could, as we believe they should, be able to be brought in the jurisdiction where the plaintiff resides. I believe that in the interests of clarity, it would be useful for this point to be included in the Committee report. I request that a copy of this letter be placed in the hearing record. Sincerely, ALAN B. MORRISON. Hon. ROBERT W. KASTEN MEIER, AMERICAN COLLEGE OF TRIAL LAWYERS, Chairman, Subcommittee on Courts, Committee on the Judiciary, House of Representatives, Washington, D.C. DEAR MR. KASTEN MEIER: Thank you for your letter dated September 23, 1977, and the enclosures. As you know I have previously discussed these matters with Mike Remington. I am chairman of the Pound Revisited Committee of the American College of Trial Lawyers. This is a committee of distinguished Fellows of the College as you will see from the list of its members which I enclose herewith. The American College of Trial Lawyers is a highly selective organization whose membership, now approximately 3,000, is limited to no more than one percent of the lawyers in any state. To qualify for membership, a lawyer must have devoted 15 years to trial practice and be invited to membership through the recommendation of the Fellows in his state and approved by the Board of Regents of the College. The College is in communication with the Judicial Conference of the United States, the Administrative Offices of the United States Courts, the Justice Department, the Federal Judicial Center and has liaison with the American Bar Association, all to the end of fostering improvements in the administration of justice. We welcome the opportunity to make our suggestions to the Congress through your committee. I have prepared a letter stating the position of the American College of Trial Lawyers on limitation of diversity jurisdiction of the federal courts, a copy of which I enclose herewith. I have addressed a copy of the letter as well to Senator Eastland as chairman of the Senate Committee on the Judiciary and have sent a counterpart to each member of the judiciary committees of the Senate and the House. The College has also taken a position in opposition to the creation of separate specialized bankruptcy courts and of Article III judgeships for those courts, as I communicated to the members of the judiciary committees of the House and Senate by letter dated May 13, 1977. Sincerely yours, "POUND REVISITED" COMMITTEE Thomas E. Deacy, Jr., Chairman (Kansas City, Mo.) Joseph A. Ball (Los Angeles, Calif.) James D. Fellers (Oklahoma City, Okla.) Samuel E. Gates (New York, N.Y.) Erwin N. Griswold (Washington, D.C.) Francis R. Kirkham (San Francisco, Calif.) Gene W. Lafitte (New Orleans, La.) Robert M. Landis (Philadelphia, Pa.) Samuel W. Murphy, Jr. (New York, N.Y.) Kraft W. Eidman (Houston, Tex.) THOMAS E. DEACY, Jr. Enclosures Hon. JAMES O. EASTLAND, AMERICAN COLLEGE OF TRIAL LAWYERS, Chairman, Committee on the Judiciary, Washington, D.C. DEAR CHAIRMAN EASTLAND: The Pound Revisited Committee of the American College of Trial Lawyers on August 4, 1977, approved the recommendation of its Subcommittee on Delays and Congestion in the Courts that the diversity jurisdiction of the United States District Courts be narrowed by prohibiting a plaintiff from filing a diversity suit in a district court in a state in which he is a citizen and by increasing the jurisdictional amount in diversity cases to a minimum of $25,000. On August 5, 1977, the Board of Regents of the American College of Trial Lawyers approved this recommendation and adopted it as the position of the College. Respectfully submitted, THOMAS E. DEACY, Jr. AMERICAN COLLEGE OF TRIAL LAWYERS, Re Statutorily Mandated Priorities 28 U.S.C. § 332. Hon. JAMES O. EASTLAND, Chairman, Committee on the Judiciary, U.S. Senate, Washington, D.C. DEAR CHAIRMAN EASTLAND: The Department of Justice, through Assistant Attorney General Daniel J. Meador of the Office for Improvement of the Administration of Justice, has proposed amendment of § 332 Title 28 U.S.C. to eliminate congressionally mandated priorities for civil cases in the district courts and the courts of appeal, providing in lieu thereof for the establishment of priorities, where necessary, by the respective circuits. On April 22, 1977, the Subcommittee on Delays and Congestion in the Courts of the Pound Revisited Committee of the College recommended that the College support this proposal which recommendation was approved by the Executive Committee of the College and the Department of Justice was advised of this official position of the College. On August 4, 1977, the Pound Revisited Committee ratified the action of its subcommittee and at its meeting on August 5, 1977, the Board of Regents of the College ratified the action of both the Pound Revisited Committee and the Executive Committee. Very truly yours, THOMAS E. DEACY, Jr. ADMINISTRATIVE CONFERENCE OF THE UNITED STATES, Hon. ROBERT W. KASTEN MEIER, DEAR CHAIRMAN KASTEN MEIER: This is in response to your letter of October 25, 1977, requesting the comments of this Office on H.R. 9622, a bill to abolish diversity of citizenship as a basis of jurisdiction of federal district courts and to abolish the