It has been observed to a person with a hammer all problems look like a nail. In the context of the legal profession, which is to say in the context of people trained in the formal legal process as a method for resolving disputes, other methods of resolving disputes can seem as ‘alternative’ as a screw and a screwdriver might seem to the person with a hammer.  In reality, the vast majority of disputes are resolved without recourse to legal institutions or even legal rules. What’s more, great lawyers do not reflexively frame their clients' disputes in terms of formal legal process, but instead consider whether other methods of resolving the dispute might yield better results or come at a lower cost.

     This consideration may come when a dispute has arisen and even when litigation has begun. It can also arise, however, when a cooperative business relationship is being put together, so that if disputes arise, as they foreseeably can, the question of how they can best be resolved has already been put to rest. Even those who anticipate becoming transactional attorneys and never personally appearing in court need to have a sophisticated understanding of the benefits and the costs of resolving disputes in different settings and in different ways. 

     The following excerpt addresses dispute resolution methods from the perspective of a transactional lawyer. It walks through the major options that are relevant, and some of the advantages and disadvantages of each. Great lawyers have internalized the information that follows. Be sure that you do as well.

From William F. Fox, International Commercial Agreements and Electronic Commerce (6th Edition 2018). Used by permission of the author.

     § 3.4  PLANNING FOR DISPUTE RESOLUTION

     Many persons entering into international agreements for the first time find it difficult even to contemplate something going wrong with the deal. People enter commercial transactions with the expectation that the contracts will be fully performed. Frequently when a negotiation session is going well and after some decent personal relationships have been formed, it is almost impossible to look across the table and conceived of the other person reneging on the deal. But it is in the planning and drafting process that a party must anticipate problems and must consider how disagreements might be managed if they do arise.

     Dispute resolution is the management and resolution of conflict between the parties that can range over a broad spectrum of different possibilities. It is something that cannot be ducked in international commercial transactions because the parties will be at great distances from each other after the agreement is consummated. The people responsible for drafting and negotiating the agreement are rarely those who have the day-to-day responsibility for performance. Even if the parties have the greatest sense of well-being and security at the time of signing the contract, external conditions can still disrupt the agreement no matter how much personal regard and trust the negotiating parties have for each other.

     For this reason, virtually all properly drafted international contracts contain some kind of dispute resolution clause. For those contracts fully performed without incident, the clause is superfluous. However, for those deals that fall apart, the clause can be crucial. A few minutes of inattention to dispute resolution at the planning and drafting stage of an agreement can cost millions of dollars later on when a dispute has to be resolved.

     Many dispute resolution clauses are drafted haphazardly and put in as an afterthought and without the consideration that they really deserve.Many less-than-acceptable clauses simply incorporate some boilerplate from a book of forms with very little inquiry into how the clause might actually work if a dispute occurs. Worse, garden-variety dispute resolution clauses often incorporate the more rigid techniques of dispute resolution such as arbitration and litigation without obliging the parties to try to work things out between themselves in a milder, less-threatening setting such as renegotiation or mediation.

     A lot of these mistakes are made because many of the people who drafting plan contracts know relatively little about dispute resolution. The following discussion is an introduction to the various forms of dispute resolution for contract drafters and planners. Chapter 4 sets out some useful dispute resolution clauses, and chapters 8 through 13 of this book contains an extensive discussion of each of these different devices as they are employed in practice.

     There is no uniform worldview of dispute resolution. Lawyers in the United States have a favorite saying: “One person’s delay is another person’s due process.” Developing proper dispute resolution procedures in domestic controversies now occupies a great deal of the time of many US legal scholars.  In international transactions many additional factors, such as cultural and language differences, often affect dispute resolution process. For example, the antagonism and ferocity of US litigation is taken for granted in the United States, but is regarded as totally unproductive – perhaps even despicable – by societies in the Far East and elsewhere in the world. Understanding the apprehensions that these cultural differences create might persuade the parties negotiating a contract to opt for some less-drastic dispute resolution mechanism – such as mediation – to be attempted before a more adversarial process such as arbitration or litigation is utilized.

     Yet those processes which are less adversarial such as mediation and arbitration are often much less final and certain; and finality of result (i.e., The understanding that a dispute has been conclusively resolved and that the final decision is enforceable against the losing party) is very important in most commercial transactions. Agreeing to engage in a process of dispute resolution that cannot lead, in and of itself, to a final decision may have the effect of lengthening the overall dispute resolution phase of an agreement and multiplying the cost of obtaining a permanent resolution of the dispute.

     There are a number of devices regularly used to resolve international commercial matters. They include the device of adaptation by which the contract itself is drafted in a sufficiently flexible fashion to accommodate unanticipated occurrences such as supply shortages, strikes or sharp price increases or decreases. Similarly, since international contracts are normally the product of negotiation by definition they are always subject to renegotiation. Frequently, adaptation and renegotiation go hand in hand. The twin concepts of mediation and conciliation are essentially processes by which negotiation between the parties takes place in the presence and with the assistance of a third party who is sometimes referred to as a facilitator. The more structured forms of commercial dispute resolution, arbitration and litigation, are probably the best known among the public at large and easily the most frequently utilized devices on the international level but each of these can still be rigid, costly, time-consuming, totally under the control of specialists, and so adversarial that the parties’ relationship is permanently damaged.

     § 3.4.1 ADAPTATION

     Contract provisions such as force majeure clauses and flexible pricing terms that turn, say, on the increase or decrease of a published cost of living index are provisions that allow a contract to change with new circumstances without provoking a breach or forcing the parties into some kind of formal dispute resolution. Long-term contracts almost always contain a number of adaptation provisions. Frequently, even when the contract does not contain such clauses, the law underlying the contract will supply certain adaptation and gap-filling terms. For example, under the UCC a contract for the sale of goods does not even have to specify a price. If the contract is silent as to price, UCC section 2-305 provides that the price is “a reasonable price at the time of delivery [of the goods.]” The legal doctrines of impossibility and frustration may excuse performance in whole or in part or for a certain period of time even if the contract does not contain a force majeure clause or even if the force majeure clause does not expressly cover the incident that has caused the problems.

     § 3.4.2 RENEGOTIATION

     If the contract cannot itself adapt to changing circumstances, the parties may always renegotiate. Some parties place an express obligation of renegotiation in the contract with the expectation that the parties will not resort to a more formal method of dispute resolution without first trying to talk to each other. Some companies that have a large stake in preserving existing contracts, such as the US airplane manufacturer, Boeing Corporation, insert renegotiation clauses in their contracts that specify that the renegotiation must take place between two high-level corporate officials. In multi-billion-dollar contracts to be performed over a period of many years, renegotiation can be a matter of life and death for the contracting parties. Like the initial negotiation, renegotiation is simply a dialogue or discussion between the disputing parties that has as its goal the resolution of the dispute by mutual agreement. Normally, it is cheap, quick and has the advantages of a solution that is neither coerced nor imposed by external entities. One of its best features is that it can be undertaken while the contract continues to be performed. To the extent that a negotiated solution is possible, it is almost always the most advantageous and cost-beneficial device.

     § 3.4.3 MEDIATION/CONCILIATION

     The twin devices of mediation and conciliation are, as noted above negotiation in the presence of or with the help of a third party. In some settings, mediation may be nothing more than a friendly conversation. In other settings, particularly when conducted under formal commercial mediation rules it can rival the formality of commercial arbitration. To a certain extent, mediation has many of the advantages of a negotiated settlement in then that it is relatively uncoerced, fast, and confidential; but in complex matters it may take a great deal more time. The addition of the third-party mediator is an additional expense and the educating of that person on the facts of the dispute can lengthen the proceeding. However, to the extent that the parties believe they have worked out the final solution themselves (albeit with the assistance of a third party mediator), they may find the end result highly satisfactory.

     § 3.4.4 ARBITRATION

     Most international commercial agreements call for arbitration of any disputes that may arise under the contract by incorporating standard form arbitration clauses. These clauses, in turn, usually incorporate the procedural rules of one or another of the major international arbitral bodies such as the ICC or UNCITRAL. Some clauses incorporate the rules of a national arbitrable body such as the AAA or the Japan Commercial Arbitration Association. Some local or regional business entities, such as the Stockholm Chamber of Commerce, promulgate rules and supervise arbitration proceedings.

