Washington - The lawsuits that Connecticut Attorney General Richard Blumenthal filed against the three major rating agencies for allegedly violating antitrust practices by rating municipalities and their bonds lower than necessary have been moved from state to federal court.

Attorneys representing the three agencies - Moody's Corp., Fitch Inc., and McGraw-Hill Cos., the parent company of Standard & Poor's - confirmed that "removal petitions" were filed last Thursday and that the cases have been moved to federal court from the state Superior Court in Hartford where the lawsuits were initially filed in July.

Blumenthal's office has 30 days to file a motion to return the case to state court or file for an extension. The attorneys for the rating agencies declined to comment further.

Blumenthal filed the lawsuits alleging that the credit agencies gave municipalities and their bonds lower ratings than they deserved, costing taxpayers millions of dollars in unnecessary bond insurance and higher interest rates. He said an investigation could result in possible additional antitrust, consumer protection, and other violations by the rating agencies as well as muni bond insurers and other entities.

The agencies have said the lawsuits are "without merit" and that they plan to "vigorously defend themselves" against the charges.

Plaintiffs may choose the court in which they file a lawsuit, according to the American Bar Association. A plaintiff can sue an out-of-state defendant in state court if the case involves state law issues. To move a case to federal court, defendants must prove they have a "diversity of citizenship" - meaning they are citizens of different states, which can include corporations - and that the amount involved in the controversy is more than $75,000.

If the attorney general's office files a motion to return the case to state court, the federal and state courts will have to reconcile the issue of whether the three defendants can claim diversity of citizenship as corporations. A corporation is considered a citizen of the state in which it is incorporated and in the state where it has its principle place of business.

Additionally, the defendants can also motion to have the three separate cases consolidated under one judge.

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