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What cases can be brought in state and federal court?

The smallest of details can make the largest of differences for Detroit residents. Oftentimes, these seemingly minor details might not be noticed by the individual at the time, even if it turns out to have a major impact on the person's life.

This is often the case when it comes to the legal system. Seemingly minor details about a case can end up having a major influence on how the case is resolved. For instance, last week, this blog discussed a case that was filed in Michigan federal court, but that involved a breach of contract action under Michigan law.

While the distinction between having a case filed in state court or federal court may seem insignificant, the venue for the case can have a large impact on how the case gets resolved. Federal law differs in many respects from state law, including the elements of the claim at issue and the procedure for how that claim will be heard.

It is sometimes difficult to determine whether business litigation should be brought in federal or state court. State courts typically hear cases involving a breach of contract or other alleged violations of state law. Federal courts, on the other hand, may hear cases involving federal statutes that may be at issue in a case. Federal courts can also hear cases between citizens of different states, but only if the amount at issue in the lawsuit is more than $75,000. This threshold is frequently not hard to surpass in business litigation, where the alleged damages can total several hundreds of thousands of dollars at a minimum.

These differences boil down to a question of jurisdiction. Federal courts can only hear cases in which the court has jurisdiction, which is much narrower than a state court's jurisdiction. When either court would have jurisdiction to hear the case, the parties can decide for themselves whether to bring the case in federal or state court.

Source: Federal Judicial Center, "What the federal courts do," accessed on Aug. 22, 2015

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