Should my business file its lawsuit in federal or state court? Would filing in one court give my company the upper hand? The decision of venue is an often-overlooked facet when filing a commercial suit, but this simple decision can be central to the success of your case. At Hone Law, we apply a forward-thinking mindset to every area of our work. This allows us to set our business clients up for success. For more insight into the issue of venue selection in commercial lawsuits, consider contacting our team at (702) 608-3720 today.
What Is Jurisdiction?
Jurisdiction refers to the authority that a court of law has to carry out legal judgments. For a court to hear a case, it must have jurisdiction. The court system in the United States is broken down into two fundamental systems: state court and federal court. State laws and constitutions, as well as the Constitution of the United States and federal law, limit courts’ jurisdiction over different cases.
The Federal Court System
The federal court system is made up of 94 U.S. District Courts, 13 Appellate Courts, and the U.S. Supreme Court. District Courts are responsible for hearing civil and criminal cases, and special courts have been established to handle bankruptcy, international trade, and federal claims. Courts in the federal system can only hear some cases: claims that raise a federal question and issues centered on diversity of citizenship.
These are two important legal concepts when answering the question of should my business file its lawsuit in federal or state court. Your attorney may advise you to file in federal court if any of the following are true:
- Your case involves a violation of federal law or the Constitution.
- The controversy is between citizens of different states and involves an amount greater than $75,000.
- Your case relates to bankruptcy, copyright, patent, or maritime law.
- The United States is a party in your case.
The State Court System
The state court system has been established by the laws of each state and generally has the authority to hear cases involving events in the state. State courts have broad jurisdiction and – for the most part – cases that businesses are likely to be involved in are typically tried in state court.
Each state has a unique court system, and the Nevada state court structure can be broken down as follows:
- District courts, which handle civil cases involving more than $15,000, criminal cases, as well as family and juvenile cases. There are 17 district courts in the state.
- Justice courts, which handle civil cases involving less than $15,000, small claims, and other preliminary and minor matters. There are 40 justice courts in the state.
- Municipal courts, which handle traffic violations and misdemeanor ordinances.
- Appellate courts, which handle appeals.
State courts typically have jurisdiction unless your lawsuit involves a type of case over which federal courts have jurisdiction. There are some notable exceptions to this, however, such as cases that have dual jurisdiction.
What Is Concurrent Jurisdiction?
Sometimes, you have the choice to file your lawsuit in either state or federal court. This is known as concurrent jurisdiction. If both federal and state courts have jurisdiction over your claim, your attorney will deliberately choose the forum that is more favorable for your case.
Should My Business File Its Lawsuit in Federal or State Court?
If your company is the plaintiff bringing the lawsuit, you have the advantage of choosing between state and federal court. At Hone Law, we believe that jurisdictional issues are critical when deciding where to litigate. We consider a range of factors when selecting which court to file a commercial lawsuit, including:
- Jury pool and jury size: In Nevada, a jury typically consists of eight people, unless both parties agree on a different number (Rule 48 of the Nevada Rules of Civil Procedure). Federal juries, however, range from six to twelve people. Since juries must reach a unanimous verdict, jury size and the personalities represented in the jury are critical. While most state courts pool jury members from the county in which the court sits, federal courts typically pool from multiple counties or half the state, offering a wider selection for jury members.
- Proximity to your business: A business may choose to file in state court out of convenience. Sometimes, the nearest federal court is hundreds of miles away.
- Statute of limitations: If you have missed the filing deadline under state law, you may need to file in federal court.
- Litigation style differences: State court cases may not be assigned to one judge for all purposes, meaning pretrial motions may be heard by one judge and the trial may be conducted by another judge. This is unlike federal court, where one judge is typically assigned to the case. Another difference is in the length of the process. Federal court cases may involve a greater amount of administrative work and pretrial proceedings, extending the duration of litigation.
- Governing laws and precedents: Sometimes, judicial precedents involving similar cases at the state or federal level may work to your advantage in one court versus the other. Your attorney can explain governing laws and judicial precedents, and whether these factors influence your choice of venue.
The defendant may be able to request that a case originally filed in state court be brought to federal court. A defendant may do this for various reasons. For instance, federal courts may have more experience with your type of lawsuit and can handle the issue more efficiently. Alternatively, the defendant may want to access the wide geographic area that accompanies jury pools in federal cases.
Ensure Strategic Decision-Making with Hone Law Today
Should my business file its lawsuit in federal or state court? While this question may seem menial at first glance, the implications that this decision has on the outcome of your case can be significant. At Hone Law, we are more than fearless commercial litigators. We are a team of experienced legal advocates and strategic advisors who will review your case to determine the right course of action based on your interests, needs, and assets. To learn more, consider contacting us at (702) 608-3720 today.