Lawsuits can be filed in either state court or federal court, depending on where the litigants live or do business, the type of case, the amount in controversy, and the legal issues in dispute. When both courts have jurisdiction – known as concurrent jurisdiction – strategic factors like litigation pace, judge selection, and procedural flexibility should guide your choice.
Understanding how these courts differ – and when you have a choice between them – is one of the most consequential early decisions in any Texas business dispute.
What Is Concurrent Jurisdiction?
Concurrent jurisdiction exists when both state and federal courts have the authority to hear and decide the same case. As a general rule, state courts share jurisdiction with federal courts over most federal claims – unless Congress has passed a law granting federal courts exclusive authority over that type of case.
When Only Federal Courts Can Hear a Case
Congress has reserved exclusive jurisdiction for federal courts over certain categories of claims, including:
- Patent and copyright disputes under federal law
- Claims arising under the Securities Exchange Act of 1934
- Admiralty and maritime claims
- Antitrust claims under federal law
If your dispute falls into one of these categories, state court is not an option – you must file in federal court.
What Happens When Concurrent Jurisdiction Exists
When concurrent jurisdiction exists, you and your attorney should discuss your options:
- If you are filing the lawsuit (the plaintiff), you and your attorney can choose in which court to file based on strategic advantage.
- If you are sued in state court or federal court (the defendant), you may be able to “remand” your case from federal court to state court or “remove” your case from state court to federal court if certain prerequisites are met.
Factors to consider include the court's caseload, the pace at which you wish to manage the litigation, whether you want an elected or an appointed judge, and potential procedural advantages.
What Are the Advantages of Filing in Texas State Court?
State courts in Texas have broad jurisdiction and can hear most claims under state or federal law, even if the litigants are from different states.
When selecting state court over federal court, consider these factors:
- Texas state trial courts tend to move at a slower pace compared to federal courts due to heavier caseloads. It can take longer to get a hearing and set a trial date. This can be an advantage or disadvantage depending on your budget and the opposing party’s interests.
- The rules of procedure at state court can be more relaxed than federal court. This allows you to change deadlines and manage your case with more flexibility.
- Because you often have a slower docket (i.e., timetable of deadlines) in state court, you can spread your legal costs out over a longer period of time.
- State courts can also be less intimidating – an advantage for businesses and individuals who don’t have experience with litigation.
What Are the Advantages of Filing in Federal Court?
In contrast with state courts, federal courts have a much narrower jurisdiction. They only have jurisdiction when the opposing parties are citizens of different states (and the amount in controversy is greater than $75,000) or when a federal question is presented.
A federal question arises when a case is based on the U.S. Constitution, a federal statute, or a federal treaty – for example, disputes involving U.S.-registered patents, copyrights, trademarks, antitrust claims, or securities regulations. Federal courts have exclusive jurisdiction over many of these matters.
Is federal court a more favorable venue for your dispute? Consider these factors:
- One of the biggest advantages of a federal court is that federal judges are appointed, whereas state judges are elected. This can eliminate the potential for a “home-field” advantage in state court cases.
- Federal court can be a better option when you have multiple plaintiffs or defendants, or third-party litigation.
- Federal court may be a better option when you have a complex subject matter.
- Federal court judges manage their dockets closely – deadlines are strictly enforced – so your litigation pace will be quicker than in state court. This is often an advantage when you want to be aggressive in your litigation to seek an early resolution or put pressure on the opposing party.
In Texas, federal cases are typically filed in one of four U.S. District Courts: the Southern, Northern, Eastern, or Western District of Texas. Houston-area cases generally fall under the U.S. District Court for the Southern District of Texas.
Federal vs. State Court: At a Glance
| Factor | Texas State Court | Federal Court |
|---|---|---|
| Jurisdiction | Broad – most state and federal claims | Limited – diversity of citizenship or federal question |
| Litigation Pace | Slower; heavier dockets | Faster; strictly enforced deadlines |
| Judges | Elected | Appointed |
| Procedural Rules | More flexible | Stricter – Federal Rules of Civil Procedure |
| Cost Timing | Spread costs over longer timeline | Costs concentrated; quicker resolution |
| Best For | Local disputes, cost-conscious litigants, flexibility | Complex matters, multi-party cases, national issues |
| Moving Between Courts | Defendant may remove to federal court if criteria met | Party may move to remand to state court if criteria met |
Is Federal Court More Powerful Than State Court?
