Legal Environment of Business Chapter 2 Civil Procedure Alan Davis CHINESE PRO ERB! Tell me, I ll forget.

. Show me, I may remember. But involve me and I ll understand. "ll students should come prepared to all classes, but, especially the assistants for today who are Thomas Lyonfields, David Schneider, Jinghong Huang, Alex ever, !aige Stifter, !hoenix He The Supreme "ourt has nine members# Suppose that we had a five$four decision# Answer the following %uestions& hat is a five$four decision' (four )udges decide one way, five decide the other *xplain the following terminology + ,a)ority opinion (the law

"oncurring opinion (all the )udges have the same opinion ,inority opinion ( the opinion of the minority of )udges ( it-s not what the law is today, it-s what the law could be tomorrow Alex sues David alleging that David is responsible for brea.ing her anti%ue which is valued at /0,111,111# 2oth parties agree that the anti%ue is valued at /0,111,111 + the only issue for a )ury to decide is whether or not David is responsible for the brea.age# A )ury returns a verdict of /311,111# Answer the following %uestions& 04 5s this an appropriate )ury verdict' hy or why not' 6o, because they are only deciding the %uestion of fact, whether or not he did it He bro.e it, he owes her /0,111,111, if he didn-t he owes her nothing

74 5f Jinghong is the )udge and wishes to overturn the )ury verdict what is the standard that must be met to do this'

84 5s the standard met in this case'

hy or why not'

94 2asically, what are Judge Jinghong-s options' 0 Accept the verdict :problem& still didn-t answer the %uestion4 7 ;emand(send bac. to )ury :problem& the )ury could come bac. with the same verdict4 8 Judgement nov()udgement for not understanding the verdict 9 Declare a mistrial(new )ury, redo the trial :problem& more time, more expense4 3 *ncourage parties to settle Answer the following true$false %uestions relating to what we have done so far in this course& 04 The doctrine of Stare Decisis states that li.e cases should be decided ali.e in the same )urisdiction# true 74 <enerally, in a )ury trial, the )ury will decide both %uestions of fact and %uestions of law# false 84 A motion for summary )udgment will be granted if there are no material facts in dispute and thus there is nothing for a )ury to decide# true 94 The highest legal authority in the =S is the =S constitution# true 34 5n the state of ,issouri, provisions of the state constitution would ta.e priority over provisions of the federal constitution# false !aige brings a lawsuit against Thomas alleging that he sold her a defective bi.e# Answer the following %uestions# 04 Thomas ma.es a motion for summary )udgment, if a court grants the motion what is the )udge effectively saying' 5ts not a %uestion of fact, no facts in dispute

7# Suppose that !aige wins the case and Thomas wishes to appeal the case because of ># hich of them is going to argue that > is a %uestion of law' hy' Thomas& %uestion of law !aige& %uestion of fact
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hich of them is going to argue that > is a %uestion of fact' paige

hy'

CI IL PROCE#$RE % &"'IN( " C"SE )RO* CO*PL"IN& &O +$#(E*EN& Note! ,e are going to go all the ,a- through the c-cle of a la,suit using the Paige v. &homas case as an e/ample % so all 0uestions a1out 2the case3 refer 1ac4 to this. "lso5 I am going to appoint one of m- assistants to 1e Paige5 one to 1e &homas5 one to 1e a 6udge5 one to 1e the 6ur-5 and one to 1e an appeals 6udge. So5 the assistants should 1e prepared to ma4e up facts in the various stages 7let us have some fun as ,e do this8. Step one %Choosing the court The first decision that the plaintiff :the party bringing the action4 has to ma.e is in which court to begin# The plaintiff will file what is called a complaint and the defendant :the one who is charged with wrong(doing4 will file what is called an ans,er. 5n ?the case@, who is the plaintiff and who is the defendant' !aige&plaintiff, Thomas& defendant The =S has 37 legal systems + the federal system, the 31 states, and the District of "olumbia# The rules vary slightly from )urisdiction to )urisdiction# See *xhibit 7(7 on page 8A#

