When I try to explain diversity jurisdiction to my clients, most of their eyes glaze over. I’ll try to do it here without making you yawn. Diversity jurisdiction allows defendants to remove a case filed in state court to federal court if all defendants are from a different state than the plaintiffs. Say Mary Jane from Florida sues her employer, Evil Empire, LLC. They do have offices in Florida where Mary Jane worked, but they are incorporated and have their main offices in Texas. Diversity jurisdiction would allow Evil Empire to remove Mary Jane’s case to federal court even if all her claims were under state law.
Bizarre, right? But it happens all the time. It’s more complicated than what I just described, but that’s it in a nutshell. Diversity lets the employer forum shop and force employee-plaintiffs into a different court. Employers in many states (maybe justifiably) think federal court is a friendlier place for them.
The reasoning behind diversity jurisdiction is that local courts might be biased against non-local defendants. That was possibly true in 1789, when it was created, but is it true now? I’d bet not. I haven’t seen any studies comparing how out-of-state defendants fare in state court as compared to federal court, but with TV, the Internet, Skype, Twitter, and Facebook crashing down barriers, local prejudice has to be dissipating.
The other thing I’ve never gotten is that federal judges are also locals. A federal judge appointed in Iowa is going to be from Iowa. Does that mean we assume state judges are more biased than federal? I’m willing to bet that isn’t true. The state court judges I appear in front of don’t give a hoot where a defendant is from. I’ve never seen it be an issue. And juries in state and federal court are from the same group of people – all local.
I thought diversity jurisdiction was silly when I learned about it in law school (which may partly explain my less-than-stellar grade in Civil Procedure), and think it’s pretty ridiculous now.
So why did Congress just make it easier for defendants to remove cases to federal court? Normally, defendants have a year to remove, but this change lets them remove all the way up to trial under certain circumstances. That means an employee could go through the expense of conducting discovery and getting ready to go to trial, then have to start over in federal court. Good for the defendant with superior financial resources, very bad for the lowly employee.
Rather than allowing the federal courts to be used as a cynical ploy to cost employees more money, why not eliminate diversity removal altogether? If the purposes it served when enacted no longer exist, then let’s do away with it. Plaintiffs should be allowed to choose their forum within reason. If they file in a court that has jurisdiction and that’s the right venue, they should be able to proceed.
Allowing a last-minute removal is a gigantic waste of state and federal judicial labor and resources. It’s also a colossal money-suck of taxpayer dollars. Let’s get rid of diversity removal. If you agree, contact your member of Congress and tell them. I would encourage employee-side groups like NELA and unions to explore this issue.
Think I’m wrong? Tell me why you want your tax dollars spent this way.
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