federal court input in areas of law-such as defamation and privacy-which have become increasingly "constitutionalized” in terms of federal constitutional defenses. Absent diversity jurisdiction only the United States Supreme Court, among the federal courts, would be able to contribute to the development of such law. It certainly is true that each of these unintended roles for diversity jurisdiction could be handled by specific legislation aimed at the problem in question (and indeed the original ALI proposal coupled its call for reduction in diversity jurisdiction with the extension of federal question jurisdiction to federal or constitutional matters raised defensively and an elimination of the requirement of complete diversity in a variety of situations). But it is questionable whether a series of special extensions of jurisdiction coupled with an otherwise complete abolition of diversity is workable or whether, in the end, the sum of the new parts would equal the benefits provided by the present whole.

We believe that many of these same factors militate against adoption of S. 2094. While there can be little doubt that the fear of prejudice against out-of-staters which may have lain behind the original grant of diversity jurisdiction is of no consequence as to a plaintiff suing in his home state, it is also true that other benefits of diversity jurisdiction exist and, in our view, these benefits outweigh a theoretical anomaly which has been accepted for generations. Certainly, the principal practical motivation for change-the easing of the burden on the federal judiciary—is somewhat less persuasive in this context since fewer cases (between 50% and 80% of all diversity cases) 63 would be eliminated from the federal docket by S. 2094 than under S. 2389. Even this switch, however, could have a significant impact on already overburdened state trial courts in many metropolitan areas. The legislation would engender some measure of confusion, while potentially depriving many litigants of the benefits of a national court system well adapted to handle modern disputes stretching across state boundaries.

VI. COMMENTS WITH RESPECT TO SPECIFIC
PROVISIONS OF PENDING LEGISLATION

While both proposed pieces of legislation raise broad questions with respect to federalism and judicial administration, narrower questions as to the mechanics of the legislation also are posed. We deal with these below in an effort to provide a complete assessment of the proposed legislation. The remedying of the narrow objections we note would not alter our basic opposition to the legislation itself.

S. 2389, providing for total abolition of diversity jurisdiction, is also noteworthy in eliminating the $10,000 jurisdictional requirement with respect to federal question cases. We think this is a useful change, removing a bar to types of cases which properly should be heard in the federal courts without regard to the amount in controversy.

In abolishing jurisdiction over diversity cases, the bill requires a change in the existing venue laws as well. S. 2389 opts simply to apply the general outlines of existing diversity venue to federal question venue. This would

have the effect of adding as bases of venue the district of plaintiff's residence and the location of aspects of the cause of action. In view of such an expansion of existing venue for federal question cases, it would seem that some explanation in the legislative history would be appropriate.

The bill also deletes reference to the phrase "in which the claim arose” as a basis for venue, substituting “in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.” This latter phrase is already in 28 U.S.C. § 1391(f) so that the change eliminates the use of differing phrases within the venue statute itself. It may be overly sanguine to assume that this change will eliminate problems with respect to the issue of appropriate locations for venue, however. The proposed phrase may be broader than the long-arm jurisdiction concept of "where the claim arose" and confusion between the standards-often considered in the same cases-may be expected.64

The bill also would allow-for the first time-removal of a suit by a resident defendant sued by an alien in state court. This results from the proposed repeal, apparently as superfluous, of present 28 U.S.C. § 1441(b), which precludes removal by resident defendants in all diversity cases. Consistent with the logic behind the proposed abolition of diversity, it would seem that § 1441(b) should be retained to cover the small class of cases involving alien plaintiffs and resident defendants.

S. 2389 increases the jurisdictional amount to $25,000 for so-called alienage cases. While possibly making a small cut in the number of such cases, the amendment seems to run contrary to the rationale offered for retention of such jurisdiction, namely, that a national court should be available where foreign states, citizens or subjects are parties. Logically, such consideration applies without regard to the amount in controversy. If such jurisdiction is appropriate for legitimate policy reasons, it should be retained without crabbed dollar limits which the same legislation elsewhere eliminates entirely for other classes of cases (i.e., federal question jurisdiction).

S. 2389 provides that its provisions shall apply to "any civil action commenced on or after the date of enactment of this Act." S. 2094 is phrased in terms of "actions commenced after the date of enactment of this Act." Both leave open areas of potential ambiguity as to applicability, particularly as to state civil suits, however denominated, which would have been eligible for removal under the standards applicable to diversity removal prior to the enactment of the proposed amendments, but which would not be eligible under the new amendments and which had not been removed at the time of enactment. This problem could be remedied relatively simply in either a clearly inclusive or exclusive manner.