     Under modern procedural systems, arbitration is essentially the litigation of a dispute before an arbitrator rather than a judge. The procedure is adversarial and almost always handled by lawyer-specialists. However, there are many arbitrations in which nonlawyer sit as arbitrators and there is usually no requirement that either the representatives of the parties or the arbitrator be a lawyer. It is just that arbitration is such a complicated undertaking and is so close in concept to Anglo-American style litigation that most parties put themselves in the hands of their lawyers if they have to arbitrate. Often, the arbitration clause will require that the arbitrator be expert in the underlying subject matter. For example, an arbitration clause in, say, a construction contract might call for an arbitrator with at least 10 years’ experience in the construction industry.

     Parties who are worried about the ability and for integrity of a single arbitrator, irrespective of whom that person may be, often provide for a three-person arbitration panel with each side choosing one of the arbitrators. The two party-appointed arbitrators then pick the third member of the panel, who normally chairs the panel and presides over the arbitration. Contrary to the beliefs of many laypersons, arbitration is often costly, time-consuming, and far from satisfactory. Especially antagonistic opponents frequently go into court both before, during, and after the arbitration to test the ultimate validity of the process. As a result, arbitration is not always a complete substitute for litigation. The administrative fees that must be paid at the outset merely to commence the arbitration under the supervision of organizations such as the ICC or the AAA are substantial.

     There is very little so-called nonbinding arbitration in international commercial arbitration. To the extent that this concept exists, it is probably only a species of mediation and is used mainly in the labor relations sector. Thus, the decision of a commercial arbitrator is – at least in theory – final and conclusive. However, in certain instances when the losing party balks at the decision of the arbitrator, who issues her decision in the form of an arbitral award, it must be taken into some domestic court system for confirmation and enforcement against the losing party. Sometimes a party will refuse to commence arbitration. Then the party seeking arbitrate must resort to domestic courts for an order compelling the other party to arbitrate.

     Even with these inherent disadvantages, arbitration is generally favored by most commentators and appears to be the dispute resolution device of choice in most international commercial agreements. One of the major reasons for this pride-of-place is that an international treaty, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards – permits the enforcement of arbitral awards rendered in one country to be enforced in another country. Except within the EU, there is no parallel treaty for the enforcement of court judgments. As a result, if one is worried about where enforcement might take place, arbitration is often superior to litigation.

     § 3.4.5 LITIGATION

     Litigation is a formal proceeding conducted in an appropriate court in the country of the buyer or the country of the seller, or in some instances in a country perceived to be neutral by the parties. There is really no such thing as international litigation or an international court for parties to private agreements. The International Court of Justice at the Hague is restricted to disputes between countries, although it has served as the site for arbitration of commercial disputes between United States and Iran under the Algerian accords of 1981. As litigation’s detractors constantly note, the process is expensive, costly, and often protracted. It can be handled only by lawyer-specialists. Indeed, in many countries no one other than a lawyer may litigate a case.

     In many circumstances, litigation can cause additional hostility and antagonisms between the parties. Unlike arbitration or mediation, parties usually do not resort to litigation until and unless the entire agreement has fallen completely apart. By contrast, arbitration and mediation can often be utilized to resolve a dispute that arises within the overall commercial undertaking without terminating the agreement itself. Litigation has some advantages. It is generally final when concluded – that is, there is usually no other form (other than an appeal to a higher court) and no other recourse for the losing party except to honor the judgment of the court. The failure to comply with the court’s judgment in most countries creates contempt of court problems for the recalcitrant party.

     Litigation is sometimes a mechanism of choice even in international commercial contracts, because a number of lawyers – particularly in the United States – are cynical about the other forms of dispute resolution and conclude that they might as well go into court in the first instance because in all likelihood that is where the parties will wind up in any event. However, there some special difficulties in using litigation and domestic courts to resolve international commercial disputes. Domestic courts frequently lack jurisdiction over parties in other countries. They also have a great deal of difficulty in enforcing their judgments abroad. To a certain extent, domestic courts can evidence prejudice against foreign parties who come into those courts.

     Some contracting parties try to eliminate the problem of local prejudice by providing for litigation in the courts of the third country. To the extent that the third country agrees to hear the case, this maneuver is always a possibility. For example, in one important case eventually decided by the United States Supreme Court, the Bremen v. Zapata Off-Shore Oil Company, a dispute arising between a German shipping company and an American oil company, the contract provided for dispute resolution in the High Court of Justice in London. Great Britain had nothing to do with the contract or the two parties. The United States Supreme Court honored that choice of form even when one of the parties tried to litigate the dispute in federal court in the United States. Within the EU choice of forum causes, including causes a call for litigation in a neutral form, are generally honored so long as one of the parties is deemed to be domiciled within the jurisdiction of a country that is part of the Union.

     § 3.4.6 OTHER FORMS OF DISPUTE RESOLUTION

     There are other forms of dispute resolution worthy of attention that may have increasing utility for commercial disputes even know they are not commonly used by the international business community. For example, businesses in the United States have experimented with a commendable device known as the minitrial, a procedure in which lawyers for the contending parties present a summary of each party’s case to an important corporate official, such as a corporation VP, for each of the parties. That official must attend the proceeding with express authority to settle the case. The executives listen to a short presentation by the parties’ attorneys and are frequently assisted by a third-person referee, often a retired judge. After the abbreviated presentations are concluded – and normally they last only a day or so – the executives and the referee consider the presentations and attempt to negotiate a final agreement.

     Some jurisdictions in the United States, notably the state of California, now permit parties to seek out and hire their own judge in a program formally referred to as the California Reference Procedure, but colloquially labeled rent-a-judge. No party can be forced into this procedure, but if both parties agree to its use, it is helpful in moving quickly to a resolution of the case because it avoids the congestion of the regular system of state courts (many civil cases in the United States take 3 to 4 years to reach a final decision). Moreover, the decision rendered by the judge is binding on the parties just as if it had been rendered in a regular court. There is no evidence that the rent-a-judge procedure has caught on elsewhere in the world, however.

     Having set out these elaborate descriptions of the various forms of dispute resolution, it may be helpful to see some of the same ideas presented in pictorial form. The following chart, see figure 3.1, depicts the alternatives in terms of various factors [this chart is available on TWEN]. On the left side of the chart are the factors of time, cost, and tonality. Those factors increase as one moves down the chart. For example, the mechanisms become more time-consuming (in terms of how long from start to finish it normally takes to complete the procedure) and more expensive. By definition, litigation – because it is procedurally far more complex and because it is heavily dependent on court-imposed timetables in court-created congestion – is more expensive than mediation. The final factor on the left side of the chart, finality, simply reflects whether the parties may move to another form of dispute resolution if they do not like the result in the mechanism in question.

     Put another way, if mediation fails or an arbitrable award is not complied with voluntarily by the losing party, the parties must normally go into court to resolve the dispute. By contrast, there is no subsequent dispute resolution forum after litigation. There the parties receive a final judgment rendered by court that must be complied with, so long as the court has jurisdiction over both parties. All the mechanisms other than litigation require consent by both parties. Litigation is the only process that one party may utilize without the consent of the other side. (Of course, even this requires a small disclaimer. If the parties have already signed an agreement to arbitrate, they will be held to that agreement even of one party now wishes to litigate.)

     The factors on the right side of the chart, party autonomy and confidentiality, decrease as one moves down the list. Party autonomy is a matter of party control. Obviously, the parties have less control over an arbitration or court proceeding (those devices are much more the hands and under the control of arbitrators or judges) than over renegotiation. As one moves down the list, the dispute is placed in the hands of neutral, third parties over whom the disputing parties have very little control. The factor of confidentiality is frequently an important one in commercial dispute resolution, particularly for those disputes that involve important commercial or trade secrets. To the extent that one moves down the chart, more and more people become aware of and have knowledge of the parties’ dispute.

