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Business Law Chapter 2 Homework Clearly One Could Argue That The Injuries

Page Count
9 pages
Word Count
4457 words
Book Title
Business Law: Text and Cases 14th Edition
Authors
Frank B. Cross, Kenneth W. Clarkson, Roger LeRoy Miller
1
CHAPTER 2
COURTS AND ALTERNATIVE
DISPUTE RESOLUTION
ANSWERS TO CRITICAL THINKING QUESTIONS
IN THE FEATURE
MANAGERIAL STRATEGYBUSINESS QUESTIONS
1A. If you were facing an especially complex legal disputeone involving many facets
and several different types of lawwould you consent to allowing a U.S. magistrate
judge to decide the case? Why or why not? Yes. U.S. magistrate judges are selected by
federal district court judges through a merit selection process. Applicants are interviewed by a
screening committee of lawyers and others from the federal judicial district in which the position
will be filled. The committee selects the five most qualified, who are voted on by the district court
2A. If you had to decide whether to allow a U.S. magistrate judge to hear your case,
what information might you ask your attorney to provide concerning that individual?
Applicants for the position of magistrate judge include attorneys, administrative law judges, state
court judges, and others. Important information concerning a judge who hears a specific case
2 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
CASE 2.1LEGAL REASONING QUESTIONS
1A. What is “diversity of citizenship? Diversity of citizenship exists when the plaintiff and
defendant to a suit are residents of different states (or similar independent political subdivisions,
2A. How does the presenceor lackof diversity of citizenship affect a lawsuit? A fed-
eral district court can exercise original jurisdiction over a case involving diversity of citizenship.
3A. What did the court conclude with respect to the parties’ “diversity of citizenship”
in this case? In the Mala case, the court concluded that the parties did not have diversity of
citizenship. A plaintiff who seeks to bring a suit in a federal district court based on diversity of
citizenship has the burden to prove that diversity exists. Malathe plaintiff in this casewas a
CASE 2.2CRITICAL THINKING
WHAT IF THE FACTS WERE DIFFERENT?
Suppose that Gucci had not presented evidence that Wang Huoqing had made one actual
sale through his Web site to a resident (the private investigator) of the court’s district.
Would the court still have found that it had personal jurisdiction over Wang Huoqing?
Why or why not? The single sale to a resident of the district, Gucci’s private investigator,
helped the plaintiff establish that the defendant ’s Web site was interactive and that the defend-
CHAPTER 2: COURTS AND ALTERNATIVE DISPUTE RESOLUTION 3
LEGAL ENVIRONMENT
Is it relevant to the analysis of jurisdiction that Gucci America’s principal place of busi-
ness is in New York state rather than California? Explain. The fact that Gucci’s headquar-
ters is in New York state was not relevant to the court’s analysis here because Gucci was the
CASE 2.3CRITICAL THINKING
LEGAL ENVIRONMENT
Who can decide questions of fact? Who can rule on questions of Law? Why? Questions
of fact can be decided by triers of fact. In a jury trial, the trier of fact.is the jury. In a non-jury trial,
it is the judge who decides questions of fact. Rulings on questions of law are made only by
judges, not juries.
GLOBAL
In some cases, a court may be asked to determine and interpret the law of a foreign
country. Some stats consider the issue of what the law of a foreign country requires to
be a question of fact. Federal rules of procedure provide that this issue is a question of
law. Which position seems more appropriate? Why? Proof of what a foreign law states,
and possibly its translation, may be appropriate for a jury to decide, based on a submission of
such evidence as a foreign publication of statutes or case law, or the testimony of an expert wit-
ANSWERS TO QUESTIONS IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
1A. Federal jurisdiction
The federal district court exercises jurisdiction because the case involves diversity of citizenship.
Diversity jurisdiction requires that the plaintiff and defendant be from different jurisdictions and
4 UNIT ONE: THE LEGAL ENVIRONMENT OF BUSINESS
2A. Original or appellate jurisdiction
Original jurisdiction, because the case was initiated in that court and that is where the trial will
3A. Jurisdiction in Illinois
No, because the defendants lacked minimum contacts with the state of Illinois. Because the
defendants were from another state, the court would have to determine if they had sufficient
4A. Jurisdiction in Nevada
Yes, because the defendants met with Garner and formed a contract in the state of Nevada. A
state can exercise jurisdiction over out-of-state defendants under a long arm statute if defend-
ANSWER TO DEBATE THIS QUESTION IN THE REVIEWING FEATURE
AT THE END OF THE CHAPTER
In this age of the Internet, when people communicate via e-mail, texts, tweets,
Facebook, and Skype, is the concept of jurisdiction losing its meaning? Many believe that
yes, the idea of determining jurisdiction based on individuals’ and companies’ physical locations
no longer has much meaning. Increasingly, contracts are formed via online communica-
tions. Does it matter where one of the parties has a physical presence? Does it matter where
the e-mail server or Web page server is located? Probably not.
