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.
62
Syllabus
(a) The general-diversity statute, § 1332(a), authorizes federal
court jurisdiction over cases in which the citizenship of each
plaintiff is diverse from the citizenship of each defendant. See
Carden v.
Arkoma Associates, 494 U. S. 185, 187. When
a plaintiff files a state-court civil action over which the federal
district courts would have original jurisdiction based on diversity
of citizenship, the defendant or defendants may remove the action
to federal court, § 1441(a), provided that no defendant "is a
citizen of the State in which such action is brought," § 1441(b).
In a case not originally removable from state court, a defendant
who receives a pleading or other paper indicating the
postcommencement satisfaction of federal jurisdictional
requirements--e. g., by reason of a nondiverse party's
dismissal-may remove the case to federal court within 30 days. §
1446(b). No case, however, may be removed based on diversity "more
than 1 year after commencement of the action."
Ibid. Once a
defendant has filed a notice of removal in the federal court, a
plaintiff objecting to removal "on the basis of any defect in
removal procedure" may, within 30 days, file a motion to remand the
case to state court. § 1447(c). This 30-day limit does not apply,
however, to jurisdictional defects: "If at any time before final
judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded."
Ibid. Pp.
67-69.
(b)
American Fire &
Casualty Co. v.
Finn, 341 U. S.
6, and
Grubbs v.
General Elec. Credit Corp.,
405 U. S. 699,
are key cases in point and tend in Caterpillar's favor. Each
suggests that the existence of subject-matter jurisdiction at time
of judgment may shield a judgment against later jurisdictional
attack despite an improper removal.
Finn, 341 U. S., at 16;
Grubbs, 405 U. S., at 700. However, neither decision
resolves dispositively a controversy of the kind here at issue, for
neither involved a plaintiff who moved promptly, but
unsuccessfully, to remand a case improperly removed from state
court to federal court, and then challenged on appeal a judgment
entered by the federal court. Pp.70-73.
(c) Beyond question, as Lewis acknowledges, diversity became
complete in this case when Whayne Supply was formally dismissed as
a party. Nevertheless, Caterpillar moves too quickly in claiming
that elimination of the
jurisdictional defect before trial
also cured a
statutory flaw-Caterpillar's failure to meet
the § 1441(a) requirement that the case be fit for federal
adjudication at the time the removal petition was filed. By timely
moving for remand, Lewis did all that was necessary to preserve his
objection to removal. An order denying a motion to remand,
"standing alone," is "obviously ... not final and [immediately]
appealable" as of right,
Chicago, R. I. &
P. R.
Co. v.
Stude, 346 U. S. 574,
63
578, and a plaintiff is not required to take an interlocutory
appeal pursuant to 28 U. S. C. § 1292(b) in order to avoid waiving
whatever ultimate appeal right he may have. Having preserved his
objection, Lewis urges that ultimate satisfaction of the
subject-matter jurisdiction requirement ought not swallow up
antecedent statutory violations. Lewis' arguments in support of
this position are hardly meritless, but they run up against an
overriding consideration. Once a diversity case has been tried in
federal court, with rules of decision supplied by state law under
the regime of
Erie R. Co. v.
Tompkins, 304 U. S. 64,
considerations of finality, efficiency, and economy become
overwhelming. Cf.,
e. g., Newman-Green, Inc. v.
Alfonzo-Larrain, 490 U. S. 826,836. This
view is in harmony with a main theme of the removal scheme devised
by Congress, which calls for expeditious superintendence by
district courts. In this case, no jurisdictional defect lingered
through judgment in the District Court. To wipe out the
adjudication post judgment, and return to state court a case now
satisfying all federal jurisdictional requirements, would impose an
exorbitant cost on our dual court system, a cost incompatible with
the fair and unprotracted administration of justice. Pp.73-77.
