Caterpillar Inc. v. Lewis

PETITIONER: Caterpillar Inc.
LOCATION: New York State Capitol

DOCKET NO.: 95-1263
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 519 US 61 (1996)
ARGUED: Nov 12, 1996
DECIDED: Dec 10, 1996

Kenneth Steven Geller - Argued the cause for the petitioner
Leonard J. Stayton - Argued the cause for the respondent

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.


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?

Media for Caterpillar Inc. v. Lewis

Audio Transcription for Oral Argument - November 12, 1996 in Caterpillar Inc. v. Lewis

William H. Rehnquist:

We'll hear argument now in No. 95-1263, Caterpillar, Inc. v. James David Lewis.

Mr. Geller.

Kenneth Steven Geller:

Thank you, Mr. Chief Justice, and may it please the Court:

The Sixth Circuit reversed the judgment of the district court in this case, not because of any error in the district court proceedings, and not because the district court lacked jurisdiction to try this case, but solely because the district... the case was not within Federal diversity jurisdiction at the time that the case was removed from State court.

Because this ruling conflicts with prior decisions of this Court and makes no sense from the standpoint of judicial economy, we've asked the Court to grant review.

Now, the facts that are necessary to understand the legal issue are these.

The plaintiff, James Lewis, was injured while operating a bulldozer manufactured by Caterpillar and serviced by Whayne Supply Company.

He brought suit in Kentucky State court against Caterpillar and Whayne Supply alleging a number of tort claims.

Liberty Mutual Insurance Group which had paid Lewis worker's compensation benefits intervened as a plaintiff to protect its subrogation rights and brought virtually identical tort claims against Caterpillar and Whayne Supply.

Now, at the time the complaint was filed, the case was not removable to Federal court because both plaintiff Lewis and defendant Whayne Supply were citizens of Kentucky, so there wasn't complete diversity of citizenship.

Several months later, however, Caterpillar's counsel learned that Lewis had settled his claim with Whayne Supply, the non-diverse defendant, and Caterpillar thereupon removed the case to Federal court in Kentucky.

Lewis moved to remand the case, making the single argument that the district court lacked subject matter jurisdiction.


Ruth Bader Ginsburg:

He was right at that point, was he not, because Whayne was still in the litigation.

So, when the motion was made to remand to State court, there was not complete diversity--

Kenneth Steven Geller:


Ruth Bader Ginsburg:

--and the case should have been remanded.

Is that not correct?

Kenneth Steven Geller:

That was obviously a disputed issue, but as the case comes to this Court, that's correct.

Sandra Day O'Connor:

Well, I think we have to assume this, and he made a timely objection.

He preserved his objection.

Kenneth Steven Geller:

He made a motion to remand.

That's correct.

Sandra Day O'Connor:


Kenneth Steven Geller:

Yes, Justice O'Connor.

Sandra Day O'Connor:

And I don't know if it's all that clear whether an interlocutory appeal would ever lie at that point, is it?

Kenneth Steven Geller:

From the denial of the motion to remand?

The Sixth Circuit and other circuits have allowed appeals in that circumstance.

We don't rely heavily on that in this case, but there are many cases that have allowed appeals in that circumstance, including some cases in the Sixth Circuit that we cited in our brief.

But it would be a discretionary--