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a website for classes taught by William H. Widen


FALL 2017

*INTRODUCTION TO UNITED STATES LAW--Introductory Remarks
    --Last Modified: Thursday, 03-Aug-2017 09:20:44 EDT

Introductory Remarks: Orientation to the Structure of Laws in the United States

The law of the United States is not a single body of law.  Rather, in the United States, the law is primarily structured as a dual or parallel system of substantive laws. (Some exceptions to the dual structure are noted at the end of this summary.) First, there is a national or federal law which applies throughout the United States.  The national law principally consists of the United States Constitution (the document that structures the federal govenment and its relationship to the states, among other things), the United States Code (statutory law), and treaties.  Second, there is a system of substantive state laws which apply generally within the geographic boundaries of a particular state (though there is the possibility of extra territorial application of state law).  State substantive laws consist of a state constitution, statutory laws enacted by a state legislature and the common law (with traces of civil law in Louisiana). As you may know, there are fifty states in the United States.  What this means, as a practical matter, is that a single federal or national law applies across all fifty states BUT there are fifty different systems of state laws which may apply to a particular matter depending on the location of the matter, the parties involved and the property subject to the law.  Needless to say, this double system of substantive laws can be very confusing on first exposure.

To add to this confusion, in the United States there are two primary systems of courts--a national or federal court system AND a state court system (indeed, fifty individual state court systems, as each state has its own system of courts).  Accompanying this dual system of courts, one finds a dual system of procedure to follow in the courts--federal procedure is followed in the federal courts and the applicable state court procedure is followed in each state court system.  It is typical for the procedure followed to be divided between civil procedure and criminal procedure, depending on the nature of the case.  For example, there are Federal Rules of Civil Procedure and Federal Rules of Criminal Procedure.  It is common for the details of Federal Civil Procedure to differ from the rules of civil procedure followed in a state court (and, similarly for criminal procedure).  As a matter of detail, even certain aspects of procedure in the federal court system may vary slightly by geographic district if a federal judicial district has adopted what are known as "local rules."  Aside from these local rules, the procedure followed in federal courts is uniform across the United States.  The procedural rules followed in the various state courts are not uniform (though there will be many similarities--the differences typically are in the details).

A striking feature of law in the United States is the degree to which the laws of political subdivisions of the national government play a central role in the practice of law--particularly given that there are fifty states (and, as noted at the end of this summary, some additional important subdivisions that are not states!).  This might seem like a recipe for chaos.

Two examples illustrate the central role played by state law, as opposed to federal or national law, in the United States.  First, the profession and practice of law is primarily regulated by the individual states, and not the federal government.  In order to practice law in the United States, as a general rule, one must pass a bar exam in a particular state (such as New York or Florida).  After passing the exam, coupled with a background or fitness check administered by the state and passage of an ethics exam, a person may be admitted to the bar in that state.  However, a license to practice law is generally limited to practice within the state of admission, but not elsewhere.  For example, I am admitted to practice law in the State of New York.  This bar admission does not qualify me to practice law in the State of Florida.  To practice law in the State of Florida, I would have to take the Florida bar exam and go through the admission process in Florida.  Though admission to the practice of law is done on a state by state basis, one does not find sub-classifications, such as solicitor and barrister, as one finds in some countries.

[NB: In our first class, I would like to know whether and to what extent such a system exists in your home countries.  My understanding is that, in many countries, admission to the practice of law is controlled at the national level and not at the level of a political subdivision of the country, though membership in a local bar association may be required.]

Second, much substantive law in the United States is state law and not federal law.  For example, the substantive law governing most contracts in the United States will be state law and not federal law.  Thus, in a contract for the sale of goods between a Florida person and a New York person, it is common to include a governing law clause which will specify that either Florida law or New York law will govern the transaction--in certain key respects the contract law of these two states differ--and thus a choice must be made.  One would not specify the governing law for a contract to be performed in the United States to be simply "United States law."  The law of a particular state must be specified.  Even in an international transaction in which it is desired to specify United States law as the governing law, the contract will select the law of a particular state to govern the transaction--and not the law of the United States more generally.

