Chapter 2
THE COURT SYSTEM AND DISPUTE RESOLUTION
RESTATEMENT
A court is a government-established tribunal created to hear and decide matters brought before it. Courts have
specific types or classes of cases assigned to them and over which they have authority; referred to as jurisdiction.
The types of jurisdiction include original jurisdiction which is the authority to conduct the first proceedings in the case.
Appellate jurisdiction is the authority to review the proceedings of other courts. Courts can have broad authority over
a variety of cases, or general jurisdiction as with a trial court, or can have special or limited jurisdiction as with
juvenile or probate courts.
There are federal and state court systems. The federal court system consists of specialty courts such as tax court
and bankruptcy courts, a general trial court called federal district court, the U.S. court of appeals and the U.S.
Supreme Court. State court systems have a general trial court, called a county, circuit or superior court, an appellate
court, and a state supreme court.
When a dispute is taken to court, it begins with a plaintiff filing a complaint. The defendant answers the complaint by
denying the allegations or counterclaiming. The parties may be represented by lawyers who are officers of the court
trained to represent others in the presentment of a case.
Following the pleadings in a case, the parties begin discovery whereby they determine the facts of the case through
depositions, requests for production and interrogatories.
Based on the evidence obtained during discovery, the parties may move for summary judgment which is a decision
in a case in which the facts are not in dispute.
A trial begins with voir dire, or the process of questioning jurors for bias or arbitrary exclusion through the use of
peremptory challenges. The trial proceeds with opening statements and then the plaintiff’s case. The order for
questioning witnesses is direct, cross-, redirect, and recross-examination. A directed verdict can be granted if the
plaintiff’s proof was insufficient to establish the elements of the case. Following a jury verdict, the losing party can
move for a judgment N.O.V. or a new trial. The collection of a judgment is obtained through execution on a writ of
execution or garnishment.
Other methods, besides litigation, that can be used to settle disputes are called alternative dispute resolution. The
methods of alternative dispute resolution include arbitration, mediation, medarb, reference to third person, association
tribunal, summary jury trial, rent-a-judge, minitrial, contract provisions and ombudsmen. These methods vary in
formality but are all non-judicial means for dispute resolution.
STUDENT LEARNING OUTCOMES
LO.1: Explain the federal and state court systems.
LO.2: Describe court procedures.
LO.3: List the forms of alternative dispute resolution and distinguish among them.
INSTRUCTOR’S INSIGHTS
Break the chapter down into three components – related Learning Outcomes are indicated in ( ):
1. What are the court systems and names of the various courts? (LO.1)
Cover the federal court system
Explain generally how state court systems work
Discuss the types of courts and their jurisdiction
2. How does a case go through a court? (LO.2)
List the parties involved in a court case
Explain the initial steps in a law suit
Describe how a trial proceeds
Discuss the parties’ options after a trial is finished
3. What are the alternatives to litigation for dispute resolution? (LO.3)
Explain arbitration
Discuss mediation
Cover MedArb
Define and discuss reference to a third person, association tribunals, summary jury trials, rent-a-judge,
mini-trial, contract provisions, and ombudsmen as alternative means of dispute resolution
CHAPTER OUTLINE
I. What are the Court Systems and Names of the Various Courts?
A. Types of courts
1. Subject matter jurisdiction – courts have authority based on type of case
2. Original jurisdiction – trial courts; where case is heard initially
3. General jurisdiction – authority of broad subject matter in cases
4. Limited or special jurisdiction – narrow scope of subject matter; e.g., probate, domestic relations,
juvenile courts
5. Appellate jurisdiction – court that reviews the work of other courts
a. Reversible error – mistake in lower court with the potential to affect the outcome
b. Court can affirm, reverse, or remand
CASE BRIEF: Stanford v. V.F. Jeanswear, LP
84 So.3d 825 (Miss. App. 2012)
FACTS: Mary Kay Stanford (Stanford) was driving a truck for V.F. in late evening of February 7, 2006 when
she began to feel nauseous. She pulled into a truck scale house to rest for the evening. She
parked the truck, and as she attempted to climb into the sleeper compartment, she tripped over a
cooler. Stanford fell into the sleeper compartment and hit her head on the bed rail; the fall knocked
her unconscious. Stanford’s husband, William Stanford, who was riding with her, attempted to
revive her. After she regained consciousness, William offered to take her to the emergency room.
Stanford declined and decided to stay in the sleeper compartment and rest until morning. Stanford
contacted V.F. dispatch and made the notifications to the company about her injury. The company
arranged for the two to return home.