(d) Lewis' prediction that rejection of his petition will
provide statecourt defendants with an enormous incentive to attempt
unlawful removals rests on an assumption this Court does not
indulge-that federal district courts generally will not comprehend,
or will balk at applying, the removal rules Congress has
prescribed. The prediction furthermore assumes defendants'
readiness to gamble that any jurisdictional defect, for example,
the absence of complete diversity, will first escape detection,
then disappear prior to judgment. This Court is satisfied that the
well-advised defendant will foresee the likely outcome of an
unwarranted removal-a swift and nonreviewable remand order, see §§
1447(c), (d), attended by the displeasure of a district court whose
authority has been improperly invoked. Pp.77-78.
Reversed and remanded.
GINSBURG, J., delivered the opinion for a unanimous Court.
Kenneth S. Geller argued the cause for petitioner. With him on
the briefs were Michael R. Feagley, John E. Muench, Charles
Rothfeld, Leslie W Morris II, James B. Buda, and William F.
Maready.
64
Leonard J.
Stayton argued the cause for
respondent.
With him on the brief were Paul Alan Levy and Alan B. Morrison.
*
JUSTICE GINSBURG delivered the opinion of the Court. This case,
commenced in a state court, involves personal injury claims arising
under state law. The case was removed to a federal court at a time
when, the Court of Appeals concluded, complete diversity of
citizenship did not exist among the parties. Promptly after the
removal, the plaintiff moved to remand the case to the state court,
but the District Court denied that motion. Before trial of the
case, however, all claims involving the nondiverse defendant were
settled, and that defendant was dismissed as a party to the action.
Complete diversity thereafter existed. The case proceeded to trial,
jury verdict, and judgment for the removing defendant. The Court of
Appeals vacated the judgment, concluding that, absent complete
diversity at the time of removal, the District Court lacked
subject-matter jurisdiction.
The question presented is whether the absence of complete
diversity at the time of removal is fatal to federal-court
adjudication. We hold that 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.
I
Respondent James David Lewis, a resident of Kentucky, filed this
lawsuit in Kentucky state court on June 22, 1989, after sustaining
injuries while operating a bulldozer. Asserting state-law claims
based on defective manufacture, negligent maintenance, failure to
warn, and breach of war-
*
Patrick W Lee filed a brief for the Product Liability
Advisory Council, Inc., as
amicus curiae urging
reversal.
65
ranty, 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.
Several months later, Liberty Mutual Insurance Group, the
insurance carrier for Lewis' employer, intervened in the lawsuit as
a plaintiff. A Massachusetts corporation with its principal place
of business in that State, Liberty Mutual asserted subrogation
claims against both Caterpillar and Whayne Supply for workers'
compensation benefits Liberty Mutual had paid to Lewis on behalf of
his employer.
Lewis entered into a settlement agreement with defendant Whayne
Supply less than a year after filing his complaint. Shortly after
learning of this agreement, Caterpillar filed a notice of removal,
on June 21, 1990, in the United States District Court for the
Eastern District of Kentucky. Grounding federal jurisdiction on
diversity of citizenship, see 28 U. S. C. § 1332, Caterpillar
satisfied with only a day to spare the statutory requirement that a
diversity-based removal take place within one year of a lawsuit's
commencement, see 28 U. S. C. § 1446(b). Caterpillar's notice of
removal 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. App. 31.
Proceeding on the understanding that the settlement agreement
between these two Kentucky parties would result in the dismissal of
Whayne Supply from the lawsuit, Caterpillar stated that the
settlement rendered the case removable.
Id., at 31-32.
Lewis objected to the removal and moved to remand the case to
state court. Lewis acknowledged that he had settled his own claims
against Whayne Supply. But Liberty Mutual had not yet settled its
subrogation claim against Whayne Supply, Lewis asserted. Whayne
Supply's presence as a de-
66
fendant in the lawsuit, Lewis urged, defeated diversity of
citizenship.
Id., at 36. Without addressing this argument,
the District Court denied Lewis' motion to remand on September 24,
1990, treating as dispositive Lewis' admission that he had settled
his own claims against Whayne Supply.
