Chapter 2: Courts and Jurisdiction

Courts and Jurisdictions

• Major court systems in the United States

  1. Federal court system

  2. State court systems

State Court Systems

• Each state, Washington DC, and each territory of the United States has its own separate court system

• State courts resolve > 95% of the lawsuits brought in this country

• State court systems include:

  1. Trial Courts

     • a. Limited-Jurisdiction Trial Courts

     • b. General-Jurisdiction Trial Courts

  2. Intermediate Appellate Courts

  3. Highest State Court (State Supreme Court)

1a. Limited-Jurisdiction Trial Courts [State]

• Limited-jurisdiction trial courts (inferior trial courts) hear matters of a specialized or limited nature

  • Example Traffic courts, juvenile courts, family law courts

• Evidence can be introduced and testimony can be given

• Decision can be appealed to a general jurisdiction court or possibly an appellate court

• Small claims courts hear civil cases involving small dollar amounts ($5,000, $10,000)

  • Generally, the parties must appear individually and cannot have lawyers represent them

1b. General-Jurisdiction Trial Courts [State]

• General-jurisdiction trial courts (courts of record) hear cases of a general nature that that are not within the jurisdiction of limited-jurisdiction trial courts

  • Ex: domestic relations, probate, civil, juvenile, criminal

• Records and stores testimony and evidence in trials

• Some states have division as to

  • Criminal cases

  • Civil cases

• Decisions are appealable to an intermediate appellate court or the state supreme court

2. Intermediate Appellate Courts [State]

• Intermediate appellate courts (court of appeals) hear appeals from trial courts

• Review trial court record to determine if errors of law have occurred during trial that require (1) reversal or (2) modification of decision

• No new testimony or evidence permitted

• Appellate court decisions are appealable to the state’s highest court

• In sparsely populated states that do not have an intermediate appellate court, trial court decisions can be appealed directly to the state’s highest court

3. Highest State Court (State Supreme Court) [State]

• The highest state court (state supreme court) is the highest court in a state court system, which hears appeals from intermediate appellate state courts and certain trial courts

• No new testimony or evidence is heard

• Decisions of state supreme courts are final, unless there is an error related to federal law, then it is appealable to the U.S. Supreme Court

  • Death penalty cases involving U.S. Constitutional issues are often cases that are appealed to SCOTUS

Federal Court System

1. Trial Courts

   • a. Special Federal Courts

   • b. U.S. District Courts

2. U.S. Courts of Appeals

3. U.S. Supreme Court

   

1a. Special Federal Courts [Federal]

• Special federal courts are federal courts that hear matters of specialized or limited jurisdiction

  • U.S. Tax Court: involve federal tax laws

  • U.S. Court of Federal Claims: cases brought against the U.S.

  • U.S. Court of International Trade: civil cases arising out of customs and international trade laws of the U.S.

  • U.S. Bankruptcy Court: involve federal bankruptcy laws

  • U.S. Court of Appeals for the Armed Forces

  • U.S. Court of Appeals for Veterans Claims

1b. U.S. District Courts [Federal]

• U.S. district courts are federal trial courts of general jurisdiction that decide cases not within the jurisdiction of specialized federal courts empowered to:

  • Impanel juries

  • Receive evidence

  • Hear testimony

  • Decide cases

• At least one district court in each state

  • District: geographical area served by each court

  • There are 94 in total

• U.S. territorial courts are federal trial courts located on Guam, the Northern Mariana Islands, and the U.S. Virgin Islands

2. U.S. Courts of Appeals [Federal]

• The U.S. courts of appeals are the federal court system’s intermediate appellate courts

  • Hear appeals from:

    • District courts located in its circuit

    • Certain special courts

    • Federal administrative agencies

• 13 Circuits in federal court system

• Circuit: geographical area served by each court of appeals

  • 12th circuit court in Washington DC is called the U.S. District of Columbia Circuit

• 13th court of appeals is the U.S. Court of Appeals for the Federal Circuit, which has special appellate jurisdiction to review the decisions of the Court of Federal Claims, the Patent and Trademark Office, and the Court of International Trade

• It was created to provide uniformity in the application of federal law in certain areas, particularly patent law

---

• As appellate courts, each of these courts hears appeals from the district courts located in its circuit as well as from certain special courts and federal administrative agencies

• Reviews the record of lower courts or administrative agency proceedings

  • Determine if there has been any error of law that would warrant reversal or modification of decision

• No new evidence or testimony is heard

• Appeals are heard by a three-judge panel

  • After a decision is rendered by the three-judge panel, a petitioner can request an en banc review by the full appeals court

