Bus 207 Week 1-2 Notes
Bus 207 Week 1-2 Notes bus 207
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This 13 page Class Notes was uploaded by Brittany Bourdage on Sunday March 6, 2016. The Class Notes belongs to bus 207 at California Polytechnic State University San Luis Obispo taught by Chris Carr in Winter 2016. Since its upload, it has received 9 views. For similar materials see Legal Responsibilities of Business in General at California Polytechnic State University San Luis Obispo.
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Bus 207- Law and Responsibilities of Business Notes Jeff Radding – free legal advice th Final: Friday, June 10 @ 4:10pm 3/28/16 The Purposes/Functions/Value of Business Law: 1. Order and Predictability 2. Efficiency 3. Social Justice 4. Bargaining in the Shadow of the Law 5. Provide Firms with the Opportunity to Gain or Maintain Competitive Advantage BATF: they work to help to protect the consumers What’s the Moral of Our Wine Label Example and Discussion? 1. Managers must “get in the game”, even if the legal rules aren’t clear. 2. Managers must understand how the law can minimize risk and create value. 3. Managers must understand that legal risks and issues should be spotted and factored into business decisions in the same way as other risks. 4. Managers must realize that legal disputes are inevitable. 5. Managers need to stop “leaving it up to the lawyers to sort out and clean up the mess.” Instead, they need to start taking responsibility for disputes, being proactive, and resolving them. Chapter 2 (PolyLearn) Introduction to American Law Jurisprudence: the study of law Law: “a body of rules of action or conduct prescribed by controlling authority, and having binding legal force flexible, developing, and ever-changing Sources of American Law: England’s courts and legislative bodies, the US Constitution, and its framework of legislative, executive, and judicial branches. Common Law: the English legal system was developed following the Norman Conquest in 1066. Common law: the new, always developing body of judge-made law Stare decisis: Latin phrase meaning “let the law stand” became the cornerstone of the common law and modern jurisprudence, offers stability and guidance to legal issues Most courts in this country have the power to issue legal and equitable decisions, orders, and remedies The US Constitution the “Supreme Law of the Land” Statutes: laws adopted by Congress Regulations: laws created by the administrative agencies Law can be classified into several categories: substantive and procedural, public and private, and civil and criminal Substantive law: those that regulate rights and obligations; provide the rules Procedural law: provides the step-by-step process which a case progresses through the court system, establishes methods for enforcing rights that exist by reason of substantive law Criminal law: deals with wrongs committed against society Civil law: privately enforceable rights and duties between parties Schools of thought: legal theorists attempt to formulate models that best express the roles law should or does play in our society Analytical law theory: suggests the law is defined by logic as applied to a particular set of facts, there is no room for human emotion or social conditions Command/ruling class theory: the law is simply a reflection of the ruling political part; moral, social, and historical traditions have no effect. Economic law theory: law must be based primarily upon the principles of the free enterprise system, such as supply and demand, cost- benefit, analyses, and open-market efficiency. Critical legal studies (CLS): the law is simply a political movement and that rather than being neutral, the law should be the primary vehicle for social change Business Law—Why Is It Important A. Law and legal issues confront you at every turn B. Management deals with the law and legal issues practically every day C. Thus, you have to understand it, its importance, how it affects you, its nature, functions, and how judges interpret it Types of Law A. State and federal constitutions -establish the structure of the government and allocate power among its various branches and subdivisions -they also prevent units of government from taking certain actions or passing certain laws, especially those laws that restrict individual rights B. Federal and State Statutes: law that is created by Congress or a state legislature C. Common Law: involves judges/courts stepping in and making law that governs and regulates business activity in areas where there has been an absence of legislative or administrative action 1. Courts look at precedent and decide whether to apply the doctrine of stare decisis (should be decided the same was as past cases presenting the same facts and legal issues or distinguish the case (called case law reasoning) 2. Much of our tort, contract, property, agency law, etc. that govern business transactions comes from the common law 3. The common law controls/prevails only if there is no other type of law that applies to the case “Common