You want to sue somebody who wronged you. The only problem is, there are too many courts floating around. Should you sue in federal court? Or state court?
The answer will often depend on who you are suing and the kind of claims that you are suing over.
The simplest explanation is this one – If your lawsuit involves claims that exclusively involve violations of federal law, then you belong in federal court. For instance, if you allege that your boss has discriminated against you in such a way that it violates federal civil rights laws, then you can bring that claim in federal court. Allegations of copyright or patent infringement also usually belong in federal court since copyright and patent protections stem from federal laws (not individual state laws).
Conversely, if you are suing somebody based exclusively on state laws, you will probably be required to file your lawsuit in state court. There are potential exceptions to this rule, but we will get to those in a bit. If you have simple claims for breach of contract, personal injury, defamation, etc., chances are that you will want to file in state court since federal law generally does not provide for such claims.
There is an important exception that allows you to sue in federal court when only state law claims are involved. This is known in legal circles as the “diversity jurisdiction” rule. The rule works this way – If you are a resident of state X and are suing a person or entity that is a resident of a different state, then you can sue in federal court if the amount of money you are seeking is greater than minimum limits set my Congress. Under present law, the minimum amount you need to seek under diversity jurisdiction is $75,000. However, Congress has the power to raise or lower this threshold amount. If you claim that you are owed at least a total of $75,000 from the person you are suing, federal courts will generally hear the case unless it is clear that there is no way the claim can reach that amount ($75,000) or if the person is a resident from a different state.
Frequently asked questions on this subject:
Question: What if I am suing more than one person on state claims and one defendant happens to be from my own state and the other defendant(s) are from different states. Can I still sue in federal court under the “diversity jurisdiction” rule?
Answer: No. Each and every defendant that you sue must be from a different state in order to invoke the “diversity jurisdiction” rule. Even if you sue 100 people in a lawsuit, the presence of one single defendant from your own state will prevent this.
Question: How do I know which state a defendant is a resident of?
Answer: Generally speaking, the state where a person’s permanent home is will be considered their residence (or “domicile” as the courts will often say). However, each state is free to craft their own rules to determine if one is a resident of that state or not. Courts will also look at other factors to determine if a person intended to become a resident of a particular state or not (i.e., were they married in a specific state? Do they work or go to school there?, etc.) Also keep in mind that somebody can be considered a resident of more than one state for legal purposes of the “diversity jurisdiction” rule. If you are from state X and suing somebody who is a legal resident of both state X and Y, then there still is no “diversity” that would allow you to file purely state claims in federal court. If you aren’t sure which state a defendant is a resident of, please consult an attorney if you are thinking of suing in federal court.
Question: I am suing a business or corporation. Which state are they a “resident” of?
Answer: A corporation is a ‘resident’ of any state that it is legally incorporated in as well as the state where its principal place of business is. (This can mean that it is a resident of more than one state. For instance, if business X is technically incorporated in Delaware but has its principal place of business in California, it will be considered a resident of both Delaware and California.)
Question: My lawsuit contains causes of action based on both federal and state law. Can I still sue in federal court?
Answer: The general answer is – yes. As long as the both the federal and state causes of action derive from the same general incident that you feel you were wronged over, a federal court can still usually decide related state law claims in your lawsuit. The caveat to this is that there must be at least one issue of federal law for the federal court to decide. (In legal-speak, this is known as the federal courts have ‘pendent jurisdiction’ over the related state claims). There are also rare instances where a federal court might lack jurisdiction over a case with federal claims. For instance, the 11th Amendment to the Constitution prohibits you from suing a state or state entity in federal court. If you are unsure this exception might apply to you or not, please consult an attorney.
Question: My lawsuit contains causes of action based on both federal and state law. Can I still sue in state court?
Answer: The general answer is – yes. In legal-speak, the state court has “concurrent jurisdiction” to hear federal claims. But again, there are some important caveats. To begin with, there are certain kinds of claims that can ONLY be brought in federal court because they have “exclusive jurisdiction” over such claims. Examples include claims over copyright or patent violations, bankruptcy claims, federal tax disputes, etc. As usual, it would probably be best to consult an attorney if you aren’t sure on this issue.
The other thing to keep in mind with this issue is that if you file your lawsuit in state court and your complaint contains some federal causes of action, the defendant can try and get the case ‘removed’ to federal court against your wishes. You can then try to argue to the federal court that it should ‘remand’ the case back to state court because it would best be settled there. However, ‘remove’ and ‘remand’ arguments can take up a lot of time, money and resources. To avoid this hassle, consult with an attorney first before deciding where to file.
Where to file a lawsuit can be a complex and confusing business. If you think that your case is complex due to either the kinds of claims you are bringing or the kinds of defendants you are suing, please think about having an experienced attorney handle the filing.
[Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither HandelontheLaw.com, or any of its affiliates, shall have any liability stemming from this article.]