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Federal jurisdiction and venue act takes effect

The Federal Courts Jurisdiction and Venue Clarification Act (JVCA) [text, PDF; materials] took effect Friday after being signed into law by US President Barack Obama [official website] last month. According to the House Judiciary Committee Report [text, PDF], the purpose of the law is to clarify federal jurisdiction statutes to avoid wasting judicial resources. The core of the JVCA's changes address jurisdiction and procedure for removal of state court claims to federal court. Among those changes, the JVCA states that inclusion of unrelated state claims does not prevent removal that is otherwise appropriate under federal question jurisdiction, and it adopts a "preponderance of the evidence" standard for determining the amount in controversy requirement for diversity jurisdiction. The JVCA also codified the judicially-created "rule of unanimity," which states that all defendants who have been properly joined and served to the action must consent to the removal of the action to federal court.

Some commentators support the overall purpose of the JVCA, but disagree [JURIST op-ed] with its specific method of attaining that purpose. First, it is difficult to superimpose new statutory procedures over existing interpretations in case law and there is additional difficulty in integrating the newly codified procedures with the many different interpretations of the existing laws in state courts. Concern has also been expressed over the fact that there were no hearings on the bill since 2005, and thus two potentially beneficial provisions were deleted without debate [JURIST op-ed]. The first would allow a plaintiff to avoid removal based on diversity jurisdiction by stipulating that the amount in controversy is below the required amount for diversity jurisdiction. The second provision, which would abrogate derivative jurisdiction in all cases, was deleted because the Department of Justice [official website] wants to be able to use the rule "when suits involving Federal officers and agencies are removed to Federal court." Other commentators point out [National Law Review report] that "while the Act does not eliminate the prior law's provision that the 30-day removal period is triggered by service or 'receipt' of the pleading, there is no indication that Congress intended to abrogate [the current practice], holding that formal service, not mere receipt, is required."

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