Caterpillar Inc. v. Lewis

519 U.S. 61, 117 S. Ct. 467, 136 L. Ed. 2d 437, 1996 U.S. LEXIS 7643
Supreme Court of the United States·Decided December 10, 1996·No. 95-1263·Published·Cited by 2,077 cases

Opinion

Justice Ginsburg

delivered the opinion of the Court.

This case, commenced in a state court, involves personal injury claims arising under state law. The case was removed to a federal court at a time when, the Court of Appeals concluded, complete diversity of citizenship did not exist among the parties. Promptly after the removal, the plaintiff moved to remand the case to the state court, but the District Court denied that motion. Before trial of the case, however, all claims involving the nondiverse defendant were settled, and that defendant was dismissed as a. party to the action. Complete diversity thereafter existed. The case proceeded to trial, jury verdict, and judgment for the removing defendant. The Court of Appeals vacated the judgment, concluding that, absent complete diversity at the time of removal, the District Court lacked subject-matter jurisdiction. of

The question presented is whether the absence of complete diversity at the time of removal is fatal to federal-court adjudication. We hold that a district court’s error in failing to remand a case improperly removed is not fatal to the ensuing adjudication if federal jurisdictional requirements are met at the time judgment is entered.

I

Respondent James David Lewis, a resident of Kentucky, filed this lawsuit in Kentucky state court on June 22, 1989, after sustaining injuries while operating a bulldozer. Asserting state-law claims based on defective manufacture, negligent maintenance, failure to warn, and breach of war *65 ranty, Lewis named as defendants both the manufacturer of the bulldozer — petitioner Caterpillar Inc., a Delaware corporation with its principal place of business in Illinois — and the company that serviced the bulldozer — Whayne Supply Company, a Kentucky corporation with its principal place of business in Kentucky.

Several months later, Liberty Mutual Insurance Group, the insurance carrier for Lewis’ employer, intervened in the lawsuit as a plaintiff. A Massachusetts corporation with its principal place of business in that State, Liberty Mutual asserted subrogation claims against both Caterpillar and Whayne Supply for workers’ compensation benefits Liberty Mutual had paid to Lewis on behalf of his employer.

Lewis entered into a settlement agreement with defendant Whayne Supply less than a year after filing his complaint. Shortly after learning of this agreement, Caterpillar filed a notice of removal, on June 21,1990, in the United States District Court for the Eastern District of Kentucky. Grounding federal jurisdiction on diversity of citizenship, see 28 U. S. C. § 1332, Caterpillar satisfied with only a day to spare the statutory requirement that a diversity-based removal take place within one year of a lawsuit’s commencement, see 28 U. S. C. § 1446(b). Caterpillar’s notice of removal explained that the case was nonremovable at the lawsuit’s start: Complete diversity was absent then because plaintiff Lewis and defendant Whayne Supply shared Kentucky citizenship. App. 31. Proceeding on the understanding that the settlement agreement between these two Kentucky parties would result in the dismissal of Whayne Supply from the lawsuit, Caterpillar stated that the settlement rendered the case removable. Id., at 31-32.

Lewis objected to the removal and moved to remand the case to state court. Lewis acknowledged that he had settled his own claims against Whayne Supply. But Liberty Mutual had not yet settled its subrogation claim against Whayne Supply, Lewis asserted. Whayne Supply’s presence as a de *66 fendant in the lawsuit, Lewis urged, defeated diversity of citizenship. Id., at 36. Without addressing this argument, the District Court denied Lewis' motion to remand on September 24, 1990, treating as dispositive Lewis’ admission that he had settled his own claims against Whayne Supply. Id., at 55.

Discovery, begun in state court, continued in the now federal lawsuit, and the parties filed pretrial conference papers beginning in July 1991. In June 1993, plaintiff Liberty Mutual and defendant Whayne Supply entered into a settlement of Liberty Mutual’s subrogation claim, and the District Court dismissed Whayne Supply from the lawsuit. With Caterpillar as the sole defendant adverse to Lewis, 1 the case pro *67 ceeded to a six-day jury trial in November 1993, ending in a unanimous verdict for Caterpillar. The District Court entered judgment for Caterpillar on November 23, 1993, and denied Lewis’ motion for a new trial on February 1, 1994.