Id., at 55.
Discovery, begun in state court, continued in the now
federallawsuit, and the parties filed pretrial conference papers
beginning in July 1991. In June 1993, plaintiff Liberty Mutual and
defendant Whayne Supply entered into a settlement of Liberty
Mutual's subrogation claim, and the District Court dismissed Whayne
Supply from the lawsuit. With Caterpillar as the sole defendant
adverse to Lewis,l the case pro-
1 In accord with 28 U. S. C. § 1367 and Rule 14 of the Federal
Rules of Civil Procedure, Caterpillar, after removing the case to
federal court, impleaded Lewis' employer, Gene Wilson Enterprises,
a Kentucky corporation, as a third-party defendant. See App. 2.
Gene Wilson Enterprises, so far as the record shows, remained a
named third-party defendant, adverse solely to third-party
plaintiff Caterpillar, through judgment. See Brief for Respondent
5. No dispute ran between Lewis and his employer, and Caterpillar's
third-party complaint against Gene Wilson Enterprises had no
bearing on the authority of the federal court to adjudicate the
diversity claims Lewis asserted against Caterpillar. See,
e. g.,
Wichita Railroad &
Light Co. v.
Public Util.
Comm'n of Kan., 260 U. S. 48, 54 (1922)
(federal jurisdiction once acquired on the ground of complete
diversity of citizenship is unaffected by the subsequent
intervention "of a party whose presence is not essential to a
decision of the controversy between the original parties"). As
elaborated in 3 J. Moore, Moore's Federal Practice , 14.26, p.
14-116 (2d ed. 1996) (footnotes omitted); "Once federal subject
matter jurisdiction is established over the underlying case between
[plaintiff] and [defendant], the jurisdictional propriety of each
additional claim is to be assessed individually. Thus, assuming
that jurisdiction is based upon diversity of citizenship between
[plaintiff] and [defendant], the question concerning impleader is
whether there is a jurisdictional basis for the claim by
[defendant] against [third-party defendant]. The fact that
[plaintiff] and [third-party defendant] may be co-citizens is
completely irrelevant. Unless [plaintiff] chooses to amend his
complaint to assert a claim against [third-party defendant],
[plaintiff] and [third-party defend-
67
ceeded to a six-day jury trial in November 1993, ending in a
unanimous verdict for Caterpillar. The District Court entered
judgment for Caterpillar on November 23, 1993, and denied Lewis'
motion for a new trial on February 1, 1994.
On appeal, the Court of Appeals for the Sixth Circuit accepted
Lewis' argument that, at the time of removal, Whayne Supply
remained a defendant in the case due to Liberty Mutual's
subrogation claim against it. App. to Pet. for Cert. 8a. Because
the party lineup, on removal, included Kentucky plaintiff Lewis and
Kentucky defendant Whayne Supply, the Court of Appeals observed
that diversity was not complete when Caterpillar took the case from
state court to federal court.
Id., at 8a-9a. Consequently,
the Court of Appeals concluded, the District Court "erred in
denying [Lewis'] motion to remand this case to the state court for
lack of subject matter jurisdiction."
Id., at 9a. That
error, according to the Court of Appeals, made it necessary to
vacate the District Court's judgment.
Ibid.2
Caterpillar petitioned for this Court's review. Caterpillar
stressed that the nondiverse defendant, Whayne Supply, had been
dismissed from the lawsuit prior to trial. It was therefore
improper, Caterpillar urged, for the Court of Appeals to vacate the
District Court's judgment-entered after several years of litigation
and a six-day trial-on account of a jurisdictional defect cured,
all agreed, by the time of trial and judgment. Pet. for Cert. 8. We
granted certiorari, 517 U. S. 1133 (1996), and now reverse.
II
The Constitution provides, in Article III, § 2, that "[t]he
judicial Power [of the United States] shall extend ... to Con-
ant] are simply not adverse, and there need be no basis of
jurisdiction between them."