S. 2094 would, by leaving intact the basic provisions of 28 U.S.C. § 1441, allow a defendant to remove a case to federal court which an in-state plaintiff could not himself have commenced there. This seems consistent with the notion, pivotal to S. 2094, that only out-of-state parties should be allowed to invoke diversity jurisdiction; it may, however, have the unintended effect of encouraging collusion by parties where both are eager to obtain a federal

forum, leading parties to agree that a non-resident defendant will remove the case from state to federal court to accomplish a choice of forum plaintiff could not have made. This problem may be inherent in the halfway measure of S. 2094, although an affidavit of non-collusion or the like might be required if the problem were considered to be serious enough.

Finally, one of the substantial practical problems with the halfway measure of S. 2094, as drafted, is that it limits proper venue to the district where all defendants reside or where the claim arose. In multi-party cases there may be no district where all defendants reside and the remaining basis for venue may prove impracticable for a variety of reasons. The effect of this limited venue requirement thus could well be to deprive the very plaintiff who most requires the various procedural benefits of a national court system of a realistic opportunity to avail himself of such benefits. An extension of the venue provisions to any district in which one or more defendants resides and a change in the location basis to that now in 28 U.S.C. § 1391(f) and proposed in S. 2389 thus might be desirable if the features of S. 2094 are to be implemented.

CONCLUSION

For the reasons stated, we believe that substantial alteration of diversity jurisdiction is unwarranted, and accordingly, we oppose H.R. 9622, its Senate counterpart, S. 2389, and S. 2094.

FOOTNOTES

1

124 Cong. Rec. H. 1569 (daily ed. Feb. 28, 1978).

2 Ch. 20, 1 stat. 73 (1789). The Judiciary Act was drafted and debated by many of those who participated in framing the Constitution. See Wisconsin v. Pelican Ins. Co., 127 U.S. 265, 297 (1888); Warren, New Light on the History of the Federal Judiciary Act of 1789, 37 Harv. L. Rev. 49, 57–130 (1923). The statute created a system of inferior federal courts, including at least one district court for each state and three circuit courts, the latter possessing the original jurisdiction of some diversity cases, "concurrent with the courts of the several states." Ch. 20 § 11, 1 stat. 73 (1789). 1875 Legislation broadened the scope of diversity-type cases within the circuit courts' original cognizance. Judiciary Act of 1875, ch. 137, § 1, 18 stat. 470 (1875). In 1891, further procedural modifications were made in the Circuit Court of Appeals Act, ch. 517, 26 stat. 826 (1891). This act created courts of appeals for each circuit, which became the only circuit courts when the 1911 Judicial Code abolished the original circuit courts and transferred diversity and other types of cases to the district courts. Judicial Code Act of 1911, ch. 231, 36 stat. 1087 (1911).

3 U.S. Const. art. III, § II.

4 Friendly, The Historic Basis of Diversity Jurisdiction, 41 Harv. L. Rev. 483, 487 (1928); Moore and Weckstein, Diversity Jurisdiction: Past, Present and Future, 43 Tex. L. Rev. 1 (1964); 13 C. Wright and A. Miller, Federal Practice and Procedure § 3601 at 573 (1975); see also Frank, For Maintaining Diversity Jurisdiction, 73 Yale L.J. 7, 9 (1963).

5 See, e.g., Bank of United States v. Deveaux, 9 U.S. (5 Cranch) 61 87 (1809). “However true the fact may be, that the tribunals of the states will administer justice as impartially as those of the nation, to parties of every description, it is not less true, that the constitution itself either entertains apprehensions on this subject, or views with such indulgence the possible fears and apprehensions of suitors, that it has established national tribunals for the decision of controversies between aliens and a citizen, or between citizens of different states."

6 Friendly, supra n.4, at 498–99.

7 In Federalist No. 81, Hamilton observed "every man may discover that courts constituted like those of some of the States would be improper channels of the judicial authority of the Union."

8 41 U.S. (16 Pet.) 1 (1842).

9 304 U.S. 64 (1938).

10 See discussion in Statement of John P. Frank, before the Subcommittee on Courts, Civil Liberties, and the Administration of Justice of the House Committee on the Judiciary, Hearings on Diversity of Citizenship, 95th Cong., 1st Sess. at 232 (1977) (hereinafter “House Hearings").