3. U.S. Supreme Court [Federal]

• The U.S. Supreme Court is the highest court of the federal court system which hears appeals from:

  • Federal Circuit Courts of Appeals

  • Federal District Courts

  • Special federal courts

  • Highest state courts

• Composed of nine justices – nominated by the president and confirmed by the Senate

• President appoints:

  • One justice as the Chief Justice of the Supreme Court

  • The other eight justices are Associate Justices

• The Supreme Court is an appellate court

Jurisdiction of the U.S. Supreme Court

• No new evidence or testimony is heard

• The lower court record is reviewed to determine whether there has been an error that warrants a reversal or modification of the decision

• The Supreme Court’s decision is final

Decisions of the U.S. Supreme Court

• The U.S. Constitution gives Congress the authority to establish rules for the appellate review of cases by the Supreme Court, except in the rare case in which mandatory review is required

• Congress has given the Supreme Court discretion to decide what cases it will hear

• Petition for certiorari: a petition asking the Supreme Court to hear a case

• Writ of certiorari: an official notice that the Supreme Court will review a case

• Types of decisions of the U.S. Supreme Court:

  1. Unanimous - all the justices voting agree as to the outcome AND reasoning used to decide a case and the decision becomes precedent

  2. Majority - a majority of the justices (5) agree as to the outcome AND reasoning used to decide a case and the decision becomes precedent

     • Has the same force of law as a unanimous decision

  3. Plurality - a majority of the justices (5) agree as to the outcome of a case BUT not as to the reasoning for reaching the outcome

     • A plurality decision settles the case but is not precedent for later cases

  4. Tie - reach a tie (equal) vote

     • The lower court’s decision stands

     • The decision is not precedent

• Concurring opinion: individual reasons issued by a justice who agrees with the outcome of a case but not the reasons offered by other justices

• Dissenting opinion: reasons issued by a justice who does not agree with a decision

Jurisdiction of Federal Courts

• Federal courts have limited jurisdiction to hear cases involving a (1) federal question OR (2) diversity of citizenship

(1) Federal Question

• The federal courts have subject matter jurisdiction to hear cases involving “federal questions”

• Federal question cases are cases arising under the U.S. Constitution, treaties, or federal statutes and regulation

• No dollar-amount requirement on these cases

(2) Diversity of Citizenship

• Diversity of citizenship is a means for bringing a lawsuit in federal court that involves a nonfederal question but where the parties are (1) citizens of different states or (2) a citizen of a state and a citizen of a foreign country

• Dollar amount of controversy MUST exceed at least $75,000

• If there is diversity of citizenship, the plaintiff may bring the case in either state or federal court

  • If a plaintiff brings a diversity of citizenship case in federal court, it remains there

  • If the plaintiff brings a diversity of citizenship case in state court, it will remain there unless the defendant removes the case to federal court

• Federal courts must apply the relevant state law to diversity of citizenship cases

• The federal court must apply the appropriate state’s law in deciding the case

• A corporation is considered to be a citizen of the state in which it is incorporated and the state in which its principal place of business, such as its headquarters, is located

  • Thus, if a plaintiff who is a resident of one of these states sues the corporation in the same state, there is no diversity of citizenship, and the case will be heard in state court

  • However, if a plaintiff who is a resident of one state sues the corporation in any state in which the corporation is not a citizen, there is diversity of citizenship; the case will be heard in a U.S. district court if the plaintiff brings the case in federal court or if the corporate defendant moves the case to federal court should the plaintiff have brought the case in state court

  • A corporation could be incorporated and have its principal place of business in one state, therefore making it a citizen of only one state

Exclusive Jurisdiction

• Federal courts have exclusive jurisdiction (sole jurisdiction of a federal court to hear and decide cases involving specified subject matters) to hear cases involving:

  • Federal crimes

  • Antitrust

  • Bankruptcy

  • Patent and copyright issues

  • Suits against the United States

  • Most admiralty cases

• State courts cannot hear these cases

Jurisdiction of State Courts

• State courts and the courts of Washington DC and the territories of the United States have jurisdiction to hear cases that federal courts do not have jurisdiction to hear

  • Ex: cases involves real estate, corporations, contracts

• State courts have concurrent jurisdiction (jurisdiction shared by two or more courts) with federal courts to hear cases involving diversity of citizenship and federal questions over which federal courts do not have exclusive jurisdiction

• If a case involving concurrent jurisdiction is brought by a plaintiff in federal court, the case remains in federal court

• If the plaintiff brings a case involving concurrent jurisdiction in state court, the defendant can either let the case be decided by the state court or remove the case to federal court

• If a case does not qualify to be brought in federal court, it must be brought in the appropriate state court

Case 2.1 Full Faith and Credit Clause

• Under the Full Faith and Credit Clause of the U.S. Constitution (Article IV, Section 1), a judgment of a court of one state must give “full faith and credit” to the courts of another state

  • Example A plaintiff wins a monetary judgment against a defendant in California court. The defendant owns property in Ohio. If the defendant refuses to pay the judgment, the plaintiff can file a lawsuit in Ohio to enforce the California judgment and collect against the defendant’s property in Ohio.

