December 22, 2019
Via E-mail and mail to RulesCommittee Secretary@ao.uscourts.gov Rebecca A. Womeldorf, Esq. Secretary
Committee on Rules of Practice & Procedure Thurgood Marshall Federal Judiciary Building One Columbus Circle, N.E., Room 7-300 Washington, DC 20544
Dear Madame Secretary:
Please accept this document as DRI's response to the changes proposed to FRCP
7.1. An electronic version ofthis document was submitted earlier. Thank you for your assistance.
Sincerely, fltr:-.w Philip L. Willman DRI President
cc: John R. Kouris, DRI Executive Director
December 22, 2019
DRI Response to Proposed Changes to FRCP 7
With a membership of approximately 19,000 individual and corporate members, DRI is the world's largest international membership organization of lawyers involved in the defense of civil litigation. DRI is committed to anticipating and addressing issues germane to defense lawyers and their clients, improving the civil justice system, and preserving the civil jury trial. Our organization's history encompasses nearly six decades of efforts by dedicated members who see the need for a coordinated approach to meet the challenges of defending parties in civil litigation. The proposed amendments to Federal Rule of Civil Procedure 7.1 is one such challenge.
DRI supports the efforts to improve FRCP 7.1 through the addition of a provision to address issues that may arise in determining whether or not a district court has jurisdiction over a case filed in or removed to federal court under 28 U.S.C. § 1332.
We offer three (3) suggestions to improve the Proposed Rule that, if adopted, will clarify the application of diversity jurisdiction under 28 U.S.C. § 1332. DRI's proposed changes are in bold italics:
(2) Parties in a Diversity Case. Unless the court orders otherwise, a party in an action in which jurisdiction is based on diversity under 28 U.S.C. § 1332(a) must file a disclosure statement that names and identifies, as specified by that statute, the citizenship of that party and every individual or entity whose citizenship is attributed to that party at the time the action is filed in district court.
The purpose of the first suggested change- inserting "as specified by that statute" into the rule - is to make it clear that this statute specifies how citizenship is determined for the purpose of establishing diversity jurisdiction. This proposed change is important because a corporation may be deemed a citizen of more than one state by 28 U.S.C. § 1332(c)(1). Likewise, this section also specifies the unique way citizenship is determined when an insurer is sued in a direct action where its insured is not a party. The statute additionally establishes the citizenship of a legal representative of a decedent, an incompetent, or a minor. Such legal representatives are considered citizens of the state of the party they represent.
The second suggested change - inserting "that party and" - makes the rule clearer. This proposed adjustment specifies that the party to the action must disclose its own citizenship and the citizenship of others attributed to that party. Also, by referencing
the statute as the source of how to determine citizenship, legal representatives should not be expected to disclose their citizenship, as it is irrelevant for the purposes of determining diversity.
The third suggested change- inserting "filed in district court"- is suggested because the time of filing is relevant in determining diversity jurisdiction when a case is removed to federal court. See 28 u.s.c. § 1446.
We also propose an amendment to Part (b) of FRCP 7.1to ensure that disclosure statements are made promptly in all circumstances. The proposed amendment is in bold italics:
(b) TIME TO FILE; SUPPLEMENTAL FILING. A party must:
(1) file the disclosure statement with its first appearance, pleading, petition, motion, response, or other request addressed to the court or within 60 days of the filing the case in district court, whichever is earlier; and
(2) promptly file a supplemental statement if any required information changes.
The purpose for adding "or within 60 days of the filing of the case in district court" establishes a date certain for all parties to make their required disclosures. Without a provision setting such a deadline, it is possible that parties, who otherwise would not file one of the previously mentioned documents, would incur the risk that a party could let significant time pass before filing one of the documents described in subparagraph (1) along with the required disclosure statement. As a result, the other parties would suffer the hardship of a late recusal or a remand for lack of diversity. The proposed change would allow the court to promptly evaluate recusal issues and whether or not there are proper grounds to exercise diversity jurisdiction.
DRI supports the current language in the Proposed Rule, but we also believe that the suggestions outlined in this statement will improve the rule and case management issues by setting a clear deadline for the parties to make their disclosures in diversity cases and to submit the necessary corporate disclosure statements.
Phillip L. Willman DRI President