amount-in-controversy requirement in federal question cases. The portion of the bill which is of special interest to us is Section 2, which amends 28 U.S.C. § 1331 to remove entirely the requirement that more than $10,000 be in controversy in order for a federal court to have jurisdiction of a federal question case. As you know, the Administrative Conference for many years supported legislation to amend Section 1331. Our efforts led to the enactment in the last session of S. 800, as Pub. L. 94-574. This statute amended Section 1331(a) to remove the jurisdictional amount requirement in actions brought "against the United States, any agency thereof, or any officer or employee thereof in his official capacity." The amendment was based on an official recommendation of the Administrative Conference (Recommendation 68–7). Section 2 of H.R. 9622 would now remove the requirement for all federal question cases-a proposal which has not been considered by the Administrative Conference as a body. Nevertheless, I feel that my Office's experience in the successful effort to amend Section 1331 enables us to make several observations which may be of interest to your Committee. The relevant question facing the Committee is: what kinds of federal question cases still remain subject to the jurisdictional amount requirement after the passage of S. 800? In 1970, when the Senate was considering legislation similar to this bill, (see Senate Hearings on S. 3568, June 3, 1970), Professor Charles Wright, the noted expert on federal jurisdiction, gave his opinion in a letter to Subcommittee Chairman Kennedy that "there is no risk that ending the amount in controversy requirement for federal question cases would open the federal courts to unpredictable numbers of unknowable kinds of cases. The terrain is well marked." If anything, the terrain has now become more well marked, and the number of potential federal question cases still subject to the jurisdictional amount requirement would seem to have dwindled considerably compared to 1970, when Professor Wright wrote. Of course, as you know, there are numerous special federal question jurisdictional sections in Title 28 which give district courts original jurisdiction without any amount-in-controversy requirement. Two of the more open-ended of these sections, Section 1337 and Section 1343, serve to exempt many federal question cases from the need to satisfy Section 1331's amount-in-controversy requirement. Section 1337 gives district courts jurisdiction over actions arising under statutes regulating interstate commerce, and Section 1343 (3) gives jurisdiction over actions brought under the Constitution or any of the civil rights laws. Therefore, even in 1970, the "residue" of federal question cases that had to be brought under Section 1331 was relatively small. An important, and perhaps the largest, segment of this residue was suits against federal agencies and officers. Section 1337 covered some of these suits. Additionally, some courts had been receptive to claims that the Administrative Procedure Act was an independent source of jurisdiction. Other courts rejected this expedient but somewhat dubious rationale. But the amount of threshold litigation on the issue was considerable, and much arbitrariness resulted. Not until the passage of S. 800, which amended Section 1331 directly, was the problem resolved. (The Supreme Court recently recognized and welcomed the resolution in Califano v. Sanders, 430 U.S. 99 (1977)). Another part of the residue identified in 1970 by Professor Wright concerned suits challenging the constitutionality of state statutes. Section 1343 (3) was, then as now, available to such litigants. Professor Wright noted, however, that the Supreme Court in Hague v. CIO, 307 U.S. 496 (1939), had "suggested that a person claiming a right inherently incapable of pecuniary valuation may proceed under Section 1343 (3) without regard to amount in controversy but that if the claim is that a property right is being unconstitutionally denied the suit is under Section 1331 and the requisite amount must be in controversy." Two years later, however, the Supreme Court in Lynch v. Household Finance Corp., 405 U.S. 538 (1972), abandoned the supposed distinction and found a property right claim to be properly brought under Section 1343 (3). Thus, the Supreme Court, in effect, construed the civil rights jurisdictional statute quite broadly to ameliorate the strictness of Section 1331, much as some lower courts had broadly construed the Administrative Procedure Act for similar reasons. It may be well for Congress now to consider whether it would be more jurisprudentially sound to amend Section 1331 so as to avoid the necessity for litigants and courts to rely so heavily on Section 1343 (3). Furthermore, the Supreme Court's expansive reading of Section 1343(3) has, itself, created uncertainties and gaps, all of which produce threshold litigation and some arbitrary distinctions. Even after Lynch some types of defendants in suits sought to be brought under Section 1343 (3) have been held not to be "persons" under the civil rights laws. Suits against municipalities can be troublesome. In Dahl v. City of Palo Alto, 372 F. Supp. 647 (N.D. Calif. 