part, this measure was intended to free laying hens from the claustrophobia of so-called battery cages, where the hen is confined to a space, shared with several other hens, that permits each hen no more 67 square inches. 

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Freedoms guaranteed by the Bill of Rights included the following:

Freedom of SpeechAmendment I, p. 21

Freedom from Compelled Self-Incrimination

Freedom from Unreasonable Searches and Seizures

Freedom of Religion

Business and the Bill of Rights

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Freedom of Speech

Can Government Force Tobacco Companies To Add Graphic Warnings?

Requirements of New Law• Companies must rotate between 9

images• Must be printed on top half – front

and back• Must constitute 20% of any

advertising• Companies will have to spend 10s

of millions of dollars to comply

Law Struck DownUnconstitutional Aug 2012

• Can you require a manufacturer to go beyond factual information?

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Freedom of Speech

Political speech – Reasonable restrictions Citizens United. Hillary – the Movie. Corporate political speech (campaign finance laws). Commercial speech (advertising)

– Lower standard false or misleading advertising Central Hudson Test

– Substantial Government interest – Law directly advances that interest– Law goes no further than necessary

– CASE 4.2 Bad Frog Brewery, Inc. v. New York State Liquor Authority (1998).

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Courts

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The Judiciary’s Role in American Government

Courts -- interpret and apply the law. Judicial review—determining the

constitutionality of laws—the judicial branch acts as a check on the executive and legislative branches of government – Marbury v. Madison (Marbury appointed as a federal judge by President John Adams. James Madison was to deliver the documents. Thomas Jefferson won presidential election and ordered that the remaining writs not be delivered.

Bush v. Gore (u-Tube clip)Justice Breyer on the US Supreme Court 

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Basic Judicial Requirements

Before a lawsuit can be brought before a court, certain requirements must first be met. These include:

Jurisdiction• Federal

• State• Subject

Venue Standing to Sue

24Start here next week

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Federal Question jurisdiction exists when a dispute concerns federal law, statutes, or administrative regulation or treaties of the United States.

Diversity Jurisdiction exists in lawsuits between citizens of different states and the amount in controversy, exclusive of interest and all costs, exceeds $75,000. The “Erie Doctrine” set forth in Erie Railroad v. Tompkins, 304 U.S. 64 (1938).

Federal Jurisdiction

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Federal Jurisdiction

Natural person citizenship is legal residence or domicile.

Corporations may have dual citizenship based on: – Nerve Center Test;– Place of Operations Test; or– Total Activity Test.

Federal Courts have jurisdiction over United States.

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Personal jurisdiction: court has legal authority over the parties to the suit. – Court can have jurisdiction based on: Defendant’s

Residence, Defendant’s Act(s) or Location of Property in question.

“Long Arm” Statutes and the “Minimum Contacts” Test for jurisdiction over non-resident defendant if it purposefully availed itself of privilege of conducting business in forum state.

Personal Jurisdiction

WSJ 3/13/16

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Quill v. North Dakota – requires offices or employees. Alabama is saying that if over $250,000 in revenue then = “economic presence.”

Venue

Venue has to do with the most appropriate location for a trial, which is usually the geographical area in which the event leading to the dispute took place or where the parties reside.

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Standing to Sue

A requirement that a party must have a legally protected and tangible interest at stake sufficient to justify seeking relief through the court system.– Plaintiff must be the proper person.– Plaintiff must have a personal interest in the outcome.– Plaintiff will benefit from a favorable ruling.

The controversy at issue must also be a justifiable controversy, one that is real and substantial, as opposed to hypothetical or academic.

Auto Plant Subsidy Case30

Trial Courts

State courts: Courts of general jurisdiction

may be called by a variety of names.

