We’ve all been there – the claim is filed in State Court and you have to determine if you and your insured would fare better in Federal Court or the claim is filed in Federal Court and you want to know if the outcome might be better before a State Court judge. With every case, some amount of homework should be done to determine which venue is better and whether you should file the appropriate motions to have the case moved.
Before you go too far into your investigation as to which venue might be better for your particular case, please note that a few criteria must be present before you will even be allowed to have your case in Federal Court. First, the matter must either involve a Federal Question (violation of a Federal Statute or a Constitutional Issue) or you must establish diversity. As most of your cases likely do not involve an alleged violation of the Constitution, you will need to determine if your case meets diversity requirements.
According to Federal Code, specifically 28 U.S.C. §1332(a), 28 U.S.C. § 1441, and 28 U.S.C. § 1446, the amount in controversy in your case must be for more than $75,000 and there must be complete diversity between the plaintiff and defendant. Because Indiana is a notice pleading state and does not permit ad damnum’s (request for specific damages), it is often difficult to determine if the amount in controversy is more than $75,000.00. However, if the Complaint alleges permanent injuries, past and future medical expenses, or other indications that the amount sought by the plaintiff(s) will exceed the threshold amount, you will likely be able to establish that the amount in controversy element has been established. [1]
Once you have established that the amount in controversy has been established, you must then determine if there is, in fact, completed diversity. This criteria requires that both the plaintiff and all defendants are domiciled in different states. To make this determination regarding a corporate defendant, the corporation’s principal place of business or corporate registration is where you will want to look.
Far too often, however, when determining whether a case should be removed to Federal Court or remanded back to State Court, attorneys only consider the diversity of the parties, amount in controversy, and/or if the case includes a federal question. In reality, other very important considerations need to be made, including: 1) is this a case that a motion for summary judgment could be successful on given the known facts; 2) how quickly do you want to dive into discovery (which may be useful for a motion for summary judgment); and 3) are you concerned about limiting the costs of the case or have a goal to minimize costs and settle the case without retaining experts?
As mentioned above, one matter that should definitely be considered is whether the facts of the case suggest a motion for summary judgment might be successful. If your answer is yes, then you may want to consider removing the case to federal court (assuming the requirements of diversity, amount in controversy, and/or federal question at issue are first met). But why file the motion for summary federal court and not Indiana state court?
At first glance the language between Federal Rule 56 and Indiana Trial Rule 56 might appear to be synonymous as to the standards and burden of proof. But in actuality, there are small nuances in the language that make a BIG difference.
As we all know, summary judgment uses the factual evidence obtained during the discovery phase of litigation in an attempt to determine if there are any factual disputes that will require continued litigation, likely in the form of a trial. If there are no facts in dispute, then the court can decide the case on summary judgment. The standard for achieving summary judgment and the burden of proof, however, are vastly different between state and federal courts.
In state court, summary judgment is often disfavored and the nonmoving party has the benefit of a presumption in its favor. This means that the moving party has an initial burden to overcome in order to be granted summary judgment. More specifically, state courts require that the movant “designate sufficient evidence to foreclose the nonmovant’s reasonable inferences and eliminate any genuine factual issues.” Thus, the moving party must actually rebut any potential arguments of the opposing party, often prior to that party even making any argument or rebuttal. If the moving party is able to successfully meet this burden, then, and only then, the burden shifts to the nonmoving party to demonstrate the “existence of a genuine issue for trial on each challenged element.”
In federal court, however, the movant must only inform the court of the basis of the motion and identify relevant portions of the record “which it believes demonstrate the absence of a genuine issue of material fact.” If the movant does this successfully, then the burden shifts to the nonmoving party to establish a genuine issue of material fact. Crucially, the moving party in federal court does not need to actually develop and rebut the arguments that would be made by the nonmoving party before it can shift the burden.
Perhaps even more importantly, in recent years the Indiana Court of Appeals and Supreme Court have proclaimed their strong disfavor of the entry of summary judgment on most matters (especially on cases involving negligence). Instead, they prefer to allow the plaintiff his or her day in court. You do not have to look much further than recent opinions of the Indiana Court of Appeals and Supreme Court, to see that these Judges and Justices continuously shoot down motions for summary judgment. “Indiana [state courts] consciously err on the side of letting marginal cases proceed to trial on the merits,” “not prematurely closing the courthouse doors to the non-moving party,” and “[e]nsuring that parties are not prematurely denied their day in court.” Hughley v. State, 15 N.E.3d 1000, 1005 (Ind. 2014). Federal counterparts are not restrained by such beliefs and often prefer to dismiss a case that has little chance of being successful before a jury.
