Judiciary
HomepageMy name is Mitchell F. Dolin, and I am a practicing attorney in Washington, D.C. I am a member of the Federal Initiatives Task Force of the American Bar Association's Section of Litigation, and a former Co-Chair of its Federal Legislation Committee.
Diversity Jurisdiction. The ABA opposes those provisions of H.R. 1989 that would (a) eliminate diversity jurisdiction for in-state plaintiffs, and (b) raise the jurisdictional amount in diversity cases from $50,000 to $75,000 and index that amount for inflation.
For more than 200 years, since the ratification of the Constitution and the enactment of the Judiciary Act of 1789, diversity jurisdiction has well served the ends of justice in America. Congress should not alter that jurisdiction in the absence of a compelling demonstration of a need for change. The ABA believes that the proponents of change cannot make that showing.
The ABA believes that in-state plaintiffs, like out-of-state plaintiffs, are equally entitled to the benefits of diversity jurisdiction -- a proposition recognized by Congress in 1789. Diversity jurisdiction shields litigants from localized prejudices, offers litigants speedier disposition in areas of the country where the state courts are particularly clogged, places before the federal courts questions of national importance, and fosters an important dialogue between the state and federal systems. If jurisdiction is eliminated for in-state plaintiffs, the benefits of a federal forum will be denied to plaintiffs without the financial means to pursue litigation outside of their home states.
Diversity cases account for approximately 21 percent of the civil filings in the federal district courts. In total numbers, annual diversity filings have declined from 70,000 to 50,000 since the amount in controversy was raised from $10,000 to $50,000 in 1989. The leading causes of federal court congestion are the increased criminal caseload, unfilled judicial vacancies, and the creation of new federal causes of action and crimes. Curbing diversity jurisdiction is no panacea if the problem is federal court congestion.
Article III status for the Judgeship authorized for the Commonwealth of the Northern Mariana Islands. Judges of the District Court for the Northern Mariana Islands are appointed for a term of ten years, and may be removed from office by the President for cause. The ABA supports the establishment of the District Court for the Northern Mariana Islands as an Article III court as a means of providing Article III status for future appointees to the District Court for the Northern Mariana Islands.
Criminal Justice Amendments: The Association supports an integrated system model for the delivery of defense services that includes: adequately funded and staffed public defender offices in every jurisdiction where conditions permit, as its primary component; an administered assigned counsel panel to assure an appropriate level of participation by the private bar; and quality control for the use of contracts for services. The ABA also endorses adding needed flexibility to the Criminal Justice Act in order to enhance the support, advice, or assistance provided panel attorneys in those districts that have not established a federal defender organization. The Association also endorses a mechanism to establish administratively compensation rates and case compensation maximum amounts under the Criminal Justice Act to ensure that those rates and amounts of compensation would be appropriate to the type of cases, the location in which services are provided, and reflect changes in the costs of law practice.
Mr. Chairman and Members of the Subcommittee:
My name is Mitchell F. Dolin, and I am a practicing attorney in Washington, D.C. I am a member of the Federal Initiatives Task Force of the American Bar Association's Litigation Section and a former Co-Chair of the Section's Federal Legislation Committee. I have been designated by the ABA's president, Roberta Ramo, to present the Association's position on H.R. 1989, the Federal Courts Improvement Act of 1995. We at the ABA welcome these hearings as an opportunity to bring the expertise and experience of the organized bar to your consideration of this legislation.
This omnibus bill, which Congressman Moorhead and Congresswoman Schroeder introduced on June 30, 1995, at the request of the Administrative Office of the United States Courts, contains both technical and substantive provisions. My testimony today will focus on those substantive areas where the ABA has adopted policy, principally those that would affect the scope of federal diversity jurisdiction.
A. DIVERSITY JURISDICTION
H.R. 1989 seeks to limit the scope of diversity jurisdiction in two significant respects: (1) Section 304 would prohibit invocation of diversity jurisdiction by in- state plaintiffs; and (2) Section 309 would increase the minimum amount in controversy from $50,000 to $75,000 and provide for periodic inflation adjustments. Before turning to the specifics, a few general comments about diversity jurisdiction may be helpful in putting these proposals in perspective.
