Unit 2 – Legal Environment of Business Study Guide

STUDY GUIDE: Unit 2 – Legal Environment of Business (Chapters 3–5)

CHAPTER 3: The American Judicial System, Jurisdiction, and Venue

Structure & Roles of the Judiciary

  • Judicial Branch Roles:

    • The judiciary resolves disputes and interprets/apply laws through judicial review.

  • Court Hierarchy:

    • State Courts:

    • Trial Court → Appellate Court → State Supreme Court

    • Federal Courts:

    • District Court → Circuit Courts of Appeal → United States Supreme Court

  • Trial vs. Appellate Courts:

    • Trial Courts: Focus on fact-finding through witness/evidence testimonies, with proceedings held before either a jury or a bench (judge without a jury).

    • Appellate Courts: Do not introduce new facts; their purpose is to review previous rulings for errors and to set legal precedents.

Common Law & Precedent

  • Binding Precedent: Lower courts in the same jurisdiction are required to follow precedents established by higher courts.

  • Persuasive Authority: Such precedents may influence decisions but are not binding outside the jurisdiction where they were set.

  • Written Opinions: These documents outline the court's reasoning and serve as references for future cases.

Jurisdiction (JDS)

  • Subject Matter Jurisdiction (SMJ):

    • State Jurisdiction: Generally has broad authority over most state matters, handling a variety of cases.

    • Federal Jurisdiction: Bound by federal questions or diversity jurisdictions involving amounts exceeding $75,000 where parties reside in different states.

  • Personal Jurisdiction:

    • In-State Jurisdiction: Automatically conferred for individuals residing within the state.

    • Out-of-State Jurisdiction: Requires adherence to long-arm statutes, which necessitate minimum contacts with the state as part of due process consideration.

    • Property-Based Jurisdiction:

    • In Rem Jurisdiction: Legal action based on an individual's property within the state.

    • Quasi in Rem Jurisdiction: Where property is attached or involved in order to assert jurisdiction.

  • Original vs. Concurrent Jurisdiction:

    • Original Jurisdiction: This describes the authority of a court to be the first to hear a case.

    • Concurrent Jurisdiction: Occurs when multiple courts have jurisdiction over the same case.

Internet Jurisdiction

  • Zippo Sliding-Scale: A legal framework assessing online activities:

    • Passive: Less likely to confer personal jurisdiction.

    • Interactive: More likely to establish personal jurisdiction.

  • Calder Effects Test: Personal jurisdiction can be asserted if a defendant intentionally harms someone in the forum state.

  • International Considerations: Distinctions between country-of-origin rules versus reception rules in different regions.

Venue

  • The venue refers to the most convenient location for a case to be heard; changes can occur for fairness reasons or contractual agreements.

Case Studies

  1. Caniglia v. Strom (2021)

    • Legal Principle: Fourth Amendment exception regarding home protection.

    • Facts: Police entered Caniglia's home without a warrant after a welfare check and seized firearms based on the