[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
EXPLORING FEDERAL DIVERSITY JURISDICTION
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON THE CONSTITUTION
AND CIVIL JUSTICE
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 13, 2016
__________
Serial No. 114-93
__________
Printed for the use of the Committee on the Judiciary
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Available via the World Wide Web: http://judiciary.house.gov
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COMMITTEE ON THE JUDICIARY
BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr., JOHN CONYERS, Jr., Michigan
Wisconsin JERROLD NADLER, New York
LAMAR S. SMITH, Texas ZOE LOFGREN, California
STEVE CHABOT, Ohio SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa Georgia
TRENT FRANKS, Arizona PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas JUDY CHU, California
JIM JORDAN, Ohio TED DEUTCH, Florida
TED POE, Texas LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah KAREN BASS, California
TOM MARINO, Pennsylvania CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan
Shelley Husband, Chief of Staff & General Counsel
Perry Apelbaum, Minority Staff Director & Chief Counsel
------
Subcommittee on the Constitution and Civil Justice
TRENT FRANKS, Arizona, Chairman
RON DeSANTIS, Florida, Vice-Chairman
STEVE KING, Iowa STEVE COHEN, Tennessee
LOUIE GOHMERT, Texas JERROLD NADLER, New York
JIM JORDAN, Ohio TED DEUTCH, Florida
Paul B. Taylor, Chief Counsel
James J. Park, Minority Counsel
C O N T E N T S
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SEPTEMBER 13, 2016
Page
OPENING STATEMENTS
The Honorable Trent Franks, a Representative in Congress from the
State of Arizona, and Chairman, Subcommittee on the
Constitution and Civil Justice................................. 1
The Honorable Steve Cohen, a Representative in Congress from the
State of Tennessee, and Ranking Member, Subcommittee on the
Constitution and Civil Justice................................. 2
The Honorable John Conyers, Jr., a Representative in Congress
from the State of Michigan, and Ranking Member, Committee on
the Judiciary.................................................. 4
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Chairman, Committee on the Judiciary 64
WITNESSES
Charles J. Cooper, Partner, Cooper & Kirk, PLLC
Oral Testimony................................................. 6
Prepared Statement............................................. 8
Joanna Shepherd, Professor of Law, Emory University School of Law
Oral Testimony................................................. 29
Prepared Statement............................................. 21
Ronald Weich, Dean, Professor of Law, University of Baltimore
School of Law
Oral Testimony................................................. 44
Prepared Statement........................................46
deg.OFFICIAL HEARING RECORD
Material Submitted for the Hearing Record but not Reprinted
Material submitted by the Honorable Trent Franks, a Representative in
Congress from the State of Arizona, and Chairman, Subcommittee on
the Constitution and Civil Justice. This material is available at
the Subcommittee and can also be accessed at:
http://docs.house.gov/Committee/Calendar/
ByEvent.aspx?EventID=105301
EXPLORING FEDERAL DIVERSITY JURISDICTION
----------
TUESDAY, SEPTEMBER 13, 2016
House of Representatives
Subcommittee on the Constitution
and Civil Justice
Committee on the Judiciary
Washington, DC.
The Subcommittee met, pursuant to call, at 11:06 a.m., in
room 2237, Rayburn House Office Building, the Honorable Trent
Franks (Chairman of the Subcommittee) presiding.
Present: Representatives Franks, Goodlatte, DeSantis,
Gohmert, Jordan, Cohen, and Conyers.
Staff Present: (Majority) Paul Taylor, Chief Counsel; Jake
Glancy, Clerk; Perry Apelbaum, Staff Director & Chief Counsel;
James J. Park, Minority Counsel; Matthew Morgan, Professional
Staff Member; and Veronica Eligan, Professional Staff Member.
Mr. Franks. The Committee hearing will come to order. I
want to welcome all of you this morning. And I will now make an
opening statement.
In Federalist Paper No. 81, Alexander Hamilton described
how Article III of the Constitution was designed to establish a
system of Federal courts competent to the determination of
matters of national jurisdiction. To that end, section 2 of
Article III allows Congress to extend the jurisdiction of
Federal courts to controversies ``between citizens of different
states,'' cases in which, by their interstate nature,
implicated national concerns.
Prior to the ratification of the Constitution, our new
Nation was governed by the Articles of Confederation, which
allowed States to impose rules that benefited their own
commercial interests while hurting consumers nationwide by
limiting the free flow of goods and services throughout the
country.
The Framers of our Constitution were clear that for America
to succeed, the rules had to be changed to allow the
development of a vibrant national economy that could sustain
the needs of all of its citizens, in whatever States they might
live. To that end, the Framers drafted a commerce clause and
also a clause allowing Federal courts to hear disputes between
citizens of different States so goods and services could cross
State lines into new markets without the fear that local State
officials would stack the deck against them.
James Madison, in the Virginia ratifying convention,
defended Federal court diversity jurisdiction over all cases
involving any citizens from different States as follows: ``It
may happen that a strong prejudice may arise in some States
against the citizens of others who may have claims against
them. We know that tardy and even defective administration of
justice has happened in some States. A citizen of another State
might not chance chance to get justice in a State court, and at
all levels he might think himself injured.''
Alexander Hamilton also explained in Federalist Paper No.
80 that, ``No man ought certainly to be a judge in his own
case, or in any case--or any cause in respect to which he has
the least interest or bias. This principle has no
inconsiderable weight in designating the Federal courts as the
proper tribunals for the determination of controversies between
States and their citizens.''
He elaborated that ``in order to the inviolable maintenance
of that equality of privileges and immunities to which the
citizens of the Union will be entitled, the national judiciary
ought to preside in all cases in which one State or its
citizens are opposed to another State or its citizens. The
power of determining causes between two States, between one
State and the citizens of another, and between the citizens of
different States is essential to the peace of the Union.'' He
had an opinion, didn't he?
Yet the Federal courts themselves, through various
opinions, have narrowed Federal jurisdiction over cases
involving citizens of different States such that the existence
of citizens from two different States in a lawsuit, in and of
itself, as contemplated by the text of Article III, section 2,
does not confer Federal court jurisdiction.
This hearing will examine whether Congress should
statutorily expand Federal court diversity jurisdiction to more
accurately reflect the expectations of the Framers of the
Constitution, and to implement its Federal court diversity
jurisdiction clause as originally understood.
So with that, I will now yield to the Ranking Member for an
opening statement.
