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CHAPTER 3 Traditional and Online Dispute Resolution Before a


CHAPTER 3 Traditional and Online Dispute Resolution Before a court can hear a case, it must have jurisdiction. Over what must it have jurisdiction? – PowerPoint PPT presentation

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Title: CHAPTER 3 Traditional and Online Dispute Resolution Before a

CHAPTER 3Traditional and Online Dispute
Learning Objectives
  • 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?
  • In a lawsuit, what are pleadings? What is
    discovery, and how does electronic discovery
  • What are the components of a trial? An appeal?
  • What role does settlement play? What forms of
    Alternate Dispute Resolution are the common ones?

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.

Many Facets of Jurisdiction
  • Personal Jurisdiction
  • Jurisdiction over Property
  • Jurisdiction over Subject Matter
  • Original or Appellate Jurisdiction
  • Federal Court Jurisdiction
  • Concurrent or Exclusive Jurisdiction

Jurisdiction Over Persons
  • Power of a court to compel the presence of the
    parties (including corporations) to a dispute to
    appear before the court and litigate.
  • Courts use long-arm statutes for non-resident
    parties based on minimum contacts with state.
  • Cole v. Mileti (1998).

Jurisdiction Over Property
  • Also called in rem jurisdiction.
  • Power to decide issues relating to property,
    whether the property is real, personal, tangible,
    or intangible.
  • A court generally has in rem jurisdiction over
    any property situated within its geographical

Jurisdiction over Subject Matter
  • This is a limitation on the types of cases a
    court can hear, usually determined by federal or
    state statutes.
  • For example, bankruptcy, family or criminal
  • General (unlimited) jurisdiction.
  • Limited 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.

Federal Court Jurisdiction
  • Federal Question cases in which the rights or
    obligations of a party are created or defined by
    some federal law.
  • Diversity cases where
  • The parties are not from the same state, and
  • The amount in controversy is greater than 75,000.

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.

  • Venue is concerned with the most appropriate
    location for the trial.
  • Venue is determined by statute. In Texas, venue
    in civil cases is governed by the Texas Civil
    Practice Remedies Code in Criminal Cases by
    the Texas Code of Criminal Procedure.

Texas Venue General Rule
  • 15.002. VENUE GENERAL RULE. (a) Except as
    otherwise provided by this subchapter or
    Subchapter B or C, all lawsuits shall be brought
  • (1) in the county in which all or a substantial
    part of the events or omissions giving rise to
    the claim occurred
  • (2) in the county of defendant's residence at the
    time the cause of action accrued if defendant is
    a natural person
  • (3) in the county of the defendant's principal
    office in this state, if the defendant is not a
    natural person or
  • (4) if Subdivisions (1), (2), and (3) do not
    apply, in the county in which the plaintiff
    resided at the time of the accrual of the cause
    of action.

Texas Mandatory Venue
  • Texas law provides for mandatory venue in certain
    kinds of cases where there is such a mandatory
    provision, it trumps the general rule. Some
  • LAND. Certain suits relating to land (partition,
    suits to determine title, recover property, or
    for damages to land) must be brought in the
    county in which all or a part of the land is
  • LANDLORD-TENANT. Suits arising out of a lease
    must be brought in the county where the premises
    are located.
    mandamus against the head of a State Department
    in Travis County.
    Plaintiff lived at the time the claim accrued,
    where the defendant resided at the time of suit,
    or the residence of the defendant, if the
    Plaintiff chooses that venue.

Texas Mandatory Venue
  • (a) In this section, "major transaction" means a
    transaction evidenced by a written agreement
    under which a person pays or receives, or is
    obligated to pay or entitled to receive,
    consideration with an aggregate stated value
    equal to or greater than 1 million. The term
    does not include a transaction entered into
    primarily for personal, family, or household
    purposes, or to settle a personal injury or
    wrongful death claim, without regard to the
    aggregate value.
  • (b) An action arising from a major transaction
    shall be brought in a county if the party against
    whom the action is brought has agreed in writing
    that a suit arising from the transaction may be
    brought in that county.

