Can I Sue for State Law Issues in Federal Court?

Regardless of the type of claim you have, whether it’s a contractual claim, personal injury case, or any other legal matter, you must identify the proper court in which to file your lawsuit. For state law claims, filing in federal court is possible if the matter falls within specific categories authorized by the U.S. Constitution and federal statutes, most commonly through diversity or supplemental jurisdiction.

To get help determining whether you can or should bring your state cause of action in federal court, contact an experienced civil litigation attorney in your area.

Understanding Federal vs. State Court Jurisdiction

The judicial system in the United States is comprised of a parallel court system. State courts are in one system, and federal courts are in the other.

• State courts. As courts of general jurisdiction, state courts handle most disputes in the United States. This includes most matters involving breach of contract, property, family, personal injury, and other state law.
• Federal courts. Courts of limited jurisdiction, federal courts can only hear cases that fall within specific categories authorized by the U.S. Constitution and federal statutes. They must have subject matter jurisdiction to hear the case.

The parallel court systems operate on separate tracks, so to speak. This, however, does not mean that one court is more prestigious or will provide a better outcome than the other.

When Can You Bring a State Law Claim in Federal Court?

In civil litigation, there are two main pathways for a state-law claim to reach federal court, either through diversity jurisdiction or by supplemental jurisdiction.

Because federal jurisdiction is limited, you must have a legal basis, subject matter jurisdiction, to bring your case in federal court.

Diversity Jurisdiction

A litigant can initiate a claim under a state law or a state statute when the parties are citizens of different states, or when a foreign party is involved.

The basic requirements for federal court jurisdiction are:

1. The parties must be from different states (diversity of citizenship)
2. The amount in dispute must exceed a set threshold

Diversity jurisdiction was designed to provide a neutral forum for parties and to reduce concerns that a local court may favor a resident. This means that a business owner with her principal place of business in Texas who has a breach-of-contract claim against a company based in California, alleging $250,000 in damages, may qualify for federal-court jurisdiction.

The Amount in Controversy

The money damages in cases with diversity jurisdiction must exceed $75,000. To determine whether the amount in controversy has been satisfied, the court considers the damages sought, and in some cases, the value of what is at stake in the litigation.

Some class actions can be brought in federal court under the Class Action Fairness Act (CAFA) when the aggregate amount in controversy exceeds $5 million and there is minimal diversity. Generally, minimal diversity means at least one class member is a citizen of a different state than at least one defendant, and other CAFA requirements and exceptions apply.

Complete Diversity

To satisfy the requirement for complete diversity in civil actions, no plaintiff can share state citizenship with any defendant. For example, say a plaintiff from Virginia sues defendants in New York and Virginia. In this case, diversity fails because at least one plaintiff and at least one defendant are citizens of the same state.

Supplemental Jurisdiction

In cases where the lawsuit already involves a valid federal law claim, the court may also hear related state law claims. In federal question cases, the court can hear state-law claims because Congress wanted to make it more convenient to litigate closely connected cases in the same court.

The statute and case law provide how the court will evaluate whether it has jurisdiction; the claims must involve a “common nucleus of operative facts.”

For example, a litigant can bring a federal anti-discrimination claim in federal court and also claims for wrongful termination under state law. In that case, the federal district court can hear both civil cases together.

Sources of Jurisdiction Rules

The U.S. Constitution, federal statutes, and decisions by the Supreme Court of the United States define federal court jurisdiction.

Article III of the Constitution provides that the judicial power extends to several types of cases and controversies. For example, federal courts have exclusive jurisdiction over certain types of cases, such as bankruptcy cases and patent and copyright cases. The Supreme Court has original and exclusive jurisdiction over controversies between two or more states.

Article III further authorizes Congress to determine the allocation of federal jurisdiction within the federal court system and between federal and state courts. Congress authorized federal courts to exercise concurrent jurisdiction with state courts over cases involving citizens of different states that meet the amount-in-controversy requirement.

In a suit brought in state court, the defendant may be able to remove the case to federal court by filing a notice of removal in the federal district court that covers the place where the state case is pending.

In general, for individuals, domicile determines citizenship. For businesses, the state of incorporation and principal place of business determine citizenship.

Mixed Federal and State Claims

When state and federal claims are combined in a lawsuit, the court has some discretion. It may decline to hear state court claims in certain situations, such as when the federal claim is dismissed early.

Thus, getting into federal court is only the first part of this federal civil procedure. Other considerations determine whether the case will stay in federal court.

Strategic Considerations: Federal vs. State Court

Even when both federal and state court jurisdiction is available, the choice requires attorneys to consider what is likely to produce the best outcome. Although no outcome is guaranteed based on which court system a litigant chooses to bring a case in, there are factors to weigh.

• Jury pools. Because juries are drawn from different geographic areas, the jury’s composition can determine the outcome of the case.
• Procedural rules. Federal cases follow the Federal Rules of Civil Procedure, which are different from state laws. This impacts how discovery proceeds, timelines, and motion practice.
• Judges. Article III judges in the federal system have lifetime appointments and often manage smaller caseloads. Therefore, they may be able to give your matter more attention.
• Speed and cost. Timelines and expenses can differ greatly based on whether you choose to litigate in state or federal court.
• Predictability. Some parties prefer what is perceived as more consistent outcomes in federal court. At the same time, other parties may prefer the local courts, where they may be more familiar with the judges and other attorneys.

While making strategic decisions about which court to file in is part of good legal work, there are limits. Forum shopping occurs when litigants select a jurisdiction that offers procedural or legal advantages. It has its own considerations and limits. The best court to file your lawsuit depends on the specific facts, the parties, and the goals of the case.

Get Legal Help Today

Filing a lawsuit in federal court (instead of state court) can affect everything from the statute of limitations and case timelines to potential damages awarded. Speaking with a skilled attorney can help you navigate the considerations involved in determining whether to sue in state or federal court.

Visit the Super Lawyers directory to begin your search for an experienced civil litigation attorney.