2 Because the Court of Appeals held the District Court lacked
jurisdiction over the case, it did not reach several other issues
Lewis raised on appeal. See App. to Pet. for Cert. 2a, 9a, n.
3.
68
troversies ... between Citizens of different States." Commencing
with the Judiciary Act of 1789, ch. 20, § 11, 1 Stat. 78, Congress
has constantly authorized the federal courts to exercise
jurisdiction based on the diverse citizenship of parties. In
Strawbridge v.
Curtiss, 3 Cranch 267 (1806), this
Court construed the original Judiciary Act's diversity provision to
require complete diversity of citizenship.
Id., at 267. We
have adhered to that statutory interpretation ever since. See
Carden v.
Arkoma Associates, 494 U. S. 185, 187
(1990). The current general-diversity statute, permitting federal
district court jurisdiction over suits for more than $50,000
"between ... citizens of different States," 28 U. S. C. § 1332(a),
thus applies only to cases in which the citizenship of each
plaintiff is diverse from the citizenship of each defendant.3
When a plaintiff files in state court a civil action over which
the federal district courts would have original jurisdiction based
on diversity of citizenship, the defendant or defendants may remove
the action to federal court, 28 U. S. C. § 1441(a), provided that
no defendant "is a citizen of the State in which such action is
brought," § 1441(b).4 In a
3 This "complete diversity" interpretation of the
general-diversity provision is a matter of statutory construction.
"Article III poses no obstacle to the legislative extension of
federal jurisdiction, founded on diversity, so long as any two
adverse parties are not co-citizens."
State Farm Fire &
Casualty Co. v.
Tashire, 386 U. S. 523, 531
(1967).
4 In relevant part, 28 U. S. C. § 1441 provides:
"(a) Except as otherwise expressly provided by Act of Congress,
any civil action brought in a State court of which the district
courts of the United States have original jurisdiction, may be
removed by the defendant or the defendants, to the district court
of the United States for the district and division embracing the
place where such action is pending. For purposes of removal under
this chapter, the citizenship of defendants sued under fictitious
names shall be disregarded.
"(b) Any civil action of which the district courts have original
jurisdiction founded on a claim or right arising under the
Constitution, treaties or laws of the United States shall be
removable without regard to the citizenship or residence of the
parties. Any other such action shall be removable only if none of
the parties in interest properly joined and
69
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. §
1446(b). No case, however, may be removed from state to federal
court based on diversity of citizenship "more than 1 year after
commencement of the action."
Ibid.5
Once a defendant has filed a notice of removal in the federal
district court, a plaintiff objecting to removal "on the basis of
any defect in removal procedure" may, within 30 days, file a motion
asking the district court to remand the case to state court. §
1447(c). This 30-day limit does not apply, however, to
jurisdictional defects: "If at any time before final judgment it
appears that the district court lacks subject matter jurisdiction,
the case shall be remanded."
Ibid.6
served as defendants is a citizen of the State in which such
action is brought."
5 In full, 28 U. S. C. § 1446(b) provides:
"The notice of removal of a civil action or proceeding shall be
filed within thirty days after the receipt by the defendant,
through service or otherwise, of a copy of the initial pleading
setting forth the claim for relief upon which such action or
proceeding is based, or within thirty days after the service of
summons upon the defendant if such initial pleading has then been
filed in court and is not required to be served on the defendant,
whichever period is shorter.
"If the case stated by the initial pleading is not removable, a
notice of removal may be filed within thirty days after receipt by
the defendant, through service or otherwise, of a copy of an
amended pleading, motion, order or other paper from which it may
first be ascertained that the case is one which is or has become
removable, except that a case may not be removed on the basis of
jurisdiction conferred by section 1332 of this title more than 1
year after commencement of the action."