Texas Permissive Venue
  • Texas law specifies permissive venue for a
    number of kinds of cases. This means that suit
    in these venues is OK, as long as nobody seeks
    a change to a mandatory venue. Some examples
  • Suits against insurance companies can be brought
    where the companys principal office in Texas is
    located, where the loss occurred or where the
    policyholder resided at the time of the loss.
  • Suits against executors, administrators or
    guardians can be brought where the estate is
    administered if it is to recover a claim against
    the estate, or if the suit is against the
    representative for negligence of the person whose
    estate he represents, it can be brought in the
    county where the negligence occurred.

Texas Permissive Venue
  • (a) Except as provided by Subsection (b), if a
    person has contracted in writing to perform an
    obligation in a particular county, expressly
    naming the county or a definite place in that
    county by that writing, suit on or by reason of
    the obligation may be brought against him either
    in that county or in the county in which the
    defendant has his domicile.
  • (b) In an action founded on a contractual
    obligation of the defendant to pay money arising
    out of or based on a consumer transaction for
    goods, services, loans, or extensions of credit
    intended primarily for personal, family,
    household, or agricultural use, suit by a
    creditor on or by reason of the obligation may be
    brought against the defendant either in the
    county in which the defendant in fact signed the
    contract or in the county in which the defendant
    resides when the action is commenced. No term or
    statement contained in an obligation described in
    this section shall constitute a waiver of these

Standing to Sue
  • In order to bring a lawsuit, a party must have
    standing to sue.
  • Standing is sufficient stake in the
    controversy party must have suffered a legal
  • Standing can be conferred by statute or by common

State and Federal Courts
Trial Courts
  • Courts of record-court reporters.
  • Opening and closing arguments.
  • Juries are selected.
  • Evidence, such as witness testimony, physical
    objects, documents, and pictures, is introduced.
  • Witnesses are examined and cross-examined.
  • Verdicts and Judgments are rendered.

Civil Procedures in State Court
  • Pleadings.
  • Plaintiffs Complaint.
  • Citation/Summons.
  • Defendants Answer/General Denial.
  • Pre-Trial Motions.
  • Motion for Judgment on the Pleadings.
  • Motion for Summary Judgment.

Trial Process
  • It may not seem like it, but trials follow a
    pretty structured and linear process
  • Plaintiffs petition sets forth distinct and
    recognized causes of action.
  • Identifies the facts that (i) support those
    causes of action and (ii) plaintiff will prove.
  • Defendants answer may admit all or none of
    Plaintiffs facts. It may contain objections to
    the petition, assert affirmative defenses,
    counterclaims or crossclaims.
  • Trial proceeds on the facts identified by the
    parties pleadings and narrowed down by the
    discovery process.

Civil Procedures in State Court
  • Discovery.
  • Depositions and Interrogatories.
  • Requests for Documents.
  • Requests for Admission.
  • Pre-Trial Conference.
  • Jury Selection (Voir Dire).

Causes of Action
  • These are claims for legal relief that are
    recognized by the law. Some examples are
  • Breach of a contract
  • Negligence
  • Trespass
  • Violation of Deceptive Trade Practices Act
  • Libel

Causes of Action
  • Causes of action can be established by decisions
    of courts (common law) or by legislatures
  • Generally, one has to prove a set of elements
    that make up a cause of action.
  • Elements are factual occurrences that, taken
    together, give rise to some legal claim.

Causes of Action
  • For example, Anderson believes that Billings has
    cheated him by inducing him to invest in a
    non-existent Chinchilla farm. Might he have a
    cause of action for fraud?
  • This would depend on whether Anderson can prove
    the elements of fraud, which are
  • Anderson made a false statement
  • Anderson knew the statement was false and
    intended to deceive Billings
  • Billings justifiably relied on the false
  • Billings suffered a loss, and
  • The loss was suffered because of Billings false

Proof at Trial
  • There must be evidence at trial of each element
    of a cause of action.
  • The jury (or the judge if it is a bench trial
    and the judge is also acting as the fact finder)
    decides what happened what the facts are.
  • If there is no evidence on which to base their
    factual determination, there is error in the
    trial and an appeal will likely result in

Civil Procedures in State Court
  • Trial.
  • Opening arguments.
  • Plaintiffs Case in Chief.
  • Defense cross-examines Plaintiffs witnesses.
  • Defense Case in Chief.
  • Plaintiff cross-examines Defense witnesses.
  • Closing Arguments.
  • Verdict / Motion JNOV /Judgment.
  • Appeal.