law” is based on judicial precedent, generally derived from principles rather than rules, consisting of broad and comprehensive principles based on justice, reason, and common sense, refers to law with both continuity and the capacity for change William’s successors created permanent courts called “King’s Courts” or curia regis Judges served as the “depositories of the law”, thus, the common law originated in written judicial decisions, which enunciated authoritative legal principles, drawn from the customs and practices of society, in the course of resolving disputes between litigants. D. Administrative regulations and decisions (“Administrative Law”) 1. State and federal legislatures have the power to and often create administrative agencies to handle problems because they lack the time/expertise to do so. These agencies in turn get their power to make law by a delegation of power from the legislature. 2. Two types of law are created by administrative agencies: a. Administrative regulations (enacted by the agency itself, not the legislature) b. Agency decisions (some agencies have internal court structures and procedures) E. Treaties 1. Made by the president with foreign governments, requires 2/3 Senate approval F. Ordinances a. Made by school districts, municipalities, etc. (cities only) b. Ex. Zoning ordinances, building ordinances G. Executive orders 1. Made by presidents or governors a. Gives presidents/governors the power to issue and make laws b. Ex. Sending troops overseas Priority of Law A. The Federal Supremacy Clause: If/when there is such a conflict, the Supremacy Clause provides that the federal law must prevail. 1. Individual states may provide more protection for citizens that is provided by the U.S. Supreme Court and/or the US Congress Classifications of Law A. Public and Private Law 1. Public—concerns the powers of the government and the relations between government and private parties 2. Private—establishes a framework of legal rules the enable private parties to set the rights and duties they owe each other B. Criminal and Civil Law 1. Criminal—government prosecutes someone for the commission of a crime; criminal law regulates behavior so threatening that society outlaws it altogether a. Penalty – prison and/or a fine b. Ex. The rules of contract 2. Civil – one party sues another party a. Penalty/Remedy – money damages and/or equitable relief such as an injunction 3. Always Remember: a whole different set of rules applies to both civil and criminal law. Ex. The burden of proof. In a civil case, the burden of proof is “beyond a preponderance of the evidence” and in a criminal case it is “beyond a reasonable doubt” C. Substantive and Procedural Law 1. Substantive – substantive rights of the people are affected 2. Procedural – controls the behavior of government bodies (usually the police and courts) as they establish and enforce the rules of substantive law 3. A law can be classified more than one of the above (i.e. our three strikes law = a criminal, substantive, and public law) Jurisprudence and Jurisprudential Schools (Legal Schools of Thought) A. Natural Law 1. Defines law as all commands of a recognized political authority which are not unjust. a. Advantage: protects the “little guy”, the underdog, the oppressed b. Disadvantage: a bit pie in the sky; what would life/society be like if everyone believed unjust laws need not be obeyed? Disagreements = morality B. Legal Positivism 1. Defines law as the command of a recognized political authority. a. Advantage: promotes stability and predictability b. Disadvantage: what if it is enacted by a corrupt authority such as a Stalin or Hitler? C. Legal Realism 1. Defines law as what public decision-makers actually do. a. Advantage: more “real world” and practical than the other schools b. Disadvantage: There is disagreement regarding the relationship between law and morality and the duty to obey the law Chapter 3 The Anatomy of a Civil Case 1. The anatomy of a civil case; our system, for better or worse, like it or not, is an adversarial legal system (often involves and is based on conflict, “butting heads”) A. The Pleadings 1. Service of the Summons and Complaint a. Complaint: 1. Describes the factual basis for the plaintiff’s suit 2. Explains why the court has jurisdiction over the case 3. Outlines the legal theory on which the plaintiff relies 4. Indicates the damages or other relief that the plaintiff seeks (also formally commences the case in the court system) b. Once the plaintiff has files their summons and complaint with the court, the defendant must then be “served” with a copy of the documents 2. The filing of the answer – once the defendant has been “served”, the defendant must file their answer with the court within 30 days in state court from the date on which the plaintiff’s complain and summons were served on a. In answering a plaintiff’s complaint, the defendant may admit or deny some of the allegations in the complaint b. If this is not done, the plaintiff can have a default judgment entered against the defendant which cuts off the defendant’s rights to file an answer and effectively ends the case 3. The counter-claim/cross-complaint a. Filed by the defendant with and when he/she files the answer B. Preliminary Motions to Dismiss the case – designed to week out and dismiss frivolous lawsuits, untimely lawsuits, defective lawsuits, etc. before a full-blown trial 1. Motion to dismiss: may be made on various grounds 2. The demurrer: basically says “so what?”