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Understanding Venue in Business Litigation: A Comprehensive Guide

When a business relationship goes sour, and another party stops playing by the rules, it may be time to take them to court to rectify the situation. However, before your case begins, it’s worth taking some time to reflect on the complicated issues of venue and jurisdiction and how they will affect your case. Getting your case heard in the right business litigation venue ensures that your team will get a fair hearing and get your case started on the right foot. 

Facing Business Litigation in California?

2 Types of Jurisdiction

Certain courts have the authority to hear your case and certain courts don’t. The criteria for whether or not a court can hear your case can be broken into two categories: personal jurisdiction and subject matter jurisdiction. 

1. Personal Jurisdiction

A court must have authority over the defendant, otherwise, its decision would be unenforceable. If a defendant is a citizen of a certain state, or their business was incorporated or primarily operates out of that state, then that state’s court has general jurisdiction over the defendant. 

However, even if the defendant is not a citizen of the state, by doing business in that state, and taking advantage of the benefits conferred by that state’s laws and government, they implicitly place themselves under the authority of that state’s courts. This is known as specific jurisdiction. 

2. Subject Matter Jurisdiction

In addition to having authority over the defendant, the court in which your case is heard must also be appropriate to the subject matter of your case. For example, bankruptcy cases have their own courts which only handle bankruptcy cases. The court in which you file your case must be one that is appropriate to the issues specific to your suit. 

State Courts vs. Federal Courts

Sometimes, when a case meets certain criteria, it can be heard by a federal court instead of a state or local court. One reason this might happen is if the case in question deals with an infringement of federal laws, such as civil rights cases, or patent infringements; this is another example of the relevance of subject matter jurisdiction.

However, another reason a case might go to federal court is if there is diversity of citizenship. If the plaintiff and defendant are based in different states, and the plaintiff seeks $75,000 or more worth of damages, then that case may be heard in a federal court. 

Interestingly, diversity of citizenship cases may also be heard in a state court. Plaintiffs should be deliberate about which court they choose. Utilizing experienced counsel to help guide decisions on which procedural rules are likely to benefit them and how judges in each court lean, will help decide which court best suits their case. 

Venue in Business Litigation

Choice of venue is a decision about what county or district courts to file a lawsuit in. Typically, three main criteria are used when deciding to file a lawsuit in a specific county :

  • It is the county where the defendant resides,
  • The contract in question was signed in that county,
  • Or the dispute happened in that county. 

It’s also important to note that when taking legal action against a company, it can be treated as either based out of the location in which it was incorporated or the location where it primarily does business. It is important to note that in real estate cases, the venue is generally wherever the property in question is located. Plaintiffs should choose the venue that they think has the most sympathetic judges or juries. However, defendants can always try to change the venue as part of the pre-trial process if it poses a serious inconvenience to them or a witness. 

Get Expert Counsel When Determining Legal Venue In Business Litigation

As you can see, many different factors go into determining the best business lawsuit venue in business litigation, and it can be hard to know which one to choose. That’s why it’s so important to work with experienced lawyers who know California’s legal landscape and can use their expertise to advocate forcefully for you. 

Ruben P. Ruiz PC is just such a law office, and with experience handling high-stakes litigation for a wide variety of clients, we are uniquely suited to help handle your business’s legal battles so you can focus on running your business. Fill out the form below to start a conversation about how we can help your business handle its legal issues. 

Contact us today by filling out the form below. Our fees start at $250 for half an hour. If we decide to work together, the fee for the initial consultation will be credited to your account.