Whether to Sue or Defend in a State or Federal Court
Whether you are able to choose a federal court is beset by federal jurisdictional technicalities your lawyer can explain - - an example is determining the state in which a corporation "resides." Putting aside time limits and other arcane technicalities, here is how it works in civil cases.
Some cases must be brought in a federal court. Examples are actions for patent and copyright infringement, bankruptcy cases, suits for refund of federal taxes, claims under federal antitrust laws and other cases where federal jurisdiction is exclusive. A much larger number of cases must be brought and defended in a state court. These are actions in which the plaintiff's claim is based upon state, not federal, law and the plaintiff and at least one defendant reside in the same state.
But many cases can be brought in either a state or federal court. These include actions in which the parties on each side all reside in different states (i.e., where no plaintiff and no defendant reside in the same state), where the claim in suit exceeds a certain amount, or where the plaintiff's claim is based squarely on federal law and Congress has provided that the claim can be enforced in either a state or federal court.
Cases between corporate or individual citizens of different states invoke federal jurisdiction called diversity jurisdiction, so-called because there is diversity of citizenship among the parties. Actions based on federal law may be tried in federal court on what is called federal question jurisdiction.
If you or your company is a plaintiff bringing the suit, you have the first choice of a state or federal court if there is a choice. But if you are sued as a defendant in a state court, you still may have a choice. This is so because cases filed in a state court can sometimes be removed to federal court. When a case is removed to a federal court, all activity in the state court stops and the case begins anew in the federal court.
Cases filed in a state court can be removed to a federal court when there is federal question jurisdiction or when there is diversity jurisdiction and no defendant resides in the state in which the action was originally brought.
If you have a choice of court, what should you consider before you make it? Here are some factors you should think about and discuss with your lawyer:
- The jury pool:
- State courts draw their jurors from the county in which the court sits. Federal courts draw from a district-wide pool. In urban counties, a state court jury can be expected to consist primarily of city dwellers from a range of social and economic classes. Federal courts, with access to jurors throughout a multi-county district, are likely to include more suburban dwellers. To illustrate, in San Francisco this means that a state court jury will be drawn entirely from the City and County of San Francisco while a jury in the federal Northern District of California may be drawn from the nine Bay Area counties.
- Jury size:
- Civil juries in most state courts, California included, consist of twelve persons. Federal civil juries in most districts, including those in California, are made up of six persons. There is little reliable information about whether a six person federal jury will behave differently from a twelve person state court jury because of differences in jury size. Many experienced trial lawyers believe that the "strong juror," i.e. one who possesses the personal qualities needed to influence other jurors, may play a larger role with the smaller jury.
- Number of votes required for a verdict:
- Here the differences between federal and state court juries may be more significant than those associated with jury size. Federal juries must vote unanimously to reach a verdict. Most state court juries can return a verdict arrived at by majority vote, in California nine out of twelve.
- Differences in federal and state court litigation style:
- In a state court your case may be subjected to a "fast track," which contemplates readiness for trial within 120 days after the complaint is filed. This results in short time limits which can increase litigation costs and limit thoroughness of preparation for trial. State cases often are not assigned to a judge for all purposes. This means that pretrial motions may be heard by one judge after another and that you will not know who the trial judge will be until the case is assigned just before trial. In most federal courts, including those in California, cases are assigned by random drawing to one judge for all purposes when the complaint is filed. This means that the judge who will conduct the trial will become familiar with the case throughout the pretrial period.
There is more "paper chasing" in federal courts than state courts. Federal courts require lawyers to generate a greater quantity of written material than in state court and to attend status conferences and other supervisory proceedings. An increasing number of federal courts, including the one for the San Francisco Bay area, require pretrial resort to alternate dispute resolution proceedings, which can include mediation, early neutral evaluation or nonbinding arbitration. These features of federal practice increase litigation costs for some cases over what costs might have been in a state court.
- Differences in the way governing law is applied:
- Your lawyer will be able to tell you whether there are judicial precedents involving similar cases in either the state or federal court which may work to your advantage or disadvantage in one court or the other. When the law is unclear, there are still general considerations which may help you make a choice of court. If the case turns on federal law, as with cases which qualify for federal question jurisdiction in the federal court, litigating the action in a state court may deny you the federal law expertise of a federal judge. If the case will be governed by state law, a state court may offer one distinct advantage: If your case poses a state law question for which there is no definitive authority from an appellate court, a state trial judge can decide what state law ought to be, subject only to the final decision of a reviewing court. On the other hand, when federal judges apply state law in diversity cases, even though the judge may have a lifetime of experience with the law of the state, the absence of definitive state law appellate authority does not permit a federal court to decide what state law ought to be. Rather, the federal court must make what is called an "Erie guess" concerning the state's law. Named after a landmark decision of the United States Supreme Court, the "Erie guess" requires the federal judge to determine what the supreme court of the state would decide if confronted with the same legal question.