Week 7

Week 7 Discussion.


Define and explain what personal jurisdiction and subject matter jurisdiction mean and how these terms are relevant to one who does business in different states: In the personam jurisdiction, or jursidiction over the person, controls which of the federal district courts will determine the case (Jennings, 1, pg. 80). Deciding which court can be used in the two-step process; subject matter and in personam jurisdiction must fit the same court (Jennings, 1, pg. 80, 81). For example, let’s say you reside in North Carolina and a friend resides in Virgina. If your friend physically attacked you in North Carolina why visiting you, then North Carolina would have full authoriy over the case. Subject matter power responds to the strength of court to settle a certain kind of proceeding and supply the solution required (Jurkociski, 2). In addition, for a court to determine or attempt a specific case, both parties and the suject matter must be within the established powers of the court (Jennings, 1, pg. 80). The subject matter of a case directs which court has jursidiction (Jennings, 1, pg. 80).


Research a case in your home state supreme court that deals with an important state issue and provide the facts of the case, the holding, and the law: Gift Surplus, LLC v. North Carolina exrel. The plantiff Gift Surplus operates a video sweepstakes that is unlawful under the North Carolina law, and the plantiff No Limit Games designs and sells software for video sweepstakes. After years of state-court legal proceeding disputing whether North Carolina law banned Gift Surplus Sweepstakes, the plantiffs now challenge the validity of the state law making it a crime to operate certain video sweepstakes as well as the one provided by Surplus. The court has subject matter jurisdiction and the plantiffs’ asserts are not averted by the state court litigation. The North Carolina statute does not breach the First Amendment because it controls non revealing behavior and not speech. Nor is the law unlawfully unclear; the statutes prohibitions are very large and forbid almost all sweepstakes, but they are understandable.


There are two plan tiffs’ in the case, Gift Surplus and No Limit Games. Gift Surplus operates an online retail store, at which it assits a video sweepstakes. Customers can purchase gift cards from Kiosk, frequently placed inside another business establishment, to reclaim at Gift Surplus online store. The purchase comes with the chance to engage in a video sweepstakes by playing a video game that is reproduced, but fake, gambling experience, and likely winning a prize. The video sweepstakes in its present structure is unlawful under North Carolina constitution. In 2020, the North Carolina General Assembly discoursed the statute matter in reply to recognized loopholes, in its laws that prohibited all video gaming machines offering games of possibility such as video poker. Soon after the State Legislature discoursed video sweepstakes, operators challenged the statute under the First Amendment claimimg the video games used to report sweepstakes outcomes on their machines were guarded speech.


In 2012 the North Carolina Supreme Court held that the statute did not breach the First Amendment deciding that the statute essentially controlled noncommunative conduct-operating or placing into operation an electronic machine to run a video sweepstakes- rather than guarded speech. After a trial, the trial court established that the game and sweepstakes did not breach the rules and regulations because skill governs over prospect. The court supplied a lasting injunction forbidding the state from applying the law against Surplus. North Carolina Court of Appeals reversed and the suit went to the North Carolina Supreme Court while the appeal was pending.The North Carolina Supreme Court held that video sweepstakes breached the 14-306.4 statute. As with Gift Surplus game in its 2015 conclusion, the court held that the video sweepstakes used a game in which probability prevailed over expertise.In February 2022, the North Carolina Supreme Court held that the altered Gift Surplus game and video also breached the statute.


While the court has subject matter jurisdiction over the plantiffs’ and neither profess preclusion nor issue preclusion apply, the state triumphs over the merits. Section 14-306.4 controls non expressive behavior, not speech, and thus it does not breach the First Amendment. It is ordered that- 1: the plantiffs’ motion for priliminary injunction, Doc. 5 is changed to a motion for lasting injunction and DENIED. 2: The plantiffs’ oral motion for summary judgement is DENIED. 3: The defendant’s motion to dismiss, Doc 35, is changed to a motion summary judgement and GRANTED. 4: Judgement will submitted individually as time allows. This the 7th day of June, 2022.




1: Business: Its Legal, Ethical, and Gloal Environment, 12e, Marianne Moody Jennings, 2022, 2018 Cengage Learning Inc. pg. 80, 81


2: Cornell Law School- Stephanie Jurkowski, June 2017- https://www.law.cornell.eduwex/subject_matter_jurisdiction


3: Gift Surplus, LLC v. North Carolina exrel. Cooper, 2022 U.S. Dist. LEXIS 101129 United States District Court for the Middle District of North Carolina, June 7, 2022., Decided; June 7, 2022,Filed 1:22-cv-148, 2022 U.S. Dist. LEXIS 101129*| 2022 WL 2046533


Personal jurisdiction refers to the authority of a court over a person, while subject matter jurisdiction refers to the power of a court to hear a particular type of case. Both types of jurisdiction are important for businesses that operate in different states as they need to ensure they are following the laws and regulations in each state and understand which court has jurisdiction over them in case of any legal disputes.

In the case Gift Surplus, LLC v. North Carolina exrel. Cooper, the plaintiffs, Gift Surplus and No Limit Games, challenged the validity of a North Carolina law that banned certain video sweepstakes. The North Carolina Supreme Court held that the law did not violate the First Amendment as it controlled non-communicative conduct rather than speech. The court also established that the game and sweepstakes did not violate the rules and regulations because skill governs over prospect. However, in 2022, the court held that the altered Gift Surplus game and video also breached the statute.

Overall, this case highlights the importance of understanding both personal and subject matter jurisdiction when doing business in different states and the potential legal implications of not following the laws and regulations in each state.

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