The Legal Environment of Business, 8e (Kubasek)
Chapter 3 The American Legal System
1) ________ is the power of the courts to hear a case and render a decision that is binding on the
parties.
A) Jurisdiction
B) Venue
C) Residency
D) Acclimation
2) A court with ________ jurisdiction has the power to review a previously made decision to
determine whether the trial court erred in making its initial decision.
A) original
B) appellate
C) in rem
D) exclusive federal
3) A court of original jurisdiction is usually referred to as a(n) ________ court.
A) trial
B) appellate
C) supreme
D) en banc
4) A court of ________ jurisdiction has the power to initially hear and decide a case.
A) original
B) appellate
C) review
D) supreme
5) A plaintiff refers to the party ________.
A) on whose behalf the complaint is filed
B) against whom an action is being brought
C) who listens to a dispute
D) who is designated to pass judgment on a case
6) The party against whom an action is being brought is the ________.
A) remainderman
B) plaintiff
C) defendant
D) complainant
7) The ________ is a detailed statement of the basis for the plaintiff’s lawsuit and the relief being
sought.
A) verdict
B) counterclaim
C) answer
D) complaint
8) A court has in personam jurisdiction over a person when ________.
A) that person responds to the complaint
B) a complaint has been filed in court against that person
C) the court serves him or her with a copy of the plaintiff’s complaint and a summons
D) that person enters within the borders of the state in which the court is located
9) Which of the following statements is true about in rem jurisdiction?
A) When the owner of a property cannot be located for personal service, a court with in rem
jurisdiction could order the property sold.
B) If the property under dispute is outside the state, but the owner is within the state, the court
has in rem jurisdiction over the property.
C) In rem jurisdiction grants a court the power to review a previously made decision.
D) In rem jurisdiction grants a court the power to try a case without a jury.
10) Which of the following is the traditional method of service of process?
A) certified mail
B) certified mail, return receipt requested
C) publication
D) a sheriff hands the summons and complaint to the defendant
11) The ________ is an order of the court notifying the defendant of the pending case and telling
him or her how and when to respond to the complaint.
A) summons
B) complaint
C) temporary injunction
D) permanent injunction
12) ________ is providing the defendant with a summons and a copy of the complaint.
A) Licensure
B) Censure
C) Service
D) Reprobation
13) Which of the following statements is true about right of removal?
A) A defendant cannot exercise the right of removal.
B) A state court judge cannot decline a valid right of removal request.
C) It can only be exercised for cases filed in a federal court.
D) It refers to a plaintiff’s right to stop a case from being moved to a federal court.
14) Mark, a resident of Nebraska, was driving through Oklahoma when his car struck Katherine’s
vehicle. If Katherine resides in Oklahoma, in which court should she file a case to claim
damages?
A) the U.S. Supreme Court
B) a U.S. federal district court in Nebraska
C) a Nebraska state trial court
D) an Oklahoma state trial court
15) Paul, a resident of Arizona, purchased a collector’s edition of a magazine from Arthur, a
retailer of comics and magazines, at a convention held in Arizona. Paul paid for the magazine,
but did not receive it. If Arthur is a resident of California, which of the following statements is
true?
A) The long-arm statute grants the Arizona state trial court in personam jurisdiction over Arthur,
if it can be proved that Arthur has enough points of contact in Arizona.
B) The long-arm statute grants the Arizona state trial court in rem jurisdiction over Arthur, if it
can be proved that Arthur has enough points of contact in Arizona.
C) Only the California state trial court has in rem jurisdiction over Arthur, as he is a resident of
California.
D) As this case does not fall under concurrent federal jurisdiction, Arthur cannot exercise his
right of removal.
16) Jennifer, a resident of North Carolina, was granted a patent for a device she invented.
Donald, a resident of Texas, claims to have invented the device earlier, and disputes the patent
granted to Jennifer. Which of the following should Donald do?
