Chapter 3 Courts Jurisdiction and Administrative Agencies Two

Chapter 3 Courts, Jurisdiction, and Administrative Agencies

Two Major Court Systems Federal court system Court systems of the 50 states, Washington, DC (District of Columbia), and territories of the United States Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -2

State Court Systems Limited-jurisdiction trial courts Courts that hear matters of specialized or limited nature Evidence can be introduced and testimony can be given General-jurisdiction trial courts Courts that hear cases of a general nature that are not within the jurisdiction of limited-jurisdiction trial courts Testimony and evidence at trial are recorded and stored for future reference Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -3

State Court Systems Intermediate appellate courts Courts that hear appeals from trial courts No new evidence or testimony is permitted Highest state court The highest court in a state court system It hears appeals from intermediate appellate state courts and certain trial courts Decisions are appealable to the U. S. Supreme Court Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -4

Exhibit 3. 1 - Typical State Court System Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -5

Federal Court System Article III of the U. S. Constitution provides that the federal government’s judicial power is vested in one “Supreme Court” It authorizes Congress to establish “inferior” federal courts Pursuant to its Article III power, Congress has established the U. S. district courts U. S. courts of appeals U. S. bankruptcy courts Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -6

Special Federal Courts U. S. Tax Court • Hears cases that involve federal tax laws U. S. Court of Federal Claims • Hears cases brought against the United States U. S. Court of International Trade • Handles cases that involve tariffs and international trade disputes Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 3 -7

Special Federal Courts U. S. Bankruptcy Court • Hears cases that involve federal bankruptcy laws U. S. Court of Appeals for the Armed Force • Exercises appellate jurisdiction over members of the armed services U. S. Court of Appeals for Veterans Claims • Exercises jurisdiction over decisions of the Department of Veterans Affairs Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 3 -8

US District Courts The federal court system’s trial courts of general jurisdiction There are 94 district courts The geographical area served by each court is referred to as a district Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -9

US Courts of Appeals The federal court system’s intermediate appellate courts Circuit – The geographical area served by each court There are 13 circuits in the federal court system The first 12 are geographical The 12 th circuit court is called the District of Columbia Circuit The 13 th court of appeals is called the Court of Appeals for the Federal Circuit Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -10

Court of Appeals for the Federal Circuit A U. S. Court of Appeals in Washington, DC, that has special appellate jurisdiction to review the decisions of the: Court of Federal Claims Patent and Trademark Office Court of International Trade Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -11

Supreme Court of the United States Created by Article III of the US Constitution Highest court in the U. S. Located in Washington, D. C. Composed of nine justices who are nominated by the President and confirmed by the Senate Chief Justice of the U. S. Supreme Court ▪ Appointed by the president ▪ Responsible for the administration of the Supreme Court The other eight justices are Associate Justices of the U. S. Supreme Court Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -12

Jurisdiction of the U. S. Supreme Court It is an appellate court It 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 The Supreme Court’s decision is final Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -13

Exhibit 3. 5 - Federal Courts of Appeal Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 3 -14

Decisions of the U. S. Supreme Court Unanimous • All the justices voting agree as to the outcome and reasoning used to decide a case • It sets precedent for later cases Majority • A majority of the justices agree as to the outcome and reasoning used to decide a case • It sets precedent for later cases Plurality • A majority of the justices agree as to the outcome of a case but not as to the reasoning for reaching the outcome • It does not set precedent for later cases Tie • The lower court decision is affirmed • It does not set precedent for later cases Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -15

Jurisdiction of Federal Courts Type of Jurisdiction Description Federal question • Cases arising under the U. S. Constitution, treaties, and federal statutes and regulations • There is no dollar-amount limit for federal question cases that can be brought in federal court Diversity of citizenship • Cases between citizens of different states or between a citizen of a state and a citizen or subject of a foreign country • Federal courts must apply the appropriate state law in such cases • The controversy must exceed $75, 000 for the federal court to hear the case Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -16

