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Contract Cases in Federal Court

When your business is sued in federal court, it can be a strange and surprising experience. A common question that we receive from business owners is, “How can my business be sued in federal court over a contract? Isn’t federal court just for crimes and serious litigation?”

How it Works

In most cases, federal cases over contracts are brought because one party is from a different state than the opposing party and there is more than $75,000 in damages that are at issue in the lawsuit. In other words, your first instinct might be right: a contract case only enters the federal court because it is a pretty big deal. 

Beyond this, contract cases in federal court are much different than contract cases in state court. A breach of contract action requires that the plaintiff (the person bringing the lawsuit) demonstrate that the defendant violated the terms of an agreement. This agreement doesn’t have to necessarily be written (although it usually is when there is a lot of money at stake). 

Several defenses to contract actions exist, including proof that the contract was impossible to perform or that the plaintiff violated the contract first. In rare cases, the contract itself might violate state or federal law, which means it cannot be enforced in court.

More About Federal Court Cases

Cases in federal court should be taken seriously because they tend to move quickly. This is especially true of the Eastern District of Pennsylvania, often referred to as “the rocket docket” because of the speed with which the cases move to trial. In other words, if you are not preparing from day one, you are not going to be ready by the time the case gets to the summary judgement phase and to trial. 

Contact Cornerstone Law Firm

If you or your business has been sued in federal court, it is important to seek litigation attorneys who can handle your case. Contact the Cornerstone Law Firm and speak with our experienced federal litigators to discuss your options in moving forward and how you can best defend your case.

Representation in Federal Court

If you’ve been sued in the Federal District Court for the Eastern District of Pennsylvania, there are a number of questions you will need to confront quickly. These questions include whether you were properly sued in the Eastern District, whether the Commonwealth of Pennsylvania has “personal jurisdiction” over you in a lawsuit, and whether you have any counter-claims or defenses that you will need to raise in your first pleadings.

In federal court, if you have been served with a complaint you typically have only 21 days from the date of service to answer. If you waive service in advance, you will have longer to respond. 

Does Your Case Belong in Federal Court?

In addition to determining counterclaims and affirmative defenses available to you, an important question you should analyze is whether the case belongs in federal court rather than state court. Unlike state courts, federal courts are of limited jurisdiction, which means they can only handle cases specifically authorized by the Constitution and by Congress.

Whether the case you are involved in falls under those categories of cases authorized by Congress and the Constitution is a question requiring legal analysis that needs to be done immediately to determine whether the court has subject-matter jurisdiction over the claim. 

Choosing Your Next Steps

Additionally, like any other case, as a defendant, you need to decide up front whether you wish to fight the case and defend it on its merits or attempt to settle it and avoid the rising costs of defending a lawsuit. This decision can be difficult, but is made easier when you really understand the likelihood of your success in defending a case and the possible risks involved in losing it. This requires an exploration of the facts and law that gave rise to the lawsuit.

The Eastern District of Pennsylvania is sometimes called the “rocket docket” because of the speed with which litigation moves and the promptness of trial dates. Most cases in the Eastern District are set for trial in less than a year from the date the suit is filed. This is remarkably fast for courts of any kind and makes the Eastern District of Pennsylvania one of the most fast-paced courts in the country. 

Contact Cornerstone Law Firm

Perhaps you have heard the expression, “Don’t make a federal case out of it.” This simple expression confirms one truth about federal cases—they are serious and shouldn’t be ignored.

If you have been sued in the Eastern District of Pennsylvania, we welcome you to contact Cornerstone Law Firm. Contact us today for a consultation on your federal case:

Waiving Summons in Federal Court

When you have been sued in federal court, it is customary for the attorney who represents the plaintiff (the person suing you) to reach out to you by email or letter with a copy of a Waiver of Summons. An example of what this document looks like is provided below.

waiver of summons
Sample Waiver of Summons

A Waiver of Summons requests that you sign and accept the service of the Complaint, thus simplifying the process of bringing you in to court to be sued. So why would anyone do this? Why make it easier for the person trying to sue you? There are three good reasons why you should consider waiving service of the Complaint:

1. You have more time to answer

If you are served with a Complaint in federal court, you get only 21 days to answer the Complaint. This is a very quick turnaround, especially when you take into consideration the time it might take to find a litigation attorney you trust who can handle a federal case.

However, if you sign the Waiver of Summons, you get 60 days from the date the waiver was offered to you. With more than double the time to answer, you may also have the opportunity for other procedural maneuvers and even opportunities to resolve the case out of court before undertaking the expense of filing an answer or a motion to dismiss.

2. It costs less to waive summons

Under Federal Rule of Civil Procedure 4, if you refuse to waive service, you are responsible for the cost of service. This can cost hundreds of dollars in some cases and that cost will ultimately be passed on to you, regardless of whether you win or lose the lawsuit. Compared to other litigation costs, this may not seem like much, but when you have the option to waive service and avoid this cost altogether, it certainly seems unnecessary.

3. You can avoid the embarrassment of personal service

Many people do not care about personal service and do not mind if a private process server shows up to hand them a complaint. However, if you run a business, and in many other circumstances, you may prefer not to be embarrassed in front of coworkers, friends, business associates, or relatives by service of the complaint and the announcement in front of those people that you have been sued in court.

Waiver of Summons allows you to avoid living under the constant fear of a process server arriving in your office or at your home, and announcing to everyone within earshot that you have a lawsuit in federal court against you.

To waive or not to wave?

With all that said, there are also some times that it is not wise to waive service of process. Although these situations are relatively rare, a good litigation attorney who handles cases in federal court can help you decide whether it is right to waive service or to force the other side to serve you with the process. And more important than this decision are the many decisions that will immediately follow.

Should you file an answer or a motion to dismiss? Should you be in discovery immediately or is a private, internal investigation the first step? These and a hundred other questions can be worked through with experienced litigation counsel.

Call Cornerstone Law Firm today if you have been sued in federal court to discuss your case and to see if one of our litigation attorneys can help you.