I suspect that lawyers who have practiced international transactions will be familiar with governing law clauses in contracts between parties in different countries.  For example, a contract between a person in Colombia and a person in France may elect to apply the law of France, the law of Colombia or an international treaty such as the CISG to govern the transaction.  However, for a contract between a person in Bogota and a person in Cartagena, or between a person in Paris and a person in Nice, one might expect the contract to be governed by a national civil code applicable to all contracts entered into within Colombia or France.  Thus, though a contract to be performed internally within a single country may state a governing law for the sake of completeness (e.g. "This contract shall be governed by the laws of France."), there is no real decision to make (or law to choose) for a transaction that is internal to a particular country.  This is, as noted above, not the case in the United States.  Choice of law rules and, in voluntary transactions, decisions to elect application of the law of a particular state matter a great deal even for matters and transactions internal to the United States.

[NB: In our first class, I would like to know whether and to what extent, you find that a single national law is applicable in a uniform manner throughout your country to various types of transactions and circumstances or whether an when the law of a political subdivision would be important.]

To be sure, the prominent role played by state law in the United States may seem chaotic.  A few rules, however, mitigate potential conflicts and confusions, though they do not eliminate them.

The overriding principle which brings some order to this dual system of laws in the United States is known as the "Supremacy Clause."  It is contained in the United States Constitution--the highest law in the land.  In substance, it states that if there is a conflict between a federal law and a state law, the federal law shall govern or control the matter covered by the law.  The text of the Supremacy Clause is as follows:

"This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const. Art. VI, cl. 2.

Taken in isolation, the Supremacy Clause principle could, over time, render state law irrelevant.  This would happen if the federal government enacted laws that superceded laws passed by the individual states or if the United States Supreme Court found that a state law violated its provisions.

To be sure, in some areas of law, the federal government has enacted laws that supercede state laws.  And, some state laws have been struck down by the United States Supreme Court as a violation of the United States Constitution.  A signature example of federal law superceding state law is in the area of racial discrimination.  Following the United States Civil War (which ended in 1865) many state laws had been enacted which discriminated against African Americans on the basis of race. The United States Supreme Court found that such laws violated the United States Constitution.  And, Congress has passed various laws governing civil rights and voting rights to guard against wrongs such as workplace discrimination and state laws designed to deny, as a practical matter, the right of African Americans to vote.  However, there has not been a wholesale or widespread replacement of state law by federal law.  This replacement has not happened in a comprehensive way due to a second structural feature of the United States Constitution--the restriction of the federal government to the exercise of "enumerated powers." See U.S. Const. Art. I, sec. 8.  However, we shall also see that the United States Supreme Court has given a broad interpretation to the scope of some of these enumerated powers so that the ability of the federal government to pass legislation is broader than the simple language of the United States Constitution would seem to suggest.

[Current event note: You may have read in the press about the relaxation of certain state criminal laws which prohibit the sale and use of marijuana in the United States.  Laws against marijuana sale and use exist as both federal law, which treats marijuana as a controlled substance, as well as state laws.  Various states (eight in total by my count), including California, Colorado (and, recently, Nevada) have legalized the sale and recreational use of marijuana (with additional states allowing for medicinal use).  However, the federal law has not been changed.  It appears that the federal government, at least until now, has not been enforcing federal law against marijuana distribution and use in these states to any great extent.  A good case can be made that the federal laws against marijuana are not wise and should be repealed.  However, until then (if ever) we have a case in which state law is functioning as if it were supreme over federal law because of lax enforcement or non-enforcement of federal law.  As a pure matter of the structure of government, this is a troubling circumstance for the rule of law, regardless of your views on the merits of the issue. On August 1, 2017, Senator Cory Booker from New Jersey introduced a bill before the United States Senate to change federal marijuana laws--essentially legalizing marijuana as a federal law matter.  NB: Please do an internet search for "Cory Booker" & "marijuana" to read further about this development--you might start with UPI and Washington Post articles.  Note that many see the criminalization of marijuana use as a civil rights issue because enforcement of those laws has adversely impacted the African American community.  One might see an inversion of the role of federal and state law from that found in the last century in the United States--in the past federal law was on the vanguard in protecting civil rights from discriminatory state law.  In the area of marijuana laws, one might see certain states as on the vanguard in protecting civil rights, while federal law functions in a discriminatory fashion.  The problem, of course, is that as a matter of the structure of government, because of the Supremacy Clause, the states do not have the ultimate power to protect against a federal government determined to enforce marijuana laws.  One solution is to elect Senators and Representatives to Congress who would vote to repeal existing federal marijuana laws.  Absent such a change in federal law, the conflict problem will continue to exist.]