     None of these procedures is perfect. No perfect procedure is likely to be discovered. For persons engaged in planning and drafting international commercial agreements, one thing is clear. To the extent of the parties do not choose a method of dispute resolution on their own, one will be imposed on them whenever a dispute arises under the contract.

     It is worth remembering that the conflict resolution techniques listed above are not mutually exclusive. In many cases, one or more of these methods may operate, even in parallel.

     For example, in what has come to be known as “bargaining in the shadow of the law,” many negotiations take place against the background of what is most likely to happen if the matter is taken to court or arbitration. Negotiators take into account both the risk-adjusted probability of success or failure and the cost of the process in evaluating whether a negotiated agreement would better serve their needs. In the United States, most litigated matters never make it to trial. They are either resolved by motion practice or, quite often, settled by negotiated agreement, with the negotiations proceeding even as litigation continues. Far fewer than 10% of all filed cases end up being tried.

     One difference between courts (state-hosted litigation) and the other methods of resolving conflict is that courts do more than just resolve the dispute between the parties. They serve a public function. In common law systems, the resolution of the dispute creates law that can be applied to other cases. In the United States, litigation also serves a regulatory function, with many industries regulated as much through litigation as through government ministries.

     What happens when this regulatory function is cut short by pushing cases into arbitration? The following case suggests but does not squarely address the societal costs of that issue.

     As a dispute resolution system, arbitration is exceptional in a number of ways. First, to a high degree, arbitration awards in proceedings that operate pursuant to the New York Convention on arbitration are enforceable in government operated legal systems worldwide. In fact, it is generally considered easier to enforce an arbitration award than a foreign court judgment.

     Arbitration is also exceptional in that parties can elect ahead of any ripe dispute to submit disputes to arbitration, and so be foreclosed from going to government run court systems. By contrast, those who agree to negotiate or mediate may still proceed to government run courts if no voluntary agreement is reached. Arbitration serves as an either/or - electing arbitration closes the doors to the courthouse.

     In systems where litigation serves a public purpose, as it does in common law systems where cases build out the law, arbitration reduces the grip of the legal system on those public issues. Large scale redirection to arbitration can also impact the regulatory function of litigation by making aggregrate litigation of common disputes uneconomical if not impossible.

     Different countries vary in what they consider a binding agreement to submit a potential matter to arbitration. In some countries, the level of formality has to be high (a clear remit in governing legal documents); in others, more informal documentation, such as exchange of emails, may suffice. In addition, to the degree that contract laws differ by nation, issues such as public interest and unconscionability may figure differently.

     The following case illustrates the US policy of favoring arbitration.

     1. We have omitted a concurrence by Justice Thomas (what is a concurrence?) and a dissent by Justice Breyer (what is a dissent?). If you have any doubts that you can give a correct definition, now is a good time to go to Black's Law Dictionary. We also have removed many of the citations and embedded page numbers to make reading easier; we will do this for most cases included in this book but not always. 

     2. One takeaway from AT&T Mobility should be clear: the US courts have a strong policy favoring arbitration. One of the points of dispute about the case is to what degree that strong preference is, in fact, desirable. In the US system, both arbitration awards and litigation in a court can resolve individual disputes. However, in litigation, unlike arbitration, litigation can create new law and provide a public vindication of rights. In many cases, the arbitration agreement provides that outcomes remain private, which means that other potential litigants with similar claims may not be made aware of their claims. On the other hand, shifting disputes to private resolution can reduce costs for the parties and take a burden off the court system. In his celebrated article, Against Settlement, 93 Yale L.J. 1073 (1984), Professor Owen Fiss takes aim at settlement and other alternative dispute resolution devices:

"In my view, however, this account of adjudication and the case for settlement rest on questionable premises. I do not believe that settlement as a generic practice is preferable to judgment or should be institutionalized on a wholesale and indiscriminate basis. It should be treated instead as a highly problematic technique for streamlining dockets. Settlement is for me the civil analogue of plea bargaining: Consent is often coerced; the bargain may be struck by someone without authority; the absence of a trial and judgment renders subsequent judicial involvement troublesome; and although dockets are trimmed, justice may not be done. Like plea bargaining, settlement is a capitulation to the conditions of mass society and should be neither encouraged nor praised."

     Fiss goes on to note that in the US, litigation serves a public purpose by making law and vindicating rights publicly, among other aspects, and argues that litigation rather than settlement can be 'virtuous':

"To conceive of the civil lawsuit in public terms as America does might be unique. I am willing to assume that no other country . . .has a case like Brown v. Board of Education in which the judicial power is used to eradicate the caste structure. I am willing to assume that no other country conceives of law and uses law in quite the way we do. But this should be a source of pride rather than shame. What is unique is not the problem, that we live short of our ideals, but that we alone among the nations of the world seem willing to do something about it. Adjudication American style is not a reflection of our combativeness but rather a tribute to our inventiveness and perhaps even more to our commitment."

     What do you think? Do you think public adjudication serves a public purpose even in systems other than that of the US? In the US, much legal regulation and much definition of what the law means takes place through litigation instead of through government agencies, but that is not true to the same degree in other systems. Even within the US, if arbitration is cheaper and faster for the parties, should they feel an obligation to create a public good through litigation?

     3. Since AT&T Mobility, consumer contracts in the US increasingly, even almost uniformly, contain mandatory arbitration clauses that effectively preclude class action arbitrations in courts. One scholar in 2019 surveyed consumer contracts between the top Fortune 100 companies in the United States and their consumer customers. Of the 100 companies, 81 used arbitration agreements to avoid court litigation, and 78 specifically precluded class arbitrations.  See Imre Stephen Szalai, The Prevalence of Consumer Arbitration Agreements by America's Top Companies, 52 U.C. Davis L. Rev. Online 233, 238 (2019) 

     4.  On the other hand, plaintiffs' attorneys whose path to court is barred have developed a technique called "mass arbitration." In this approach, virtually identical arbitrations will be filed by one law firm on behalf of similarly situated plaintiffs - sometimes thousands at one time. Because the cost of arbitration is unequally divided with the corporations historically bearing the lion's share and the cost of access to arbitration by individuals kept low, the filing of 10,000 identical arbitrations can put a significant assymetrical financial burden on the defendant, even aside from the cost of attorneys' fees and any liability ultimately imposed. In response, some corporations who have pushed to move consumer complaints to arbitration are seeking new arbitration providers who are less friendly to plaintiffs.  Others, such as Amazon, have dropped their mandatory arbitration clauses altogether.

     From the beginning of organized civilization governments have provided methods for resolving disputes between the government and the public as well as between members of the public. At no time have governmental dispute resolution systems had a monopoly on resolving conflict, nor are they the only judicial or quasi-judicial processes open today to people with disputes. Nonetheless, government courts are important in many ways. Even when disputes are resolved privately, lurking in the background is the prospect of what a government court might do if presented with the dispute, which often channels the negotiations. Government courts also serve an important role for the government itself by establishing the supremacy and the authority of the government over private actors.

     There are, however, important differences between different governmental systems. As we shall see soon, different governmental systems operate under markedly different procedures. In addition, while all court systems resolve disputes, courts also play additional and sometimes different roles in the governments of their host countries. For example, U.S. courts are given a regulatory role and important lawmaking roles that are often not the case in other countries. 

     It is important for transnational lawyers to have a sophisticated and nuanced understanding of how different national court systems function. In STL you will achieve this substantially through in-depth study of the US system followed by an in-depth study of the Chinese system. This will prepare you to study other systems throughout the world.

     The following gives a thumbnail overview of some of the important differences.  It is hoped that a bit of context will help you move more quickly to an advanced understanding

     When we turn to formal, state-run judicial processes, not all systems are the same. This is true both within a country and across nations. For example, in the United States state courts may follow and often do follow a different set of procedural rules than are used in the federal courts. In other countries, on the other hand, special purpose courts exist which will follow their own set of procedures that are optimized for the kind of case they hear, such as intellectual property or international disputes.

