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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Federal Courts Jurisdiction Clarification Act of 2006’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
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 con-
tacts. 
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. 
SEC. 2. RESIDENT ALIEN EXCEPTION. 
Section 1332(a) of title 28, United States Code, is 
amended— 
(1) by striking the last sentence; and 
(2) in paragraph (2), by inserting after ‘‘foreign 
state’’ the following: ‘‘, except that the district 
courts shall not have original jurisdiction of an ac-
tion between a citizen of a State and a citizen or 
subject of a foreign state admitted to the United 
States for permanent residence and domiciled in the 
same State’’. 
SEC. 3. CITIZENSHIP OF CORPORATIONS AND INSURANCE 
COMPANIES WITH FOREIGN CONTACTS. 
Section 1332(c)(1) of title 28, United States Code, 
is amended— 
(1) by striking ‘‘a corporation’’ and all that fol-
lows through ‘‘, except’’ and inserting ‘‘a corporation 
shall be deemed to be a citizen of every State and 
foreign state by which it has been incorporated and 
of the State or foreign state where it has its prin-
cipal place of business, except’’; and 
(2) by striking all that follows ‘‘party-defend-
ant,’’ and inserting ‘‘such insurer shall be deemed a 
citizen of— 
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‘‘(A) every State and foreign state of which 
the insured is a citizen; 
‘‘(B) every State or foreign state by which 
the insurer has been incorporated; and 
‘‘(C) the State or foreign state where the 
insurer has its principal place of business; 
and’’. 
SEC. 4. REMOVAL AND REMAND PROCEDURES. 
(a) ACTIONS
REMOVABLE
GENERALLY.—Section 
1441(c) of title 28, United States Code, is amended to 
read as follows: 
‘‘(c)(1) If a civil action includes— 
‘‘(A) a claim arising under the Constitution, 
laws, or treaties of the United States (within the 
meaning of section 1331), and 
‘‘(B) a claim not within the original or supple-
mental jurisdiction of the district court or a claim 
that has been made nonremovable by statute, 
the entire action may be removed if the action would 
be removable without the inclusion of the claim de-
scribed in subparagraph (B). 
‘‘(2) Upon removal of an action described in para-
graph (1), the district court shall sever from the action 
all claims described in paragraph (1)(B) and shall remand 
the severed claims to the State court from which the ac-
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tion was removed. Only defendants against whom a claim 
described in paragraph (1)(A) has been asserted are re-
quired to join in or consent to the removal under para-
graph (1).’’. 
(b) PROCEDURE FOR REMOVAL OF CIVIL ACTIONS.— 
Section 1446 of title 28, United States Code, is amended 
as follows: 
(1) The section heading is amended to read as 
follows: 
‘‘§ 1446. Procedure for removal of civil actions’’. 
(2) Subsection (a) is amended— 
(A) by striking ‘‘or criminal prosecution’’; 
and 
(B) by striking ‘‘removal signed pursuant 
to Rule 11 of the Federal Rules of Civil Proce-
dure and containing’’ and inserting ‘‘removal. 
The notice of removal shall be signed in the 
same manner and with the same effect as a 
pleading, written motion, or other paper in a 
civil action in a district court of the United 
States, and shall contain’’. 
(3) Subsection (b) is amended— 
(A) by inserting ‘‘(1)’’ after ‘‘(b)’’; 
(B) by designating the second paragraph 
as paragraph (3); 
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(C) by inserting after paragraph (1) (as 
designated by subparagraph (A) of this para-
graph) the following: 
‘‘(2) When a civil action is removed solely under sec-
tion 1441(a), all defendants who have been properly joined 
and served must join in or consent to the removal of the 
action. A defendant shall have 30 days after receipt by 
or service on that defendant of the initial pleading or sum-
mons described in subsection (b)(1) to file the notice of 
removal. During the 30-day period before a defendant files 
a notice of removal— 
‘‘(A) any other defendant served before the be-
ginning of that 30-day period may consent to the re-
moval by the later-served defendant even though 
that earlier-served defendant did not previously ini-
tiate or consent to removal; and 
‘‘(B) any defendant not yet served may join in 
or consent to the removal.’’; 
(D) in paragraph (3) (as designated by 
subparagraph (B) of this paragraph), by strik-
ing ‘‘action.’’ and inserting ‘‘action, unless equi-
table considerations warrant removal. Such eq-
uitable considerations include whether the 
plaintiff has engaged in manipulative behavior, 
whether the defendant has acted diligently in 
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seeking to remove the action, and whether the 
case has progressed in State court to a point 
where removal would be disruptive.’’; and 
(E) by adding at the end the following: 
‘‘(4) If removal of a civil action is sought on the basis 
of the jurisdiction conferred by section 1332(a), the sum 
demanded in good faith in the initial pleading shall be 
deemed to be the amount in controversy, except that— 
‘‘(A) the notice of removal may assert the 
amount in controversy if the initial pleading seeks— 
‘‘(i) non-monetary relief; or 
‘‘(ii) a money judgment, but the State 
practice either does not permit demand for a 
specific sum or permits recovery of damages in 
excess of the amount demanded; and 
‘‘(B) removal of the action is proper on the 
basis of an amount in controversy asserted under 
subparagraph (A) if the district court finds, by the 
preponderance of the evidence, that the amount in 
controversy exceeds the amount specified in section 
1332(a). 
‘‘(5)(A) In a case to which paragraph (3) applies that 
is not removable solely because the amount in controversy 
does not exceed the amount specified in section 1332(a), 
information relating to the amount in controversy in the 
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record of the State proceeding, or in responses to dis-
covery, shall be treated as an ‘other paper’ under para-
graph (3). If the defendant first receives such a paper, 
through service or otherwise, within 1 year after the com-
mencement of the action and during the trial or within 
30 days before the date set for trial, removal may be had 
only upon a finding that the plaintiff deliberately failed 
to disclose the actual amount in controversy in order to 
prevent removal. 