Mr. Cohen. Thank you, Mr. Chair.
Once again, we're holding a hearing that's designed to make
the case that Congress should tilt the playing field in favor
of corporate defendants and against those harmed by their
wrongdoing. Not exactly what I live by. Not exactly what I
think a law should live by. We all should look to the people
that are being hurt and injured and give them the benefit of
the doubt whenever you can. In this case, we give the mighty
and the powerful every opportunity to oppress, to injure, and
to harm without compensation.
The hearing title is seemingly innocuous, but the ultimate
goal of this hearing seems to advocate for appealing the more
than 200-year-old complete diversity requirement, a requirement
that the first Congress created and the Supreme Court has
repeatedly upheld since 1806. Doing so would do serious harm to
consumers, Federal courts, and the fundamental balance between
the national government and State sovereignty.
Diversity jurisdiction is the jurisdiction of Federal
courts to hear otherwise purely State law matters when the
parties are citizens of different States. It's rooted in
Article III, section 2 of the Constitution, which provides in
part that Federal courts have the power to hear controversy of
citizens of different States.
The diversity statute defines the scope of diversity
jurisdiction more precisely, imposing various requirements,
such as a minimum amount in controversial requirement and the
requirement that there be complete diversity. That is that
every plaintiff is a citizen of a different State than every
defendant in order for a Federal court to exercise jurisdiction
over a purely State matter.
This hearing seems like old wine--and not old wine that has
aged well, but old wine that you should throw out--in a new
bottle. Earlier this year, for instance, we considered
legislation that would have drastically altered another
longstanding and related doctrine, the doctrine of fraudulent
joinder in order to make it easier for Federal courts to
exercise jurisdiction over State cases.
I would oppose the attempt to repeal the complete diversity
requirement for the same reasons I oppose the fraudulent
joinder legislation: First, repealing complete diversity and
thus making it easier to bring purely State law matters into
Federal court would significantly increase the workload of the
Federal judiciary. Not a bad thing for people to work hard, but
not when there are not enough judges.
This increase would impact all litigants in the Federal
courts, not just those bringing diversity suits, or diminish
the attention to resources Federal courts could give to every
case on their dockets, criminal and civil.
The increased workload would stem from the increased number
of cases a Federal court would have to hear, should it become
easier to file State law cases in Federal court. The burden,
however, would be compounded by the high number of judicial
vacancies that resulted from the Senate's failure--absolute
disregard for their duties constitutionally imposed--to act in
a manner timely on presidential judicial nominations. And the
first in line, I should remind, is Edward Stanton, Jr.--or the
third, excuse me, who is the U.S. attorney in the Western
District of Tennessee and first in line, been waiting 11 months
for confirmation.
Secondly, repealing the complete diversity requirement
would upset the careful balance between the roles of State and
Federal courts under our system of federalism. I find it ironic
some conservers--who invoked phrases like ``states' rights''
and ``activist Federal judges,'' and opposing things like
voting rights or civil rights--are now seeking to empower the
Federal courts to become substantial arbiters of State law, the
power traditionally and rightly belonging to State courts.
State courts should interpret and shape State laws in instances
where Federal courts shape State laws are and should be the
narrowest exceptions.
Finally, the increased cost of potential complexity of
litigating State law matters in Federal courts may result in
ultimately denying those with meritorious claims their day in
court. Plaintiffs have a right to choose the form in which
their claims will be heard. Repealing the complete diversity
requirement threatens to erode that right and add cost to the
litigation State claims, the prospect of which could result in
dissuading those with meritorious claims from even filing suit.
I'm deeply disappointed we are wasting our time on our
limited time that we have in this Congress, in this Committee
on this hearing. We should be focused on restoring voting
rights. Right before an election, what are we doing about
voting rights? ``Nada.'' Nothing. The courts are acting. Yeah,
North Carolina went too far and joined. We're doing nothing to
let people vote, because we don't want them to vote on the
majority side. They want to impose restrictions to limit
people's power to vote and express their will.
Criminal justice reform so important people are being
deprived of their liberty and kept for longer periods of time
than necessary at $30,000 a person. Did we deal with criminal
justice reform? No. And due process for individuals who might
be fleeing from a policeman. Have we dealt with that? No. Are
we dealing with--and this wouldn't be in this Committee, but in
this Congress--funding to fight Zika? No.
There's so many matters that we have to come forth and
could come forth in this Subcommittee, but we're not dealing
with them. We're finding 200-year-old statutes to attack.
Repealing a well-settled law does not seem to be one of the
reasons we should be here and using our precious time.
With that, I sayeth no more and yield back the balance of
my time.
Mr. Franks. And I thank the gentleman.
And it appears that we don't have any other opening
statements, so--oh, I'm sorry, Mr. Conyers, forgive me. You're
just such a shrinking wallflower over there in the corner,
nobody can see you.
And so I now recognize the full Judiciary Committee Ranking
Member, Mr. Conyers of Michigan, for his opening statement.
Mr. Conyers. Thank you, Mr. Chairman. I'm honored to be
recognized here. I've been around long enough to be known by
most of the Members of the House.
I take the position that the hearing focusing on Federal
diversity jurisdiction whereby Federal courts may hear
otherwise purely State law cases if the plaintiff and the
defendant are citizens of different States. For more than two
centuries now, the Congress has imposed and the Supreme Court
has upheld the requirement of complete diversity, which
mandates that every plaintiff must be a citizen of a different
State than every defendant for a Federal court to have
jurisdiction of the lawsuit.
Unfortunately, based on the majority of witnesses'
testimony, it appears that this hearing may be laying the
groundwork for the outright repeal of this longstanding
requirement, and it represents the latest attempt by corporate
interest to deny State court plaintiffs access to justice.
As many of you may recall, I've long opposed any effort to
repeal the complete diversity requirement for the following
reasons: To begin with, expanding the scope of Federal
diversity jurisdiction upends the careful, centuries-long
balance between Federal and State sovereignty that current law
has achieved.
More than a decade ago, when we were considering the Class
Action Fairness Act of 2005, which, among other things,
eliminated the complete diversity requirement for certain class
actions, I raised the concern then that the measure would
undermine State law by substantially divesting State courts of
the ability to interpret State law. State courts, after all,
should be the final arbiters of State law.