Courts of limited jurisdiction include:– Divorce courts– Probate courts– Traffic courts– Small claims courts

Federal courts: Court of general jurisdiction

is the U.S. District court. Courts of limited jurisdiction

include:– U.S. Tax Court– U.S. Bankruptcy

Court– U.S. Court of Federal

Claims

Intermediate Appellate CourtsSupreme Courts

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Adversarial System

Attorney Represents Client as an Adversary

Judge is Unbiased, Serves to Enforce Rules

Work-Product

Following a Case Through the State Courts

A sample civil court case in a state court would involve the following:

ThePleadings

PretrialMotions Discovery

PretrialConference

TrialPost trialMotions

The Appeal34

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The Pleadings

Complaint:– Filed by the plaintiff with the court to initiate the lawsuit;

served with a summons on the defendant.– Default judgment

Answer:– Admits or denies allegations made by the plaintiff; – may assert a counterclaim or – an affirmative defense.

Motion to dismiss:– A request to the court to dismiss the case for stated reasons,

such as the plaintiff’s failure to state a claim for which relief can be granted.

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Pretrial Motions

Motion for judgment on the pleadings: Will be granted if the parties agree on the facts and the only question is how the

law applies to the facts. The judge bases the decision solely on the pleadings. Motion for summary judgment: Will be granted if the parties agree on the facts. The judge applies the law in

rendering a judgment.The judge can consider evidence outside the pleadings when evaluating the

motion.Motion for Judgment Notwithstanding the verdict

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Discovery

The process of gathering evidence concerning the case. Discovery involves:– Depositions (sworn testimony

by a party or a witness)– Interrogatories (written

questions by one party towards the other made with assistance from the attorneys)

– Various requests (for admissions, documents, medical exams)

Rudy Giuliani – I do not recall

38Ethical Consideration, p. 98Ethical to bury opposing attorney in paper-work in response to a discovery request?

DepositionClinton – What “is” is.

Jury Selection Debate – Sample Debate – Split Room in Half – 2 Minutes to Develop Arguments

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The state of Alabama, on behalf of a mother (T.B.) brought a paternity suit against the alleged father (J.E.B.) of T.B.’s child.

During jury selection, the state, through peremptory challenges removed nine of the ten prospective male jurors. J.E.B.’s attorney struck the final male from the jury pool. As a result of these peremptory strikes, the final jury consisted of all women.

Father lost and appealed based on gender discrimination and equal rights amendment.

Jury Selection

The jury selection process, also known as voir dire, consists of questions directed to prospective jurors to assess potential bias.

Jury video – McMahon, Philadelphia DA Training Video – 40

Trial

The typical course of a trial can be diagrammed as follows:

OpeningStatements

Plaintiff’s Introduction of Evidence

Defendant’s Introduction of

EvidenceClosing

Arguments

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The Appeal

Either party can appeal the trial court’s judgment to an appropriate court of appeals.

After reviewing the record on appeal, the abstracts, and the attorneys’ briefs, the appellate court holds a hearing and renders its opinion.

Enforcing the Judgment

Securing a verdict does not mean there are assets to pay the judgment.

One of the primary factors to decide before filing suit is whether the defendant has resources or assets to pay a judgment.

Roles of an Attorney

Adviser – advises a client on steps to take to avoid possible legal problems.

Drafter – writes contracts and other documents for clients.

Negotiator – persuades, argues, or settles with another party on a client’s behalf.

Advocate – presents a client’s position in court.Attorney-Client Privilege. Attorney-client privilege prevents a court and other government bodies from compelling disclosure of the information. (WORK PRODUCT – NOT DISCOVERABLE)44

Group DebateA Manager’s Dilemma p. 41: (1) take advantage of tax savings v. (2) unethical to take advantage of tax savings.

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Legal Representation and Alternative Dispute Resolution

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Negotiation Exercise

Joan (age 30, 10 years at firm, makes $50,000) works as a paralegal at a 50 person law firm (30 attorneys and 20 support staff). Her immediate supervisor, Jim, tells sexual jokes that bother Joan. Jim makes $200,000, 20 years at the firm and is 40 years old). Once he showed her an x-rated cartoon that he thought was funny. Jim also ogles Joan and asks Joan to shut the door when they work together in his office. He sometimes touches her shoulder or pushes their chairs so close together their legs touch. This makes Joan uncomfortable. He also uses double entendres around her with one example being the time Joan said “it’s going to be a long hard night” (referring a tough case they are working on) and Jim replied “that’s what she said” and laughed. Assume Jim’s overall behavior amounts to illegal sexual harassment.