On appeal, the Court of Appeals for the Sixth Circuit accepted Lewis’ argument that, at the time of removal, Whayne Supply remained a defendant in the case due to Liberty Mutual’s subrogation claim against it. App. to Pet. for Cert. 8a. Because the party lineup, on removal, included Kentucky plaintiff Lewis and Kentucky defendant Whayne Supply, the Court of Appeals observed that diversity was not complete when Caterpillar took the case from state court to federal court. Id., at 8a-9a. Consequently, the Court of Appeals concluded, the District Court “erred in denying [Lewis’] motion to remand this case to the state court for lack of subject matter jurisdiction.” Id., at 9a. That error, according to the Court of Appeals, made it necessary to vacate the District Court’s judgment. Ibid. 2

Caterpillar petitioned for this Court’s review. Caterpillar stressed that the nondiverse defendant, Whayne Supply, had been dismissed from the lawsuit prior to trial. It was therefore improper, Caterpillar urged, for the Court of Appeals to vacate the District Court’s judgment — entered after several years of litigation and a six-day trial — on account of a jurisdictional defect cured, all agreed, by the time of trial and judgment. Pet. for Cert. 8. We granted certiorari, 517 U. S. 1133 (1996), and now reverse.

II

The Constitution provides, in Article III, §2, that “[t]he judicial Power [of the United States] shall extend ... to Con *68 troversies . . . between Citizens of different States.” Commencing with the Judiciary Act of 1789, ch. 20, § 11, 1 Stat. 78, Congress has constantly authorized the federal courts to exercise jurisdiction based on the diverse citizenship of parties. In Strawbridge v. Curtiss, 3 Cranch 267 (1806), this Court construed the original Judiciary Act’s diversity provision to require complete diversity of citizenship. Id., at 267. We have adhered to that statutory interpretation ever since. See Carden v. Arkoma Associates, 494 U. S. 185, 187 (1990). The current general-diversity statute, permitting federal district court jurisdiction over suits for more than $50,000 “between . . . citizens of different States,” 28 U. S. C.

Free access — add to your briefcase to read the full text and ask questions with AI

Caterpillar Inc. v. Lewis, 519 U.S. 61, 117 S. Ct. 467, 136 L. Ed. 2d 437, 1996 U.S. LEXIS 7643 (1996).

519 U.S. 61 (Caterpillar Inc. v. Lewis) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Stevens v. F.B.I.
D. Alaska, 2020
Hughes v. AT&T
D. Alaska, 2020
Upper Skagit Tribe v. Lundgren
584 U.S. 554 (Supreme Court, 2018)
Grancare v. Ruth Thrower
889 F.3d 543 (Ninth Circuit, 2018)
Zyzzx2 v. Wells Fargo Bank
Ninth Circuit, 2017
France v. Thermo Funding Co.
989 F. Supp. 2d 287 (S.D. New York, 2013)
Shields v. Murdoch
891 F. Supp. 2d 567 (S.D. New York, 2012)
Ackerberg v. Citicorp USA, Inc.
887 F. Supp. 2d 934 (N.D. California, 2012)
Stewart v. Atwood
834 F. Supp. 2d 171 (W.D. New York, 2012)
Mireles v. Wells Fargo Bank, N.A.
845 F. Supp. 2d 1034 (C.D. California, 2012)
Aurora Loan Services LLC v. Sadek
809 F. Supp. 2d 235 (S.D. New York, 2011)
Synergy Advanced Pharmaceuticals, Inc. v. Capebio, LLC
797 F. Supp. 2d 276 (S.D. New York, 2011)
Log Cabin Republicans v. United States
716 F. Supp. 2d 884 (C.D. California, 2010)
Younglove Construction, LLC v. PSD Development, LLC
724 F. Supp. 2d 847 (N.D. Ohio, 2010)
Quantlab Financial, LLC v. Tower Research Capital, LLC
715 F. Supp. 2d 542 (S.D. New York, 2010)