The complete diversity requirement and other limitations on
the scope of diversity jurisdiction are designed to serve this
important federalism interest. And repealing it beyond the
class action context would only heighten my concerns. And in
addition, eliminating the complete diversity requirement would
increase costs and might make even litigation costs prohibitive
for many plaintiffs with meritorious claims.
As it is, the cost of litigation increases whenever Federal
courts are called upon to decide State law questions because of
the added complexity and time required to resolve such issues.
Eliminating complete diversity would only increase these costs
on litigants with a disproportionate adverse impact on
plaintiffs who generally have fewer resources than the
corporate defendants they typically face in court.
Once again, our experience with the Class Action Fairness
Act is instructed, as the law made it far more burdensome,
expensive, and time consuming for injured persons to vindicate
their rights under State law. So we should be wary of spreading
this harm even more broadly.
Finally, eliminating complete diversity would increase
burdens on an already strained Federal court system. Even by
the majority of witnesses' own estimate, eliminating the
complete diversity requirement would potentially add more than
a half a million additional cases to the Federal court dockets
every year.
As it is, the Federal court system is already straining to
meet its current caseload in light of significant unmet
judicial resource needs. There are numerous judgeship
vacancies, as well as an overwhelming need to create new
judgeships that require congressional action. Accordingly, we
should be especially wary of eliminating the longstanding
complete diversity requirement, a requirement whose
constitutionality the Supreme Court has repeatedly upheld for
more than 200 years.
And so I want to commend the Ranking Member, Mr. Cohen, for
his statement, which I support.
And I thank the witnesses for their presence and look
forward to their testimony.
Thank you, Mr. Chairman.
Mr. Franks. Thank you, sir. I thank the gentleman.
And without objection, other Members' opening statements
will be made part of the record.
So I will now introduce our witnesses. Our first witness is
Mr. Charles Cooper, a partner at the Cooper & Kirk Law Firm in
Washington, D.C. Welcome, Mr. Cooper.
Our second witness is Professor Joanna Shepherd, professor
of law at Emory Law School. And welcome, Ms. Shepherd.
Our third and final witness is Dean Ronald Weich, professor
of law at the University of Baltimore. Welcome, Professor.
Each of the witnesses' written statements will be entered
into the record in its entirety. And I'd ask each witness to
summarize his or her testimony in 5 minutes or less. And to
help you stay within that time limit, there is a timing light
in front of you. The light switches from green to yellow,
indicates that you have 1 minute to conclude your testimony.
When the light turns red, it indicates that the witnesses' 5
minutes have expired.
And so before I recognize the witnesses, it is the
tradition of this Subcommittee that they be sworn. So if you'd
please stand.
Do you swear that the testimony you're about to give before
this Committee is the truth, the whole truth, and nothing but
the truth so help you God?
You may be seated.
And let the record reflect that all of the witnesses
responded in the affirmative.
So I would now recognize our first witness, Mr. Charles
Cooper. Mr. Cooper, if you make sure that microphone is on.
TESTIMONY OF CHARLES J. COOPER, PARTNER,
COOPER & KIRK, PLLC
Mr. Cooper. Good morning, Mr. Chairman, Mr. Ranking Member,
and Members of the Subcommittee. I want to thank you for
inviting me to participate in this morning's hearing on the
subject of diversity jurisdiction. And I'm honored to share my
thoughts with you on the issues that are raised by this subject
matter, particularly the issues raised by complete diversity,
the doctrine of complete diversity.
Forum selection is controlled in our system of litigation,
both State and Federal, by plaintiffs. It is therefore no
surprise and no accident that mass tort suits and other large-
scale interstate disputes cluster in certain notoriously
plaintiff-friendly State jurisdictions.
The proliferation of complex interstate disputes in State
courts has imposed massive, often bankrupting, costs on major
American manufacturing corporations and has placed great
burdens on the national economy. Large-scale interstate
disputes almost always involve adverse parties of diverse
citizenship. Yet the out-of-state defendants are often locked
in State court, unable to remove those cases to Federal court.
The cases cannot be heard in Federal court because the
Supreme Court early on interpreted the diversity jurisdiction
statute to require complete diversity of citizenship. Thus, the
plaintiffs in many interstate disputes can keep their out-of-
state defendants trapped in State court simply by naming at
least one in-State defendant.
Now, I want to make four quick points this morning about
complete diversity. First, the diversity of citizenship clause
of Article III, section 2 provides simply that Federal judicial
power--and I'm quoting--Federal judicial power shall extend to
controversies between citizens of different States.
The literal scope of that plain language thus clearly
embraces cases of minimal diversity, that is cases where any
single plaintiff and any single defendant are citizens of
different States. And the Supreme Court has held that complete
diversity is not a constitutional requirement of the diversity
clause. That is, Article III, section 2, is satisfied by
minimal diversity case.
Second, the requirement of complete diversity is at war
with the animating purpose of the diversity clause of section
2, which was succinctly described by Hamilton in Federalist No.
80, previously noted by the Chairman, but I think it bears
repeating. ``The national judiciary ought to preside in all
cases in which one State or its citizens are opposed to another
State or its citizens. For it is that tribunal which, having no
local attachments, would be likely to be impartial between the
different States and their citizens.''
Now, that understanding of the purpose of diversity
jurisdiction was echoed by virtually every supporter of the
Constitution in the ratifying debates. James Madison put the
point a little more bluntly in the Virginia convention. ``It
may happen that a strong prejudice may arise in some States
against the citizens of others who may have claims against
them. A citizen of another State might not chance to get
justice in a State court, and in all events, he might think
himself injured.''
My third point is that the requirement of complete
diversity can be traced to a Supreme Court decision in 1806
construing--actually, misconstruing the language of the
original diversity provision in the 1789 Judiciary Act, which
was materially identical to the language of the diversity
clause in Article III, section 2.
The decision called Strawbridge against Curtiss was issued
by Chief Justice Marshall in a perfunctory six-sentence opinion
that offered no reasoning in support of his texturally strained
conclusion that a case--and this is quoting from that statute--
``between a citizen of a State and a citizen of another State
somehow requires complete diversity rather than minimal
diversity.''
Marshall and the majority of the Court later came to the
view that Strawbridge had been wrongly decided. And Marshall is
reported to have--and I'm quoting from a Supreme Court case--to
have repeatedly expressed regret to his fellow justices that
the decision had been made. But the case has never been
overruled. Thus, the statutory requirement of complete
diversity of citizenship is not one that the first Congress
truly intended to impose on the Federal judiciary in the first
place, but it has nonetheless governed the Federal judiciary
for over 200 years.
