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May 18, 2006

SLM No. 4: Are Federal Courts Better for Corporate Clients?

In the past 10 years I've published three articles about federal judges versus state judges and posted about it in October. But those articles were all too long--and until now I've never made the topic of federal judges a misty-eyed Sensitive Litigation Moment. The short answer to the question: Yes--almost always. The reason is that as business is done increasingly across state borders, chances are good that your corporate clients' cases, whether as a plaintiff or as defendant, will be on "enemy" or at least "foreign" turf. Generally, there is no use in having your clients and you before state judges--who are often popularly elected. So if you're a plaintiff, file your business case in federal court on the basis of diversity (suits between "citizens of different states") or federal question jurisdiction. If your client is sued as a defendant, remove the case if you can to a federal court under 28 U.S.C. section 1441. If you are creative, and your best clients and you are both terrified of most state court systems anyway, you'll find a way. (And if you can't, at least demand a jury; work hard to select a good one when the time comes.)

Are federal judges really "better"? Another short answer: Probably yes--with more than a few glaring exceptions in both systems. But the real point here is that federal judges are supposed to be "better", and more impartial toward outsiders who appear before them. Most but not all federal judges get this. One of the reasons diversity jurisdiction was created was because of the framers’ concern that all-too-human prejudices of the local judiciary toward out-of-state persons would unfairly affect outcomes in trial courts. If you want to read more about this, see a small book by a great man, Erwin Griswold, Law and Lawyers in the United States, 65 (Cambridge, Harv. Press 1964) based on the Hamlyn Lectures delivered in England in late 1964. Also see Hart and Wechsler, The Federal Courts and the Federal System, 24 (Brooklyn, Foundation Press, 1953).

Posted by JD Hull at May 18, 2006 11:16 PM


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