Stare decisis” and the “judicial system | LEG 500 – Law, Ethics, and Corporate Governance | Strayer University


The brokerage firm of E. F. Hutton was charged with federal criminal violations of interstate funds transfers. In reviewing the case, the lawyers for the government discovered internal Memoranda from and between branch managers in several states that outline a process for check kiting (a literal stringing together of checks and deposits) that enabled E. F. Hutton to earn interest on phantom deposits.

In 1985 E. F Hutton was found guilty of check kiting managers of the firm use check kiting technique to obtain legal interest over large sums of money, lawyers of government discovered internal memoranda from an between branch managers in several states that outlined process for check kiting that unableed E. F Hutton to earn interest on phantom deposits. E. F Hutton was charge with federal criminal violations.

The case will be tried in the Federal District Court by the United State Attorney, under the Federal Court System because the Federal District has the jurisdiction that involved cases from different states and also the damage exceeds $75,000. Because is a federal crime it is tried a Federal district.

The obligations of the layer is to draft the documents without a perfume with the complete facts and transaction of the fraud committed. The company’s obligation was to show the correct financial statements, the company have the right to provide the correct documents and financial statements to the court. Company have to take steps in order to avoid any future possibilities of having any more frauds.

EFH manager should not disclosed the documents to the government. Managers need communicate to the directors about the situation and look solutions to find the way to avoid future fraud for happen.



The phrase Stare Decisis comes from Latin and means “let the decision stand”. It is a doctrine that allows judges to examine previous cases as examples to make decisions about new cases. Stare Decisis is closely connected to the idea of a precedent. This means that if a Supreme Court has previously made a ruling on a similar case, it will use that precedent as a model for another case. However, following a precedent does not necessarily mean that all similar cases will be decided in the same way. Other factors, such as context or changes in societal views, can also influence whether or not a precedent will be followed.

One of the most talked about recent U.S. Supreme Court decisions was the April 2018 decision of Janus v. American Federation of State, County and Municipal Employees. The case was brought by Mark Janus, a child support specialist who worked for the state government in Illinois. He sued the union, saying he did not agree with its positions and should not be forced to pay fees to support its work. By a 5-to-4 vote, the court ruled that government workers who choose not to join unions may not be required to help pay for collective bargaining. This ruling overruled the court’s 1977 decision in Abood v. Detroit Board of Education, in which the court stated that forcing nonmembers to pay for a union’s political activities violated the First Amendment; however, it was constitutional to require nonmembers to help pay for the union’s collective bargaining efforts to prevent freeloading and ensure “labor peace.” The five majority opinion justices, Justice Samuel A. Alito Jr., Chief Justice John G. Roberts Jr., and Justices Anthony M. Kennedy, Clarence Thomas, and Neil M. Gorsuch, claimed that the distinction between the two cases justified a departure Stare Decisis, and overruled the 40+ year-old precedent. Justice Elena Kagan wrote the dissent, joined by Justices Ruth Bader Ginsburg, Stephen G. Breyer, and Sonia Sotomayor.

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