When a Canadian company becomes involved in a dispute with a business located in the United States, and in the event litigation becomes necessary, one of the first questions to be answered is where suit should be filed.

In Canada, suit should be filed in the jurisdiction with the closest "real and substantial connection" to the dispute. In that sense, under Canadian law, there is generally only one appropriate forum to file suit.

However, under U.S. law, suit can be brought in any state where the defendant is a resident or otherwise maintains sufficient contacts.M/p.

Some defendants may have limited contacts with other jurisdictions and therefore may only be subject to suit in the state where they reside. For other defendants, there may be several states where the defendant could be sued, leaving to the plaintiff the option of choosing the forum that is most advantageous to the plaintiff's claims. Under those circumstances, it is in the plaintiff's best interests to determine what jurisdictions are potentially available and then select the state that provides the greatest advantage.

1. Determine Where Suit Can Be Brought.

Each state in the U.S. is regarded as a distinct, independent legal jurisdiction. As a result, courts located within each state generally only have authority to adjudicate disputes concerning persons located within the boundaries of that state.

Therefore, courts located in California, for instance, only have authority over parties that are residents of California. Accordingly, if suit were filed in the U.S., a Canadian company involved in a dispute with a California resident normally would be limited to filing suit only in California. This would be true even if California otherwise had no other interest in, or connection to, the dispute at issue.

Under certain circumstances, a defendant may be subject to suit in a state other than the state where it resides.

To determine whether a non-resident defendant is subject to a court's jurisdiction, courts are restricted by the defendant's constitutional right to due process. The due process requirement protects an individual's liberty interest in not being subject to the binding judgments of a forum with which the defendant has established no meaningful contacts. This protection affords a potential defendant a measure of predictability regarding where it might be sued.

In this context, a defendant is entitled to a degree of "fair warning" that the defendant could be haled into court in another state. This "fair warning" requirement is satisfied if the defendant has "purposefully directed" his activities at the forum and the litigation results from injuries that "arise out of or relate to" those activities. Therefore, generally speaking, a non-resident defendant's due process rights will not be implicated when that defendant purposefully engages in conduct that creates a substantial connection to the forum such that the defendant should reasonably anticipate being subject to the jurisdiction of the forum's courts. However, random, fortuitous, or attenuated contacts will not be enough. Rather, the contacts must be substantial and purposeful and must be directed towards the forum. If a defendant lacks sufficient contacts with the forum, absent other circumstances, the defendant is not subject to the court's jurisdiction and cannot be sued there.

Given this rubric, depending on the nature of the dispute at issue, a company that maintains offices or conducts business in several states could be subject to suit in more than one jurisdiction. As long as the plaintiff can establish the defendant has maintained sufficient minimum contacts for the defendant to be haled into the state's courts consistent with the defendant's right to due process, a plaintiff could have a multitude of jurisdictions to choose from in determining where to file suit. Making that decision can be a complicated process.

2. Choose The Most Advantageous Forum.

Although the concept of "forum shopping" may seem abhorrent in the Canadian legal system, in the U.S., a defendant can only be sued in a jurisdiction that is fundamentally fair to the defendant. Therefore, a defendant in the U.S. cannot legitimately complain about "forum shopping" – even when sued in a state with little connection to the dispute at issue. Accordingly, when a defendant is subject to suit in more than one state, the plaintiff has the right to choose the forum that is most advantageous to the plaintiff.

Moreover, the U.S. legal system is extremely diverse, and there can be wide disparities in substantive laws and procedural rules from one state to the next. Each potential jurisdiction could have its own advantages and disadvantages under the circumstances, including the costs of litigating in that forum, the right to proceed in federal court or state court, the relative speed of litigation, and a whole variety of other factors that could have an important impact on the outcome of the case. Making this determination should involve a detailed, thoughtful analysis of the substance of the plaintiff's claims in light of the substantive laws and procedural rules that would apply in each available jurisdiction, as well as a consideration of any other strategic advantages and disadvantages that might arise.

Conducting an analysis of the available jurisdictions can be complicated and time-consuming. However, because the forum where suit is filed could have a determinative impact on the outcome of the case, taking the time to carefully consider the options available before filing suit could be well worth the effort.