Tips For Navigating Conflict Of Laws Between Jurisdictions In Business Litigation
As with most business litigation-related matters, determining jurisdiction in a lawsuit can be complicated. Today, most businesses operate nationally, if not globally, and a dispute that arises in one location may have completely different legal ramifications than if it were to occur in another.
Author:James PierceReviewer:Paolo ReynaMay 31, 20233.4K Shares144.8K Views
As with most business litigation-related matters, determining jurisdiction in a lawsuit can be complicated. Today, most businesses operate nationally, if not globally, and a dispute that arises in one location may have completely different legal ramifications than if it were to occur in another. Logically, this makes sense, but in practice, there are many factors to consider when it comes to jurisdiction, whether you’re the plaintiff or the defendant in a particular case. These tips can help you navigate conflicts of law between jurisdictions to protect your business.
Defining a Conflict of Laws
Simply put, a conflict of laws is when the laws of two or more jurisdictions connect with a dispute in such a way that its outcome depends on which jurisdictions law will be used to resolve the dispute. The conflicting laws may be between U.S. federal law and state law, a law between states, or laws between countries. For example, consider intellectual property violations that might occur against a brand in multiple states or countries.
Determining Jurisdiction in Business Litigation
So, how do you determine jurisdiction or which court has the authority to govern a given dispute? First, it depends on the jurisdictional category in which the case falls: subject matter or personal. Subject matter has to do with the type of case and the amount of money involved. For example, a federal court could hear a case where the amount of the claim exceeded $75,000. Personal jurisdiction has to do with where the plaintiff and the defendant either live or work or have some connection. There are two types of personal jurisdiction: general and specific.
In general jurisdiction, a state court could only hear a case when a company is incorporated and/or has its principal place of business in that state. So, just because a company does some business within a certain state doesn’t necessarily mean it can be sued there.
In specific jurisdiction, the defendant must have certain minimum contacts within a state in order for a court in that state to hear a case. Essentially, the plaintiff can’t be the only connection between that state and the defendant. The Supreme Court recently extended this to whether or not a state has a legitimate interest in the case, i.e., if the plaintiff is a state resident, suffered harm in the state, and all the relevant acts in the case occurred in the state.
Navigating a Conflict of Laws
With a better understanding of jurisdiction and conflict of laws, we can now discuss tips to help you protect your business.
- Include a clause in business contracts that identifies which jurisdiction is the governing law and excludes the conflict of laws principles if possible. But, you’ll need to be able to determine the most advantageous governing law which can be applied to your business.
- Include a jurisdiction clause to resolve contract disputes in court. Or an arbitration clause for disputes to go through arbitration. Determining which is best depends on a number of factors, including whether a judgment from the court will be enforceable where the defendant is located.
- If your company is sued in an out-of-state court system, you’ll want to first consider whether it’s proper to be sued there. On the flip side, if you’re planning to sue another company, carefully consider in which state to make the claim. Keep in mind that it’s the plaintiff’s responsibility to prove jurisdiction.
- Consult a legal professional that is experienced in business litigation and has expertise in the type of dispute you’re facing.
A Business Litigation Lawyer You Can Count On
Attorney Kline Preston is a skilled business litigation lawyer with almost thirty years of experience getting positive client results. Here’s what to expect:
- A comprehensive, confidential evaluation and assessment of your case
- Step-by-step guidance through the legal process
- Case investigation - gathering documents, records, information, and evidence
- Being presented with all available options for litigation
- A strong, well-supported case to get you the most favorable result in court
James Pierce
Author
Paolo Reyna
Reviewer
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