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CH 5] Business 101 5-13

Illustration 5.2 The U.S. Judicial System

Federal State

United States State
Supreme Court Supreme Court

United States State
Courts of Appeals Courts of Appeals

United States State
District Courts District Courts

cases. It is important to note that the Congress has the responsibility to establish inferior
(federal) courts to the supreme Court and as such from the language of Article III, Section 5
1 may disestablish an inferior federal court. Article I, Section 8 also grants Congress the
power “[t]o constitute Tribunals inferior to the supreme Court.”
In meeting these responsibilities, Congress has established District Courts and Courts
of Appeals to handle litigation of federal issues.
In the federal judicial system, it is a U.S. district court that is the first to hear a federal
case. Each state has at least one district court located in it. The decision in these cases are
made by a jury, or by the judge if each party waives its right to a jury trial. The losing party appeal
may appeal the case to the U.S. Court of Appeals for that region, and there are thirteen Challenge the decision
federal Appeals Courts. of the court.
An appellant of the appeals court may further appeal the decision of a U.S. court of
appeals to the U.S. Supreme Court, and this court may decide to hear the case or not. Of court of appeals
all appeals, the U. S. Supreme court hears only about four percent of the cases that are Court that hears appeals
from the general trial
appealed to it. If the U.S. Supreme Court chooses not to hear the case, the ruling of the courts.
lower court stands. As a matter of record, the 9th Circuit U.S. District Court is the most
overturned court on appeal in the federal judiciary system. That is, the justices that sit on appellant
this regional court have their decisions struck down more than any other of the other 12 Party making an appeal
circuit courts. for a higher court to
Many Supreme Court decisions affect businesses. For example, the Court decided on review a case.

January 15, 2002, that the Equal Employment Opportunity Commission may pursue
employee discrimination claims against a company in court even though the company has
an agreement with the employee to settle all disputes out of court through binding
arbitration. This decision has implications for businesses of all sizes that attempt to avoid
potentially costly EEOC litigation through clever employment contracts. The Supreme
Court has ruled they can't shield themselves in this manner.

State Courts
The structure of most state court systems is similar to the federal court system. A legal
case will originate in a circuit court or general jurisdiction court. Some states call their
general jurisdiction courts by other names, such as superior courts, common pleas courts,
or district courts. Most states also have courts of appeals and the decisions of an appeals
court can be appealed to the state supreme court.
When a legal question originating in a state court concerns a question of federal
constitutionality or federal law, and only after traversing through the state court system to
the state Supreme Court can that question be appealed to the U.S. Supreme Court.

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