Deck 1: Overview of the Legal Environment of Marketing

Question 1

What is a "circuit split"? List two mechanisms by which a circuit split may be resolved.

Answer 1

A circuit split occurs when two or more federal circuit courts of appeals interpret the rule of law on a particular issue in different ways; the net result is that federal law is NOT uniform across the country on that particular point.
The most common way for a circuit split to be resolved is for the Supreme Court to grant cert and decide the rule of law, which is then binding on all courts. Alternatively, assuming a constitutional issue is not involved), Congress may pass a statute clarifying what the rule of law is.

Question 2

Dana Jenkins designed a remote control model submarine kit for use in small ponds and pools. He contacted RC Electronic Gadget Makers, an electronics manufacturer, about possibly purchasing his invention. Before he disclosed the details of the invention to RC, he required RC to sign a disclosure form, which stated, among other things, that Jenkins would retain all intellectual property rights in the invention unless RC and Jenkins agreed upon a purchase and sale of those rights, and which provided that RC would not reveal any trade secrets that Jenkins had in the invention. The contract was signed at RC's headquarters in Georgia, where all discussions and negotiations between the parties took place.

Answer 2

RC ended up rejecting Jenkins' invention. A few months later, however, RC came out with a virtually identical remote control submarine. Jenkins wants to file suit for trade secret misappropriation a state law claim). Jenkins is a resident of Michigan. RC is a Delaware corporation with its principal place of business in Georgia.
a. Can Jenkins file suit in Michigan state court? Explain thoroughly.
No. There would be subject matter jurisdiction here because this is a state law claim trade secret misappropriation). However, RC is not a Michigan resident and there are not sufficient minimum contacts here to support personal jurisdiction over RC in Michigan. The contract that RC entered into with Jenkins was made in Georgia. The mere fact that Jenkins is a Michigan resident is not enough to give the Michigan court jurisdiction over the defendant; there must be some greater connection between RC and the state.
b. Can Jenkins file suit in Georgia state court? Explain thoroughly.
Yes. This is a state law issue trade secret law) so there is subject matter jurisdiction. There is also personal jurisdiction over the defendant, RC, who is a resident of Georgia.
c. Can suit be brought in federal court? Why or why not? If suit can be brought, what substantive law federal or state) would apply?
Perhaps. It is possible this could be brought in federal court under diversity jurisdiction. Jenkins and RC are citizens of different states RC is a citizen of both Delaware and Georgia; Jenkins is a citizen of MI) - we just need to know whether there is more than $75,000 at stake. If there is diversity jurisdiction, Georgia substantive law would apply because this contract was formed in Georgia.

Question 3

A breach of contract claim brought by a buyer in Kansas against a seller in Illinois involving the sale of $100,000 worth of parts that turned out to be defective i.e., a state law claim) may be heard in either federal or state court, depending upon the preference of the plaintiff.

Answer 3

False

Question 4

Unhappy litigants may appeal decisions of the state court of last resort to the federal trial court.

Question 5

A business concerned about minimizing the likelihood of being subjected to long-arm jurisdiction as a result of its Internet advertising should consider limiting its webpage design to passive or non-interactive designs.