chapter 2 traditional and online dispute resolution
TRANSCRIPT
Chapter 2Traditional and Online
Dispute Resolution
Chapter 2Traditional and Online
Dispute Resolution
22
§1: Judiciary’s Role§1: Judiciary’s Role
Judiciary interprets and applies law to resolve disputes.Judicial Review is not mentioned in the Constitution but established in Marbury v. Madison (1803).Power of the court to “decide what the law is.” Process by which a court decides upon
constitutionality of legislative enactments and executive actions.
33
§2: Basic Judicial Requirements§2: Basic Judicial Requirements
Jurisdiction—power of a court to decide a case.Personal Jurisdiction over people within a court’s geographical area.Long-Arm statutes give jurisdiction over non-
residents with “minimum contacts” with court’s geographical area.
Corporations: minimum contact if business is transaction within the area.
44
Basic Judicial RequirementsBasic Judicial Requirements
In Rem Jurisdiction over property located within the court’s geographical area.
Subject Matter Jurisdiction over particular types of cases.Defined by statute: Probate, bankruptcy,
divorce, etc.
Original and Appellate Jurisdiction.
55
Basic Judicial RequirementsBasic Judicial Requirements
Federal Courts can exercise jurisdiction over cases involving: Federal QuestionsDiversity of Citizenship
• Parties from different states involving at least $75,000
Bankruptcy, patents and suits between states.
Concurrent jurisdiction with state courts.
66
Jurisdiction in CyberspaceJurisdiction in Cyberspace
Internet transcends geographical and political borders.
Courts use the “sliding-scale” approach to determine jurisdiction.
Passive AdsE-Commerce Some Business
Yes NoDepends
77
Basic Judicial RequirementsBasic Judicial Requirements
Venue—most appropriate location for a trial.Court balances parties interests.
Standing to Sue—plaintiff must have a legally protected and tangible interest which has been injured.
88
§3: State and Federal Court Systems
§3: State and Federal Court Systems
State Supreme CourtState Supreme Court
State Appellate CourtsState Appellate Courts
State Trial CourtsState Trial Courts
Municipal CourtsMunicipal Courts
U.S. Supreme CourtU.S. Supreme Court
U.S. Courts of AppealU.S. Courts of Appeal
U.S. District CourtsU.S. District Courts
U.S. SpecializedU.S. SpecializedFederal Admin.Federal Admin.
99
§4: Alternative Dispute Resolution§4: Alternative Dispute Resolution
Trials are a means of dispute resolution that are very expensive and sometimes take many months to resolve.
There are “alternative dispute resolution” (ADR) methods to resolve disputes that are inexpensive, relatively quick and leave more control with the parties involved.
1010
ADRADRADR describes any procedure or device (including such internet sites as www.squaretrade.com ) for resolving disputes other than the traditional judicial process.
Unless court-ordered, there is no record which is an important factor in commercial litigation due to trade secrets.
Most common: negotiation, mediation, arbitration.
1111
NegotiationNegotiation
Less than 10% of cases reach trial.Negotiation is informal discussion of the parties, sometimes without attorneys, where differences are aired with the goal of coming to a “meeting of the minds” in resolving the case.Successful negotiation involves thorough preparation, from a position of strength.
1212
Assisted NegotiationAssisted Negotiation
Mini-Trial: Attorneys for each side informally present their case before a mutually agreed-upon neutral 3rd party (e.g., a retired judge) who renders a non-binding “verdict.” This facilitates further discussion and settlement.Expert evaluations.Conciliation: 3rd party assists in reconciling differences.
1313
MediationMediation
Involves a neutral 3rd party (mediator).
Mediator talks face-to-face with parties (who typically are in different adjoining rooms) to determine “common ground.”Advantages: few rules, customize process,
parties control results (win-win).Disadvantages: mediator fees, no sanctions or
deadlines.
1414
ArbitrationArbitrationMany labor contracts have binding arbitration clauses.
Settling of a dispute by a neutral 3rd party (arbitrator) who renders a legally-binding decision; usually an expert or well-respected government official.
1515
Arbitration DisadvantagesArbitration Disadvantages
Results may be unpredictable because arbitrators do not have to follow precedent or rules of procedure or evidence.
Arbitrators do not have to issue written opinions.
Generally, no discovery available.
