There exists a fifty-square-mile slice of this great country in which, arguably at least, a quirk of jurisdictional jurisprudence prevents any person from being convicted of any crime. The “Zone of Death,” as it was described by Michigan State University College of Law Professor Brian C. Kalt, lies in the southwestern corner of Yellowstone National Park where it crosses from Wyoming into Idaho. There the lethal legal loophole arises from three intersecting considerations:

1. As the federal government has exclusive jurisdiction over the National Park, any crime committed there would be prosecuted in federal court for the District of Wyoming, which includes all of Yellowstone.
2. The Sixth Amendment holds that a person must be tried by a jury of the “State and district wherein the crime shall have been committed,” meaning that a person committing a crime in the Zone would need to be tried by people living both in the District of Wyoming and the portion of Yellowstone that sits in Idaho.
3. Grizzly bears are not allowed to serve on juries, and a lack of jurors precludes a defendant’s ability to obtain a jury trial, which is guaranteed by the Constitution.

All of that said, the good people at the Department of Justice are likely to get would-be felons on some other prosecutable charge, such as conspiracy, so your mileage may vary. But, as always, we can take a valuable lesson from this cautionary tale: it matters where you get sued.

What courts are out there?

Readers of your humble author’s previous works will recall that if you are a business owner, the odds of being sued are quite high. Those lawsuits are going to take place in either state or federal court.

State courts are courts of general jurisdiction; with a few exceptions, they can hear any claims brought by any litigants. In most states, the court system is divided into tiers based on the amount of money at issue. Some states have strict dividing lines between tiers, but others (like Virginia) have overlapping jurisdictional amounts; the General District Court has exclusive jurisdiction over claims less than $4,500 but shares jurisdiction with the Circuit Court over personal injury and wrongful death claims for less than $50,000. In most states, court districts are demarcated by county lines, though some, like Virginia, have separate courts for large cities like Richmond.

States can also establish specialized courts for things like domestic relations, juvenile justice or tax issues. Appeals from all these courts will make their way up to the state’s supreme court (which is not always called that, as our friends in New York and Maryland can attest), usually after a stop at the intermediate appeals court.

Federal courts can only hear cases falling under certain categories, the most popular are of which are called “federal question jurisdiction” and “diversity jurisdiction.” The former applies when a federal statute or the constitution is at issue, for example in the civil rights or intellectual property realms. The latter kicks in when two conditions are met: the amount in controversy must exceed $75,000, and there is “complete diversity among the parties,” which is a fancy way of saying that the plaintiff and defendant are not citizens of the same state.

The first level of courts in the federal system are the ninety-four District Courts. Some of them cover entire states, some of them don’t, and the decision making on this question was suspect at best – West Virginia has two Districts, and North Carolina has three, while Colorado, Arizona and Nevada each have one. Appeals from these Courts travel up to the eleven Circuits of the United States Court of Appeals, and a very, very small number of cases decided there are heard by the United States Supreme Court. The Supreme Court can also hear appeals from certain state supreme court decisions, and it has original jurisdiction over a few classes of dispute, including suits between states.

Finally, the federal system also includes some specialized courts, including the Tax Court, Court of Federal Claims, and the bankruptcy courts.

That’s all very interesting, but where am I going to end up?

First, let’s talk federalism. More likely than not, you are going to start your case in state court. For various reasons, state courts are generally friendlier to plaintiffs, especially when they are from the forum state. Realizing that, federal law gives defendants the right to remove cases to federal court if that case could have originally been filed there.

Regardless of which type of court in which you find yourself, the next question is one of location, which itself has two components. The first is personal jurisdiction. Through a long and complicated series of cases with names like Pennoyer and International Shoe, the Supreme Court has determined that a defendant can only be brought into court in jurisdictions where they are “at home” (for example, where they have a store) or where they have “purposely availed themselves” of the benefits of that state’s laws (for example, sending products to customers there). Expanding those two ideas would take about four hours of lectures, but the general gist is this: if you do business in a state (or agree by contract to litigate there), that state will have jurisdiction over you.

