Bento Cuisine is a lunch-cart business. It occupies a street corner in Texarkana, a city that straddles the border of Arkansas and Texas. Across the street—and across the state line, which runs down the middle of the street—is Rico’s Tacos. The two businesses compete for customers. Recently, Bento has begun to suspect that Rico’s is engaging in competitive behavior that is illegal. Bento’s manager overheard several of Rico’s employees discussing these competitive tactics while on a break at a nearby Starbucks. Bento files a lawsuit against Rico’s in a federal court based on diversity jurisdiction. (See Basic Judicial Requirements and Following a State Court Case.)

1) Determine whether Rico’s could file a motion claiming that the federal court lacks jurisdiction over this dispute. Why and why not? Explain.

2) Assume that the case goes to trial. Bento believes that it has both the law and the facts on its side. Nevertheless, at the end of the trial, the jury decides against Bento, and the judge issues a ruling in favor of Rico’s. If Bento is unwilling to accept this result, what are its options? Explain

1. Rico's could file a motion claiming that a federal court lacked jurisdiction to hear the dispute, but the motion would likely be denied. Because there appears to be diversity of citizenship in the situation set out here, if the amount in controversy exceeds the jurisdictional amount, a suit can be filed in a federal district court.

2. Bento's first option might be to file a motion to set aside the verdict and hold a new trial. This motion will be granted if the judge is convinced, after examining the evidence, that the jury was in error (assuming the trial involved a jury) but does not think it appropriate to issue a judgment for Bento's side. Bento's second option would be to appeal the trial court's judgment, including a denial of the motion for a new trial, to the appropriate court of appeals. An appellate court is most likely to review the case for errors in law, not fact. In any case, the appellate court will not hear new evidence.