Litigation FAQs

Litigation and Appeals

Can corporations avoid consumer class actions?

Corporations often use arbitration clauses in consumer sales agreements in order to limit the types of dispute resolution available should difficulties arise. Such a clause requires that the parties to the agreement resolve any disputes through arbitration. Arbitration involves the competitive presentation of evidence to a neutral decision-maker. The arbitrator makes a binding win/lose decision that usually cannot be appealed.

While arbitration has the advantages of expedience and relatively low cost, an arbitration clause precludes parties from taking disputes covered by the arbitration clause to court. Since a class action lawsuit involves direct judicial oversight, arbitration clauses thwart the development of a consumer class. Instead, each individual consumer must pursue his or her own arbitration procedure against the contracting business.

In an adhesion contract, i.e., "take it or leave it" agreements offered by businesses, the consumer must either accept included arbitration clauses or forego the goods or services. These clauses are extremely common in consumer agreements ranging from credit card agreements to car sales contracts. Such arbitration clauses may be illegal if they are unfair or constitute overreaching by businesses, and some consumers may prefer to do business with companies that do not limit their recourse.

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Why do appeals courts deal with only legal issues?

Many litigants misapprehend the role of appellate review. The judicial system distinguishes between issues of fact and issues of law. The trial jury (or judge when no jury is used) determines the facts of the case, while appellate courts review only the legal aspects of the case. One reason that appellate courts do not reopen the facts in a case is that the jury and trial court occupied a better position from which to judge the credibility of the evidence presented.

Example: Assume Andy is a witness in a criminal trial that testifies that the criminal defendant was with him on the night of the crime. Although his words clearly state that the defendant spent the evening assembling care packages for charity causes, he shifts around in his chair a great deal. Additionally, his voice shakes and he sweats profusely. If the appellate court reconsidered the evidence from the transcript, it might find the testimony more persuasive without knowledge of the witness's suggestive body language and demeanor.

Another reason that appellate courts review legal issues instead of factual matters is that limiting the factual record to issues raised at trial aids predictability and stability in society. If a plaintiff won a case but the defendant retained the ability to keep bringing in more witnesses and documentary evidence after trial, the issue would never finally get resolved and the public would lose faith in the judicial system. Finally, the court system simply does not have the resources to allow trial procedures to continue indefinitely. These reasons underline the importance of bringing all-important evidence out at trial.

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What are the prerequisites to raising a legal issue on appeal?

Even though appellate courts have the power to review legal issues, it may not consider those arguments that were not preserved for appeal. Appellate courts rule on whether the trial court committed errors that justify a change in the trial verdict; however, the appellate court will not hear arguments regarding legal issues that the lawyers did not mention at the time they arose. To receive full appellate review, counsel must have objected on the record to whatever legal issue is later raised as error.

If no objection was made, the appeals court will change the verdict only for plain or structural error. Plain error is a mistake so obvious and significant that no judge in his right mind would have acted in that way. The plain error must carry a real risk of a miscarriage of justice for appellate relief to be granted. Structural error affecting the fundamental fairness of the proceeding may also cause reversal on appeal even where the lawyer did not object.

Even if counsel raises an objection at trial and the trial judge did err, the appellate court will grant relief only if the error was harmful. If the error did not affect the outcome, the appeals court will not change the trial court's verdict. Most trial court errors are found harmless under this analysis on appeal.

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Why does changing the description of a debt change a creditor's rights in bankruptcy?

Some forms of bankruptcy litigation allow creditors to object to the discharge of debts owed to them. In bankruptcy, many debts can be discharged or dissolved, but some debts cannot be treated this way, and the obligation to pay survives the bankruptcy. Creditors can argue that their debts are non-dischargeable because they belong to one of these categories, entitling them to collect from the debtor. The following list provides some general debt categories that are not dischargeable in bankruptcy.

  • Federal, state and local tax claims
  • Mortgages
  • Liens on property
  • Customs duties
  • Spousal support
  • Child support
  • Student loans
  • Secured debts
  • Government fines and penalties
  • Debts incurred through fraud
  • Punitive damage claims for some actions
  • Debts not listed in the bankruptcy application

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What is small claims court?

Most states have a small claims court available for citizens to resolve smaller disputes without the formality of a full-fledged trial. Typically, the plaintiff can file a simple form stating his or her claim with the state trial court division. The court sets a trial date and notifies the defendant of the suit. Generally, the parties appear before a judge and make their arguments in an informal manner. The judge may make his or her decision immediately, or mail it shortly after the trial date.

Despite the informality of the procedure, court standards still apply, and the parties must assert legally valid claims and defenses for an effective result. Many small claims court litigants consult an attorney to define their arguments. Small claims courts usually set no lower limit on the amount that may be recovered, but do cap the maximum amount that may be in issue. The procedure can offer a quicker and cheaper alternative for relatively small cases, but winning plaintiffs still face problems enforcing their judgments. Prevailing parties may need to garnish wages or bank accounts in order to recover their damages.

