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St. Paul Mercury Indemnity Co. v. Red Cab Co.

303 U.S. 283 (1938)

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St. Paul Mercury Indemnity Co. v. Red Cab Co.

United States Supreme Court
303 U.S. 283 (1938)

Facts

Red Cab Company (plaintiff), an Indiana corporation, sued Saint Paul Mercury Indemnity Company (Saint Paul) (defendant), a Minnesota corporation, in Indiana state court. Red Cab claimed that Saint Paul had issued a 30-day workers’ compensation insurance binder, during which time several employees were injured. Red Cab alleged that Saint Paul wrongfully denied coverage, forcing Red Cab to pay attorneys, investigators, and medical bills and compensation to injured workers. Red Cab demanded $4,000 in damages. Saint Paul removed the case to federal court based on diversity jurisdiction. At the time, the federal amount-in-controversy jurisdiction threshold was $3,000. Red Cab then amended its complaint, attaching an itemized damages statement totaling only $1,380.89. The district court entered judgment for Red Cab. On appeal, the Seventh Circuit declined to reach the merits, holding that the reduced claim amount deprived the district court of jurisdiction and required remand to the state court. The United States Supreme Court granted certiorari.

Rule of Law

Issue

Holding and Reasoning (Roberts, J.)

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