The principle of enumerated powers in essence states that the federal government may only enact legislation that regulates enumerated (and thus limited) subject matter areas.  Any subject matter area for which the United States Constitution does not give power to the federal government to legislate is reserved to the states.  This means that, in theory, there are vast areas of social conduct over which the federal government has no power to pass legislation.  This structural feature leaves a large area of regulation to the exclusive province of the states.  If only the state can pass a law with respect to a certain subject matter, then there is no possibility of a conflict with a federal law for which the Supremacy Clause must be invoked to resolve the conflict.  Or so it would seem.

One enumerated power given to the federal government under the United States Constitution is the power to regulate interstate commerce--this power is known as the Commerce Clause power.

Using federal marijuana laws again as an example, however, we can see that restricting federal law making only to enumerated subject matter areas has not resulted in an overly stringent limitation on the exercise of federal power.  In 1970, President Nixon signed the federal Controlled Substances Act which sets federal policy with respect to drugs.  It regulates the manufacture, importation, possession, use and distribution of certain substances by listing substances on five different schedules.  Marijuana is listed as a "Schedule I" substance for which restrictions and penalties are most stringent.  Among other features which criminalize marijuana, no prescriptions may be written by a doctor for a Schedule I substance.  The State of California had passed a state law called the Compassionate Use Act which allowed individuals to grow and use marijuana for personal medical use under doctor supervision.  Thus, there was a direct conflict between federal law and state law.  Under the Supremacy Clause, federal law should preempt state law.  However, individuals who used medical marijuana in California in compliance with California law sued for injunctive and declaratory relief to block enforcement of federal law in their case.  The United States Supreme Court held that Congress had the power to prohibit the local cultivation and use of marijuana in compliance with California law because the power of Congress to regulate interstate commerce included the power to regulate purely local activities that are part of an economic "class of activities" that have a substantial effect on interstate commerce.  The case is Gonzales v. Raich, 545 U. S. 1 (2005).  You should read this case before our first class meeting for a good introduction to the operation of the Supremacy Clause and the use of enumerated powers to pass federal legislation, particularly the Commerce Clause.

[Current event note: I view the current trend under state laws to legalize marijuana use, and the conflict with federal drug laws, to be one of the most, if not the most, significant issue with implications for our structure of government in the United States today.  That is why I have included a somewhat extended discussion of the matter in this year's introduction to United States law course.]

