Jefferson v. Certain Underwriters at Lloyd's London
658 F. App'x 738
| 5th Cir. | 2016Background
- Plaintiffs sued multiple defendants in Louisiana state court on state-law asbestos claims; Lloyd’s was later added as an excess insurer defendant.
- One original defendant impleaded South African entities (including IDC); IDC removed the case to federal court under the Foreign Sovereign Immunities Act (FSIA).
- The MDL court granted summary judgment for the South African entities, and the case was returned to the Eastern District of Louisiana; subsequent settlements left Lloyd’s as the sole remaining defendant.
- The district court sua sponte remanded the remaining claims to state court under 28 U.S.C. § 1367(c), stating the parties were not diverse, without briefing on diversity.
- Lloyd’s appealed, arguing complete diversity existed at the time of the remand and the district court therefore lacked discretion to remand.
- The Fifth Circuit found the record inadequate to determine Lloyd’s citizenship at removal, vacated the remand order, and remanded for factual development on diversity jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court could remand after removal when non-diverse parties were dismissed | Jefferson: presence of non-diverse defendants at filing means only supplemental jurisdiction existed and remand was proper | Lloyd’s: dismissal/settlement of non-diverse parties created complete diversity so district court lacked power to remand | Dismissal of non-diverse parties can cure diversity defects; whether district court could remand depends on citizenship at time of remand |
| Whether the propriety of a remand is judged at time of removal or remand | Jefferson: jurisdictional status at filing/removal controls | Lloyd’s: later events (dismissals) can create diversity and govern at time of remand | Propriety is judged at the time of remand, not time of removal |
| Whether Lloyd’s established diversity of citizenship on appeal | Jefferson: remand order should stand; record supports non-diversity | Lloyd’s: argues Lykes (its insured) was not citizen of plaintiffs’ states, so Lloyd’s is diverse | Fifth Circuit: record lacked sufficient, admissible evidence to establish Lloyd’s citizenship; appellant bears burden to show jurisdiction |
| Appropriate remedy when record is insufficient on jurisdictional facts | Jefferson: affirm remand | Lloyd’s: vacate remand | Court vacated remand and remanded to district court to develop record and decide diversity jurisdiction |
Key Cases Cited
- Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336 (1976) (remand orders reviewability principles)
- Carlsbad Tech. v. HIF Bio, Inc., 556 U.S. 635 (2009) (appellate review of remand when district court declined to exercise jurisdiction after concluding it lacked original jurisdiction)
- Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989) (Rule 21 dismissals of non-diverse defendants can preserve federal jurisdiction)
- Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996) (postremoval dismissal of diversity-destroying defendant can cure jurisdictional defect)
- Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567 (2004) (time-of-filing rule limitations; dismissals can cure diversity defects)
- Firefighters’ Ret. Sys. v. Citco Grp. Ltd., 796 F.3d 520 (5th Cir. 2015) (propriety of remand judged at time of remand; vacating remand when later jurisdictional grounds existed)
- Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242 (5th Cir. 2011) (vacating remand where diversity existed after dismissal of non-diverse parties)