     There are two families of judicial process that you will encounter at STL. One is the process that is typical in the United States, which has arisen from the British common law tradition. We will spend much time in this course discussing the origins and operation of the common law tradition. You will learn that the United States today no longer represents a pure common-law tradition, as it is been overlaid to a significant extent by statutes and codes, but nonetheless the common law process and the role of judges in that process still form an important part of the US process.

     The common law tradition is found in much of the world where the British empire had influence – the UK, Ireland, the USA, Canada, Australia, New Zealand, India, Pakistan, Singapore, Israel (partially), much of sub-Saharan Africa, Hong Kong, and various other former British colonial outposts. Each country’s application of the common law differs and is a source of comparative study even within the common law family. In some jurisdictions, while there is a common law tradition the current application is better described as a hybrid between the civil law and the common law. In this course, we will go deep into how the US system operates but not so much into other common law jurisdictions.

     The other family of legal traditions that you will encounter will be the civil law systems.  The civil law derives not from the British tradition, but from the continental European tradition, in which bodies of law and procedure are compiled into codes. These codes are given legal effect by a legislature or an executive, and then applied by judges whose case-by-case rulings are not understood to change or extend the law. Early examples of civil law codes include one developed under the Roman Emperor Justinian, whose code still has influence more than a millennium and a half after it was first created, and that of the French Emperor Napoleon, who ordered the creation of a code that had significant impact in Europe and throughout the French empire. To a significant degree, the statutes in China draw upon the civil law tradition, both with regard to substantive law and to procedure, although, of course, the Chinese courts also reflect unique aspects of Chinese tradition and governance. In general, the Chinese procedural code was significantly adopted from that of Japan, which in turn had much earlier adopted the German procedural code as then used in Germany. In recognition that your education at STL will include courses with distinguished Chinese scholars, we will leave extended discussion of the Chinese system to the professors expert in that area.

     There are, of course, many other dispute resolution systems that have existed and that could exist. The process used in imperial China, for example, was neither a common law nor a modern civil law system.

     The differences between the common law and civil law systems are both substantive (which is to say, in the way law is created) and procedural. We will look briefly at both categories of differences.

     In a pure civil law system, judges apply rather than make law; the relevant civil codes are the exclusive source of all law, and new law comes only from legislative action. Interpretations of the law by a court might be persuasive, of course, but courts are under no obligation to match an application of the law to prior cases.

     In reality, how things work may not match this ideal in any given civil system. In China, for example, you will encounter the Guiding Case system, and you will be able to form your own opinion as to whether and to what degree the guiding cases effectively make interstitial law by providing guidance where there are gaps in the statutory language.

     In the common law systems, judges do make law. They make law both in the purely traditional common law way, where the body of law has arisen from cases. Tort law and contract law, for example, in some jurisdictions reflect this. Beyond that, and increasingly commonly, judges make interstitial (filling in the spaces) common law. While a statute or the Constitution provides a text for interpretation, the judicial interpretations of that text have binding status. For example, both the interpretation of the Constitution and the interpretation of major statutes such as the Sherman Antitrust Act reflect this process, with the 'law' being much more case created than text created even though the statutory or Constitutional text is a necessary and confining starting point. In many areas of law the interstitial judicial rulings are effectively the law.

     How cases make law depends on a doctrine called stare decisis. What is stare decisis?

“The rule of adherence to judicial precedents finds its expression in the doctrine of stare decisis. This doctrine is simply that, when a point or principle of law has been once officially decided or settled by the ruling of a competent court in a case in which it is directly and necessarily involved, it will no longer be considered as open to examination or to a new ruling by the same tribunal, or by those which are bound to follow its adjudications, unless it be for urgent reasons and in exceptional cases.” William M. Lile et al., Brief Making and the Use of Law Books 321 (Roger W. Cooley & Charles Lesley Ames eds., 3d ed. 1914).

     The concept of necessarily decided seems, in the abstract, clear enough. If a statement of law is not necessarily decided, that is to say if the court could have reached the same result without reaching that issue, it is dicta and not part of the holding. In application, the concept of “when a point or principle of law has been once officially decided or settled by the ruling of a competent court in a case in which it is directly and necessarily involved” may prove harder than it at first appears. Making this determination is a point that will be covered over and over again in your classes at STL as you are asked to provide the holding of a case. You will find that when a point of law is “directly and necessarily involved” can be elusive.

     Aside from this classic application of "necessity" in determining what a holding is, there are variations. Some state supreme courts and the federal Ninth Circuit Court of Appeals in the US use a somewhat less strict approach that has been called the 'adjudicative model' of holdings.

In these jurisdictions, a holding is any ruling expressly resolving an issue that was part of the case. Courts in these jurisdictions eschew a narrow focus on the actual outcome, looking instead to every issue that could have affected a possible outcome of the case. Call this the “adjudicative model” because the key question is whether an issue has been ruled on--that is, adjudicated--not whether that ruling was necessary. Unlike the necessity model, the adjudicative model embraces the courts’ law-declaration function, rather than viewing it as a regrettable side effect of dispute resolution.

Charles W. Tyler, The Adjudicative Model of Precedent, 87 U. Chi. L. Rev. 1551 (2020)

     Aside from what courts say a holding is, lawyers and scholars sometimes take a more nuanced approach and look to the signaling effect when the same or a similar set of judges is involved, even if the stated rule is not quite directly or necessarily involved. For now, we refer you to an excellent treatment of holdings by Professor Larry Solum on his Legal Theory Lexicon. We do this for two reasons. First, as with our reference to Black’s Law Dictionary, we want to direct your attention to the excellent resource that Professor Solum’s site represents. Many foundational issues of legal theory are covered in the blog with precision and nuance, and are accompanied by a carefully curated selection of additional resources. We suggest that you browse through the site and go back whenever some of the guiding concepts of first-year study prove confusing. Secondly, we think he handles the issue well. To access his treatment of holdings, go to:

     https://lsolum.typepad.com/legaltheory/2019/04/legal-theory-lexicon-holdings.html

     If you have difficulty reaching his site, which may be blocked by the great firewall because of the blog service it is hosted on, a copy of this entry is available on TWEN.

     The processes of civil law systems also often differ from the processes of common law systems. There is a difference in how the litigation proceeds - in a common law system the parties define the issues and select the evidence; the role of the judge has been compared to that of a baseball umpire calling whether a pitch is a ball or a strike (if you are unfamiliar with baseball, as many non-Americans are, this is similar to calling whether the ball in a tennis or ping pong match lands inside or outside the line, but not serving the ball). Civil law systems often have the judge more directly in charge of the litigation, selecting the issues to be briefed and requesting evidence to be presented. Such judges are sometimes referred to as inquisitorial judges. Some argue that academic scholarship is more important in civil law system as it helps to guide judges on issues left open by the statutes.That said, the differences sometimes are exaggerated. Some argue that common law and civil law systems are converging, although this claim also is sometimes exaggerated.

     Professor Langbein, elaborating on his famous law review article, John H. Langbein, The German Advantage in Civil Procedure, 52 U. Chi. L. Rev. 823 (1985), has summarized the differences:

“The conduct of civil litigation in Continental legal systems differs markedly from the Anglo-American tradition, although the differences should not obscure the fundamental similarity that both are adversary systems. In Continental systems lawyers for the litigants play important roles in formulating their clients' positions, nominating lines of factual inquiry, and overseeing the work of the court. The greatest difference between the two traditions is the allocation of responsibility for identifying and investigating disputed issues of fact. In our procedure, the adversaries gather potential proofs in out-of-court pretrial discovery proceedings; and if the case resists settlement, the adversaries select and adduce proofs at trial. In Continental practice, by contrast, the court determines the sequence for investigating issues of fact; and, subject to adversary oversight, the court examines witnesses. Our distinction between pretrial and trial is unknown; rather, a European court investigates and adjudicates in discontinuous hearings, as many as the case requires.

*     *     *

“Beyond description, the article had the further purpose of highlighting the main advantages that arise from the German tradition of judicial control of fact-gathering: (1) By having the trier control the sequence of fact-gathering, the Germans are able to minimize unproductive investigation; in contrast, our division between pretrial discovery and trial provides incentives for excessive search. (2) By having the court examine the witnesses, the Germans prevent lawyers from having pretrial contact with nonparty witnesses, thereby precluding the coaching of witnesses that disfigures our civil justice. (3) The Germans employ neutral experts whose duty is to aid the court in finding the truth, in contrast to the litigation-biased expert witnesses that American lawyers recruit and pay to bolster preordained results.

