A bill passed in Congress (H.R. 394) last year has flown pretty much under the radar. The U.S. Senate gave final passage to the Federal Courts Jurisdiction and Venue Clarification Act of 2011, and President Obama signed it into law. Some believe the Act contains the most far-reaching package of revisions to the Judicial Code since the Judicial Improvements Act of 1990. The changes deal primarily with removal and venue. We will write on this new law in more detail in the March issue. At this juncture, I will mention a few of the changes made. The Act:
• revises the “separate and independent” claim provision of §1441(c), dealing with the removal of civil actions that include both federal and unrelated state claims. The new provision requires severance and remand of claims not within the original or supplemental jurisdiction of the district court.
• codifies the “rule of unanimity” for removal in cases involving multiple Defendants. Each Defendant is given 30 days in which to initiate removal.
• resolves several issues relating to the determination of the amount in controversy when the Defendant removes a civil action based on diversity. It adopts a “bad faith” exception to the statutory provision prohibiting removal of a diversity case more than one year after filing.
• completely rewrites Chapter 87 on venue, abolishing the distinction between backup venue in diversity and federal-question cases.
• eliminates §1392’s separate provision dealing with “local” as opposed to “transitory” actions.
• further abrogates the Supreme Court decision in Hoffman v. Blaski, 363 U.S. 335 (1960), by authorizing transfer of venue to a district where the action could not have been brought initially, as long as all parties consent.
• narrows the resident-alien proviso now located at the end of 1332(a), which appears to be the only provision affecting original jurisdiction.
The Act’s provisions will apply to newly-filed actions starting 30 days after enactment. I haven’t attempted to cover all of the ramifications of the law and would welcome any comments from lawyers around the country on the new law. Hopefully, we will be able to give our readers a little better read on the Act next month.
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