Anatomy of a U.S. Lawsuit – Where Do I Sue?

Filing a lawsuit in the United States can feel daunting, and one of the earliest decisions you will need to make is where to sue. While there are cases that can only be filed in state court (i.e., when all parties are domiciled in one state) and others that can only be filed in federal court (i.e., when a question of federal law is at issue, e.g. in patent cases), most times our international clients actually have a choice. Here is a basic breakdown of the federal court system, the state court system, and considerations for deciding which one is best suited for your case.

Federal Court

The United States District Courts are the federal trial courts. There are 94 district courts, at least one in each state, and this is where federal cases are adjudicated. In some of the larger districts (such as California), districts are sub-divided into “divisions”.

Separately, there are appellate courts (U.S. Court of Appeals) for each circuit. Consistent with their name, this is where appeals are adjudicated. Appellate courts have particular rules that must be strictly adhered to throughout a case.

In addition, there are specialized federal courts that have been created for specific matters. Most commonly asked about, each district has its own bankruptcy court. There is also a Court of International Trade, which is located in New York, that has exclusive jurisdiction over actions relating to recovery of custom duties and tariff penalties under U.S. tariff and trade laws.

State Court

In contrast, each state in the U.S. has a system of state courts, which may also be sub-divided into divisions. State courts usually also handle specific legal areas, such as probate court (i.e., wills and estates), family court (i.e., divorces) and juvenile court.

Factors to Consider When Deciding Whether Federal Court or State Court Makes Sense

As mentioned above, there is strategy involved in deciding whether filing in federal or state court offers a better likely outcome. Some of the key practical factors that should be considered include:

  • The amount of time it takes to get to trial: unfortunately, U.S. cases are notorious for taking much longer than cases in most other countries. Generally speaking, we see that getting to trial in federal courts is quicker. This is because federal judges often exert tighter control over their cases, and some are very proactive about keeping the parties on track for an original trial date (whereas in state court, it seems judges are more open to rescheduling trials multiple times).
  • Relatedly, the potential judges: federal courts lack “peremptory challenges”, meaning that once you’re assigned a judge, you’re largely stuck. It’s always a good idea to review potential judges and their general history of rulings and timelines.
  • “Alternative dispute resolution”: alternative dispute resolution (or, ADR) generally refers to programs that provide for settlement conferences, early neutral evaluations, mediations, etc. based on the parties’ request (or sometimes, this is mandated by the court). Most federal courts have court-based ADR programs. These programs vary but can be very effective in (1) getting parties to consider the strengths and weaknesses of their cases, and (2) provide a forum in which parties can consider settlement vs. the time and expense of taking a case through trial.
  • Where the case will be physically located: sometimes, state court cases can be assigned to courthouses that are a bit removed from major U.S. cities. Federal courthouses are typically located in major cities.
  • And finally, the format of filing: this has a larger effect on your attorneys, but federal courts have implemented electronic case filing (or, ECF). ECF filing is much more convenient and typically provides 24-hour access to the court file. In contrast, some state courts are still on the paper system, which means filing and retrieving case documents can be expensive and time-consuming, and may result in delays.

There are also myriad procedural rules that should be taken into account, which we’ll cover in a subsequent post!