The Association's position on diversity jurisdiction is one of long standing. In June 1978, the ABA formally adopted its position opposing the elimination of diversity jurisdiction in general and the elimination of diversity jurisdiction for in-state plaintiffs in particular. This action was taken after the House of Delegates had rejected a resolution to abolish or curtail diversity jurisdiction.
For more than 200 years, diversity jurisdiction has well served the ends of Justice in America. The system of coordinate jurisdiction, under which the federal and state courts are both empowered to resolve questions of state and federal law, has been a vital part of our federalism since 1789. While some may think it anomalous, it is an important part of our federal system and is not inconsistent with notions of sound judicial administration. Congress should not alter diversity jurisdiction in the absence of a compelling demonstration of a need for change. The ABA believes that the proponents of change have not made, and cannot make, that showing.
The arguments for and against legislative change are by now familiar to the members of this Subcommittee. Those who propose the total elimination of diversity jurisdiction rely most heavily on two arguments: that the fear of local prejudice originally justifying diversity jurisdiction is a vestige of the past; and that the elimination of diversity jurisdiction would relieve our overburdened federal courts. Those who favor retention of diversity jurisdiction dispute the premise that localized prejudices have disappeared and believe that there are better ways to lessen the burdens on our federal system than to shift that burden to our overtaxed state courts.
The oft-stated goal of the Judicial Conference of the United States has long been the abolition of diversity jurisdiction. Its endorsement of limitations such as eliminating in-state plaintiff suits and increasing the amount-in-controversy threshold are interim steps toward that goal. However, few issues of concern to the legal profession have evoked the Bar's uniform, sustained, and strongly held opposition as this issue. The vast majority of the organized bar, including the American Trial Lawyers Association, the American Corporate Counsel Association, and all fifty state bars have steadfastly opposed such diversity "reforms."
The Judicial Conference recently took this opposition into account when it recently finalized the recommendations of its Proposed Long Range Plan for the Federal Courts relating to federal court jurisdiction. Earlier versions of the Plan called on Congress "to eliminate diversity," with narrow enumerated exceptions, or alternatively to reduce substantially the scope of diversity by eliminating in-state plaintiffs' jurisdiction and by raising the minimum amount-in-controversy requirement. The final approved Long Range Plan drops the call for eliminating diversity jurisdiction and instead urges Congress to "consider seeking to reduce the number of federal court proceedings" based on diversity jurisdiction. Sections 304 and 309 of H.R. 1989 reflect the Judicial Conference's incremental approach. The ABA, however, believes that these proposals are as flawed as the older calls for complete elimination of diversity.
Section 304 of H.R. 1989 would bar plaintiffs from invoking diversity jurisdiction when they sue in their home states. Under this proposed legislation, however, an out-of- state defendant sued in state court by an in-state plaintiff would still have the right to remove to federal court.
The elimination of diversity jurisdiction for in- state plaintiffs obviously implicates different arguments from proposals to eliminate diversity jurisdiction entirely. Those who propose elimination of in-state plaintiffs' diversity jurisdiction tend to argue from narrower grounds; they argue:
(1) that although local bias may persist, a plaintiff suing in his or her home state need not fear such bias; and (2) that elimination of diversity jurisdiction for resident plaintiffs is a moderate change that would alleviate the federal caseload burden without swamping the state courts.
The ABA submits that, while the pending bills appear to be less extreme than total elimination of diversity, they have the same basic defects and in some ways would have consequences even more untoward than total elimination.
The argument that in-state plaintiffs are not entitled to a federal forum in their home states because they need no protection against localized prejudices is both untrue and beside the point. The fact is that many in-state plaintiffs seek a federal forum in their home states to escape real or perceived state-court bias. For example, a local plaintiff suing an out-of-state corporation might nonetheless be the victim of local bias if the corporate defendant is the major employer in his or her small town. Similarly, some in- state plaintiffs may be much more out of step with local folkways and sympathies than the out-of-state defendant. Federal court would provide such plaintiffs access to a jury venire drawn from a broader geographical range, one that may be (or perceived to be) less beholden or sympathetic to the defendant. Thus, while we tend to assume that the non- resident defendant is the only party that needs protection from local prejudices, this is not always the case.