CHAPTER 2: COURTS AND ALTERNATIVE DISPUTE RESOLUTION 5
ANSWERS TO ISSUE SPOTTERS
AT THE END OF THE CHAPTER
1A. Sue uses her smartphone to purchase a video security system for her architectural
firm from Tipton, Inc., a company that is located in a different state. The system arrives a
month after the projected delivery date, is of poor quality, and does not function as ad-
vertised. Sue files a suit against Tipton in a state court. Does the court in Sue’s state
have jurisdiction over Tipton? What factors will the court consider in determining juris-
diction? Yes, the court in Sue’s state has jurisdiction over Tipton on the basis of the company’s
minimum contacts with the state.
Courts look at the following factors in determining whether minimum contacts exist: the
quantity of the contacts, the nature and quality of the contacts, the source and connection of the
cause of action to the contacts, the interest of the forum state, and the convenience of the par-
2A. The state in which Sue resides requires that her dispute with Tipton be submitted
to mediation or nonbinding arbitration. If the dispute is not resolved, or if either party
disagrees with the decision of the mediator or arbitrator, will a court hear the case?
Explain. Yes, if the dispute is not resolved, or if either party disagrees with the decision of the
ANSWERS TO BUSINESS SCENARIOS
AT THE END OF THE CHAPTER
21A. Standing
This problem concerns standing to sue. As you read in the chapter, to have standing to sue, a
party must have a legally protected, tangible interest at stake. The party must show that he or
22A. Venue
The purpose behind most venue statutes is to ensure that a defendant is not “hailed into a re-
mote district, having no real relationship to the dispute.” The events in dispute have no connec-
tion to Minnesota. The Court stated: “Looked at through the lens of practicality—which is, after
ANSWERS TO BUSINESS CASE PROBLEMS
AT THE END OF THE CHAPTER
23A. Arbitration
In many circumstances, a party that has not signed an arbitration agreement (Kobe in this case)
cannot compel arbitration. There are exceptions, however. According to the court, “The first re-
lies on agency and related principles to allow a nonsignatory (Kobe) to compel arbitration when,
24A. SPOTLIGHT ON NATIONAL FOOTBALL LEAGUEArbitration
An arbitrator’s award generally is the final word on the matter. A court’s review of an arbitrator’s
decision is extremely limited in scope, unlike an appellate court’s review of a lower court’s deci-
sion. A court will set aside an award only if the arbitrator’s conduct or “bad faith” substantially
prejudiced the rights of one of the parties, if the award violates an established public policy, or if
the arbitrator exceeded her or his powers.
25A. Minimum contacts
No. This statement alone was insufficient to establish that Illinois did not have jurisdiction over
the defendant. The court ruled that Med-Express failed to introduce factual evidence proving
26A. Arbitration
Yes, a court can set aside this order. The parties to an arbitration proceeding can appeal an ar-
bitrator’s decision, but court’s review of the decision may be more restricted in scope than an
appellate court’s review of a trial court’s decision. In fact, the arbitrator’s decision is usually the
final word on a matter. A court will set aside an award if the arbitrator exceeded her or his pow-
ersthat is, arbitrated issues that the parties did not agree to submit to arbitration.
2-7A. BUSINESS CASE PROBLEM WITH SAMPLE ANSWERCorporate contacts
No, the defendants’ motion to dismiss the suit for lack of personal jurisdiction should not be
granted. A corporation normally is subject to jurisdiction in a state in which it is doing business.
A court applies the minimum-contacts test to determine whether it can exercise jurisdiction over
an out-of-state corporation. This requirement is met if the corporation sells its products within
the state or places its goods in the “stream of commerce” with the intent that the goods be sold
in the state.
28A. Appellate, or reviewing, courts
Yes, the state intermediate appellate court is likely to uphold the agency’s findings of fact.
Appellate courts normally defer to lower tribunals’ findings on questions of fact because those
forums’ decision makers are in a better position to evaluate testimony. A trial court judge or jury,
for example, can directly observe witnesses’ gestures, demeanor, and other nonverbal conduct
during a trial. A judge or justice sitting on an appellate court cannot.
29A. A QUESTION OF ETHICSAgreement to arbitrate
(a) This is very common, as many hospitals and other health-care provides have
arbitration agreements in their contracts for services. There was a valid contract here. It is pre-
sumed in valid contracts that arbitration clauses will be upheld unless there is a violation of pub-
(b) McDaniel had the legal capacity to sign on behalf of her mother. Someone had to
do that because she lacked mental capacity. So long as in such situations the contracts do not
CHAPTER 2: COURTS AND ALTERNATIVE DISPUTE RESOLUTION 9
ANSWERS TO LEGAL REASONING GROUP ACTIVITY QUESTIONS
AT THE END OF THE CHAPTER
210A . Access to courts
(a) The statute violates litigants’ rights of access to the courts and to a jury trial be-
cause the imposition of arbitration costs on those who improve their positions by less than 10
percent on an appeal is an unreasonable burden. And the statute forces parties to arbitrate be-
(b) The statute does not violate litigants’ constitutional right of access to the courts be-
cause it provides the parties with an opportunity for a court trial in the event either party is dis-
satisfied with an arbitrator’s decision. The burdens on a person’s access to the courts are rea-
(c) The determination on rights of access could be different if the statute was part of a
pilot program and affected only a few judicial districts in the state because only parties who fell
under the jurisdiction of those districts would be subject to the limits. Opponents might argue
that the program violates the due process of the Fifth Amendment because it is not applied fairly
throughout the state. Proponents might counter that parties who object to an arbitrator’s deci-

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