B LAW 341 Introduction to Contracts, Liability Issues & Intellectual Property Sources of Law; Three Branches of Government: General Authority and Powers Enumerated in the U.S. Constitution − All three branches: sources of law o Ex: Administrative Law-Executive Branch − Regulatory bodies: Patent & Trademark Office (PTO) – for regulating those − More examples: President (POTUS) - executive orders, negotiates treaties − Judges: Laws at state level-American common law system (except La.) − Judges: at all levels (state, federal) interpret statutes-creates a body of case law. Sources of U.S. Law Primary sources of law: - 1. Constitutional Law o A) U.S. Constitution ▪ Ex: Best Buy example o Where do we find the law? We know who makes it. o Primary sources of law: are sources for binding rules o Secondary sources: merely persuade o Structure of the sources is important ▪ Some trump others ▪ Eventually, if you know the issue, you should be able to identify the probably source of rules ▪ Comes from experience ▪ What is right and what is wrong A societal agreement on what the limits are• Backed up by the power of the people o The government - Foundation of all law in the United States: o Not specific, merely a baseline o Reserves certain powers in the Federal Government, everything else to the states ▪ Other laws cannot conflict o B) State Constitutions ▪ Powers based on the Constitution • Statues enacted by congress • States executed by the executive branches, and those agencies create their own rules ▪ Legislative enactments include: • Statutes • Administrative law o C) Federal and State Administrative Law ▪ Rules created by agencies – empowered to do so by statutes) o D) Common Law (law created by the courts) ▪ Interpretation of constitutions, statutes, regulations ▪ Creation of new law in the absence of constitutions, statues, regulation Common Law and the Courts - Courts decide disputes o A) Interpret laws (statutes) and rules (administrative law) o B) Fill in gaps - Court decisions are precedential o Bind same or lower courts in the future o Stare decisis-judges are bound by the precedent o History to be discussed “Case of First impression” – in the absence of constitutions, statutes and regulations, judges under the common law of a state (except La.) can create new law How do courts make law? 2 aspects: 1. Courts fill in the gaps (gap filling) a. Courts interpret and apply statutory law b. Courts apply basic legal principles in the absence of statutory law c. Common law 2. Subsequent courts are bound by those decisions (precedential) a. Bind inferior courts in future cases with similar facts b. Stare Decisis - Important to remember that stare decisis binds inferior courts - Stare decisis: to stand on decided cases o Only one person (or possibly panel of three or nine) - Note that court decisions may not represent the popular opinionThe Shrinking Common Law - Common law was formerly dominant (19th and early 20th century) o Slowly replaced by state and federal statutory law o Ex: Uniform Commercial Code (UCC) ▪ States can have different treatments of uniform laws - Courts can still interpret in “gaps” – what statues don’t address clearly – interpretations essentially creates new law - Courts might be called on to create new law in fast changing areas o Technology and medical - Which is preferable? Ex: sentencing statutes Examples of Courts and Common Law: - Supreme Court interprets the Constitution - An offer is required for formation of a contract Why We Have Legal Systems - To manage conflict and maintain order - To provide a forum for settling disputes - To protect expectations including personal and property rights - To facilitate social change and equality Common Law Legal System - The American Legal System based on the Common Law of England - Common law legal system: some basis in Roman legal concepts - Mainly evolved in England since 1066 A.D. - 49 of the 50 states: adopted it as the primary basis of their legal systems - Used in many countries in the world, particularly those once colonized by England o Ex: Canada, Australia o Ex: Some countries (and states, provinces) are mixed with both common law and civil law systems e.g., South Africa “The life of the law has not been logic: It has been an experience.” Holmes also said “… a page of history is worth a volume of logic.” – Justice Oliver Wendell Holmes Invasion of England (1066 A.D.) The Historical Beginnings of the Common Law Key Characteristics of the English Common Law: - 1st characteristic: actual life experiences serve as building blocks o Experiences judges use to create a body of law - Dynamic system – way of changing social and economic conditions - 2nd characteristic: A complex system of procedural safeguards - Distrust of a powerful centralized government (the King) spawned common law concepts such as: o 1. Procedural and substantive “due process” (Fundamental fairness)o 2. The presumption of innocent o 3. The right to a jury and a lawyer o 4. The right to a speedy trial o 5. Double jeopardy o 6. The right to have your day in court - Power evolved to multiple parties, judges, lawyers, and juries Early Common Law: - A king of parliament did not create the common law, it was done at the local level by judges presiding over real problems - Common law – always evolving but slowly How was the Common Law first structured? - After Norman invasion judges were sent out to the counties (shires) to create law “common to the realm” of England - When judges heard cases a “precedent” would be created – binding on all future cases in that county - Some cases were appealed to the “Magna Curia” or high court in London - If upheld rule was binding on the entire realm-Hence Common Law (of England) Precedent & Stare Decisis - All courts are bound by the precedent in the area the court has jurisdiction over o This is because of Stare Decisis - Stare decisis: “Stand by the decision” or “let the decision stand” (Latin) o Obligation of courts to honor past precedents o Still the bedrock of English and U.S. Common Law Modern Generalization on Stare Decisis - Lower state courts are always bound by their own state supreme court decisions o But not by other states’ supreme court decisions - Legislative bodies (ex: Congress) are not bound by stare decisis o Ex: Legislatures can remove or reform their own previous legislation • Legislatures can write statues that contradict common law without regard to Stare Decisis Overturning Precedent? - Question: Can judges overturn precedent? o Yes: but must articulate compelling social, economic, or technological reasons to overturn a rule of law o Creates fairness, predictability and certainty - Note: a prior case with distinguishable facts does not create a precedent that must be followed by a court Development of the Courts of Chancery or Equity- Courts of Equity or Chancery: arose in 16th century England to reform the Common Law o Common law became overly rigid and technical - Choices of remedies were particularly important o Remedies: to create equity (fairness) issued by the king and Chancellor ▪ “Keeper of the King’s Conscience” - Later: Courts to create equity and fairness were set up by Chancellors (hence Courts of Chancery) - Are Equitable Remedies important today? o Yes o Courts of law & equity have merged o Courts of law today issue equitable remedies ▪ Ex: injunctions, temporary restraining orders (TRO’s) o Equitable remedies are commands from the Court to do or not to do something-non-monetary in nature Generalizations about the Civil Law Legal System - Civil Law system: o Uses deductive reasoning o Common law is inductive - Civil Law: a particular problem is addressed and solved - Judges can NOT make law, can only interpret existing law - All general rules of law (mainly codes) are made by legislative bodies o Ex: Parliament, Congress - Codes are sometimes written purposely broad to enable judges to have the flexibility to make rulings in individual cases o Like gap filling in American Law Common Law vs. Civil Law Regarding Impact of Precedent on Future Cases - Civil Law does not apply stare decisis o Applies jurisprudence constante ** - Stare Decisis: one case creates a binding precedent - Jurisprudence constant: a series of similarly decided cases creates binding precedent Classifications of the Law 1. Public Law vs. Private Law 2. Criminal Law vs. Civil Law 3. Substantive Laws vs. Procedural Laws Public Law Vs. Private Law - Private Law: concerns disputes between private citizens o Ex: Tort Law - Public: involves the government o Public law can involve both civil and criminal actions o Criminal law – always classified as a public lawCriminal Law vs. Civil Law - Criminal Law: offenses against the state - Provides for: o Punishment o Protects society o Deters potential criminals from committing crimes o Attempts to rehabilitate the criminal - Civil Law: redresses claims, often by private parties o Seeks remedies – not punishment ▪ Ex: Breach of contract, victim of a tort o Remedies include: ▪ Legal Remedies: compensatory damages for a personal or economic loss ▪ Equitable remedies: command by a court • Rescind a contract, or perform a contract-specific performance - Differences: o Criminal: burden of proof is on the state and is “beyond a reasonable doubt” o Civil: burden of proof is on the plaintiff and is a “preponderance of the evidence” - OJ was found guilty in a criminal proceeding but was found liable in a civil proceeding - Suing a person after a criminal trial is not double jeopardy - There are more Constitutional protections in Criminal Law: o Right to a speedy trial o Right to remain silent o Right to a lawyer, even providing a free one if necessary o Right to a Miranda warning Substantive Law vs. Procedural Law - Substantive laws: create rights and duties - Defines legal relationships of people with other people or between them and the state o The rules of law governing the creation or enforcement of a contractual promise are substantive in nature - Procedural laws: create rules or processes o How rights and duties are enforced (deals with the method and means by which substantive law is made and administered) Structure of the Courts Federal Courts: - 1. Limited (Subject Matter) Jurisdiction o Federal question or diversity of citizenship ▪ Federal question bases: based on issues arising out of the U.S. Constitution or out of federal statues ▪ Diversity of Citizenship: requires that all plaintiffs be citizens of different states from all defendants or one is a citizen of a foreign country- 2. U.S. District Court (Trial Court) o Federal district courts = trial courts of the federal judicial system o General jurisdiction ▪ General jurisdiction: power to hear any type of case o One or more per state o Have the authority to: o Review lawsuits o Receive evidence o Evaluate testimony o Impanel juries o Resolve disputes - 3. U.S. Court of Appeals o Right to appeal o Congress has created 12 U.S. Courts of Appeal plus a special Court of Appeals for the Federal Circuit as intermediate appellate courts in the federal system - 4. U.S. Supreme Court o Discretionary appeal (writ of certiorari) ▪ Writ of Certiorari: the procedure for requesting a second review (also known as petition for leave to appeal o Appeal from federal vs. state supreme courts ▪ 4 U.S. Supreme court justices must vote YES to grant a petition for a writ of certiorari ▪ Case must involve a federal question o Final say over U.S. Constitution (Judicial Review) ▪ Judicial Review: the ultimate power to invalidate actions by the president or the Congress • Allows the courts to review actions taken by the executive branch and to declare them unconstitutional State Courts: - 1. Limited Subject Matter Jurisdiction o Limited jurisdiction: power to hear only certain types of cases - 2. Trial Court (District Court) o General subject matter jurisdiction ▪ General jurisdiction: power to hear any type of case o Civil (law and equity) and criminal matters - 3. Appeals Court o Questions of law? o Questions of fact? o Right to appeal (intermediate, some states right to state supreme court) - 4. Supreme Court o Discretionary appeal (if three levels) o “Writ of Certiorari”: the procedure for requesting a second review (also known as petition for leave to appeal Federal vs. State Courts- Jurisdiction – separate bodies of law - Federal government reserves some powers, the rest is left to the states - Supreme Court review of highest state court decisions relating