United States Supreme Court
519 U.S. 61 (1996)
James David Lewis (plaintiff), a Kentucky resident, was injured while operating a bulldozer. Lewis filed a lawsuit against Caterpillar Inc. (Caterpillar) and Whayne Supply Company (Whayne) in state court alleging defective manufacturing, negligent maintenance, failure to warn, and breach of warranty. Caterpillar (defendant) was a Delaware corporation that manufactured the bulldozer. Whayne was a Kentucky corporation that maintained the bulldozer. Several months after the suit was filed, Liberty Mutual, a Massachusetts corporation, intervened as a plaintiff. Before trial commenced, Lewis settled with Whayne. Subsequently, Caterpillar motioned to remove the lawsuit from state court to federal court on the grounds of diversity of citizenship. Caterpillar argued that the settlement eliminated Whayne as a defendant and thus created complete diversity between the defendant and the plaintiffs. Lewis objected to the removal arguing that Liberty Mutual had not settled its claims against Whayne and thus Whayne remained a defendant to the suit, defeating complete diversity. The federal district court granted Caterpillar’s request for removal. After the grant of removal, Liberty Mutual and Whayne settled. After a jury trial Lewis’s suit against Caterpillar was dismissed. The court of appeals vacated the district court's judgment and held that the district court should not have granted removal because Whayne was still a party to the action at that time. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Ginsburg, J.)
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