A) file a case in a North Carolina state trial court, as it has in personam jurisdiction over Jennifer
B) file a case in a Texas state trial court, as the long-arm statute grants it in rem jurisdiction over
Jennifer
C) file a case in the Ninth Circuit Court of Appeals, as there is concurrent federal jurisdiction due
to diversity of citizenship
D) file a case in a federal trial court, as federal courts have exclusive jurisdiction over this
subject matter
17) James rents a house in Wisconsin. Sandra, the owner of the house, lives in Pennsylvania. A
portion of the roof in the rented house collapses. If James is claiming damages due to negligence,
which of the following statements is true?
A) James has to file a lawsuit in a Pennsylvania state trial court, as in personam jurisdiction is
required.
B) A federal court has to hear this case, as it will have exclusive subject matter jurisdiction in
this case.
C) A lawsuit can be filed in a Wisconsin state trial court, as in rem jurisdiction is sufficient.
D) James has to wait for Sandra to enter Wisconsin and then file a lawsuit there.
18) Charlie, a resident of Colorado, made a purchase on the website of the online megastore,
Emerold, Inc. The product delivered to Charlie’s residence in Colorado was damaged and
Emerold, Inc. refused to replace it. The headquarters of Emerold, Inc. is located in New York,
but the product was shipped from a warehouse in Kansas. In this scenario, which of the
following statements is true?
A) Only the Kansas state court has jurisdiction to try Emerold, Inc. as the defective product was
shipped from Kansas.
B) A federal court has to hear this case, as it has exclusive jurisdiction on this subject matter.
C) If the warehouse superintendent in Kansas is served, Emerold, Inc. as a corporation has been
served.
D) If online transactions are considered as sufficient points of contact, a Colorado state court has
in personam jurisdiction over Emerold, Inc.
19) ________ jurisdiction is the power of a court to render a decision in a particular type of case.
A) Subject matter
B) In rem
C) Quasi-in rem
D) In personam
20) ________ jurisdiction refers to cases that may be heard only in the state court system.
A) In personam
B) In rem
C) Quasi-in rem
D) State court
21) Which of the following statements is true of concurrent jurisdiction?
A) All federal criminal prosecutions fall under concurrent jurisdiction.
B) A case that requires an interpretation of the U.S. Constitution must be heard only in a federal
court.
C) A bankruptcy case will be heard in a state trial court.
D) A case that involves diversity of citizenship falls under concurrent jurisdiction.
22) ________ jurisdiction applies to cases that may be heard only in the federal court system.
A) Ninth Amendment
B) Exclusive federal
C) Tenth Amendment
D) Intrastate
23) A court of original jurisdiction is usually referred to as a trial court.
24) A court of appellate jurisdiction has the power to convene a jury.
25) Before a court can render a decision affecting a person, the court must have jurisdiction over
the person.
26) The complaint is a detailed statement of the basis for the plaintiff’s lawsuit and the relief
being sought, while the cross-complaint is an order of the court notifying the defendant of the
pending case and telling him or her how and when to respond to the complaint.
27) Long-arm statutes enable a court to serve a defendant outside the state as long as the
defendant has engaged in certain acts within the state such as committing a tort within the state
or doing business within the state.
28) If the plaintiff and defendant are from different states, the case can only be heard in a federal
court.
29) When a person’s rights under the federal Constitution have been violated, the case must be
tried in a federal court.
30) In rem jurisdiction refers to the power of a court to render a decision that affects property
directly.
31) Cases involving diversity of citizenship can be heard in a federal court if an amount in excess
of $75,000 is in controversy.
32) Explain the rationale behind granting the right of removal to both parties in a case.
33) What is a long-arm statute?
34) Define subject matter jurisdiction. In terms of subject matter jurisdiction, describe the types
of cases that are subject to: a) exclusive federal jurisdiction; b) concurrent (in other words, both
federal and state) jurisdiction; and c) state court jurisdiction.
35) How do courts achieve in personam jurisdiction?
36) ________ refers to where a case is brought.
A) Parley
B) Res ipsa loquitur
C) Venue
D) Absolution
37) ________ is clearly prescribed by statute in each state, and is a matter of geographic
location. It is usually based on the residence of the defendant, the location of the property in
dispute, or the location in which the incident out of which the dispute arose occurred.