to constitutional issues Constitutionality of statute in Marbury v. Madison Judicial Review - Structure differs - Judges may be elected Limited Jurisdiction Courts - Small Claims Court: o Handles much of the litigation between businesses and its customers o Used by businesses to collect accounts and by customers to settle disputes with the business community that are relatively minor from a financial perspective ▪ Ex: The People’s Court ▪ Ex: Landlord-tenant disputes - Family court - Traffic court Trial Court - Court of general jurisdiction o Ex: Law and Order - Civil and criminal matters - Appeal from limited jurisdiction courts State Courts - Appeals Court: what can be appealed when and why o In populous states there are 2 levels of reviewing courts: ▪ Courts of Appeal (Intermediate level) • Typically 3-5 judges ▪ Supreme Court (highest court) • 7-9 judges o Appeal as of right o Panel reviews trial record (no new trial) o Questions of law, “de novo” o Questions of fact, “clearly erroneous” o Jury verdicts, “substantial evidence” Supreme Court - Generally discretionary appeal - May take the place of appellate court in two-tier states Beware: some states use very confusing names CONSTITUTION & BUSINESS Federal Authority to Regulate vs. the Rights of States to Regulate - Enumerated Powers: This is what Congress can do o 18 enumerated powers- Query: What is the extent to which Congress can permissibly regulate business at federal and state levels? - Federalism: separation of power between the federal government and state/local governments at the state and local levels o The relationship is key to figuring out Congress’ limits vs. what the states can regulate o Federalism – the basis of the Civil War ▪ Issue that started it all = slavery The Constitutional Powers of State Governments - Regulatory Powers of States o 10th Amendment: “The powers note delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” o These rights: a state’s police power ▪ Police power: authority of state to regulate a state’s health, safety, welfare and morals o Ex: Public education ▪ Built it without the interference of Fed authority o Ex: Every state & Local laws, liquor laws, zoning laws, land use laws Congress’ Authority under the Commerce Clause - Commerce Clause: Article 1, Section 8 of the Constitution o Congress can regulate Commerce with foreign nations and among the Several States and with the Indian tribes ▪ Among several states means: fed. Government has the power to regulate us Gibbons v. Ogden (1824) - New York was licensing steam travel in rivers - Congress said New York doesn’t have the right - Fulton’s Folly Chief Justice John Marshal - 1801 to 1835 - Longest serving as the Chief Justice - Federalist - Interstate vs. Intrastate Doctrine o Crossing state lines & movement o Ex: Railroad is regulated by Fed (crosses state lines) - Doctrine: anything that is intrastate can be regulated by State Gov. o Interstate: (through many states) regulated by fed. Gov. o No immediate influence on the U.S. - Marshall’s interpretation on Gibbons v. Ogden: o Thought intermingled meant between and among the states o Applicable to all navigation on land and water - Influence began to change in the 1880s:o Economy was evolving from an agrarian society to an industrial society - Courts & Congress greatly influenced until 1937 Social and Economic Issues of the Early 20th Century - 1. Child Labor: o New immigrants (from eastern & southern Europe) ▪ In bad shape o Tried to get child labor to be illegal but it was unconstitutional didn’t cross state line ▪ Steel Labor: 1937 • Gibbons vs. Odgen (Because of this nothing was getting done) • Jones & Laughlin o Things changed after Great Depression - 2. Dangerous Industries o Ex: steal, meatpacking - The Jungle: o Illustrated how difficult things were for new workers o Men wanted to strike ▪ Wagner Act: Protected strikers o Jones & Laughlin opposed Wagner act because they weren’t interstate commerce Affectation Theory – A new Direction under the Commerce Clause - SCOTUS: Supreme Court of United States o Congress can regulate anything that affects interstate commerce o Created affectation theory - SCOTUS: In NLRB v. Jones and Laughlin (J&L) Steel Company 1937 heard a case involving strikes at a major steel producer in Pittsburgh o J&L’s argument: Its steelmaking activities were not in interstate commerce since did not involve movement o SCOTUS: Congress can regulate anything that affects interstate commerce ▪ This is known as the “Affectation Theory” ▪ “Affects” … what does it mean? The Affectation Theory was Soon Challenged - Wichard v. Filburn: further defined the boundaries of the new Affectation Theory - Facts: o Roscoe Filburn was a small Ohio farmer who produced wheat on 5 acres of land o He violated the AAA (Agri. Adjustment Act) o All the wheat he grew was only consumed by his family and farm animals ▪ No transactions - He lost- SCOTUS: Even though Filburn’s activities might not directly affect interstate commerce, in the aggregate, it may have a substantial effect on interstate commerce - Signaled SCOTUS’ willingness to broadly apply the Affectation Theory o Pretty much gave congress all the power they needed Other Application of Commerce Clause: Social Issues - The Civil Rights Act (CRA) of 1964: De-segregated public accommodations outlawing states’ “Jim Crow” laws o Civil Rights Act – mainly rights for African Americans o Prior to 1964, southern states had Jim Crow laws: ▪ Jim Crow laws: races can’t mix - Heart of Atlanta Motel v. U.S. 1964: Hotel arguing its activities were not in interstate commerce so not controlled by CRA of 1964 - SCOTUS: Motel’s activities were in interstate commerce because: o 1. Segregation interferes with business and convention in Southern cities o 2. Interferes with businesses that wish to obtain services of persons who don’t wish to subject themselves to segregation and discrimination o 3. Restricts the business enterprises in the efficient allocation of natural resources Commerce Clause Analysis - Exclusively Federal Subject Matter o State Regulatory Law in direct conflict with Federal Law o These laws would be preempted by Supremacy Clause ▪ Supremacy Clause: courts may be called upon to decide if a