Short title; table of contents

(a)

Short title

This Act may be cited as the

Federal Courts Jurisdiction Clarification Act of 2006

. (b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Resident alien exception.

Sec. 3. Citizenship of corporations and insurance companies with foreign contacts.

Sec. 4. Removal and remand procedures.

Sec. 5. Indexing the amount in controversy.

Sec. 6. Facilitating use of declarations to specify damages.

Sec. 7. Effective date.

Resident alien exception

Section 1332(a) of title 28, United States Code, is amended— (1)by striking the last sentence; and (2)in paragraph (2), by inserting after foreign state the following: “, except that the district courts shall not have original jurisdiction of an action between a citizen of a State and a citizen or subject of a foreign state admitted to the United States for permanent residence and domiciled in the same State”.

Citizenship of corporations and insurance companies with foreign contacts

Section 1332(c)(1) of title 28, United States Code, is amended— (1)by striking a corporation and all that follows through , except and inserting “a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business, except”; and (2)by striking all that follows “party-defendant,” and inserting “such insurer shall be deemed a citizen of—

(A)every State and foreign state of which the insured is a citizen; (B)every State or foreign state by which the insurer has been incorporated; and (C)the State or foreign state where the insurer has its principal place of business; and

Removal and remand procedures

(a)

Actions removable generally

Section 1441(c) of title 28, United States Code, is amended to read as follows:

(c)(1)If a civil action includes— (A)a claim arising under the Constitution, laws, or treaties of the United States (within the meaning of section 1331), and (B)a claim not within the original or supplemental jurisdiction of the district court or a claim that has been made nonremovable by statute,

the entire action may be removed if the action would be removable without the inclusion of the claim described in subparagraph (B).

(2)Upon removal of an action described in paragraph (1), the district court shall sever from the action all claims described in paragraph (1)(B) and shall remand the severed claims to the State court from which the action was removed. Only defendants against whom a claim described in paragraph (1)(A) has been asserted are required to join in or consent to the removal under paragraph (1).

(b)

Procedure for removal of civil actions

Section 1446 of title 28, United States Code, is amended as follows: (1)The section heading is amended to read as follows:

1446.

Procedure for removal of civil actions

(2)Subsection (a) is amended— (A)by striking or criminal prosecution; and (B)by striking removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing and inserting removal. The notice of removal shall be signed in the same manner and with the same effect as a pleading, written motion, or other paper in a civil action in a district court of the United States, and shall contain. (3)Subsection (b) is amended— (A)by inserting (1) after (b); (B)by designating the second paragraph as paragraph (3); (C)by inserting after paragraph (1) (as designated by subparagraph (A) of this paragraph) the following:

(2)When a civil action is removed solely under section 1441(a), all defendants who have been properly joined and served must join in or consent to the removal of the action. A defendant shall have 30 days after receipt by or service on that defendant of the initial pleading or summons described in subsection (b)(1) to file the notice of removal. During the 30-day period before a defendant files a notice of removal— (A)any other defendant served before the beginning of that 30-day period may consent to the removal by the later-served defendant even though that earlier-served defendant did not previously initiate or consent to removal; and (B)any defendant not yet served may join in or consent to the removal.

;

(D)in paragraph (3) (as designated by subparagraph (B) of this paragraph), by striking action. and inserting action, unless equitable considerations warrant removal. Such equitable considerations include whether the plaintiff has engaged in manipulative behavior, whether the defendant has acted diligently in seeking to remove the action, and whether the case has progressed in State court to a point where removal would be disruptive.; and (E)by adding at the end the following:

(4)If removal of a civil action is sought on the basis of the jurisdiction conferred by section 1332(a), the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy, except that— (A)the notice of removal may assert the amount in controversy if the initial pleading seeks— (i)non-monetary relief; or (ii)a money judgment, but the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded; and (B)removal of the action is proper on the basis of an amount in controversy asserted under subparagraph (A) if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds the amount specified in section 1332(a). (5)(A)In a case to which paragraph (3) applies that is not removable solely because the amount in controversy does not exceed the amount specified in section 1332(a), information relating to the amount in controversy in the record of the State proceeding, or in responses to discovery, shall be treated as an other paper under paragraph (3). If the defendant first receives such a paper, through service or otherwise, within 1 year after the commencement of the action and during the trial or within 30 days before the date set for trial, removal may be had only upon a finding that the plaintiff deliberately failed to disclose the actual amount in controversy in order to prevent removal. (B)If a finding is made under subparagraph (A) that the plaintiff deliberately failed to disclose the actual amount in controversy in order to prevent removal, and the notice of removal is filed more than 1 year after commencement of the action, that finding shall be deemed to be equitable considerations under paragraph (3) that warrant removal.

(4)Section 1446 is further amended— (A)by striking subsections (c) and (e); and (B)by redesignating subsections (d) and (f) as subsections (c) and (d), respectively. (c)

Procedure for removal of criminal actions

Chapter 89 of title 28, United States Code, is amended by inserting after section 1446 the following new section:

1446a.