On February 8, 2006, Stanford went to Dr. Allie Prater for an evaluation of her injuries. Dr. Prater’s
notes reflect that Stanford’s chief complaints were blackouts, syncope, and slurred speech.
Upon receiving the test results, Dr. Prater referred Stanford to Dr. Glenn Crosby, a neurosurgeon.
Before seeing Dr. Crosby, Stanford presented to Dr. Johnny Mitias, an orthopedic surgeon, on
On March 31, 2006, Dr. Crosby diagnosed Stanford with symptomatic cervical spondylosis with
osteophyte complex and ordered physical therapy. The physical therapy aggravated Stanford’s
symptoms, so Dr. Crosby recommended a cervical diskectomy and fusion at C3–4. Dr. Crosby
performed the recommended surgeries on August 8, 2006. After surgery, Stanford began
complaining of pain in her left buttock and down her left leg. Dr. Crosby ordered a lumbar MRI,
which revealed a large rupture of the lumbar spine at L4. On November 28, 2006, Dr. Crosby
performed a diskectomy at the L4 level.
Dr. Crosby’s notes indicate that Stanford “had a fall this past year” that may have aggravated her
A hearing was held before an administrative judge (AJ), who denied Stanford’s claim for workers’
ISSUE: Was the admission of the evidence about the cruise and horseback riding and hairy chest contest
prejudicial and a basis for reversible error?
HOLDING: No,
REASONING: The evidence was damaging to Stanford’s case but was not prejudicial particularly given that the AJ
B. Federal court system (See Figure 2-1)
1. Federal district court (See Figure 2-2 in text)
a. Trial court
b. General jurisdiction
i. U.S. is a party
ii. Cases between citizens of different states ($75,000 or more)
iii. Cases arising under U.S. Constitution or statute
c. Each state is at least one federal district
d. Specialty courts
i. Limited jurisdiction
ii. Bankruptcy, tax, Indian tribal court
2. U.S. Court of Appeals
a. Twelve geographic circuits (districts grouped together) plus one additional circuit
b. One court of appeals per circuit
c. Three-judge panel reviews cases
3. U.S. Supreme Court
a. Appellate jurisdiction
i. U.S. Courts of Appeals
ii. State supreme courts when constitutional issue is involved
b. Review is granted pursuant to writ of certiorari process
c. Trial court for ambassadors, public ministers, consuls and state vs. state
C. State court systems (See Figure 2-3 in text)
1. General trial courts: civil and criminal jurisdiction
2. Specialty courts – probate, family
3. City, municipal, and justice courts
4. Small claims courts
5. State appellate courts
6. State supreme courts
II. How Does a Case Go Through a Court? – Court Procedure
A. Participants in the court system
1. Plaintiffs – initiates proceeding (criminal case: prosecutor)
2. Defendant – party against whom proceedings are brought
3. Judge – presides over proceedings
4. Jury – citizens sworn to reach a verdict
B. Which law applies – conflicts
1. Law of state in which court is located governs procedural questions
2. Law of state in which contract was made governs
3. Choice of law provisions in contracts govern
C. Initial steps in a lawsuit
1. Complaint – states cause of action – commencement of lawsuit
2. Service of process – notifies defendant
3. The defendant’s response and the pleadings
a. Answer and/or counterclaim – also called the pleadings
b. Motion to dismiss – demurrer
c. Deny
4. Discovery – process of learning the evidence that exists prior to trial
a. Deposition – sworn testimony not in court room; can be used to impeach differing recollection or
testimony at trial
b. Interrogatories – questions answered under oath
c. Requests for production of documents – obtaining paper evidence
5. Motion for summary judgment – asks for decision when facts are not in dispute
6. Designation of expert witnesses
D. The trial
1. Jury selection
a. Voir dire examination – use Martha Stewart example from text and on website update
b. Challenge for cause – bias, conflict
c. Peremptory or arbitrary challenge – lawyer need not give reason
2. Opening statements
3. Presentation of evidence
a. Witnesses are examined by direct, cross-, re-direct, and recross-examination
b. Roles change according to who is presenting his/her case
4. Motion for directed verdict granted if plaintiff did not establish case
DISCUSSION POINTS: Ethics & the Law
Honesty, Lawyers, and BP Claims
The lawyers should have declared their conflicts of interest, which would have made them ineligible to participate in
DISCUSSION POINTS: Thinking Things Through
Why Do We Require Sworn Testimony?
Discuss with students the inconsistency in the statements. The oath makes a difference in what is said. Discuss the
ethics of Microsoft’s differing positions.
5. Closing argument or summation
6. Motion for mistrial
DISCUSSION POINTS: E-Commerce & Cyberlaw
Google’s Impact on Trials
What are the implications of your Internet connections? Should you always disclose that you are friends with
someone involved in the case during jury selection? Discuss how often Google has become an issue in cases.