11 Id.

12 See, e.g., Friendly, Federal Jurisdiction: A General View 139–52 (1973); Bork, Dealing with the Overload in Article III Courts, 70 F.R.D. 231, 236–37 (1976); Burger, Annual Report on the State of Judiciary, 62 A.B.A.J. 443 (1976); Friendly, supra n.4, at 483, 492-97, 510 (1928); Frankfurter, Distribution of Judicial Power Between United States and State Courts, 13 Cornell L.Q. 499 (1928). Chief Justice Burger has said that there is likely to be so much additional jurisdiction thrust on the federal courts over the next decade that they will do well to perform those functions alone without having to handle diversity cases as well. Commission on Revision of the Federal Court Appellate System, Structure and Internal Procedures, Recommendations for Change, App. D. at 176 (1975); Letter from Chief Justice Warren E. Bur

ger to Senator Roman L. Hruska, May 29, 1975, referred to in Bratton, Diversity Jurisdiction-An Idea Whose Time Has Passed, 51 Ind. L.J. 347 (1976). A useful listing of the large body of commentary relating to the debate over retention of diversity jurisdiction is set forth in 13 C. Wright and A. Miller, Federal Practice and Procedure § 3601 (1975).

13 28 U.S.C. § 1441(a) (1970). 14 28 U.S.C. § 1441(b) (1970). 15 28 U.S.C. § 1332(C) (1970).

16 28 U.S.C. § 1391 (1970), as amended, Acts of Oct. 21, 1976, Pub. L. Nos. 94-574, 94-583, 90 stat. 2721, 90 stat. 2897.

17 See 28 U.S.C. § 1391(f) (1970), as amended, Act of Oct. 21, 1976, Pub. L. No. 94-583, 90 stat. 2897.

18 Statement of Daniel Meador, Ass't Att'y Gen., Office for Improvements in the Administration of Justice, Dep't of Justice, Before the Subcommittee on Improvements in Judicial Machinery of the Senate Committee on the Judiciary, 95th Cong., 2d Sess. (1978) (hereinafter "Senate Hearings").

19 See 28 U.S.C. § 1391(b) (1970).

20 Statement of Frederick A. O. Schwarz, Jr., with regard to S. 2389, in Senate Hearings.

21 Statement of Alan B. Morrison, Director, Public Citizen Litigation Group, in Senate Hearings.

22 American Law Institute, Study of the Division of Jurisdiction Between State and Federal Courts at 12-13 (1969) (hereinafter "ALI Study").

23 Id. at 3-4 (summary).

24 Professor David Shapiro of the Harvard Law School had also suggested that the district judges within each federal judicial district be authorized, after taking into consideration the benefits and burdens of diversity jurisdiction in the district, including certain enumerated factors, to adopt a local rule which would in effect retain the present system, adopt the ALI proposal or abolish diversity within their own district. Shapiro, Federal Diversity Jurisdiction: A Survey and a Proposal, 91 Harv. L. Rev. 317, 340 (1977).

25 See letter of Hon. Edward T. Gignoux to Hon. Robert W. Kastenmeier, Nov. 7, 1977, reproduced in House Hearings at 378; see also 66 A.B.A.J. 477 (1977). 26 See supra n. 12; see also Burger, supra n. 12.

27 See supra n. 12.

28 See Statement of Charles A. Wright in House Hearings at 218. Professor Wright delivered a similar statement at the Senate Hearings.

29 Director of the Administrative Office of the United States Courts, Annual Report A-14, Table C 2 (1977).

30 Federal Judicial Center, The 1969-70 Federal District Court Time Study 66G, Table XVII (1971).

31 Burdick, Diversity Jurisdiction Under the American Law Institute Proposals: Its Purpose and Effect on State and Federal Courts, 48 N.D.L. Rev. 1, 10–12 (1971). 32 Statement of Hon. Robert W. Kastenmeier, 124 Cong. Rec. H.1555 (daily ed. Feb. 28, 1978).

33 Burdick, supra n. 31, at 14-15.

34 "Our state court systems are able and willing to provide needed relief to the federal court system in such areas as . . . the assumption of all or part of diversity jurisdiction presently exercised by the federal courts." Resolution of Conference of Chief Justices, August 3, 1977, reproduced in part in letter from Hon. Robert J. Sheran to Hon. Robert W. Kastenmeier in House Hearings at 268. This letter also