state law is invalid because it conflicts with a federal law ▪ If a federal law preempts a subject, then any state law that attempts to regulate the same activity is unconstitutional under the supremacy clause • Ex: Fed exclusively handles bankruptcy - Possible Dual Regulation Between Federal and State (Dormant Commerce Clause) o I. Federal law does not preempt state regulatory law, but state regulatory law is unconstitutional if: ▪ A. State law is irreconcilable conflict with federal law ▪ B. State law constitutes an undue burden (substantially effects) interstate commerce: • 1. Is the purpose of the state regulator law a legitimate local purpose? o Does it fall within the state’s Police Powers? • 2. Does the state’s regulatory law impact interstate commerce? • 3. If so, balance the burdens on interstate commerce vs. the benefits to the health, safety and welfare of the law to its citizens ▪ C. State law discriminates against interstates commerce in favor of intrastate commerce • Ex: Possible duals: Minimum Wage lawso Fed stated minimum wage = $7.25 for whole country o Some states passed their own minimum wage law o Can’t pass a minimum wage lower than $7.25 o State can give you more rights than Fed can but not less - Exclusively Local Subject Matter (State or Local Government Laws) o No duel regulation-state or local law governs Gonzales v. Raich (2005) - California Compassionate Use Act (1996) conflicts with federal law o Similar to recent state rules o Commerce Clause Controlled Substances Act DEA Rule Two Issues in Raich: 1. Does regulating California’s medical marijuana law exceed the federal government’s commerce clause powers? a. No b. Congress is not exceeding its powers to regulate an intrastate activity if the activity affects the federal government’s ability to regulate interstate activities 2. Does California’s law present a substantial effect (undue burden) on interstate commerce? a. Yes b. High demand in the interstate market will draw marijuana into that market c. Production of the commodity meant for home consumption, be it wheat (ex: Wichard) or marijuana, has a substantial effect on supply and demand in the national market for that commodity Exclusive State Matters – Law in the News (Sept. 3rd) - 20 consecutive rulings stated the state bans on same-sex marriage were unconstitutional - These rulings states SCOTUS repudiation of the Defense of Marriage Act (DOMA) in the U.S. v. Windsor provides a constitutional right to marry - Louisiana federal judge last week: DOMA provides language reserving the rights to a state to define marriage Generalizations Regarding the U.S. Constitution as a Source of Law - No legislation (statues, codes, ordinances, etc.) passed by Congress, state legislatures or local governments can conflict with the Constitution - Bill of Rights limit legislation – rights to the people which governments cannot infringe upon - Judicial Review: final say over what the Constitution means is by the Supreme Court How powerful is Judicial Review of the U.S. Constitution? - Constitutional amendment overturned only by Amendment to the Constitution - Requirements:o 1. 2/3rds of the House and Senate o 2. Ratified by 3/4th’s (38) of the state legislatures - Over 10,000 constitutional amendments have been proposed by Congress, but only a handful have been passed by both the House and Senate o Only 4 amendments meant to undo a Supreme Court ruling have passed: ▪ 11th: bans lawsuits by citizens on one state against another ▪ 14th: passed in reaction to the Dred Scott case which refused to give citizenship to African-Americans ▪ 16th Amendment: ratified in 1913 to overrule an 1895 decision that said that income tax was unconstitutional ▪ 26th: lowered the voting age from 21 to 18 Bill of Rights and Business - Two important concepts for understanding the Bill of Rights: o 1. State Action ▪ Required before the Bill of Rights apply ▪ By a local, state, or federal government ▪ Does not apply to a private business ▪ Application: only to a statute, regulation or court order that impinges on a right existing in the Bill of Rights o 2. Selective Incorporation - Bill of Rights before the Civil War: applied only to the federal Government - After the Civil War: the ratification of the 14th amendment o 14th amendment was passed in 1868 in part as a reaction to “Black Codes” passed after the slaves were freed ▪ 14th amendment: prohibits “states” from abridging federal privileges and immunities, from denying life, liberty or property without due process of law and to deny equal protection of the law o Southern states’ governments continued to abuse African-Americans o Black Codes were Southern state laws – Examples: ▪ Criminalized a breach of a servant’s duties ▪ Denied blacks property rights, to own guns ▪ Travel passes beyond a county ▪ Required young blacks to be apprentices of former slave owners until the age of 18 Continued… 14th Amendment: states could no longer discriminate or violate due process rights How did this interpretation evolve? - SCOTUS: incorporated “bits and pieces” of the Bill of Rights to apply to the states o Ex: the 1st Amendment freedom of speech and press: incorporated to overrule actions by the state of New York in 1925 - SCOTUS: selectively incorporate: “Those liberties the court finds to be fundamental and necessary to the ordered liberty of a free society”Limits to Federal Government Legal/Government Changes since 9/11 - Patriot Act (government spying-Snowden) - Bigger government: o Dept. of Homeland Security o 1,200 government agencies and 1,900 private contractors working on counter terrorism, security, intelligence - Budgets for Coast Guard, TSA, and Border Patrol have more than doubled - Huge increase in visa denials - Huge rise in deportments Bill of Rights and Business (Continued…) - In the 50’s and 60’s selective incorporation accelerated - In 1961 the exclusionary rule was created from Mapp v. Ohio - Incorporated the 4th Amendment right of unreasonable searches and seizures to states - Gideon v. Wainwright (1963) SCOTUS: Criminal defendant is entitled to a free lawyer if he could not afford one o This incorporated the 5th and 6th amendment - In 1966, Miranda v. Arizona SCOTUS: “Miranda Rights” o 5th amendment