Federal or State Court?

An interesting question you may have is whether to file an action in federal or state court.  As a general rule, any case can be heard in state court, with few exceptions.  Federal cases may only be heard, with a few exceptions, where (1) at least one of the claims is based on federal law, or (2) the parties are from different states and the amount in controversy is over $75,000.

Federal courts have a reputation for being more prestigious, which draws people to them, but it is a lot more complicated than that.

In New York State, the initial filing fee is usually $210 vs. $400 in federal court.  However, New York courts have more filing fees after the case is initially filed, but in federal court, there are almost none.

Federal rules are arguably somewhat more defendant-friendly.  In fact, if there is a basis to bring the case in federal court, and the plaintiff brings the case in state court, the defendant has the option to “remove” the action from state court and transfer it to federal court.

If at any time, the federal court has a complaint with both state and federal claims and it dismisses the federal claims, it generally dismisses the state claims too, but “without prejudice.”  The federal court is essentially saying “there are only state-law claims, so this case would be best heard in state court.”  Then the plaintiff has to pay generally a $210 state filing fee.

Another big consideration is the pool of judges in the relevant state and federal courts, as well as jury demographics.

In the end, sometimes I choose state, and sometimes federal.  I cannot say definitively that one is better than the other.

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