Procedure for removal of criminal actions

(a)

Notice of removal

A defendant or defendants desiring to remove any criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such prosecution is pending a notice of removal. The notice of removal shall be signed in the same manner and to the same effect as a pleading, written motion, or other paper in a criminal prosecution in a district court of the United States and contain a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action. (b)

Requirements

(1)A notice of removal of a criminal prosecution shall be filed not later than thirty days after the arraignment in the State court, or at any time before trial, whichever is earlier, except that for good cause shown the United States district court may enter an order granting the defendant or defendants leave to file the notice at a later time. (2)A notice of removal of a criminal prosecution shall include all grounds for such removal. A failure to state grounds which exist at the time of the filing of the notice shall constitute a waiver of such grounds, and a second notice may be filed only on grounds not existing at the time of the original notice. For good cause shown, the United States district court may grant relief from the limitations of this paragraph. (3)The filing of a notice of removal of a criminal prosecution shall not prevent the State court in which such prosecution is pending from proceeding further, except that a judgment of conviction shall not be entered unless the prosecution is first remanded. (4)The United States district court in which such notice is filed shall examine the notice promptly. If it clearly appears on the face of the notice and any exhibits annexed thereto that removal should not be permitted, the court shall make an order for summary remand. (5)If the United States district court does not order the summary remand of such prosecution, it shall order an evidentiary hearing to be held promptly and after such hearing shall make such disposition of the prosecution as justice shall require. If the United States district court determines that removal shall be permitted, it shall so notify the State court in which prosecution is pending, which shall proceed no further. (c)

Writ of habeas corpus

If the defendant or defendants are in actual custody on process issued by the State court, the district court shall issue its writ of habeas corpus, and the marshal shall thereupon take such defendant or defendants into custody and deliver a copy of the writ to the clerk of such State court.

(d)

Conforming amendments

The table of sections for chapter 89 of title 28, United States Code, is amended— (1)in the item relating to section 1446, by inserting of civil actions after removal; and (2)by inserting after the item relating to section 1446 the following new item:

1446a. Procedure for removal of criminal actions.

Indexing the amount in controversy

(a)

In general

Section 1332 of title 28, United States Code, is amended by adding at the end the following new subsection:

(f)(1)Effective on January 1, 2011, and January 1 of each fifth year thereafter, the dollar amount then in effect as the minimum amount in controversy applicable under subsection (a) shall be adjusted by an amount, rounded to the nearest $5,000 (or, if midway between multiples of $5,000, to the next higher multiple of $5,000), equal to the percentage of the dollar amount which corresponds to the change in the Consumer Price Index for the month of September of the appropriate year, over the Consumer Price Index for the month of September of the fifth year preceding the appropriate year. (2)The Director of the Administrative Office of the United States Courts shall determine the amount of each adjustment under paragraph (1) and, not later than November 15 of the appropriate year, shall submit for publication in the Federal Register the amount (and the percentage change in the Consumer Price Index that is the basis for that amount), and the new minimum amount in controversy to take effect on January 1 of the succeeding calendar year. (3)As used in this subsection— (A)the appropriate year is the year preceding the year in which the adjustment under paragraph (1) is to take effect; and (B)the term ‘Consumer Price Index’ means the Consumer Price Index for All Urban Consumers published by the Department of Labor.

(b)

Conforming amendment

Section 1332(a) of title 28, United States Code, is amended by inserting “as adjusted under subsection (f),” after $75,000,.

Facilitating use of declarations to specify damages

(a)

Removal generally

Section 1441(a) of title 28, United States Code, is amended by adding at the end the following new sentence: “If the plaintiff has filed a declaration in State court, as part of or in addition to the initial pleading, providing that the plaintiff will neither seek nor accept an award of damages or entry of other relief exceeding the amount specified in section 1332(a), the case may not be removed on the basis of the jurisdiction under section 1332(a) as long as the plaintiff abides by the declaration and the declaration is binding under the laws and practice of the State. If the plaintiff has filed such a declaration in State court but thereafter fails to abide by that declaration, the defendant or defendants may file a notice of removal within 30 days after receiving, through service or otherwise, a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the plaintiff seeks or is willing to accept an award of damages or other relief exceeding the amount specified in section 1332(a).”. (b)

Procedure after removal

Section 1447 of title 28, United States Code, is amended by adding at the end the following new subsection:

(f)Within 30 days after the filing of a notice of removal of a civil action in which the district court’s removal jurisdiction rests solely on original jurisdiction under section 1332(a), the plaintiff may file a declaration with the district court providing that the plaintiff will neither seek nor accept an award of damages or entry of other relief exceeding the amount specified in section 1332(a) of this title. Upon the filing of such a declaration, the district court shall remand the action to State court unless equitable circumstances warrant retaining the case.

Effective date

(a)

In general

Subject to subsections (b) and (c), the amendments made by this Act take effect on the date of enactment of this Act, and apply to any action or prosecution commenced on or after such date of enactment. (b)

Applicability of change in jurisdictional amount

Any change in the amount in controversy under section 1332(a) of title 28, United States Code, that is made pursuant to the amendments made by section 5 shall apply to any action or prosecution commenced on or after the date such change becomes effective. (c)

Treatment of cases removed to Federal court

For purposes of subsections (a) and (b ), an action or prosecution commenced in State court and removed to Federal court shall be deemed to commence on the date the action or prosecution was commenced in State court.