due process clause was incorporated to give a criminal suspect “Miranda Rights” - The 7th Amendment: o Bill of Rights: Not all have been selectively incorporated to the states o Right not incorporated: the 7th amendment right to a jury trial in civil cases arising under the common law for claims over $20 The First Amendment and Business-Corporate Political Speech - Political speech by corporations: protected by the First Amendment - Citizens United v. Federal Election Commission (2010) SCOTUS: Corporations can spend freely to support or oppose candidates for President and Congress o Form of free speech and expression The 1st Amendment: rights to free speech and expression: strong rights with exceptions Exceptions: 1. Lewd & Obscene (criminal in nature) a. How is obscenity determined? b. SCOTUS test: Miller v. U.S. (1973: i. The basic guide lines for the trier of fact must be: a. 1. Whether the “average person, applying contemporary community standards” would find that work, taken as a whole, appeals to the prurient interest i. Prurient: inordinately interested in matters of sex; lasciviousb. 2. Whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law c. Whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value 2. Profane (criminal in nature) 3. Libel and Slander (civil in nature) 4. Insulting, fighting and dangerous words a. Ex: Yelling fire in a crowded theatre Cohen vs. California - Kid wore a jacket “Fuck the Draft” - Has a political context so it’s okay Advertising and 1st Amendment - Commercial Speech: accorded less protection than is political speech - To survive a constitutional challenge on commercial speech, a government must prove the following 3 elements: o 1. Government must show that there’s a “substantial governmental interest” o 2. Its regulation directly advances the interest o 3. Its manner of regulation is not more extensive than necessary to serve the interest - In Posadas de Puerto Rico v. Tourism Company, SCOTUS: o 1. An advertising ban on gambling in Puerto Rico was a substantial government interest that it could protect health, safety, etc. o 2. Its restriction directly advanced its interest since it cut down on who it wished to protect – Puerto Ricans but… o 3. The law was not more extensive than necessary to serve the interest since the companies were still allowed to advertise in the Mainland Legal Limitations - Kutch can’t advertise/endorse alcohol o Not retired and has influence over young generation - Mickey Mannel can advertise/endorse alcohol because he is retired Speech/Expression Protection under the Constitution - Speech or Expression Not Protected: o Lewd & Obscene o Profane o Defamation (libel, slander) o Insulting, Fighting, and Dangerous words - Speech or Expression Protected, but less than political: o Commercial Speech o Note: Commercial speech with political content protected is more o Ex: Music protest - Speech or Expression Most protected: o Political speecho Note: Even political speech that by itself would not be protected o Ex: profane, obscene, satire, etc. Chapter 5 Requirements for Judicial Review (Aka Getting into Court) - Basic Requirements: o Jurisdiction ▪ Personal ▪ Subject Matter o Standing of the Parties o Justiciable (ripe for review) Jurisdiction - Business engage in transactions in many states, creating complicated legal procedural issues - Before a case can be handled, there must be jurisdiction over both the PERSN (in personam and) - The subject matter (type of controversy or content of the case) considered by the court Personal Jurisdiction over a Person Within a State - Personal Jurisdiction: o Within a state, personal jurisdiction is assumed between persons within the state’s boundaries ▪ Ex: In a car accident with someone from Eire, PA. (Defendant) in which someone from State College is injured (Plaintiff) ▪ Plaintiff could exert personal jurisdiction over the defendant from Eire Personal Jurisdiction over an Out-Of-State Person Question: Could personal jurisdiction be exerted over someone from another state, say Ohio? - Two Requirements o 1. Long-Arm Statute ▪ Legal authority to sue someone in another state o 2. “Minimum Contacts” ▪ 1. Presence in the state by transacting business in the state ▪ 2. Contracting to insure someone in the state ▪ 3. Commission of a tort in the state - Any of these could make Pennsylvania the forum state for prosecuting a civil case against the defendant from Ohio - Answer: Yes, you can sue Ohio Guy Why Do We Have “Minimum Contacts”? - Constitutionally required: “Due Process” clause of the 5th amendment and 14th amendment (selectively incorporated to states)- 5th amendment: government cannot deprive someone of their “Life, Liberty or Property” without “due process” of law - Applies to the power of the state courts - Unfair forum shopping Personal Jurisdiction over a Corporation - SCOTUS case of International Shoe v. Washington (1945) to determine “minimum contacts” - Facts: The international shoe company had no office in Washington state, but traveling salesmen would go there, solicit shoe orders and ship the shoes to that state from St. Louis, Mo. - This was enough contacts to establish “Minimum Contacts” in the state of Washington - The bottom line: if you’re a corporation and you ship goods and services out of state, be prepared to be sued in those states you conduct business - If the business relationship is an ongoing basis, the plaintiff will likely have personal jurisdiction over you International Jurisdiction - Based on U.S. minimum contacts model o Different laws and rights may complicate Requirements for Judicial Review - Jurisdiction o Subject Matter Jurisdiction (power over the controversy) o Remember? o Federal Question OR ▪ Federal question bases: based on issues arising out of the U.S. Constitution or out of federal statues o Diversity of Citizenship (plus an excess of $75,000) ▪ Diversity of Citizenship: requires that all plaintiffs be citizens of different states from all defendants Jurisdiction: Does this court have the power to decide the case? - The limitation on personal jurisdiction is Constitutional due process (5th & 14th Amendment) - Personal Jurisdiction (power over the parties) - Located in state o Used to be that people didn’t move around so much so this was all that was needed - Long arm statute: minimum contacts o Has increased quite a bit – several Supreme Court decisions expanding the doctrine o Look at intentional torts, doing business, minimum contacts, effects, etc. In rem jurisdiction - property located What about business on the Internet?