6 In relevant part, 28 U. S. C. § 1447(c) provides:
"A motion to remand the case on the basis of any defect in
removal procedure must be made within 30 days after the filing of
the notice of removal under section 1446(a). If at any time before
final judgment it appears that the district court lacks subject
matter jurisdiction, the case
70
III
We note, initially, two "givens" in this case as we have
accepted it for review. First, the District Court, in its decision
denying Lewis' timely motion to remand, incorrectly treated Whayne
Supply, the nondiverse defendant, as effectively dropped from the
case prior to removal. See App. 55. Second, the Sixth Circuit
correctly determined that the complete diversity requirement was
not satisfied at the time of removal. App. to Pet. for Cert.
8a-9a.7 We accordingly home in on this question: 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
defendant?
Petitioner Caterpillar relies heavily on our decisions in
American Fire &
Casualty Co. v.
Finn,
341 U. S. 6 (1951),
and
Grubbs v.
General Elec. Credit Corp., 405 U. S. 699 (1972),
urging that these decisions "long ago settled the proposition that
remand to the state court is unnecessary even if jurisdiction did
not exist at the time of removal, so long as the district court had
subject matter jurisdiction at the time of judgment." Brief for
Petitioner 8-9. Caterpillar is right that
Finn and
Grubbs are key cases in point and tend in Caterpillar's
favor. Each suggests that the existence of subject-matter
jurisdiction at time of judgment may shield a judgment against
later jurisdictional attack. But neither decision resolves
dispositively a controversy of the kind we face, for neither
involved a plaintiff who moved
shall be remanded .... The State court may thereupon proceed
with such case."
7 Caterpillar's petition for certiorari raised the question
whether the subrogation claim asserted by Liberty Mutual, and thus
the citizenship of Whayne Supply, should be disregarded for
purposes of determining diversity of citizenship, in view of the
settlement agreed upon between Lewis and Whayne Supply. See Pet.
for Cert. i, 18-23. Our order granting review did not encompass
that question, see 517 U. S. 1133 (1996), and we express no opinion
on it.
71
promptly, but unsuccessfully, to remand a case improperly
removed from state court to federal court, and then challenged on
appeal a judgment entered by the federal court.
In Finn, two defendants removed a case to federal court on the
basis of diversity of citizenship. 341 U. S., at 7-8. Eventually,
final judgment was entered for the plaintiff against one of the
removing defendants.
Id., at 8. The losing defendant urged
on appeal, and before this Court, that the judgment could not stand
because the requisite diversity jurisdiction, it turned out,
existed neither at the time of removal nor at the time of judgment.
Agreeing with the defendant, we held that the absence of federal
jurisdiction at the time of judgment required the Court of Appeals
to vacate the District Court's judgment.
Id., at 17-18.8
Finn's holding does not speak to the situation here, where the
requirement of complete diversity was satisfied at the time of
judgment. But Caterpillar points to well-known dicta in Finn more
helpful to its cause. "There are cases," the Court observed, "which
uphold judgments in the district courts even though there was no
right to removal."
Id., at 16.9 "In those cases," the Finn
Court explained, "the federal trial court would have had original
jurisdiction of the
8 The Court left open in Finn the question whether, on remand to
the District Court, "a new judgment [could] be entered on the old
verdict without a new trial" if the nondiverse defendant were
dismissed from the case. 341 U. S., at 18, n. 18. In the
litigation's second round, the District Court allowed the plaintiff
to dismiss all claims against the nondiverse defendant. See Finn v.
American Fire & Casualty Co.,
207 F.2d
113, 114 (CA5 1953), cert. denied, 347 U. S. 912 (1954).
Thereafter, the District Court granted a new trial, on the
assumption that the original judgment could not stand for lack of
jurisdiction. See 207 F. 2d, at 114. Ultimately, the Court of
Appeals for the Fifth Circuit set aside the judgment entered after
the second trial and ordered the original judgment reinstated.
Id., at 117.
9The Court cited Baggs v. Martin,
179 U. S. 206 (1900), and
three lower federal-court cases. Finn, 341 U. S., at 16, n. 14.
72
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."
Ibid.
