Legal Question in Business Law in California

Re: California vs. Michigan Law

You may be able to transfer the case to California. Generally, a business will have to be sued where the contract was entered into or pursuant to the contract terms. A lawsuit can also be filed where the Defendant resides. Please call me if you have any questions or to review your paperwork.

Re: California vs. Michigan Law

Generally, yes.

I can think of four questions or issues that may arise with respect to whether Plaintiff X can sue Defendant Y in Courtroom Z.

They are Power, Standing, Jurisdiction and Venue. Convenience may be a fifth, but it may just be a subcategory of Jurisdiction.

First, the plaintiff must have the legal capacity to sue. Examples of persons not competent to sue are minors (who must have a guardian ad litem) and corporations whose powers have been suspended, e.g. for non-payment of the franchise tax.

Next, the plaintiff must have standing to sue. That means the plaintiff must have a sufficient interest in the outcome of the matter. This often arises in the context of whether an individual who is unhappy with, say, a government policy or business practice can sue the government or the business on moral or philosophical grounds without having a legal nexus to the subject matter of the proposed suit.

Jurisdiction is a frequent issue. A Michigan resident cannot sue a California resident in Michigan without establishing subject-matter jurisdiction in Michigan. If the California resident expressly agreed by contract to Michigan jurisdiction, it's a given. Jurisdiction in another state can also be established by the defendant doing business in that state, by a tort or crime committed there, and a few other ways. Generally, it is based on defendant's reasonable expectation that he might be sued there, combined with the proposed forum state's legitimate interest in enforcing its law and policy against that defendant.

In addition to subject matter jurisdiction, the court must obtain personal jurisdiction over the defendant. This happens when the defendant is duly served with the summons and complaint.

Venue is the issue of determining which court in a multi-courthouse system is the proper location for trial. Venue is usually proper in a county where a defendant resides, or where a contract was to be performed; there are other bases for venue (e.g. where real property is situated) and sometimes venue is proper in more than one county.

Re: California vs. Michigan Law

Here is the balance of my answer, which I have to put in a separate posting because LawGuru limits me to 3000 characters per posting:

Inconvenience can also result in a court denying its services to a plaintiff. A suit may be otherwise proper in Hawaii, but if most of the parties live in Maine and there is a basis for jurisdiction in Maine, the Hawaii court may refer the case to Maine on the basis that Hawaii is a "forum non conveniens" (legal Latin for inconvenient forum).

Some cases are eligible for hearing and trial in the federal court system as well as or instead of a state court.

A somewhat separate issue is which state's laws shall be used to interpret a contract. There are instances where a court in State A has jurisdiction, etc., but the contract has to be interpreted and enforced under the laws of State B (usually due to a choice of law clause in the contract).

So, this discussion may give you a useful checklist to determine where the proposed suit can be tried. These matters are pretty technical and there are myriad ways to challenge a suit that is, or might be, improperly brought, so you may want to retain a lawyer who has good knowledge of civil procedure.