Civil Procedure I, Pages 246–248

Caterpillar, Inc. v. Lewis

Supreme Court of the United States, 1996

Facts:

Plaintiff was injured while using defendant's bulldozer and filed this lawsuit in Kentucky, where he is a resident, based on state-law claims. The defendants are Caterpillar, Inc., a Delaware corporation with its principal place of business in Illinois, and Whayne Supply Company, a Kentucky corporation with its principal place of business in Kentucky. Several months after the filing, plaintiff's employer's insurance company, Liberty Mutual, entered the lawsuit as a plaintiff. Liberty Mutual is a Massachusetts corporation with its principal place of business in Massachusetts.

Plaintiff Lewis and defendant Whayne Supply entered into a settlement less than a year after filing the complaint. Caterpillar then filed a notice of removal with one day to spare, based on the fact that complete diversity was now absent. The district court denied plaintiff's movement to remand the case.

Liberty Mutual settled with Whayne three years later. Caterpillar won the jury trial.

Issue:

The question presented is whether the absence of complete diversity at the time of removal is fatal to federal-court adjudication.

Plaintiff's Argument:

Plaintiff Liberty Mutual has not yet settled when the court granted removal, and thus the removal was invalid.

Reasoning:

  • Congress seems to have intended removal to not be reversed often, based on their short time frame for motions to remand.

  • To reverse a trial so late would double court costs.

  • Lewis' fears of abuse are not anticipated.

Rule/Holding:

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.

Judgment:

Reversed and remanded.

Note:

KY, MA v. DE & IL, KY