.. even if the facts alleged in the plaintiff’s complaint are true and correct, the laws that are on the books still don’t allow the plaintiff to recover anything against the defendant so the complaint should be dismissed C. Discovery – involves the pretrial exchange of all relevant information between parties in a lawsuit; always remember that the scope of discovery is broad 1. Rationale/Purpose Behind Discovery: helps avoid surprise at trial, predict the outcome of trail, pin the parties and witnesses down so they can’t change their story at trial (and if they do that discovery can be used to discredit them 2. Tools of Discovery a. Depositions – oral questions/answers under oath b. Interrogatories – written questions submitted to the other side to answer and they must be answered and signed under oath c. Request for production of documents d. Request for physical and/or mental examinations – used where the plaintiff claims some physical/mental/emotional injury D. Later Pre-Trial Motions filed by the Plaintiff or Defendant to try and win the case early and before/without the necessity of a full- blown, expensive trial 1. Summary Judgement Motion – a “trial by paper”/trail by affidavit, think of it as a mini-trial only it takes place with a motion, supporting papers, affidacirs, vs live witnesses like a normal would entail E. Pretrial conference/hearing – takes place right before the trial where the attorneys for the parties meet with the court/judge to discuss and address administrative issues 1. As part of this, there will also be settlement discussions/pressures imposed by the court on the parties in the form of a mandatory settlement conference F. The Trial – court trials and jury trials 1. The Stages of a Trial a. Chose/decide whether to have a court or jury trial b. Jury selection (only in a jury trial) 1. Voir Dire “to speak the truth” (jury selection takes place). i. For Cause – a prospective juror is excused by the court automatically ii. Rationale - obviously you don’t want someone on the jury that can’t be fair 2. Peremptory challenges – where the attorneys can excuse a prospective juror for any reason at all (except race) i. Rationale: keep the dispute fair ii. In California in a civil case, each attorney/each side gets 6 peremptory challenges c. Opening statement of the plaintiff’s attorney or prosecutor d. Opening statement by defendant’s attorney e. Presentation of the plaintiff/prosecution’s case 1. Motion for directed verdict – often made by the defendant at this point f. Presentation of the defendant’s case g. Rebuttal witnesses h. Closing argument for plaintiff/prosecution i. Closing argument for defendant j. Rebuttal closing argument for the plaintiff/prosecution k. The judge then reads the jury instructions to the jury (if jury trial) l. Deliberation by the judge (if court trial) or the jury (if jury trial) m. Announcement of the verdict G. Trial and Post Trial Motions (designed to cure/fix/address faulty, defective, or “crazy things that may have happened during the trial) 1. Motion for directed verdict – usually make right after the plaintiff presents their case in chief 2. Motion for judgment notwithstanding the verdict (JNOV) – where the defendant asks the judge to set aside all or a part of the jury’s verdict on the ground that it was in no way supported by the evidence 3. Motion for a new trial – either party can make, but is usually the “loser.” If granted, new trial is granted on all or limited issues. H. Appeal 1. Options available to an appellate court: affirm in whole or in part, perverse in whole or in part, remand back to the trial court, etc. 2. The role of an appellate court in NOT to re-litigate the case I. Enforcing the Judgment/Collection – if the plaintiff is lucky enough to win, then they still have to collect on that judgment that the court/jury awarded in his/her favor 1. Tools for enforcing a judgment are: a. Writ of execution – allows sheriff to seize and sell the defendant’s property b. Garnishment – allows sheriff to seize property, $ or employment wages in the hands of a third party, and then give it to the plaintiff 3/30/16 Common law = judge-made law State Court – 30 days, Federal Court – 20 days Finding a Good Lawyer Step One Options: telephone book, family friends, local bar association, internet sites, Martindale-Hubbell Law Directory, AVVO Step Two Preparation, filing and service of the Summons and Complaint Step Three Preparation and filing of the Answer by the Defendant Step Four Preliminary Motions to Dismiss the Case -Motion to dismiss -The demurrer -Motion for judgment on the pleadings *Think of these motions as safety valves/checks in the system to weed out cases that shouldn’t be there/have been filed and/or to narrow the issues in dispute in a case* Step Five -Discovery -Tools: Interrogatories, Request for production of documents, Request for physical and/or mental exams, Deposition David Boies -used to pressure, specialized in complex corporate litigation, dyslexic, asked to leave northwestern for a scandal with one of the professor’s wife, nd then moved to Yale (2 in his class), now runs his own firm with 100+ lawyers, represented Antitrust vs Microsoft, conservative in legal decisions Chapter 3 cont. To survive being deposed: 1. Make answers brief and tightly focused, avoiding the temptation to expand beyond what was asked. 