Jurisdiction and Venue FAQ

It depends entirely on what the NDA says. There are three possibilities:

If the NDA has an exclusive venue clause:

• They can ONLY sue you in the courts specified in the NDA
• Common formulation: "The exclusive jurisdiction and venue for any dispute shall be the state and federal courts located in [County, State]"
• This locks in the location regardless of where either party is based

If the NDA has a non-exclusive venue clause:

• They can sue in the specified courts OR any other court with proper jurisdiction
• This preserves flexibility for both parties
• Common for mutual NDAs where both sides want options

If the NDA is silent on venue:

• Default jurisdictional rules apply
• They can typically sue where you are located, where you conduct business, or where the breach occurred
• This creates uncertainty that both parties usually want to avoid

These terms are related but distinct legal concepts:

Jurisdiction:

• The court's legal authority to hear a case and render a binding judgment
• Two types matter: subject matter jurisdiction (does this court handle this type of case?) and personal jurisdiction (does this court have authority over the parties?)
• Without jurisdiction, any judgment is void

Venue:

• The specific geographic location where the case will be heard
• Assumes jurisdiction exists - the question is which courthouse
• Can sometimes be transferred for convenience even if proper

Practical Example: A California federal court might have jurisdiction over your case (you are in California, amount exceeds $75,000, parties are from different states). But venue might be improper if the contract requires venue in New York - even though the California court has the power to hear the case, it should transfer or dismiss because you agreed to New York.

Why both appear in contracts: Contracts typically address both - consent to jurisdiction (I agree this court has power over me) and selection of venue (I agree cases must be filed in this location).

This is one of the most important distinctions in jurisdiction clauses:

Exclusive Jurisdiction:

• Disputes can ONLY be heard in the specified courts
• All other courts are excluded
• Creates certainty about where litigation will occur
• Favors the party in the specified location

Non-Exclusive Jurisdiction:

• The specified courts are acceptable, but other courts may also have jurisdiction
• Preserves flexibility for both parties
• Plaintiff can choose among available forums
• Creates some uncertainty but more options

Factor	Exclusive	Non-Exclusive
Certainty	High - you know where you will litigate	Lower - multiple forums possible
Flexibility	None - locked into one location	High - options preserved
Who it favors	Party in the specified location	The plaintiff (who gets to choose)
Emergency relief	May have to travel for TROs	Can seek in nearest court

Both have advantages and disadvantages. Here is a practical comparison:

Federal Court Advantages:

• Perceived neutrality: Less potential for local bias
• Experienced judges: Often lifetime appointments with commercial experience
• Better discovery tools: Strong enforcement of discovery rules
• Clearer procedures: Federal Rules of Civil Procedure are well-established
• Trade secret expertise: DTSA (federal trade secret law) cases must be in federal court

State Court Advantages:

• Often faster: May have less crowded dockets
• Easier access: More locations, closer to parties
• Specialized courts: Some states have business courts (Delaware Chancery)
• No federal jurisdictional requirements: No diversity or federal question needed
• Jury trials: May be easier to get if desired

Practical tip: Many NDA clauses specify "state and federal courts located in [location]" - this preserves both options and lets the plaintiff choose based on the specific circumstances of the case.

Federal courts have limited jurisdiction. You need one of the following:

Diversity Jurisdiction (28 U.S.C. 1332):

• Parties are from different states (or one is foreign)
• Amount in controversy exceeds $75,000
• Most common basis for NDA cases in federal court

Federal Question Jurisdiction (28 U.S.C. 1331):

• The claim arises under federal law
• For NDAs, this usually means DTSA (Defend Trade Secrets Act) claims
• Must be a federal claim, not just state law with federal issues

Supplemental Jurisdiction (28 U.S.C. 1367):

• If you have a valid federal claim, you can add related state claims
• Allows combining state NDA breach claims with federal trade secret claims

Watch out: A jurisdiction clause saying "federal courts of [State]" does not give federal courts jurisdiction they would not otherwise have. You still need diversity or a federal question.

Maybe, but it is difficult if you agreed to venue in that court:

Forum Non Conveniens:

• Traditional doctrine allowing transfer to a more convenient forum
• BUT: Most NDAs include a waiver of this defense
• If you waived it, the court will likely deny your motion to transfer

Transfer Under 28 U.S.C. 1404 (Federal Courts):

• Allows transfer "for the convenience of parties and witnesses, in the interest of justice"
• Courts consider: witness locations, evidence locations, each party's relative means
• Contractual venue selection clauses are given significant weight
• Transfer is discretionary - no guarantee

Improper Venue:

• If they sued somewhere other than what the contract specifies, you can move to dismiss or transfer
• This is your strongest argument - they violated the agreement

Significant additional costs compared to litigating locally:

Direct Additional Costs:

• Local counsel: You will likely need an attorney licensed in that jurisdiction ($300-$800/hour depending on location)
• Travel: Flights, hotels, meals for every court appearance, deposition, mediation
• Executive time: Your businesspeople traveling for depositions and trial
• Witness expenses: Flying in witnesses from your location

Cost Estimates by Case Stage:

• Pre-suit negotiations: $2,000-$5,000 additional for local counsel coordination
• Motion practice: $5,000-$15,000 additional per motion (travel, local counsel)
• Discovery: $10,000-$50,000 additional (depositions require travel)
• Trial: $20,000-$100,000+ additional (team on-site for days or weeks)

Practical impact: The cost differential can make it uneconomic to pursue smaller claims or defend against weak claims. This is exactly why the other party may want venue in their home court - it creates practical barriers to your access to justice.