Discuss the importance of jurors using only the evidence presented. Discuss importance of following the Judges’
cautions and being forthright.
7. Jury instructions
8. Jury verdict or mistrial if deadlocked
9 Motion for new trial or judgment N.O.V. (judgment non obstante verdicto)
E. Posttrial procedures: Recovery
1. Costs
2. Attorney fees
3. Execution of judgment and suit
4. Writ of execution or writ of garnishment
III. What are the Alternatives to Litigation for Dispute Resolution (ADR)? (See Figure 2-4 in text)
A. Arbitration
1. Means of avoiding expensive legal costs
2. Federal Arbitration Act and Uniform Arbitration Act govern
3. Arbitration can be mandatory or elective
4. Scope of arbitration: as broad as possible
5. Finality of arbitration
a. Usually provided for by the parties
b. If non-binding, any litigation begins anew for a trial de novo
B. Mediation
1. No authority to make a decision
2. Third party is a go-between to facilitate communication
C. MedArb – party has authority to hear case and suggest resolution to each side
D. Expert panel: a method to focus in on technical issues and singular issues as in construction contracts
E. Reference to third person: case is given to outsider(s) – ordinarily, parties agree that the decision is final
F. Association tribunals
1. These groups have a board or committee to settle disputes
2. The National Association of Home Builders requires arbitration
G. Summary jury trial: a dry run or mock trial to see how the case is perceived
H. Rent-a-Judge: an experienced judge is hired to hear the case
I. Minitrial: heart of dispute is heard; parties agree to limit issues of dispute
J. Contract provisions can set parameters of ADR, type of ADR, etc.
ANSWERS TO QUESTIONS AND CASE PROBLEMS
1. Trial process. Steps in litigation:
1. Complaint by plaintiff
2. Service of process on defendant
a. Jury selection: voir dire, challenge for cause, peremptory challenge
b. Opening statements
c. Plaintiff’s case: direct, cross, redirect, recross
2. Arbitration. The benefits are, in theory, that alternatives are faster. However, these arbitration methods are now
dragging out nearly as much as a trial. ADR allows for no public hearing and all the problems that go along with
3. Jurisdiction. Ralph’s case will go to federal district court because it is a trial involving a violation of a federal
statute.
5. Arbitration. The danger feared by the three developers is a real one. It would be better for them to agree to
submit the matter to arbitration. Persons who were experienced with real estate developments and the law of
6. Mandatory arbitration clauses. The U.S. Supreme Court held that the arbitration clause was valid because (1)
there was strong federal policy favoring arbitration; and (2) the party challenging the validity of an arbitration
Financial Corp. v. Randolph, 531 U.S. 79]
7. Expert witnesses; evidence. The answer can be found in the Yates case. When an expert does not disclose
evidence that helps to evaluate his or her credibility, there has been a reversible error that is grounds for
8. Types of courts. (a) Small claims court – original; limited
(b) U.S. Bankruptcy court – original; limited
9. Discovery. Yes, the Pension Fund would be entitled to have access to determine whether Mr. Ellison had said
anything that contradicted his public statements. The court did, in fact, allow the Pension Fund to have access.
10. Federal Arbitration Act. Yes. When the seller delivered pursuant to the purchase order, it became bound by the
terms of the purchase order, including the arbitration clause of that order. Because the buyer and seller were
11. Arbitration/mandatory clauses. The presumption that arbitration clauses in contracts (here in a collective
bargaining agreement) are valid and enforceable does not extend to those statutory rights that parties to the
contract may have. In this situation, the employee had a clear right to pursue remedies under federal statute and
12. Trial; jury selection. The lawyers can obtain information about prospective jurors through questionnaires as well
as the process of voir dire. Some of the background questions on voir dire are place of employment and whether
they know any of the parties in the case. Mr. Guber could be excused because of his relationship with Ms.
13. Binding arbitration; finality. Generally arbitration awards are not set aside by courts. Unless there is fraud
involved, the decision stands even when it appears that the arbitrator’s decision is very different from
14. Discovery evidence. Trial. On cross-examination, the lawyer can confront the witness on the business practice.
15. Arbitration Arbitration agreements can be enforced under Federal Arbitration Act (FAA) without contravening
Section 1 of the Federal Arbitration Act (FAA) excludes from the Act’s coverage “contracts of employment of
seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C.
§ 1. All but one of the Courts of Appeals which have addressed the issue interpret this provision as exempting
contracts of employment of transportation workers, but not other employment contracts, from the FAA’s
management system for classroom use.