Write a 2–page executive briefing of a selected business-related case that has been decided by a state court, a federal court, or the United States Supreme Court. In this introductory course to busine
Common Law Tradition
Although American colonists broke with King George III in the 18th century, the U.S. today still relies heavily upon the legal traditions of Great Britain. Central to this tradition is the common law system, which means that courts view every new case within the context of decisions made in similar cases in the past. This concept is known as stare decisis, or, "what has been decided in the past will guide the future." Although judges will closely review cases based upon the facts presented in each individual instance, they can, and must, make their decisions based upon decisions arrived upon by courts that have adjudicated similar cases.
Think of it this way: if courts did not apply stare decisis in lawsuits involving commercial interests, there would be no consistency in how courts interpret and implement the law. Some critics will argue that courts do not always look to the past in applying laws today, but, in reality, this is mandated not only by principles of U.S. jurisprudence, but it is also strictly taught in every law school in the nation.
Role of the Judicial Branch
The judicial branch, as early as Marbury v. Madison, 5 U.S. 137 (1803), has been entrusted with the interpretation of the U.S. Constitution. Early in our nation's history, it was actually an open question as to whether or not American courts, specifically the United States Supreme Court, would have the ultimate authority in deciding what laws are, or are not, constitutional. That has been decided decisively: the courts have the final word. It has often been remarked, accurately, that U.S. courts are the most powerful courts within any developed nation. In fact, the United States Supreme Court must be looked upon as the most powerful judicial body in the world.
The vast majority of commercial disputes, however, are not settled in the courts before a judge, but are resolved via alternative means of dispute resolution. For those cases that cannot be resolved without court litigation, the lawsuit can be a long, laborious, and expensive process. Ultimately, the courts do have the final word in deciding how constitutional principles involved in business law apply to a given conflict between adversarial parties.
Parallel Systems
As you review the system of laws in the United States, you should see U.S. jurisprudence as traveling along two separate but very similar highways. In truth, the United States maintains a parallel system of courts that are available to litigants.
State courts are where the vast majority of commercial transaction disputes are adjudicated. State courts handle the majority of business transactions because, more often than not, disputes involve two business parties that are either incorporated in, or function within the boundaries of the same state.
When adversarial parties function in different states, or when their disputes and controversies involve federal questions, they necessarily go to the federal courts.
In both the state and federal courts, decisions that are arrived at during the first level of adjudication can be appealed through appeals courts. The decisions of those appeals courts can subsequently be taken to a state Supreme Court or the United States Supreme Court. It is important that you review the study materials to understand diagrammatically how business law disputes navigate through the sometimes Byzantine system of parallel laws and courts in the United States.
Alternative Dispute Resolution
It is also important to recognize, especially given the avalanche of business litigation that we see today, that many business parties have decided to completely avoid the system of state and federal courts, and to take their disputes to what is known as alternative dispute resolution. When parties decide to settle their agreements through arbitration or through mediation, they are essentially taking a completely different direction in handling their business transactional disputes. They agree beforehand that a disinterested, objective third party will listen to the facts from both sides and arrive at a decision that is binding upon both parties.
Critics of alternative dispute resolution have argued that arbitration does not allow for the same appeals that are available to litigants in state and federal courts, and there is some truth to this: usually an arbitrator's decision is final, and often neither party can appeal to an appeals board. Others argue with a great deal of evidence that this system saves both time and money, and allows for business disputes to be settled in a way that is efficient for both sides. Whichever side of this argument you adhere to, one thing is certain: given the skyrocketing costs of court litigation, alternative dispute resolution will be a feature of settling disputes for commercial parties for some time to come.