• Case

  • V.L. v. E.L.

  • 136 S.Ct. 1017 (2016)

  • Supreme Court of the United States

• Issue

  • Does the Full Faith and Credit Clause require Alabama to enforce Georgia’s adoption judgment?

• Decision

  • The U.S. Supreme Court reversed the decision of the Alabama Supreme Court and remanded the case for further proceedings consistent with its opinion

Standing to Sue, Jurisdiction, and Venue

• Not every court has the authority to hear all types of cases

• First, to bring a lawsuit in a court, the plaintiff must have standing to sue

• In addition, the court must have jurisdiction (in personam, in rem, or quasi in rem) and the case must be brought in the proper venue

Standing to Sue

• Standing to sue is a requirement that a plaintiff must have some stake in the outcome of case of a lawsuit in order to bring a lawsuit

• Example Linda’s friend Jon is injured in an accident caused by Emily. Jon refuses to sue. Linda cannot sue Emily on Jon’s behalf because she does not have an interest in the result of the case.

• A few states now permit investors to invest money in a lawsuit for a percentage return of any award of judgment

• Courts hear and decide actual disputes involving specific controversies

• Hypothetical questions will not be heard, and trivial lawsuits will be dismissed

Personal (In Personam) Jurisdiction

• In personam jurisdiction is a court’s jurisdiction over a person to a lawsuit

  • Court → Plaintiff: always, because the plaintiff files the lawsuit

  • Court → Defendant: must determine whether the court has it for the defendant

    • General (all-purpose) jurisdiction is the jurisdiction in which a defendant can be sued regardless of where the underlying action prompting the lawsuit occurred

      • For an individual defendant, this is the state where the individual resides

      • For a corporation, this is the state in which the corporation is incorporated and the state in which it has its headquarters

    • Specific (case-specific) jurisdiction is the jurisdiction in which a defendant can be sued because of the defendant’s contacts with that jurisdiction

    • Will have, if defendant:

      • Was served process in jurisdiction

      • Lives in the jurisdiction

      • Other reasons defined in state’s long-arm statute

Service of Process

• The Due Process clauses in the U.S. Constitution prohibit courts from exercising personal jurisdiction over a defendant unless the defendant has proper notice of the court’s proceedings

  • Thus, a defendant must be notified that he or she is being sued and the court in which the lawsuit is being brought

    • This is usually accomplished by having a court summons and copy of the plaintiff’s complaint formally served on the defendant

      • Other acceptable methods include traditional mailing, newspaper publication of notice, and e-mailing

• The service of process is the summons being served on a defendant to obtain personal jurisdiction over him or her

  • Personal jurisdiction exists over a defendant who is within the boundaries of the state

  • A corporation is subject to personal jurisdiction in the state where it is incorporated, has a principal office, or does business

• A party who disputes the jurisdiction of a court can make a special appearance in that court to argue against imposition of jurisdiction

  • Service of process is not permitted during such an appearance

Long-Arm Statute

• A long-arm statute extends a state’s jurisdiction to nonresidents who were not served summons within the state

  • The nonresident defendant in the civil lawsuit must have had some minimum contact with the state such that the maintenance of that lawsuit in that state does not offend traditional notions of fair play and substantial justice

• Long-arm statute must satisfy Due Process concerns

  • International Shoe Company v. State of Washington is a U.S. Supreme Court decision that established the “minimum contacts” and “traditional notions of fair play and substantial justice” tests to determine whether a defendant is subject to the jurisdiction of a court

• States generally permit jurisdiction over nonresidents in the following three situations:

  1. Defendant committed tort within state (ex: caused an automobile accident in the state)

  2. Defendant entered into contract either in the state or affects the state (and allegedly breached the contract)

  3. Defendant transacted other business in the state that allegedly caused injury to another person

Case 2.2 Jurisdiction

• Case

  • Bristol-Myers Squibb Company v. Superior Court of California

  • 137 S.Ct. 1773 (2017)

  • Supreme Court of the United States

• Issue

  • Does California's exercise of jurisdiction over the nonresident plaintiffs violate the Due Process Clause?

