Friday, December 02, 2011
UPDATED: Jurisdiction and Venue Clarification Act
Update: Here is the enrolled bill that was sent to the President.
One More Update: President Obama signed the bill into law on Wednesday.
After the jump is a post from Arthur Hellman at Pittsburgh, discussion the Jurisdiction and Venue Clarification Act, which just passed Congress and is on its way to the President. The law makes significant changes in a number of confusing areas of jurisdiction and venue, including diversity cases involving resident aliens, the 30-day removal clock in cases involving multiple defendants, and all of venue.
My civ pro class is going to change once again. But, as I said in a comment on the earlier post, for once I am glad civ pro is a spring course here.
Posted by Howard Wasserman on December 2, 2011 at 09:46 AM | Permalink
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"finally abolishing the hairsplitting distinction between backup venue in diversity and federal-question cases"
Awww, that was fun to teach. "What's the difference between 'is subject to personal jurisdiction' and 'may be found'? ... Nothing!"
Posted by: Bruce Boyden | Dec 2, 2011 11:35:16 AM
I only wish Professor Boyden was right in practice; it's really easy to "find" a corporate defendant somewhere that it's not subject to general personal jurisdiction. This is a particular problem in IP cases...
Posted by: C.E. Petit | Dec 2, 2011 2:59:00 PM
A question for Civ Pro professors/nerds: If I understand correction, the overrule of Hoffman, as it appears in this statute, takes the form of an amendment to section 1404, with no corresponding change in section 1406 (or section 1631, for that matter). Prior to the amendment, sections 1404 and 1406 used functionally identical language ("where it might have been brought" in 1404, "in which it could have been brought" in 1046, and "in which the action or appeal could have been brought in 1631"). Because of the functionally identical language in 1404, 1406, and 1631, I've always thought that the Hoffman rule applied to transfers under all three statutes. If I was right about that, then isn't it the case that a transfer to a forum that would not have been a proper one had the plaintiff filed there as an original matter, but to which the parties would consent, is now allowed ONLY if the transfer is made pursuant to 1404, and not made pursuant to 1406 (or 1631)? Add to that what I understood to be the interpretation that prevents 1404's broad "any civil action" language from swallowing 1406, namely, that 1404 applies only to cases in which the original filing was in a forum where venue (perhaps both venue and jurisdiction) were proper. If all of this is right, do we now have a situation in which transfer to a forum that would not have been a proper one had the plaintiff filed there as an original matter, but to which the parties would consent, is allowed ONLY if the forum in which the case was originally filed was one where venue (perhaps both venue and jurisdiction) were proper? But transfer to a forum that would not have been a proper one had the plaintiff filed there as an original matter, but to which the parties would consent, is NOT allowed if the original filing were in an improper forum? If this is right, can anyone justify such a result in functional terms? Could I just add that I'm really hoping I have this wrong (so please correct me)?
Posted by: Jim Greiner | Dec 3, 2011 6:20:02 AM
Ironically enough, it didn't take long for a court (without intent, obviously, and unclearly) to point out a hole in even the revised venue and transfer rules.
In re Link_A_Media Devices Corp., No. 2011-M990 (Fed. Cir. 02 Dec 2011), held (under Third Circuit law) that the District of Delaware abused its discretion in refusing to transfer a matter to the Northern District of California where the witnesses and documents and corporate headquarters of both plaintiff and defendants were. As I read the JVCA, it still leaves the standards for how to apply the various factors in resolving a motion for change of venue in the hands of the individual circuits -- which gets really interesting in patent litigation, because the Federal Circuit must use the procedural law of the regional circuit in which the case arose.
Posted by: C.E. Petit | Dec 3, 2011 11:57:33 AM
I think the link in the update is to the wrong file. Here's a link to the enrolled bill on Thomas.
Posted by: William Baude | Dec 4, 2011 10:45:06 PM
I'm particularly interested in the "issues relating to the determination of the amount in controversy when the defendant removes a civil action based on diversity." The big problem is how to determine the amount in controversy when a case has been removed, and the state-court complaint doesn't name a dollar figure, because one is either not-required or not-permitted to do so under state law. (The courts have been tied in a knot about this. See McPhail v. Deere, 529 F.3d 947 (10th Cir. 2008) and Meridian v. Sadowski, 441 F.3d 536 (7th Cir. 2006) for discussion.)
I may well be missing something or perhaps some illuminating elements of the legislative history, but I'm not sure whether the "clarification" will turn out to work. For example, the bill adopts a "preponderance of the evidence" standard without resolving the confusion over what that means (discussed in McPhail), or (more importantly) without addressing the problem that there frequently won't *be* any "evidence" beyond the complaint so early in the proceedings.
The bill also sets a rule for 1, when the state-court complaint contains a "sum demanded," or 2, "the State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded." But it doesn't seem to address the case of a state court that does "permit" but does not *require* that a sum be demanded-- if a complaint in such a state lacks a "sum demanded," then neither 1 nor 2 applies. In such a case should courts fall back on their pre-JVCA practice, or should they do the same thing they would do if sum-naming were forbidden? Or something else?
Posted by: William Baude | Dec 4, 2011 11:08:23 PM
There is an interesting change that nobody seems to be discussing, unless I've missed it.
Present law calls for removal to be effected within 30 days of receipt "through service or otherwise" of the complaint by the defendant. This has been interpreted to mean that service upon a statutory agent, such as the secretary of state, does not start the removal clock running.
The amended law requires the filing within "30 days after receipt by or service on that defendant". "Receipt" and "service" are distinguished, meaning that service does not have to mean receipt. Service thus on a statutory agent, which is proper service but which does not result in receipt by the defendant, would appear, under this revision, to start the clock running. As established case law recognizes, such a result is unreasonable.
Posted by: Adam | Dec 29, 2011 2:28:01 PM