[Current event note: You may have read in the press about efforts to reform the health care system in the United States.  The issue, in broad brush, is whether or not to repeal legislation signed by President Obama which, among other things, required individuals to purchase health insurance in individual marketplaces (often with a subsidy to aid low income persons).  Without considering its policy merits, the legal issue following passage of the Affordable Care Act (or Obamacare) was whether or not the United States Congress had the power to pass such a law because it required the purchase of health insurance.  Such a law could not have been passed unless a specific provision of the United States Constitution authorized its passage.  Obviously, no specific provision of the United States Constitution mentioned health care insurance.  However, the United States Constitution does authorize Congress to pass laws regulating interstate commerce as one of its many enumerated powers.  Many thought that the Affordable Care Act might be sustained as a regulation of interstate commerce.  Having read Gonzales v. Raich assigned above, you might have reached this same conclusion.  However, by a vote of 5-4 in the United States Supreme Court, the Justices held that the regulation of interstate commerce did not go so far as to authorize Congress to force individuals to purchase a product.  The Afforadable Health Care Act (or Obamacare) was upheld, however, as a proper exercise of power under the specific authority given to Congress to impose a tax, another specific enumerated power.  No members of Congress, nor President Obama, had argued that the law was a proper exercise of federal authority on the basis of the taxing power--probably for the reason that raising taxes is unpopular.  Additionally, over the years, the United States Supreme Court had given a very expanded reading of those types of activities which might affect interstate commerce and thus become a proper subject for federal legislation--again, as illustrated by Gonzales v. Raich.  It had gotten to the point that many believed almost any sort of federal legislation might be upheld by invoking the Commerce Power.  The more expansive an interpretation given to enumerated powers, the greater the chance that a federal law will replace a state law.]

The court system is a third area in which one might think the federal courts would or could replace the state courts.  Again, this has not happened due to a structural feature of the federal court system.  To file a case in federal court, as a general matter, one must have two types of jurisdiction: personal jurisdiction over the parties; and, subject matter jurisdiction over the type of case filed.  The federal courts are courts of limited subject matter jurisdiction--a federal court can only hear certain types of cases in which subject matter jurisdiction exists.  This is true even if the court would otherwise have personal jurisdiction over the parties.  In contrast to the limited subject matter jurisdiction of the federal courts, state courts are typically courts of general jurisdiction which may hear any case for which a cause of action might be sustained and over which the state court has personal jurisdiction over the parties.  [Note, a court may assert jurisdiction in appropriate cases, other than personal jurisdiction, by invoking "in rem" or "quasi in rem" jurisdiction, which will be addressed later in the course.]  The two most common types of federal subject matter jurisdiction are known as "federal question jurisdiction" and "diversity jurisdiction."  These will be examined in more detail later in the course, but as prelude, federal question jurisdiction generally arises when the issue in a case turns on the application or interpretation of a federal statute or a provision of the United States Constitution.  Diversity jurisdiction arises when a case involves a plaintiff from one state and a defendant from another state (provided that a jurisdictional threshold amount in controversy is at stake--currently an amount in excess of $75,000).  Importantly, the question of subject matter jurisdiction is a question of pure power.  Parties may not waive the requirement to satisfy subject matter jurisdiction--a court without subject matter jurisdiction is simply powerless to hear the case.  A party may raise lack of subject matter jurisdiction to dismiss a case.  Alternately a court can raise the issue of lack of subject matter jurisdiction on its own motion, without party involvement, and dismiss the case.  In contrast, a party may elect to waive an objection for lack of personal jurisdiction by consenting to the jurisdiction of the court--a party may do this because the objection to lack of personal jurisdiction is a personal right of the party, and not a questoion of power of the court to act.

As a general matter, both the federal courts and the state courts are structured as a three tier system.  At the federal level, the lowest level court is a trial court known as a "Federal District Court."  A single judge presides over a trial at which facts are found (generally by a jury--unless the right to a jury trial is waived) and the law is applied.  A Federal District Court may hear both civil and criminal matters over which it has jurisdiction.  Above the Federal District Court sits an appellate court known as a "Federal Circuit Court of Appeals."  Typically, three federal circuit court judges sit on a panel to hear and decide the appeal.  As a general matter, a party has the ability to appeal a decision of a Federal District Court to a Federal Circuit Court of Appeals.  Above the Federal Circuit Courts of Appeal sits the United States Supreme Court--the highest court in the United States federal court system.  It is staffed by nine judges who are referred to as "Justices."  As a general matter, one does not have the right to cause the United States Supreme Court to hear an appeal from a Federal Circuit Court of Appeals.  The typical way in which a case is heard by the United States Supreme Court is by filing a document called a "writ of certiorari" with the Court, explaining why the case is of sufficient importance to be heard.  A common reason for the grant of such a writ is what is known as a "Circuit Split"--a circumstance in which one Federal Circuit Court of Appeals has decided an issue of law one way, while another Federal Circuit Court of Appeals has decided that issue of law another way.  The United States Supreme Court is likely to take such a case in order to settle the matter (or resolve the "split") so that the application of law is uniform throughout the United States.  A similar three tier structure of courts is found in state court systems, though the number of judges hearing an intermediate appeal or an appeal to the highest state court may vary.  Though the United States Supreme Court is the highest court in the United States, it is not the final decisionmaker on matters of state law.  The proper interpretation of a state law is reserved for the highest court in the applicable state.  It is not uncommon for a federal court to "certify" a pure question of state law to the highest state court in order to obtain an interpretation.