My fourth point is a much closer and more controversial one
than the others. It is that a very strong case can be made that
a requirement of complete diversity cannot constitutionally be
imposed by Congress, even if it were inclined to do so. And
that strong case was made by a figure no less than Joseph Story
in Martin against Hunter's Lessee.
My time has expired, and so, Mr. Chairman, I'll refer the
Subcommittee to my discussion of those constitutional issues in
my written testimony. Thank you very much.
[The prepared statement of Mr. Cooper follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
__________
Mr. Franks. Thank you, Mr. Cooper.
I will now recognize Professor Shepherd for 5 minutes.
TESTIMONY OF JOANNA SHEPHERD, PROFESSOR OF LAW, EMORY
UNIVERSITY SCHOOL OF LAW
Ms. Shepherd. Thank you, Chairman Franks, Ranking Member
Cohen, and Members of the Subcommittee for the opportunity to
testify today.
My research focuses on empirical analyses of the civil
justice system and the judiciary. Today, I will discuss one of
my recent studies that examines the impact on Federal court
caseloads of an expansion in diversity jurisdiction.
Research suggests that the bias recognized by the original
Framers against out-of-state litigants and corporations persist
today. Surveys of attorneys indicate that bias based on
residency status or corporate status continue to be the primary
rationales for seeking a Federal forum over a State forum in
diversity cases. The intensifying politicization of State
courts and State judicial elections likely account for some of
the present judicial bias in State courts.
Approximately 90 percent of State court judges must be
reelected by voters, and in the last several decades, these
elections have become more competitive and contentious with
aggressive campaigning and significant spending.
A substantial body of empirical research, including much of
my own work, has shown that State judicial elections lead
judges to decide cases in ways that will get them reelected,
and this includes favoring in-State litigants who are voters
over out-of-State litigants.
Despite this evidence of bias, some commentators have
argued that expanding diversity jurisdiction would place an
impossible burden on the Federal courts. My study addresses
this question by estimating the impact on Federal caseloads of
replacing complete diversity with the minimal diversity
standard required by the Constitution.
To determine the impact of moving from a complete diversity
standard to a minimal diversity standard, the study compiled
data from several different sources. First, a team of
independent researchers from Emory University collected and
coded data from almost 3,600 complaints filed in the State
courts in 2013. Additional data were compiled from Federal
court caseloads, data on diversity cases in Federal courts,
data on removal statistics to Federal courts, and data on State
civil court filings.
The results from the 3,600 coded complaints showed that
about 7.5 percent of the cases were removable under the current
complete diversity standard. An additional 6.3 percent of the
complaints would be removable under a minimal diversity
standard. However, the majority of cases that satisfy the
current complete diversity standard are not filed in Federal
court, nor ever removed to Federal court.
There are numerous reasons why diverse litigants that do
not fear local bias may prefer to remain in State court. To
mention a few: Many State courts have established positions in
an area of law and defendants prefer the certainty of State
court over the uncertainty of Federal court; some State courts
and judges, such as specialized business courts in the States,
have special expertise that may make them more knowledgeable
about certain areas of law than the Federal courts; defense
counsel may have closer contacts and stronger relationships to
both State court judges and attorneys; in cases involving
individuals or small businesses, the convenience in lower cost
of State court may deter removal to Federal court; and finally,
a defendant such as a large local employer might assume that
potential local bias in State court, either judicial or
political, may actually work in its favor.
Indeed, existing Federal data on removal statistics reveals
that of the 7.5 percent of the complaints in our study that
were removable under complete diversity, the majority, about 97
percent, would never be removed.
Next, I applied the actual removal rate under complete
diversity to the number of potentially removable cases under
minimal diversity. My co-panelist questions whether this is a
safe assumption to make, to assume that the percentage of
removable cases that are actually removed under complete
diversity will be the same percentage that is actually removed
under minimal diversity.
I agree that this is an assumption. Unfortunately, assuming
is all we can do because we don't live in a world with a
minimal diversity standard. However, there's no reason to think
that the removal rate will be higher under minimal diversity.
If anything, it should be lower.
Because some of the new cases will have plaintiffs and
defendants that share a domicile, the advantages of keeping the
cases in State court that I just detailed will be even more
likely to exist. Convenience, lower travel costs, favorable
local bias, and close relationships with judges and attorneys,
are more likely to convince these defendants that do not fear
local bias to stay in State court. Thus, if anything, the
percentage of cases that are actually removed should decrease
under minimal diversity, not increase.
But, assuming that the removal rate stays the same, the
data revealed that approximately 13,900 additional cases would
be removed annually to Federal court under a minimal diversity
standard. This represents only a 7.7 percent increase in
Federal court caseloads.
And while this 7.7 percent increase seems like a small
burden, the burden could be further reduced by increasing the
amount in controversy requirement to a level above $75,000. Or
alternatively, filling existing judicial vacancies or expanding
the number of Federal District Court judgeships--which has
happened ten times since 1960--would also alleviate this
burden.
Thank you again for the opportunity to speak to you today.
[The prepared statement of Ms. Shepherd follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
__________
Mr. Franks. Thank you, Professor.
Mr. Weich.
TESTIMONY OF RONALD WEICH, DEAN, PROFESSOR OF LAW, UNIVERSITY
OF BALTIMORE SCHOOL OF LAW
Mr. Weich. Thank you.
Good morning, Chairman Franks, Ranking Member Cohen, full
Committee Ranking Member Conyers, and Members of the
Subcommittee. My name is Ronald Weich. I'm the dean at the
University of Baltimore School of Law, and I appreciate the
opportunity to testify today.
The subject of today's hearing, Federal diversity
jurisdiction, is very technical, but as has been noted by the
Members of the Committee, it is very important. It implicates
core principles in our constitutional system: State
sovereignty, the proper functioning of the Federal courts, and
questions of federalism.
And the importance of the subject lead me to urge, above
all, that the Committee proceed with great caution. This is
potentially a powder keg for the Federal courts and for our
system of federalism. And if the Committee wants to explore, as
the title of the hearing suggests, Federal diversity
jurisdiction, that's fine.
But to legislate in this area would require far more
consideration. And specifically, I would urge that you consult
with key stakeholders and subject matter experts across the
spectrum. I am not, myself, a civil procedure professor. I
don't teach Federal jurisdiction. As the dean of a law school,
I have a certain perspective that I'll share with the Committee
today, but I would urge that subject matter experts in this
very technical area be consulted before any legislation is
advanced.
