The Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq.Chapter Two:The Court SystemI. The Court SystemsA. Federal Judges- Are nominated by the president and confirmed by a majority vote of the United States Senate.B. State Judges- Are chosen by various methods dependent on the state. The doctrine of judicial immunity applies to both federal and state judges.-- In North Carolina judges are elected –-- Doctrine of Judicial Immunity --C. Organization of the Court System-1. Courts of Original Jurisdiction- otherwise known as the trial court.2. Courts of Appellate Jurisdiction- Courts that hear appeals from the trial court.II. The Federal CourtsA. Federal District Courts- Courts of Original Jurisdiction in the federal system. These courts hear matters of federal question, i.e., cases involving an issue of federal law. 1. There are currently 94 federal districts.-- Three in North Carolina--2. These are the only courts in the federal system that uses juries. 3. This system also employs the use of federal “magistrates”.B. Federal Appellate Courts- Is the intermediate level appellate court in the federal system. Reviews decisions of federal districtcourt.1. Consist of three judge panels2. 12 Geographically based courts of appeal.C. Specialized Federal Courts- These courts differ from other federal courts in that their jurisdictions are defined in terms of subject matter.1. US Bankruptcy Court2. US Court of Federal Claims3. US Court of International Trade4. US Tax CourtThe Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq.5. The Court of Appeals for the Federal Circuit- Subject matter jurisdiction is limited to appeals from the district courts in patent, trademark and copyright cases; in cases where the US is a defendant; appeals from the Court of Federal Claims and from the Court of International Trade; and the review of administrative rulings of the US Patent and Trademark Office. D. US Supreme Court- The highest court in the country1. Justices- Nominated by the President and confirmed by the Senate.2. Cases- are heard by nine justices, one of which is the Chief Justice. The court determines which cases it will hear and which ones will be declined. If the court declines to hear a matter, the lower court’s ruling stands. 3. Writ of Certiorari- document filed in order to gain review by the US Supreme Court. Thousands are received each term but generally only 70-80 opinions are issued.III. The State Courts- Similar in general framework as the federal court system but varies state by state.A. State Courts of Original Jurisdiction- Trial courts.1. General Jurisdiction- Have authority to decide almost any kind of dispute and are able to grant virtually every type of relief.a. Organization- Often organized by districts or counties -- District Court in North Carolina – -- Circuit Court in Florida--2. Limited or Special Jurisdiction- Include municipal courts, justice of the peace courts, and other more specialized courts. a. Jurisdiction- Similar to that of district courts but only hearspecial matters, i.e., probate matters, guardianship etc.b. Appeals- An appeal of a special proceeding is a trial de novo to the court of general jurisdiction meaning that the parties get a new trial.The Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq.B. State Courts of Appellate Jurisdiction- Generally, a party has the right to appeal a trial court judgment to at least one higher court. C. Rules of Civil Procedure- The procedural rules that govern a lawsuit.1. Federal Rules of Civil Procedure (FRCP)- Contained in the United States Code, Title 28.2. Adoption by the States- Most states have adopted the federal rules for use in state courts or have adopted rules similar to them.3. Governs the following- the procedure of the litigation process,including the pleadings, discovery, trial procedures, and relevant motions.4. Rules apply to civil matters only- a different set of rules govern criminal and administrative procedures.IV. Jurisdiction- “the power to speak of the law,” determines the limits within which a court may declare, administer, or apply the law.A. Subject Matter Jurisdiction (SMJ)- is created by a constitution or a statute that says what types of disputes a court can resolve.This may be a limitation on the specific type of case or on the dollar amount in controversy. 1. SMJ in Federal Courts- Under the US Constitution, federal courts may hear only those cases within the judicial power of the United States. a. Federal Question- Judicial power of the federal courts extends to all cases arising under the US Constitution, the Laws of the United States and Treaties made or which shall be made under their authority. b. When Federal Jurisdiction is Based on Parties Involved- here most of the litigation is generated by:The Legal Environment of BusinessFINA 2244 Christina Sheppard Futrell, Esq. i. Cases in which the United States is a party to the suit or ii. Cases involving citizens of different states otherwise known as diversity jurisdiction. To establish federal diversity jurisdiction the parties must also show: -- that they are from different state and -- that the amount in controversy is more than $75,000B. Personal Jurisdiction- the court must also have authority over the person of the defendant. This is accomplished by service of a summons on the defendant. The summons is what notifies the defendant of the lawsuit.1. Out of State Defendants- The court can obtain personal jurisdiction over an out of state defendant by:a. Personal Service – serving the defendant while her or she is present in the state or;b. Long Arm Statute- If the defendant is not in the state but the defendant committed a wrong while in the state or has done business in the state a long arm statute permits a state’s court to reach beyond the state’s boundaries for jurisdiction over nonresident defendants.2. Out of State Business Defendants- courts primarily have jurisdiction over a corporation in the following three situations:a. The court is in the state in which the corporation is incorporated.b. The court is in the state where the corporation has its headquarters or its main operation.c. The court is in a state in which the corporation is doing business. C. Jurisdiction over Property- 1. In rem