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Should My Personal Injury Case Be Heard in Federal or State Court?

It is not uncommon for a defendant in a product liability or other personal injury lawsuit to prefer federal over state courts. Although the substantive law of Tennessee governs such cases regardless of venue, federal courts apply different procedural rules which often prove more favorable to defendants. That is why, if you are a plaintiff in such a lawsuit, it is important to ensure the proper court hears your case.

Understanding “Diversity” Jurisdiction

So why are some personal injury cases heard in federal court? Basically it comes down to where the defendant—or defendants—reside. Here is an illustration from an ongoing case. The victim in this case was driving his car in Tennessee when “became uncontrollable” and collided with another car. The airbag failed to deploy in the victim’s car, incapacitating him.

The victim’s mother, acting as her son’s conservator, filed suit in Tennessee state court against the manufacturer of the car, as well as the used car dealer her son purchased the vehicle from. The manufacturer is a Delaware corporation based in Michigan. The used car dealer is a Tennessee-based company.

The manufacturer removed (transferred) the lawsuit from state to federal court. The plaintiff then moved to remand (return) the case back to state court. The federal judge assigned to the case sided with the plaintiff and granted remand.

As noted above, the key to federal jurisdiction lies in where the parties reside. This is because federal law requires “complete diversity” among the parties before a federal court may exercise jurisdiction over a case governed by state law. Complete diversity means none of the defendants may be legal residents of the same state as the plaintiff. In other words, if the plaintiff had sued only the manufacturer, there would be no question the case belongs in federal court; by adding the used car dealer, a Tennessee resident like the plaintiff, the case should remain in state court.

In an attempt to keep the case in federal court, the manufacturer argued there was “fraudulent joinder,” that is the plaintiff had no legitimate claim against the used car dealer and named it as a defendant to defeat complete diversity. The judge disagreed. Without ruling on the merits of the plaintiff’s lawsuit, the judge said she did raise a “colorable claim” against the dealer under Tennessee law. Specifically, the plaintiff accused the dealer of negligence in inspecting the used car before selling it to her son.

Although the judge noted no prior Tennessee case “specifically addresses the existence of a duty to inspect used cars” prior to sale, other states have recognized such claims. At a minimum, this raises a novel question of law for the Tennessee state courts to address. The judge also noted if, as the plaintiff further alleged, the dealer “actually undertook to inspect the vehicle” on its own initiative, that could also give rise to liability under Tennessee law.

Need Help from Our Personal Injury Lawyers?

While jurisdictional issues may seem dry and unimportant, they often dictate the substantive outcome of many product liability cases. That is why it is always important to work with an experienced Tennessee personal injury attorney who understands the court system inside and out. Contact the offices of Fox & Farley, Attorneys at Law, in Clinton or Knoxville if you need assistance right away.

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