Chapter 2: Traditional and Online Dispute Resolution

1. Chapter 2: Traditional andOnline Dispute Resolution

2. Learning Objectives • What is judicial review? How and when was the power of judicial review established? • Before a court can hear a case, it must have jurisdiction. Over what must it have jurisdiction? How are the courts applying traditional jurisdictional concepts to cases involving Internet transactions?

3. Learning Objectives • What is the difference between a trial court and an appellate court? • What is discovery, and how does electronic discovery differ from traditional discovery? • What are three alternative methods of resolving disputes?

4. The Judiciary’s Role in American Government • 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….” • Today, judicial review is exercise by both federal and state courts.

5. Basic Judicial Requirements • 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.

6. Basic Judicial Requirements • Jurisdiction. • Jurisdiction over Persons or Property. • Court can exercise personal jurisdiction (in personam). • Long-Arm Statutes: Courts exercise jurisdiction over non-resident defendants based on “minimum contacts” with state. 

7. Basic Judicial Requirements • Jurisdiction. • Long-Arm Statutes. • Corporate Contacts: does the firm do business or advertise within the state? • CASE 2.1 Southern Prestige Industries, Inc. Independence Plating Corp. (2010). Did the New Jersey firm have minimum contacts with North Carolina?

8. Basic Judicial Requirements • Jurisdiction. • Jurisdiction Over Subject Matter. • General and Limited Jurisdiction: statutory limitation on the types of cases a court can hear (e.g., probate and bankruptcy). • Can also be limited to amount in controversy (amount of monetary damages).

9. Basic Judicial Requirements • Jurisdiction. • Original and Appellate Jurisdiction. • Courts of original jurisdiction is where the case started (trial). • Courts of appellate jurisdiction have the power to hear an appeal from another court.

10. Basic Judicial Requirements • Jurisdiction. • Jurisdiction of the Federal Courts. • Federal Questions: rights or obligations of a party are created or defined by some federal law. • Diversity of Citizenship: parties are not from same state, and amount in controversy must exceed $75,000.

11. Basic Judicial Requirements • Jurisdiction. • Exclusive vs. Concurrent Jurisdiction. • Exclusive: only one court (state or federal) has the power (jurisdiction) to hear the case. • Concurrent: more than one court can hear the case.

12. Basic Judicial Requirements • Jurisdiction in Cyberspace. • Sliding Scale Standard to determine whether a court has jurisdiction. Some Interaction Substantial Business Interaction Passive Website No Yes

13. Basic Judicial Requirements • Jurisdiction in Cyberspace. • International Jurisdiction Issues. • CASE 2.2 Gucci America, Inc. v Wang Huoqing (2011). What factors did the court consider in its decision to assert jurisdiction over the defendant?

14. Basic Judicial Requirements • Venue. • Venue is concerned with the most appropriate location for the trial. • Generally, proper venue is whether the injury occurred. • Standing to Sue. • A party must have suffered a legal injury and have a sufficient “stake” in the controversy.

15. State and Federal Court Systems Federal Courts Texas Courts Ct. Criminal Appeals Supreme Court U.S. Supreme Court Court of Appeals Circuit Courts of Appeals District Court County Court Justice Court Municipal Court U.S. District Court

16. State and Federal Court Systems

17. State and Federal Court Systems • State Court Systems. • Trial Courts. • “Courts of record”- have court reporters. • Small Claims Courts are informal, inferior courts with limited amounts in controversy (usually $5,000).

18. State and Federal Court Systems • State Court Systems. • Appellate, or Reviewing Courts. • Review trial court proceedings to determine whether the trial complied with procedural and substantive rules of law. • Generally, appellate courts will consider questions of law, but notquestions of fact.

19. State and Federal Court Systems • State Court Systems. • Highest State Courts. • Usually, but not always, called a ‘supreme court.’ • Decisions of a state’s highest court on matters of state law are final. The U.S. Supreme Court can overrule a state supreme court when there are federal laws involved.

20. State and Federal Court Systems • The Federal Court System. • Basically a three-tiered system: • U.S. District Courts (trial courts of general jurisdiction). • U.S. Courts of Appeal.  • The U.S. Supreme Court. 

21. State and Federal Court Systems • The Federal Court System. • U.S. District Courts • Courts of original jurisdiction based on federal statutes. • U.S. Courts of Appeal. • There are 13 Courts of Appeal representing district courts throughout the country. 

22. Federal Court System:U.S. Courts of Appeal

23. State and Federal Court Systems • The Federal Court System. • The U.S. Supreme Court. • Final arbiter of U.S. Constitution. • Petition for Court to hear case by Writ of Certiorari. • www.supremecourt.gov

24. Following a State Court Case • The Pleadings. • The Plaintiff’s Complaint.  • The Defendant’s Answer.  • Motion to Dismiss. 

25. Following a State Court Case • The Pleadings. • Plaintiff’s Complaint. • Court acquires jurisdiction over subject matter and Plaintiff. • Facts: What happened. • Prayer: Court relief.

