Federal Courts Jurisdiction and Venue Clarification Act of 2011

us supreme court.jpgThere are numerous procedural, substantive, and even attitudinal differences in the way civil cases are handled between State and Federal Courts. The differences can determine the outcome of a case.

In many instances, the line is sharp over which court system has jurisdiction, leaving little to no choice over which system will get the case. In others, however, legal maneuvering can dictate where a case will land. It is important, therefore, for lawyers to fully understand the factors that determine the outcome.

Given the significance of the outcome, parties to legal proceedings have always tussled over the jurisdiction issue, spawning a plethora of statutes and case law. Ironically, the many statutes and opinions on the subject have to a degree created more confusion than clarity.

With the passage of the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Congress and President Obama have attempted to simplify the issue. The Act, which went into effect on January 6, 2012, codifies a number of common law rules dealing with the removal of civil cases from State Court to Federal Court. Here are some of the important points contained in the Act:

  • Each Defendant has 30 days from the date that particular Defendant received service of the complaint in which to file its notice of removal. If the case is not initially removable, but later becomes removable, the Defendant(s) must file its notice of removal within 30 days after it receives a copy of an amended pleading or other paper demonstrating that the case has become removable. After one year from the date the case was filed, the case cannot be removed based on diversity jurisdiction unless the Federal Court “finds that the Plaintiff has acted in bad faith in order to prevent a Defendant from removing the action.” 28 USC § 1446(b)-(c). Our office is currently involved in a case with Defendants in Atlanta and Tampa. Because of the Florida Defendants, jurisdiction is in State Court. From information learned through discovery, we are considering dismissing the Florida Defendants from the case. Because the complaint was served on the Georgia Defendants in December, 2010, the case will remain in State Court even if the Florida Defendants are dismissed.
  • Every Defendant must consent to removal before a case can be properly removed from State Courts. 28 USC § 1446(b)(2)(A). This codifies the general rule previously applied by most Courts. Because it is a judgment call as to which jurisdiction, State or Federal, favors a particular side, it is not always easy to get full consent. For the most part, Defendants seem to favor Federal Court.
  • The rule for some time has been that for a Defendant to remove a civil case from State to Federal Court, the Defendant must prove with “legal certainty” that the amount in controversy exceeds $75,000. The Act eases the standard of proof to a “preponderance of the evidence.” 28 USC § 1446(b).
  • Venue is another matter addressed by the Act. For purposes of the Act, venue concerns which court within the Federal Court system a case can be sent. Prior to the Act, transfers were restricted to Courts where the case could have been originally commenced. Under the Act, Federal Courts may transfer cases to “any district or division to which all parties have consented.” 28 USC § 1404(a). This is both a substantial and a sensible change.
  • When a State Court case is removed to Federal Court on federal question grounds, the Federal Court must now sever all claims not within its jurisdiction and remand such claims to the State Court from which it was removed. Prior to the Act, Federal Courts could choose to keep the entire case.
  • Federal Court decisions to remand cases to State Courts remain largely un-appealable. 28 USC § 1447(d).

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.