Leveling the Judicial Playing Field for Manufacturers
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“We could go a long way toward bringing back balance to the U.S. judicial system by re-establishing the clear and original intent of the Founding Fathers — restoring a system of minimal diversity and eliminating the perception that certain state courts are biased against out-of-state defendants.”
NAM Senior Vice President and General Counsel Linda Kelly, July 9, 2015
What Is Diversity Jurisdiction?
Diversity jurisdiction is in Article III of the U.S. Constitution, which gives defendants an avenue to remove a case to federal court if they are from a different state as the plaintiff to prevent any bias at the state level.
Why Is Diversity Jurisdiction Important?
Its present day application contributes to a slew of legal problems facing manufacturers today, including the high cost of litigation, the practice of venue shopping, and the development of out-of-balance, plaintiff-biased jurisdictions across the country. It allows plaintiffs’ lawyers to game the system by drumming up cases in different states and shopping them around to the most plaintiff-friendly state courts, otherwise known as magnet jurisdictions.
How Has Diversity Jurisdiction Evolved?
The “complete diversity” rule was established in 1806, which required all parties to be from separate states in order to fall under the jurisdiction of federal courts.
In the 200 years since Justice Marshall’s game changing decision, the U.S. legal system has grown exponentially more complicated and prone to frivolous lawsuits, and access to justice has been diminished.
What Needs To Be Done?
Legal thought leaders, including noted Constitutional expert Chuck Cooper with his Harvard Journal of Law & Public Policy article titled “Complete Diversity and the Closing of the Federal Courts,” have begun to make the case that restoring federal diversity jurisdiction to its intended form, requiring only minimal diversity to allow for removal to federal court, is well-justified.
NAM’s Manufacturers’ Center for Legal Action supports a focused and sustained effort to condition the environment and build the intellectual case for the reform with legal, academic and publicly policy stakeholders prior to any legislative engagement.
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