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Caterpillar Inc. v. Lewis

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Brief Fact Summary.

Defendant removes a case based on diversity jurisdiction even though an intervening plaintiff and another defendant defeat diversity. The Plaintiff appeals the removal.

Synopsis of Rule of Law.

If federal jurisdiction is proper at the time of judgement, then a district court’s error in early removal does not warrant vacating a verdict.

Points of Law - Legal Principles in this Case for Law Students.

In a case not originally removable, a defendant who receives a pleading or other paper indicating the postcommencement satisfaction of federal jurisdictional requirements--for example, by reason of the dismissal of a nondiverse party--may remove the case to federal court within 30 days of receiving such information.

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Facts.

Plaintiff Lewis, a Kentucky resident, sued Whayne Supply company and Defendant Caterpillar, a Delaware corporation, for injuries he sustained while operating a bulldozer manufactured by Caterpillar. After the suit was filed Liberty Mutual, a Massachusetts corporation, intervened as a plaintiff. Before trial Plaintiff Lewis settled with Whayne. Defendant Caterpillar then filed a motion to remove the case to federal court based on diversity of citizenship. Plaintiff Lewis argued that diversity jurisdiction was not appropriate because Plaintiff Liberty Mutual had not settled its claims with Whayne and therefore diversity was not satisfied. The district court granted Defendant Caterpillar’s request for removal. After removal, Liberty Mutual and Whayne settled. After a jury trial Plaintiff Lewis’s claim against Defendant Caterpillar was dismissed. The court of appeals vacated the judgement of the district court, holding that the district court should not have granted removal because Whayne was still a party at the time. The Supreme Court of the United States granted certiorari.

Issue.

If a district court prematurely removes a case, does it warrant vacating the verdict if federal jurisdiction is proper at the time of judgement?

Held.

No, if a federal district court prematurely removes a case, it does not warrant vacating the judgement if jurisdiction is proper at the time of judgement.

Discussion.

  1. To allow a federal court’s judgement to be vacated and retried in state court would be extremely inefficient and costly.
  2. It would also make no sense to send a case that now warrants diversity jurisdiction back to state court.
  3. Removal emphasizes judicial economy.
  4. The court rejects Plaintiff Lewis’s argument that parties will request removal in the hopes that diversity jurisdiction will be satisfied later. This would be a huge gamble by defendants that will be rejected by judges.
  5. The mistake of a district court in prematurely removing a case will not happen often.
  6. The judgement of the court of appeals is reversed.

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