NEW ACT AFFECTS VARIOUS ASPECTS OF REMOVAL OF CASES TO FEDERAL COURT

The Federal Courts Jurisdiction and Venue Clarification Act of 2011, includes several amendments affecting the timing of removal in diversity-jurisdiction cases, removal in cases with multiple defendants, determining the amount in controversy, original jurisdiction, and venue.  Important changes regarding removal include:

• Each defendant has 30 days from the date of service to initiate removal, so all defendants are now on an equal footing. If removal is initiated by a later-served defendant, earlier-served defendants may join in or consent to the removal;
• The “rule of unanimity” is now codified, requiring all defendants to consent to removal;
• When a case is removed based on diversity, and the amount in controversy (“AIC,” and it remains in excess of $75,000) is contested, the "preponderance of the evidence" standard applies.  The amendments set forth some procedures for determining whether the standard has been met; 
• When a complaint does not indicate the AIC, the defendant may still remove, even after the 30-day period expires, if discovery from the plaintiff shows that the AIC exceeds $75,000;
• A carefully crafted "bad-faith" exception to the existing statutory provision that prohibits removal of a diversity case more than one year after filing; and
• Upon removal, district courts must now sever and remand claims that are not within the original or supplemental jurisdiction of the district court (or which are nonremovable by statute).

The effective date of the Act is Jan. 8, 2012.  It applies to actions commenced on or after the effective date, and state actions removed to federal court are deemed to commence on the date the action was filed in state court, as defined by state law.  Thus, the amended removal statutes will not apply to any action that was commenced in state court before Jan. 8, 2012. 

The Act also includes amendments affecting original jurisdiction and venue.