Now, the characterization of United States law as a "dual" system of laws divided between national law and state law, coupled with a dual system of national and state courts, is a generalization or simplification of the true state of affairs.  For completeness, you should know that there are exceptions and details which qualify this generalization as briefly outlined below.

First, there are geographic areas in the United States subject to its jurisdiction which are not technically "states".  Examples of such geographic areas include the Commonwealth of Puerto Rico, territories such as the United States Virgin Islands, and the District of Columbia (in which the capital of the United States is located).  These are all areas located outside the geographic boundaries of any of the fifty states.  To a greater or lesser extent, like the states, these are political subdivisions which also have their own local laws.

Second, political subdivisions exist within each of the fifty states.  Generally, these political subdivisions are known as "counties" (in Louisiana, "parishes") and "municipalities" (or "cities").  For example, the University of Miami is located in Miami-Dade County and in the City of Coral Gables.  It is common for both counties and municipalities to have enacted laws.  Sometimes these laws are known as "ordinances."  For example, in Miami-Dade County it is illegal to own a dog breed known as a "pit bull."  In Coral Gables, it is required that one obtain a permit to construct an addition onto your home (or, indeed, to paint it a different color!).  In other cities in Miami-Dade County, the laws governing home renovation are typically less restrictive.  In other counties in Florida, one may own a pit bull.

Third, even within a state it is possible that certain geographic areas will not be subject to the laws of that state.  For example, in certain states of the United States there are Native American lands known as "Indian Reservations" or simply "Reservations" which are subject to governance by Native American tribes of indigenous peoples. An example of such an area is the Miccosukee reservation west of Miami-Dade county. For example, the State of Florida would not be permitted to enter a reservation to arrest a Native American, even for a crime committed in Coral Gables.  Even though Florida law generally prohibits most forms of casino gaming, casinos are permitted on Reservations.  Native American tribes in various states of the United States have taken advantage of their exemption from state laws to run various casino businesses within the state despite a generally applicable state prohibition on casino gaming. (Casino gaming is an example, and this is not a definitive statement or summary, of a very complex area of law.)  To a greater or lesser extent, Tribal councils have enacted their own laws which apply on tribal reservation lands.  For example, many have enacted some form of commercial code.  Another example of a geographic area within a state which is not generally subject to the laws of the state include National Parks (such as the Everglades) and United States military bases.

These exceptions and details can be very important, or even critical, to a certain matter.  However, they are of secondary importance for a first introduction to United States law.

To provide a practical viewpoint for some topics raised in the discussion above, at the end of the Introductory Remarks we will consider a clause from an actual syndicated loan agreement reproduced below.  See if you can identify or explain some features of the below clause based on the above discussion.  What law has been chosen to govern the agreement and why?  Why are New York conflicts or choice of law rules excluded from the law chosen?  What do you suppose the references to New York General Obligations Law are for? [Do not hesitate to search the internet or look in the law library to see the text of these laws!]. Why are the parties submitting to the jurisdiction of both New York State courts and a Federal district court located in New York?


 26. GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW (OTHER THAN THE NEW YORK GENERAL OBLIGATIONS LAW 5-1401 AND 5-1402)). EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  * * *








Last Modified: Thursday, 03-Aug-2017 09:20:44 EDT