Subject Matter Jurisdiction: Which Court Has Power to Hear My Case?This article will help you determine whether you must file your lawsuit in federal or state court.
The U.S. and state constitutions, as well as federal and state laws, grant and limit courts' jurisdiction, which simply means the power to hear and decide a case. To make a legally valid decision, a court must have both subject matter jurisdiction (power to hear the kind of case a lawsuit involves) and personal jurisdiction (power over the parties involved in the lawsuit).
The reason this is important is that in addition to filing a case on time, a plaintiff has to file it in the proper court. If by mistake you file a case in the wrong court, a defendant may get the case moved (perhaps to a court that's less convenient or favorable to you than if you had chosen the proper court), or even get the case dismissed altogether by filing a "Motion to Dismiss for Lack of Jurisdiction." Dismissal for lack of jurisdiction may be only an inconvenience if you have time to refile the lawsuit in the proper court. But if the time limit on filing your case (the statute of limitations) runs out before you can do this, your court-picking mistake may mean that the defendant can have your lawsuit thrown out permanently. (See Is Your Lawsuit Timely?)
For almost every type of case, the rules we talk about below make it pretty simple to figure out in which court you should file your complaint. Be aware, however, that jurisdiction issues can occasionally become extremely complex when they involve such fundamental questions as whether a case should be heard in federal or state court or whether a state may require residents or businesses of a different state to appear in its courts.
|Full Faith and Credit |
Under the "Full Faith and Credit" clause of the U.S. Constitution, every state has to honor court cases legally decided in other states. This means that if the court in which you file suit has the legal right to decide a case (jurisdiction), you can enforce the judgment anywhere in the country. (You may have to register your judgment in another state before you can collect in that state.)
One requirement for filing a case in federal district court is that the court have what lawyers call "subject matter jurisdiction." Federal courts have subject matter jurisdiction in two kinds of cases:
Cases that arise under a federal law (called "federal question" cases). Federal district courts have subject matter jurisdiction if your case is based on (arises under) any federal law. Examples include:
- You sue a police officer for violating a federal civil rights statute that authorizes civil damages lawsuits by persons who are unlawfully arrested.
- You own a patent, and sue an individual for manufacturing an item that violates your patent. (Federal law creates patent rights.)
- An owner of a small business, you sue a large company for violating federal antitrust laws.
- Under a federal law aimed at eliminating discrimination by businesses, a civil rights organization sues a restaurant chain for maintaining a policy of discouraging patronage by members of ethnic minority groups.
Diversity of citizenship cases. Federal district courts also have subject matter jurisdiction if you are suing a citizen of a different state (or a foreign national), and you are asking for at least $75,000 in money damages. (The monetary floor may be responsible for the old saying, "Don't make a federal case out of it.") Don't be fooled by the "subject matter jurisdiction" label-if a federal court has jurisdiction based on diversity of citizenship, the subject matter of the case doesn't matter. Examples of federal diversity jurisdiction include:
- As a citizen of New York injured in a traffic accident, you sue the New Jersey citizen who was driving the car that struck you and your complaint asks for damages in excess of $75,000. (You could file the complaint in a federal court in either New York or New Jersey.)
- As a businessperson who is a citizen of Florida, you sue a citizen of Great Britain for breaching a contract and causing you to lose $100,000.
- Bluegrass Corp., a corporation whose headquarters are in Kentucky, sues a company headquartered in Washington for $300,000 for breach of contract based on the Washington company's supplying the wrong kind of grass seed. (You could file the complaint in a federal court in either Kentucky or Washington.)
- A company headquartered in Tennessee sues a Texas Internet news service provider for $125,000 for publishing false information about the company's business operations. (You could file the complaint in a federal court in either Tennessee or Texas.)
For diversity jurisdiction purposes, individuals can be a citizen of only one state at a time, and are generally citizens of the state in which they maintain a principal residence. A corporation can be a citizen of two states, the state in which it is incorporated and the state in which it maintains its principal place of business. Federal courts have diversity jurisdiction only if complete diversity between plaintiffs and defendants exists.
Example: Cobb, a Georgia citizen, wants to sue Peachy Corp. Peachy Corp is a Delaware corporation with its principal place of business in Atlanta. Diversity jurisdiction does not exist, because Cobb and Peachy are both Georgia citizens.
