5 Key Differences Between Federal and State Business Litigation

If your business is facing a lawsuit, one of the first questions that comes up is: Will the case be in state court or federal court? Most business owners aren’t familiar with the differences, but knowing the basics can help you understand what’s at stake.

Here are the key differences between federal and state business litigation that every business should know.

1. The Types of Cases Each Court Hears

• State Courts handle the vast majority of business disputes - contract issues, employment matters, and other state law claims.
  
  
• Federal Courts hear cases that involve federal laws (like intellectual property or antitrust), cases where the United States is a party, and disputes between citizens of different states when the amount in controversy exceeds $75,000 (called “diversity jurisdiction”).

2. Judges and Jurors

• State Court Judges are often elected, and rules can vary depending on the state.
  
  
• Federal Court Judges are appointed for life and follow a uniform set of federal rules. Federal juries are usually drawn from a wider geographic area, which can impact how they view your case

3. The Rules and Procedures

• State Courts may have different rules from county to county, and the process can be more flexible.
  
  
• Federal Courts follow the Federal Rules of Civil Procedure, which are stricter and more formal. This often means more extensive written filings and tighter deadlines.

4. Speed of the Process

• State Court Cases can move faster in some situations, but they can also face delays depending on the local docket.
  
  
• Federal Cases generally take longer, but the procedures are more structured and predictable.

5. The Stakes and the Costs

• State Court Litigation is usually less costly, especially for smaller disputes.
  
  
• Federal Court Litigation is often more expensive because of the stricter rules, larger teams of attorneys, and the higher stakes involved.

Why It Matters for Your Business

Understanding whether your dispute belongs in state or federal court can help you prepare for the time, cost, and risk involved. It also highlights why choosing the right attorney - one with experience in both federal and state courts - can make all the difference.

If your business has been sued or is considering filing a lawsuit, don’t wait. Call us today at (415) 633-6841 or email us at Info@BendLawGroup.com.

We’ll explain your options and help you protect your business.

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Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal or tax advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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