Understanding the US Court System

Business Law, Sixth Edition
© 2019 BVT Publishing. All rights reserved.
S-1
Chapter 3: Court Systems

S-2
Learning Objectives
• Understand the U.S. court system.
• Discuss the state court structure.
• Explain the federal court structure.
• Distinguish between state and
federal law.
• Contrast law and equity.
• Describe equitable procedures.

S-3
3.0 In the News
Senate Confirms Gorsuch for Supreme Court
http://bvtlab.com/sQ7F2
The Senate voted to confirm Neil Gorsuch to be an
associate justice on the Supreme Court, concluding
weeks of partisan battles that culminated with
Majority Leader Mitch McConnell invoking the so-
called “nuclear option” to eliminate the filibuster.
• Discuss the ramifications of this action.

S-4
3.1 Operating the Court System (Slide 1 of 2)
Trial judges
• Extremely important players in the court
system
• Control the litigation during trial,
including the evidence presented
to a jury

S-5
Reviewing court judges and justices
• Judges: generally serve on intermediate
level appellate courts
• Justices: generally serve on highest
courts
• Almost always function as a panel of
three, five, seven, or nine
3.1 Operating the Court System (Slide 2 of 2)

S-6
3.1c The Jury
• The grand jury issues an indictment.
• The role of the trial jury is largely to
determine the facts of a case. Part of
that process is having the jury
determine credibility of witnesses and
parties during trial.
- Jurors may be used in criminal and civil
matters.
- Juries often consist of twelve individuals.

S-7
3.1c Critical Thinking
Case: Colgrove
The United States Supreme Court faces the
question of whether a state statute that allows a
jury of only six people for a civil trial is
constitutional under the Seventh Amendment.
• What type of civil case must be tried before a jury
under the language of the Seventh Amendment?
• Why does the Supreme Court conclude that a six-
person jury is as reliable as a twelve-person jury?
• Do you think the same result would occur if the
proposed jury consisted of less than six members?

S-8
3.2a The State Structure (Slide 1 of 2)
Dual System
• State courts
• Federal courts
Three levels (usually)
• Trial
• Intermediate appellate (reviewing)
• Final appellate (reviewing)

S-9
3.2a The State Structure (Slide 2 of 2)
Jurisdiction: “power to hear a case”
• General jurisdiction: State court can
hear most cases.
• Limited jurisdiction:
- Geographic area served
- Subject matter
- Dollar limit

S-10
3.2b The Federal Structure
Three levels (usually)
• Trial
• Intermediate appellate (reviewing)
• Final appellate (reviewing)

S-11
3.2c Federal District Courts (Slide 1 of 2)
District courts are the trial courts of
the federal judicial system.
Civil jurisdiction is limited to:
• Diversity of citizenship: Case is
between citizens of different states or
between a citizen of one state and a
citizen of a foreign country.
- Minimum dollar requirement is
$75,000.

S-12
3.2c Federal District Courts (Slide 2 of 2)
• Federal question: Suit arises under
U.S. Constitution, treaties and federal
law.
-No minimum dollar requirement

S-13
3.2c Critical Thinking
Case: Hertz Corporation v. Friend
• Does this case make it easier or harder for
corporate employers to move such lawsuits
from state court to the federal court system? Why?
• In determining “principal place of business,”
what does the Court indicate a lower federal
court judge should consider?
• Explain the rationales the Court offered to support
its explanation of “principal place of business.”
Hertz v. Friend: Where is a corporation a
citizen?(7:30) http://bvtlab.com/Ypjfe

S-14
3.2d The Law in Federal Courts
• Federal courts use the rules of federal
procedure.
• Federal question cases are decided
using federal substantive law.
• A federal court in a diversity of
citizenship case uses the substantive
law of the state in which it sits to decide
such a case.

S-15
3.2d Critical Thinking
Case: Erie Railroad
Federal courts sitting in diversity of citizenship
actions are bound by state court precedents
involving substantive law questions.
• Why was Tompkins able to file this lawsuit in a
federal district court?
• Why did Tompkins argue that the federal common
law should apply in this case?
• How does the Supreme Court’s decision provide for
the same outcome of the litigation regardless of the
court system in which the case is filed?

S-16
3.3 Law and Equity
Basic Distinction
• Purpose
- Law: to provide stability and certainty
- Equity: to promote fairness
• Remedy
- Law: damages
- Equity: decree

S-17
3.3b Equitable Procedures (Slide 1 of 2)
• There is usually no right to a trial
by jury.
• Sometimes a special appointee,
known as a master in chancery,
assists with the fact-finding.
• The decision is called a decree.

S-18
3.3b Equitable Procedures (Slide 2 of 2)
• A person may be jailed for violating a
decree.
• Courts of equity use maxims instead
of rules of law to decide cases.
• The use of maxims allow courts to
achieve justice.

Understanding the US Court System

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