I want to address several issues, starting with Strawbridge
against Curtiss, which Mr. Cooper referred to, the 1806
decision by Chief Justice Marshall. Mr. Cooper is a legendary
litigator. I respect him greatly. But I fear that he has taken
on mission impossible here trying to convince Congress to
overturn a decision by Chief Justice John Marshall from 210
years ago.
Not only has the Supreme Court not overturned, never
seriously questioned the holding in Strawbridge that Article
III requires complete diversity, but Congress has never come
back to that question in a significant way. And I'll describe
that in some detail.
You know, I looked--after reviewing Mr. Cooper's testimony,
I went back last night, and using my somewhat atrophied legal
research skills, I wanted to see whether Strawbridge had been
questioned in Supreme Court cases in these 210 years, and it
really has not in any significant way. There are decisions from
the 19th century, the 20th century, and as I cite in my
testimony, the Exxon Mobil versus Allapattah case in 2005,
where the Supreme Court says we adhere to the principle of
complete diversity.
Meanwhile, Congress, which could have imposed a different
diversity standard, hasn't done so. In fact, it's done the
opposite. The Congress has repeatedly raised the amount in
controversy threshold to make diversity jurisdiction less
available, and Congress has taken other steps to limit rather
than expand Federal diversity.
One exception to that is, of course, the Class Action
Fairness Act of 2005, and that seems to me to be a cautionary
tale. I've heard that there are practitioners and judges who
feel that that law allowed too many cases into Federal court.
Perhaps there are defendants who fear that it doesn't go far
enough. And that might be a fit subject for consideration, but
that's far, far from the very dramatic step of changing
complete diversity to minimal diversity.
In my testimony, I point out that Congress has, for 210
years, largely restricted diversity jurisdiction for three
reasons, which have been highlighted by Members of the
Committee already: Number one, State sovereignty; number two,
litigation costs; and number three, the proper functioning of
the Federal courts.
On State sovereignty, it must be emphasized that these are
State law claims arising under State statutes or State common
law, and it is quite a dramatic thing from the perspective of
federalism to say that a Federal court not accountable to the
citizens of a State should adjudicate those claims. And it's
really ironic. I know many Members of this Committee have long
championed the principle of State sovereignty and States'
rights, and it seems odd that now you would move in a different
direction in this area.
I speak in my testimony about the Maryland judiciary, which
I know well, which is very well equipped to handle these cases.
And I know you have on this Committee, a former State court
judge, Judge Gohmert, who knows well the State judiciary in
Texas.
I point out in my testimony that the exercise of diversity
jurisdiction tends to increase complexity and costs. And I
highlight, for example, the problems that are created when a
Federal court has to certify a question to State courts. It can
take years for that to be resolved.
And then finally, the Federal courts, where, as has been
pointed out, the caseload is increased, there are fewer judges.
My distinguished co-panelist, Professor Shepherd, says it would
only be 7.7 percent of an increase in the caseload. That's a
dramatic increase for Federal judges. And I fear that if we're
simply assuming because the past is present, that that's not
going to be a very comforting assumption for Federal judges and
administrators who would be looking at really an ocean of new
cases coming into the Federal courts.
So for all these reasons, I would urge the Committee to
proceed with great caution before expanding Federal diversity
jurisdiction.
[The prepared statement of Mr. Weich follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
__________
Mr. Franks. Thank you, Mr. Weich.
I would now thank all of the panel members for their
testimony. We'll proceed under the 5-minute rule with
questions, and I would begin recognizing myself for 5 minutes.
And Mr. Cooper, I'll direct my first rather basic, sort of
the blooming obvious award question to you. What do you think
the implications are of your argument for federalism? And I'll
put it a little differently. Do you think that a minimum
diversity standard is a violation of States' rights and what
the--that the Founders or Framers somehow got the wrong
ballots?
Mr. Cooper. Chairman Franks, I do not. And, you know, I
come to this issue as somebody who, I think, has a reputation,
if you will, but certainly a pedigree of being very, very
protective of federalism, principles of federalism, State
rights, not only in my early time in the Reagan administration
Justice Department where some people called me the federalism
cop of the Administration, but also in my private practice
where I've represented a number of States and attempted in
every way to zealously protect those reserved rights under the
10th Amendment. But my research into this subject matter has
completely satisfied me that this is one of those provisions of
the Constitution that quite carefully and deliberately created
a path, if you will, into Federal--neutral Federal tribunals
for interstate disputes.
The necessity of a neutral Federal tribunal to take to
resolve interstate disputes of national importance was viewed
by all of the Founders as a necessary feature of the Federal
Government's power to regulate interstate commerce, and of all
the other substantive provisions, Chairman Franks, that were
designed to ensure a national commercial network.
And so I believe, in fact, that our Federal system depends
as much on the Federal courts having diversity jurisdiction
over large interstate disputes as it does that this body,
Congress, have regulatory power over interstate commerce. They
go hand in hand.
Mr. Franks. Yes, sir. Thank you, Mr. Cooper.
And I'd now like to ask Professor Shepherd on this issue of
local ``bias.'' I know one of your areas of interest is the
empirical research concerning bias in general, especially in
contemporary State court litigation against out-of-state
defendants. And what are the principal findings that you've had
in that regard?
Ms. Shepherd. Well, I could go on and on. This is a big
area of my research and others as well. But the research
generally shows that in the majority of States--there's three
States where judges have permanent tenure, like in the Federal
system, but in the other 47 States, they don't. And they're
selected and retained through a variety of methods: Elections,
appointed, merit selection.
But in all of these systems, there is a real problem of
bias. There is a problem of certain kinds of judges being more
likely to be put on the bench and then be retained based on the
way that they vote. We find that the campaign money matters a
lot for who wins and then who stays on the bench. We find that
contributions from certain groups are very correlated with the
way those judges vote.
So judges that receive more money from group X are more
likely to vote in favor of group X. And, you know, we've seen--
in Caperton v. Massey, we saw the Supreme Court take this issue
up for the first time and recognize that there is a risk of
real bias, but we still have recusal rates, recusal systems
that are not really in place to protect the litigants.
And so there's just an overwhelming body of evidence that I
could produce, you know, this high for you that would suggest
that there's a lot of bias in the State courts today.
Mr. Franks. Well, thank you.