A) Service of process
B) Res ipsa loquitur
C) Parley
D) Venue
38) Forum non conveniens is ________.
A) a doctrine that allows a case to be moved from a state court to a federal court
B) applicable only for cases falling under exclusive federal jurisdiction
C) a doctrine that allows a change in venue of the case
D) granted regardless of the judge’s opinion
39) Which of the following statements is true about venue of the trial?
A) The venue of the trial court determines which court system has jurisdiction over the case.
B) The defendant’s right to have the venue changed is called right of removal.
C) The doctrine of forum non conveniens grants the plaintiff the right to irreversibly fix the
venue.
D) The request for change of venue is granted at the judge’s discretion.
40) Forum non conveniens is the doctrine which allows a party to request a change in venue.
41) Which of the following statements is true about the federal court system?
A) Appeals of benefits decisions made by the Veterans Administration are heard only by the
Federal Circuit Court of Appeals.
B) Appeals from administrative agencies are heard only by the Federal Circuit Court of Appeals.
C) Bankruptcy cases must be filed under trial courts of limited jurisdiction.
D) The U.S. Supreme Court only hears appeals in the federal system.
42) Which of the following statements is true about the structure of the court system in the
United States?
A) The U.S. Supreme Court functions only as an appellate court.
B) The state court of last resort is the only appellate court in the state court system.
C) Intermediate courts of appeal hear appeals only from courts of general jurisdictions.
D) County courts hear cases falling under general jurisdiction.
43) The second level of courts in the federal court system is made up of the U.S. ________.
A) district courts
B) courts of appeal
C) courts of last resort
D) superior courts
44) The U.S. Supreme Court is the ________.
A) court of last resort
B) court of initial resort
C) trial court
D) intermediate appellate court
45) Which of the following statements is true of state court systems?
A) A court of last resort is often the only appellate court in a state.
B) The small claims court is a court of general jurisdiction in most states.
C) Intermediate courts of appeal deal only with cases falling under general jurisdiction.
D) Each state has only one trial court of general jurisdiction.
46) In state court systems, most cases are originally filed in the ________ court of ________
jurisdiction.
A) appellate; general
B) trial; general
C) appellate; special
D) trial; special
47) A common court of limited jurisdiction in most states is the ________ court.
A) trial
B) appellate
C) intermediate
D) small claims
48) The court of last resort in the state court system is frequently called the ________ court.
A) superior
B) district
C) supreme
D) trial
49) The plaintiff can always choose the system in which to file a case regardless of subject
matter jurisdiction.
50) The U.S. Supreme Court is the court of last resort in the federal court system.
51) The U.S. Supreme Court also functions as a trial court of limited jurisdiction.
52) Which of the following statements is true of attorney-client privilege?
A) An attorney may divulge information if it involves confession of a crime that has been
committed.
B) An attorney who learns about a crime that a client is about to commit can choose not to reveal
that information.
C) Formal documents prepared by the attorney as work product may be revealed by the attorney
without client permission.
D) The attorney-client privilege is not extended to the work-product doctrine.
53) According to the ________ doctrine, formal and informal documents prepared by an attorney
in conjunction with a client’s case are privileged and may not be revealed by the attorney without
the client’s permission.
A) parley
B) parol evidence
C) substantial performance
D) work product
54) Simon is an attorney who has been hired by Naptune, Inc. to defend against claims of
profiteering. While discussing the charges with Mark, who is an employee of Naptune, Simon
learns that Naptune is about to engage in profiteering again. In this scenario, which of the
following statements is true?
A) Simon is legally obliged to inform the police about any future criminal activities of Naptune,
Inc.
B) Simon cannot legally include this information in his work product and inform the court.
C) Simon can only divulge this information to the police if Mark explicitly permits it.
D) Simon can include this in the work product, but can choose not to inform the authorities.
55) Which of the following statements is true of attorneys?
A) When an attorney’s client is a corporation, the attorney-client privilege is void.
B) In-house corporate attorneys are legally forbidden from representing their employers in court.
C) Attorneys may represent their corporate clients in negotiations with labor unions.
D) Attorneys who are hired to draw up contracts and corporate charters are called in-house
counsel.