New Federal Courts Jurisdiction and Venue Clarification Act of 2011
The new Federal Courts Jurisdiction and Venue Clarification Act of 2011 took effect on January 6, 2012.
The new Federal Courts Jurisdiction and Venue Clarification Act of 2011 took effect on January 6, 2012. It makes some significant changes to 28 U.S.C. § 1332 (the diversity citizenship statute), §§ 1441 & 1446 (the removal and removal procedure statutes), and § 1391 (the general venue statute). It both resolves certain splits among the federal circuit courts as to the interpretation of those statutes and enacts new substantive provisions regarding diversity jurisdiction, venue, and removal. Read the new Act in full here.
The most significant changes are:
- where an action involves multiple defendants, each defendant now gets its own 30-day clock from when it’s served in order to remove the action to federal court.
- where all parties consent, a district court may now transfer venue under 28 U.S.C. § 1404 to a district even where the action could not have been brought originally in that district.
- for venue purposes, if a state which has more than one federal judicial district, a corporate defendant is now deemed to reside in any district in that state in which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate state; if there’s no such single district, the corporation is to be deemed to reside in the district in which it has the most significant contacts.
- for removal purposes and, specifically, for purposes of determining the amount in controversy of cases removed on the basis of diversity jurisdiction, a federal court may now look to the notice of removal for the amount in controversy if the plaintiff is seeking non-monetary relief, or if the plaintiff is seeking a money judgment but the law of the state doesn’t permit a demand for a sum certain or allows recovery for amounts in excess of what’s prayed for.
- discovery responses in state litigation that provide information allowing the defendant to ascertain for the first time the amount in controversy are now considered an “other paper” whose service can trigger the 30-day clock for removal.
- adoption of a bad faith exception to the 1-year time limit on removals of diversity cases – meaning that the action may removed even after the passage of one year from commencement of the action if the plaintiff “deliberately failed to disclose” the amount in controversy in order to prevent removal.
- in removed actions, mandatory severance and remand of claims that aren’t within the district court’s original or supplemental jurisdiction.