Case 3. 1: U. S. Supreme Court Diversity of Citizenship Hertz Corporation v. Friend 130 S. Ct. 43, 174 L. Ed. 2 d 627, Web 2009 U. S. Lexis 5114 (2009) Supreme Court of the United States Issue Is Hertz Corporation a citizen of California? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -17

Jurisdiction of State Courts State courts and the courts of Washington, DC, and territories of the United States have jurisdiction to hear cases that federal courts do not have jurisdiction to hear Cases involving laws of states, Washington, DC, territories, and local governments Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -18

Exhibit 3. 6 - Jurisdiction of Federal and State Courts Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -19

Standing to Sue • Some stake in the outcome of a lawsuit Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -20

In Personam, in Rem, and Quasi in Rem Jurisdiction Type of Jurisdiction Description In personam jurisdiction • A court has jurisdiction over the parties to the lawsuit • The plaintiff submits to the jurisdiction of the court by filing the lawsuit there • Personal jurisdiction is obtained over the defendant through service of process to that person In rem jurisdiction • A court has jurisdiction to hear and decide a case because it has jurisdiction over the property at issue in the lawsuit Quasi in rem jurisdiction • A plaintiff who obtains a judgment against a defendant in one state may utilize the court system of another state to attach property of the defendant that is located in the second state Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -21

Long-arm statute A statute that extends a state’s jurisdiction to nonresidents who were not served a summons within the state Exercise of long-arm jurisdiction is permitted over nonresidents who have: ▪ Committed torts within the state ▪ Entered into a contract either in the state or that affects the state (and allegedly breached the contract) ▪ Transacted other business in the state that allegedly caused injury to another person Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -22

Venue A concept that requires lawsuits to be heard by the court with jurisdiction that is nearest the location in which the incident occurred or where the parties reside Change of venue – may be requested so that an impartial jury can be found The courts frown upon forum shopping Forum shopping – looking for a favorable court without a valid reason Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -23

Forum-selection Clause A contract provision that designates a certain court to hear disputes concerning the nonperformance of a contract Choice-of-law clause: A contract provision that designates a certain state’s law or country’s law to be applied to disputes concerning the nonperformance of a contract Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -24

Jurisdiction in Cyberspace Zippo Manufacturing Company v. Zippo Dot Com, Inc. An important case that established a test for determining when a court has jurisdiction over the owner or operator of an interactive, semi-interactive, or passive website Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -25

Case 3. 2: Jurisdiction over an Internet Seller Chanel, Inc. v. Banks Web 2010 U. S. Dist. Lexis 135374 (2010) United States District Court for Maryland Issue Does the court have personal jurisdiction over the defendant? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -26

Administrative Agencies that governments create to enforce regulatory statutes Administrative law: Law that governments enact to regulate industries, businesses, and professionals Combination of substantive law and procedural law Substantive administrative law – Law that is enforced by the administrative agency Procedural administrative law – Establishes the procedures that an administrative agency must follow while enforcing substantive administrative laws Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -27

Federal Administrative Agencies Created by the U. S. Congress State administrative agencies: Agencies created by legislative branches of states to administer state regulatory laws Local administrative agencies: Agencies created by cities, municipalities, and counties to administer local regulatory law Substantive rule: A rule issued by an administrative agency that has the force of law and to which covered persons and businesses must adhere Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -28

Powers of Administrative Agencies Type of Power Description Rule making Authority to issue substantive rules Judicial authority Authority to adjudicate cases through an administrative proceeding Executive power Power to investigate and prosecute possible violations of statutes and rules Power to issue an administrative subpoena Licensing Power to issue a license before a person can engage in certain professions or businesses Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -29

Administrative Procedure Act (APA) A federal statute that establishes procedures for federal administrative agencies to follow while conducting their affairs Administrative law judge (ALJ): An employee of an administrative agency who presides over an administrative proceeding and decides questions of law and fact concerning a case ALJ’s decision is issued in the form of an administrative order ▪ Decisions are subject to judicial review Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -30

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 3 -31