Many Florida business litigation and Fort Lauderdale and Palm Beach commercial litigation lawyers file lawsuits in state court without recognizing that the lawsuit may be filed in federal court. Litigating cases in federal court may sometimes be preferred because, among other things, federal judges generally have fewer cases than state court judges (and, therefore, may have greater resources to devote to the case) and implement scheduling orders (see Fed. R. Civ. P. 16) to ensure that the case will be tried within a reasonable time (e.g., 18 months). On the other hand, in state court, there are often no scheduling orders, and the rules for amending pleadings are more liberal, often making the proceedings more protracted (i.e., at least twice as long). If federal court may be preferred, how does one get into federal court?
There are two ways in which a federal court may have subject matter jurisdiction over a case. The first is so-called “federal question” jurisdiction under 28 U.S.C. § 1331, which provides that “district courts shall have jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” The other is diversity jurisdiction under 28 U.S.C. § 1332, which permits a federal court to preside over matters where the amount in controversy exceeds $75,000.00 and the dispute is between citizens of different states. Complete diversity is required, meaning that no defendant may be a citizen of the same state as a plaintiff.
A business entity’s “citizenship” is determined by its state of incorporation or where its place of business is located—i.e., its “headquarters” or “nerve center,” where its directors, officers, or managers control the entity. See Hertz Corp. v. Friend, 559 U.S. 77 (2010). For partnerships and limited liability companies, however, citizenship is determined by the individuals who control the entity—namely, its partners and members. Finally, when a decedent’s estate is a party to the litigation, citizenship is determined by the estate in which the decedent was a citizen; the personal representative’s citizenship is irrelevant.
If you’re in need of representation in a federal business dispute, call a Fort Lauderdale and Palm Beach business lawyer at (954) 440-0901 for assistance. The Fort Lauderdale and Palm Beach business lawyers at The Carlin Law Firm, PLLC represent individuals, corporations, limited liability companies, and partnerships with litigating federal business disputes throughout the State of Florida.
By: Justin C. Carlin
Florida LLC Litigation: Theft or Other Misconduct by a Managing Member of an LLC
In the context of Fort Lauderdale business litigation, some members of Florida limited liability companies, also known as “LLCs,” learn that the managers or other members of the LLC have wrongfully taken funds from the company, or have otherwise harmed the company by breaching their fiduciary duties to the company. When this happens, the members’ ownership interests in the company—which entitles them to distributions of the company’s profit—are usually dramatically reduced or completely eliminated. Understandably, these members may wish to sue the managers and members whose conduct caused their losses. READ MORE
By: Justin C. Carlin
A common dilemma in Florida real estate litigation is preventing the property that is the subject of a lawsuit from being dissipated during the lawsuit. For example, if A invested money to purchase real estate purchased by B, and B endeavored to sell the property without providing A with his proportionate share of the sale proceeds, what could A do to prevent the sale of the property during the pendency of his lawsuit against B for breach of contract? READ MORE
Chapter 744 of the Florida Statutes outlines the procedures for having someone declared legally incapacitated and appointing a “guardian” to make some or all decisions for the alleged incapacitated person (referred to as an “AIP”). This process is known as “involuntary guardianship.” The process begins when the person alleging incapacity files in Circuit Court both a petition to determine incapacity and a petition for the appointment of a guardian. READ MORE
A limited liability partnership (an “LLP”) offers a major advantage to a common law partnership, in that partners in a LLP are not personally liable for the LLP’s obligations. A LLP is governed by the rules of the Revised Uniform Partnership Act (“RUPA”), except that, if a limited liability partnership also is a limited partnership, the Uniform Limited Partnership Act (“ULPA”) will govern all issues dealing with the limited partnership. READ MORE
Custodial accounts may be created under the Florida Uniform Transfer to Minors Act, see §710.101, et seq., Fla. Stat (2018) (the “UTMA”), so that an adult (the “custodian”) is placed in charge of a minor’s funds until the minor reaches the age of 18 years. Such an account is frequently utilized by parents as part of a general estate plan or is the result of divorce proceedings in which the parents agree to set aside funds for their child or children. READ MORE