“Having pointed to these advantages, the article warned that the greater responsibility of the bench for the conduct of civil proceedings in Germany entails risks of its own. Thus, the article discussed how the twin safeguards of a professionalized judiciary and a stunningly liberal right of appellate review provide the needed correctives.”

John H. Langbein, Trashing the German Advantage, 82 Nw. U. L. Rev. 763 (1988)

     Again, your full course of study at STL will give you deep familiarity with both a common law system, that of the US, and a civil law system, that of China. For now, the following chart addresses in a summary fashion some of the distinctions:

     We now turn to a bit more depth on the origins of the common law system. We will return to aspects of this throughout the course; at present, the goal is to provide an overview of some major themes to help orient you.

     The Early Development of the Common Law

     What came to be known as the common law began to develop in England after the Norman conquest of England in 1066. The Norman kings established a body of courts under the jurisdiction of the king, rather than directly under the jurisdiction of local lords, as had been the case prior to the conquest.

     King Henry II did much to institutionalize the common law. He began the practice of sending judges from his court across the country. These judges would resolve cases on a one by one basis, reaching the result they considered fair. However, these judges would return to London and discuss the results of their labors with the other justices of the crown. Over time, a practice developed where the judges followed the decisions of other justices who had faced the same issue. This developed into the doctrine we now know as stare decisis.

     The King’s courts also revived the jury system, where members of the community were impaneled to resolve issues placed before them. The early juries bore little resemblance to today’s modern jury, and were expected to rely upon their local knowledge in assessing the facts of the case. Again, however, from these early beginnings arose the division of labor between the judges, who were in charge of applying the law, and the jury, which was expected to determine the facts.

     Important to the development of the common law was the system of bringing the case into court. In the common law courts, the case began with the filing of a writ. Early on, a writ was simply a statement of what the dispute was about. However, over time the writs became formalized and for a case to be able to go forward the facts pleaded had to fit within one of the established writs, some of which roughly correspond to today’s causes of action.

     In determining whether a given set of facts fit within one of the established writs, the common law judges effectively were making law. They determined the boundaries of the cause of action. They did this from the beginning of the common law system, and were in fact making law in this nature before the British Parliament became a legislative body.

     The judges of the time, however, apparently did not view themselves as creating law. Rather, they seem to have viewed the law as something that existed independently, and in their labors they were merely identifying the contours of the law. In the ideology of the time, law was something that was discovered, rather than created.

     Over time, the system of writs became very rigid and formalized. Failure to complete the proper writ would lead to dismissal of the action, although it could be refiled later under the proper writ. Similarly, the common law defenses were rigidly defined, and failure to assert a defense that fit with the facts as they were established could be a fatal error. The rigidity of the common law was one of the factors that led to the evolution in the United Kingdom of a parallel system of justice known as equity.

     As noted above, the common law courts of England operated under the authority of the king. It was from the king, through the Lord Chancellor, that plaintiffs would purchase the writs needed to launch a lawsuit.

     In some cases no writ fit the fact pattern involved. In those cases, given that the king was all-powerful, a plea could be made to the king in order to have justice done. Over time, the role of responding to these pleas was delegated from the king to the Lord Chancellor.

     From this informal beginning an alternative system of courts developed. Chancery only operated in those settings where the common law courts provided no adequate remedy. For such cases, however, an alternative system of procedure, remedies, and law developed.

     Equity was sometimes referred to as the application of the king’s conscience. By its nature, equity is discretionary, unlike the more rigid rule-based common law. It is the goal of the Chancellor to do what’s fair, rather than to rigidly apply doctrine to facts.

     Remedies also differ. The common law principally provides a remedy of money damages. Equity, on the other hand, often involves injunctions or other orders requiring the defendant to take certain actions.

     The net of this was that in England two parallel systems of justice operated under the dominion of the king, that of law and that of equity. On occasion, the two systems could offer competing, and inconsistent, results - when, for example, a party was placed under an injunction to not enforce a common law order. In such situations, equity was given priority, and the ruling of the equity court would prevail.

     The United States court system is a dual court system. There are state courts and there are federal courts. Each system has its own procedural rules. States and the federal government also have different bodies of substantive law, although as we shall see on many occasions cases may be brought on federal law questions in state court and on state law questions in federal court.

     The existence of dual court systems raises certain procedural and strategic issues for every case. For starters, lawyers will have to decide which system they prefer to proceed in. Depending on the case, it might be advantageous to be in federal court or it might be advantageous to be in state court. This will be a question addressed early by any competent trial lawyer. The next question will be in which system the case can be brought. While there is substantial overlap between the systems, and while many cases can be tried in either system, that is not always the case. We will see in quarter three the issues that arise with regard to whether or not a federal court has the power to hear the case.

     Within the federal courts, the trial courts are called district courts. A district court will hear all kinds of federal cases. Federal District Court judges are appointed for life to protect them from political pressure, and their salaries may not be reduced. These characteristics of federal judges are set in Article III of the Constitution, and they are sometimes referred to as Article III judges. District court judges serve in a district that is within one state or territory. Some states - for example, Vermont - have only one federal district court district within the state. Others, for example New York, have multiple districts. When we get to venue we will spend a little more time on this.

     In the federal system, there are subordinate judges who do not have Article III status. Bankruptcy judges, for example, are appointed for a term of years by the judges in the district. Similarly, magistrate judges are appointed for a term of years. Bankruptcy judges handle - wait for it - bankruptcy cases. Their rulings are subject to being revisited by the district court judges. Magistrate judges often handle pretrial matters such as discovery, and upon agreement of the parties can try a case (this might happen, for example, to get an earlier trial date in a civil case). Again, all actions of the magistrate judges can be tried anew before the district court judge, if the district court judge is so inclined.

    Above the federal district courts are the Courts of Appeal.  The Courts of Appeal, or circuit courts, are arranged by territory, except for the Federal Circuit which handles specialized subject matters (cases against the federal government and certain kinds of intellectual property cases). The District of Columbia Circuit covers the District of Columbia (the seat of the federal government), for example, while the Fourth Circuit includes the district courts from Maryland, Virginia, West Virginia, North Carolina, and South Carolina. There are twelve Courts of Appeal covering geographic areas, plus the Federal Circuit.

     Above the Courts of Appeal is the Supreme Court of the United States. The Supreme Court's docket is largely discretionary, and each year it takes relatively few cases, those normally being cases that the justices have concluded raise important issues of law that need to be resolved. The device for securing review in the Supreme Court is a petition for certiorari. If the petition is granted, the Court will take the case.

    Each state also has its own court system. Within these systems, which can differ in terminology, there are generally trial courts, courts of appeal, and a state supreme court.  For questions of state law, the state supreme court in that state is the final voice on interpreting that state law. Put differently, if a state supreme court issues a rule of contract interpretation, the US Supreme Court cannot rewrite that state law.

     What the Supreme Court can do, and sometimes does do, is decide whether the state law is consistent with the requirements of federal law and the Constitution. We will see state court decisions set aside because of a conflict with the Constitution. We will not see state court decisions set aside because the US Supreme Court has a different view as to how to best interpret or develop state law. 

     The map below sets forth the boundaries of the federal district and circuit courts.

     Both the common law and equity features of the courts in the colonies became part of the judicial system in the United States after the American Revolution. The law as it existed at the time of American independence was “received” into American law at the time of independence. As a general matter, this meant that both common law and equitable doctrine as it stood at that time became part of the law in the US.

     To this day, of course, the US system bears significant resemblance to and owes a great debt to the traditional English system. As with other members of the common law family, the US courts draw on British tradition in the way courts operate and in the way legal doctrine is developed.

     That said, the US has developed some exceptional aspects of its own. One element of US practice that is unusual is its reliance on “after-the-fact” regulation through litigation. Litigation creates incentives for obeying the law and disincentives for committing legal violations. The imposition of damages is seen to cause parties to self regulate.