2. Prepare diligently beforehand. 3. At the deposition, stay calm and truthful. 4. Understand your side’s legal strategy that you don’t undermine your value as a witness for the company if the case goes to trial. “One Day, One Trial” allows citizens who are not seated on a jury to return to work the next day, guaranteed. “Lender Liability” a lender steps out of its traditional role of simply lending money and letting the recipient of the loan run his/her business an the project, and instead becomes too involved in micromanaging the project 4/4/16 Request for Physical and/or Mental Exam Depositions (oral questions and answers under oath transcribed by a court reporter) Step 6 -Later pretrial motion filed by the Plaintiff or Defendant -Motion for summary judgment (trial by paper) *Think of this motion/part of the case as another safety valve/check in the system to weed out weak cases and/or narrow the issues in dispute in a business case Step 7 The Pretrial Conference/Hearing -Also usually entails a mandatory settlement conference with/between the parties Step 8 The Trial -Stages of a trial 1. Choice of a jury or a bench trial 2. Jury Selection* (Voir Dire) -Peremptory Challenges (each side gets 6) 3. Opening statement of the plaintiff’s attorney 4. Opening statement of the defendant’s attorney 5. Presentation of the plaintiff’s case 6. Presentation of the defendant’s case 7. Rebuttal witnesses 8. Closing argument for the plaintiff 9. Closing argument for the defendant 10. Closing argument in response for the plaintiff 11. Judge’s instruction to the jury* 12. Deliberations by the jury, or, if a judge/bench trial then by the judge 13. Announcement of the verdict *Occurs only in jury trials Preponderance of the Evidence Jury Instruction “Preponderance of the evidence” means evidence that has more convincing force than that opposed to it Step 9 Trial and Post Trial Motions (after the verdict is rendered): -Motion for directed verdict -Motion for judgment notwithstanding the verdict -Motion for a new trial – either party can make, usually the “loser.” If granted, new trial is granted on all or limited issues *Think of these motions as a safety valve/check to help fix a harmful and significant error that occurred in the system/trial Step 10 Appeal -Options available to an appellate court: affirm in whole or part, reverse in whole or in part, remand back to the trial court, etc. Step 11 Enforcing the Judgment/Collection -Writ of execution: allows sheriff to seize and sell property owned by the defendant -Garnishment: allows sheriff to seize property, money or wages due and owing to the defendant but in the hands of a third party, and then give it to the plaintiff Chapter 3 Study Outline Cont. I. Types of State Courts and Their Jurisdiction 1. What is it/what do we mean by it? a. It is a court’s power to hear a case and issue a decision that is binding on the parties 2. The situation is that the plaintiff can’t sure the defendant in any state court he chooses. The plaintiff must sue in a court that has jurisdiction over the case. In other words, the court must have: a. Subject matter jurisdiction over the case, and, either of the following: 1. In personam (“personal jurisdiction”) over the parties in the case; or Subject matter jurisdiction the court’s power to decide the type of case at issue In personam/personal jurisdiction usually based on residence, location, or activities of a defendant within the state ]] B. State Courts of Limited Jurisdiction 1. Small Claims Courts (amount in controversy is $7,500 or less for a plaintiff individual or $5,000 or less for a plaintiff corporation) and Municipal Courts (amount in controversy is $25,000 or less) a. Features of these courts: informal, no transcript of the proceeding, faster, cheaper, parties in small claims can argue their own cases, etc. C. State Trial Courts of General Jurisdiction 1. Superior Courts (any amount of money in controversy, but usually greater than $25000) a. Features: not governed by limits on civil and criminal penalties that above-referenced courts are; keep detailed records of proceedings; slower, more expensive, more formal, etc. D. State Court of Appeal 1. Features: decide legal questions of law and generally accept the lower trial court’s findings of fact 2. SLO sits in the Second District Court of Appeal *which