I'm going to now turn to our Ranking Member and recognize
him for 5 minutes for questions.
Mr. Cohen. Thank you, sir.
Professor Shepherd, you have been in favor of having
additional Federal courts created and--that the backlog that
we've got in the Senate, you mentioned in your testimony, that
could end. Have you written any letters to the Members of the
Judiciary Committee urging them to approve the District Court
judges who are sitting before them?
Ms. Shepherd. No, I have not.
Mr. Cohen. Haven't taken that step.
7.7 percent is a pretty large increase really. I mean,
they're behind as is. How can you--that's your figure. It could
be greater, it could be lesser. Without the Senate acting and
approving the nominees of the President or increasing judges,
how could this work?
Ms. Shepherd. No, I mean, I agree that given the current
situation where we have a lot of vacant judgeships, that that
does represent a problem. I mean, hopefully those vacancies
will be filled. They have been slowly, little by little.
In terms of expanding the number of judgeships, that has
happened ten times since 1960. We were at a number down near
200, and now we're at 667. So it's not that, you know, crazy of
an idea that we might increase that, but, of course, you're
right, we would have to not only create new judgeships but
actually fill the vacancies as well.
You know, I think another idea that might make a lot of
sense and certainly has more of a background is increasing the
amount in controversy from 75,000 to some higher amount. And
then we would be limiting, not just the new cases that would
satisfy the minimal diversity standard that would go forward,
but also some of the current cases that satisfy complete
diversity, there would be some of those that would no longer be
removable as well.
Mr. Cohen. Your statements about the State courts and the
idea that sometimes they don't take the cases to Federal court
because they've got a judge they like or something or--and they
can get a favorable--and the money has--and I don't say it
doesn't. What's your position on Citizens United?
Ms. Shepherd. I think Citizens United has--I think it's
very--the way it treats judicial elections should be separated
from the way it treats other elections, but I have written very
publicly against Citizens United as it applies to judicial
elections.
Mr. Cohen. How about nonjudicial elections where people
approve judges and might be influenced by the money they
receive from certain groups?
Ms. Shepherd. You know, that's not--I mean, all my research
is really just focused on the issues in State judicial
elections, so I don't really feel qualified to answer that.
Mr. Cohen. Just curious, have you been paid anything by the
National Association of Manufacturers at any time in the past?
Ms. Shepherd. They paid for the coding for the researchers
that--it costs a lot to hire a team of researchers to code
this. And as with a lot of my work, that--the actual coding
projects are funded by some other group. Like a lot of my
judicial work is funded by the American Constitution Society,
the coding projects are. This coding project was funded by NAM.
Mr. Cohen. And how much did NAM pay you for doing that
work?
Ms. Shepherd. Pay me or pay the researchers?
Mr. Cohen. Paid you.
Ms. Shepherd. I would have to look back through--it was 10
researchers. They make, you know, $12 to $15 an hour. I don't
recall the exact numbers. I would have to look back through----
Mr. Cohen. So you didn't get paid, just the researchers got
paid?
Ms. Shepherd. The researchers got paid, and there was a
small amount for my time, but the majority of it went to the
researchers.
Mr. Cohen. How much was that small amount?
Ms. Shepherd. I would have to--I'm sorry, I don't recall.
Mr. Cohen. Was it as much as a $105,000 consulting fee from
the American Tort Reform Association for your work there?
Ms. Shepherd. No.
Mr. Cohen. Wasn't that much, okay.
Ms. Shepherd. No.
Mr. Cohen. You wrote an article, and I don't know what it
is, but the title of it intrigues me, about ``Baseball's
Accidental Racism: The Draft, African-American Players, and the
Law.'' Would you tell me what that was about? I'm a baseball
fan.
Ms. Shepherd. Oh, yes. I'm going to probably get it wrong,
and I apologize. It's been over a decade. I was actually an
econ professor when I wrote that. I was good friends with Nolan
Ryan--with the scout, Red Murff, who was the--who drafted, I
guess, or whatever the verb at that point was, Nolan Ryan. And
he used to talk about how back in his day when he was a scout,
things were completely different. And he found Nolan when he
was 14, worked with him, had him out to his ranch every summer.
I grew up in Texas. And when it came time for Nolan to sign
with the team, he went with who Red said should be, you know,
the best team.
And then he said the draft just did away with all of that.
There was no incentive to invest in a player because they could
go--they could sign with any team. You had no say over that.
And he said it's really harmed a lot of the lower-income
groups, including, at the time, a lot of the, you know,
minority groups.
And so it was just an empirical analysis confirming that
the draft did have these negative impacts on certain lower-
income groups because scouts no longer had the incentive to
really work with and invest in the skills of players.
Mr. Cohen. Thank you. There has been a decrease in African-
American players in the major leagues, and part of it's because
of opportunity costs that football and basketball seem to take.
But I think it's been an unfortunate situation, because it's
America's sport, and it should be more reflective of our
populous and Willie Mays' great talents.
I yield back the balance of my time.
Ms. Shepherd. Thank you.
Mr. Franks. I will now recognize the Vice-Chairman of the
Subcommittee, Mr. DeSantis, for 5 minutes.
Mr. DeSantis. Well, thank you, Mr. Chairman.
Thanks to the witnesses.
So, Mr. Cooper, is it the case that you think that if
Congress were to legislate a minimal diversity, would that be
constitutional? I mean, I guess, I know you would argue that it
would be in terms of original principles, but we would have to
get a favorable Supreme Court decision, they would have to
reevaluate this, and the courts too?
Mr. Cooper. No. Congressman DeSantis, I honestly don't
think there's anyone who doubts Congress' ability to legislate
minimum diversity. The harder question is whether Congress
would have authority to legislate complete diversity, if that's
what it decided to do. But the burden of my testimony is that
it never did decide to do that in the original 1789 Judiciary
Act.
The language was very closely similar to Article III,
section 2, and the interpretation in Strawbridge that that
requires complete diversity is something that strains the
language itself, and it adds a restriction that the language
just doesn't apply in certainly none of the history. And the
Court itself, or the author of the Court and the majority of
the members, later came to think it was wrongly decided.
But I don't think anyone doubts really that Congress has--
because the Constitution itself does not require complete
diversity. Congress has the ability to legislate minimal
diversity. And it did, as, I think, the Ranking Member
mentioned in his opening remarks, or perhaps it was Congressman
Conyers, I am sorry, referencing CAFA, the Class Action
Fairness Act, where complete diversity was significantly
relaxed.