-Mere advertisement or posting – no -Transact business (send products, make contracts) –yes -Defame, if foreseeable - yes Subject matter jurisdiction (power over the controversy) State or federal matter Potentially concurrent General jurisdiction vs. limited jurisdiction Original vs. appellate jurisdiction If you are going to be subject to a judge (and a state’s laws), it has to be fair We’ll see tomorrow that the answer to jurisdiction depends on what court you are referring to. The appropriate court to decide an issue -Keeps the law settled. What if traffic court judges could decide whether you Subject Matter Jurisdiction State=less complicated & faster Requirements for Judicial Review (Getting into Court) - Standing to Sue: o 1. Property parties ▪ Real parties in interest▪ Case and controversy ▪ Are they the real parties at interest ▪ Was there an injury suffered or threatened? ▪ Basic question is the injury. We’ll see that suing in contract can be even more limited. o 2. Justiciable controversy (ripe for review) Pledge of Allegiance Case o Standing depended on custody of daughter (right to protest her curriculum) o Family court ruled that daughter cannot participate and man does not have custody Justiciable? - Man sues parents for not loving him enough o A 32-year-old Brooklyn man is suing his parents, claiming he wasn't loved enough by them and that their neglect has caused him to be homeless and jobless. o Maybe justiciable, but no cause of action. - Bernard Bey: accused parents of causing mental anguish & making him feel "unloved and beaten by the world.” - Bey: claimed he was physically & emotionally abused, ran away from home when he was 12, & was in & out of the shelter system after age 16. The Litigation Process - 1. Complain o Jurisdiction over the parties and the subject matter ▪ Venue: actual physical location within the state - 2. Answer o Certain defenses required - 3. Discovery o Extremely liberal ▪ Exceptions for privilege • Doctor, priest & minister can’t tell your secrets ▪ Document and testimonial - 4. Trial - 5. Appeal - Class actions: when people similarly situated want to sue as a class (group) o Opt-out: you don’t have to be involved if you don’t want to be o Individuals themselves don’t get a lot of money o Ex: group suing Ford after accident Conflicts: exists whenever there are 2 or more points of view Disputes: arises when one party makes a claim that another party denies Conflict + Claim that is rejected = Dispute Alternate Dispute Resolution (ADR)- Alternative to the U.S. Courts o Useful to downplay lawyers ▪ Advocacy system: zealously representing clients o Litigation is costly (Both sides are “losers” o Juries are unpredictable ▪ Which is why both sides want settlement ▪ 6 juries for civil case ▪ Some people only want jury when they are guilty because they can persuade jury into thinking they are innocent (Judge would know better) o Time o Secrecy in settlement “Light” Alternate Dispute Resolution - Negotiation: the process used to persuade or coerce someone to do what you want the to do o May be assisted by third-party (lawyer) ▪ Usually both parties work out their own agreement o Get to understand opponent o Generally not binding unless in contract o *Easiest, cheapest, fastest - Mediation: process by which a third person (mediator) attempts to assist disputing parties in resolving their differences interest-based method o Third party takes more active role o Third party may receive confidential information o May reduce posturing (thru “caucusing”) ▪ Caucus: private meeting with the mediator outside the presence of the other disputant o Generally not binding o Good if 2 people are in a dispute (3rd party doesn’t have to be a lawyer)nobbbkppk - Arbitration o Arbitrator: decision maker, who should be disinterested in any financial impact of the decision and neutral regarding the issues presented in the dispute ▪ Private proceeding with no public record available to the press o More formal and extensive procedure ▪ May be binding ▪ Limited review by courts o Huge efficiency advantages for business o Individuals may have less flexibility than litigation Embracing Arbitration: - Parties agree after dispute arises o Arise when parties already in dispute decide that arbitration is better than litigation o Might be hard to find common ground- Parties agree by contract before dispute o Relying on a pre-dispute arbitration clause is smarter Much more powerful - Federal Arbitration Act (1925): encourages disputing businesses to utilize arbitration o Limited judicial review of awards ▪ Fraud ▪ Arbitrator misconduct ▪ Unconscionability o Favors arbitration - Uniform Arbitration act o Function: to let persons determine whether or not they want to use arbitration by agreement - Arbitration mandated by statue o Small claims, divorces o More safeguards and procedures o Constitutional issues-due process considerations (state action): ▪ Some people think mandated arbitration is unconstitutional because: • 1. Deprive one of property and liberty of contract without due process of law • 2. Violate the litigant’s Seventh Amendment right to a jury trial and/or the state’s constitutional access to courts’ provisions • 3. Result in the unconstitutional delegation of legislative or judicial power in violation of state constitutional separation-of-powers provisions o De novo court review: the court tries the issues anew as if no arbitration occurred ▪ De novo = “new” o Constitutional if: fair procedures: notice and a fair hearing (record of facts and law) and judicial review de novo if loser wishes to do so ▪ Penalties of loser go to court and lose again-fees and court costs. Nature of Tort Law & Intentional Torts Against Persons Tort: a civil wrong that’s not a breach of contract 3 torts: 1. Intentional 2. Negligence 3. Strict Liability *All 3 can involve injury against persons and property 1. Intentional Torts: - Intent: Results, which are substantially likely to follow from an action. - Intentional torts: some do and some don’t require malice or specific intent to harm another o One exception requiring malice: defamation when the victim is a public figure, intentional infliction of mental distress- Mistake: depending on the tort, generally not a defense - Insanity: not a defense Common Examples of Intentional Torts Against Person - A) Assault: placing another in immediate apprehension of fear - B) Battery: offensive, unjustified touching of another without consent. o (See Harper, pp. 179-180): Factual Issue: To touch someone merely to get their attention (boss) vs. done in an offensive or harmful manner (employee) ▪ Common defenses to both: privilege, consent, defense of self and defense of others. - C) Infliction of mental distress or outrage: o = A battery to the emotions o Outrageous & intentional conduct o Strong probability of causing mental distress ▪ Usually requires the plaintiff to prove not only mental distress but also physical symptoms - D) Invasion of privacy: o A) Appropriation of another’s name or likeness case o B) Intrusion upon another’s solitude o C) Disclosure of highly private information - E) False imprisonment: o Intentional and unjustified confinement o Non-consenting person o Statutory Defense for false imprisonment involving shoplifting ▪ Reasonable suspicion ▪ Reasonable length of time ▪ Reasonable force o Citizen’s Arrest (General detention privilege) ▪ Generally limited to felonies ▪ Statutory defense to assault, battery, false imprisonment Defamation – Tort against a Person’s Reputation Slander = oral defamation Libel = written defamation Elements: - 1. A false statement about a person or business’ reputation, honesty or integrity. - 2. Publication. o Communication to a 3rd party (not just to the victim) - 3. Damages o Lost profits, business, lost reputation in the community (subjected to ridicule and contempt) etc. - 4. Malice or reckless disregard for the truth if target is a public figure. o Public figure: someone who voluntarily puts himself in the public eye: politicians, actors, athletes, coaches. o “Accidental” celebrities are not public figure - Defenses: The truth, privileged communications o (Ex.: statements in court by lawyers, judges, in legislative bodies (by congressmen) Tort Against Persons: Fraudulent Misrepresentation - Fraud-both negligent or intentional o Criminal fraud - Also a defense in contracts since it fails the test of mutual assent (2nd part of course) - Tort remedy: Compensatory and punitive damages - Contract remedy: Economic losses, rescission of contract - 3 ELEMENTS to prove intentional misrepresentation or fraud: - 1. Misrepresentation of a material fact o Concealment o Defenses: Puffery, future predictions - 2. Intent to deceive (scienter) - 3. Justifiably reliance on the misrepresentation. o Gullible, naïve victim defense Torts Against Property Property rights in land= right to exclude in a reasonable manner Intentional Torts Against Property - A) Trespass to Land (Right to exclude reasonably) o Entering without permission (express or implied) o Person or other thing under person’s control ▪ Farm animals, discharge of water o Can be intentional or not intentional (alters damages) o Harm ▪ Compensatory, nominal damages o Defenses: Permission (express or implied), necessity - B) NUISANCES o Public Nuisance ▪ Government enforcement o Private Nuisance (intangible invasion) ▪ Unreasonable interference with use (noise, smells) ▪ Use rights are not unlimited ▪ Balance use property owner’s rights with others o Nuisance ▪ Injunction ▪ Damages ▪ Harm required • Examples: loss of business or profits, sickness, mental distress - C) Trespass to Chattels (Norman French-Cattle) ▪ Trespass: intentionally crossing someone else’s land boundaries without permission o Temporary interference with exclusive right of use or enjoyment▪ Ex: “keying” a car’s paint, joyride o Physical contact not required ▪ Direct or indirect (virtual exclusion) o Dispossession o Impairs condition o Defenses: permission and necessity ▪ Ex: getting wife to hospital if she is having a baby - D) Conversion: intentionally depriving someone of goods owned o Permanent or temporary, but total deprivation of property o Trespass to Chattels vs. Conversion ▪ All conversions are trespasses ▪ The distinction is degree of loss • Trespass to chattel is partial deprivation and/or damage to the thing taken • Conversion would be total deprivation and/or total damage to the thing taken ▪ Stealing (conversion) vs. joyride/returns car (trespass to chattel) ▪ Destruction (conversion) vs. “keying” the car (trespass to chattel) Trespass Against Property – Modern Version Intel Corp. v. Hamidi (Cal. Sup. Ct. 2003) - Disgruntled ex-Intel employee: Sent barrage of e-mails to Intel employees, harshly criticizing management. - Intel sued: he claimed the e-mails on Intel’s network & equipment constituted to be a trespass to chattels - California Supreme Court: Issue of free speech, not trespass - Distingush: o Register.com v. Verio, Inc.(2nd Cir. 2004): o Cybertrespass: when defendant used automated computer program to scour databases of a competitor (virtual, non-physical invasion) Property Torts:NEGLIGENCE & STRICT LIABILITY Negligence: liability that involves unreasonable behavior that causes injury Four elements required to prove negligence: 1. Duty of Care a. A duty exits when the average reasonable person would recognize the existence of an unreasonable risk to others b. Query; was it foreseeability? c. Duty of care = Behavior Standard i. This duty is imposed by operation of law as opposed to voluntarily (ex: by contract) d. Special Duties e. Duty of care to business customers – “Invitees” f. Duty of care imposed on professionals to clients/patients (Malpractice) i. Doctors ii. Lawyers iii. Engineers iv. Accountants g. No duty to rescue someone in distress: i. Exceptions: 1. Family member 2. If you cause the situation calling for the rescue 3. Pre-existing duty to rescue (ex: policeman) 4. You began and then failed to follow through 2. Breach of the Duty of Care a. Once duty is established, defendant must breach the duty of care (ex: fails to adhere to behavioral standard)b. Elements #1 plus #2 = fault c. Does fault = negligence? d. Calculus of fault: i. B < P x L ii. B= burden or cost of avoiding harm iii. P = Probability of harm occurring iv. L = Loss (extent of injury) v. If cost of avoiding harm is less than the chances of it occurring X extent of losses (ex: injuries, death, property, loss) than cost of avoiding the danger should be paid 1. Ex: the cost of tying boat adequately less than chances of it getting lose and damaging other properties vi. Query: should all cars be manufactured to withstand a 100 mph collision? 