Joan talks to Jim about this and he tells her to lighten up and try to have some fun. Jim says he is just trying to reduce tension in an often stressful work environment.

Joan sues for sexual harassment. You are on one side to settle the case. Take 3-4 minutes to plan strategy and then 6-8

minutes to negotiate a settlement. See additional confidential facts. Joan: Groups A D C G Jim Groups F B E H47

http://www.pon.harvard.edu/

Decision to File a Lawsuit

Decision to File Factors include:– Whether the law provides a remedy.– Whether the person can expert to prevail.– Whether the expected benefit will compensate for

expenses and other costs, including any business lost as a result of the lawsuit and accompanying publicity.

Decision to Defend Factors include:– Relationship Risk– Publicity Risk– Cost Risk (settlement may be cheaper)48

Self-Assessment of Negotiation Style

Comments on tool?

Agree with results?

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Establish Best Alternative to a Negotiated Agreement (BATNA).

Establish your interests versus your position.

Evaluate each negotiating issue.

Negotiation: Planning

Know what you want Know when you are better

off walking away Plan a strategy/Do your

homework Win-Win Listen to the other side Give/Get

The Search for Alternatives to Litigation

Alternative dispute resolution (ADR) Less costly Less time-consuming Private

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The Search for Alternatives to Litigation

Forms of ADR include:

Negotiation Mediation Arbitration

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Negotiation and Mediation

Negotiation– With or without attorneys– Simple and fast– No third party

Mediation– Third party involved– With or without attorney – usually no attorneys

Arbitration – More formal– Third party involved– Generally binding

Key is to know what you want and when to you are better off walking away - Negotiation Exercise

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In many ways, mediation is an extension of the parties’ negotiations.

History of Mediation. Selecting a Mediator.

– Society of Professionals in Dispute Resolution (SPDR).– American Mediation Council (AMC).

Mediation

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Mediation

Confidentiality.When to Use Mediation.Mediation Process.Dangers.

The Federal Arbitration Act (FAA)

Provides Enforcement for Arbitration Decisions. FAA provides the means for enforcing the arbitration procedure that the parties have established for themselves.

FAA Covers Arbitration Clauses in Interstate Commerce. The FAA covers any arbitration clause in a contract that involves interstate commerce

Contract Between Parties

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End-of-Chapter Q:3.2Plus American Express Co. V. Italian Colors Restaurant-p.68Arbitration that Prevents Class Action LawsuitsCase went to US Supreme Court

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AT&T Case – Nov 9, 2010AT&T Mobility v. Conepcion

• US Supreme Court Case• $30.22 sales tax on “free phone”• Arbitration clause prevents class

action lawsuits• Plaintiffs argue the clause is

“unconscionable”• Arbitration Clause Details

• AT&T must pay a minimum of $7,500 if it loses

• AT&T pays all arbitration fees

Arbitration Clauses in Employment Contracts

Why Employers Like Arbitration for Employee Disputes. Arbitration is easier, faster, and less costly than litigation. Therefore, more businesses are including arbitration clauses in their contracts. What happens if a potential employee objects to the clause? Is this mandatory condition enforceable?

Is that a Problem?Why might victims of employment discrimination prefer to litigate their claims in a judicial forum rather than having them arbitrated, even assuming that arbitration proceedings would be unbiased and would not violate due process rights?58

What about for medical procedures?

Hooters case

The Arbitration Process

The three steps of arbitration are:

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Setting Aside an Arbitration Award

Crime or Contrary to Public Policy. No award will be enforced if compliance with the award would result in commission of a crime or would violate public policy. An arbitration award may also be set aside because of defects in the arbitration process.