Mr. DeSantis. Now, a lot has changed since the 1789
Judiciary Act, particularly in the legal profession,
particularly when you talk about some of the massive cases that
can be brought. And I think you allude to this in your
testimony, plaintiffs really can go anywhere in the country, so
to speak, and find specific jurisdictions that have a track
record of being very friendly to certain cases. I think you
cited this one place in Illinois where the asbestos cases all
were brought, even though most of the plaintiffs never have any
connection to Illinois.
So how would what you're proposing change that dynamic, and
would changing that dynamic be better for the economy?
Mr. Cooper. Yes. Well, relaxing the complete diversity
requirement would change that dynamic by allowing the removal
of cases where there is diversity, minimal diversity, to
Federal court. The original--I would submit to the Committee--
Subcommittee, the original intendment and understanding of the
purpose and the operation of the diversity clause in Article
III, section 2.
As you mentioned, there are a number of State court
jurisdictions where literally hundreds of cases--for example,
Madison County and the asbestos cases--fewer than one-tenth of
the cases in those State--in those State courts in Madison
County have--do the plaintiffs have anything to do--or the
defendants, for that matter--have anything to do with the
jurisdiction, by way of citizenship anyway.
And this would permit that kind of clear gaming of--and
forum selection for the reasons that Professor Shepherd has
outlined to be frustrated by ensuring that those cases, which
are, you know, very large interstate disputes among very large
concerns, could be removed to a Federal tribunal.
Mr. DeSantis. And is the, I guess, the implication that
there are certain State courts that have developed kind of a
reputation of being very conducive for certain types of cases,
that if you remove that to an Article III court that it would
be, I guess, less friendly for some of the lawyer-driven major
litigation?
Mr. Cooper. There is a reason that these cases--usually
mass tort cases, but other kinds as well--these interstate
disputes concentrate in particular State jurisdiction. There's
a reason for that. Plaintiffs' lawyers select those
jurisdictions. There's a reason for that. I think we've heard
testimony thus far to explain that phenomenon.
And if the Federal jurisdiction in those areas was
available on a minimal diversity basis, even if significantly
restricted by an increased amount in controversy, for example,
then I think those kinds of forum shopping abuses, really,
would disappear.
Mr. DeSantis. Thank you.
My time's expired. I yield back.
Mr. Franks. I thank the gentleman.
I now recognize the Ranking Member of the full Committee,
Mr. Conyers, for 5 minutes.
Mr. Conyers. Thank you, Mr. Chairman.
I thank the witnesses for their discussion here.
I'm going to--since Professor Weich has not been asked a
single question yet, I'll break this void and ask him about the
estimate made by his co-panelist, Ms. Shepherd, who estimates
that 557,000 cases would become removable, which is twice the
current civil Federal caseload. She's hoping that only 2.5
percent of them will actually get removed. But what would
happen if more were removed? What, in your view, would be the
impact on Federal courts, sir?
Mr. Weich. Right. Thank you, Congressman Conyers, for that
question. First of all, as to the estimate by Professor
Shepherd, she says assuming is all we can do, and I understand
that it's an assumption based on social science principles that
she has applied here, but it is a very scary prospect that,
based on that assumption, a change would be made to law that
might increase the Federal caseload so dramatically.
As you say, there are over half a million additional cases
that she has found that could end up in Federal court. And one
point to make here is that because these are multidefendant
cases, if Congress were to move to a minimal diversity
standard, any defendant could make that choice, even if other
defendants didn't want to see the case removed to Federal
court. There would be more decisionmakers, and so you would
see, I think, the reason to fear that there would be more than
only 7.7 percent.
But even if it were that, that is a very large increase for
an already overstressed Federal court system. And, again, these
are State law cases. It's not just the number. It's the kind of
cases. Federal judges aren't principally responsible for
knowing State law. They have to master it in particular cases
here. Sometimes State law is unclear and they have to seek
certification from the highest State court in which they sit.
There's tremendous complexity about which State law is to
apply, whether supplemental jurisdiction attaches.
For all these reasons--there are costs that are associated
with increasing and expanding Federal diversity jurisdiction.
And for these reasons, at the very least, Congress should move
slowly, but in the end, I think it would be unwise to expand
this category of Federal jurisdiction.
Mr. Conyers. Thank you so much.
Does eliminating the complete diversity requirement raise
any federalism concerns given that its elimination may allow
Federal courts to play an even larger role in deciding purely
State law claims?
Mr. Weich. It does. I assume that question was directed to
me, Congressman Conyers, and I feel that it does raise State
sovereignty concerns in a very significant way. And in part,
there is not just, you know, the abstract balance between
Federal and State. It's how State courts are viewed, and the
talk of bias and judicial hellholes, I think, really is a
disservice to the hardworking, highly professional State court
judges.
You know, in 1789, you know, at the framing of the
Constitution, the first Judiciary Act, and in 1806 when Chief
Justice Marshall decided Strawbridge, the country was more
factionalized. One had reason to question whether State courts
had loyalty to the Federal Government.
There is no question. We have fought wars to ensure
allegiance to the Federal Constitution. And there is no doubt--
and I tell you, every day I deal with Maryland State court
judges who are deeply committed to doing their jobs and
adhering to and enforcing the Federal Constitution and Federal
rights. And there's just no reason to think that the State
judiciary, in general, is incompetent or biased or incapable of
handling their responsibility to apply State law.
Mr. Conyers. Thank you.
Related to that in a way is the consideration of the impact
that might occur with the elimination of complete--of the
complete diversity rule would have on the cost for litigants
seeking to file claims in State courts. Wouldn't that--could
that be significant?
Mr. Weich. Yes. I mean, I'm interested to hear Professor
Shepherd say that she thinks not all cases--not many cases
would be removed, because many parties in State court
appreciate the convenience and lower cost of litigating in the
jurisdiction in which they sit. If all that is true, then
expanding Federal jurisdiction and allowing defendants to
remove cases to Federal court will, I think, increase costs and
limit convenience and take disputes out of the local fora in
which they belong.
Mr. Conyers. Thank you, sir.
And I thank Chairman Franks.
Mr. Franks. I thank you, sir.
And I would now recognize the gentleman from Texas, Mr.
Gohmert, for 5 minutes.
Mr. Gohmert. Thank you, Mr. Chairman. And we appreciate the
witnesses being here, and I do find it interesting too, the
discussion about bias.
