Step 1: Where to Sue
It doesn't matter how well you play the game if you show up at the wrong arena.
Simply put, different courts have different types of power over different types of cases. One would not seek a divorce in traffic court or fight a traffic ticket in the Supreme Court. While judges in both courts wear robes and bang gavels, they lack what lawyers call subject matter jurisdiction to hear such cases.
Beyond power over the type of case presented, judges must also have power over the person being sued, or personal jurisdiction. Finally, because there are many courts in many different states and counties which have both types of power, one must determine the appropriate location for the lawsuit by referring to venue rules which are designed to divvy up the judicial workload.
Subject Matter Jurisdiction
To determine whether a particular court has the power to hear a particular type of case, one must understand how the state and federal court systems are organized and the power allotted to each type of court within each system.
Federal Courts
There are many courts within the federal system, each with specific types of power:
1. United States District Courts.
Generally speaking, U.S. District Courts have the power to hear two types of cases: (1) "Federal Question" Cases; and (2) "Diversity" Cases. Federal question cases are those which arise under a federal law or statute. Thus, cases which claim that a defendant’s violation of federal law caused certain damages may be brought in the U.S. District Court, where judges skilled in the application of federal law will apply that law to the case at hand. In most cases, claims arising under federal law may be filed in either federal or state court as both systems are said to "share" power over such disputes. This is known as concurrent jurisdiction. By contrast, cases arising under certain federal laws, like copyright and patent law, may only be filed in federal district courts because such courts have sole power to hear them. This is called exclusive jurisdiction.
Unlike federal question cases, diversity cases do not arise under federal law, but typically allege a violation of state statutory or case law (known as "common law"). While state law claims are usually reserved for state court, they may be filed in federal court where citizens of one state are suing citizens of another state for more than $75,000. In such cases, we say that the parties are of "diverse citizenship" and that the amount in controversy exceeds the requisite "jurisdictional amount." If both requirements are met, plaintiffs have the choice of suing in either federal or state court because there is concurrent jurisdiction over these cases.
Each state has at least one federal district court. Larger states may have more than one district, while very large states like New York may have as many as four such districts dividing the state’s population and judicial workload. Though most litigants are concerned with the subject matter jurisdiction of such trial courts as the U.S. District Court, the federal system contains other courts with the power to hear other types of cases. Beyond the U.S. District Court, there are specialized courts known as the U.S. Bankruptcy Court, the U.S. Court of Federal Claims and the U.S. Tax Court which handle a much more narrow range of cases. Furthermore, there are two other levels of courts in the federal system which hear appeals.
2. U.S. Courts of Appeal.
Those who are dissatisfied with the decision rendered in the U.S. District Courts may complain to the trial judge’s "boss" -- the U.S. Court of Appeals. In general, there are twelve such courts throughout the nation presiding over "circuits" which reign over U.S. District Courts located within specific regions. For example, those who lose cases in the U.S. District Court for the District of Maryland may appeal adverse decisions to the U.S. Court of Appeals for the Fourth Circuit -- the same court that presides over federal trial courts in Virginia, North Carolina, South Carolina and West Virginia. Although all dissatisfied litigants have a right to appeal to the appropriate appellate circuit, this does not allow them to try their case over again. Rather than calling new witnesses or making new arguments, the appellate court will only reverse a lower court decision if the trial judge committed some type of legal error in the decision making process. Thus, a trial judge who mistakenly overruled an objection to irrelevant and harmful evidence may be reversed for such a legal error on appeal. However, a litigant who simply disagrees with the jury’s verdict, but cannot specify any legal error which yielded this unfavorable outcome will likely lose on appeal as well.
3. U.S. Supreme Court.
While litigants have a right to appeal adverse decisions to the U.S. Courts of Appeal, they do not have a right to take their cases to the highest court in the nation. In most cases, the decision of the U.S. Courts of Appeal are final. Although litigants may seek further review by the nine justices sitting on the Supreme Court of the United States, these justices pick and choose only the most monumental of cases presenting the most significant and interesting legal issues. In fact, although more than 7,000 litigants per year request that the Supreme Court hear their cases, the high court only selects approximately 100 cases each year. Thus, every year, the court refuses to hear many very important cases.
Maryland State Courts
Like their federal counterparts, each state has a system of trial and appellate courts with specific power to hear specific types of cases. Although each state differs somewhat in design, the lines of power are frequently drawn with reference to the value of the cases brought before each trial court. This is certainly true of the Maryland court system:
1. The Maryland District Courts.
The lowest rung of Maryland’s judicial ladder, this is where you would expect Judge Judy or Judge Wapner to sit if they were Maryland judges. In fact, the Maryland District Court was originally called the "People’s Court." Like its televised namesake, the District Courts hear small claims of $5,000 or less and larger claims up to $30,000. In addition, all such cases are heard before District Court judges as there are no jury trials in the District Court. Small claims for $5,000 or less may only be filed in the District Court because they are subject to the exclusive jurisdiction of that court, while claims above that amount up to $30,000 may either be filed in the District Court or the state Circuit Court because these two courts share concurrent jurisdiction over such matters.
2. The Maryland Circuit Courts.
Like the District Courts, each county of Maryland contains a trial court of even greater power known as the Circuit Court. While the District Court generally may not hear claims above $30,000, the sky is the limit in Circuit Court. Furthermore, in cases above $25,000, litigants may try their cases before a judge or a jury, provided that the right to a jury trial is properly invoked. Thus, if litigants choose to file suit in Maryland state courts, the more monumental cases will be heard in the Circuit Court.