The following is a general summary of a typical state system# Court of limited 6urisdictions % traffic court :handling traffic violations4, pro1ate courts :handling the estates of deceased people4, small claims court :for small amounts, in ,issouri it is less than /3,1114# These courts are not courts of record which means there is no transcript of the proceedings# &rial courts + these are courts of record and handle both civil cases and criminal cases# <enerally, the 1urden of proof in a civil case is the preponderance of the evidence rule which means that, it is more li.ely than not, that something is true# <enerally, the 1urden of proof in a criminal case is beyond a reasonable doubt, which means that there is no doubt at all#

E/ample! Bou may remember the CJ Simpson case where he was accused of .illing his wife# 5n the criminal case, a ma)ority African(American )ury found him not guilty# hile later in a wrongful death suit brought by her parents, an all(white )ury found him responsible for her death and ordered him to pay the family a /03,111,111 )udgment# Answer the following %uestions& 04 5t is difficult to reconcile the decision of the )ury in the criminal case :where he was found not guilty4 and the civil case :where he was held responsible4# They seem inconsistent and many commentators have explained the difference on racial grounds# *xplain#

74 There is a way to explain the different results based on the following analysis# Let us suppose that you were on both )uries and you concluded that there was a D1E probability that he did it# "oncerning the burden of proof in a criminal case ( beyond a reasonable doubt + how would you rule in the criminal case'

84 Cn the other hand, considering the burden of proof in a civil case ( preponderance of the evidence rule (i.e. more likely than not) how would you rule in the civil case' ,ore li.ely than not

94 The family actually never collected any money from CJ :although they had won a )udgment4 because he was ?)udgment proof@# hat does this mean' CJ didn-t have 03 million dollars to give to the family To be able to litigate in a particular court, the plaintiff must establish that the court has both su16ect matter 6urisdiction :i#e# )urisdiction over the item being litigated4 as well as personal 6urisdiction :i#e# )urisdiction over the defendant in the case4# 5f the court lac.s one of these things, it cannot hear the case# An example of sub)ect matter )urisdiction is that a civil court cannot hear a criminal case and vice versa# A state court cannot hear a federal issue and generally a federal court cannot hear a state issue :but, see the discussion of diversit- 6urisdiction below8. <enerally, some areas of law are reserved to the federal level + antitrust, ban.ruptcy, labor, and civil rights laws are generally federal matters# Tort laws :civil wrongs4, contract law, and most criminal laws are state matters# However,
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there are many exceptions to these general rules# For example, although ban.ruptcy is a federal matter, each state has its own rules about what a person going through ban.ruptcy can .eep + for example, in ,issouri it is a car and a house valued up to /711,111# 5n Florida it is a car and a house valued up to /3,111,111 :guess where CJ bought a house after his wife-s family won a multi( million / lawsuit4# !ersonal )urisdiction says that the court has control over the person# Cbviously, if the person lives in the state, the state courts would have )urisdiction# So called, long9arms statures which provides that if a person does business in a state the state would have )urisdiction + :i#e# the court has a long arm4# Referring to the case % 5ndicate when you thin. a ,issouri court would have )urisdiction to hear ?the case@ in terms of sub)ect matter and personal )urisdiction# 04 Thomas is a manufacturer of bi.es# His factory is in Gansas but he sells his bi.es in all 31 states# ,issouri has )urisdiction 74 Thomas owns a retail bi.e shop with only one location which is in Gir.sville# ,issouri has )urisdiction 84 Thomas owns a retail bi.e shop in 2ug Tussle Ar.ansas where !aige purchased the bi.e# !aige is a resident of ,issouri# This is Thomas-s only location# ,issouri does not have )urisdiction because Thomas-s business is 5n Ar.ansas 94 Same as ?8@ except that Thomas sells bi.es via a mail order catalog and he mails his catalogs throughout the country# ,issouri has )urisdiction because he sent mail order catalogs to missouri 34 Same as ?8@ except that Thomas sells bi.es via the 5nternet# ,issouri has )urisdiction D4 Thomas is a resident of 5owa and is not a merchant# Cn a bi.e trip through ,issouri, he meets !aige and sells her his personal bi.e# ,issouri has )urisdiction because the sale happened within ,issouri # Overvie, of the federal s-stem At the federal level, there are the following trial courts&

