Business Law Study Set 14

Business

Quiz 2 :

Courts and Alternative Dispute Resolution

Quiz 2 :

Courts and Alternative Dispute Resolution

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VIDEO QUESTION: Jurisdiction in Cyberspace. Go to this text's Web site at www.cengage.com/blaw/darkson and select "Chapter 2." Click on "Video Questions" and view the video titled Jurisdiction in Cyberspace. Then answer the following questions. (a) What standard would a court apply to determine whether it has jurisdiction over the out-of-state computer firm in the video (b) What factors is a court likely to consider in assessing whether sufficient contacts existed when the only connection to the jurisdiction is through a Web site (c) How do you think the court would resolve the issue in this case
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a) The court would apply the minimum contacts test to determine whether the court has jurisdiction over the computer firm.
b) The court will consider the following factors: the quantity and quality of the contacts in the forum state, the source and connection of these contacts in terms of the cause of action, the interest of forum state to litigate these issues and the convenience of the parties.
c) The court will weigh the factors listed above. If the court finds that the computer firm purposely availed itself by doing business in the state of a prolonged period of time and wants to protect its citizens, it will find that the minimum contacts test will weigh in the favor of jurisdiction.

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Arbitration PRM Energy Systems, Inc. (PRM), owned technology patents that it licensed to Primenergy to use and to sublicense in the United States. The agreement stated that all disputes would be settled by arbitration. Kobe Steel of Japan was interested in using the technology at its U.S. subsidiary. PRM directed Kobe to talk to Primenergy about that. Kobe talked to PRM directly about using the technology in Japan, but no agreement was reached. Primenergy then agreed to let Kobe use the technology in Japan without telling PRM. The dispute between PRM and Primenergy about Kobe went to arbitration, as required by the license agreement. In addition, PRM sued Primenergy for fraud and theft of trade secrets. PRM also sued Kobe for using the technology in Japan without its permission. The district court ruled that PRM had to take all complaints about Primenergy to arbitration. PRM also had to take its complaint about Kobe to arbitration because the complaint involved a sublicense Kobe was granted by Primenergy. PRM appealed, contending that the fraud and theft of trade secrets went beyond the license agreement with Primenergy and that Kobe had no right to demand arbitration because it never had a right to use the technology under a license from PRM. Is PRM correct, or must all matters go to arbitration Why or why not [PRM Energy Systems, Inc. v. Primenergy, 592 F.3d 830 (8th Cir. 2010)]
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Arbitration:
This question could go either way, though courts tend to be more deferential toward arbitration.
In this case, PRM had allowed P to license and sublicense the patents and then directed K to contact P about licensing. PRM had signed a contract with P agreeing to arbitration on ALL issues related to P's licenses and sublicenses.
Thus, any disputes arising from P and PRM would go to arbitration. The issue is slightly complicated by the fact that PRM claims that K's behavior exceeded the right of the license by using it in Japan, and thus, was beyond the scope of the arbitration clause and could be pursued in a court.
However, this arbitration clause was so broad as to include "all disputes."
Arguably, all disputes include disputing whether K had been validly issued a license by P that would be subject to arbitration. Most likely, the arbitration clause would be binding in regards to all disputes including P, PRM and K.

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Jurisdiction Marya Callais, a citizen of Florida, was walking along a busy street in Tallahassee, Florida, when a large crate flew off a passing truck and hit her, causing numerous injuries. She experienced a great deal of pain and suffering, incurred significant medical expenses, and could not work for six months. She wants to sue the trucking firm for $300,000 in damages. The firm's headquarters are in Georgia, although the company does business in Florida. In what court might Callais bring suit-a Florida state court, a Georgia state court, or a federal court What factors might influence her decision
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Jurisdiction:
A federal court can hear a case based on diversity citizenship and if the amount in controversy is over $75,000. In this case, MC is a citizen of Florida and the firm is from Georgia; the amount in controversy is $300,000 which is clearly over $75,000. This case could then be heard in a federal court based on diversity. (It cannot be heard on federal question because it is a tort claim.)
For the Florida state court to hear the case, they have must have jurisdiction over the defendant. The state can have jurisdiction over the firm (or incorporation) if the firm can be deemed a resident of the state by doing business. In this case, the firm does business in Florida and thus, the state has jurisdiction over them. Furthermore, the accident occurred in that state and they would have interest in protecting their citizen, MC.
The Georgia state court can also hear the case as the plaintiff, by filing the complaint in Georgia, has availed itself to jurisdiction. Since the firm is headquartered in Georgia, they are also subject to the state's jurisdiction. However, the accident occurred in Florida, so it is probably not MC's first choice as she is also a resident of Florida and it is probably inconvenient.

