The feds will get first crack at Loughner. Assuming the result there is unsatisfactory from the state of AZ's perspective, they can subsequently file charges against him; however, if the finding in federal court is not guilty by reason of mental defect/insanity, it will be extremely difficult to obtain a different verdict in state court.
Obtaining a not guilty by reason of mental defect result is normally a very difficult outcome for the defense to achieve; however, in this case Loughner appears to have left a lengthy and well-documented trail of bizarre behavior and disordered reasoning/thinking behind him. My guess is there's a 50/50 shot he gets the not guilty by mental defect verdict and spends the rest of his days in a federal mental hospital.
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