In any event, the argument that in-state plaintiffs need no refuge from local prejudice misses the mark for a more fundamental reason: It incorrectly assumes that avoidance of local prejudice is the only justification for diversity jurisdiction. In fact, quite little is know about why diversity jurisdiction was provided for in the Constitution and the Judiciary Act of 1789. If protection of non- resident defendants from geographical prejudices had been the main rationale for diversity jurisdiction, it would be difficult to explain why in-state plaintiffs have been permitted to invoke diversity jurisdiction since the enactment of the Judiciary Act of 1789.
The benefits of diversity jurisdiction are many and transcend concerns about geographical bias. Diversity jurisdiction brings to the federal courts questions of national importance; indeed, as one federal judge has observed, the "demonstrable need for a federal jurisdiction in major matters affecting interstate commerce . . . alone should justify its continued existence." Diversity jurisdiction also facilitates an important dialogue between the state and federal courts by which each system learns from the other in connection with procedural and evidentiary rules, as well as matters of substantive law. It also preserves a citizen's access to justice and provides an alternative forum well worth its cost. Aside from complaints about the burdens that diversity cases may impose on the federal courts, there appears to be general satisfaction with the manner in which the federal courts handle diversity cases.
Eliminating in-state plaintiffs' diversity jurisdiction would deprive litigants of important federal innovations. For instance, the machinery now available under Section 1407 of the Judicial Code (28 U.S.C. 1407) for pretrial consolidation of multi-district litigation ("MDL") involving mass disasters and mass-tort situations applies only to cases in federal court. One need look no further than the MDL proceedings in Philadelphia relating to asbestos claims to appreciate the benefits of permitting in-state plaintiffs access to a federal forum. Similar benefits, actual and potential, are facilitated by nationwide class actions in the federal courts. In addition, some very recent federal innovations, such as the December 1993 changes in the Federal Rules of Civil Procedure regarding pre-trial discovery and the plans of individual districts pursuant to the Civil Justice Reform Act of 1990, promise to streamline the pre-trial process for all civil cases in the federal district courts.
If congestion in the federal courts is the problem, the solution is not to limit the public's access to the system by reducing the scope of diversity jurisdiction, especially when that jurisdiction is serving a useful purpose in our society. Diversity jurisdiction should not be blamed for the fact that many federal courts are crowded.
In the recent past, diversity cases have tended to account for between twenty percent (20%) and twenty-three (23%) of the annual civil case filings in the federal courts. According to the most recent 1995 statistics published by the Administrative Office of the United States Courts, diversity cases accounted for only twenty-one percent (21%) of civil filings. Prior to the 1989 effective date of the increase in the amount-in-controversy requirement, diversity cases accounted for nearly twenty-nine percent (29%) of the federal civil docket. In terms of annual filings, diversity cases are down from nearly 70,000 in 1988 to fewer than 50,000 in 1995. As a percentage of the federal civil docket, diversity filings are as low as they have been in 45 years and down eight percentage points below where they were several years ago.
Diversity-related strains on the federal system have thus been significantly reduced during the past seven years. Congestion in the federal courts comes from many other sources, including the increased criminal caseload, the statutory creation of new federal causes of action and crimes, unfilled judicial vacancies, population growth, and the increasing litigiousness of the American public and its government. Curtailing diversity jurisdiction is no panacea if the problem at issue is federal court congestion.
Moreover, any perceived benefits of relieving federal burdens by eliminating federal jurisdiction for in- state plaintiffs would be more than offset by the burdens that would be imposed on our state judicial systems. The argument that diversity cases should be shifted from the federal courts, which are overburdened, to the state courts, which can easily absorb them because of the state system's collectively larger capacity, is an inaccurate over-simplification. Some federal districts are not overburdened, while some state courts are so overburdened that it takes several years to get a case to trial. Obviously, justice will not be served by "transferring cases from one logjam to another."
