I 

109TH CONGRESS 

2D SESSION H. R. 5440 

To amend title 28, United States Code, to clarify the jurisdiction of the 

Federal courts, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2006 

Mr. SMITH of Texas introduced the following bill; which was referred to the 

Committee on the Judiciary 

A BILL 

To amend title 28, United States Code, to clarify the 

jurisdiction of the Federal courts, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Federal Courts Jurisdiction Clarification Act of 2006’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Resident alien exception. 

Sec. 3. Citizenship of corporations and insurance companies with foreign contacts. 

Sec. 4. Removal and remand procedures. 

Sec. 5. Indexing the amount in controversy. 


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Sec. 6. Facilitating use of declarations to specify damages. 

Sec. 7. Effective date. 

1 SEC. 2. RESIDENT ALIEN EXCEPTION. 

2 Section 1332(a) of title 28, United States Code, is 

3 amended— 

4 (1) by striking the last sentence; and 

5 (2) in paragraph (2), by inserting after ‘‘foreign 

6 state’’ the following: ‘‘, except that the district 

7 courts shall not have original jurisdiction of an ac8 tion between a citizen of a State and a citizen or 

9 subject of a foreign state admitted to the United 

10 States for permanent residence and domiciled in the 

11 same State’’. 

12 SEC. 3. CITIZENSHIP OF CORPORATIONS AND INSURANCE 

13 COMPANIES WITH FOREIGN CONTACTS. 

14 Section 1332(c)(1) of title 28, United States Code, 

15 is amended— 

16 (1) by striking ‘‘a corporation’’ and all that fol17 lows through ‘‘, except’’ and inserting ‘‘a corporation 

18 shall be deemed to be a citizen of every State and 

19 foreign state by which it has been incorporated and 

20 of the State or foreign state where it has its prin21 cipal place of business, except’’; and 

22 (2) by striking all that follows ‘‘party-defend23 ant,’’ and inserting ‘‘such insurer shall be deemed a 

24 citizen of— 


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1 ‘‘(A) every State and foreign state of which 

2 the insured is a citizen; 

3 ‘‘(B) every State or foreign state by which 

4 the insurer has been incorporated; and 

5 ‘‘(C) the State or foreign state where the 

6 insurer has its principal place of business; 

7 and’’. 

8 SEC. 4. REMOVAL AND REMAND PROCEDURES. 

9 (a) ACTIONS REMOVABLE GENERALLY.—Section 

10 1441(c) of title 28, United States Code, is amended to 

11 read as follows: 

12 ‘‘(c)(1) If a civil action includes— 

13 ‘‘(A) a claim arising under the Constitution, 

14 laws, or treaties of the United States (within the 

15 meaning of section 1331), and 

16 ‘‘(B) a claim not within the original or supple17 mental jurisdiction of the district court or a claim 

18 that has been made nonremovable by statute, 

19 the entire action may be removed if the action would 

20 be removable without the inclusion of the claim de21 scribed in subparagraph (B). 

22 ‘‘(2) Upon removal of an action described in para23 graph (1), the district court shall sever from the action 

24 all claims described in paragraph (1)(B) and shall remand 

25 the severed claims to the State court from which the acVerDate Aug 31 2005 21:35 May 30, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5440.IH H5440

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1 tion was removed. Only defendants against whom a claim 

2 described in paragraph (1)(A) has been asserted are re3 quired to join in or consent to the removal under para4 graph (1).’’. 

5 (b) PROCEDURE FOR REMOVAL OF CIVIL ACTIONS.— 

6 Section 1446 of title 28, United States Code, is amended 

7 as follows: 

8 (1) The section heading is amended to read as 

9 follows: 

10 ‘‘§ 1446. Procedure for removal of civil actions’’. 

11 (2) Subsection (a) is amended— 

12 (A) by striking ‘‘or criminal prosecution’’; 

13 and 

14 (B) by striking ‘‘removal signed pursuant 

15 to Rule 11 of the Federal Rules of Civil Proce16 dure and containing’’ and inserting ‘‘removal. 

