USA Law and Practice Contributed by: G. J. Ligelis Jr., Christopher K. Fargo, Alyssa K. Caples and Margaret T. Segall, Cravath, Swaine & Moore LLP
Cravath, Swaine & Moore LLP Two Manhattan West 375 Ninth Avenue New York, NY 10001 USA
Tel: +1 212 474 1000 Fax: +1 212 474 3700 Email: newyork@cravath.com Web: www.cravath.com
1. Legal System and Regulatory Framework 1.1 Legal System Legal System
mon law, also referred to as case law, is established through judicial decisions, which create precedents and may bind or guide subsequent court proceed - ings and decisions. Precedents may be established by state or federal courts and precedents of appellate courts are binding on lower courts within the same jurisdiction. In contrast, precedents from other juris - dictions or from a court at the same level may have persuasive (informative or influential) effect but are not binding. International treaties, federal and state statutes as well as the rules enacted by regulatory agencies, such as the US Securities and Exchange Commission (the “SEC”) and the Federal Trade Commission (the “FTC”), present further sources of US law and regula - tory frameworks. The US Congress, as the legislative branch of the federal government, is responsible for passing federal statutes. Congress may also delegate rulemaking power to executive or independent agen - cies to enact and enforce regulatory rules; the SEC and the FTC are examples of such agencies with rule - making power. The responsibility of these regulatory agencies is not limited to implementing and enforc - ing new rules but also extends to the interpretation of existing laws, thereby shaping the legal landscape further. 1.2 Regulatory Framework for FDI The USA does not provide a strict framework for for - eign direct investment (FDI) and has historically been relatively open to FDI. The Committee on Foreign Investment in the United States (the “CFIUS”) is the committee authorised to review certain foreign invest -
The laws of the USA derive from several different sources and exist in various forms. The US Constitu - tion is the supreme law of the land, under which the legal landscape is composed of common law, statu - tory law and regulatory rules. In addition, matters may be governed by US federal law, the law of one or more of the 50 US states or be subject to both federal and state jurisdiction at the same time. Each jurisdiction has its own common law, statutory law and regulatory rules, as well as its own court system and procedural rules. State courts have jurisdiction over claims governed by state law and certain claims governed by federal law. Federal courts have jurisdiction over claims governed by federal law and only limited jurisdiction over claims governed by state law. The court systems in the vari - ous states are usually structured similarly to the fed - eral court structure, in which there is a Supreme Court as the highest court, the Court of Appeals as an inter - mediate appellate court (not all state court systems have intermediate appellate courts) and the trial courts or courts of first instance (called district courts in the federal system). Sources of US Law In addition to statutory laws and regulatory rules at the US federal and state level, a significant portion of applicable law derives from common law. Com -
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