[Congressional Record Volume 156, Number 132 (Tuesday, September 28, 2010)]
[House]
[Pages H7161-H7164]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FEDERAL COURTS JURISDICTION AND VENUE CLARIFICATION ACT OF 2010
Mr. SCOTT of Virginia. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 4113) to amend title 28, United States Code, to
clarify the jurisdiction of the Federal courts, and for other purposes,
as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4113
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Federal
Courts Jurisdiction and Venue Clarification Act of 2010''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--JURISDICTIONAL IMPROVEMENTS
Sec. 101. Treatment of resident aliens.
Sec. 102. Citizenship of corporations and insurance companies with
foreign contacts.
Sec. 103. Removal and remand procedures.
Sec. 104. Effective date.
TITLE II--VENUE AND TRANSFER IMPROVEMENTS
Sec. 201. Scope and definitions.
Sec. 202. Venue generally.
Sec. 203. Repeal of section 1392.
Sec. 204. Change of venue.
Sec. 205. Effective date.
TITLE I--JURISDICTIONAL IMPROVEMENTS
SEC. 101. TREATMENT OF RESIDENT ALIENS.
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 under this subsection of an action
between citizens of a State and citizens or subjects of a
foreign state who are lawfully admitted for permanent
residence in the United States and are domiciled in the same
State''.
SEC. 102. CITIZENSHIP OF CORPORATIONS AND INSURANCE COMPANIES
WITH FOREIGN CONTACTS.
Section 1332(c)(1) of title 28, United States Code, is
amended--
(1) by striking ``any State'' and inserting ``every State
and foreign state'';
(2) by striking ``the State'' and inserting ``the State or
foreign state''; and
(3) 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 and 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''.
SEC. 103. REMOVAL AND REMAND PROCEDURES.
(a) Actions Removable Generally.--Section 1441 of title 28,
United States Code, is amended as follows:
(1) The section heading is amended by striking ``Actions
removable generally'' and inserting ``Removal of civil
actions''.
(2) Subsection (a) is amended--
(A) by striking ``(a) Except'' and inserting ``(a)
Generally.--Except''; and
(B) by striking the last sentence;
(3) Subsection (b) is amended to read as follows:
[[Page H7162]]
``(b) Removal Based on Diversity of Citizenship.--(1) In
determining whether a civil action is removable on the basis
of the jurisdiction under section 1332(a) of this title, the
citizenship of defendants sued under fictitious names shall
be disregarded.
``(2) A civil action otherwise removable solely on the
basis of the jurisdiction under section 1332(a) of this title
may not be removed if any of the parties in interest properly
joined and served as defendants is a citizen of the State in
which such action is brought.'' ''.
(4) Subsection (c) is amended to read as follows:
``(c) Joinder of Federal Law Claims and State Law Claims.--
(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 of this title), 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).''.
(5) Subsection (d) is amended by striking ``(d) Any'' and
inserting ``(d) Actions Against Foreign States.--Any''.
(6) Subsection (e) is amended by striking ``(e)(1)
Notwithstanding'' and inserting ``(e) Multiparty, Multiforum
Jurisdiction.--(1) Notwithstanding''.
(7) Subsection (f) is amended--
(A) by striking ``(f) The court'' and inserting ``(f)
Derivative Removal Jurisdiction.--The court''; and
(B) by striking ``under this section'' and inserting
``under this title or other applicable law''.
(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:
``Sec. 1446. Procedure for removal of civil actions''.
(2) Subsection (a) is amended--
(A) by striking ``(a) A defendant'' and inserting ``(a)
Generally.--A defendant''; and
(B) by striking ``or criminal prosecution''.
(3) Subsection (b) is amended--
(A) by striking ``(b) The notice'' and inserting ``(b)
Requirements; Generally.--(1) The notice''; and
(B) by striking the second paragraph and inserting the
following:
``(2)(A) 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.
``(B) Each defendant shall have 30 days after receipt by or
service on that defendant of the initial pleading or summons
described in paragraph (1) to file the notice of removal.
``(C) If defendants are served at different times, and a
later-served defendant files a notice of removal, any
earlier-served defendant may consent to the removal even
though that earlier-served defendant did not previously
initiate or consent to removal.