17 The notice of removal shall be signed in the 

18 same manner and with the same effect as a 

19 pleading, written motion, or other paper in a 

20 civil action in a district court of the United 

21 States, and shall contain’’. 

22 (3) Subsection (b) is amended— 

23 (A) by inserting ‘‘(1)’’ after ‘‘(b)’’; 

24 (B) by designating the second paragraph 

25 as paragraph (3); 


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1 (C) by inserting after paragraph (1) (as 

2 designated by subparagraph (A) of this para3 graph) the following: 

4 ‘‘(2) When a civil action is removed solely under sec5 tion 1441(a), all defendants who have been properly joined 

6 and served must join in or consent to the removal of the 

7 action. A defendant shall have 30 days after receipt by 

8 or service on that defendant of the initial pleading or sum9 mons described in subsection (b)(1) to file the notice of 

10 removal. During the 30-day period before a defendant files 

11 a notice of removal— 

12 ‘‘(A) any other defendant served before the be13 ginning of that 30-day period may consent to the re14 moval by the later-served defendant even though 

15 that earlier-served defendant did not previously ini16 tiate or consent to removal; and 

17 ‘‘(B) any defendant not yet served may join in 

18 or consent to the removal.’’; 

19 (D) in paragraph (3) (as designated by 

20 subparagraph (B) of this paragraph), by strik21 ing ‘‘action.’’ and inserting ‘‘action, unless equi22 table considerations warrant removal. Such eq23 uitable considerations include whether the 

24 plaintiff has engaged in manipulative behavior, 

25 whether the defendant has acted diligently in 


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1 seeking to remove the action, and whether the 

2 case has progressed in State court to a point 

3 where removal would be disruptive.’’; and 

4 (E) by adding at the end the following: 

5 ‘‘(4) If removal of a civil action is sought on the basis 

6 of the jurisdiction conferred by section 1332(a), the sum 

7 demanded in good faith in the initial pleading shall be 

8 deemed to be the amount in controversy, except that— 

9 ‘‘(A) the notice of removal may assert the 

10 amount in controversy if the initial pleading seeks— 

11 ‘‘(i) non-monetary relief; or 

12 ‘‘(ii) a money judgment, but the State 

13 practice either does not permit demand for a 

14 specific sum or permits recovery of damages in 

15 excess of the amount demanded; and 

16 ‘‘(B) removal of the action is proper on the 

17 basis of an amount in controversy asserted under 

18 subparagraph (A) if the district court finds, by the 

19 preponderance of the evidence, that the amount in 

20 controversy exceeds the amount specified in section 

21 1332(a). 

22 ‘‘(5)(A) In a case to which paragraph (3) applies that 

23 is not removable solely because the amount in controversy 

24 does not exceed the amount specified in section 1332(a), 

25 information relating to the amount in controversy in the 


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1 record of the State proceeding, or in responses to dis2 covery, shall be treated as an ‘other paper’ under para3 graph (3). If the defendant first receives such a paper, 

4 through service or otherwise, within 1 year after the com5 mencement of the action and during the trial or within 

6 30 days before the date set for trial, removal may be had 

7 only upon a finding that the plaintiff deliberately failed 

8 to disclose the actual amount in controversy in order to 

9 prevent removal. 

10 ‘‘(B) If a finding is made under subparagraph (A) 

11 that the plaintiff deliberately failed to disclose the actual 

12 amount in controversy in order to prevent removal, and 

13 the notice of removal is filed more than 1 year after com14 mencement of the action, that finding shall be deemed to 

15 be ‘equitable considerations’ under paragraph (3) that 

16 warrant removal.’’. 

17 (4) Section 1446 is further amended— 

18 (A) by striking subsections (c) and (e); and 

19 (B) by redesignating subsections (d) and 

20 (f) as subsections (c) and (d), respectively. 

