Tuesday, April 25, 2006, 4/25/2006 09:10:00 AM

Federal Claims May End Up in Federal Court

By Todd
Some of the readers of this blog might not be professional litigators or professional litigants. This post is for you. We've talked about cases involving the federal Computer Fraud and Abuse Act which is codified in the federal law books at 18 U.S.C. section 1030 and the sections thereafter. We've also talked about cases involving state law claims for breach of confidentiality agreement and unfair and deceptive trade act statutes in state codes. How is it that some cases end up in state court and some end up in federal court and why would anyone care about the difference? A court is a court, right?

Wrong. A general statement could be made that state courts, and the judges that run those courts, are usually not as well funded as the federal courts and those state court judges also are often elected - instead of appointed like the federal judges (who are appointed by the President). Due to the differences in funding, access to clerks and other administrative services, and related differences, our experience is that state court is often a less sophisticated and less discriminating forum for lawsuits of all types, including lawsuits involving misappropriation of trade secrets. State judges might be said to be less critical of weaknesses in a plaintiff's case and will sometimes let some proof defects slide while federal judges are often more knowledgeable about the law and more interested in challenging a plaintiff's claim - and a defendant's defenses, for that matter.

We tell you this because one of the ways to end up in federal court is for the defendant to "remove" to federal court the case originally filed by the plaintiff in state court. Defendants have an interest in removing the case to federal court if there are known or apparent weaknesses in the plaintiff's claims and there is an opportunity to have a discriminating court and judge critically examine those weaknesses. Another reason a defendant might want to remove a case to federal court is that plaintiff's attorneys often file a case in the court they feel comfortable in and feel they might have advantages in - so the defendant's removal is sometimes to blunt the potential impact any forum shopping might have.

Quality Machine Mfg. v. Williamson, et al., 2006 WL 950176 (April 12, 2006 E.D. La.) was a case filed by a former employer against a former employee and some of his alleged co-conspirators. The claims included ones under Louisiana state law for "unfair trade practices" but ALSO under the federal Computer Fraud and Abuse Act. Williamson and his co-defendants thought to themselves "hmmm . . . maybe federal court is a better forum for us in this case." So they removed the case, successfully so, on the grounds that the federal Computer Fraud and Abuse Act claim permitted federal jurisdiction over the claims. Quality Machine's attorneys obviously didn't like federal court. As a response to the defendants' removal, they decided to dismiss their Computer Fraud and Abuse Act claim so as to deprive the federal court of a federally-based claim such that the court would want to keep the case in its hands and on its docket.

Quality Machine's strategy worked. Their dismissal of that claim, accompanied by a motion to remand (editor's note: "remand" is just a little used word meaning "judicially return"), worked its magic and the federal court returned the case to state court where it is now being litigated.

Every once in a while we decide that we should explain developments in the law as if the reader doesn't know much about the law in the first place. This is one such post - we hope it helps.

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