What Happens When Your Case Gets Moved To State Court

Magistrate Court versus State Court

I got a call from a prospective client today who wanted to ask me questions about the process and the costs of pursuing a case in state court that had started in magistrate or small claims court. I am sharing my thoughts here because the points we discussed are relevant to a broad community of small business owners and individuals faced with similar concerns.

Her case started as a landlord/tenant dispute where the landlord filed suit against her company for an amount just under the statutory maximum for small claims in Georgia. As the case developed, the landlord decided it had additional claims that it wanted to pursue, and the tenant had counter claims that she wanted to include in the suit. At the first hearing, which in Magistrate Court is usually the only hearing, the judge bound the case over to State Court, which means he transferred the case to a court that has no limits on damages and claims so that all of the claims being asserted by the parties could be addressed in one case.

I explained to my Prospective Client that there were lot of advantages for a Defendant in State Court. 

First, she is going to be able to include any and all claims that she believed she had in the new case because there is no statutory maximum amount of damages.

Second, she’s going to be able to ask the court to award her her attorney’s fees as an element of damages, something she could not have done in Magistrate Court. 

Third, she was going to have an opportunity to conduct discovery - to have a formal investigation of the landlord’s claims including asking in advance for all documents that support of this claim and asking for responses to questions about the details of this claim. In Magistrate Court, she would probably have been shown those documents and details at the final hearing in Court.  She might also be able to take testimony of the landlord and/or his representative to nail down specifics about the claim.

Fourth, the State Court case will take more time compared to the relatively quick and efficient process of a Magistrate Court case.  Magistrate Court cases are designed to bring a more efficient and immediate result.  In State Court, the discovery period, where you conduct your investigation, can last six months and in many cases longer.  And then getting on a court calendar at the end of the case takes a significant amount of time. There is also the option in a State Court case to ask for a jury trial, which a lot of parties like because it puts the final decisions in the hands of your peers as opposed to in the hands of a judge. There is additional time involved in getting on a jury trial calendar in a State Court case so the whole process will take a lot longer than a Magistrate Court case.

Of course, one of the challenges of this move is the increased costs for legal fees and the expenses associated with producing documents and taking testimony.  Most Magistrate Court cases do not require the services of an attorney.  The amount of attorney fees you will incur will of course depend on the complexity of the claims being asserted and the defenses raised, and the appetite for fighting about it.  Those fees and expenses can be an element of damages that are recoverable in some cases.

Many of the above elements in a State Court case can be a benefit to a small business involved in litigation.  Keep this list in mind when assessing your options and discussing those options with your attorney.