)ederal district court % this is a general court that handles all federal matters# To be heard by this court, a plaintiff must establish either that there is a federal 0uestion :i#e# a matter of federal law4 OR there must be diversit- 6urisdiction which exists when the parties are from two different states :but only if the amount in dispute is over /H3,1114# ;eferring to ?the case@, if !aige was a resident of ,issouri and Thomas was a resident of Alas.a, which court do you recommend that she begins her legal action' hy' Stated another way, would a federal district court have )urisdiction :even though product liability is generally a state issue4' hat would be your advice if he lived in "anada' Specialt- courts % Ban4ruptc- Courts :handles ban.ruptcy cases4, Court of )ederal Claims :based in ashington which only handles cases in which the defendant is the =S government4, and the &a/ Court :which handles federal tax cases4#

)ederal Courts of "ppeal % There are 08 "ircuits "ourts of Appeals# See *xhibit 7(8 on page 91# Twelve of these courts are based on geography# The 08th court is called the Federal "ircuit which only hears appeals from the "ourt of Federal "laims# Iuestion& hat circuit is ,issouri in' Alas.a' 6ew Bor.' Texas'

Suppose !eter is in the =S Army and is a resident of ,issouri# hile on a tour of duty in 5ra%, !eter was wounded and had to have a leg amputated# =nfortunately, an army doctor :who graduated at the bottom of her class in medical school4 cut off the wrong leg# Answer the following %uestions& 04 hat do you call a doctor that graduates at the bottom of her medical school' A doctor

74 5f !eter had a choice which party would he rather sue the doctor or the =S government' "onsider who has ?deep poc.ets@# The government, because the payoff would be bigger

84 5f !eter chooses to sue the =S <overnment what court will he go to' The court of federal claims

94 5f !eter loses the case, to which circuit should he appeal' Should it be the Ath circuit :where he lives4, the D" circuit :where the court is located4 or something else' Another way to as. this %uestion is why do you need the federal circuit'

Step 2 % *otions % After the initial complaint and ans,er are filed with the court, the parties can ma.e motions to the court to as. that certain evidence be admitted or excluded# For example, some common motions in criminal cases may be& ,otion to suppress confession + because the police did not inform the defendant of her Miranda rights :more about this later when we discuss the right to have an attorney4# ,otion to suppress evidence + because the police did not get a proper search warrant :more about this later when we discuss the fourth amendment4# ,otion to suppress discussion of prior bad acts + Defendants sometimes argue that the government cannot introduce the fact that the defendant has been charged :and or convicted4 of a similar act before + the argument is that it would pre)udice the )ury so as to prevent a fair trail + the government will counter that the prior bad acts can be included if it ?shows a pattern@ of behavior# ,otion for a change in venue (i.e. location) + defendants will often ma.e these motions because of pre(trial publicity# They argue they will not get a fair trial in this particular location# ;eferring to ?the case@ why might Thomas want a change in venue' The ob)ective of motions is to determine the ?rules of the game@ + that is what evidence can and cannot be introduced at trial# Are these %uestions of fact or %uestions of law' (Iuestions of law

