When do small claims courts have jurisdiction? Could I use my local small claims court to sue a large out-of-town company?

The ability to sue in any kind of court depends on whether or not it has jurisdiction over the lawsuit. For a court to be able to hear a case, it must have both subject matter jurisdiction over the issues and personal jurisdiction over the parties involved.

Subject Matter Jurisdiction & Small Claims Court

Subject matter jurisdiction is the court's authority to hear the type of case before it. Small claims courts, also known as magistrate or district courts, are civil courts that have limited subject matter jurisdiction. The damages sought in the lawsuit must be under a specific amount, generally around $15,000 but often lower. If a plaintiff initiates a lawsuit involving more than that amount, the case will either be dismissed or the recovery limited to that over which the court has jurisdiction. In addition to monetary amount, small claims courts must also have subject matter jurisdiction over the case because of its nature. For example, an heir could not sue in small claims court over issues involving an estate because this type is more properly brought in orphans or probate courts.

Personal Jurisdiction & Small Claims Court

The small claims court must also have personal jurisdiction over the parties to it for the lawsuit to be heard there. For personal jurisdiction to exist, the parties must have some type of relationship to the region in which the case was filed. Certainly, the relationship exists if the main office of the business you want to sue is in the same region as the small claims court. However, to sue an out of town company, it must be established, for example, that the company does business in the region.

The Ability to Sue in Small Claims Court

So if your case involves an out of town company that does business in your area and the amount you are looking for is not more than the jurisdictional amount, you should be able to sue. However, the above is a very simplified way of looking at jurisdictional issues. Questions of jurisdiction are often tricky to resolve, so before filing your lawsuit, you should consult with an attorney.