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Do military personnel enjoy the same constitutional protections in a criminal case that civilians do?

Military personnel are not excluded from the rights set forth in the Constitution and Bill of Rights, but the Constitution does give Congress the power to make rules regulating the military services that may affect constitutional rights. The military law applies to members of the armed services even when they are on leave or otherwise away from the base, so the impact of military law on their constitutional expectations extends into their personal lives.

Generally, most civilian rights are afforded to military personnel to the extent possible in the military context. Military appellate courts seem to attempt to interpret military law consistent with civilian standards. For some issues, military personnel enjoy broader protections than civilians.

Example: Civilians must receive Miranda warnings only during questioning in police custody. Military laws require a Miranda-style warning before any military suspect is questioned, whether or not he or she is in custody. Under the military rule, if a member of the armed services is under suspicion for a crime but not in custody, he or she must receive information about his or her rights before a military official begins questioning the individual regarding the suspected crime.

In other areas such as search and seizure, military personnel have reduced expectations of privacy, which in turn reduces their constitutional protections against these types of activities.

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What is a statute of limitations?

A statute of limitations is a legal deadline by which a plaintiff must start a lawsuit. If the plaintiff does not start his or her lawsuit by the time the statute of limitations runs out, then he or she is barred from bringing the action. Both the federal and state legal systems use statutes of limitation in order to prevent old claims from coming out many years later contrary to the expectations of all the parties. Additionally, statutes of limitation help ensure the relevant evidence is available for review at trial. The time period varies by the type of lawsuits and the jurisdiction, so it is important to find out what the time limits are for each specific case. Even a strong case can be dismissed if brought hours after the statute of limitations deadline.

While the idea of a time limit may seem simple, it can be difficult to tell when the statute of limitations starts running. Some limitations begin to run when a plaintiff knew or should have known of the claim.

Example: If ABC Roofing installed a new roof on a house that started to leak right away, but the homeowner did not look in the attic for eighteen years to notice the water damage, the homeowner has waited too long to bring a suit against ABC. Even though the homeowner just found out about the damage, he could have been reasonably expected to find the problem in a shorter length of time.

Sometimes, the statute of limitations is tolled or stopped during certain periods. If the defendant is out of state and cannot be brought before the court, the statute of limitations stops until he or she returns. Insanity and minority can also stop the statute of limitations while the plaintiff remains insane or underage.

Even though the statute of limitations for a particular action may not run out for many years yet, plaintiffs should pursue their actions in a timely manner. The statute may have started to run earlier than the plaintiff expected or the best evidence may be lost if there is a lengthy delay.

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What is an interference hearing and how does it affect patent protection?

First-to-file countries grant patent protection to the original filer of the patent application, rather than to the original inventor. Therefore, whoever first makes the application to the national patent authority gains patent protection in that country. The United States is the only country to use a first-to-invent system, which grants patent protection to the first party to create an invention, regardless of who filed first.

Because it is harder to prove who first invented a device, the Board of Patent Appeals and Interferences may conduct administrative hearings to determine who really invented a given product when multiple applications are pending or occur close in time. The board uses a strict analytical model to find the original creator of the invention. The board considers evidence of conception, construction, patent application, and other issues.

Because the first-to-invent standard makes it easier to challenge the validity of a patent, inventors should consult with an attorney regarding the best methods for recording invention processes. Many inventors maintain notebooks that describe their activities in detail. Some prepare signed and witnessed disclosure documents as the inventive process continues.

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In what ways can the Court of International Trade help domestic industries compete with imports?

Imported goods may pose a threat to domestic industries by competing unfairly. Two common issues raised against importers are that the imported goods were either dumped on the American market at an unfair price or that the goods benefited unduly from a foreign subsidy. Both claims stem from difficulty competing with low-priced foreign goods. Parties injured by either of these activities can bring the matter before the International Trade Commission. This body may impose antidumping or countervailing duties to bring up the price of the imports to aid the domestic producers. The Court of International Trade reviews final ITC decisions. The court may also review negative determinations by the government body that the domestic party suffered no material injury. The court will review appeals from negative determinations to find whether the government investigated the following factors:

  • The change in volume of dumped or subsidized imports;
  • The effect of the imports on prices in the domestic market; and
  • The impact of the imports on the domestic industry, including sales, profits, market share, productivity, and other factors.

Many findings of material injury by the ITC or the Court of International Trade must be reviewed periodically, so parties receiving assistance from a countervailing or antidumping duty should know when the aid will expire and the procedures for urging its continuation.

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If the Constitution only mentions the Supreme Court, how did all the other federal courts develop?

The U.S. Constitution directed the creation of a federal judiciary. While the Supreme Court was the only court expressly mentioned in the document, the Constitution gave Congress the power to establish other federal courts. As Article III, Section 1 states, the "judicial Power of the United States shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish."

Although our current federal court system seems very well established, it is only the latest edition of the federal judiciary. Historically, Congress changes the judicial system to fit modern requirements.