Example: Cobb, a Georgia citizen, wants to sue Ruth (a Maryland citizen) and Wagner (a Georgia citizen). Diversity jurisdiction does not exist, because Cobb and one of the defendants are citizens of the same state.
2. State Court Jurisdiction
State courts almost always have the power to hear cases involving events that took place in the state where the court sits or if defendants reside in or are served with a summons and complaint in that state. (For more information on personal jurisdiction see Personal Jurisdiction: In Which Court Can You Sue the Defendant?)
This means that unless your case involves one of the few types of cases over which federal courts have exclusive jurisdiction
, the state court in the state in which you live will probably have jurisdiction to hear your case, whether you're seeking an adoption, guardianship or divorce, suing a landlord or a tenant, have a consumer complaint against a contractor or repair shop, want to go to small claims court, need to probate a will, or are involved in one of the vast variety of other kinds of legal disputes. If you're reading this book and either are or are soon to be involved in a lawsuit, the odds are overwhelming that you'll be in state court.
Example: Dobbs, a Michigan resident, buys a used car from Rick's Used Cars, a Michigan business. A few weeks later, the car breaks down and Dobbs learns that it needs a new engine. Dobbs sues Rick's Used Cars for fraud and breach of contract in Michigan, which has jurisdiction because Rick's is a Michigan business.
Example: Allnut lives in Arizona and is involved in a traffic accident in Arizona with Marlowe, a Texas resident. Allnut could file a lawsuit in Arizona state court, which would have jurisdiction since the accident took place there. (Every state has a "motorist" law that confers jurisdiction on its state courts to hear cases involving all traffic accidents occurring in that state.) Allnut could also file suit in Texas, where Marlowe resides, since state courts almost always have jurisdiction to hear cases filed against defendants who live in the state. (However, Allnut could not file the lawsuit in California or Florida in an effort to combine a vacation with legal business. Neither state is the site where traffic accident-related events occurred or the defendant lives.)
Example: Elaine, a New York citizen, sues Officer Kramer (also a New York citizen) for violating her civil rights by falsely arresting her. Elaine bases the suit on a federal statute, 42 United States Code Sec. 1983, and asks for damages of $10,000. A New York federal court has the power to hear Elaine's case. Since the case is based on (arises under) a federal statute, the New York federal court has jurisdiction even though Elaine and Officer Kramer are citizens of the same state and Elaine seeks less than $75,000. Alternatively, Elaine could file the lawsuit in New York state court, which would have power to hear the case because the arrest occurred in New York and both Elaine and Officer Kramer live there. The state court has "concurrent jurisdiction" with the federal court and enforces the federal law as it would a state law. Elaine can go "forum shopping" between New York federal and state court.
Dual Jurisdiction: When You Can File in Federal or State Court. Most lawsuits that can be filed in federal district court can also be filed in state court. Federal courts have "exclusive" jurisdiction only in a very few kinds of "federal question" cases, such as lawsuits involving copyright violations, patent infringement and federal tax claims. This means that plaintiffs in all "diversity jurisdiction" cases and nearly all "federal question" cases have a choice of suing in federal or state court. Lawyers call the process of deciding which court is best for a plaintiff's case "forum shopping." For example, a plaintiff who has a choice of courts may consider such factors as:
- Which courthouse is closer to the plaintiff's place of work and business? For example, a plaintiff may choose to file in a state court simply because the nearest federal court is 250 miles away.
- Which court has a longer statute of limitations? A plaintiff whose case is untimely under state law would surely choose to file suit in federal district court in a federal question case if federal law provided a longer statute of limitations. (Federal courts use a state's statute of limitations in a "diversity jurisdiction" case.)
- Differences in the judges. For instance, a plaintiff may think that local state court judges have a judicial philosophy that makes them more likely to sympathize with the plaintiff's claim.
- Differences in the jury panel. State and federal courts may have different boundaries for jury selection purposes, and a plaintiff may, for example, file suit in federal court because it selects jurors from a wider geographic area.
|Consult a legal coach for advice on forum shopping. |
Many subtle factors can affect forum shopping. If you have a choice of courts, it would be wise to consult with a legal coach who has experience in both federal and state courts.