Date: 2016-02-25
Speaker: JACKSON LEE (democrat)
Chamber: H

Mr. Chairman. just a few minutes ago the Judiciary Committee ranking and chairman were in a hearing that exuded bipartisan expressions for fixing the challenges that we have. with the location of data and international requests for data being held by Americas technology companies. It was an interesting and open discussion. which I want to evidence on the RECORD. The Judiciary Committee is continuing and has had over the years bipartisan approaches to a number of difficult questions. which we have solved. including our approach to criminal justice reform. I thank the chairman and ranking member for that. I also want to acknowledge that we have some challenges. as was evidenced by comments from the gentleman from Tennessee. on the restoration of the Voting Rights Act. We find ourselves again in a challenge that I hope can be fixed. First. I want to make it very clear that I practiced law for a number of years and served as an associate municipal court judge and as well was a quasiprosecutor on the Select Committee on Assassinations which. I allow. this body did research when that select committee was in place the issues of the investigations of Dr. Martin Luther Kings assassination and John F. Kennedy. So I know the importance of lawyers. of which I have the greatest respect and of which I am one. I understand that trial lawyers are representing both defendants and plaintiffs and corporations come into the court with trial lawyers. So I am a little taken aback by any suggestion that the words "trial lawyers" have a negative connotation. Anyone who wants to win a case in a courtroom must have a lawyer. and you would want to make sure that they are a trial lawyer. As well. you want to make sure that you have the rights of due process. So I would make the argument that trial lawyers go into court. whether they are representing corporations or plaintiffs. Corporations in many instances may be defendants. In that case. I will tell you you are making it far more difficult by pushing cases into the Federal court under H.R. 3624. It is more expensive and they take longer. making it difficult for workers. consumers. and patients generally to have their cases closer to home in State courts. However. there may be an instance where a corporation is a plaintiff and you will have the same blocking of that corporation by this bill. If this bill was enacted. it would tip the scales of justice in favor of corporate defendants or others that make it more difficult for injured plaintiffs. It would effectively eliminate the local defendant exception by diversity jurisdiction. I heard someone sayand it bears repeatingit is a solution looking for a problem. The current standard used by the courts to determine whether the joinder of a nondiverse defendant is improper. however. has been in place for a century. We have no evidence that this has put anyone in a position of not getting due process. That is our goal in the court system. The fraudulent joinder doctrine is well established and. in fact. will only be found if the defendant establishes that the joinder of the diversitydestroying party in the State court was made without a reasonable basis. We have a system. but this particular bill reverses this longstanding policy by imposing new requirements. Finally. Mr. Chairman. if I might. further taking away a defendants responsibility to prove that Federal jurisdiction over State cases is improper alters the fundamental precept of a party seeking removal. I ask my colleagues to recognize that we have bipartisanship on this committee. I oppose this legislation and ask my colleagues to oppose it. I thank the gentleman for yielding and rise in strong opposition to H.R. 3624. the "Fraudulent Joinder Prevention Act of 2016." H.R. 3624 is the latest effort to deny plaintiffs access to the forum of their choice and. possibly. to their day in court. H.R. 3624 seeks to overturn longstanding precedent in favor of a vague and unnecessary test that forces state cases into federal court when they dont belong there. and gives large corporate defendants an unfair advantage to pick and choose their forum without the normal burden of proving proper jurisdiction. If enacted this bill would tip the scales of justice in favor of corporate defendants and make it more difficult for injured plaintiffs to bring their state claims in state court. H.R. 3624 would effectively eliminate the local defendant exception to diversity jurisdiction under 28 U.S.C. 1441(b)(2). which currently prohibits removal to federal court even when there is complete diversity when a defendant is a citizen of the state in which the action is brought. The current standard used by courts to determine whether the joinder of a nondiverse defendant is improper. however. has been in place for a century. and no evidence has been put forth demonstrating that this standard is not working. Rather. the "Fraudulent Joinder Doctrine." is a wellestablished legal doctrine providing that: fraudulent joinder will only be found if the defendant establishes that the joinder of the diversitydestroying party in the state court action was made without a reasonable basis of proving any liability against that party. H.R. 3624 reverses this longstanding policy by imposing new requirements on federal courts considering remand motions where a case is before the court solely on diversity grounds. Specifically. it changes the test for showing improper joinder from a onepart test ("no possibility of a claim against a nondiverse defendant") to a complicated fourpart test. requiring the court to find fraudulent joinder if: There is not a "plausible" claim for relief against each nondiverse defendant. There is "objective evidence" that "clearly demonstrates" no good faith intention to prosecute the action against each defendant or intention to seek a joint judgment. There is federal or state law that clearly bars claims against the nondiverse defendants. or There is actual fraud in the pleading of jurisdictional facts. What should be a simple procedural question for the courts. now becomes a protracted minitrial. giving an unfair advantage to the defendants (not available under current law) by allowing defendants to engage the court on the merits of their position. By requiring litigation on the merits at a nascent jurisdictional stage of litigation based on vague. undefined. and subjective standards like "plausibility" and "good faith intention." and by potentially placing the burden of proof on the plaintiff. this bill will increase the complexity and costs surrounding litigation of state law claims in federal court and potentially dissuade plaintiffs from pursuing otherwise meritorious claims. Further. taking away a defendants responsibility to prove that federal jurisdiction over a state case is indeed proper alters the fundamental precept that a party seeking removal should bear the heavy burden of establishing federal court jurisdiction. The bill is a winwin for corporate defendants. At its most harmful. it will cause nondiverse defendants to be improperly dismissed from the lawsuit. At its least harmful. it will cause an expensive. timeconsuming detour through federal courts for plaintiffs. Wrongdoers would not be held accountable for the harm they cause. while the taxpayers ultimately foot the bill. For example: large corporate defendants (i.e. typically the diverse defendants) would be favored by the bill because. if the nondiverse defendant is dismissed. they can blame the nowabsent instate defendant for the plaintiffs injuries. Smaller. nondiverse defendants would also be favored because the diverse defendant does all the work for them. The diverse defendant removes the case to federal court and then argues that the nondiverse defendant is improperly joined. If the federal court retains jurisdiction. the nondiverse defendant must be dismissed from the case. If one or more defendants are dismissed from the case. it is easy for the remaining defendant to finger point and blame the absent defendant for the plaintiffs injuries. Even if a federal court remands the case to state court under the bill. the defendants have successfully forced the plaintiff to expend their limited resources on a baseless. timeconsuming motion on a preliminary matter. While large corporate defendants can easily accommodate such costs. plaintiffs (i.e. injured consumers. patients and workers) cannot. Regardless of whether the case is remanded to state court or stays in federal court. this new. mandated inquiry will be a drain on the limited resources of federal courts. By mandating a full meritsinquiry on a procedural motion. H.R. 3624 is expensive. timeconsuming. and wasteful use of judicial resources. Lastly. by seeking to favor federal courts over state courts as forums for deciding state law claims. this bill offends principles of federalism. The ability of state courts to function independently of federal courts procedural analysis is a necessary function of the success of the American judiciary branch. For these. reasons I urge my colleagues to join me in opposing H.R. 3624. the Fraudulent Joinder Prevention Act.