21 (c) PROCEDURE FOR REMOVAL OF CRIMINAL AC22 TIONS.—Chapter 89 of title 28, United States Code, is 

23 amended by inserting after section 1446 the following new 

24 section: 


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1 ‘‘§ 1446a. Procedure for removal of criminal actions 

2 ‘‘(a) NOTICE OF REMOVAL.—A defendant or defend3 ants desiring to remove any criminal prosecution from a 

4 State court shall file in the district court of the United 

5 States for the district and division within which such pros6 ecution is pending a notice of removal. The notice of re7 moval shall be signed in the same manner and to the same 

8 effect as a pleading, written motion, or other paper in a 

9 criminal prosecution in a district court of the United 

10 States and contain a short and plain statement of the 

11 grounds for removal, together with a copy of all process, 

12 pleadings, and orders served upon such defendant or de13 fendants in such action. 

14 ‘‘(b) REQUIREMENTS.—(1) A notice of removal of a 

15 criminal prosecution shall be filed not later than thirty 

16 days after the arraignment in the State court, or at any 

17 time before trial, whichever is earlier, except that for good 

18 cause shown the United States district court may enter 

19 an order granting the defendant or defendants leave to 

20 file the notice at a later time. 

21 ‘‘(2) A notice of removal of a criminal prosecution 

22 shall include all grounds for such removal. A failure to 

23 state grounds which exist at the time of the filing of the 

24 notice shall constitute a waiver of such grounds, and a 

25 second notice may be filed only on grounds not existing 

26 at the time of the original notice. For good cause shown, 


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1 the United States district court may grant relief from the 

2 limitations of this paragraph. 

3 ‘‘(3) The filing of a notice of removal of a criminal 

4 prosecution shall not prevent the State court in which such 

5 prosecution is pending from proceeding further, except 

6 that a judgment of conviction shall not be entered unless 

7 the prosecution is first remanded. 

8 ‘‘(4) The United States district court in which such 

9 notice is filed shall examine the notice promptly. If it 

10 clearly appears on the face of the notice and any exhibits 

11 annexed thereto that removal should not be permitted, the 

12 court shall make an order for summary remand. 

13 ‘‘(5) If the United States district court does not order 

14 the summary remand of such prosecution, it shall order 

15 an evidentiary hearing to be held promptly and after such 

16 hearing shall make such disposition of the prosecution as 

17 justice shall require. If the United States district court 

18 determines that removal shall be permitted, it shall so no19 tify the State court in which prosecution is pending, which 

20 shall proceed no further. 

21 ‘‘(c) WRIT OF HABEAS CORPUS.—If the defendant 

22 or defendants are in actual custody on process issued by 

23 the State court, the district court shall issue its writ of 

24 habeas corpus, and the marshal shall thereupon take such 


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1 defendant or defendants into custody and deliver a copy 

2 of the writ to the clerk of such State court.’’. 

3 (d) CONFORMING AMENDMENTS.—The table of sec4 tions for chapter 89 of title 28, United States Code, is 

5 amended— 

6 (1) in the item relating to section 1446, by in7 serting ‘‘of civil actions’’ after ‘‘removal’’; and 

8 (2) by inserting after the item relating to sec9 tion 1446 the following new item: 

‘‘1446a. Procedure for removal of criminal actions.’’. 

10 SEC. 5. INDEXING THE AMOUNT IN CONTROVERSY. 

11 (a) IN GENERAL.—Section 1332 of title 28, United 

12 States Code, is amended by adding at the end the fol13 lowing new subsection: 

14 ‘‘(f)(1) Effective on January 1, 2011, and January 

15 1 of each fifth year thereafter, the dollar amount then in 

16 effect as the minimum amount in controversy applicable 

17 under subsection (a) shall be adjusted by an amount, 

18 rounded to the nearest $5,000 (or, if midway between mul19 tiples of $5,000, to the next higher multiple of $5,000), 

20 equal to the percentage of the dollar amount which cor21 responds to the change in the Consumer Price Index for 

22 the month of September of the appropriate year, over the 

23 Consumer Price Index for the month of September of the 

24 fifth year preceding the appropriate year. 