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A QUESTION OF ETHICS: Agreement to Arbitrate. Nellie Lumpkin, who suffered from various illnesses, including dementia, was admitted to the Picayune Convalescent Center, a nursing home. Because of her mental condition, her daughter, Beverly McDaniel, filled out the admissions paperwork and signed the admissions agreement. It included a clause requiring parties to submit to arbitration any disputes that arose. After Lumpkin left the center two years later, she sued, through her husband, for negligent treatment and malpractice during her stay. The center moved to force the matter to arbitration. The trial court held that the arbitration agreement was not enforceable. The center appealed. [ Covenant Health Rehabilitation of Picayune, LP v. Lumpkin, 23 So.3d 1092 (Miss.App. 2009)] (a) Should a dispute involving medical malpractice be forced into arbitration This is a claim of negligent care, not a breach of a commercial contract. Is it ethical for medical facilities to impose such a requirement Is there really any bargaining over such terms (b) Should a person with limited mental capacity be held to the arbitration clause agreed to by the next-of-kin who signed on behalf of that person
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QUESTION WITH SAMPLE ANSWER: Appellate Review. The defendant in a lawsuit is appealing the trial court's decision in favor of the plaintiff. On appeal, the defendant claims that the evidence presented at trial to support the plaintiff's claim was so scanty that no reasonable jury could have found for the plaintiff. Therefore, argues the defendant, the appellate court should reverse the trial court's decision. Will an appellate court ever reverse a trial court's findings with respect to questions of fact Discuss fully.
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Jurisdiction In 2001, Raul Leal, the owner and operator of Texas Labor Contractors in East Texas, contacted Poverty Point Produce, Inc., which operates a sweet potato farm in West Carroll Parish, Louisiana, and offered to provide field workers. Poverty Point accepted the offer. Jeffrey Brown, an owner of and field manager for the farm, told Leal the number of workers needed and gave him forms for them to fill out and sign. Leal placed an ad in a newspaper in Brownsville, Texas. Job applicants were directed to Leal's car dealership in Weslaco, Texas, where they were told the details of the work. Leal recruited, among others, Elias Moreno, who lives in the Rio Grande Valley in Texas, and transported Moreno and the others to Poverty Point's farm. At the farm, Leal's brother Jesse oversaw the work with instructions from Brown, lived with the workers in the on-site housing, and gave them their paychecks. When the job was done, the workers were returned to Texas. Moreno and others filed a suit in a federal district court against Poverty Point and others, alleging, in part, violations of Texas state law related to the work. Poverty Point filed a motion to dismiss the suit on the ground that the court did not have personal jurisdiction. All of the meetings between Poverty Point and the Leals occurred in Louisiana. All of the farmwork was done in Louisiana. Poverty Point has no offices, bank accounts, or phone listings in Texas. It does not advertise or solicit business in Texas. Despite these facts, can the court exercise personal jurisdiction Explain. [ Moreno v. Poverty Point Produce, Inc., 243 RR.D. 275 (S.D.Tex. 2007)]
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What are the factors that the court looked at in determining whether minimum contacts existed between the defendant and the state of North Carolina
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Why did the court state that the convenience of the parties was not "determinative" in this case
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CASE PROBLEM WITH SAMPLE ANSWER: Arbitration Clause. Kathleen Lowden sued cellular phone company T-Mobile USA, Inc., contending that its service agreements were not enforceable under Washington state law. Lowden requested that the court allow a class-action suit, in which her claims would extend to similarly affected customers. She contended that T-Mobile had improperly charged her fees beyond the advertised price of service and charged her for roaming calls that should not have been classified as roaming. T-Mobile moved to force arbitration in accordance with the provisions that were clearly set forth in the service agreement. The agreement also specified that no class-action suit could be brought, so T-Mobile also asked the court to dismiss the request for a class-action suit. Was T-Mobile correct that Lowden's only course of action was to file arbitration personally Why or why not [ Lowden v. T-Mobile USA, Inc., 512 F.3d 1213 (9th Cir. 2008)]
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Arbitration Thomas Baker and others who bought new homes from Osborne Development Corp. sued for multiple defects in the houses they purchased. When Osborne sold the homes, it paid for them to be in a new home warranty program administered by Home Buyers Warranty (HBW). When the company enrolled a home with HBW, it paid a fee and filled out a form that stated the following: "By signing below, you acknowledge that you … CONSENT TO THE TERMS OF THESE DOCUMENTS INCLUDING THE BINDING ARBITRATION PROVISION contained therein." HBW then issued warranty booklets to the new homeowners that stated: "Any and all claims, disputes and controversies by or between the Homeowner, the Builder, the Warranty Insurer and/or HBW … shall be submitted to arbitration." Were the new homeowners bound by the arbitration agreement, or could they sue the builder, Osborne, in court Explain. [ Baker v. Osborne Development Corp., 159 Cal.App.4th 884, 71 Cal.Rptr.3d 854 (Cal.App. 2008)]
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Jurisdiction Xcentric Ventures, LLC, is an Arizona firm that operates the Web sites RipOffReport.com and BadBusinessBureau.com. Visitors to the sites can buy a copy of a book titled Do-It-Yourself Guide: How to Get Rip-Off Revenge. The price ($21.95) includes shipping to anywhere in the United States, including Illinois, to which thirteen copies have been shipped. The sites accept donations and feature postings by individuals who claim to have been "ripped off." Some visitors posted comments about George S. May International Co., a management consulting firm. The postings alleged fraud, larceny, possession of child pornography, and possession of controlled substances (illegal drugs). May filed a suit in a federal district court in Illinois against Xcentric and others, charging, among other things, "false descriptions and representations." The defendants filed a motion to dismiss for lack of jurisdiction. What is the standard for exercising jurisdiction over a party whose only connection to a jurisdiction is over the Web How would that standard apply in this case Explain. [ George S. May International Co. v. Xcentric Ventures, LLC , 409 F.Supp.2d 1052 (N.D.Ill. 2006)]
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Standing Jack and Maggie Turton bought a house in Jefferson County, Idaho, located directly across the street from a gravel pit. A few years later, the county converted the pit to a landfill. The landfill accepted many kinds of trash that cause harm to the environment, including major appliances, animal carcasses, containers with hazardous content warnings, leaking car batteries, and waste oil. The Turtons complained to the county, but the county did nothing. The Turtons then filed a lawsuit against the county alleging violations of federal environmental laws pertaining to groundwater contamination and other pollution. Do the Turtons have standing to sue Why or why not
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