Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996)

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OCTOBER TERM, 1996

Syllabus

CATERPILLAR INC. v. LEWIS

certiorari to the united states court of appeals for the sixth circuit

No. 95-1263. Argued November 12, 1996—Decided December 10, 1996

Respondent Lewis, a Kentucky resident, commenced this civil action in

Kentucky state court after sustaining personal injuries while operating a bulldozer. Asserting state-law claims, 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. Liberty Mutual Insurance Group, a Massachusetts corporation with its principal place of business in that State, intervened as a plaintiff, asserting subrogation claims against both Caterpillar and Whayne Supply for workers' compensation benefits Liberty Mutual had paid to Lewis on behalf of his employer. Shortly after learning of a settlement agreement between Lewis and Whayne Supply, Caterpillar filed a notice of removal in Federal District Court, grounding federal jurisdiction on diversity of citizenship, see 28 U. S. C. 1332. The notice 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. Caterpillar assumed that the settlement agreement between these two parties would result in Whayne Supply's dismissal from the lawsuit, yielding complete diversity and rendering the case removable. Lewis promptly moved to remand the case to state court, asserting that diversity was defeated by Whayne Supply's continuing presence as a defendant due to Liberty Mutual's subrogation claim against it. The District Court denied the motion, erroneously concluding that diversity had become complete. Before trial, however, Liberty Mutual's subrogation claim against Whayne Supply was settled, and that defendant was dismissed as a party. Complete diversity thereafter existed. The case proceeded to trial, jury verdict, and judgment for Caterpillar. The Sixth Circuit vacated the judgment, concluding that, absent complete diversity at the time of removal, the District Court lacked subject-matter jurisdiction.

Held: 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. Pp. 67-78.

61

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