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1 ‘‘(2) The Director of the Administrative Office of the 

2 United States Courts shall determine the amount of each 

3 adjustment under paragraph (1) and, not later than No4 vember 15 of the appropriate year, shall submit for publi5 cation in the Federal Register the amount (and the per6 centage change in the Consumer Price Index that is the 

7 basis for that amount), and the new minimum amount in 

8 controversy to take effect on January 1 of the succeeding 

9 calendar year. 

10 ‘‘(3) As used in this subsection— 

11 ‘‘(A) the ‘appropriate year’ is the year pre12 ceding the year in which the adjustment under para13 graph (1) is to take effect; and 

14 ‘‘(B) the term ‘Consumer Price Index’ means 

15 the Consumer Price Index for All Urban Consumers 

16 published by the Department of Labor.’’. 

17 (b) CONFORMING AMENDMENT.—Section 1332(a) of 

18 title 28, United States Code, is amended by inserting ‘‘as 

19 adjusted under subsection (f),’’ after ‘‘$75,000,’’. 

20 SEC. 6. FACILITATING USE OF DECLARATIONS TO SPECIFY 

21 DAMAGES. 

22 (a) REMOVAL GENERALLY.—Section 1441(a) of title 

23 28, United States Code, is amended by adding at the end 

24 the following new sentence: ‘‘If the plaintiff has filed a 

25 declaration in State court, as part of or in addition to the 


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1 initial pleading, providing that the plaintiff will neither 

2 seek nor accept an award of damages or entry of other 

3 relief exceeding the amount specified in section 1332(a), 

4 the case may not be removed on the basis of the jurisdic5 tion under section 1332(a) as long as the plaintiff abides 

6 by the declaration and the declaration is binding under 

7 the laws and practice of the State. If the plaintiff has filed 

8 such a declaration in State court but thereafter fails to 

9 abide by that declaration, the defendant or defendants 

10 may file a notice of removal within 30 days after receiving, 

11 through service or otherwise, a copy of an amended plead12 ing, motion, order or other paper from which it may first 

13 be ascertained that the plaintiff seeks or is willing to ac14 cept an award of damages or other relief exceeding the 

15 amount specified in section 1332(a).’’. 

16 (b) PROCEDURE AFTER REMOVAL.—Section 1447 of 

17 title 28, United States Code, is amended by adding at the 

18 end the following new subsection: 

19 ‘‘(f) Within 30 days after the filing of a notice of re20 moval of a civil action in which the district court’s removal 

21 jurisdiction rests solely on original jurisdiction under sec22 tion 1332(a), the plaintiff may file a declaration with the 

23 district court providing that the plaintiff will neither seek 

24 nor accept an award of damages or entry of other relief 

25 exceeding the amount specified in section 1332(a) of this 


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1 title. Upon the filing of such a declaration, the district 

2 court shall remand the action to State court unless equi3 table circumstances warrant retaining the case.’’. 

4 SEC. 7. EFFECTIVE DATE. 

5 (a) IN GENERAL.—Subject to subsections (b) and (c), 

6 the amendments made by this Act take effect on the date 

7 of enactment of this Act, and apply to any action or pros8 ecution commenced on or after such date of enactment. 

9 (b) APPLICABILITY OF CHANGE IN JURISDICTIONAL

10 AMOUNT.—Any change in the amount in controversy 

11 under section 1332(a) of title 28, United States Code, that 

12 is made pursuant to the amendments made by section 5 

13 shall apply to any action or prosecution commenced on or 

14 after the date such change becomes effective. 

15 (c) TREATMENT OF CASES REMOVED TO FEDERAL

16 COURT.—For purposes of subsections (a) and (b ), an ac17 tion or prosecution commenced in State court and re18 moved to Federal court shall be deemed to commence on 

19 the date the action or prosecution was commenced in State 

20 court. 

Æ 


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