The Difference Between Filing a Lawsuit in a State Court vs. a Federal Court

Although most personal injury cases are filed in state courts, sometimes they can be filed in a federal court. But, in order to file a personal injury lawsuit to be filed in a federal court, one of two conditions must be met:

  1. There must be federal law implications
  2. There must be diversity of citizenship between the parties, and an amount in controversy of greater than $75,000

If a federal law makes up the basis of your lawsuit, then you may usually file in a federal court.  For example, if you file a lawsuit against a police officer for violating your constitutional civil rights, then the suit may be brought in a federal court.

Keep in mind, however, that cases with federal implications, such as the one above, may be filed in either a state court or a federal court––with some exceptions. If your case is filed in a federal court because there are federal law implications, the federal court will apply both the procedural rules of the federal court and federal law to your case.

Diversity of Citizenship Explained

A lawsuit may also be filed in a federal court if it involves what lawyers call “complete diversity”. For complete diversity to exist, two conditions must be met:

Every party on one side of the case must be from a different state than every party on the other side of the case. In other words, all of the plaintiffs must reside in a different state than all of the defendants. It doesn’t matter if all of the plaintiffs are from the same states or if all of the defendants are from the same state. The comparison is made only between plaintiffs and defendants and no state can be represented on both sides.

For the purposes of determining diversity, a corporation is from two states, according to the law––the state where it is incorporated and the state where it primarily does business. So for a corporation, you may have to account for two different states.

The second requirement for complete diversity is that the amount at issue in the case (called “the amount of controversy”) must have the possibility of being greater than $75,000. In a car accident case, if there is significant pain and suffering, there’s a strong possibility of a jury awarding more than $75,000. On the other hand, if the case were only about property damage and the damage was at most $10,000, then there could be no diversity of jurisdiction.

If your case is filed in a federal court because there is diversity of citizenship, the court will apply the procedural rules of the federal courts to your case, but state law from the state where the accident occurred will be applied in regard to your causes of action.

The purpose of diversity of jurisdiction is to prevent what is referred to as “home cooking”. In other words, to prevent a plaintiff from being able to file a lawsuit against an out-of-state party in his or her hometown, where the lawyers and judges know each other, and where there may be an unfair bias of the judge in favor of the local person.

The theory is that federal courts, which are fewer in number than state courts and where judges are appointed by the President, will have less of this type of bias. As such, in addition to the plaintiff being able to file a lawsuit in a federal court in the above circumstances, the defendant has the right to “remove” a case from a state court and into a federal court if either of the above requirements are satisfied.

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