is actually located/hears cases in Ventura II. Types of Federal Courts and Their Jurisdiction A. Federal District Courts (U.S. district court) – in the federal system, the lawsuit begins here 1. Every state has at least one federal district court in it, California has 4 2. Federal District Court jurisdiction: the two different bases for federal court jurisdiction are (either one will suffice): a. Diversity jurisdiction- suit between citizens of different states and the amount in controversy exceeds $75,000 1. Corporation = considered to be a citizen both where incorporated and the state where it has its principal place of business b. Federal question jurisdiction – the case “arises under” federal law, the U.S. Constitution, a federal law/statute or a treaty of the US 1. E.g. – lawsuits which claim that a person’s civil rights have been violated B. “Specialized” Federal Courts 1. Some cases are so unique and specialized that the federal government and the Constitution have designed “specialized courts” to hear them and the case must be filed only in that court C. Federal Courts of Appeal 1. Hear appeals from federal district courts and state supreme courts a. Here in California, we are located in the Ninth Circuit Court of Appeal, which is actually located/hears cases in San Francisco D. The United States Supreme Court 1. Most appeals to the U.S. Supreme Court come from federal courts of appeal and state supreme courts 2. Case must fall within the court’s certiorari jurisdiction in order to be heard (it is discretionary), meaning you petition the Court to hear your case by filing what is called a writ of certiorari and the Court can either grant your writ or deny it. a. Only a very small % of cases are heard/writs are granted. At least 4 of the 9 justices of the Supreme Court must vote to hear the case/grant the writ (called the “rule of four”). Supreme Court Rule 10: Considerations Governing Review On Certiorari 1. A review on writ of certiorari is not a matter of right, but of Judicial discretion, and will be granted only where there are special and important reasons therefore. The following while neither controlling nor fully measuring the Court’s discretion, indicate the character of reasons that will be considered: a. When a federal court of appeals has rendered a decision in conflict with the decision of another federal court of appeals on the same matter b. When a state court of last resort has decided a federal question in a way in conflict with the decision of another state court of last resort or of a federal court of appeals c. When a state court of last resort or a federal court of appeals has decided an important question of federal law which has not, but should be, settled by this Court, or has decided a federal question in a way in conflict with applicable decision of this Court. 2. The same general considerations outline above will control in respect of petitions for writs of certiorari to review judgments of the Court of Claims, of the Court of Customs and Patent Appeals, and of any other court whose judgments are reviewable by law on writ of certiorari. III. Alternative Dispute Resolution (“ADR”) A. Pros of ADR: greater flexibility, faster, cheapter, less formal, etc. B. Cons of ADR: “shoddy” justice, sometimes called the so-called expert arbitrator or mediator is no “expert” at all and is instead incompetent, lazy, or biased; no writted record of the proceeding. IV. Common forms of ADR 1. Arbitration (can be court-ordered or voluntary) 2. Mediation 3. Settlement discussions and/or negotiations 4. Other – summary jury trials 4/6/16 -California’s Long Arm Statute: A court may exercise personal jurisdiction over any non-California resident who in person or through agent: 1. Transacts any business within the state or contracts anywhere to supply goods or services in the state; or 2. Commits a tortious act in the state; or 3. Commits a tortious act outside the state causing injury to person or property within the State of California if he a. regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in California, or b. expects or should reasonably expect the act to have consequences in California and derives substantial revenue from interstate or international commerce; or 4. Owns, uses or possesses any real property situated within the state Scalia Video Notes -doesn’t like activist judges, originalist, “old-fashion”, constitution is meant to impede change/make change hard, social conservative 4/11/16 ADR (Alternative Dispute Resolution) -Governmental Procedures (the public court system) -Federal Courts & State Courts -Non-Governmental Procedure (private ADR) -Arbitration, Mediation, Summary Jury Trial, Rent-A-Judge, & Minitrial See pg. 149-150 for notes (in Reader) -Arbitration: an adversarial process with two or more parties competing with each other before a neutral decision-maker [PRIVATE] ex. Judge Judy -Mediation: there is no decision-maker, rather a neutral “agreement” to create a safe environment [PRIVATE] ex. Kind of like a therapist $1-3K a day for either an arbitrator or mediator