There are a number of reasons why defendants generally, or insurers specifically, may prefer to litigate matters in federal court. First, the pleading standards required by federal courts are generally more stringent than in state courts, which: (1) gives insurers a better understanding of their insureds’ legal and factual arguments; and (2) makes the utility of early motion practice more easily foreseeable.
Second, while state courts are seen as providing a “home court” advantage to their in-state insureds, federal courts are viewed as less partisan and above the fray. Courts across the country recognize that the diversity statute (which, along with the removal statute, allows cases pending in state court to be “removed” to—and litigated in—federal court) exists in part to prevent favoritism for in-state litigants, and discrimination against out-of-state litigants. See, e.g., J.A. Olson Co. v. City of Winona, Miss., 818 F.2d 401, 404 (5th Cir. 1987) (noting that diversity jurisdiction and removal exist to protect out-of-state defendants from in-state prejudices).
