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Administrative Office of the U.S. Courts

Judicial Conference Opposes Expanded Jurisdiction in Y2K Legislation

Legislation that would expand federal court jurisdiction to include Year 2000 class action disputes is inconsistent with the long-held principle that the federal courts should be preserved as tribunals of limited jurisdiction, a representative of the federal Judiciary told a House committee today.

Testifying before the House Judiciary Committee in opposition to H.R. 775, the Year 2000 Readiness and Responsibility Act, was Judge Walter Stapleton (3^rd Cir.), a U.S. court of appeals judge in Wilmington, DE, and chair of the Judicial Conference Committee on Federal-State Jurisdiction.

"H.R. 775, as well as similar proposals in the Senate, seeks to promote the resolution of potentially large numbers of Y2K disputes," Judge Stapleton told the committee. "Some of the provisions, however, will affect and perhaps significantly disrupt the administration of justice in the federal courts."

The Judicial Conference, at its meeting in March, 1999, voted to oppose the provisions expanding federal court jurisdiction over Y2K class actions in bills H.R. 775, S. 96, and S. 461 currently under consideration by Congress. The Conference also opposes the Y2K pleading requirements in the bills because they circumvent the Rules Enabling Act, among other reasons. The Judicial Conference is the policy-making body of the federal Judiciary.

Judge Stapleton pointed out that the assignment of the class action workload to the federal courts may engender a very large number of class action lawsuits. Section 404 of H.R. 775 provides for the removal of any such Y2K class action to federal court by any single defendant or any single member of the plaintiff class who is not a representative party. "The transfer of this burden to the federal courts," said Judge Stapleton, "holds the potential of overwhelming federal judicial resources and the capacity of the federal courts to resolve effectively in a timely manner not only Y2K cases, but other causes of action as well."

In addition to the potential adverse docket impact on the federal courts, H.R. 775 infringes upon the traditional authority of the states to manage their own judicial business. Indeed, there appears to be no substantial justification for the transfer of the workload.

"Expansion of class action jurisdiction over Y2K class actions in the manner provided in H.R. 775," said Judge Stapleton, "would be inconsistent with the objective of preserving the federal courts as tribunals of limited jurisdiction and the reality that the federal courts are staffed and supported to function as tribunals of limited jurisdiction." According to Judge Stapleton, state courts handle about 95 percent of the nation's judicial business, and a decision to limit access to this resource in the face of what others predict could be a "tidal wave" of Y2K litigation, could negatively affect the efficient resolution of disputes.

Finally, Judge Stapleton addressed the pleading provisions in Y2K litigation that would require a plaintiff to state with particularity certain matters in the complaint regarding nature and amount of damages, material defects, and the defendant's state of mind. These requirements are inconsistent with the general notice pleading provisions found in the Federal Rules of Civil Procedure and bypass the Rules Enabling Act. "This will cause confusion and traps for unwary lawyers who are accustomed to relying on the Federal Rules of Civil Procedure for pleading requirements," warned Judge Stapleton. "It also would signal yet another departure from uniform, national procedural rules. . . ."