I was wondering, Professor Shepherd, do you have empirical
studies and data about bias in Federal court?
Ms. Shepherd. No. I mean, there--I haven't done any of that
work, but there are some studies that mainly just looked at the
relationship between ideology and the way Federal court judges
rule, and as you can imagine, there is a linkage there. Judges
appointed by Republicans tend to vote differently than judges
that are appointed by Democratic Presidents. But importantly,
it's not because they don't have to be retained or run for
reelection or reappointment, it's different, and it's based
more on this kind of fundamental predictable ideology than it
is who's giving money to the campaign.
Mr. Gohmert. It is interesting to observe, though. I can't
recall anyone ever appointed to Federal court, and especially
the Supreme Court, that was touted as a liberal who took to the
court and became immensely conservative, but certainly it's
happened the other way.
But I--I do want to reiterate something Mr. Weich has said
about having worked as a prosecutor but for much longer period
as a civil litigator in both State and Federal courts, from MDL
litigation, all kinds of litigation, and having appeared in
front of different Federal courts and State judges. Having been
a State district judge and a State appellate court judge, I
found a tremendous amount of bias in Federal courts, and that
is obviously why you have people who have learned how to game
the Federal court system by filing multiple suits and hoping
the case comes up in the Federal court judge they want and then
dismissing others. I mean, it's become quite a game.
I also saw great disservice to people who had complaints
about benefits from their employment that got removed to
Federal court and there became an end of their righteous claim.
There has--I've seen a great deal of injustice that was not
occurring at the State court level that did occur at the
Federal level. So I think that's worth keeping in mind.
And when people talk in terms of, gee, it's terrible for
States like Texas that elect their judges, much better if you
have judges appointed, it seems like to me there is equal pros
and cons. I have seen massive abuses from people who sought
their appointment, played the political game, got their
appointments, and then became far more political than somebody
who had to stand for election and appear to be fair to all
sides.
So anyway, it's interesting, the studies, the empirical
data you refer to from State courts that doesn't appear to be
done for Federal courts, and yet experience shows there's an
awful lot of bias in Federal courts that is not being talked
about.
Well, I appreciate your testimony today. You've provided
data that I'm going to have to look in and do some cross-
referencing myself, but it's an interesting issue, and I
appreciate all of you bringing it to our attention.
Thank you. I yield back.
Mr. Franks. And I thank the gentleman.
And I now recognize the Chairman of the Judiciary
Committee, Mr. Goodlatte, for 5 minutes.
Mr. Goodlatte. Well, thank you, Mr. Chairman. I appreciate
your holding this hearing. I appreciate the testimony of the
witnesses, particularly from my good friend, Chuck Cooper. It
is great to see you here with us. And I'm going to just briefly
share some of my thoughts about this issue.
Federal court diversity jurisdiction might seem dry and
technical at first blush, but it's actually near the heart of
the Founders' vision of the body politic; namely, their
understanding that Federal courts should hear cases between
citizens of different States, especially when those lawsuits
involve commercial or other subjects integral to the national
economy.
Currently, when a citizen from one State sues a defendant
from another State, the interstate nature of that lawsuit gives
Federal courts jurisdiction over the case. While the
Constitution provides that Congress can grant Federal courts
jurisdiction over all such cases, cases involving what lawyers
refer to as minimal diversity, a glitch in current statutory
law, allows trial lawyers to forum shop and keep their cases in
the State courts they prefer if they sue a defendant from
another State and simply also sue an additional local defendant
in the State in which they're filing the case.
Not surprisingly, these rules have been abused by trial
lawyers who sue local defendants, even though the plaintiffs'
claims against those defendants have little or no support in
fact or law, because suing those local defendants allows trial
lawyers to keep their case in a preferred State court forum.
This Committee reported out and the House passed earlier
this year the Fraudulent Joinder Prevention Act, which would
limit this abuse. And just over a decade ago, I was the chief
sponsor of the Class Action Fairness Act, which was enacted
into law in 2005. As many people have noted, including current
7th Circuit Court of Appeals Judge Diane Wood, that legislation
addressed the same problem in the context of class action
lawsuits.
In the conference report on that law, Congress was explicit
about its view of the purpose of diversity jurisdiction and the
need in multi-State class actions to close another aspect of
this jurisdictional loophole. The conference report commented,
for example, that one of the primary historical reasons for
diversity jurisdiction is the reassurance of fairness and
competence that a Federal court can supply to an out-of-State
defendant facing suit in State court.
The report went on to describe the many reasons the
Constitution extends Federal court jurisdiction to lawsuits
involving citizens of different States, even when questions of
State law are at issue. Among these reasons are that citizens
in one State might experience injustice if they were forced to
litigate in out-of-State courts, that the availability of
Federal courts would shore up confidence in the judicial system
by preventing even the appearance of discrimination in favor of
local residents, and that the option of going to Federal court
would guard against the possibility that the State courts might
discriminate against interstate business and commercial
activities because diversity jurisdiction is itself a means of
ensuring the protection of interstate commerce.
The conference report section entitled ``National Class
Actions Belong in Federal Court Under Traditional Notions of
Federalism'' makes clear that it's unfair to have one State
court dictating to 49 others what their laws should be, that
it's unfair to maintain a system that allows State court judges
to dictate national policy, and that the existing system often
allowed one State court to issue rulings that flatly
contradicted the law of another implicated State.
The Committee report on the Class Action Fairness Act
concluded as follows: ``The Federal courts are the appropriate
forum to decide most interstate class actions because these
cases usually involve large amounts of money and many
plaintiffs, and have significant implications for interstate
commerce and national policy. By enabling Federal courts to
hear more class actions, this bill will help minimize the class
action abuses taking place in State courts and ensure that
these cases can be litigated in a proper forum.''
Today, this hearing is about whether those same principles
should apply more broadly to provide for justice and fairness
in even more context and situations involving multiple States
and national interests. So I thank the witnesses again for
their contribution today.
I yield back.
Mr. Franks. And I thank the gentleman, and couldn't have
said it better myself. And this concludes today's hearing. And
I want to thank all of our witnesses. I want to thank the
audience and certainly the Members. And without objection, all
Members will have 5 legislative days to submit additional
written questions for the witnesses or additional materials for
the record.
And with that, this hearing is adjourned.
[Whereupon, at 12:09 p.m., the Subcommittee was adjourned.]
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