1974), the court recognized that a municipality is not a "person" under the civil rights laws, but found jurisdiction because the alleged property taking happened to amount to $15,000. Similarly in Smetanka v. Borough of Ambridge, 378 F. Supp. 1366 (W.D. Pa. 1974), the court found boroughs to be outside the scope of the civil rights laws. The result was that the plaintiff's damage action against the borough for alleged unconstitutional denial of her freedom of speech was dismissed on juris dictional grounds, since the court also found that her deprivation did not amount to more than $10,000. As to whether school districts or state (or state related) universities are "persons," see the cases collected in Gray v. Union County Intermediate Educ. Dist., 520 F. 2d 803, 805 n. 1 (9th Cir. 1975). The amount-in-controversy barrier also continues to apply to cases, in Professor Wright's words, "in which a state statute is claimed to be invalid because contrary to a federal statute other than a civil rights statute." A plaintiff in such a case may not invoke Section 1343(3), and unless he can invoke one of the other special jurisdictional statutes, he must have more than $10,000 at stake. Two examples are McCall v. Shapiro, 292 F. Supp. 268 (D. Conn. 1968), and Duffany v. Van Lare, 373 F. Supp. 1060 (N.D. N.Y. 1973). In both cases, plaintiffs challenged state welfare laws as being inconsistent with the Social Security Act. Because they did not have more than $10,000 at stake their complaints were dismissed. Thus, there still appears to be several types of federal question cases still subject to the amount-in-controversy requirement of Section 1331. We have no way of estimating the potential number of such cases, although Professor Wright's assumption in 1970 that the number would be predictably small seems even more valid today. Your Committee will undoubtedly wish to explore this question further. However, assuming a manageably small increase in the number of cases added to the federal dockets, we believe that it would be quite reasonable for Congress to clarify the structure of the laws of federal jurisdiction by totally eliminating the jurisdictional amount requirement from Section 1331. With respect to the other operative provision of H.R. 9622, Section 1, which would abolish diversity of citizenship as a basis of jurisdiction of federal district courts, we have no comment. The views expressed herein are those of this Office and not necessarily those of the Administrative Conference as a body. Sincerely yours, ROBERT A. ANTHONY, Chairman. APPENDIX II-PREVIOUSLY PUBLISHED MATERIALS [From 51 IND. L.J. 314 (1976), copyright 1976 by the Trustees of Indiana University] Diversity Jurisdiction-An Idea Whose Time Has Passed JUDGE HOWARD C. BRATTON* The judicial Power . . . shall extend between Citizens of different States.1 ... to Controversies. With these few words the Constitution sets forth the foundation for the diveristy jurisdiction first conferred upon the federal courts by the Judiciary Act of 1789. These same words have provoked a controversy that has continued intermittently throughout our history, and it is once again time to reexamine diversity jurisdiction to determine whether it is justified in view of present day conditions and the workload facing the federal courts in litigation affecting federal rights. The historical justification for federal diversity jurisdiction was the need to assure an out-of-state litigant that there was a forum to which he could resort where he need fear no bias, and where the remedies afforded would be coextensive with rights created by state law and enforceable in state courts. Much lip service has been paid to this fear of state-court bias against the outsider, although it is far from certain that this was a strong motivation for the insertion of the diversity clause in the Constitution or its implementation in the first Judiciary Act. Indeed, fear of state legislatures, and the belief that federal courts would be creditors' and businessmen's courts, significantly influenced the decision to provide for diversity jurisdiction.2 The supposed fear of the hostility of state courts to litigants from other states did not play the primary role it has since been assigned. Judicial interpretation nevertheless made the idea a part of the constitutional clause.* Even if it were to be assumed that the fear of bias against the outsider-litigant actually existed at the time of the framing of the Constitution and at the time of enactment of the first Judiciary Act, and that this apprehension continued in the nation's early days, there would still remain the question whether such a fear is presently justified. It is conceded by some of the most ardent supporters of diversity jurisdiction that, if this fear is the only reason for its continuance, the jurisdiction United States District Court for New Mexico. 1 U.S. CONST. art. III, § 2. 2 Friendly, The Historic Basis of Diversity Jurisdiction, 41 HARV. L. Rev. 483, 492 97 (1928). 3 Id. 4 See Bank of the United States v. Deveaux, 9 U.S. (5 Cranch) 61, 87 (1809); Friendly, supra note 2, at 492. |