What State Has Jurisdiction Over Shareholder Disputes?
Shareholder disputes can arise for a wide variety of different reasons. If you are considering filing a lawsuit as a shareholder—whether a direct claim or a derivative claim—it is imperative that you follow the proper filing procedures. This raises an important question: Where do you file a shareholder lawsuit? After all, many companies operate in different states. You may not even be located in the same state as the company. In this blog post, our Miami shareholder dispute attorneys explain the most important things to know about jurisdiction and shareholder lawsuits.
Jurisdiction: Understanding the Basics
As a starting point, it is crucial to understand the concept of jurisdiction. Cornell Legal Information Institute defines jurisdiction simply as the “power of a court to adjudicate cases and issue orders.” In other words, a court will only have the authority to hear a case if it has jurisdiction over the parties and the legal matter in question. If you file a direct shareholder lawsuit or a shareholder derivative claim in a court without the jurisdiction to hear the matter, then the case could be dismissed on those grounds alone.
Personal Jurisdiction and Businesses
One of the things that makes lawsuits involving businesses complicated is that multiple states may have personal jurisdiction over a company. This applies to the full range of commercial disputes, including shareholder lawsuits. A state may have jurisdiction to hear a shareholder dispute against a corporation or its officers if:
- The business is incorporated in the state;
- The business has its primary headquarters in the state; or
- There are “sufficient contacts” between the state and the issue in question.
It is not uncommon for a company with a primary place of business in Florida to be incorporated in another state. Notably, the Delaware Division of Corporations reports that two-thirds of all Fortune 500 companies in the United States are incorporated in Delaware.
You Must File a Shareholder Lawsuit in the Right Place—A Lawyer Will Let You Know
When deciding where to file a shareholder lawsuit, you need to make sure that you choose the proper venue. Beyond ensuring that the court actually has jurisdiction over the case, there may be some legal and logistical reasons to prefer one state over another. Shareholder disputes are complicated claims, especially when you are dealing with a potential multi-jurisdiction or cross-state issue. A Florida attorney with experience representing clients in shareholder disputes will be able to review the specific facts of your case and make sure that you file any legal claim in the appropriate place.
Schedule a Confidential Consultation with a Shareholder Lawyer in South Florida
At Pike & Lustig, LLP, our Florida shareholder law attorneys have the professional experience and expertise to protect your rights. We are focused on getting results for clients. If you have questions about jurisdiction and shareholder disputes, our team can help. Contact us today for your confidential consultation. We represent shareholders throughout South Florida, including in Miami-Dade, Palm Beach, and Broward Counties.