Statement of Ranking Member Nadler for the Markup of H.R. 3487, Regarding Diversity Jurisdiction

Sep 13, 2018

WASHINGTON, D.C. --  Today, Congressman Jerrold Nadler (D-NY), Ranking Member of the House Judiciary Committee, delivered the following opening remarks during a Judiciary Committee markup of H.R. 3487 regarding diversity jurisdiction:

“Mr. Chairman, H.R. 3487 would upend two centuries of a bedrock legal principle so that mostly corporate defendants can more easily remove purely state-law cases to federal court, where they will have numerous advantages over injured consumers, patients, and workers.

“This bill is yet another attempt by the Republican Majority to tilt the legal playing field in favor of large corporations.  In doing so, it would also clog the Federal courts, drain judicial resources, upset well-established law, and delay justice for plaintiffs seeking to hold wrongdoers accountable for the injuries they cause.

“For more than 200 years, Congress has required what is known as “complete diversity” in order to remove a purely state-law case from state court to federal court.  To invoke diversity jurisdiction, every plaintiff must be a citizen of a different state from every defendant.

“H.R. 3487, however, would turn this concept on its head.  It would require, instead, only minimal diversity.  As long as just one defendant is from a different state from one plaintiff, the case would qualify for diversity jurisdiction, and it could be heard in federal court.

“Such a radical departure from the current well-established rule threatens state sovereignty and violates federalism principles by denying state courts the ability to shape state law.  State courts should be the final arbiters of state law, but this bill would place thousands of new state-law questions in the hands of federal courts each year.

“It would also increase both the complexity and the cost of civil litigation, placing further burdens on plaintiffs, who tend to have fewer resources than comparatively well-funded corporate defendants.

“In addition, this legislation would burden an already-strained federal court system by adding potentially thousands of new cases to federal court dockets.  According to one of the Majority’s own witnesses, a minimal diversity standard would increase federal district caseloads by 7.7 percent.  This figure is probably grossly understated, and it does not take into account the added burden and complexity of more federal courts being required to interpret state law, or the additional appellate cases that are sure to arise from those decisions.

“In 2005, Congress passed the Class Action Fairness Act, which included a minimal diversity standard for class action cases.  Experience has shown that this law has made it far more burdensome, expensive, and time-consuming for injured persons to vindicate their rights under state law.

“What should serve as a cautionary tale, however, instead serves as inspiration for the Republican Majority.  They seek to double-down on this anti-plaintiff rule, and to extend it to non-class action cases as well.

“This bill is part of a general effort by the Republicans to close off access to the courts to ordinary Americans.  With every step they take—whether it is reducing the ability to bring class action lawsuits, reclassifying more lawsuits as frivolous and subject to mandatory sanctions, or opposing legislative attempts to limit mandatory arbitration clauses—they are transforming our system of justice into one that only serves the very rich and powerful.

“Finally, this bill would double the filing fee required to remove a case to federal court under the diversity jurisdiction statute.  It is my understanding that this provision is intended to pay for the salaries and other costs associated with creating new judgeships under the prior bill.  Even if this provision were to generate sufficient revenue to fund these judgeships—which is highly speculative—it would likely be self-defeating.  This bill would swamp the federal courts with so many new cases that the caseloads would quickly far outpace the capacity of the new judges it is intended to fund, and we will find ourselves back again considering a request for yet more judges.

“Once again, we are rushing into a markup on legislation that is clearly not fully thought through.  As with the prior bill, we have not had a legislative hearing on this proposal, and there was no attempt to reach out to relevant stakeholders for their opinions of the bill, and its potential consequences. 

“We should instead take our time, and undergo a careful and thoughtful analysis of this proposal.”

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