     This is joined with a remarkable lack of barriers to initial market entry. In general, many activities that require prior regulatory approval in other countries can take place in the United States without the prior involvement of regulators

     As one scholar has noted:

“In all these exchanges over the benefits of a liberalized economic order, the United States is invariably Exhibit A. No country seems to realize the benefits of wide open markets, of relaxed entry into the world of commerce, and of economic dynamism as fully as the United States. . . .

“What distinguishes the United States is not that it is an unregulated market--far from it. What is distinctive about the United States is the extent to which we regulate not entry but consequences. There is a significant difference between an unregulated market and a deregulated market featuring low entry costs but careful scrutiny after the fact. What really sets the United States apart is the fact that its basic regulatory model is ex post rather than ex ante, a form of regulation that draws heavily on its common-law tradition. It is precisely the availability of meaningful ex post accountability that comes to define much of the operation of the rule of law in the United States.”

Samuel Issacharoff, Regulating After the Fact, 56 DePaul L. Rev. 375, 377 (2007)

     As the author of the article notes, shifting regulation to consequences has powerful advantages. Not requiring regulatory approval in advance reduces costs of administration, removes an opportunity for regulatory gatekeepers to engage in corruption, and avoids bureaucratic delays. It also shifts enforcement to those directly affected by violations of the law, rather than relying on perhaps out of touch bureaucratic understandings of where the issues lie.

     The US implements this after-the-fact regulation with some unusual aspects of its procedure. Litigants and their lawyers are given coercive investigatory powers. Those litigants often can, and often do, seek redress where government agencies have not chosen to act.

“The American civil discovery process effectively confers upon private litigants and their lawyers the same investigatory powers as federal agencies to compel sworn testimony and to disgorge documents; they can obtain the same court orders commanding a violator to cease its unlawful conduct and pay for its violations; and the court orders are backed by the same federal police powers.”

Sean Farhang, The Litigation State: Public Regulation and Private Lawsuits in the United States (p. 8).

“In the past decade, there was an average of about 165,000 lawsuits filed per year to enforce federal statutes in United States district courts. These suits spanned the waterfront of federal policy, including antitrust, civil rights, labor and employment, environmental, banking, and securities/commodities exchange regulation. More than 97 percent of the suits were privately filed. At present, the role of private litigation in many important areas of federal policy in the United States is massive both in absolute terms and relative to enforcement by the national government.”

Sean Farhang, The Litigation State: Public Regulation and Private Lawsuits in the United States (p. 10).

     There is another side, of course. No one likes being sued. Courts are relatively inefficient and expensive. The agendas of private litigators charged with enforcing the laws might not map to the public interest. We are not asking you to conclude that the US system is better.

     For now, what matters is to be aware that the US system relies on the litigation system in ways other countries do not. First, as a common law system, courts are used to make law. Both in creating law entirely, as has been the case with traditional contract and tort doctrine, and in giving meaning to sometimes vague (sometimes deliberately vague) statutory language, court cases create legal rules. Second, given the role of after the fact regulation, the US relies on its litigation system to achieve public goals, such as effective regulation, and not just to resolve individual disputes.

     There is another aspect of US procedure and governance that bears note. This is the concept of “adversarial legalism.” More so than many countries, the US is legalistic – issues tend to get decided according to rules, rather than based on unstructured or holistic judgments. Secondly, more so than in many countries, the process for applying those rules is formal and adversarial.

     Robert Kagan, author of the influential book Adversarial Legalism, has put it this way:

“Compared to other economically advanced democracies, American civic life is more deeply pervaded by legal conflict and by controversy about legal processes. The United States more often relies on lawyers, legal threats, and legal contestation in implementing public policies, compensating accident victims, striving to hold governmental officials accountable, and resolving business disputes. American laws generally are more detailed, complicated, and prescriptive. Legal penalties in the United States are more severe. And American methods of litigating and adjudicating legal disputes are more costly and adversarial.

"To encapsulate some of the distinctive qualities of governance and legal process in the United States, I use the shorthand term ‘adversarial legalism,’ by which I mean policymaking, policy implementation, and dispute resolution by means of lawyer-dominated litigation. Adversarial legalism can be distinguished from other methods of governance and dispute resolution that rely instead on bureaucratic administration, or on discretionary judgment by experts or political authorities, or on the judge-dominated style of litigation common in most other countries. While the United States often employs these other methods too, it relies on adversarial legalism far more than other economically advanced democracies."

     A short excerpt from Kagan’s book is on TWEN, and it is required reading for this course. For further reading, multiple copies of his book are available in the library.

     For now, what you should be realizing is that while the US, like other countries, uses its public courts to resolve private disputes, it charges its judicial system with duties not always imposed on courts in other countries. Courts in the US make law. They provide an important part of the regulatory system. They are intended to provide a check on the other branches of government. As we dig deeper into the US system, understanding it requires understanding these sometimes important roles. Keep these goals in mind.

     Imagine two neighbors, both farmers. One farmer (whom we will call Farmer Brown) has a prize pig. This pig is the apple of his eye, the subject of his most intense pride and affection. One day this pig is gone. As Farmer Brown searches the neighborhood for his pig, he spies the very pig in the pig pen of his neighbor, Farmer Green. For whatever reason, Farmer Green refuses to return the pig to Farmer Brown, and Farmer Brown must consider his options.

     As we have already noted, litigation may not be the preferred way to go, even if litigation is a practical solution. It might be better to talk it out through negotiations, or to draw in another neighbor to mediate the dispute. It should never be assumed that litigation is the best option, even when it looks like litigation might be an available option.

     To get to whether litigation is even a feasible option requires addressing some preliminary issues. Farmer Brown must be persuaded that there is a legal theory that would provide relief, and relief of a kind that solves his problem. For a wayward pig with the status of chattel property, it seems like this could be the case. On the other hand, if the hummingbirds that previously have dined at Farmer Brown’s backyard feeder, giving him hours of pleasure, decide to fly to another setting, there may not be a legal theory that applies.

     Then there is the likelihood of winning the lawsuit. Here, there are facts we don’t know that might bear on that. If, for example, Farmer Brown had previously contracted to sell the pig to Farmer Green, but had failed to deliver, the odds of winning might not be so great. Similarly, if the actual identity of the pig is open to debate, the odds of success would go down.

     Not least, the issue of cost effectiveness has to be considered. In the US system, setting aside isolated cases, each party must bear its own legal fees. Attorneys are expensive. Even prize pigs, even beloved pigs, are not of unlimited value. Can Farmer Brown obtain relief at a cost that makes sense? The US is a capitalistic society, and as with everything else the wheels of justice are greased with money. Cost effectiveness is not just a matter of fees. Farmer Brown will have to take into account whether Farmer Green is able to pay the damages sought or to return the pig if so ordered by a court.

     Only after these issues are worked through will Farmer Brown and his attorney proceed to the next step.

     Selecting a proper court

     In the United States, litigants often, but not always, have a choice as to where to file suit. In some cases, even cases involving wayward pigs can be filed in federal court (if, for example, the two farmers reside in different states and the value of the pig is above the minimum statutory threshold). In almost every case, a lawsuit can be filed in the appropriate state court (although, as we shall see, the defendant may have an option to move it to federal court if certain conditions are met). Farmer Brown and his attorney will think long and hard about which court system they would prefer to be in.

     The court they choose must have subject matter jurisdiction (that is, be able to hear the kind of case that is brought) and also must have jurisdiction over the parties. Sometimes in state courts claims of a certain size or type are relegated to small claims courts; in some states, cases asserting an equitable claim (such as one seeking an injunction that the pig be returned) must be filed in the Chancery courts which handle equitable claims.

     Jurisdiction over the parties or the property that is the subject of a suit has to do with the power of the court over those it requires to submit to its procedures. As you might imagine, a court’s reach is not unlimited, and the case and the parties must have some connection to the forum, or must have consented to be there. In the US, this is a complicated issue, which we will spend some time unpacking. Jurisdiction over the parties also goes by the name personal jurisdiction.

