Where — Exactly — Do I File My Lawsuit?

I’ve been harmed: An employee left my company and took with him proprietary information; my employer owes me past wages or severance, or has discriminated against me; I’ve been hit by a car; my husband or wife and I have split up and I want to file for divorce. 

 

There are courthouses all over the city and state. Where must I file my lawsuit? Do I have a choice?

You might. And, of course, you might not.

First things first: if you have a written agreement with the other party to the dispute, you and your attorney should look at the agreement to determine whether there is an arbitration clause. That would require you to resolve the dispute in arbitration, not in court. Also, there may be a “step” mediation clause in the agreement that requires you to first try settling the dispute in a private mediation before starting a lawsuit. If you bring a lawsuit despite an enforceable arbitration or mediation clause, the other side may go to court and get an order staying or dismissing the lawsuit — and you will have just wasted time and money.

Some claims, such as discrimination claims, may require you to submit your claim to a federal or state agency (such as the EEOC) and to await a determination or receive permission to file a lawsuit before you may do so. Your lawyer, who should be experienced in such claims, will know what you must do. Don’t be surprised if you cannot march into court on day one, as much as you might like to.

Let’s assume that there is nothing to stop you from filing a lawsuit, and that, hopefully, you’ve made some reasonable efforts to resolve the dispute before doing so. Here’s where it gets tricky: Depending upon the nature of the claim and certain elements of it, you may have no choice of where to go or you may have several.

Courts must have subject matter jurisdiction over the claim and personal jurisdiction over the parties in order to hear a case.

Subject matter jurisdiction is exactly what it sounds like: Is the particular court empowered to hear the type of dispute you wish to bring? For example, the New York City Family Court does not have subject matter jurisdiction over a bankruptcy proceeding and the United States Bankruptcy Court does not have subject matter jurisdiction over a custody dispute. Also, there may be jurisdictional thresholds that determine where a case may be brought. For example, two breach-of-contract actions may be factually identical other than that in one, the plaintiff claims damages of $10,000 and in the other, $100,000. In New York City, the $10,000 claim must be brought in New York Civil Court, which has jurisdiction of such claims up to $25,000, and the $100,000 action must be brought in the Supreme Court, which has jurisdiction over such claims above $25,000.

In federal court, there are certain types of claims over which, simply by their nature, the court would have subject matter jurisdiction. These would include claims brought under the Lanham Act for Trademark Infringement, the FLSA, ERISA, RICO and other claims identified in statutes. The federal court would also have jurisdiction over other types of claims, including tort and contract disputes, so long as there is complete diversity amongst the parties and the amount in question is greater than $75,000.

Personal jurisdiction sounds easy, but can be tricky. For example, if you are seeking to bring an action in New York State court, is the person you wish to sue a resident of New York State? Are you able to serve the individual with the summons and complaint in New York State? Is it a business formed in w York State? Is it a foreign business authorized to do business in New York State? Are there facts that would give rise to jurisdiction even though the other party’s principal residence, or principal place of business, is not in New York? These may be complicated questions to resolve and are subjects more suited for a law review article than a blog article. However, do not be surprised when your rush to start your lawsuit is delayed as you navigate these issues. Again, if the court does not have subject matter jurisdiction or personal jurisdiction, your case will be dismissed. And, again, you will have wasted time and money.

Let’s assume that more than one court has subject matter jurisdiction and personal jurisdiction. For example, you have a tort claim or a contract claim where the amount in dispute is in excess of $75,000; you have jurisdiction over the defendant; and there is complete diversity amongst and between you and the defendants. In that case, you could proceed in New York State Supreme Court or in federal court. Your choice! Where should you go?

 

There Are Many Factors That You and Your Attorney Should Consider:

  • Is this the type of claim that a federal court has a greater familiarity with and more expertise in than a state court would, or vice versa?
  • How important is the pace of the litigation to you? While most plaintiffs — indeed, most parties — are happy to have a lawsuit resolved as quickly as possible, different courts have different rules and procedures that may impact the length of time a case will take to resolve. These rules and procedures may also significantly affect cost. Where is your case most likely to be heard efficiently and in the most cost-effective manner?
  • What are the different types of alternative dispute resolution that are available, or mandatory, in each court?
  • If a commercial claimant and you are choosing between state and federal court in New York:

The in-state court, will you be able to bring the case in the Commercial Division — which has monetary thresholds — or will you have to bring your case in a regular assignment court Part? Litigating a case in a regular assignment court Part can be very different than litigating a case in the Commercial Division, which has many different rules and procedures designed to expedite the resolution of significant commercial disputes. For example, the minimum threshold for a case to be brought in the Commercial Division is presently $500,000. If your dispute is over a significant amount of money but less than $500,000, you will not be allowed to bring it in the Commercial Division. In that case, you may prefer bringing your action in federal court.

These are just some of the considerations in deciding where you should start a lawsuit. Be sure to consider carefully with your attorney where you should be before you file the summons and complaint.