In order to hear a case, a court must have jurisdiction. Jurisdiction means that the court has legal authorization to hear that case. Without that authorization, parties must go somewhere else to try their case because that court cannot legally hear their arguments. There are two general types of jurisdiction: personal jurisdiction and subject matter jurisdiction. The type of court occasionally limits subject matter jurisdiction. The tax court, for example, can only hear cases regarding tax disputes. Personal jurisdiction means that the court has some authority over the person. Ususally, if the parties live in the same area as the court, the court will have jurisdiction in the case.
The Fourth Circuit Court of Appeals for the State of Louisiana recently explained personal jurisdiction and its requirements in a case arising from the St. Bernard 34th Judicial District Court. In that case, the plaintiff lived in Louisiana, but the defendant, a real estate company was incorporated and did business in Tennessee. The plaintiffs were a couple that rented a cabin in Pigeon Forge, Tennessee. They made the reservation online. When they went to the cabin, however, the couple both slipped and fell on the wet steps of the cabin. The couple attempted to sue the real estate company in Louisiana state court.
Generally, if the parties are from two different states, then it is likely more appropriate to file the case in federal court. Federal courts have diversity jurisdiction, which allows them to settle issues between residents of different states. However, state courts can also occasionally hear cases that involve parties who are not from the same state.
If the state attempts to hear a case involving individuals from different states, then it must do so using its “long-arm statute.” A long-arm statute allows the state to pull the non-resident party into that state in order to sit for trial. In this case, the couple attempted to pull the real estate company from Tennessee in to sit for trial in Louisiana.
There are a number of reasons that someone might want to sue in state court instead of federal court. Perhaps the most important is that it might be much more convenient to sue in state court because one court is right down the block while the federal court could be a state away. In addition, the judges in the state might have a history of being more sympathetic to your cause. The court fees and overall costs associated with the litigation might be less as well.
In order to use the long-arm statute, the real estate company had to satisfy the minimum contacts rule. That is, the company had to have purposely attempted to get customers in Louisiana in order to be subject to Louisiana law. The idea is that a state should not be able to haul someone into court if that party did not purposefully make themselves subject to that state’s law. If, for example, if you had never been to Hawaii, did not know anyone in Hawaii, and had never done business with anyone in Hawaii, then there should be no reason that the Hawaiian court could call you in to defend a case in Hawaii. It violates a general notion of fairness. Not to mention that defending a suit in Hawaii when you live in Louisiana would likely be very expensive.
If the couple in this case could prove that the real estate company had minimum contacts, then the burden would shift to the real estate company to argue that defending a case in Louisiana is fundamentally unfair or would be unduly burdensome, much like the Hawaii example.
In this case, however, the couple could not get the real estate company into Louisiana state court because they could not satisfy the minimum contacts requirement. The couple requested information from the chamber of commerce to get information regarding a real estate company in Tennessee. The Tennessee company did not try to get customers in Louisiana directly because they did not advertise there, as such, the court decided that the real estate company could not be subject to Louisiana laws under the long-arm statute. Nonetheless, the couple could still try to take the case to a federal court instead of one in Louisiana.
Jurisdiction is one of the first questions you must answer when filing a lawsuit, but it can be a complicated subject. The Berniard Law Firm is experienced in this area and would be happy to help you with your legal needs. Call us today!