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State Court vs. Federal Court in Employment Litigation

There are many choices that a plaintiff must make when he or she decides to bring a lawsuit. A number of variables may affect the manner in which a case proceeds, and the judgment in which it ultimately results. One of the most important decisions that must be made at the earliest stages of litigation is that regarding the forum in which the lawsuit will take place. When an individual files a complaint, he or she may have the option to do so in either state court or federal court in certain circumstances. Each forum has unique advantages and disadvantages, so it is important to be informed about both before initiating legal proceedings.

There are two basic reasons for which a lawsuit may be allowed in federal court: (1) the lawsuit involves a question of federal law, and (2) the lawsuit is between citizens of different states, and the amount in controversy exceeds $75,000. The former of these reasons is known as "federal question" jurisdiction, while the latter is known as "diversity" jurisdiction.

In the context of employment litigation, many cases have the potential to be brought in federal court on grounds of either federal question or diversity jurisdiction. Potential federal question jurisdiction exists because many state employment laws are based on similar federal laws, and so an employment plaintiff will usually have the option of suing under either the state or federal provisions. Potential diversity jurisdiction is frequently present, as plaintiffs often sue large companies that are incorporated, and that maintain their headquarters, in other states.

Though federal court is often available to employment plaintiffs, it is usually more advantageous for plaintiffs to sue under state employment laws, and to bring their cases in state court. First, state laws almost always provide greater protection than their federal counterparts. For example, a comparison of California's Fair Employment and Housing Act (FEHA) and the federal law upon which it is based, Title VII of the Civil Rights Act of 1964, reveals that Title VII maintains a cap on compensatory and punitive damages, while FEHA enables plaintiffs to recover unlimited damages. Second, the state court forum itself provides procedural advantages to plaintiffs. For instance, a plaintiff suing under FEHA in state court does not have to win by a unanimous jury verdict, whereas a similarly situated plaintiff in federal court must obtain a unanimous jury verdict to win. Many employment plaintiffs bringing state claims also prefer to litigate in state court because state judges are more familiar with the applicable state laws, and because their own attorneys have more experience with state court practice.

Because state court is advantageous to plaintiffs, defendants will typically attempt to remove lawsuits that were initiated in state court to federal court. Defendants always have a right of removal as long as no defendant is a citizen of the state in which the lawsuit was brought, and the lawsuit could have been brought in federal court originally. Plaintiffs may be able to avoid removal, or to get their cases remanded back to state court, by pleading only state law claims, or by destroying the diversity of citizenship between the parties (this can be done by adding a plaintiff who is a citizen of the same state as an existing defendant, or by adding a defendant who is a citizen of the same state as an existing plaintiff). Attorneys who represent plaintiffs in the employment context should be careful to draft their complaints so as to avoid removal whenever possible.

Sources:

Cal. Prac. Guide Employment Litigation Ch. 7-A (Rutter Grp. 2014).

Cal. Prac. Guide Employment Litigation Ch. 19-A (Rutter Grp. 2014).

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