Federal courts are not necessarily more powerful than state courts, and vice versa. They simply have different jurisdictions and processes. State courts typically decide issues that impact local and statewide issues, while federal courts often hear cases with national impact. As such, federal cases may be more newsworthy and impact more people. But neither court holds more inherent power than the other.
How Does a Case Move Between State and Federal Court?
When concurrent jurisdiction exists and a case is initially filed in state court, the defendant often has the right to move it to federal court – a process called removal. If you are sued in state court and the case meets federal jurisdictional requirements – such as diversity of citizenship or a federal question – you may petition to have it removed to the appropriate U.S. District Court. You generally have 30 days from service of the complaint to file a notice of removal.
Remand works in the opposite direction. If a case has been removed to federal court but does not actually meet the requirements for federal jurisdiction, a party can move to remand it back to state court.
An experienced litigation attorney can help you evaluate whether removal, remand, or staying in your original forum best serves your position.
Can Any Attorney Practice in Federal Court?
No, not all attorneys are admitted to practice in federal court. Admission to federal court is usually an additional privilege granted to attorneys who are in good standing with their state bar.
It is important to choose an attorney experienced in both state and federal courts so they can advise you on the pros and cons of each and help you choose the most advantageous forum for your case.
Frequently Asked Questions
Are federal judges appointed or elected?
Federal judges are appointed by the President of the United States and confirmed by the U.S. Senate. They serve lifetime appointments. Most Texas state court judges, by contrast, are elected by voters and serve fixed terms – a distinction that can create a "home-field" advantage for one side in local state court proceedings.
One notable exception is the Texas Business Court, a relatively new court that hears complex business disputes. Texas Business Court judges are appointed by the Governor, with the advice and consent of the Texas Senate, and serve two-year terms beginning September 1 of every even-numbered year. They may be reappointed.
For Texas business owners weighing forum selection, the appointed nature of both federal judges and Texas Business Court judges may be a relevant factor – particularly when you want to avoid the local political dynamics that can influence elected state court judges.
Can state courts decide issues of federal law?
Yes. Unless Congress has granted federal courts exclusive jurisdiction over a particular type of claim, state courts can hear and decide federal law questions. State courts regularly enforce federal laws.
Can you sue someone in federal court in Texas?
Yes, but only if your dispute meets one of two federal jurisdictional requirements.
- Diversity of citizenship. Federal courts can hear your case if you and the opposing party are citizens of different states and the amount in controversy exceeds $75,000. This threshold exists to give out-of-state parties access to a neutral federal forum rather than facing a potential home-field advantage in their opponent's state court. Note that diversity must be complete – if any plaintiff shares state citizenship with any defendant, diversity jurisdiction does not apply.
- Federal question. Federal courts also have jurisdiction when your dispute is based on the U.S. Constitution, a federal statute, or a federal treaty. Common examples in business litigation include disputes involving U.S.-registered patents, copyrights, or trademarks; antitrust claims; securities regulations; and certain employment claims under federal law.
What if you have both state and federal claims?
Federal courts have what is called supplemental jurisdiction, meaning they can hear state-law claims that arise from the same facts as a valid federal claim. This allows you to resolve all related disputes in a single federal proceeding rather than splitting them across two courts.
Your Forum. Your Strategy. Your Attorneys.
Choosing between state and federal court is one of the first – and most consequential – decisions in any business dispute. Get it wrong, and you may find yourself in a slower docket when speed matters, or in front of an elected judge when neutrality does.
At Hendershot Cowart P.C., our Houston business litigation attorneys bring more than three decades of experience in both state and U.S. district courts throughout Texas. We know these courts, their judges, and how to use the rules to your advantage.
Contact us online or call (713) 783-3110 to schedule a consultation.