Step : % #iscover- + both sides have to provide full disclosure of the evidence$witnesses that they plan to introduce at trial# The ob)ective of discovery is to ma.e sure there are no surprises at trial# Attorneys have the opportunity to ta.e depositions :statements under oath under penalty of per)ury4 from opposing witnesses# As an aside, 2ill "linton was impeached for allegedly lying in a deposition in the !aula Jones sexual harassment case against him# The purpose of discovery is so that there are no surprises at trial# The opposing counsel can )udge how strong their case is# Judges will often encourage parties to settle out of court to save the expense of a trial :this is .nown as 6udicial econom-8. Step ; % *otion for Summar- +udgment + *ither party can ma.e a motion for summary )udgment which is basically as.ing the court to grant a )udgment without a trial# To prevail, the party must show that 04 there is no material dispute of the facts :based on discovery4 and 74 as a matter of law, she is entitled to win# A motion for summary )udgment is made in the overwhelming ma)ority of cases and is only granted in a handful of cases# A motion for summary )udgment will be granted only if, when the evidence is viewed most favorable to the other partyJ there clearly are no facts in contention + that is there is nothing for a )ury to decide# 5t is simply a matter of applying the law#

Referring to 2the case35 ans,er the follo,ing 0uestions! 04 ,a.e Thomas-s argument that summary )udgment should be granted in his favor#

74 ,a.e the argument that summary )udgment should not be granted#

84 Should the motion be granted' This is the decision of the trial )udge# Bes 94 as the trial )udge correct' This is the decision of the appeals court#

Step < % Pretrial Conference + 5n ,issouri and the federal system, this is optional with the )udge# 5t is an informal process in which the )udge will discuss the particular rules of evidence to be used, to consider motions, and to ensure that the discovery process has been complete#

Step = % &he trial 7finall-8 9 After all of this preliminary wor. :which in a simple case could ta.e months and in a more complex case could ta.e years4, finally, the trial begins# Typically the order at trial will be as follows& Choosing a jury ;eferring to ?the case@ what .inds of people would Thomas want to exclude from the )ury' about !aige' hat

Opening statement by plaintiff :or government in a criminal case4 + this is the first opportunity the plaintiff has to convince the )ury that their ?theory of the case@ is correct# Sentences such as ?during this trial, we will show thatK##@ are typical# Opening statement by defendant + the attorney for the defendant presents her case# laintiff presents her case + through documents and witnesses + defendant-s attorney can cross examine the witnesses and challenge the validity of the documents#

After the plaintiff rests her case, the attorney for the defendant will almost always ma.e a motion for dismissal + under the argument that no reasonable )ury could agree with the facts as presented by the plaintiff + the motion is almost always made and very seldom granted# !efendant presents her case + through documents and witnesses + plaintiff-s attorney can cross examine the witnesses and challenge the validity of the documents# Closing arguments first by the plaintiff and then by the defendant and then rebuttal by the plaintiff + this might seem unfair to allow the plaintiff to go both first and last, but, remember that the plaintiff has the burden of proof. "ury instructions the )udge will give the )ury a summary of the law and will give them guidance in to how to do their deliberations + sometimes there is no )ury and both %uestions of fact and %uestions of law will be decided by the )udge + this is .nown as a bench trial. #erdict by jury the )ury delivers their verdict + generally :depends on the )urisdiction4 + a ma)ority vote is re%uired in civil cases and a unanimous vote in a criminal case# Sometimes the )udge will disagree with the verdict and can issue a judgment not $ithstanding the verdict + here the )udge believes that no reasonable )ury can come to the conclusion# E/ample! Jinghong sues David alleging that he bro.e his /0,111,111 anti%ue + the factual %uestion before the )ury is simple + was David responsible for brea.ing the anti%ue or not' The )ury decides a /311,111 verdict for Jinghong# 5s this appropriate' hy or why not' hat options does the )udge have' Step > % &he appeal process + After one party loses and a )udgment is entered, the losing party can appeal the decision + because of the great respect that the American legal system has for )uries, generally, only %uestions of la$ can be appealed generally not %uestions of fact. Hence, the standard basis for an appeal is that the )udge made some error in one of her rulings#

Step ? % Enforcing a 6udgment + Simply because one has won a )udgment does not necessarily mean that the plaintiff will actually get any money# The plaintiff simply becomes another creditor who will line up behind other creditors in attempting to get money from the defendant#

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