Out With The Old, In With The New: The JVCA Changes Rules Governing Removal, Jurisdiction And Venue

The Federal Courts Jurisdiction and Venue Clarification Act of 2011 (JVCA), P.L. 112- 63, took effect in January 2012. With it comes clarification of – and, for the most part, welcomed changes to – statutes governing removal, jurisdiction and venue in federal court. As explained below, the end result should be broader and easier access to federal courts for most domestic defendants.

Removal – Section 1446

The JVCA's amendments to 28 U.S.C. § 1446 address many of the problems defendants historically have had in removing actions to federal court, in particular the problems surrounding the timing of removal and establishing the requisite amount in controversy.

The "Last Served Defendant" Rule. The JVCA amends Section 1446 to resolve a longstanding circuit split over the timing of removal in multidefendant cases. The prior version of Section 1446 required that notice of removal be filed within 30 days after service on "the defendant," and was unclear as to when the 30 days should begin to run if multiple defendants were served on different dates, i.e., whether it should run when the first defendant or the last defendant was served. The JVCA removes this trap for the unwary by codifying the "last served defendant" majority rule and rejecting the "first served defendant" minority rule under which plaintiffs in some circuits could avoid federal court simply by serving sophisticated defendants more than 30 days after others. See 28 U.S.C. § 1446(b)(2)(B). The Unanimity Requirement. The JVCA formally codifies the longstanding unanimity requirement, which requires that all named and served defendants join in or consent to the removal. See id. § 1446(b)(2)(A). To reconcile this requirement with the codification of the last served defendant rule, see supra, the JVCA provides that "[i]f defendants are served at different times, and a later-served defendant files a notice of removal, any earlier-served defendant may consent to the removal even though that earlier-served defendant did not previously initiate or consent to removal." Id. § 1446(b)(2)(C). The One-Year Limit on Removal. The JVCA creates an exception to the traditional one-year limit on diversity jurisdiction removals. Under the prior version of Section 1446, defendants could not remove an action more than one year after it was commenced, even if in its initial form the action was not removable – a rule that encouraged plaintiffs to conceal the amount in controversy until after the year...