This is a critical practical concern. Here is how to handle it:

If You Have Exclusive Venue in a Distant Court:

• Technically, you must go to that court for TROs and preliminary injunctions
• Federal courts have duty judges who can handle emergency matters by phone/video
• You may be able to file electronically and appear telephonically initially
• BUT you will still need local counsel and may need to travel for hearings

Best Practice - Include an Emergency Relief Carve-Out:

• Standard language: "Notwithstanding the exclusive jurisdiction provisions, either party may seek emergency injunctive relief in any court of competent jurisdiction"
• This lets you go to the nearest federal court for a TRO while the main case proceeds in the contractual venue
• Critical for time-sensitive situations (ongoing disclosure, imminent harm)

If the other party violates the venue clause, you have options:

Motion to Dismiss for Improper Venue:

• File a motion arguing that venue is improper based on the contract
• The court should dismiss or transfer to the proper venue
• This is usually successful when the contract clearly specifies exclusive venue

Motion to Transfer:

• Ask the court to transfer the case to the contractually specified venue
• Often combined with or as alternative to dismissal
• Court may transfer rather than dismiss to prevent delay

Important Timing:

• File your motion early - before substantive briefing
• Venue objections can be waived if not raised promptly
• In federal court, raise in your first responsive pleading

Cost recovery: Some courts will award fees for bringing a case in the wrong venue. If the contract has a prevailing party fee provision, a successful venue motion may trigger it.

Judgment enforcement across state lines is generally straightforward in the US:

Full Faith and Credit Clause:

• The US Constitution requires states to honor judgments from other states
• A valid judgment in Delaware can be enforced in California
• The judgment creditor must "domesticate" the judgment in the new state

Domestication Process:

• File a certified copy of the judgment in the new state
• Pay applicable filing fees
• The foreign judgment is entered as a local judgment
• Relatively quick and inexpensive (often just filing fees)

Best Practice - Include Enforcement Language:

• "Each party agrees that any judgment obtained in the specified courts may be enforced in any jurisdiction where the other party has assets"
• This explicitly preserves the right to go wherever assets are located
• Avoids any argument that the venue clause limits enforcement

International enforcement: This is much more complex. US judgments are not automatically enforceable abroad. Consider arbitration with institutional rules if dealing with foreign parties.

Here are practical negotiation strategies:

Propose a Neutral Venue:

• Delaware (neutral, sophisticated courts)
• Geographic midpoint between the parties
• A major commercial center convenient to both (NYC, Chicago)
• The state where most work will be performed

Propose Non-Exclusive Jurisdiction:

• "We can accept your proposed venue, but it should be non-exclusive"
• This preserves your option to sue in your own courts if you are the injured party
• Often an acceptable compromise

Propose Defendant's Location:

• "Venue shall be in the courts of the defendant's principal place of business"
• Fair because the plaintiff (who chose to sue) must go to the defendant
• Reduces forum shopping incentives

Negotiation Script: "We understand you prefer [your state] courts. However, having to litigate 2,000 miles from our offices creates substantial practical barriers. As a compromise, we propose Delaware as a neutral venue - it has sophisticated commercial courts and neither of us has a home court advantage."

It depends on your situation and risk tolerance:

Why They Want You to Waive Jury Trial:

• Jury verdicts are less predictable
• Juries may be more sympathetic to "David vs Goliath" narratives
• Bench trials are often faster and cheaper
• Judges may be more receptive to technical/legal arguments

Arguments for Keeping Jury Rights:

• You are the smaller party - juries may favor you
• You have a sympathetic fact pattern
• Jury uncertainty increases the other side's settlement incentive

Arguments for Waiving:

• Your case is highly technical - a judge will understand it better
• You want faster, cheaper resolution
• You are the larger party with more resources
• It is not worth burning negotiating capital on this issue

Practical reality: Most NDA disputes settle before trial, so jury rights rarely come into play. But the possibility of a jury trial does affect negotiating dynamics and settlement values.

Arbitration has different trade-offs than court litigation:

Arbitration Advantages:

• Privacy: No public filings or court records
• Speed: Often faster than court (but not always)
• Expertise: Can select arbitrators with industry knowledge
• Finality: Very limited appeal rights
• International: Easier to enforce across borders

Arbitration Disadvantages:

• Cost: Arbitrator fees can be substantial ($1,000+/hour)
• Limited discovery: May not be able to get documents you need
• No injunctions: Arbitrators cannot issue TROs; need court anyway for emergency relief
• No appeal: Stuck with the decision even if wrong
• No precedent: Does not create public guidance

For NDAs specifically: Arbitration is often problematic because the most important remedy (emergency injunctive relief) requires court involvement anyway. Many NDAs include arbitration for damages claims but carve out injunctive relief for courts.