1616
Arbitration ProcessArbitration Process
Case begins with a submission to an arbitrator. Next comes the hearing where parties present evidence and arguments. Finally, the arbitrator renders an award.
Courts are not involved in arbitration unless arbitration clause in contract needs enforcement.
1717
ADR and Courts [2]ADR and Courts [2]
Court-related mediation.
Summary jury trials.
ADR and mass torts.
1818
§5: Online Dispute Resolution§5: Online Dispute Resolution
ODR refers to the proces of resolving disputes using web-based technology.Squaretrade.com
ODR is being used more often by companies like Ebay.com to resolve disputes.Negotiation and mediation services.Cybersettle.com and Clicknsettle.com
1919
Case 2.1: Cole v. MiletiCase 2.1: Cole v. MiletiFACTS:Mileti, a California resident, produced a
movie “Streamers.”Mileti organized Streamers International
Distributors, Inc., (SIDI) to distribute the film.Cole, an Ohio resident, bought two hundred
shares of Streamers stock.Cole also lent SIDI $475,000, borrowed from
Equitable Bank of Baltimore. Streamers was unsuccessful.
2020
FACTS (cont’d)Mileti agreed to re pay Cole’s loan in a
contract arranged through phone calls and correspondence between California and Ohio. Mileti did not repay the loan.
Bank sued Cole, who in turn sued Mileti in a federal district court in Ohio.
The court entered a judgment against Mileti. Mileti appealed, arguing that the court had
no jurisdiction.
Case 2.1: Cole v. MiletiCase 2.1: Cole v. Mileti
2121
HELD: JUDGMENT AGAINST MILETI AFFIRMED. COURT HAD JURISDICTION.Sixth Circuit used a three-part test to determine whether a court has jurisdiction over a nonresident defendant:A defendant must conduct activities in the state
in which the suit is filed, The cause of action must arise from those
activities,, and Those activities or their consequences must have
a substantial connection to the state.
Case 2.1: Cole v. MiletiCase 2.1: Cole v. Mileti
2222
Case 2.2: International League Against Racism vs. Yahoo!, Inc.Case 2.2: International League Against Racism vs. Yahoo!, Inc.FACTS:Yahoo!, Inc., had items for sale that
included Nazi memorabilia which was against the law in France.
Plaintiff sued Yahoo in French court seeking injunctive relief and damages.
The court ordered Yahoo to block access by persons in France or French territory to the Nazi items.
2323
FACTS (cont’d): Yahoo argued the court did not have jurisdiction
and that even if it did, Yahoo could not technically do the blocking.
HELD: AFFIRMED. Jurisdiction is based on Yahoo’s awareness “that
it is addressing French parties because upon making a connection to its auctions site from a terminal located in France it responds by transmitting advertising banners written in the French language.”
Case 2.2: International League Against Racism vs. Yahoo!, Inc.Case 2.2: International League Against Racism vs. Yahoo!, Inc.
2424
Case 2.3: Circuit City v. AdamsCase 2.3: Circuit City v. AdamsFACTS:Adams applied for a job at Circuit Ciy.She signed an employment application containing
a clause requiring the arbitration of any federal or state employment-related disputes.
Adams was hired as a sales counselor in a Circuit City store in Santa Rosa, California.
Later, Adams sued Circuit City filed a suit in a California alleging employment discrimination in violation of state law.
Circuit City then sued Adams in a federal court, asking the court to compel arbitration of Adams’s claim.
2525
FACTS (cont’d)Adams defended the suit by arguing that
Section 1 of the Federal Arbitration Act (FAA) excluded all em ployment contracts.
The court entered an order in favor of Circuit City.
Adams appealed to the Ninth Circuit, which reversed the trial court, excluding employment contracts from the FAA. Circuit City appeal to the U.S. Supreme Court.
Case 2.3: Circuit City v. AdamsCase 2.3: Circuit City v. Adams
2626
HELD: REVERSED. FAA applies to most employment contracts.The Supreme Court found that the federal
appellate court’s decision to exclude all employment contracts was inconsistent with the Court’s previous decisions. The Court also reasoned that “[c]onstruing [interpreting] the residual phrase to exclude all employment contracts fails to give independent effect to the statute’s enumeration of the specific categories of workers which precedes it….”
Case 2.3: Circuit City v. AdamsCase 2.3: Circuit City v. Adams