14 1 159 of this title, jurisdiction of a civil action shall be deter2 mined as if such sale, assignment, or other transfer had not 3 occurred. The word 'transfer' as used in this section includes 4 the appointment of a trustee, receiver or other fiduciary, or 5 of any other person to hold or receive interests of any kind, 6 whether made by private persons or by a court or other 7 official body.". 8 SEC. 2. Section 1332 of title 28, United States Code, is 9 repealed. 10 = SEC. 3. Section 1391 of title 28, United States Code, is 11 amended by repealing subsection (a) and deleting in sub12 section (b) after the words "civil actions" the following: 13 "wherein jurisdiction is not founded solely on diversity of 14 citizenship". Section 1391 is further amended by adding the 15 following cross reference at the end thereof: 16 "For special provisions relating to venue in diversity of citizenship jurisdiction cases, see chapter 84 of this title.". SEC. 4. Sections 1404 and 1406 of title 28, United States 17 Code, are amended by adding the following cross reference at 18 the end thereof: 19 20 "For special provisions relating to venue in diversity of citizenship jurisdiction cases, see chapter 84 of this title.". SEC. 5. This Act shall take effect sixty days after the 20 date of enactment. On behalf of the Judicial Conference of the United States I am transmitting herewith a draft of a bill to amend section 1332 (a)(1) of title 28, United States Code, relating to the jurisdiction of the United States district courts in civil actions between citizens of different states. The draft bill would modify the jurisdiction of the district courts by prohibiting the filing of a civil action by a plaintiff in a diversity suit in a district court located in a state of which he is a citizen. This proposed legislation was first approved by the Judicial Conference at its session in March 1976. At its recent session on March 10, 1977, the Conference reaffirmed its approval of the draft bill, but at the same time indicated its preference for legislation to bring about the complete elimination of diversity of citizenship as a basis of jurisdiction in the district courts, except in territorial district courts. The Conference has also endorsed legislation to increase the amount-in-controversy requirement for diversity cases from $10,000 to $25,000 and to eliminate the amount-in-controversy requirement in federal question cases. The enclosed draft bill, if enacted, would do away with some of the overlapping jurisdiction which now exists between state and federal courts in diversity cases. At the present time defendants in suits between citizens of different states may remove cases to United States district courts under section 1441(b) of title 28, United States Code, "only if none of the Honorable Thomas P. O'Neill, Jr. parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." The language of the enclosed draft bill, taken directly from section 1441(b), would prohibit a plaintiff from filing a diversity case in a district court situated in the state of which he is a citizen. Preliminary estimates indicate that the enactment of this legislation would reduce the number of diversity cases filed annually in the United States district courts by approximately 45 percent. 2 The existence of the diversity jurisdiction of the federal courts presumably protects a potential out-of-state litigant from the "local bias" of a state court against non-residents by providing an alternate federal forum for the determination of a law suit. Local bias, however, cannot be presumed against a resident plaintiff; yet the law permits a local plaintiff to use a federal forum in suits against defendants who are citizens of other states. Legal authorities have long pointed to the incongruity in the law which permits a plaintiff to file a diversity suit in his own state but prohibits a defendant from removing a diversity case to a federal court in his own state. While relieving the United States district courts of a portion of their caseload, the bill would not impose a significant burden on any state court, since the cases transferred would be spread over a far greater number of state courts. In addition the types of cases transferred to the state courts are those which they would normally handle and state law would be controlling. The Judicial Conference of the United States asks that the Congress give prompt consideration to legislation pertaining to the jurisdiction of the United States district courts. If diversity jurisdiction is not eliminated, the Conference asks that the Congress give consideration to this bill and to the proposal to raise the requisite jurisdictional amount in controversy from $10,000 to $25,000. Representatives Honorable Thomas P. O'Neill, Jr. 3 of the federal judiciary will be glad to furnish any additional information needed by the Congress and will be pleased to appear and testify before the Committee designated to consider this legislation. Enclosure Respectfully submitted, Rowland F. Kirks Director To amend section 1332 (a) (1) of title 28, United States Code, relating to the jurisdiction of the United States district courts in suits between citizens of different states. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 1332 (a) (1) of title 28, United States Code, is amended to read as follows: "(1) citizens of different States if none of the parties in interest properly joined as plaintiffs is a citizen of the State in which such action is brought;" SEC. 2. This Act shall apply only to cases filed on or after its effective date. 95TH CONGRESS 1ST SESSION H. R. 7243 IN THE HOUSE OF REPRESENTATIVES MAY 17, 1977 Mr. RODINO (by request) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend section 1332 (a) (1) of title 28, United States Code, to reduce the jurisdiction of the United States district courts in actions between citizens of different States. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That section 1332 (a) (1) of title 28, United States Code, is 4 amended to read as follows: "(1) citizens of different States if none of the par ties in interest properly joined as plaintiffs is a citizen of 5 6 7 the State in which such action is brought;". 8 SEC. 2. The amendment made by this Act shall apply 9 only to actions filed after the date of enactment of this Act. I |