The discussion in
Finn concentrated on cases in which
courts held
removing defendants estopped from challenging
final judgments on the basis of removal errors. See id., at 17. The
Finn Court did not address the situation of a plaintiff such
as Lewis, who chose a state court as the forum for his lawsuit,
timely objected to removal before the District Court, and then
challenged the removal on appeal from an adverse judgment.
In
Grubbs, a civil action filed in state court was
removed to federal court on the petition of the United States,
which had been named as a party defendant in a "cross-action" filed
by the original defendant. 405 U. S., at 700-701; see 28 U. S. C. §
1444 (authorizing removal of actions brought against the United
States, pursuant to 28 U. S. C. § 2410, with respect to property on
which the United States has or claims a lien). No party objected to
the removal before trial or judgment. See
Grubbs, 405 U. S.,
at 701. The Court of Appeals nonetheless held, on its own motion,
that the "interpleader" of the United States was spurious, and that
removal had therefore been improper under 28 U. S. C. § 1444. See
Grubbs, 405 U. S., at 702. On this basis, the Court of
Appeals concluded that the District Court's judgment should be
vacated and the case remanded to state court. See
ibid.
This Court reversed.
Id., at 700. We explained:
"Longstanding decisions of this Court make clear ... that where
after removal a case is tried on the merits without objection and
the federal court enters judgment, the issue in subsequent
proceedings on appeal is not whether the case was properly removed,
but whether the federal district court would have had original
jurisdiction of the case had it been filed in that court."
Id., at 702.
73
We concluded that, "whether or not the case was properly
removed, the District Court did have jurisdiction of the parties at
the time it entered judgment."
Id., at 700. "Under such
circumstances," we held, "the validity of the removal procedure
followed
may not be raised for the first time on appeal."
Ibid. (emphasis added).
Grubbs instructs that an
erroneous removal need not cause the destruction of a final
judgment, if the requirements of federal subject-matter
jurisdiction are met at the time the judgment is entered.
Grubbs, however, dealt with a case removed without
objection. The decision is not dispositive of the question whether
a plaintiff, who timely objects to removal, may later successfully
challenge an adverse judgment on the ground that the removal did
not comply with statutory prescriptions.
Beyond question, as Lewis acknowledges, there was in this case
complete diversity, and therefore federal subject-matter
jurisdiction, at the time of trial and judgment. See Brief for
Respondent 18-19 (diversity became complete "when Liberty Mutual
settled its subrogation claim with Whayne Supply and the latter was
formally dismissed from the case"). The case had by then become,
essentially, a two-party lawsuit: Lewis, a citizen of Kentucky, was
the sole plaintiff; Caterpillar, incorporated in Delaware with its
principal place of business in Illinois, was the sole defendant
Lewis confronted. Caterpillar maintains that this change cured the
threshold
statutory misstep, i.
e., the removal of a
case when diversity was incomplete. Brief for Petitioner 7, 13.
Caterpillar moves too quickly over the terrain we must cover.
The
jurisdictional defect was cured, i.
e., complete
diversity was established before the trial commenced. Therefore,
the Sixth Circuit erred in resting its decision on the absence of
subject-matter jurisdiction. But a statutory fiaw-Caterpillar's
failure to meet the § 1441(a) requirement that the case be fit for
federal adjudication at the time the removal petition is
filed-remained in the unerasable history of the case.
74
And Lewis, by timely moving for remand, did all that was
required to preserve his objection to removal. An order denying a
motion to remand, "standing alone," is "[o]bviously ... not final
and [immediately] appealable" as of right.
Chicago, R. 1.
&
P. R. Co. v.
Stude, 346 U. S. 574, 578
(1954). Nor is a plaintiff required to seek permission to take an
interlocutory appeal pursuant to 28 U. S. C. § 1292(b) 10 in order
to avoid waiving whatever ultimate appeal right he may have.ll
Indeed, if a party had to invoke § 1292(b) in order to preserve an
objection to an interlocutory ruling, litigants would be obliged to
seek § 1292(b) certifications constantly. Routine resort to §
1292(b) requests would hardly comport with Congress' design to
reserve interlocutory review for "'exceptional'" cases while
generally retaining for the federal courts a firm final judgment
rule.