All of that said, courts have the discretion to decline jurisdiction over cases for practical or equitable reasons, which brings us to the second component of the location question: venue. While a particular jurisdiction may have jurisdiction over a defendant, it may decide that another venue that also has jurisdiction is the better place for the case to proceed. For example, Delaware may have jurisdiction over a corporate defendant because it was incorporated there, but a court in Delaware will most likely decline to hear a case there based on an incident that occurred in California, as not doing so would be hugely impractical for the parties and any witnesses. The same analysis can apply within states, some of which, like Virginia, have statutes establishing where certain types of lawsuits are to be heard; for example, suits involving real property are generally heard in the county where that property is located.

What?

Let’s try an example. You make olive oil, you’ve got a storefront in Henrico County, Virginia, and your headquarters is in Hanover County, Virginia. Your brother Fredo runs a storefront in Clark County, Nevada. A Virginia resident slips in the Henrico store and breaks both tibias. Virginia has personal jurisdiction over you, and both Henrico and Hanover would be proper venues for the suit. Since the plaintiff is a Virginia resident, you cannot remove the case, so you are going to be litigating in whichever of those forums the plaintiff chooses. If the Plaintiff wants, she can sue for less than $50,000 in General District Court, but you probably won’t be that lucky.

A more complicated one: Fredo botches a deal with a California based supplier, who sues in state court in Los Angeles. Does California have jurisdiction over your company? Probably, though it would depend on the nature of the contract between the parties. Let’s assume California does have jurisdiction, and let’s assume the amount in controversy is more than $75,000. You, as a Virginia based company, can remove the case to federal court based on diversity jurisdiction. Can you transfer the case to Nevada or Virginia? Probably not; though it is a complicated analysis, the Central District of California is unlikely find that another venue is no more convenient than California. We’ll see you on Rodeo Drive.

And we’ll end with an absurd one. For some reason, you’ve never sold olive oil in Kansas - perhaps they prefer sunflower oil. You own one tractor-trailer, and its only job is to drive cross-country to deliver product from Virginia to Nevada. Your driver is instructed to never enter Kansas, and he never does, until the fateful day when he takes a wrong turn in Kansas City, Missouri, gets a case of highway hypnosis around Wichita, flips the truck and spills a few tons of olive oil on a perfectly good crop of corn. Some of that tainted corn is sold to a restaurant in Arkansas, where you regularly do business, and Missouri residents eating the corn are poisoned as a result.

Where can you be sued? Where will you be sued? There are a few options:

1. Kansas? Perhaps, but you have a good argument that Kansas does not have personal jurisdiction. The incident happened in Wichita, and all the witnesses, as well as the wrecked truck, will be in Wichita. But does Kansas have personal jurisdiction over your company? Barring some state statute saying otherwise, your lack of willful engagement with Kansas will possibly dissuade a court from finding it has jurisdiction over your company.
2. Arkansas? Maybe. Your regular course of business in Arkansas will probably create personal jurisdiction. While the accident itself did not occur there, the poisoning did, and all the other involved parties will be there or in nearby Oklahoma. Assuming the restaurant is an Arkansas resident, which it almost certainly would be, this suit would end up in state court wherever the poisoning occurred. Woo pig!
3. Missouri? Another maybe, assuming you also do business there. But luckily for you, if the alignment of the case ends up being Missouri residents versus a Kansas farm, an Arkansas restaurant, and a Virginia olive oil producer, you’re eligible for federal court.
4. Nevada? Unlikely. Nevada has personal jurisdiction over your company, but there is no real connection between the state and the incident.
5. Virginia? Virginia certainly has personal jurisdiction over your company, so you absolutely can be sued here. Moreover, under the not yet mentioned “home state defendant” rule, you would not be able to remove to federal court. But a Virginia state court will want nothing to do with a case entirely based on things that happened west of the Mississippi, so it would in all probability decline to hear the case and gently recommend that the Plaintiff’s attorneys look elsewhere.

Happily, you have lawyers that can do all this thinking for you. Questions of where to file or steer lawsuits are determined by a variety of factors, including jury pool makeups, local laws, tendencies of judges, and logistical considerations. Every case is different, and the attorneys at Setliff Law are here to make the best calls for you and your business. If you’d like to discuss any other hypotheticals, please reach out to Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261 or Anthony Tamburro (atamburro@setlifflaw.com) at (804) 377-1268.