Before you file a lawsuit, you will want to make sure that you are filing in a court that has the authority to hear the case. This concept is known as jurisdiction, and it consists of two main parts. The court must have power over the defendant that you are suing, which is known as personal jurisdiction, and it must have the power to resolve the legal issues in the case, which is known as subject matter jurisdiction.
A related but separate concept is called venue. This involves choosing which court in a certain state should hear your case. Courts are usually designated according to a city, county, or judicial district. Venue rules exist to prevent a defendant from litigating a case in an excessively inconvenient forum.
Numerous U.S. Supreme Court decisions have shaped theories of personal jurisdiction, based on constitutional principles. There are two main types of personal jurisdiction: general jurisdiction and specific jurisdiction. General jurisdiction means that a court will have personal jurisdiction over any individual who is a citizen of that state and any corporation that is "at home" in the state, which means that it is incorporated there or has its principal place of business there. This is true regardless of where the events that form the basis of the lawsuit occurred.
Meanwhile, specific jurisdiction may be found when a non-resident defendant has purposefully availed itself of the privilege of conducting activities in the forum state, or has purposefully directed its conduct into the forum state. The idea is that the defendant has received the benefits and protections of the forum state's laws, so it would be fair to require the defendant to undertake the burdens of litigating in that state. Moreover, the plaintiff's claim must arise out of the defendant's conduct in the forum state or be related to it, and the exercise of jurisdiction must be reasonable under the circumstances.
Personal jurisdiction may be established if a plaintiff serves a defendant with the summons and complaint while they are in the state where the plaintiff wants to sue them. This is true even if the defendant is only briefly in the state.
Subject Matter Jurisdiction
While personal jurisdiction involves the location of the court, subject matter jurisdiction involves choosing between federal and state courts. Most lawsuits are filed in state courts, unless the case involves a question of federal law. Federal question jurisdiction can arise in patent infringement cases, civil rights cases, federal tax cases, and other areas that the federal government extensively regulates.
If the case does not involve a federal question, a federal court will have jurisdiction only if diversity of citizenship applies. This means that the plaintiff is suing a citizen of another state and seeking at least $75,000 in damages. People are citizens of only one state, which is where they have their principal residence. Corporations can be citizens of both the state in which they were incorporated and the state in which they have their principal place of business, if these are different.
Diversity Must Be Complete
A case involving multiple plaintiffs and multiple defendants must have no plaintiff from the same state as any defendant for a federal court to hear the case based on diversity.
Often, a case that can be filed in federal court also can be filed in state court. Any case that could be filed in federal court based on diversity of citizenship could be filed in state court. As a result, a plaintiff can decide whether federal or state court would be a better place to file the case. They might want to consider which location would be more convenient, which procedural rules would favor them, and which judges tend to be friendlier to their position.
There is not necessarily only one venue in which a plaintiff can bring a lawsuit. A plaintiff generally can sue in any judicial district in which the defendant resides or does business, or in any district in which the events that led to the lawsuit occurred. For example, a car crash victim could sue in the district in which the crash happened, or a small business could sue another business for breach of contract in the district in which the owners of the businesses signed the contract. Sometimes a defendant will object to the plaintiff’s choice of venue if it is far from their location.