## Facts

- James David Lewis, a Kentucky citizen, was injured operating a bulldozer and filed Kentucky state-law tort and warranty claims against Caterpillar Inc. (a Delaware/Illinois citizen) and Whayne Supply Co. (a Kentucky citizen).
- Liberty Mutual (a Massachusetts citizen) intervened as a plaintiff seeking subrogation for workers’ compensation benefits paid to Lewis, asserting claims against both Caterpillar and Whayne.
- Caterpillar removed the case to federal court under diversity jurisdiction after learning Lewis and Whayne had reached a settlement, anticipating Whayne would be dismissed.
- Lewis promptly moved to remand, arguing complete diversity still was absent because Whayne remained in the case due to Liberty Mutual’s subrogation claim.
- The district court denied remand, even though complete diversity was not present at the time of removal.
- Before trial, Liberty Mutual settled its claim against Whayne, Whayne was dismissed, and complete diversity then existed.
- The case proceeded to a federal jury trial, resulting in a judgment for Caterpillar.
- The Sixth Circuit vacated the judgment for lack of subject-matter jurisdiction because diversity was incomplete at removal.

## Issues

1. Whether an erroneous denial of a timely remand motion after improper removal for lack of complete diversity requires vacatur of a final federal judgment when complete diversity exists at the time judgment is entered.

## Decision

- The Supreme Court unanimously reversed the Sixth Circuit.
- The Court held that the district court’s failure to remand an improperly removed case is not fatal to a final judgment if federal jurisdictional requirements are satisfied when judgment is entered.
- Because Whayne was dismissed before trial and complete diversity existed when judgment was entered, the judgment for Caterpillar was not subject to vacatur solely due to the earlier removal defect.

## Legal Principles

- A removal defect based on incomplete diversity at the time of removal does not require setting aside a final judgment if the nondiverse party is dismissed and complete diversity exists at the time judgment is entered.
- In assessing whether a final judgment may stand, a federal court may consider whether the requirements of diversity jurisdiction were satisfied at the time of judgment, even if removal was premature.
- Although the case should be remanded when statutory removal prerequisites are not met and a timely remand motion is filed, violation of removal procedure does not automatically nullify a later judgment entered with proper subject-matter jurisdiction.
- Preserving final judgments can outweigh correcting a cured removal error when jurisdiction is secure before trial and judgment.

## Conclusion

A federal judgment need not be vacated merely because removal was improper when filed, so long as the jurisdictional defect is cured before judgment and the district court has proper diversity jurisdiction when it enters final judgment.


Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996)