     There is also an issue called venue. Venue has to do with what location is an appropriate and convenient place for the litigation to go forward. There are situations where there the court has subject matter jurisdiction and jurisdiction over the parties, and yet venue is not proper.

     Commencing the action

     In some way, Farmer Brown must let Farmer Green know that a lawsuit has been filed. This happens through what is called service of process. We will get into this shortly, but generally it requires that Farmer Brown properly serves a summons on Farmer Green. There will be rules, state and federal, on how to do this; simply placing the summons in a bottle and tossing it in a river upstream of Farmer Green’s farm is unlikely to meet the statutory requirements.

     There are also limitations under the Constitution on how service of process is made. Again, we will address this shortly, but the fundamental issue is whether the method used is sufficiently fair to protect Farmer Green’s right to due process under the Constitution.

     Pleading and parties

     Generally speaking, the first pleading in a case is called the complaint, which sets out the nature of the case. As you might imagine, there are questions about how much detail the complaint should go into, and different systems resolve this question in different ways, requiring different levels of information. The complaint should show that the claimant is entitled to relief, and in most cases the lawyers will choose to identify the causes of action (perhaps a common law action for theft or wrongful detention of a pig; perhaps of violation of the federal Porcine Protection Act.) [Note – there is no such statute]. The complaint will also identify the parties. It may be that Farmer Green’s wife joins in as a co-plaintiff; it may be that upon getting more background facts Farmer Brown also adds as a defendant Farmer Yellow, who he believes played a role in moving the pig from his farm to that of Farmer Green. Perhaps most importantly, the complaint will, within the limitations imposed by the rules, begin the telling of a story designed to put the plaintiff's case forward in a sympathetic and powerful way.

     The response (Motions and Answers)

     Once Farmer Brown has filed the complaint, the burden shifts to Farmer Green to respond. There are a number of ways that Farmer Green can respond. He can challenge the choice of court, either arguing that the court lacks subject matter jurisdiction or that it lacks power to force him into court. He can also challenge venue.

     He can also attack the legal validity of the claim. In what was known in the common law as a demurrer, and what today is known as a motion to dismiss for a failure to state a claim, Farmer Green can argue that the facts alleged by Farmer Brown do not constitute an actionable legal violation. He can argue that the actions alleged do not constitute a legal wrong (in the case of the hummingbirds who seek a new home, that might be a winning motion). He might argue that an essential element of the claim was not pleaded in the complaint. For example, if the cause of action requires that Farmer Green personally entered upon Farmer Brown’s property with an intent to steal a pig, and that is not alleged, that might be applicable. Finally, in some cases, the complaint is simply so confused and haphazard that no sense can be made of it. This happens most often, as you might expect, when attorneys are not involved.

     Farmer Green can also respond by filing an answer. An answer presents his position on the case (for example, the pig in his pig pen is not in fact the pig that Farmer Brown is missing), but absent a motion for judgment on the pleadings does not require the court to rule at this time. In the answer, Green must admit or deny the allegations of Brown’s complaint, or state that he has insufficient information to do either.

     One other thing that Green can do in response is file a counterclaim. As a matter of strategy, this is often an attractive option if a plausible counterclaim exists. It changes the bargaining zone for settlement – for example, without a counterclaim the settlement zone goes from zero to paying the full claim; with a counterclaim, the zone goes from paying Green his full claim to paying Brown his full claim. The counterclaim might or might not be related – Green might decide now is a good time to litigate the $100,000 loan he gave to Brown a few years back that was never repaid, or he might bring a suit for defamation based on Brown’s telling everyone in their community that Green is a dirty pig stealer,

     Obtaining information prior to trial

     One somewhat unusual aspect of the US system is the development of facts before trial. In some systems, and historically in prior versions of the US system, there was little factual development before trial – the parties simply arrived at the courtroom and found out what the other party had to say. In other systems, notably civil law systems, factual development might occur under the direct guidance and through the initiative of the trial judge. In the US system, factual development largely happens outside the courtroom and even outside the judge’s actual supervision, as the parties exchange – and are required to exchange – information in a number of ways.

     In many ways, discovery, combined with motion practice to narrow or eliminate claims, has become how US cases are litigated in practice. The sharing of information allows both sides to price the claim, and if the case is not dismissed by a court the most frequent resolution in light of this information is that the parties reach a settlement agreement. We will discuss later in this course the number of ways that information can be exchanged – including document requests, interrogatories, depositions, and expert reports – but the key takeaway for now is that discovery is to some degree managed by the court, under limits put in place in the rules, but nonetheless largely conducted by the parties outside of court.

     Summary judgment

     With discovery bringing forward the facts, not all cases need to go to trial. In some cases, even though a full cause of action was pleaded, discovery has shown that some essential facts underlying a claim or defense cannot be established. For example, imagine if after factual and expert discovery there was no evidence in the record that could show that the pig in Farmer Green’s pig pen was in fact the pig that Farmer Brown was missing. In such cases, a court would be required to hold that there was no proof on an essential element and dismiss the claim. Summary judgment allows the acceleration of that decision to the end of discovery rather than waiting until after trial.

     Similarly, in some cases, evidence might conclusively destroy an essential element of the other party’s claim or conclusively establish a claim. For example, in an action on an unpaid debt, the uncontested entry of a government document recording the payment of the debt might eliminate the claim. On the other hand, if Farmer Brown admits that he borrowed $100,000, has not repaid it, and has no excuse for not repaying it, Farmer Green might be able to get summary judgment establishing his counterclaim. In such cases, the evidence has to be of a kind that is conclusive, and not open to being believed or disbelieved.

     Summary judgments can also be partial. In a case with multiple legal theories, one of the causes of action might be eliminated while others remain in the case. Similarly, a court might grant summary judgment on all claims that the evidence shows will be barred by a statute of limitations while allowing the more recent claims to be litigated.

     Again, strategically, summary judgment is very important. In the pure case, a case can be brought to an end. Just as significantly, the scope of the dispute can be narrowed by partial summary judgment in a way that enables settlement.

     Setting the case for trial

     If the case is not settled or dismissed, it will be set for trial. Because dockets can be heavy, and because criminal trials can claim priority on the judge’s time, the date set might not be immediate. In some courts, the case may be set for trial a year or more away. Even then, developments in the court’s workload might cause the trial date to be deferred.

     The jury and its selection

     If the relief sought is monetary damages, the parties likely have a right to have the case heard by a jury. This right has to be asserted, and can be asserted by either party. The parties can also choose to have a judge decide the facts as well as the law; in some cases, for strategic reasons or to avoid delay both parties might prefer this. Juries are generally not available for claims involving equitable remedies such as injunctions. In some cases, as we will see later in the year, whether a cause of action supports a jury trial can be a complicated issue.

     Juries are selected from the local population, and are more or less intended to be a cross-section of the community. We will address later how juries are selected.

     The trial

     In the US, unlike in civil law systems, trials are generally a stand-alone event. By contrast, in a civil law system, with no juries, the trial will proceed in a series of hearing before the judge. While cases tried to a US judge without a jury can sometimes proceed in a similar way, the use of a jury often requires the trial to proceed if possible in one proceeding.

     Again, we will discuss later the process of the trial. Suffice it to say for now that trials conducted by effective trial lawyers are essentially a form of drama, where facts that are largely already known are put before the factfinders in ways calculated to have the most impact.

     If there is insufficient evidence for a jury to base a verdict on, the defense will move for a directed verdict. (In reality, they will usually move for a directed verdict without regard to the sufficiency of the evidence).

     Submitting the case to the jury

     After the trial is closed, the judge will submit the case to the jury. The judge will read to the jury a set of jury instructions that set forth what the law is. The judge will also instruct on which party has the burden of persuasion on the issues. As you struggle through first-year courses, ask yourself how confident you are that juries understand and accurately apply these doctrinal instructions.

     The jury will meet in private and discuss the case. When they are finished, they will return to the courtroom and announce their findings.

     Posttrial motions

     After judgment, the losing party will have a chance to challenge the verdict with post-trial motions. Most typically, the motion to challenge the sufficiency of the evidence will be renewed. The losing party may also move for a new trial.

