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Tuesday, March 29, 2011

Quick Civil Procedure Case

Caterpillar Inc. v. Lewis:
519 U.S. 61 (1996)
Issue: Does the District Court's initial misjudgment still burden and run with the case, or is it overcome by the eventual dismissal of the nondiverse party.
Rule: Federal Removal JDX; Cure             
-Case may be removed to federal court within 30 days of receiving notice of availability of doing so      
-May not be longer than 1 year after commencement of the action
-Plaintiff may then request, within 30 days, to have the case remanded to state court
-If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded
Application: There are two "givens" in this case
  1. The district court, in denying Lewis' motion to remand, incorrectly treated Whayne as effectively dropped from the case prior to removal
  2. The 6th circuit correctly determined that the complete diversity requirement was not satisfied at the time of removal
-American Fire & Casualty v. Finn: The absence of federal jurisdiction at the time of judgment required the court of appeals to vacate the district court's judgment.
-"There are cases, which uphold judgments in the district courts even though there was no right to removal".. "in those case, the federal trial court would have had original jurisdiction of the controversy had it been brought in the federal court in the posture it had at the time of the actual trial of the cause or of the entry of the judgment"
-Grubbs v. General Electric Credit: The erroneous removal need not cause the destruction of a final judgment, if the requirements of federal subject-matter jurisdiction are met at the time judgment is entered
-Neither American or Grubbs involved a plaintif who moved promptly, but unsuccessfully, to remand a case improperly removed from state court to rederal court, and then challenged on appeal a judgment entered by the federal court.
-Lewis' Arguments:
  1. The ultimate satisfaction of the subject matter jurisdiction requirement out not swallow up antecedent statutory violations.
  2. This would disfavor diligent plaintiffs who timely, but unsuccessfully, move to check improper removals in district court
  3. That courts would allow improperly removing defendants to profit from their disregard of Congress' instructions, and their ability to lead district judges into error
  4. If the final judgment against him is allowed to stand, defendants will have an incentive to attempt wrongful removals.
    1. Rests upon the assumption that district courts generally will not comprehend or will balk at applying the rules of removal Congres has prescribed
    2. Further assumes that the absence of diversity will first escape detection, then disappear prior to judgment
-Had Caterpillar waited until the case was ripe for removal (until Whayne was dismissed), the 1 year limitation would have barred the removal.
-Overriding Considerations: Finality, efficiency, and economy
-Newman-Green v. Alfonzo-Larrain: Found that requiring dismissal after years of litigation, would impose unnecessary and wasteful burdens on the parties, judges and other litigants waiting for judicial attention
-The same may be said of the remain that Lewis seeks here
-To wipe out the judgment and return the case to state court would impose an exorbitant cost on the dual court system, a cost incompatible with the fair and unprotracted administration of justice.
Conclusion: The error is overcome.
-Plaintiff: James Lewis, resident of KENTUCKY
-Liberty Mutual Insurance: Insurance carrier for Lewis' employer. MASSACHUSETTS
-Defendant: Caterpillar: Manufacturer, DELAWARE Corp, Principal place of business in ILLINOIS
-Whayne Supply Co: Servicer, KENTUCKY Corp, Principal place of business in KENTUCKY

-June 22, 1989: Plaintiff files suit, asserting state-law claims based on defective manufacture, negligent maintenance, failure to warn, and breach of warranty.
-Several Months Later: Liberty mutual intervenes as a plaintiff, asserted subrogation claims against both defendants for workers' compensation benefits Liberty had paid to Lewis on behalf of his employer
-Lewis enters into a settlement agreement with defendant Whayne, less than 1 year after filing his complaint
-June 21, 1990: Caterpillar files notice of removal, in US Dist Ct. Eastern Dist. Of KY, for diversity jurisdiction
-One day before statutory requirement of removal within 1 year was in effect.
-Contended that since Whayne was no longer a party, there was diversity of the parties
-Lewis objected to the removal, and moved to remand. Stated that Liberty had not settled claim with Whayne yet.
-District court denied the motion. Stated that Lewis had already settled claim with Whayne
-June, 1993: Liberty and Whayne entered into a settlement of the subrogation claim, and Whayne was dismissed from the lawsuit
-Nov, 1993: With Caterpillar as the sole defendant, case went to trial.
-Unanimous verdict for Caterpillar
-Feb 1, 1994: Lewis' motion for a new trial was denied

-6th Circuit: Accepted Lewis' argument, and found that the District Court's judgment should be vacated

Super busy with school right now, I'll try to be more diligent in my posts :( Hope everyone is doing well!


  1. Good post dude, nice one! Thanks! :D

  2. I am doing very fine thank you! I hope you don't work too hard, or youll burn out!

  3. I messe'd up my law exams I have to repass it in June :S