‘‘(B) If a finding is made under subparagraph (A) 
that the plaintiff deliberately failed to disclose the actual 
amount in controversy in order to prevent removal, and 
the notice of removal is filed more than 1 year after com-
mencement of the action, that finding shall be deemed to 
be ‘equitable considerations’ under paragraph (3) that 
warrant removal.’’. 
(4) Section 1446 is further amended— 
(A) by striking subsections (c) and (e); and 
(B) by redesignating subsections (d) and 
(f) as subsections (c) and (d), respectively. 
(c) PROCEDURE FOR REMOVAL OF CRIMINAL AC-
TIONS.—Chapter 89 of title 28, United States Code, is 
amended by inserting after section 1446 the following new 
section: 
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‘‘§ 1446a. Procedure for removal of criminal actions 
‘‘(a) NOTICE OF REMOVAL.—A defendant or defend-
ants desiring to remove any criminal prosecution from a 
State court shall file in the district court of the United 
States for the district and division within which such pros-
ecution is pending a notice of removal. The notice of re-
moval shall be signed in the same manner and to the same 
effect as a pleading, written motion, or other paper in a 
criminal prosecution in a district court of the United 
States and contain a short and plain statement of the 
grounds for removal, together with a copy of all process, 
pleadings, and orders served upon such defendant or de-
fendants in such action. 
‘‘(b) REQUIREMENTS.—(1) A notice of removal of a 
criminal prosecution shall be filed not later than thirty 
days after the arraignment in the State court, or at any 
time before trial, whichever is earlier, except that for good 
cause shown the United States district court may enter 
an order granting the defendant or defendants leave to 
file the notice at a later time. 
‘‘(2) A notice of removal of a criminal prosecution 
shall include all grounds for such removal. A failure to 
state grounds which exist at the time of the filing of the 
notice shall constitute a waiver of such grounds, and a 
second notice may be filed only on grounds not existing 
at the time of the original notice. For good cause shown, 
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the United States district court may grant relief from the 
limitations of this paragraph. 
‘‘(3) The filing of a notice of removal of a criminal 
prosecution shall not prevent the State court in which such 
prosecution is pending from proceeding further, except 
that a judgment of conviction shall not be entered unless 
the prosecution is first remanded. 
‘‘(4) The United States district court in which such 
notice is filed shall examine the notice promptly. If it 
clearly appears on the face of the notice and any exhibits 
annexed thereto that removal should not be permitted, the 
court shall make an order for summary remand. 
‘‘(5) If the United States district court does not order 
the summary remand of such prosecution, it shall order 
an evidentiary hearing to be held promptly and after such 
hearing shall make such disposition of the prosecution as 
justice shall require. If the United States district court 
determines that removal shall be permitted, it shall so no-
tify the State court in which prosecution is pending, which 
shall proceed no further. 
‘‘(c) WRIT OF HABEAS CORPUS.—If the defendant 
or defendants are in actual custody on process issued by 
the State court, the district court shall issue its writ of 
habeas corpus, and the marshal shall thereupon take such 
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defendant or defendants into custody and deliver a copy 
of the writ to the clerk of such State court.’’. 
(d) CONFORMING AMENDMENTS.—The table of sec-
tions for chapter 89 of title 28, United States Code, is 
amended— 
(1) in the item relating to section 1446, by in-
serting ‘‘of civil actions’’ after ‘‘removal’’; and 
(2) by inserting after the item relating to sec-
tion 1446 the following new item: 
‘‘1446a. Procedure for removal of criminal actions.’’. 
SEC. 5. INDEXING THE AMOUNT IN CONTROVERSY. 
(a) IN GENERAL.—Section 1332 of title 28, United 
States Code, is amended by adding at the end the fol-
lowing new subsection: 
‘‘(f)(1) Effective on January 1, 2011, and January 
1 of each fifth year thereafter, the dollar amount then in 
effect as the minimum amount in controversy applicable 
under subsection (a) shall be adjusted by an amount, 
rounded to the nearest $5,000 (or, if midway between mul-
tiples of $5,000, to the next higher multiple of $5,000), 
equal to the percentage of the dollar amount which cor-
responds to the change in the Consumer Price Index for 
the month of September of the appropriate year, over the 
Consumer Price Index for the month of September of the 
fifth year preceding the appropriate year. 
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‘‘(2) The Director of the Administrative Office of the 
United States Courts shall determine the amount of each 
adjustment under paragraph (1) and, not later than No-
vember 15 of the appropriate year, shall submit for publi-
cation in the Federal Register the amount (and the per-
centage change in the Consumer Price Index that is the 
basis for that amount), and the new minimum amount in 
controversy to take effect on January 1 of the succeeding 
calendar year. 
‘‘(3) As used in this subsection— 
‘‘(A) the ‘appropriate year’ is the year pre-
ceding the year in which the adjustment under para-
graph (1) is to take effect; and 
‘‘(B) the term ‘Consumer Price Index’ means 
the Consumer Price Index for All Urban Consumers 
published by the Department of Labor.’’. 
(b) CONFORMING AMENDMENT.—Section 1332(a) of 
title 28, United States Code, is amended by inserting ‘‘as 
adjusted under subsection (f),’’ after ‘‘$75,000,’’. 
SEC. 6. FACILITATING USE OF DECLARATIONS TO SPECIFY 
DAMAGES. 
(a) REMOVAL GENERALLY.—Section 1441(a) of title 
28, United States Code, is amended by adding at the end 
the following new sentence: ‘‘If the plaintiff has filed a 
declaration in State court, as part of or in addition to the 
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