Since 1985, civil caseloads in the state courts have increased by thirty percent (30%). In 1992, filings per federal judge totalled 1,238 while filings per state judge totalled 3,365; for civil and criminal cases, filings are increasing much more rapidly in the state courts. In many urban areas, including Houston, New Your City, and Pittsburgh, the median time from filing to disposition has tended to be much higher in state court than in federal court.
Although we obviously cannot predict with certainty how many cases will be shifted from federal to state court as a result of the pending proposal, indications are that the numbers may be substantial and that those cases will impose a substantial burden on the state courts. The most recent quantitative study of this issue of which we are aware concludes that "barring in-state plaintiffs from filing diversity cases in federal court would impose a disproportionate burden on state courts" and "might be nearly as much of a burden on state court as would be total abolition of diversity jurisdiction." Since federal court diversity cases are on average more complex and time consuming than state court cases, transferring cases from the federal courts will impose burdens on state courts that they are not as well equipped to handle. For example, the transferred cases will involve high amounts in controversy, so they will be more complex and less susceptible to settlement. Furthermore, state courts would have to deal with additional complex multiparty litigation, but without access to federal procedural mechanisms. By combining the unprecedented burdens our state courts are facing today with the added burden of having to deal with complex new cases, enactment of Section 304 would greatly increase the problems faced by our state courts. I would also note that state courts are already facing an enormous challenge in the face of recently enacted laws shifting former federal functions to the states.
The pending bill would also have undesirable consequences for litigants and the federal courts. The practical effect in many cases would be to deprive an injured individual of access to the federal court in his home state even though his interest would be better served in federal court. The alternative of initiating litigation in an out-of- state federal court, which will be pursued by some plaintiffs, will be unavailable to poorer litigants. In cases where that step is taken, all that will be accomplished is to increase the cost of litigation and to inconvenience both the witnesses and the parties. Another consequence of eliminating in-state plaintiffs' diversity jurisdiction is that it would shift the forum-selection decision from the plaintiff to the defendant. Under the pending bill, the defendant sued by an in-state plaintiff would have the opportunity to choose between state and federal court, and it is possible that this option will be exercised by many defendants to place cases in the more heavily congested judicial system.
Section 309 of H.R. 1989 would raise the minimum jurisdictional amount in diversity cases from $50,000 to $75,000 and index that amount for inflation to be adjusted every five years. According to the Judicial Conference, the purpose of this amendment is to supplement the increase of the jurisdictional amount from $10,000 to $50,000 in 1989 by what it terms a "modest upward adjustment" and "to maintain the workload reducing effects of these changes by indexing the diversity jurisdictional amount to inflation."
The ABA supported the 1989 increase to $50,000 even though the amount required to adjust the jurisdictional amount for inflation would have only raised it to $35,000. The larger increase was to assure the preservation of diversity jurisdiction in its traditional form for at least a decade without the necessity of another statutory amendment. Our policy, therefore, only supports the current $50,000 level and statutory adjustments rather than indexing. We have not directly addressed the indexing mechanism proposed in this section.
B. JUDICIAL RETIREMENT MATTERS
Section 401 would change the "Rule of 80" age and service requirements for retirement to senior status by justices and Article III judges under 28 U.S.C. 371(b).
The Senior Status system, which originated in 1919, permits a federal judge to retire from regular active service, but retain the office and continue to perform such judicial duties as he or she is able and willing to undertake. In 1984, Congress amended the law to provide a more comprehensive and rational spectrum of age and years-of-service criteria for the retirement of federal judges. Currently under 28 U.S.C. 371, a judge between the ages of 65 and 70, whose age and years of service total 80, may elect either to retire on salary under subsection (a), or retire in senior status under subsection (b). Federal judges have life tenure under Article III of the Constitution and are not required to retire or to take senior status when they become eligible.