Coopers &
Lybrand v.
Livesay,
437 U. S. 463,
475 (1978) (quoting
Fisons, Ltd. v.
United States,
458 F.2d
1241, 1248 (CA7), cert. denied, 405 U. S. 1041 (1972)).
Having preserved his objection to an improper removal, Lewis
urges that an "all's well that ends well" approach is inappropriate
here. He maintains that ultimate satisfaction of the subject-matter
jurisdiction requirement ought not swallow up antecedent statutory
violations. The course Caterpillar advocates, Lewis observes, would
disfavor diligent plaintiffs who timely, but unsuccessfully, move
to check improper removals in district court. Further, that course
would allow improperly removing defendants to profit from
10 Section 1292(b) provides for interlocutory appeals from
otherwise not immediately appealable orders, if conditions
specified in the section are met, the district court so certifies,
and the court of appeals exercises its discretion to take up the
request for review.
11 On brief, Caterpillar argued that "Lewis effectively waived
his objection to removal by failing to seek an immediate appeal of
the district court's refusal to remand." Brief for Petitioner 13.
We reject this waiver argument, though we recognize that it has
attracted some support in Court of Appeals opinions. See,
e.
g.,
Able v.
Upjohn Co., 829 F.2d
1330, 1333-1334 (CA4 1987), cert. denied, 485 U. S. 963
(1988).
75
their disregard of Congress' instructions, and their ability to
lead district judges into error.
Concretely, in this very case, Lewis emphasizes, adherence to
the rules Congress prescribed for removal would have kept the case
in state court. Only by removing prematurely was Caterpillar able
to get to federal court inside the oneyear limitation set in §
1446(b).12 Had Caterpillar waited until the case was ripe for
removal, i.
e., until Whayne Supply was dismissed as a
defendant, the one-year limitation would have barred the way,13 and
plaintiff's choice of forum would have been preserved.14
These arguments are hardly meritless, but they run up against an
overriding consideration. Once a diversity case has been tried in
federal court, with rules of decision supplied by state law under
the regime of
Erie R. Co. v.
Tompkins,
304 U. S. 64 (1938),
considerations of finality, efficiency, and economy become
overwhelming.
Our decision in
Newman-Green, Inc. v.
Alfonzo-Larrain, 490 U. S. 826 (1989), is
instructive in this regard.
NewmanGreen did not involve
removal, but it did involve the federal
12 Congress amended § 1446(b) in 1988 to include the one-year
limitation in order to "reduc[e] the opportunity for removal after
substantial progress has been made in state court." H. R. Rep. No.
100-889, p. 72 (1988).
13 On appeal, Lewis raised only the absence of diversity. He did
not refer to the one-year limitation prior to his brief on the
merits in this Court. See Tr. of Oral Arg. 17, 30-31. Under this
Court's Rule 15.2, a nonjurisdictional argument not raised in a
respondent's brief in opposition to a petition for a writ of
certiorari "may be deemed waived." Under the facts of this case,
however, addressing the implications of § 1446(b)'s oneyear
limitation is "'predicate to an intelligent resolution' of the
question presented."
Ohio v.
Robinette, ante, at 38
(quoting
Vance v.
Terrazas, 444 U. S. 252, 258-259,
n. 5 (1980)). We therefore regard the issue as one "fairly
included" within the question presented. This Court's Rule 14.1.
The parties addressed the issue in their briefs and at oral
argument, and we exercise our discretion to decide it.
14 Lewis preferred state court to federal court based on
differences he perceived in,
inter alia, the state and
federal jury systems and rules of evidence. See Brief for
Respondent 22-23.
76
courts' diversity jurisdiction and a party defendant whose
presence, like Whayne Supply's in this case, blocked complete
diversity.