• Decision

  • The U.S. Supreme Court held that under the Due Process Clause, California does not have personal jurisdiction to hear the nonresidents’ cases against BMS

In Rem Jurisdiction

• In rem jurisdiction is jurisdiction of a court to hear and decide a case because the property of the lawsuit is located in that state

  • “Jurisdiction over the thing”

• Often is used to decide disputes over the ownership of real estate located within the state

• Example One party, a resident of New York, claims ownership of a piece of real estate located in Michigan. Another party, a resident of Wisconsin, claims ownership to the same piece of property. A Michigan court has in rem jurisdiction to decide the dispute because the real property is located in Michigan.

Quasi In Rem Jurisdiction

• Quasi in rem (attachment) jurisdiction is the jurisdiction that allows a plaintiff who obtains a judgment in one state to try to collect the judgment by attaching the defendant’s property located in another state

  • The plaintiff can bring a court action in the state in which the property is located to recover the judgment

• Quasi in rem jurisdiction is permitted under​ the Full Faith and Credit Clause of the Constitution

• Example A motorist, who resides and is driving in New Mexico, causes an automobile accident that injures Darius. Darius sues the defendant in New Mexico and recovers a judgment of $1 million. The defendant owns no property in New Mexico but does own property in Florida. Darius, under quasi in rem jurisdiction, can bring a legal action in Florida to recover the defendant’s property located there.

Venue

• Venue is the geographical location of the state court (county) or federal court (district) that will hear a law case

• Lawsuits must be heard by the court in the nearby jurisdiction in which the incident occurred or where the parties reside

  • Other factors, such as the residence of the parties, may be considered when determining venue

• Example Prentice, a resident of the state of Michigan, commits a felony crime in Los Angeles County, California. The California trial court system has jurisdiction to hear the case. Each county in the state of California has a trial court. The state trial court located in the county of Los Angeles is the proper venue because the crime was committed in Los Angeles, the witnesses are probably from the area, and so on. Although Prentice is a resident of Michigan, the state of Michigan is not the proper jurisdiction or venue for this case.

• Change of venue is a movement of a trial to a venue where a more impartial jury can be found in cases where pretrial publicity or other reason may prejudice juror located in the proper venue

• The courts generally frown on forum shopping (looking for a favorable court without a valid reason for being in that court)

Forum-Selection and Choice-of-Law Clauses

• Issues that come up when parties from different states or countries have a legal dispute over:

  • Which jurisdiction’s court will be used

  • Which jurisdiction’s laws apply to a case

• When the parties have not agreed in advance, courts must make the decision about which court has jurisdiction and what law applies

  • This situation causes ambiguity, and resolving it will cost the parties time and money

• The forum-selection clause is a contract provision that designates a certain court to hear any dispute concerning nonperformance of the contract

• The choice-of-law clause is a contract provision that designates a certain state’s or country’s law that will be applied in any dispute concerning nonperformance of the contract

• Example Export Company, located in Shanghai, China, enters into a contract with Import Company, located in San Francisco, California, United States, whereby Export Company agrees to deliver designated goods to Import Company. In their contract, the parties agree that, if there is a dispute, the Superior Court of California, located in San Francisco, will hear the case and that the United Nations Convention on Contracts for the International Sale of Goods (CISG) will be the contract law that will be applied in resolving the dispute.

Case 2.3 Federal Court Case Forum-Selection Clause

• Case

  • Carter’s of New Bedford, Inc. v. Nike, Inc.

  • 790 F.3d 289 (2015)

  • United States Court of Appeals for the First Circuit

• Issue

  • Is the forum-selection clause enforceable?

• Decision

  • The U.S. court of appeals affirmed the district court’s decision that enforced the forum-selection clause and dismissed Carter’s Massachusetts lawsuit against Nike

Jurisdiction in Digital Commerce (Cyberspace)

• Today, with the advent of the internet and the ability of persons and businesses to reach millions of people in other states electronically, particularly through websites, modern issues arise as to whether courts have jurisdiction in cyberspace

• Manufacturing Company v. Zippo Dot Com, Inc. was a seminal case that established rules for determining jurisdiction of courts over parties that sell goods over the internet

  • It established a test for determining when a court has jurisdiction over the owner or operator of an interactive, semi-interactive, or passive website

  • The court held that Dot Com was subject to personal jurisdiction under the Pennsylvania long-arm statute and ordered Dot Com to defend itself in Pennsylvania