By Mark Waterfill
There are times when an attorney may choose to proceed in state or federal court. Many causes of action allow for concurrent jurisdiction. For example, a federal employment discrimination or overtime case may be filed in either state or federal court. A breach of contract claim where there is complete diversity between the citizenship of plaintiff(s) and defendants(s) and the amount in controversy exceeds $75,000 may be filed in state or federal court.
There are some causes of action which are exclusively the province of either state or federal court. For example, family law matters (such as divorce or child custody), pursuant to federal common law, are exclusively resolved in state court even if the controversy would otherwise satisfy the diversity requirements. The same is true for probate matters.
The following types of cases may only be litigated in federal court: lawsuits between states; suits involving ambassadors or other high-ranking foreign officials; federal crimes; bankruptcy; patent, copyright, and trademark claims; admiralty; federal securities claims and banking regulation.
There is a large group of cases where the thoughtful plaintiff’s attorney and the adept defense attorney can choose the venue. The plaintiff’s attorney can take her time and carefully consider where the case might be best litigated while the defense attorney must act quickly to remove the case within 30 days of service of the complaint and no later than one year after the case was filed.
What are the various considerations when determining between state and federal court? Recently, I took an unscientific survey of several attorneys during a seminar presented on this topic. The group was a good mix of experienced and new attorneys, mostly from Indianapolis but some from the surrounding area in central Indiana. Here are some of the factors these attorneys identified.
The court rules
A careful attorney will often look at the rule differences to guide the decision. Generally, federal court rules are more regimented, more structured and some might say, clearer than in state court. As one survey respondent said, “The rules are more organized in federal court.” Another preferred state court, saying, “less deadlines in state court compared to federal court in my experience.”
The general consensus is that state court is less formal and that in federal court one must be much more aware of rules and requirements. The federal court case management process is more consistent as the Case Management Plan has completely taken hold in both the Northern and Southern Districts of Indiana. While there are some Marion County judges using a very similar system, for the most part it was noted by our respondents that the federal system is more regulated. Generally, in our Marion Circuit and Superior courts, as well as courts in the surrounding counties, different case management tools or pretrial orders are used, depending upon the judge. The “anchor date” in federal court is the date of filing or removal while many state courts set the trial date and take the discovery, summary judgment and other deadlines back from that trial date. State courts often set many trials on the same date and then have a priority system so that you may be the third in line for that date. A wise attorney is aware of the two trials set ahead of him and may contact those attorneys to see if they might be trying the case on that day. Typically, in federal court, the final pretrial confirms the trial is going and you had better be prepared.
Everything in federal courts seems to revolve around summary judgment. As one participant noted, “Where liability is a potential issue, state court is a better option. State court judges typically avoid entering summary judgment. Federal judges sometimes are overzealous using summary judgment.”
The difference lies in the standards used by each court. The burden on the moving party under Indiana law is to “designate sufficient evidence to foreclose the nonmovant’s reasonable inferences and eliminate any genuine factual issues.” Kader v. State, 1 N.E.3d 717 (Ind. Ct. App. 2013). In federal court, the moving party must only “inform the court of the basis of the motion and identify the relevant portions of the record which it believes demonstrate the absence of a genuine issue of material fact.” As one author noted, “The key difference is that in Federal court the moving party does not need to actually develop and rebut the arguments that would be made by the nonmoving party before it can shift the burden.” (Colin E. Flora, Hoosier Litigation Blog, “Indiana Court Explains the Meaningful Differences Between State & Federal Summary Judgment Standard,” Dec. 13, 2013.)
In our unscientific survey of 17 attorneys, seven described themselves as “primarily plaintiff” and six of those seven said they preferred state to federal court. There were also seven who said they were “primarily defendant,” and of those, four preferred federal court, two state court and one had no preference. As a general matter, there is at least a perception that the rules favor a plaintiff in state court and a defendant in federal court.
As we know, federal judges are appointed by the president and approved by the U.S. Senate for life. State court judges mostly are elected in some fashion. Of our 17 respondents, 12 felt federal judges were better and five stated no preference. No one said state court judges are better, although as one attorney said, “It really is a mixed bag, depends on the judge,” and another said, “excellent judges in both.”
There are many other factors which might be part of a calculation as to where to file a case. State court filing fees are less expensive; federal court has electronic filing while we are not there yet in state court; and there are different sanctioning rules and statutes between the two venues. There are numerous other differences which might lead to one decision over another. However, the thoughtful attorney will carefully consider those choices before filing the complaint or notice of removal.•
Mark Waterfill is a partner at Benesch and focuses his practice on employment law and civil litigation. The opinions expressed are those of the author.