Newman-Green proceeded to summary judgment with
the jurisdictional flaw-the absence of complete
diversity-undetected. See id., at 828-829. The Court of Appeals
noticed the flaw, invited the parties to address it, and, en banc,
returned the case to the District Court "to determine whether it
would be prudent to drop [the jurisdiction spoiler] from the
litigation."
Id., at 830. We held that the Court of Appeals
itself had authority "to dismiss a dispensable nondiverse party,"
although we recognized that, ordinarily, district courts are better
positioned to make such judgments.
Id., at 837-838.
"[R]equiring dismissal after years of litigation," the Court
stressed in
Newman-Green, "would impose unnecessary and
wasteful burdens on the parties, judges, and other litigants
waiting for judicial attention."
Id., at 836. The same may
be said of the remand to state court Lewis seeks here. Cf.
Knop v.
McMahan, 872 F. 2d 1132, 1139, n. 16 (CA3
1989) ("To permit a case in which there is complete diversity
throughout trial to proceed to judgment and then cancel the effect
of that judgment and relegate the parties to a new trial in a state
court because of a brief lack of complete diversity at the
beginning of the case would be a waste of judicial
resources.").
Our view is in harmony with a main theme of the removal scheme
Congress devised. Congress ordered a procedure calling for
expeditious superintendence by district courts. The lawmakers
specified a short time, 30 days, for motions to remand for defects
in removal procedure, 28 U. S. C. § 1447(c), and district court
orders remanding cases to state courts generally are "not
reviewable on appeal or otherwise," § 1447(d). Congress did not
similarly exclude appellate review of refusals to remand. But an
evident concern that may explain the lack of symmetry relates to
the federal courts' subject-matter jurisdiction. Despite a federal
trial court's threshold denial of a motion to remand, if, at the
end
77
of the day and case, a
jurisdictional defect remains
uncured, the judgment must be vacated. See Fed. Rule Civ. Proc.
12(h)(3) ("Whenever it appears by suggestion of the parties or
otherwise that the court lacks jurisdiction of the subject matter,
the court shall dismiss the action.");
Finn, 341 U. S., at
18. In this case, however, no jurisdictional defect lingered
through judgment in the District Court. To wipe out the
adjudication post judgment, and return to state court a case now
satisfying all federal jurisdictional requirements, would impose an
exorbitant cost on our dual court system, a cost incompatible with
the fair and unprotracted administration of justice.
Lewis ultimately argues that, if the final judgment against him
is allowed to stand, "all of the various procedural requirements
for removal will become unenforceable"; therefore, "defendants will
have an enormous incentive to attempt wrongful removals." Brief for
Respondent 9. In particular, Lewis suggests that defendants will
remove prematurely "in the hope that some subsequent developments,
such as the eventual dismissal of nondiverse defendants, will
permit thee] case to be kept in federal court."
Id., at 21.
We do not anticipate the dire consequences Lewis forecasts.
The procedural requirements for removal remain enforceable by
the federal trial court judges to whom those requirements are
directly addressed. Lewis' prediction that rejection of his
petition will "encourag[e] state court defendants to remove cases
improperly," id., at 19, rests on an assumption we do not
indulge-that district courts generally will not comprehend, or will
balk at applying, the rules on removal Congress has prescribed. The
prediction furthermore assumes defendants' readiness to gamble that
any jurisdictional defect, for example, the absence of complete
diversity, will first escape detection, then disappear prior to
judgment. The well-advised defendant, we are satisfied, will
foresee the likely outcome of an unwarranted removala swift and
nonreviewable remand order, see 28 U. S. C.
78
§§ 1447(c), (d), attended by the displeasure of a district court
whose authority has been improperly invoked. The odds against any
gain from a wrongful removal, in sum, render improbable Lewis'
projection of increased resort to the maneuver.
***
For the reasons stated, the judgment of the Court of Appeals is
reversed, and the case is remanded for proceedings consistent with
this opinion.
It is so ordered.
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