Litigation

Business Law, Sixth Edition
© 2019 BVT Publishing. All rights reserved.
S-1
Chapter 4:
Litigation

S-2
Learning Objectives
• Explain the basic principles of litigation.
• Understand the concept of jurisdiction.
• Describe the pretrial proceedings.
• Discern the jury selection process.
• Contrast the levels of burdens of proof.
• Understand jury instructions.
• Distinguish between verdict and judgment.
• Recognize motions of post trial proceedings.
• Explain the appeals process.

S-3
4.0 In the News
What The Navient Lawsuit Means For
Your Student Loans
http://bvtlab.com/p72H2
The Consumer Financial Protection Bureau
alleges that Navient “systematically and
illegally [failed] borrowers at every stage of
repayment” and improperly directed into
forbearance when borrowers might have
qualified for income-driven repayment plans.
• Discuss why this is a class-action case.

S-4
4.1a Parties to a Case (Slide 1 of 2)
• In a criminal case, the people bring
the action against the named
defendant.
• In a civil case, the term plaintiff is
used to describe the party bringing the
lawsuit by filing a complaint, and the
term defendant describes the party
against whom the complaint is
brought.

S-5
4.1a Parties to a Case (Slide 2 of 2)
• In an appealed case, the party
appealing is usually referred to as the
appellant, and the party against
whom an appeal is filed is called the
appellee (usually the successful party
in trial court).

S-6
4.1b Standing to Sue
Standing: the legal right to bring the action
because the person is legally affected by the
outcome of a case
Case or controversy: There must be
• Adverse relationship between parties
• Actual or threatened actions by at least
one of the parties must give rise to an
actual legal dispute.
• Courts must have the ability to render a
decision that will resolve the dispute.

S-7
4.1c Class Actions
Class-action suit: a person files suit on
their own behalf and on behalf of all
others who may have a similar claim.
• To be certified by a judge as a class action,
plaintiffs must have presented evidence on
four definite characteristics.
– Commonality
– Adequacy
– Numbers
– Typicality

S-8
4.1c Critical Thinking
Case: Wal-Mart Store, Inc. v. Betty Dukes
Generally, the Wal-Mart v. Dukes decision
makes it more difficult for plaintiff’s seeking to
employ the class-action apparatus, in that
each member’s claim must depend on a
common contention.
• What are the pros and cons of limiting the standing
requirement in this manner?
• In order to establish the commonality requirement,
what must plaintiffs establish?

S-9
4.2a Jurisdiction
Subject matter jurisdiction: authority to
resolve the controversy between the parties
Personal jurisdiction: the power of a court
over the parties to the legal action
-Means of achieving: Defendant is resident of the
forum state, consents to jurisdiction, is served with a
summons while in the state, long-arm statute applies
Summons: document issued by a court
directing the defendant to appear in court or
otherwise respond to the plaintiff’s allegations

S-10
4.2b Long-Arm Statutes: Generally
Extend the personal jurisdiction of courts
over nonresidents whether they are
individuals or corporations
• Involve cases in which a nonresident
temporarily present in the state has
caused a tort injury
• Involve cases arising out of the
ownership of property located within
the state

S-11
4.2c Long-Arm Statutes: Minimum
Contacts
Minimum contact requirements
• A question of fact depending on each
particular case
• General jurisdiction: defendant resides
in state where court is located
• Specific jurisdiction: case involving
nonresident defendant is sufficiently
related to the forum state

S-12
4.2c Critical Thinking (Slide 1 of 2)
Case: Bristol-Myers Squibb Company
The U.S. Supreme Court found an “insufficient
connection” between California, where plaintiffs
brought suit, and the specific claims at issue,
and, therefore declined to extend specific
jurisdiction over nonresident defendant, BMS,
under the California long-arm statute.

S-13
4.2c Critical Thinking (Slide 2 of 2)
Case: Bristol-Myers Squibb Company
• Does the decision favor plaintiffs or
defendants in this case? Why?
• According to the decision, can specific
jurisdiction be attained based only on the
fact that a defendant does business in the
state where personal jurisdiction is
asserted? Why?

S-14
4.2d Venue
Specific court that the case should be
filed with, which is usually determined
by statute
• Matters of venue are usually determined
by statute.
• If a statute does not determine venue,
proper venue is often the county or district
where the defendant resides or where the
transaction or wrong took place.

S-15
4.3a Pleadings
Complaint: the first pleading, a statement of
the facts on which the plaintiff rests his or her
case and files a lawsuit in court.
Answer: the pleading filed by the defendant
responding to the plaintiff’s complaint
• Use of counterclaims
• Importance of default judgment: the failure of
the defendant to file an answer, which allows the
court to enter a judgment for the plaintiff

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4.3b Motions Attacking Pleadings
Challenge the legal sufficiency of a
complaint.
Motion to dismiss: raises questions of
law, not questions of fact.
– Failure to allege a valid cause of action
– Lack of jurisdiction
– Expiration of time limit

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4.3c Discovery Procedures
Discovery takes the surprise out of
litigation. Brings material facts into the
open, with equal access by both parties.
• Devices
– Interrogatories
– Subpoenas
– Deposition
• Pretrial conference

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4.3d Decisions Prior to Trial
Motion for judgment on the pleadings
• Either party may seek a final decision
without a trial.
Motion for summary judgment
• Created to avoid trials when the facts
are not disputed

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4.4a Jury Selection (Slide 1 of 2)
Role of jury: deciding whether, on the
facts of the case, a person is guilty or
not guilty of the offense for which they
have been charged.
• Venire: process of selecting potential jurors
• Voir dire: ability for court and parties to
question potential jurors to determine their
fairness and impartiality

S-20
4.4a Jury Selection (Slide 2 of 2)
Challenges
• For cause challenge
- Excused based on a perceived bias or relation
to one of the parties.
• Peremptory challenges
- No cause need be given

S-21
4.4a Critical Thinking
Case: Edmonson
A peremptory challenge may not be
employed to exclude jurors on account of
their race in civil litigation.
• Does it surprise you that this issue would
come before the highest court in the land in
the 1990s? Why or why not?
• Does the decision protect the litigating
parties’ rights to a jury of their peers, or
does it protect prospective jurors?

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4.4b Proof
Evidence
• Leading questions
• Redirect examination
• Rules of evidence
Proof
• Burden of producing evidence
• Burden of proof
- Beyond a reasonable doubt
- Preponderance of evidence
- Clear and convincing proof

S-23
4.4c Motions During Trial
Motion for a directed verdict
• Asks the court to rule as a matter of law
that plaintiff has failed to establish the
case against the defendant and that a
verdict should be entered for the
defendant

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4.4d Jury Instructions
Acquaints the jury with the law
applicable to the case
• Tells the jury that if it finds certain facts,
then its verdict should be for plaintiff. If
it fails to find these facts, then the
verdict should be for the defendant.
• Both sides may submit jury instructions
to the court; court decides on the final
jury instructions.

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4.4e Verdicts and Judgments
Verdict: decision of a jury, on matters
submitted to it for consideration.
Judgment: entered by a judge, based
on the verdict.

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4.5a Post-Trial Motions
Motion for a new trial
• Granted if the judge feels that the
verdict of the jury is contrary to the
manifest weight of the evidence
Motion for a judgment
notwithstanding the verdict
• Granted if the judge finds that the
verdict is, as a matter of law, erroneous

S-27
4.5b Appeals
Types
• Matter of Right
• Discretionary
Decision of appellate court
• Affirm
• Reverse
• Remand

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