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Chapter 2

BMGT380 Chapter 2 Notes

Business and Management
Course Code
BMGT 380
William Mc Clenahan

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Chapter 2 – The Resolution of Private Disputes
State Courts
1. Courts of Limited Jurisdiction – Three basic kinds
i. Traffic courts
ii. Probate courts – deals with wills, trusts, and estates
iii. Small claims court – dollar limit, varies state to state, typically $5,000
oTrial De Novo – new trial
You can appeal in the small claims court and you pretty much start over and get a whole new trial
2. Trial Courts
oNo subject matter restrictions, can hear pretty much all kinds of cases except for ones that go to courts of
limited jurisdiction
oCourts of record – a transcript is made of the preceding (no transcript made in courts of limited jurisdiction)
oSet up of trial courts
Often called superior courts, circuit courts, county courts, courts of common pleas
3. Appellate Courts – Courts of Appeal
oGeneral rule: will not consider or listen to new evidence (evidence that was not presented in the original trial)
oLook at evidence presented in trial courts and figure out if the trial court reached the right decision
oDepending on what state you’re in, there are either one or two levels of appeals:
In smaller states, only one level of appeals
In larger states, there are two levels of appeal – if you have your trial and you lose your first appeal is
with the court of appeals, then if you lose you can further your appeal to the State Supreme Court
Jurisdiction and Venue
Apply to both state courts and federal courts, for the most part
In order for a court to hear a case, jurisdiction has to be proper and venue has to be proper
Jurisdiction – a court power to hear a case, issue, decision
Venue – geographically have you filed the case in the proper court
Three kinds of jurisdiction – Must have one and either 2a or 2b
1. Subject Matter Jurisdiction – refers to the court power to decide a particular type of action before it.
A criminal court can only hear a criminal case, it does not have subject matter jurisdiction over a
civil case
2. a. In Personam – jurisdiction over a particular defendant, exists in three situations:
Residency – People who reside in a particular state
Consent – even though not a resident in the state, if sued in a state, you can consent to it
A long-arm statute – Either doing business in the state or commit a wrongful act (*MC question
on exam)
b. In Rem – jurisdiction over the presence of property
File lawsuit wherever the property is located
Venue – which county do you sue the defendant in? General rule: county that is most fair and convenient to the
defendant. Typically the county the defendant either lives or works
Forum Selection Clauses
oThe parties can agree in advance on where the case will be heard
Federal Courts
1. Federal District Court – the federal equivalent to the state trial court
oEach federal district has one federal district court
oBasic file court
Subject Matter Jurisdiction in Federal Court (*MC question), two kinds (you only need one or the other to meet
i. Diversity Jurisdiction – the lawsuit is between citizens of different states and the amount they are fighting about is in
excess of $75,000.
Also includes lawsuits between citizens of the United States and citizens of foreign countries.
Corporation is a citizen in two places:

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i. Principle/primary place of business
ii. Where it is incorporated
ii. Federal Question Jurisdiction – when you sue somebody under the federal law, the United States Constitution, or a Treaty
of the U.S.
No amount limitation
Concurrent jurisdiction
oFor certain cases, cannot file in state court, can only file in federal court
Ex. Patent cases can only be filed in federal court
oFor other cases, plaintiff has a choice of whether they want to file in state or federal court – there is
concurrent jurisdiction (both courts have jurisdiction)
oRemoval – process whereby a defendant moves a case from state to federal court; two reasons why they
would remove a case:
Federal judges are more confident than state judges – defendant wants to get the best judge
Federal courts are quicker than state courts
oRemand process – case is sent back down to state court if conditions were not met to remove the case
2. Specialized Federal Courts
oCourt of Claims – when suing the United States
oCourt of International Trade – concerns international trade disputes
oBankruptcy Court
oTax Court
3. Courts of Appeal – aka Circuit Court of Appeal
oThere are 13 of them
The first 11 are numbered
The 12th Court of Appeal is the D.C. Circuit – federal district cases and the District of Columbia
The 13th is the Federal Circuit – hears appeals from some of the specialized courts (Court of
International Trade and Court of Claims)
oCannot consider any new evidence
oJust reviews what the trial court below did and decide if…*
4. United States Supreme Court
oPrimarily hears appeals from two sources:
Federal Appellant Court
State Supreme Court
i. Writ of Certiorari – asking the Supreme Court to take your case
ii. Chances getting the Supreme Court to take your case is very rare (somewhere between 75
and 100 cases taken per year)
iii. Has almost complete discretion as to decide which particular case it wants to take
oOriginal Jurisdiction – Supreme
Acts as a trial court in two main kinds of cases
i. One state is suing another state
ii. Where there is litigation between a particular state and the United States
Civil Procedure
Set of rules governing how a civil lawsuit is conducted
Each of the 50 states plus the District of Columbia has its own set of rules of civil procedure to decide how cases
will proceed in that state.
oThere are a total of 52 sets of rules
The United States of litigation is adversarial
oIn a civil case, the plaintiffs burden is to prove his case by a preponderance (more likely than not) that he
has a valid claim against the defendant
oIn U.S. criminal case the burden of proof is beyond a reasonable doubt
Stricter and harder to meet
oYou can have different outcomes in civil and criminal cases depended in the burden of proof
How a case begins
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