updated 6/17/2004 5:10:49 PM ET 2004-06-17T21:10:49

Lawyers for former New York Stock Exchange chief Richard Grasso have filed to move the lawsuit over his compensation brought by state Attorney General Eliot Spitzer from state to federal court.

The filing automatically removes the case from state court, though a spokesman for Spitzer said the attorney general would contest the removal in federal court by early next week.

The two sides were scheduled to meet Friday with State Supreme Court Judge Charles Ramos for a preliminary hearing, which has now been canceled due to the change of venue. Their next court date will likely be a hearing before a federal judge on whether the case should remain in U.S. District Court or be sent back to state court.

Grasso spokesman Eric Starkman noted that the move to federal court was a “technical legal matter” and did not constitute Grasso’s official response to Spitzer’s lawsuit, filed May 24. Grasso has 30 days from the date of Spitzer’s suit to file a response.

In the court filing, obtained by The Associated Press, Grasso argued that his actions as chief executive and chairman of the NYSE, including those alleged in Spitzer’s lawsuit, were done under the oversight of a federal agency — in this case, the U.S. Securities and Exchange Commission.

Spitzer spokesman Marc Violette said the automatic removal to federal court was nothing but a delaying tactic.

“This case is based on violations of state law and should be adjudicated by a state judge in state court,” Violette said. “This action by Mr. Grasso’s legal team is a distraction from the issue of unreasonable pay in violation of state not-for-profit corporation law.”

Spitzer is seeking the return of the bulk of Grasso’s $187.5 million compensation package, awarded in August 2003, claiming that the former NYSE head misled the board of directors about his pay and bullied them into approving his compensation. Revelations about the lawsuit prompted Grasso’s resignation as chairman and chief executive of the NYSE in September.

Former exchange board member Kenneth Langone, who headed the compensation committee for the board, was also named in the suit, with Spitzer seeking $18 million in damages against him for allegedly misleading fellow board members about Grasso’s pay package. Although not required to under law, Langone consented to have the case moved to federal court.

Both Grasso and Langone have vehemently denied any wrongdoing and promised to fight Spitzer’s suit in court.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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