Legal Question in Consumer Law in California

When suing a company that is doing business in multiple states, attorneys say the plaintiff has to sue in the state they reside in, not the state the company is based in.

When class actions are brought by consumers against companies, the companies often petition the court to get the lawsuits moved to the state their headquarters are in, obviously to gain some legal advantage.

Why can't consumers file lawsuits against a company in the state it is operating in if they can gain a legal advantage, for example treble damages and attorneys fees that don't exist in the plaintiff's home state?

Asked on 2/06/22, 6:24 am

2 Answers from Attorneys

Armen Tashjian Law Offices of Armen M. Tashjian

The company may be sued at its state of incorporation or where it is domiciled. If the plaintiff is not a resident of that state, and the dispute is over $75k then the case will likely be removed into the federal court due to the diversity of citizenship.

The company may also be sued in the state where it has sufficient minimum contacts and does business. The idea is that the company has availed itself to the benefits of doing business in the state and as such, must avail itself to the laws of that state.

Read the Supreme Court case World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980).

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Answered on 2/06/22, 9:31 am
Timothy McCormick Haapala, Thompson & Abern, LLP

There are actually two issues at play here, and Mr. Tashjian only touches on one - jurisdiction. The courts of any state in which a corporation has sufficient minimum contacts have jurisdiction over that corporation. So, for example every state's courts has jurisdiction over McDonalds. That, however, is not the end of the inquiry. You must then look at what is proper venue.

Proper venue is where a case is most appropriately tried among the locations that have venue. It doesn't make legal or practical sense to take a case against McDonalds, headquartered in Illinois, by a person who slipped and fell at a Yonkers, NY McDonalds and file and try it in California, even though California courts have jurisdiction over McDonalds's corporation. Proper venue for that case is going to be New York. That is where the events occurred, the physical evidence and witnesses are located, and logically is the state whose local laws should apply. If the plaintiff was visiting from California, they might successfully file and keep the case in California, but under "choice of laws" principles, NY law would be applied by the CA courts (if there was any relevant difference between the laws of the two states).

Class actions are a whole other animal, frequently involving multiple lawsuits brought in multiple locations and some brought in state courts and others filed in federal courts. Those have to be coordinated and managed and consolidated under rules that are totally different than for individual plaintiffs and defendant corporations.

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Answered on 2/07/22, 11:16 am

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