``(3) Except as provided in subsection (c), if the case
stated by the initial pleading is not removable, a notice of
removal may be filed within thirty days after receipt by the
defendant, through service or otherwise, of a copy of an
amended pleading, motion, order or other paper from which it
may first be ascertained that the case is one which is or has
become removable.'';
(C) by striking subsection (c) and inserting the following:
``(c) Requirements; Removal Based on Diversity of
Citizenship.--(1) A case may not be removed under subsection
(b)(3) on the basis of jurisdiction conferred by section 1332
more than 1 year after commencement of the action, unless the
plaintiff has acted in bad faith in order to prevent a
defendant from removing the action.
``(2) 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) nonmonetary 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).
``(3)(A) If the case stated by the initial pleading 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 subsection (b)(3).
``(B) If the notice of removal is filed more than 1 year
after commencement of the action and a finding is made that
the plaintiff deliberately failed to disclose the actual
amount in controversy to prevent removal, that finding shall
be deemed bad faith under paragraph (1).''.
(4) Section 1446 is further amended--
(A) in subsection (d), by striking ``(d) Promptly'' and
inserting ``(d) Notice to Adverse Parties and State Court.--
Promptly'';
(B) by striking ``thirty days'' each place it appears and
inserting ``30 days'';
(C) by striking subsection (e); and
(D) in subsection (f), by striking ``(f) With respect'' and
inserting ``(e) Counterclaim in 337 Proceeding.--With
respect''.
(c) Procedure for Removal of Criminal Actions.--Chapter 89
of title 28, United States Code, is amended by adding at the
end the following new section:
``Sec. 1454. Procedure for removal of criminal prosecutions
``(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 signed pursuant to Rule 11 of
the Federal Rules of Civil Procedure and containing 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 30 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 that 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 the marshal's custody and
deliver a copy of the writ to the clerk of such State
court.''.
(d) Conforming Amendments.--
(1) The table of sections for chapter 89 of title 28,
United States Code, is amended--
(A) in the item relating to section 1441, by striking
``Actions removable generally'' and inserting ``Removal of
civil actions'';
(B) in the item relating to section 1446, by inserting ``of
civil actions'' after ``removal''; and
(C) by adding at the end the following new item:
``1454. Procedure for removal of criminal prosecutions.''.
(2) Section 1453(b) of title 28, United States Code, is
amended by striking ``1446(b)'' and inserting ``1446(c)(1)''.
SEC. 104. EFFECTIVE DATE.
(a) In General.--Subject to subsection (b), the amendments
made by this title shall take effect upon the expiration of
the 30-day period beginning on the date of the enactment of
this Act, and shall apply to any action or prosecution
commenced on or after such effective date.
(b) Treatment of Cases Removed to Federal Court.--For
purposes of subsection (a), 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, within the meaning of State law, in State
court.
TITLE II--VENUE AND TRANSFER IMPROVEMENTS
SEC. 201. SCOPE AND DEFINITIONS.
(a) In General.--Chapter 87 of title 28, United States
Code, is amended by inserting before section 1391 the
following new section:
``Sec. 1390. Scope
``(a) Venue Defined.--As used in this chapter, the term
`venue' refers to the geographic specification of the proper
court or courts
[[Page H7163]]
for the litigation of a civil action that is within the
subject-matter jurisdiction of the district courts in
general, and does not refer to any grant or restriction of
subject-matter jurisdiction providing for a civil action to
be adjudicated only by the district court for a particular
district or districts.
``(b) Exclusion of Certain Cases.--Except as otherwise
provided by law, this chapter shall not govern the venue of a
civil action in which the district court exercises the
jurisdiction conferred by section 1333, except that such
civil actions may be transferred between district courts as
provided in this chapter.
``(c) Clarification Regarding Cases Removed From State
Courts.--This chapter shall not determine the district court
to which a civil action pending in a State court may be
removed, but shall govern the transfer of an action so
removed as between districts and divisions of the United
States district courts.''.
(b) Conforming Amendment.--The table of sections at the
beginning of chapter 87 of title 28, United States Code, is
amended by inserting before the item relating to section 1391
the following new item:
``Sec. 1390. Scope.''.
SEC. 202. VENUE GENERALLY.
