The Federal Courts Jurisdiction and Venue Clarification Act of 2011 (the “Act”), signed into law on December 7, 2011, becomes effective today, January 6, 2012. It applies to any case either commenced in federal court on or after today or removed to federal court and “commenced,” as determined under State law, on or after today. The Act amends certain jurisdictional and venue-related provisions of the United States Code, including substantially modifying the procedures for removing cases to federal court. It is an important development for federal court litigants. This alert identifies and describes the more significant alterations on existing law as a result of the Act. The full text of the Act is available at..(see full alert below for link).

According to the Judiciary Committee Report on the Act, the changes made by the Act were developed and based on the recommendation of the United States Judicial Conference to address the belief, expressed by judges, that “the current rules force them to waste time determining jurisdictional issues at the expense of adjudicating underlying litigation.” Report 112-10, p. 2. The Act was intended to “bring[]” more clarity to the operation of Federal jurisdictional statutes and facilitate[] the identification of the appropriate State or federal court where actions should be brought.” Id. To that end, the Act contains both “jurisdictional improvements,” altering the basis for determining citizenship of resident aliens, certain corporations, and certain insurers for purposes of diversity jurisdiction and modifying the procedures for removing cases to federal court, and “venue and transfer improvements,” altering the determination of proper venue and giving courts discretion to allow for an agreed-upon transfer to a particular forum.