[House Report 104-799]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-799
_______________________________________________________________________


 
      CLARIFICATION OF RULES FOR REMOVAL OF CASES TO FEDERAL COURT
                                _______
                                

 September 17, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


   Mr. Moorhead, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 533]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
Act (S. 533) to clarify the rules governing removal of cases to 
Federal court, and for other purposes, having considered the 
same, report favorably thereon without amendment and recommend 
that the Act do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Committee Oversight Findings.....................................     2
Committee on Government Reform and Oversight Findings............     2
New Budget Authority and Tax Expenditures........................     2
Congressional Budget Office Estimate.............................     2
Inflationary Impact Statement....................................     3
Section-by-Section Analysis and Discussion.......................     3
Changes in Existing Law..........................................     4

                          Purpose and Summary

    Under 28 U.S.C. Sec. 1447(c), a motion to remand to a state 
court a case that has been removed to federal court on the 
``basis of any defect in removal procedure,'' must be made 
within 30 days. S. 533 clarifies that it is the intent of 
Congress that this 30-day limit applies to any ``defect'' other 
than the lack of subject matter jurisdiction.

                Background and Need for the Legislation

    For some time prior to 1988, 28 U.S.C. Sec. 1447(c) 
provided that ``If at any time before final judgment it appears 
that the district court lacks subject matter jurisdiction, the 
case shall be remanded.'' In the Judicial Improvements and 
Access to Justice Act of 1988, Congress required that a 
``motion to remand the case on the basis of any defect in 
removal must be made within 30 days after the filing of the 
notice of removal under section 1446(a).'' The intent of this 
amendment was to impose a 30-day limit on all motions to remand 
except in those cases where the court lacks subject matter 
jurisdiction. The intent of the Congress is not entirely clear 
from the current wording of 28 U.S.C. Sec. 1447(c), and it has 
been interpreted differently by different courts. S. 533 
clarifies the intent of Congress that a motion to remand a case 
on the basis of any defect other than subject matter 
jurisdiction must be made within 30 days after the filing of 
the notice of removal under 28 U.S.C. Sec. 1446(a).

                                Hearings

    The Committee held no hearings on S. 533 because it viewed 
the bill as technical and noncontroversial, and it received 
broad bipartisan support.

                        Committee Consideration

    On July 23, 1996, the Subcommittee on Courts and 
Intellectual Property met in open session and ordered reported 
the bill S. 533, by voice vote, a quorum being present. On 
September 11, 1996, the Committee met in open session and 
ordered reported favorably the bill S. 533 by voice vote, a 
quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(C)(3) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, S. 533, the following estimate 
and comparison prepared by the Director of the Congressional 
Budget Office under section 403 of the Congressional Budget Act 
of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 16, 1996.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed S. 533, an act to clarify the rules governing removal 
of cases to federal court, and for other purposes, as ordered 
reported by the House Committee on the Judiciary on September 
11, 1996. CBO estimates that enacting S. 533 would not result 
in any significant impact on the federal budget. Because 
enactment of S. 533 would not affect direct spending or 
receipts, pay-as-you-go procedures would not apply.
    S. 533 would clarify that the 30-day limit for remanding a 
case from federal court to state court applies to all motions 
to remand, except in cases in which the federal court lacks 
subject matter jurisdiction. At any time prior to final 
judgment in a federal court case, the case can be remanded to 
state court if the federal court lacks subject matter 
jurisdiction. According to the Administrative Office of the 
United States Courts (AOUSC), the bill would affect only a 
small number of cases because most courts are already 
interpreting the law in a manner consistent with S. 533. 
Therefore, CBO estimates that any resulting decrease in the 
caseload of the federal court system would be negligible, and 
there would be no significant savings to the federal 
government.
    S. 533 contains no private-sector or intergovernmental 
mandates as defined in the Unfunded Mandates Reform Act of 1996 
(Public Law 104-4). In cases where a court has not interpreted 
current law as it would be clarified by S. 533, state courts 
may experience a slight increase in the number of cases 
remanded to them. However, CBO estimates that the cost of this 
increased caseload would be minimal.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Susanne S. 
Mehlman (for federal costs), and Leo Lex (for the state and 
local costs).
            Sincerely,
                                         June E. O'Neill, Director.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that S. 533 
will have no significant inflationary impact on prices and 
costs in the national economy.

               Section-by-Section Analysis and Discussion

    Section 1. Removal.--Section 1 amends section 1447(c) of 
title 28 United States Code by striking ``any defect in removal 
procedure'' and inserting ``any defect other than lack of 
subject matter jurisdiction''.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

              SECTION 1447 OF TITLE 28, UNITED STATES CODE

Sec. 1447. Procedure after removal generally

    (a) * * *
          * * * * * * *
    (c) A motion to remand the case on the basis of [any defect 
in removal procedure] any defect other than lack of subject 
matter jurisdiction must be made within 30 days after the 
filing of the notice of removal under section 1446(a). If at 
any time before final judgment it appears that the district 
court lacks subject matter jurisdiction, the case shall be 
remanded. An order remanding the case may require payment of 
just costs and any actual expenses, including attorney fees, 
incurred as a result of the removal. A certified copy of the 
order of remand shall be mailed by the clerk to the clerk of 
the State court. The State court may thereupon proceed with 
such case.
          * * * * * * *