Section 1391 of title 28, United States Code, is amended as
follows:
(1) By striking subsections (a) through (d) and inserting
the following:
``(a) Applicability of Section.--Except as otherwise
provided by law--
``(1) this section shall govern the venue of all civil
actions brought in district courts of the United States; and
``(2) the proper venue for a civil action shall be
determined without regard to whether the action is local or
transitory in nature.
``(b) Venue in General.--A civil action may be brought in--
``(1) a judicial district in which any defendant resides,
if all defendants are residents of the State in which the
district is located;
``(2) a judicial district in which a substantial part of
the events or omissions giving rise to the claim occurred, or
a substantial part of property that is the subject of the
action is situated; or
``(3) if there is no district in which an action may
otherwise be brought as provided in this section, any
judicial district in which any defendant is subject to the
court's personal jurisdiction with respect to such action.
``(c) Residency.--For all venue purposes--
``(1) a natural person, including an alien lawfully
admitted for permanent residence in the United States, shall
be deemed to reside in the judicial district in which that
person is domiciled;
``(2) a party with the capacity to sue and be sued in its
common name under applicable law, whether or not
incorporated, shall be deemed to reside, if a defendant, in
any judicial district in which such defendant is subject to
the court's personal jurisdiction with respect to the civil
action in question and, if a plaintiff, only in the judicial
district in which it maintains its principal place of
business; and
``(3) a defendant not resident in the United States may be
sued in any judicial district, and the joinder of such a
defendant shall be disregarded in determining where the
action may be brought with respect to other defendants.
``(d) Residency of Corporations in States With Multiple
Districts.--For purposes of venue under this chapter, in a
State which has more than one judicial district and in which
a defendant that is a corporation is subject to personal
jurisdiction at the time an action is commenced, such
corporation shall be deemed to reside in any district in that
State within which its contacts would be sufficient to
subject it to personal jurisdiction if that district were a
separate State, and, if there is no such district, the
corporation shall be deemed to reside in the district within
which it has the most significant contacts.''.
(2) In subsection (e)--
(A) in the first paragraph--
(i) by striking ``(1)'', ``(2)'', and ``(3)'' and inserting
``(A)'', ``(B)'', and ``(C)'', respectively; and
(ii) by striking ``(e) A civil action'' and inserting the
following:
``(e) Actions Where Defendant Is Officer or Employee of the
United States.--
``(1) In general.--A civil action''; and
(B) in the second undesignated paragraph by striking ``The
summons and complaint'' and inserting the following:
``(2) Service.--The summons and complaint''.
(3) In subsection (f), by striking ``(f) A civil action''
and inserting ``(f) Civil Actions Against a Foreign State.--A
civil action''.
(4) In subsection (g), by striking ``(g) A civil action''
and inserting ``(g) Multiparty, Multiforum Litigation.--A
civil action''.
SEC. 203. REPEAL OF SECTION 1392.
Section 1392 of title 28, United States Code, and the item
relating to that section in the table of sections at the
beginning of chapter 87 of such title, are repealed.
SEC. 204. CHANGE OF VENUE.
Section 1404 of title 28, United States Code, is amended--
(1) in subsection (a), by inserting before the period at
the end the following: ``or to any district or division to
which all parties have consented''; and
(2) in subsection (d), by striking ``As used in this
section'' and inserting ``Transfers from a district court of
the United States to the District Court of Guam, the District
Court for the Northern Mariana Islands, or the District Court
of the Virgin Islands shall not be permitted under this
section. As otherwise used in this section,''.
SEC. 205. EFFECTIVE DATE.
The amendments made by this title--
(1) shall take effect upon the expiration of the 30-day
period beginning on the date of the enactment of this Act;
and
(2) shall apply to--
(A) any action that is commenced in a United States
district court on or after such effective date; and
(B) any action that is removed from a State court to a
United States district court and that had been commenced,
within the meaning of State law, on or after such effective
date.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Virginia (Mr. Scott) and the gentleman from Texas (Mr. Smith) each will
control 20 minutes.
The Chair recognizes the gentleman from Virginia.
General Leave
Mr. SCOTT of Virginia. Mr. Speaker, I ask unanimous consent that all
Members have 5 legislative days to revise and extend their remarks and
include extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Virginia?
There was no objection.
Mr. SCOTT of Virginia. I yield myself such time as I may consume.