The most recent modification to the Rule of 80 in 1989 imposed a requirement that senior judges work a schedule that is at least 25 percent of the average active judge's schedule to be eligible for salary increases other than COLAs. The Judicial Conference must certify in each calendar year those senior judges who are meeting the 25 percent requirement.
Section 401 would only amend Section 371(b) to permit a federal judge to elect senior status between the ages of 60 and 64 if the judge's age and years of service equal 80. The Association has urged such an amendment since 1988, believing that a judge between the ages of 60 and 64 should also be permitted to retire in senior status if the judge's work years and age total 80. Section 401 would not allow, nor does the ABA policy support, amending subsection (a) to permit a judge between the ages of 60 and 64 to retire on salary.
The judicial retirement system has served our nation well, particularly during periods of reduced resources available to the federal judiciary. Senior judges have provided an essential service by helping to relieve staggering caseload pressures and by helping to compensate for lost resources due to judicial vacancies. Lowering the eligibility requirement for senior status to age 60 with a consequent increase in the years of service requirement, as proposed in Section 401, expands the number of judges available to hear cases at a minimal additional cost to the government.
The costs to the government associated with the amendment would not be substantial because a judge will continue to receive the same salary whether he or she elects senior status or not. There is, of course, the salary and related expenses associated with the appointment of a successor judge. However, such costs do not compare with the cost associated with the creation of a new judgeship. Indeed, some of the need for new judgeships is reduced by the earlier appointment of successor judges and the concomitant expansion of the pool of senior status judges. Allowing judges to assume senior status beginning at age 60 would generate an additional number of experienced judges for the pool of senior judges.
Statistics gathered by the Administrative Office of the United States Courts show that senior judges provide invaluable service to the courts, litigants, and taxpayers. Senior judges have become an indispensable resource in the efficient management of the caseload of the district courts, especially with regard to civil cases. On a day-to-day basis, senior judges are utilized to write opinions, decide motions, provide administrative services, and participate in settlement efforts. They are assigned to complex litigation -- both civil and criminal, emergency hearings, and oral argument panels. Allowing judges between the ages of 60 and 64 who have the requisite years of experience would significantly enhance the value of senior judges to our judicial system.
The ABA strongly urges the adoption of Section 401.
C. ARTICLE III STATUS FOR NORTHERN MARIANA ISLANDS
The purpose of Section 416 is to provide Article III status for future appointees to the District Court for the Northern Mariana Islands. The ABA supports the establishment of the District Court for the Northern Mariana Islands as an Article III court.
The District Court for the Northern Mariana Islands was established by 48 U.S.C. 1694(a) pursuant to the provisions of Article I, Section 8, Clause 9 of the Constitution, and granted the same jurisdiction as a district court of the United States. In addition, it has all of the jurisdiction of a bankruptcy court of the United States.
Judges of the District Court for the Northern Mariana Islands are appointed for a term of ten years and may be removed from office by the President for cause. Judges of District Courts created pursuant to Article III hold their office during good behavior, and may be removed from office only by impeachment and conviction by the Congress.
Article III status for federal judges of the Commonwealth of the Northern Mariana Islands is essential to fulfill the proper role of the federal judiciary and an important right which should be afforded in all jurisdictions which are a permanent part of the American political family.
D. CRIMINAL JUSTICE AMENDMENTS
Establishment of Federal defender organizations. Section 601 would amend the Criminal Justice Act to authorize the Judicial Conference to establish a defender organization in a district where it would not otherwise be required, based upon considerations of cost effectiveness or the interests of effective representation. The current formula for establishing federal defender organizations was set over twenty-five years ago.
The American Bar Association remains concerned that indigent defendants charged with criminal offenses should receive at least the same quality of representation afforded the fee-paying client. The ABA Standards for Criminal Justice: Providing Defense Services, Third Edition addresses these components for the establishment of a defender office. Standard 5-1.2 in part advises
(a) The legal representation plan for each jurisdiction should provide for the services of a full-time defender organization when population and caseload are sufficient to support such an organization. Multi- jurisdictional organizations may be appropriate in rural areas.