     The judgment and its enforcement

     Once a judgment is obtained, it has to be enforced. In the case of money damages, the defendant may simply pay the money. If the defendant fails to do so, the plaintiff may take the judgment to a location where the defendant has assets, and execute the judgment against those assets. In the United States, the full faith and credit clause means that any valid judgment from any US court can be enforced in any US jurisdiction. When national boundaries are crossed, the enforcement of the judgment gets much more complicated.

     Injunctions operate in personam against the defendant. Failure to comply -- say, if Farmer Green ignores an injunction requiring him to return the pig – can lead to the court holding him in contempt of court and imposing sanctions.

     Appeal

     Litigants have a right to appeal. Legal issues resolved by the trial court can be reviewed by the appellate court. The appellate court can affirm, reverse, or modify the judgment of the trial court.

     For strategic purposes, it is important to focus on when appeals can be had. In the US federal system, most issues can only be appealed at the end of the case. For example, if the trial court holds that there is personal jurisdiction over a defendant, the defendant might not be able to appeal that ruling, however questionable, until after trial. Because there is a strong possibility that the case might settle – mooting any appeal – this lack of immediate review has important implications.

     There are circumstances where appellate review can be had before final judgment. We will study those this quarter.

     State courts can, and sometimes do, have different rules on when appeals can be taken. New York state, for example, is much friendlier to appeals that are brought while the case is ongoing.

     Conclusiveness and use of judgments

     What does it mean once a case has been finally decided? If a court has found, for example, that Farmer Green only had his own pig in his pig pen, and never took Farmer Brown’s pig, Farmer Green would no doubt object if Farmer Brown went back into court to pursue the same a claim a second time to see if he might have better luck.

     Rules of claim preclusion deal with this issue. We will study later this year when claims cannot be brought again.

     Another issue that arises is when an issue has been decided between two parties, and that issue is relevant to a later case. When can that judicial determination be used to foreclose retrying the same issue? Again, we will address this later in the year.

     The march through the process of a case might not, in fact, be the way a great lawyer thinks about a case. Issues might be addressed out of order in order to develop a strategy. Those questions will vary case to case, but the below should give you some ideas.

     What is the nature of the conflict?

     What is the substance of the conflict?

     What does my client hope to gain in the resolution of the conflict? Is this something directly awardable by the court system (damages, an injunction) or something that even if not directly awardable might arise from the litigation (drawing attention to the conflict and the underlying problems, signaling seriousness about negotiation positions)?

     Who are the parties with an interest in the conflict? Which parties are essential to include in the case financial or other reasons, and which are desirable? Which are undesirable?

     What is the best way to resolve it? Do we want to go to court or pursue another method of dispute resolution?

     If litigation hosted in a government run courtroom is the best way to resolve it, what courts might be able to hear it?

     If litigation hosted in a government run courtroom is the best way to resolve it, might the applicable law vary depending on where the suit is filed? If so, which location (venue) is the best for our needs? If the other side filed the lawsuit, is there a way to move the lawsuit to the venue or system we prefer? Will the court have substance matter jurisdiction over the case in our preferred location? Will the court be able to exercise power over the parties?

     If litigation hosted in a government run courtroom is the best option, what remedies are available from the court? Does the defendant have assets in the jurisdiction sufficient to meet any claim? If not, can this judgment be enforced in a location where the defendant has assets?

     Are there close issues that might determine the outcome of the case? If so, can we get an appeal on those (or avoid an appeal on those) prior to a final judgment? Will the rules with regard to the timing of any appeals differ in other potential venues? Should that affect where we litigate?

     Taking all of that into account, of the possible venues, which do we think will be the most favorable venue for our side?

     If we file first, what can we do to make sure the case remains in the venue we chose?

     If the other side filed first, what can we do to move the case to a venue we find more favorable?

     What parties and issues should be resolved in this litigation? Are there unrelated claims that it would be efficient to bring at the same time? Are there related claims that must be brought now or lost? What parties might we or the other side want to add, and what does that mean to our strategy? Might adding or eliminating parties affect which courts have the power to hear the case?

     Can – has – the case been set forward in the pleadings in a way that allows the case to proceed past the pleading stage? Have we met our ethical burdens in the way we present the pleadings?

     If we are the defendant, what defenses, legal or factual, can we assert? Do we have counterclaims against the plaintiff that we can assert in good faith? What impact on the settlement will those claims have?

     What facts need to be established to prove the case at trial? What is the best, most effective way to establish those facts? What information must we provide to the other side? Must we provide any of that information without a request, and is there information that we need to present only if it is properly requested? Are there any grounds for withholding information that has been requested or otherwise is producible? What information does the other side have that we will want to prove our case, and how can we assure that that information comes into the record?

     After discovery is concluded, are there contested issues of fact that require a trial for resolution? If there are no contested issues, what methods are available for disposing of the case without trial?

     What steps do we need to take to make the case ready for trial? How do we make our ‘story’ vivid and persuasive for those deciding the case?

     How does the trial proceed? Does either party have the right to a jury trial, and have the proper steps been taken to obtain a jury trial? How is the jury selected? How is the case presented differently if a jury is involved? Which jurors do we want on the panel, and which jurors would we prefer to exclude? How can we do that in an ethical way?

     What motions can and should we make at trial and after trial? Can we prevent reference to things we don’t want the jury to know about? Can we limit what the jury hears in a way that helps us?

     Where and how can any judgment be enforced?

     Great lawyers are problem solvers. While your legal expertise will always be relevant, consider all ways to resolve conflicts, not just going to court.

     Conflict resolution needs to be considered in advance when possible. It is a common practice to put a dispute resolution clause in contracts. Less common, but necessary for best lawyering, is exploring which dispute resolution method best fits the situation and your client's needs. Don't just grab a standard clause without thinking it through.

     Alternative dispute resolution is alternative only from the perspective of a lawyer trained to think in terms of going to court. Most disputes are resolved without involvement of the courts and often without much consideration of the governing law.

     Alternative dispute resolution methods include adaptation, renegotiation, mediation, and arbitration. Sometimes approaches such as mini-trials are used.

     While many business disputes are resolved without regard to legal rules, it is common once disputes are pulled into court or arbitration for negotiations to be conducted with regard both to the likely outcome if fully litigated and the costs of litigation. This has been called "bargaining in the shadow of the law."

     ATT Mobility reflects a strong US policy in favor of arbitration. Even though the clause was part of a contract of adhesion (that is, one where the consumer had no realistic opportunity to bargain or obtain changes) the Court upheld the contract's arbitration clause.

     The US courts are part of the common law tradition. Unlike civil law systems, the results of litigation can make binding new law. Common law systems also differ in that the process is driven by the parties, with the judge playing somewhat more of a responsive role than in civil law systems (but be nuanced - the differences can be exaggerated, as can be the tendencies toward convergence between different systems).

     Core to common law rulemaking is the concept of stare decisis. You will need to have a firm and nuanced understanding of what a holding is and how it matters.

     The US system arose from the English system. As we will see going forward, both the common law writs and the concepts of equity have had a deep impact on US law.

     US courts differ from many other countries in the degree to which government regulation is implemented through litigation. This "ex post facto" or "after the fact" regulation carries much of the load of the US regulatory system. Overall, the US approach has been termed "adversarial legalism."

     Before heading to court, great US lawyers will work through a range of strategic questions, with the importance of the questions (for example, can the judgment be enforced where it needs to be enforced) not necessarily tracking the order in which issues come up in litigation. Great lawyers think through to the end result and adjust their steps from the very beginning.

     Because the US has both a federal court system and state court systems, which often overlap in their ability to hear a case, an important first step is figuring out which forum is most advantageous and whether the case can be brought there.

     Steps in processing a case through the court include establishing subject matter jurisdiction, establishing personal jurisdiction, drafting a complaint, making service of process, responding to the complaint by answer or motion, asserting a counterclaim if appropriate, engaging in pretrial discovery, moving for summary judgment, trial (including trial by jury), filing post-trial motions, and enforcing the judgment. After a judgment is final claim preclusion might make it applicable to limit or preclude other litigation.