The federal court system contains three levels. District courts have original federal jurisdiction. There are ninety-two districts, with at least one in each state, the District of Columbia, and Puerto Rico. The circuit courts of appeals hear appeals from the district courts, as well as cases involving federal regulatory agencies. The U.S. Supreme Court is the country's highest court. Congress also created some special federal courts, such as the federal claims court and the tax court. Some of these special courts are of very recent vintage, and show Congress's continuing role in adapting the federal judiciary to fit legal and public needs.

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Learn More: Litigation and Appeals

Litigation and appeals are the fundamental building blocks of our adversarial legal system. Litigation refers to the process of putting a case before a trial court, including the pretrial procedures leading up to that point, while appeals typically occur after the trial court reaches a decision with which one side disagrees. These distinct steps exist concurrently on the state and federal levels, with ultimate appeal to the U.S. Supreme Court for both systems.

While inextricably linked, trial and appellate courts perform completely different functions. At trial, the parties present evidence to support their legal arguments, creating a factual record. The attorneys may present documents or examine witnesses to build this record, which closes at the end of the trial. After the trial court's decision is rendered, the losing party may choose to appeal the decision to the relevant appellate court; however, the appeals court may consider only legal issues, and may not alter the trial court's factual record. The appellate system reviews the application of the law to the existing record and the actions of the trial court in making its decision. The judicial system incorporates special procedures to deal with particular legal challenges at both the trial and appeals levels, with each adaptation causing an increase in specialization among lawyers.

Bankruptcy litigation follows a bankruptcy petition, and includes attempts by a bankrupt debtor's creditors to satisfy their losses despite the bankruptcy. Creditors may argue that the bankruptcy is fraudulent, or they may seek to establish a higher claim to the bankruptcy estate.

Class actions involve a group of plaintiffs (or sometimes defendants) who share certain damages or types of legal claims. The group, or class, consolidates its arguments into a single lawsuit for resolution in court. Since most class members will not have their own lawyers, courts require special procedures to protect class members' interests.

Complex litigation results from unusual fact patterns, multiple parties, and novel legal theories. The litigation process for these complicated cases may stretch out over the course of years in order to address all the competing legal claims. Class actions are one common type of complex litigation.

Federal appellate practice includes appeals from federal trial court rulings and secondary appeals from initial appellate decisions. The U.S. Courts of Appeals for the various federal circuits and the U.S. Supreme Court hear federal-level appeals. These courts cannot reconsider the facts of the original case, but review the decisions in light of legal standards.

The Federal Claims Court is a specialized court created by Congress to address lawsuits for financial compensation brought against the U.S. government by its citizens. The court can hear a wide variety of cases and has a reputation for fairness and objectivity.

Federal trial practice happens before the U.S. District Courts. The district courts hear all types of federal cases, and employ specific rules of procedure that must be observed by litigants. Appeals from district court decisions are taken to the U.S. Court of Appeals for the relevant federal circuit.

International trade litigation takes place before the U.S. International Trade Court. This specialized court deals exclusively with international trade and customs disputes involving the federal government. Would-be litigants must clear administrative hurdles before bringing cases before this court.

Military and Veterans Appeals include both appeals from U.S. courts martial and from the Board of Veterans' Appeals. Two dedicated courts, the U.S. Court of Appeals for the Armed Forces and the U.S. Court of Veterans' Appeals, handle appeals from some court martial convictions and from adverse administrative decisions on individual veteran's issues respectively.

Multi-district litigation involves the consolidation of pretrial procedures for several related federal cases. A single court administers discovery and pretrial motion practice for all the cases, and then sends each individual case back to its original court for trial and final adjudication.

Patent litigation occurs when a patent holder suspects another party of infringing its patent rights. The patent holder can sue the accused infringer to recover monetary damages, as well as to receive a court order stopping the other party from continuing to violate patent rights.

State appellate practice involves appeals from state trial courts. Appellate systems vary from state to state and may involve two layers of appellate review. Parties can make appeals from decisions of the state's highest court to the U.S. Supreme Court.

State trial practice includes the cases that the largest number of non-lawyers encounter. Since the federal courts can handle only those cases specified in the U.S. Constitution, the state courts deal with the bulk of day-to-day legal business. State trial court decisions may be appealed through the individual state's appellate court system.

Tax litigation occurs when a taxpayer disputes decisions reached by the Internal Revenue Service. The taxpayer can choose the court he or she prefers to hear the case. Depending on the choice, the taxpayer may need to pay the disputed amount prior to judicial review.

U.S. Court of Appeals for the Federal Circuit handles appeals from several special courts established by Congress. This court exists alongside the federal circuit courts of appeals that hear appeals from the U.S. District Courts.

The U.S. Supreme Court is the highest court in the nation and the only court explicitly required by the U.S. Constitution. In most cases, the Supreme Court uses its discretion to choose for review the most significant legal issues raised by the hundreds of petitions it receives each year.

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