3. The Appellate Court of Maryland.
Like the U.S. Courts of Appeal, litigants dissatisfied with decisions of the Circuit Court have a right to take their appeals here. By contrast, litigants dissatisfied with decisions of the District Courts must take their appeals to the Circuit Courts, going up only one rung in the judicial ladder.
4. The Maryland Supreme Court.
Like its federal counterpart, the Maryland Supreme Court only hears those appeals it wants to. Thus, judges of the state’s highest court turn many important cases down and are very selective in determining the nature -- and size -- of their own case load.
Personal Jurisdiction
Beyond subject matter jurisdiction, whether suit is filed in the state or federal system, all courts must have power over the person being sued, or "personal jurisdiction." In general, a person is subject to the power of all courts sitting in the states in which they live or have substantial contact. Under the United States Constitution, it would violate an individual’s due process rights to be forced to defend in distant courts located in states where they have little, if any, contact. Thus, to determine whether personal jurisdiction exists, courts will carefully scrutinize the defendant’s contact with and activities in the state in which the lawsuit is filed.
The key question: Is it fair to hail a particular defendant into a Maryland court and force her to defend? This question is easily answered in the affirmative for Maryland citizens, for companies who are incorporated here or use Maryland as their principal place of business, or for those who are personally served within Maryland’s borders.
The question is much harder to answer in the case of non-resident defendants, whose more tenuous contacts must be examined more carefully. To determine whether Maryland state or federal courts have power over a non-resident defendant, one must look first to Maryland’s "long-arm statute" and, second, to the U.S. Constitution. Maryland’s long-arm statute operates a bit like Ma Bell ... it lists a number of contacts which allow Maryland judges to "reach out and grab someone," pull them into Maryland, and force them to defend. Under this statute, such contacts as transacting business here, contracting to supply goods here, causing an injury here, causing an injury here by an act or omission outside of Maryland (if the defendant derives substantial revenue from this state) will all suffice. Md. Cts. & Jud. Proc. Code Ann. § 6-103. While it is helpful to address the statute in arguments over the personal jurisdiction issue, we need not sweat the details too much. The Maryland Court of Appeals has broadly interpreted this statute as empowering judges to exercise power over non-residents whenever it would be constitutional to do so. This makes the vital inquiry one of federal constitutional law.
Under the Fourteenth Amendment’s Due Process Clause, the U.S. Supreme Court tells us that a non-resident defendant may only be forced to defend in Maryland where (1) he has enough minimum contacts with this state so that hailing that defendant into Maryland courts will not offend traditional notions of fair play and substantial justice. To determine whether there are minimum contacts, we must determine whether there is enough of a factual connection between the defendant, Maryland and the claim to make it fair to hail that defendant into a Maryland court. Sometimes, there will be so much of a connection between the defendant and the state of Maryland that it would be fair to force the defendant to litigate virtually any claim here whether it arose here or not. This is called general personal jurisdiction. By contrast, even defendants who have very little contact with the State of Maryland may be hailed into Maryland courts to defend against claims which specifically arose out of that contact. This is called specific personal jurisdiction
Beyond contacts, one must also look to traditional notions of fairness. In general, it is helpful to ask a few questions:
- Could the defendant have reasonably anticipated being hailed into a Maryland court? Long-term contracts with Maryland businesses will weigh in favor of jurisdiction because it is hardly a surprise that the non-resident might become embroiled in litigation here if things go wrong.
- Would the defendant incur a great burden defending here? Courts will look to the distance and to the financial burdens imposed.
- Does Maryland have an interest in protecting a local plaintiff? Yes, Maryland courts sometimes bend over backwards to help out their fellow Marylanders!
Where minimum contacts and fairness exist, so does personal jurisdiction. But, as the venue rules remind us, that is no the end of the inquiry into which court we must go with our case.
Venue
A defendant who has sufficient contacts in many states may be subject to personal jurisdiction in numerous state and federal courts -- all of which may have the power to hear cases involving that particular subject matter. Yet, with so many hundreds of state and federal courts throughout the nation, one must further narrow the "venue" or precise court in which the lawsuit may be filed. To do so, both state and federal courts have venue rules which attempt to distribute the judicial workload by limiting a plaintiff’s options on where to file suit.
To illustrate this problem, consider Paula Plaintiff’s case. While on vacation in Maryland, this Pennsylvania citizen sustained serious personal injuries when Donald Defendant, a Montgomery County, Maryland resident, struck her vehicle at a Baltimore City intersection. If Paula wants to sue Donald for the many hundreds of thousands of dollars in medical expenses and damages resulting from this devastating accident, she has several options in filing suit. First, she can file suit in either Maryland Circuit Court or federal court because both systems have subject matter jurisdiction in lawsuits between citizens of different states for more than $75,000. Second, because Donald is a Maryland citizen with more than ample contacts with that state, he is subject to personal jurisdiction in all state and federal courts within Maryland. Yet, because all counties in Maryland have Circuit Courts with both subject matter and personal jurisdiction, we must not permit Paula to sue Donald anywhere in the entire state. Venue rules serve to limit the counties and the federal districts in which plaintiffs like Paula may take their cases. Without listing the many venue rules here, Maryland’s state court venue rules would require that Paula choose a Circuit Court sitting in the county where Donald lives, does business or works; in this case, Montgomery County. Special venue rules in negligence cases also permit Paula to sue where the claim arose; in this case, Baltimore City. Thus, the venue rules often give lawyers a choice on where to file suit and it is important that good lawyers check the rules before filing.
Once we have identified a court with (1) subject matter jurisdiction; (2) personal jurisdiction; and (3) one that is the proper venue, we may proceed to file suit in the next step of the litigation phase.