Mr. Speaker, H.R. 4113, the Federal Courts Jurisdiction and Venue
Clarification Act of 2010, is intended to clarify a number of
uncertainties and technical flaws in laws regarding Federal court
jurisdiction and venue that have come to light in recent years. Let me
just cite one example.
Under current law, we have an odd scenario where State law claims can
be brought in Federal court using a diversity of citizenship basis for
Federal jurisdiction even though both parties are residents of the same
State; but because one party is a permanent resident, not a citizen,
they can claim diversity of citizenship.
H.R. 4113 makes clear that permanent legal residents are treated the
same as citizens for the purpose of diversity of citizenship. There are
many other technical clarifications in the bill like that.
I would like to thank our ranking member of the full committee, Mr.
Smith, for his leadership in bringing this bill to the floor, and I
urge my colleagues to support the bill.
I reserve the balance of my time.
Mr. SMITH of Texas. Mr. Speaker, I yield myself such time as I may
consume.
The Federal Courts and Venue Clarification Act brings more clarity to
the operation of jurisdictional statutes and facilitates the
identification of the appropriate State or Federal court in which
action should be brought.
I support this legislation and appreciate the bipartisan effort that
has been made on the part of Mr. Scott, the gentleman from Virginia.
Judges believe the current rules force them to waste time determining
jurisdictional issues at the expense of adjudicating the underlying
litigation. The contents of this bill are based on recommendations
developed and approved by the United States Judicial Conference.
The first version of the bill was developed in 2006, when I chaired
the Courts Subcommittee. At the time, we confined our review to
jurisdictional issues. Following a hearing and bill introduction, the
Courts Subcommittee favorably reported the legislation to the full
Judiciary Committee, but no further action was taken.
Since then, jurists, legal scholars, bar groups, and policy-makers
rekindled interest in resurrecting the project. This led to a rewriting
of the bill to include a second title pertaining to venue.
Given the press of legislative business, the Judiciary Committee was
unable to conduct a hearing or markup of H.R. 4113. Instead, we
processed, reviewed, and amended the bill informally, working closely
with the judiciary and various stakeholders.
In this regard, I thank the Administrative Office of the U.S. Courts,
which functioned as a clearinghouse to vet the bill with the Judicial
Conference's Federal-State Jurisdiction Committee, academics, and
interested stakeholders.
The groups that assisted in this effort include the American Bar
Association, Lawyers for Civil Justice, the Federal Bar Association,
the American Association for Justice, and the U.S. Chamber of Commerce.
[[Page H7164]]
Legal scholars from the law schools at Houston, Chicago-Kent, Loyola,
and Duke endorse suggested changes to the original text as developed by
Professor Arthur Hellman of the University of Pittsburgh School of Law,
who testified at the 2005 Subcommittee hearing and contributed
substantially to the project in the 111th Congress.
The result is a thoroughly processed, well-conceived bill that
addresses important if mundane jurisdictional and venue issues.
It's legislation that helps federal judges process their work more
promptly and fairly while clarifying what litigants should expect as
they prepare their cases.
H.R. 4113 contains a number of revisions to federal jurisdictional
and venue law. Among the changes, the bill--
clarifies the definition of ``citizenship'' for foreign corporations
and domestic corporations doing business abroad;
separates the removal provisions governing civil cases and those
governing criminal cases into two statutes;
promotes timeliness of removal by giving each defendant 30 days after
service to file a notice of removal;
creates a general venue statute that unifies the approach to venue in
diversity and federal question cases, while maintaining current venue
standards;
eliminates the outdated ``local action'' rule, which unnecessarily
restricts venue choices for certain real-property actions; and
stipulates that a natural person is deemed to reside in the judicial
district in which that person is domiciled.
Mr. Speaker, it's taken us about 5 years to reach this point, but the
wait was worth the journey. The ``Federal Courts Jurisdiction and Venue
Clarification Act'' illustrates how Congress can work with the
Judiciary and stakeholders to pursue legislative initiatives that
enhance the practice of law and the operations of our federal courts.
This is a bill that ultimately benefits American citizens who use our
legal system in defense of their legal rights and civil liberties.
I urge the Members to support H.R. 4113.
I yield back the balance of my time.
Mr. SCOTT of Virginia. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Virginia (Mr. Scott) that the House suspend the rules
and pass the bill, H.R. 4113, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________