Aetna Casualty & Surety Co. v. Flowers

Edward E. Flowers was employed by J. A. Jones Construction Company (Jones) (defendant), a North Carolina corporation. Jones was insured by Aetna Casualty & Surety Company (Aetna) (defendant), a Connecticut corporation. Edward died as a result of a workplace accident. His widow, Fannie M. Flowers (plaintiff), a Tennessee citizen, filed a lawsuit against Jones and Aetna in state court under Tennessee’s workers’-compensation law, seeking burial expenses and benefits up to $5,000 for herself and her two minor children. Under Tennessee law, workers’-compensation benefits could be paid by employers in installments. Benefits would cease to be available to a widow if she died or remarried before the full benefits were paid out, and minor children would stop receiving benefits when they turned 18. Jones and Aetna removed the case to federal district court on diversity-jurisdiction grounds, asserting that there was diversity of citizenship between the parties and the damages Fannie sought exceeded the $3,000 amount-in-controversy requirement. Fannie filed a motion to remand the case to state court. Jones and Aetna filed a motion to dismiss the case, arguing that Fannie filed the case in an improper venue. The district court dismissed the case for lack of lack of jurisdiction based on improper venue and did not reach the question of diversity jurisdiction. The court of appeals reversed the district court and remanded the case to state court. The court of appeals reasoned that due to the installment payments and conditions on the payment of benefits, the amount-in-controversy requirement for diversity jurisdiction was not satisfied because Fannie possibly would receive less than $3,000 in benefits before the benefits terminated. The court of appeals did not consider the venue question. Aetna and Jones appealed. The United States Supreme Court granted certiorari to consider whether the amount-in-controversy requirement for diversity jurisdiction was met.