H.R. 394: Federal Courts Jurisdiction and Venue Clarification Act of 2011

H.R. 394

Federal Courts Jurisdiction and Venue Clarification Act of 2011

Date
March 1, 2011 (112th Congress, 1st Session)

Staff Contact
Sarah Makin

Floor Situation

On Monday, February 28, 2011, the House is scheduled to consider H.R. 394, under suspension of the rules, requiring a two-thirds majority vote for passage.  The bill was introduced on January 24, 2011, by Rep. Lamar Smith (R-TX) and referred to the Committee on the Judiciary.  The Committee held a markup of H.R. 394 on January 26, 2011, and ordered the bill to be reported by voice vote.

Bill Summary

H.R. 394 would make several changes to judicial procedures, including the determination of original jurisdiction and court venue for certain types of cases.  The bill would specify the court of original jurisdiction for certain cases involving resident aliens and corporations.  Lastly, H.R. 394 would change how the venues for federal court cases  are determined, particularly when the cases involve multiple districts.

Background

According to the majority staff on the House Committee on the Judiciary, the House approved a similar bill (H.R. 4113) by voice vote under suspension of the rules on September 28, 2010. 

 

The Senate Judiciary Committee insisted on the following minor amendments. 

 

  • Maintaining the status quo treatment of derivative jurisdiction. H.R. 4113 as passed by the House made technical changes to §1441(f) to clarify that the derivative jurisdiction doctrine has no application to other sections within title 28. Prior to 1986, the derivative jurisdiction doctrine meant that if a state court lacked jurisdiction over an exclusively federal matter, removal to federal court under §1441(f) was nonetheless barred because the US district court’s jurisdiction was not “derivative” of the jurisdiction that attached in state court. Justice Department attorneys said that although it is infrequently used, the doctrine of derivative jurisdiction is indeed sometimes invoked by them when suits involving federal officers and agencies are removed to federal court.  They gave as a particular example the situation when a defendant seeking to escape a state court forum brings a third-party action against a federal employee.  If the federal employee was acting within the scope of the employee's employment, the U.S. can remove the case to federal court under 28 USC §1442 & §2679.  The federal court then applies the derivative jurisdiction doctrine and dismisses the third-party claim against the federal employee, remanding the underlying action to state court. DOJ says that in such instances the third-party claim against a federal employee is often brought merely to obtain a federal forum, thereby frustrating the plaintiff's choice of forum.

 

  • A clarification that a district court, and not state court, can make findings regarding the appropriateness of certain removals. This is a non-substantive change.

 

  • Substitution of the generic word “entity” for “party” in one instance, consistent with the context of its usage.  

 

  • Deletion of an extra comma in one provision. 

 

H.R. 394 includes the base text as approved by the House in the 111th Congress along with the Senate changes.  

 

H.R. 394 would attempt to bring clarity to the operation of jurisdictional statutes and facilitate the identification of the appropriate state or federal court where actions should be brought.  Many Judges believe the current rules force them to waste time determining jurisdictional issues at the expense of adjudicating the underlying litigation.  The contents are based on recommendations developed and approved by the United States Judicial Conference.  

Cost

According to CBO, H.R. 394 would have no significant budgetary impact.