Bias or Corruption.– Award was result of corruption, fraud, etc.– The arbitrator exhibited bias or corruption.– The arbitrator’s actions substantially prejudiced the rights of

one of the parties.– The arbitrator exceeded his or her powers.

Merits of the Case – will not be reviewed– Sufficiency of evidence– Arbitrator’s reasoning

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Disadvantages to Arbitration

Arbitration has some disadvantages:– Unpredictable, since arbitrators are not

required to follow prior precedents, but must only follow whatever rules have been provided by the parties.

– Expensive, sometimes as expensive as litigation.

– Time consuming, since discovery is often unavailable, the parties may have to call more witnesses than they would in litigation.

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Group DebateEnd-of-Chapter Q2.8 – Ethics – (3) pay $15,000 v. (4) pay living wage

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Negotiation Assignment Overview

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Objectives and Structure of Assignment Improve your understanding of contract law in the international arena. Increase your awareness of the terms and conditions that should be in an international

contract. Introduce you to negotiation and the skills involved in negotiation. Enhance your appreciation of cross cultural business dealings. Refine your oral and written communication skills.

• Negotiation Strategy. Upon receiving the confidential information, the partners will meet and decide their strategy. You must document your strategy and submit a paper. Include in your paper your negotiation approach, your cross-cultural approach, and your target goals (what would you consider a “win” for your company).

• Negotiate a Deal. After you plan a strategy, the parties will meet to negotiate an agreement. You must submit a paper detailing your negotiation. Include the details on your cross cultural negotiation approach (how did it work) and accomplishments compared to planning goals (how did you do compared to how you thought you would do and why).

• Draft a Contract. When an agreement is reached, each team should write a contract documenting the agreement.

• Sign a Contract. The parties should meet to discuss and compare the written contracts. One of the written contracts should be selected for the basis of the final agreement. After any necessary negotiations and changes, the contract should be signed at the bottom as follows:

Obj

ecti

ves

Stru

ctur

e

Deliverables of Assignment

• Strategies Document.

• Draft Contract.

• Signed Contract.

• Assessment Against Goals.

Deliv

erab

les

Some Contracts Basics Heading/Name Identify Parties Recitals Definitions Agreement – “NOW, THEREFORE, in

consideration of the above recitals, the terms and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, and for their mutual reliance, the parties agree as follows:”

Contract Clauses usually broken down by section

– Price/Compensation– Product– Misc

Signature block – next slide

Sample

How to sign a legal document - when you are an agent/employee

Add company name - it’s usually printed in the agreement

Printed Name

Signature

Title

Effective Date of Agreement: This is newer style signature block that is simpler to understand

Common Contract Clauses- focusing on sale of goods

Standard Clauses Product (quality, etc.) Price Quantity Time of payment Time and place of delivery Cost of delivery/Arrangement Risk of Loss (next slide) Term/Termination Tax Obligations Representations and

Warranties Title/Insurance (next slide) Documents required (e.g. Letter of

Credit)

Especially Important for Int’l Contracts Choice of

language Choice of forum Choice of law

(CISG v. U.S. law – next slide)

Force Majeure Arbitration Currency Letters of Credit

(separate contracts – next slide)

Boilerplate Titles/Headings

Clause Severability Integration/Entire

Agreement Notices Counterparts Announcements/

Confidentiality Assignment/Delegation

Additional Detail

Letters of Credit Reps and

Warranties

ROL– FOB Seller’s Place

of Business– FOB Buyer’s Place

of Business Title Choice of law/forum

United Nationals Convention on Contracts for the International Sale of Goods (CISG)

Expert Agreed to Provisions. Compromise between common law, civil law, and socialist law.

Compared to U.S.’s UCC Article 2– Mirror image rule under

common law Changes accepted under

UCC Most changes considered

“material” under CISG– Statute of Frauds

UCC - $500 USIG – no writing required

– Price – required under CISG – not under UCC

Acceptance – mailbox rule under common law and UCC – when received under CISG.

CISG Signatories

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Time to Negotiate