Playing to win in federal court: A 15-step primer

By Paul T. Moura

The idea of litigating in the federal court system can be intimidating. The rules are different, the standards can be tougher and the stakes can be higher. But if faced with a choice of whether to litigate in state or federal court, there can be a lot of benefits to picking a federal forum. 

Generally speaking, plaintiffs view state court as the more favorable forum and will choose to file in state court and strategically craft the allegations of their complaint so as to avoid removal. Conversely, many defendants view federal court as the better forum to defend claims asserted against them in light of the perceived practical and strategic advantages of a federal forum. As an attorney, your job is to advise your client as to which forum provides the most upside: state or federal? To remove, or not to remove?

Whether you are a plaintiff or defendant, this introductory guide addresses 15 of the basic items litigants should consider in order to find success in federal court.

Five strategy considerations for litigating in federal court

• The “plausibility” pleading standard. Federal courts follow the Twombly/Iqbal “plausibility” pleading standard outlined by two U.S. Supreme Court rulings, Bell Atlantic v. Twombly in 2007 and Ashcroft v. Iqbal in 2009. But many state courts apply a less stringent standard. Given this higher standard, plaintiffs may have a tougher time stating their claims and defendants in federal court may achieve more success on motions to dismiss.
• Discovery limitations. In federal court, discovery cannot commence until after the parties conduct their mandatory Rule 26(f) settlement conference. There may be an even longer discovery hold depending on the particular district or the individual judge’s rules. For defense counsel, this provides more time to investigate and prepare a defense and consider early settlement strategies. For plaintiff’s counsel, this may mean advising your client that it may take some time to gather information through discovery. In addition, the Federal Rules of Civil Procedure have very specific limits on the amount and type of discovery that can be conducted. For example, the number of depositions and special interrogatories are limited. Fed. Rule Civ. P. Rule 30(a)(2)(A)(i) [10 depositions]; Fed. Rule Civ. P. Rule 33(a)(1) [25 special interrogatories].
• Expert discovery. Federal courts require written reports from testifying experts. In addition, federal courts generally afford greater work product protection to draft expert reports, while some states allow discovery of every draft report or communication with an expert.
• Jury considerations. Federal courts require unanimous verdicts, whereas many state courts require only a majority. This can be advantageous for defendants because one dissenting voice could allow the defendant to escape liability. Additionally, depending on what district you are in, the jury pool may be different in federal court.
• Expertise in federal law. Federal judges will likely have more experience with the nuances of federal statutes and case law. Federal judges may also have the assistance of law clerks to conduct legal research and brief the issues, and can refer discovery disputes to magistrate judges with particular expertise in discovery matters. 

Can I remove to federal court? – five items to consider

• Early removal. An action filed in state court is removable if it might originally have been brought in federal court. 28 U.S.C. § 1441(a). This means that an action is removable if “diversity” or “federal question” jurisdiction exists. “Diversity” jurisdiction exists where all plaintiffs are diverse from all defendants and the amount in controversy exceeds $75,000. “Federal question” jurisdiction exists where the plaintiff’s claims arise under federal constitutional, statutory or common law.
• Late removal. If a case is not removable when the initial complaint is served, it can later become removable by amendments to the complaint or other “voluntary” actions by plaintiff creating grounds for removal. For example, a plaintiff may take actions that bring the amount in controversy over $75,000, or a plaintiff may dismiss a non-diverse defendant. In those situations, defendant’s right to remove arises when it is first put on notice that the case can be removed: i.e., upon receipt of “an amended pleading, motion, order or other paper from which it may first be ascertained that the case is … removable.” 28 U.S.C. § 1446(b). This is why it is crucial to ask yourself throughout litigation whether either “diversity” or “federal question” jurisdiction can be established. Once a defendant is on notice, the clock starts ticking and the defendant has only 30 days to file a notice of removal. In addition, under no circumstance can a lawsuit be removed based on diversity more than one year after the case is filed. 
• Class action removal. Even without complete diversity, removal of a class action is possible where: (1) there are at least 100 class members in all proposed plaintiff classes; (2) the combined claims of all class members exceed $5 million exclusive of interest and costs; and (3) any class member is a citizen of a different state than any defendant. 28 U.S.C. § 1332(d).
• It’s the defendant’s call. Only a defendant can remove to federal court. If multiple defendants are named, all must consent to removal. 28 U.S.C. § 1446(b)(2)(A). A narrow exception to this rule is when you remove on the grounds that the federal claims against your client are “separate and independent” from the claims against the other named defendants. 28 U.S.C. § 1441(c). In addition, a “local” or “resident” defendant that has been sued and served in its home state court may not thereafter remove to federal court. 28 U.S.C. § 1441(b).
• Don’t waive it! A defendant may waive the right to remove if it undertakes substantial offensive or defensive action in the state court. For example, filing a motion or counterclaim may result in a waiver.

Early motions to dismiss – defendant wins, or plaintiff survives

• Remember the pleading standard. Remember, whether a complaint is filed directly in federal court or removed to federal court, it must comply with the Twombly/Iqbal “plausibility” standard, as well as the strict pleading standards imposed by Fed. R. Civ. P. Rules 9(b) (pleading fraud or mistake) and 11(b) (representations to the court). These strict pleading standards allow a defendant to challenge a complaint that contains bare recitations of the elements of a cause action without any real factual allegations. Likewise, you can challenge claims that are “implausible” on their face, such as when the allegations do not allow a court to reasonably infer that the defendant is liable for the alleged misconduct. Thus, even if a claim would survive a liberal state court pleading standard, it may still be subject to dismissal in federal court through a motion to dismiss under Fed. R. Civ. P. 12(b)(6). 
• Limitations on motions to dismiss. The key feature of a motion to dismiss under Rule 12(b)(6) is that the moving party generally cannot offer extrinsic evidence to support the motion and must instead argue why the allegations in the complaint fail to state a claim under the appropriate pleading standard. In addition, you should keep in mind that courts routinely grant plaintiffs an opportunity to amend their complaint to correct or supplement any deficiencies. Savvy defense lawyers will therefore focus their motions to dismiss on aspects of the complaint that cannot be salvaged by amendment – i.e., where an amendment would be futile.
• Check the local rules. Some districts or specific judges require you to meet and confer with your opponent before you can file a motion. In addition, if your strategy is to file a motion to dismiss after removing the case from state court, keep in mind that you may have only seven days after you remove to file your motion. See Fed. R. Civ. P. 81(c)(2)(C).

Motions for summary judgment

• An important tool for both plaintiff and defendant. Whether you are a plaintiff or a defendant, if you feel comfortable with your legal position, motions for summary judgment under Fed. R. Civ. P. 56 are an effective tool for the moving party to offer evidence outside the pleadings to explain why their claims or defenses should prevail. When it comes to motions for summary judgment, some lawyers prefer federal court because federal judges tend to have more clerks and resources available to them to help thoroughly brief the legal issues. As a result, federal judges may be more familiar with their caseload and more inclined to grant summary judgment than state court judges.
• When? How? How many? Be sure to study carefully the timing and number. Fed. R. Civ. P. 56(b) provides that a party can file a motion for summary judgment “at any time” until 30 days after the close of discovery, but the local rules or the judge’s scheduling order may modify the timing and may limit the number of motions that can be filed. This can be critical if you plan to file a motion for partial summary judgment on some, but not all, the issues in the case.

Paul T. Moura is a commercial litigator at Hunton & Williams LLP in Los Angeles. This article was adapted from the CYLA E-News Summer 2016 edition and reprinted with permission.