Federal versus state court: What is the difference?

In some cases, a case may qualify for either federal or state jurisdiction. Having a basic understanding of each system can help guide your decision.

Jurisdiction is the legal term that defines which court can hear a case. The court system in the United States is broken into two basic systems: state courts and federal courts. State courts are established by the laws of each state and have broad jurisdiction. These courts can hear cases on everything ranging from criminal matters to family law disputes. In contrast, federal courts are established under the U.S. Constitution and have a much narrower jurisdiction. Federal courts generally hear cases that involve the following:

  • The United States as a party to the case
  • An allegation of a violation of the United States Constitution or a federal law
  • Bankruptcy, copyright, patent and maritime laws
  • Parties in different states when the amount in controversy is over $75,000

In some situations, both state and federal courts can have jurisdiction over an issue. For example, cases that involve parties in two different states, referred to diversity jurisdiction, may qualify to proceed in either federal or state courts. When both options are available, the plaintiff can choose where to file the lawsuit. In these situations, it is wise to have a basic understanding of the pros and cons of each system before choosing a jurisdiction. Two areas to consider are the differences in expense and speed.

Expense of federal versus state court cases

As noted in a recent publication by Duke Law School, federal court cases are expensive. The high cost is often the result of the discovery process. In state courts, the discovery process generally does not occur until after the parties pled their claims. In contrast, the discovery process begins before this step is taken.

Speed of federal versus state court cases

The time frame of each case will vary. Some cases will settle after discovery is complete, others will require a full trial. Due to procedural differences that translate to a more thorough nature of the legal issues, cases tired in federal court generally take longer than those conducted through the state system.

State courts can fast track cases, sometimes referred to as a "rocket docket". This can reduce the amount of time it takes to resolve the case, which can also further reduce the overall cost.

Importance of legal counsel

Although the plaintiff in a case has the first choice over which jurisdiction is used, it is important to note that the defendant may have an option. Depending on the issue, the defendant may request that a case initially brought in state court be removed to a federal court.

Jurisdictional issues are important both when determining where to litigate and when putting together agreements with dispute provisions. As a result, in either situation it is wise to contact an experienced complex litigation attorney. This legal professional will guide you through the process, working to better ensure a more favorable outcome.