26. Following a State Court Case • The Pleadings. • Defendant’s Answer: • Makes General Denial. • May move for Change of Venue. • May allege Affirmative Defenses. • May assert Counterclaims against Plaintiff.

27. Following a State Court Case • The Pleadings. • Motion to Dismiss. • Many lawsuits never go to trial. Perhaps there is a settlement, or the case was dismissed. • Either party (normally defendant) can ask the court to dismiss the case if the pleadings fail to show a legal claim.

28. Following a State Court Case • Pretrial Pleadings. • Motion for Judgment on the Pleadings. • Asks the court to rule on the case, based on the pleadings. • Motion For Summary Judgment. • Asks a court to grant a judgment for moving party without a trial. Facts are viewed in the light most favorable to the other party. Admissible evidence is submitted.

29. Following a State Court Case • Discovery: process by which parties obtain information from the opposing party prior to trial. • Depositions and Interrogatories. • Sworn testimony recorded and transcribed by court official (court reporter). • Written questions and answers under oath. 

30. Following a State Court Case • Discovery. • Requests for Other Information. • Electronic Discovery. • FRCP deals specifically with preservation, retrieval, and production of electronic data.

31. Following a State Court Case • Pretrial Conference. • Jury Selection. • Voir Dire. • Jurors can be dismissed peremptorily (no reason or for cause (bias).

32. Following a State Court Case • The Trial. • Opening Statements. • Rules of Evidence. • Judge decides what evidence is admissible for jury’s consideration. • Evidence must be relevant to the issues (tends to prove or disprove).

33. Following a State Court Case • The Trial. • Motion for Directed Verdict: at conclusion of plaintiffs’ case, court looks at evidence in most favorable light to defendant.

34. Following a State Court Case • The Trial. • Expert Witnesses. Provide specialized knowledge and opinions that help jurors decide issues. • CASE 2.3 Downey v. Bob’s Discount Furniture Holdings, Inc. (2011). Why did the trial court abuse its discretion?

35. Following a State Court Case • The Trial. • Closing Arguments: each attorney summarizes the facts and evidence and tells her client’s story in the most compelling way possible. • Verdict: The verdict specifies the jury’s findings and liability. A jury can award money damages in a civil case.

36. Following a State Court Case • Posttrial Motions. • Motion for J.N.O.V.: granted only if the jury’s verdict was unreasonable and erroneous. • Motion for New Trial: after looking at all the evidence, judge will grant the motion IF the jury was in error.

37. Following a State Court Case • The Appeal. • A party may appeal the jury’s verdict or any legal issue, motion or court ruling during the trial. • Appellants must have legitimate grounds for appeal (usually legal error). 

38. Following a State Court Case • The Appeal. • Appellate Review: the appeals court can affirm (agree with) or reverse (disagree with) the lower court’s decision. • Higher Appellate Courts.

39. Following a State Court Case • Enforcing the Judgment. • Even if a plaintiff wins a jury award of damages, the defendant may not have sufficient assets or insurance to cover the amount. • Usually these factors are considered before a lawsuit is filed.

40. Courts Adapt to the Online World • Electronic Filing. • Courts Online (websites, court dockets). • Cyber Courts and Proceedings.

41. Alternative Dispute Resolution • ADR describes any procedure or device for resolving disputes other than the traditional judicial process. • Unless court-ordered there is no record, which is an important factor in commercial litigation due to trade secrets. • Most common: negotiation, mediation, arbitration. 

42. Alternative Dispute Resolution • Negotiation. • Negotiation is informal discussion of the parties, sometimes without attorneys, where differences are aired with the goal of coming to a “meeting of the minds” in resolving the case. • Successful negotiation involves thorough preparation, from a position of strength.

43. Alternative Dispute Resolution • Mediation. • Mediator talks face-to-face with parties (who typically are in different adjoining rooms) to determine “common ground.” • Advantages: few rules, customize process, parties control results (win-win). • Disadvantages: mediator fees, no sanctions or deadlines.

44. Alternative Dispute Resolution • Arbitration. • Many employment contracts have binding arbitration clauses. • Settling of a dispute by a neutral 3rd party (arbitrator) who renders a legally-binding decision; usually an expert or well-respected government official.

45. Alternative Dispute Resolution • Arbitration. • Arbitration Clauses and Statutes. • Uniform Arbitration Act of 1955. • Federal Arbitration Act. • Issue of Arbitrability. • Mandatory Arbitration in the Employment Context: generally mandatory arbitration clauses are enforceable.

46. Alternative Dispute Resolution • Other Types of ADR. • Providers of ADR Services. • Non-profit organizations: • American Arbitration Association. • Better Business Bureau. • For Profit: • JAMS-ADR.com(Flash enabled).

47. Alternative Dispute Resolution • Online Dispute Resolution. • Also called ODR. • Uses the Internet to resolve disputes. • Still in its infancy but is gaining momentum. • See, e.g.,www.cybersettle.com .