Thus, if you think that summary judgment might be possible on all or part of the case, you will want your counsel to seriously consider the state court versus federal court question.
Indiana Rules of Trial Procedure 26(D) states as follows:
Sequence and timing of discovery. Unless the court upon motion, for the convenience of parties and witnesses and in the interests of justice, orders otherwise, methods of discovery may be used in any sequence and the fact that a party is conducting discovery, whether by deposition or otherwise, shall not operate to delay any other party’s discovery.
Whereas, Rule 26(d) of the Federal Rules of Civil Procedure states:
(1) Timing. A party may not seek discovery from any source before the parties have conferred as required by Rule 26(f), except in a proceeding exempted from initial disclosure under Rule 26(a)(1)(B), or when authorized by these rules, by stipulation, or by court order.
(2) Early Rule 34 Requests.
(A)Time to Deliver. More than 21 days after the summons and complaint are served on a party, a request under Rule 34 may be delivered:
(i) to that party by any other party, and
(ii) by that party to any plaintiff or to any other party that has been served.
(B) When Considered Served. The request is considered to have been served at the first Rule 26(f) conference.
(3) Sequence. Unless the parties stipulate or the court orders otherwise for the parties’ and witnesses’ convenience and in the interests of justice:
(A) methods of discovery may be used in any sequence; and
(B) discovery by one party does not require any other party to delay its discovery.
Thus, in Indiana state court, counsel can propound discovery immediately after the case is filed, rather than waiting until after the initial 26(f) conference and approval of the parties’ discovery plan, which must be disclosed to the Court before any discovery is conducted. This is an important distinction and requires that the decision regarding State versus Federal court be made early, as propounding “automatic” discovery could, in the instance of a federal case, “show your hand,” or lead to a discovery dispute if non-party requests are issued before approval is given by the Court.
Further, if the goal of the case is to settle early, being required to wait to propound discovery until after Rule 26(f) conference has occurred, which could be months, may be contrary to your case goals.
Consequently, keep in mind the differences in timing of discovery in federal court versus state court to determine how to best move your case forward.
Even though defense and plaintiff counsel may both agree to disclose experts at a later date or after mediation in a federal case, the parties are ALWAYS subject to the decisions (and whims) of the judge in federal court. While most state court judges will allow the attorneys involved to “try their case,” and often to dictate deadlines and extensions, especially by agreement, federal judges are more likely to move mountains before moving their own deadlines. Federal judges are required to “move cases along,” and have strict reporting requirements for cases pending for more than one (1) year [other than during times of a global pandemic] in their courts. However, in Indiana State Court, judges have more latitude and are far more likely to allow for a very liberal case management process and allow deadlines to be set and changed jointly, if an agreement can be made. Further, state court judges will usually allow for at least one or two extensions to any deadline before inquiring as to why such a motion or stipulation should not be entertained. Even when there is no agreement, most judges will grant, at least, one extension provided the reason is justified.
Thus, be ready to spend more money in the early stages of litigation on the costs of IME’s, record reviews, experts, depositions, etc. if your case is in federal court because you will not likely be able to extend court’s deadlines without extremely just cause. “We want to save money on experts,” often does not meet the strict standard that is imposed by the federal court.
If you have a case that may be ripe for summary judgment or are trying to determine if state or federal court is the best place to litigate your matter, feel free to contact the attorneys of the Merrillville office of Garan Lucow Miller, P.C. with any of your questions.
[1] As a side bar, sometimes to get out of federal court and into state court, you can get opposing counsel to agree that the amount in controversy does not exceed $75,000. This can be beneficial because it lessens the exposure for your insured, and many Plaintiffs’ counsel are willing to agree to move to state court because they fear the deadlines and strict requirements of the federal judges. I think we all know a few Plaintiffs counselors who struggled with timely discovery, disclosures, etc.
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Jennifer Davis, Editor of The Garan Report – Hoosier Edition, is a Shareholder in our Merrillville, Indiana Office. Jennifer can be reached at (219) 756-7901 or jdavis@garanlucow.com
