Removals

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Removals

Making it a Federal Case

New Developments

Kevin C. Schiferl

Frost Brown Todd, LLC


Making it a Federal Case

New Developments

! The Federal Courts Jurisdiction and Venue

Clarification Act of 2011, H.R. 394, P.L. 112-63

! Passed by Congress, signed by President Obama

and effective January 6, 2012 to all state and

federal actions

! From introduction to passage and enactment it

was just shy of one year, but relates back several

years


Making it a Federal Case

New Developments

! The Act embodies the most far reaching

package of revisions to the Judicial Code since

the Judicial Improvement Act of 1990

! The Acts amendments deal primarily with

removal and venue


Making it a Federal Case

New Developments

! Understanding the Act is as easy as 1, 2, 3.

! 1. Amendments to Removal Statutes

! 2. Amendments to Diversity Jurisdicition

! 3. Amendments to Venue Provisions


Making it a Federal Case

Removal Amendments

! Refresher--28 U.S.C. section 1441 is removal

statute with procedures set forth in 28

U.S.C. section 1446.

! Prior section 1446 provided 30 days to

remove from service on ANY defendant

! New section 1446 provides EACH defendant

shall have 30 days to remove


Making it a Federal Case

Removal Amendments

! The Rule of Unanimity previously existed and

upheld by case law

! Now, the new section 1446 codifies the

judicially created rule of unanimity by

providing ALL defendants properly joined

and served must join in or consent to

removal


Making it a Federal Case

Removal Amendments

! Rule of Unanimity extension to later-served

defendants as well

! That is, any later served defendant can

remove and the earlier served defendant

who itself did not remove can consent (20

U.S.C. seciton 1446 (2)(c)


Making it a Federal Case

Removal Amendments

! The Act now mandates the severance of all

unrelated state law claims from the federal

claims

! State law claims MUST be remanded

! This severance is by court and per statute

(28 U.S.C. section 1441(c)). No longer can

the Federal Court keep.


Making it a Federal Case

Removal Amendments

! So, important consideration must be given to

the possibility of dual state/federal

litigation

! It is projected that this is going to provide

the most difficult consideration for litigants

! It is also projected that this will be the

source of the most removal case law

developments following the act.


Making it a Federal Case

Removal Amendments

! In diversity cases, no longer a strict one-year

limit for removals

! Their is now a bad faith exception to the

one-year cap.

! New section 1446(c)(1) provides that upon a

finding of bad faith the one-year limit

doesnt apply and defendant can still remove.


Making it a Federal Case

Diversity Jurisdiction

! Amount in controversy provisions amended to

allow defendant to assert it under certain

conditions

! Preponderance of Evidence standard

! Discovery process can reactivate 30-day

period


Making it a Federal Case

Diversity Jurisdiction

! Narrowing of Diversity Jurisdiction too

! First as to resident aliens. They are clearly

NOT citizens for removal purposes

! Second, by section 1332(c)(1), the concept of

citizenship is BROADENED, further narrowing

diversity jurisdiction.


Making it a Federal Case

New Venue Provisions

! The Act adds a new provision governing

Federal venue, 28 U.S.C. section 1390.

! Venue is now defined

! Different Districts rule abolished

! Standard for determining venue is domicile

! There are now three standards applicable.


Making it a Federal Case

-The Take-Away

! The Acts Amendment affecting Removal,

Diversity, and Venue are something that all

practitioners should be aware of concerning

future litigation.

! Making a state court case a Federal one is

as easy as ever, though restrictions remain.

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