3. Causation (both in fact and proximate cause) a. 1. Causation in fact: the injury would not have occurred but for the defendant’s direct negligent act b. 2. Proximate cause (“Legal Cause”): was the harm the victim suffered reasonably foreseeable at the time of the Negligence? i. If the risk is foreseeable, the victim falls within the “Zone of Danger” 1. See Palsgraf case on side bar 10.8 on page 299****** 4. Injury a. Extent of plaintiff’s injuries = amount of damages b. Compensatory (special) damages: medical bills, lost past and future wages, etc. c. Compensatory (general) damages: pain and suffering d. Punitive (exemplary) damages: intentional torts, egregious, reckless behavior, bad corporate behavior (GM ignition issue) Defenses to Negligence: - 1. Contributory negligence: behavior by plaintiff that contributes to harm resulting from defendant’s initial negligence o Uses objective approach o What would the average reasonable person if he were in plaintiff’s situation? ▪ Applies objective standard o Historically contributory negligence: even ONE percent of fault on plaintiff = no damages paid to plaintiff o Today, (almost all states) use comparative negligence approach ▪ Ex: plaintiff who is 20% at fault for own injuries receives 20% less damages o Comparative Negligence: negligence or fault allocated between plaintiff and defendant ▪ Can result in reduction in damages paid to plaintiff ▪ The pro-rata share of negligence determined by jury ▪ Creates better opportunity for plaintiff to collect at least some damages ▪ 51 Percent Rule: most states (ex: PA) if plaintiff is responsible for excess of 50% of fault, then gets nothing▪ Pure Comparative Negligence: a few states (ex: Arizona) allow up to 99% fault of plaintiff • Plaintiff would receive just 1% of damages o $10,000 award, plaintiff receives $100 - 2. Assumption of the risk (venturesomeness): plaintiff actually knows dangerous condition; voluntarily exposes self to it o Uses subjective approach o Important in product liability cases because defense applies to strict liability cases o Contributory/comparative negligence is NOT generally a defense in product liability Special Negligence Doctrines and Statues - Good Samaritan Statues: protects primarily medical personnel who render medical help to injured o Ex: Doctor can’t be sued for negligence - Dram (spoonful) shop statutes: strict liability upon tavern owners for injuries to third parties caused by their intoxicated patrons o In some states for social hosts but usually for knowingly serving minors o Pennsylvania Dram Shop Statute: ▪ An employee or host serves alcohol to someone who is “visibly intoxicated” ▪ “Visibly intoxicated” apparent signs of intoxication, (ex: bloodshot eyes, slurred speech, staggering) ▪ The business or host’s decision to serve alcohol to visibly intoxicated person directly led to the injuries • Liable for auto, fight victims etc. Strict Liability Strict liability: require the plaintiff to prove only that the defendant was injured something proper to the plaintiff - Created in 19th Century English case of Rylands v. Fletcher. - Imposed a strict liability standard on landowners for dangerous land conditions “likely to do mischief”. - Today: Ultrahazardous activities-dynamiting; dogs, cats and children; chemicals, chemicals associated with fumigations, handling of poisons. - Most importantly, products. - Policy: Make those who perform these activities internalize the costs instead of imposing them on others (externalize costs) - These actors essentially become insurers to those impacted (consumers etc.) o Actors: in the best position to mitigate the risks (design products to make them safer, buy insurance etc.) - Requirements: o Unreasonably dangerous due to defect o Defective when defendant sells it and not changed o Normally engaged in selling producto Product is the cause of plaintiff’s physical injury - Policy Reasons: o Make those who engage in selling goods responsible for their products o To buy insurance o To mitigate risk to consumers Proving Element 1: Unreasonably Dangerous - Defect must be unreasonably dangerous - Was defect harmful? - Can its harmfulness be anticipated and controlled? o Example: A knife is dangerous, but not unreasonably dangerous. Why? - Is beer unreasonably dangerous? Bruner v. Anheuser Busch (Fla. 2001). Proving Element 2: Product is defective-design defect - Risk/Utility Test: Is there a safer alternative available and is it economically feasible? o Example: 1971 Ford Pinto (ranked by Time Magazine as one of the 50 worse cars of all time) - Query: Should Ford pay $11 per car ($137 million/year) to avoid 180 burn deaths and 2,100 burned vehicles? Read: One of the tools that Ford when deciding how to design the Pinto was a "cost-benefit analysis" for altering the fuel tanks. According to Ford's estimates, the unsafe tanks would cause 180 burn deaths, 180 serious burn injuries, and 2,100 burned vehicles each year. It calculated that it would have to pay $200,000 per death, $67,000 per injury, and $700 per vehicle, for a total of $49.5 million. However, the cost of saving lives and injuries ran even higher: alterations would cost $11 per car or truck, which added up to $137 million per year. Essentially, Ford argued before the government that it would be cheaper just to let their customers burn! Source: Mark Dowie, "Pinto Madness," Mother Jones, September/October 1977, pp. 18-32. - Reasonable Expectation Test: Consumer does not contemplate the defect. Example: Firestone tires on 2000 Ford Explorers. o The treads on new Firestone tires separating at speeds low as 40 mph o Causing over 3,000 serious accidents and 250 deaths.