CATERPILLAR INC. v. LEWIS

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Case Basics
Docket No. 
95-1263
Petitioner 
Caterpillar Inc.
Respondent 
Lewis
Opinion 
Advocates
(Argued the cause for the respondent)
(Argued the cause for the petitioner)
Tags
Term:
Facts of the Case 

Asserting state law claims, Lewis, a Kentucky native, brought suit in Kentucky state court, for injuries sustained in a construction accident, against Caterpillar Inc. (Caterpillar), a Delaware corporation, and Whayne Supply Company (Whayne), a Kentucky corporation. Liberty Mutual Insurance Group (Liberty Mutual), a Massachusetts corporation, later intervened in the case as a plaintiff. Less than a year after filing his complaint Lewis entered into a settlement with Whayne. Caterpillar immediately moved to remove the action to federal court, arguing that the settlement between Lewis and Whayne meant that there was complete diversity. Lewis protested that complete diversity was not present because Liberty Mutual had not yet settled with Whayne, so that both Whayne and Lewis were still party to the lawsuit. The District Court denied Lewis' motion to remand, erroneously concluding that complete diversity was present. Five months before the trial, Liberty Mutual and Whayne reached a settlement and the District Court dismissed Whayne from the case. Complete diversity was present for the remainder of the case, including trial and judgment in favor of Caterpillar. The Court of Appeals for the Sixth Circuit vacated the District Court's judgment, holding that the lower court had lacked subject-matter jurisdiction at the time of removal because there was not complete diversity, and should have remanded the case to state court.

Question 

Is the absence of complete diversity at the time of removal from state to federal court fatal to federal adjudication even when there is complete diversity at the time of judgment?

Conclusion 
Decision: 9 votes for Caterpillar Inc., 0 vote(s) against
Legal provision: 28 U.S.C. 1332

No. A failure to remand a case improperly removed is not fatal to federal adjudication of the case so long as federal jurisdictional requirements are met at the time judgment is entered. When a diversity case has been tried in federal court under state rules of decision, the importance of finality, efficiency and economy in judicial determinations becomes decisive. To remand this case for a new trial after several years of litigation, despite the fact that the jurisdictional defect had been cured by the time of judgment, would be to impose an exorbitant cost on the judicial system.

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CATERPILLAR INC. v. LEWIS. The Oyez Project at IIT Chicago-Kent College of Law. 22 April 2014. <http://www.oyez.org/cases/1990-1999/1996/1996_95_1263>.
CATERPILLAR INC. v. LEWIS, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/1990-1999/1996/1996_95_1263 (last visited April 22, 2014).
"CATERPILLAR INC. v. LEWIS," The Oyez Project at IIT Chicago-Kent College of Law, accessed April 22, 2014, http://www.oyez.org/cases/1990-1999/1996/1996_95_1263.