[Congressional Record (Bound Edition), Volume 156 (2010), Part 12]
[House]
[Pages 16918-16921]
[From the U.S. 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:
       ``(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

[[Page 16919]]

     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 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

[[Page 16920]]

     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.
  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.

[[Page 16921]]



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