Appellate Courts
  • Middle level of the court systems.
  • Review proceedings conducted in the trial court
    to determine whether the trial was according to
    the procedural and substantive rules of law.
  • Generally, appellate courts will consider
    questions of law, but not questions of fact.

Courts of Appeal
Supreme Courts
  • Also known as courts of last resort.
  • The two most fundamental ways to have your case
    heard in a supreme court are
  • Appeals of Right.
  • By Writ of Certiorari.
  • These include U.S. Supreme Court the Texas
    Supreme Court and the Texas Court of Criminal

Supreme Courts
  • In Texas, there are two Courts of Last Resort
  • - Texas Supreme Court
  • Hears appeals in Civil cases from the
  • intermediate Courts of Appeal
  • - Texas Court of Criminal Appeals
  • Hears appeals of Criminal cases only

  • Class Project At the US Supreme Court
  • Oral Argument
  • Heart of Atlanta Motel v. U.S.
  • Procedural History
  • -Whos the Appellant?
  • -Appellee is the United States, in particular,
    the Attorney General of the US, who at the time
    was Robert Kennedy.

  • In this case, the Motel sued the government for a
    declaratory judgment that the provisions of the
    Civil Rights Act of 1964 was unconstitutional.
    Also asked the court to enjoin enforcement of the
    act by the Attorney General.
  • The United States counterclaimed and asked for an
    injunction requiring the Motel to abide by the

  • Trial was in the US District Court for the
    Northern District of Georgia, Atlanta Division.
  • At the trial court level, the United States
    prevailed, and judgment was granted on its
    counterclaim and the injunction sought by the
    government was granted.
  • The case was appealed by the Motel. Therefore,
    at the argument, the Motel has the right to open
    and close the argument.

  • You can hear actual recording of oral argument
  • http//

Alternative Dispute Resolution
  • Trials are a means of dispute resolution that are
    very expensive and sometimes take many months to
  • There are alternative dispute resolution (ADR)
    methods to resolve disputes that are inexpensive,
    relatively quick and leave more control with the
    parties involved.

  • 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.

  • Less than 10 of cases reach trial.
  • 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.

Assisted Negotiation
  • Mini-Trial Attorneys for each side informally
    present their case before a mutually agreed-upon
    neutral 3rd party (e.g., a retired judge) who
    renders a non-binding verdict. This
    facilitates further discussion and settlement.
  • Expert evaluations.
  • Conciliation 3rd party assists in reconciling

  • Involves a neutral 3rd party (mediator).
  • 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

  • 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.

Arbitration Disadvantages
  • Results may be unpredictable because arbitrators
    do not have to follow precedent or rules of
    procedure or evidence.
  • Arbitrators do not have to issue written
  • Generally, no discovery available.

Arbitration Process
  • Case begins with a submission to an arbitrator.
    Next comes the hearing where parties present
    evidence and arguments. Finally, the arbitrator
    renders an award.
  • Courts are not involved in arbitration unless an
    arbitration clause in a contract needs

  • What are Ethics?
  • How might you approach an ethical issue?
  • - Consequences analysis
  • - Actions analysis
  • - Some of both?
  • Some examples

Ethics Tough Questions
  • You can only rescue one of each of the following,
    which do you save?
  • A child or an adult
  • A stranger or your dog
  • Hitler or lassie
  • Your spouse or a Nobel Laureate

  • A dog or a weasel
  • Your entire family or the entire canine species
  • A bottle with the cure for cancer or your brother
  • A bottle with the cure for cancer or your brother
    who just gave you one of his kidneys

Ethics in Business
  • Important Questions
  • Who does the business serve?
  • Does it matter if its an individual, a family,
    an employee owned firm, a cooperative, or a
    publicly traded corporation?

  • Ethical Dilemmas Class Project