(b) Every system should include the active and substantial participation of the private bar. That partici- pation should be through a coordinated assigned-counsel system and may also include contracts for services. No program should be precluded from representing clients in any particular type of category of case.
(c) Conditions may make it preferable to create a statewide system of defense.
Based on this policy, the Association endorses in principle an integrated system model for the delivery of defense services that includes adequately funded and staffed public defender offices in every jurisdiction where conditions permit, as its primary component; an administered assigned counsel panel to assure an appropriate level of participation by the private bar; and quality control for the use of contracts for services. We do not endorse the use of any of these components for the delivery of defense services as "stand-alone" components. Therefore, in recognition of the continued growth and diversity of defender system, the ABA would endorse in principle Section 601 of H.R. 1989 to add needed flexibility to the Criminal Justice Act.
Panel attorney support office. Section 602 of H.R. 1989 would enhance the support, advice, or assistance provided panel attorneys in those districts that have not established a federal defender organization. It authorizes the Director of the Administrative Office of the United States Courts to determine salaries of employees of a panel attorney support office pursuant to 28 U.S.C. 604(a)(5), and permits the courts in those districts to establish a panel attorney support office. The goal of this section is to enhance the provision of quality representation at minimal economic cost and to encourage courts to coordinate administrative functions.
In order to have an effective assigned-counsel system, the ABA recommends in Standard 5-2.1 of the ABA Standards for Criminal Justice: Providing Defense Services, Third Edition, that
. . . Administration of the assigned- counsel program should be by a competent staff able to advise and assist the private attorneys who provide defense services.
This standard recognizes that competent staff should be available to advise and assist members of the private bar who provide representation. This assistance could include, for example, advice on the handling of specific cases, information concerning recent criminal law and procedure developments, written materials on criminal defense, and appropriate training programs. In addition, there are numerous administrative tasks that must be discharged, including the assignment of cases to private attorneys (Standard 5-1.3), the collection of names of qualified members of the bar (Standard 5-2.2), and the approval of compensation vouchers submitted by appointed lawyers (standard 5-2.4). The adoption of this section would help to enhance the operation of assigned counsel programs in those districts in which a federal defender organization has not been established.
Compensation Rates. Section 603 would delegate authority to the Judicial Conference to establish compensation rates and case compensation maximum amounts to ensure that those rates and amounts of compensation would be appropriate to the type of cases and the location in which services are provided. The Judicial Conference would also have authority to adjust compensation rates to reflect changes in the costs of law practice.
The ABA has long endorsed a mechanism for administratively increasing case rates and compensation authorized under the Criminal Justice Act. The objective of our policy is to provide reasonable compensation in accordance with prevailing standards. (See policy adopted February, 1982.) Also, in addressing reasonable compensation, our standards urge that administrators of assigned counsel programs have the flexibility to develop criteria for compensation that take into consideration the number of hours reasonably expended in light of the complexity, duration, and difficulty of the case. (See Standard 5-2.4. "Compensation and expenses." ABA Standards for Criminal Justice: Providing Defense Services, Third Edition.)
E. JUDICIAL COST OF LIVING INCREASES
Section 504 of the Federal Courts Improvement Act, as introduced in the Senate as S. 1101, would repeal a provision enacted in a continuing appropriation resolution in 1981 that bars annual cost-of-living adjustments in pay for federal judges except as specifically authorized by Congress. That provision, 140 of P.L. 97-92, was enacted in response to the United States v. Will decision, which upheld an automatic cost-of-living increase that Congress had sought to roll-back. H.R. 1989 contains no parallel to Section 504 of S. 1101.
The ABA supports repeal of 140, which we believe has unfairly blocked all automatic cost-of-living adjustments for federal judges. This continued failure to provide adequate judicial compensation seriously affects: the ability of the government to attract and retain the highest caliber of individuals as judges; the efficient, productive and effective management of judicial resources; and the public's confidence in our justice system. Repeal of 140 would be an important step in restoring the loss in compensation that federal judges endure every year.
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In conclusion, I commend the Subcommittee for
addressing these issues and appreciate the opportunity to
contribute to the dialogue on this legislation.