The Federal Courts Jurisdiction and Venue Clarification Act of 2011 (the “JVCA”) took effect on January 6, 2012. The JVCA significantly affects how and when defendants can remove cases filed in state court. Here are the highlights:
Time for Removal in multiple defendent cases
Removal is timely under 28 U.S.C. § 1446(b) if the defendant removes the case within 30 days of service. The circuits had been split regarding how to calculate this 30-day timeframe when the first defendant was served. Other circuits, like the Eleventh Circuit, allowed removal within 30 days after the last-served defendant. The JVCA resolves this circuit split.
Under the JVCA, each defendant has 30 days from service to remove the case, regardless of when the other defendants are or were served. As has been the practice in the Eleventh Circuit, if an earlier-served defendant does not remove the case, it may still consent to a removal filed by a later-served defendant. All served defendants must consent to removal.
Limited Exception to One-year limit for removing based upon diversity
Under the old second paragraph of 28 U.S.C. § 1446(b), a defendant could not remove a case solely based upon diversity jurisdiction more than one year after the case commenced. The JVCA provides a limited exception to this rule: if the district court finds that the plaintiff acted in bad faith to prevent a defendant from removing the action, the court can permit the removal even if the one-year time limit has expired.
Establishing the jurisdictional amount in controversy on removal
Under the JVCA, if the complaint does not demand (in good faith) a specific sum, a defendant may assert an amount in controversy in the notice of removal. The district court will evaluate the amount in controversy using a preponderance of the evidence standard. Additionally, if the case is not removable solely because the amount in controversy requirement is not met, information obtained in the state court proceeding that relates to the amount in controversy can be used for an “other paper” removal under 27 U.S.C. § 1446(b)(3). A defendant has one year from the commencement of the action to remove a case based on “other paper,” subject to the bad faith exception mentioned above.
Remand of NONREMOVABLE claims
Under the JVCA, if a case includes both removable federal question claims and nonremovable claims, a defendant may remove the entire case, and the district court must sever the nonremovable claims and remand them to state court.
The JVCA also restructures the federal venue provisions to simplify their application and includes provisions regarding the treatment of resident aliens for purposes of diversity jurisdiction. Click JVCA to read the entire document.