What Court Should I Use?

When you have been wronged by another person, you may want to file a lawsuit against them. It is typically more efficient to try to work things out with them pre-litigation (in other words, before you reach the point of filing a lawsuit). But if resolution attempts have failed, then you have several options as you embark upon litigation. 


Federal Courts 

You can file your case in a federal court if the dispute at issue involves a question of federal law (as opposed to state law) or if the parties in the case are all from different states. Not all attorneys practice in federal court, and the system is fairly complex. You should seek an attorney who regularly practices in federal court to assist you if this is how you would like to proceed. 


State Courts 

Most cases belong in state court. State law covers the most common litigation issues – harm to property, personal injury, breach of contract, collections, etc. A state court judge can rule on a case even if the parties live in different states. 

There are three basic levels of state court in California, and the right fit for you depends largely on the amount of damages at issue. This is often referred to as the “amount in controversy.” This amount includes the actual damages you suffered, as well as any interest, costs, and attorneys’ fees you would like to tack on to the damages amount. For example, say you loaned someone $1,000 under a contract that allowed for attorneys’ fees and ten percent per year interest. They did not pay you back and it has been one year past the due date. So, interest on the $1,000 is $100. Let’s say you are out $1,000 between court filing costs and your attorneys’ fees so far. Your amount in controversy is $2,100. 

Small Claims Court is for simple, low-value cases. Typically, the cap in small claims court is $5,000 if you are a business and $12,500 if you are an individual. While you can pay an attorney to help you behind the scenes with advice and paperwork, no attorneys are allowed to file paperwork or make appearances in small claims court. The system is set up for people to be able to proceed on their own through a relatively simple and short process before a judge to resolve their disputes. Small claims cases usually resolve within a few months.

Limited Civil Court is for cases where the amount in controversy is $35,000 or less. Attorneys are permitted (and recommended) and the case proceeds before a judge and jury in a more formal manner. While certain aspects are limited (the amount of discovery, or certain types of pleadings) to try to expedite the case, these cases are set for trial typically 12-18 months out. If your amount in controversy starts out under $35,000 but grows as the case proceeds (interest, fees, etc.) then you can covert your case to Unlimited Civil Court. Attorneys may charge less for limited civil cases as they are less complex than unlimited civil cases. 

Unlimited Civil Court is for cases where the amount in controversy is over $35,000. These are full-blown cases, with expansive discovery, expert witnesses as needed, etc. These cases are set for trial 12-18+ months out on the judge’s calendar. These are the most expansive types of cases, and it is recommended that you have an attorney represent you.

You can file a claim for $1,000 in unlimited civil court – meaning, the amount in controversy caps are ceilings, not floors. But, doing so would likely not be efficient.

Cases cannot be decided on a piecemeal basis. This means that if you have a dispute with someone, you need to bring all the claims related to that dispute in one lawsuit, or you will be deemed to have waived the rest of the claims. For example, say I enter into a contract with you that says I am borrowing $15,000 and will pay you $10,000 in January and $5,000 in February. We have reached March, and I have not paid you anything. You could not file a small claims case against me for $10,000 for the January payment and another small claims case for $5,000 for the February payment. I have breached the contract in the amount of $15,000 and so that is the amount in controversy – you cannot split up your damages as the dispute between us is related to one single contract/transaction/incident.

Questions of efficiency and risk come into play. If you have a claim against me for $15,000, you may be better off suing me in small claims court for the $12,500 cap
(waiving the extra $2,500). Here are two examples to demonstrate this:

1) Most cases do not grant the winner their attorneys’ fees, so you want to make sure any fees you spend are worth the judgment you can win. For example, say this is the type of case where recovery of attorneys’ fees is unlikely. You pay an attorney $10,000 to take the case through limited civil court and you win your $15,000 judgment. But, you are not awarded attorneys’ fees – so your take home at the end of the day is really only $5,000. 


2)Even if you were awarded your attorney’s fees and the judgment was for$35,000 you may not collect all of that from the other side. A judgment at theend of a lawsuit is simply a piece of paper saying the other side owes you money. If they have no money to collect (no real property or other assets or a job from which you can garnish wages, etc.) then you may have trouble collecting your judgment. You will have paid your attorney in advance for their services, and then the burden is on you (alone or with the help of your attorney/a collection agency for a fee) to collect the judgment. 

These are all considerations to mull over while you decide whether to proceed with a lawsuit and, if so, in which court. Litigation is inherently risky. You could lose your case. Or the other side could file a cross-complaint against you during the case. Or you could win but not receive attorneys’ fees or be able to collect your judgment. Be sure to weigh the risks and what is important to you (money, certainty, time, etc.) before starting litigation. 

An attorney can analyze your case and advise you as to your options on how to proceed. Many attorneys offer free or low-cost phone consultations. Many will analyze your case and prepare a research memorandum for you for a small fee. These are helpful tools as you consider how to proceed with your case. 

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