Once a case is removed to federal district court on the basis of the diverse citizenship of the original parties, staying there is not guaranteed. Certain subsequent events can still deprive the court of jurisdiction. One such event, Fed. R. Civ. P. 24 intervention of a non-diverse plaintiff, led to a recent Eleventh Circuit decision remanding the case to state court. In Hensley v. Hartford Casualty Ins. Co., 2024 WL 4035389 (Sept. 4, 2024), the defendant removed a Georgia state court personal injury case to federal district court. After removal, Hartford Casualty, which paid workers’ compensation benefits to one of the plaintiffs, moved to intervene to assert a subrogation lien against any recovery. The unopposed motion was granted, with no mention of any jurisdictional issue by the court or any party. After discovery, the court granted the defendant’s motion for summary judgment on the merits. The plaintiffs appealed.
On appeal, the Eleventh Circuit predictably posed jurisdictional questions, leading to a limited remand for the purpose of determining the citizenship of all parties and whether jurisdiction continued after Hartford’s intervention. On remand, the district court proposed to deny Hartford’s intervention request and reenter summary judgment against the plaintiffs. The Eleventh Circuit responded by posing a second set of jurisdictional questions, asking whether Hartford’s intervention was as of right and whether it was an indispensable party. These questions were ultimately the subject of the court’s opinion, authored by Judge Lisa Branch.
The court explained that the intervention of an indispensable party under Fed. R. Civ. P. 19 destroys diversity jurisdiction because that party cannot be dismissed from the case. The court determined that Hartford had a right to intervene under Rule 24(a)(2) because applicable Georgia law required insurers seeking subrogation to intervene in an employee’s suit against an alleged tortfeasor to protect their lien rights. For the same reason, the court also held that Hartford was an indispensable party required to be joined for just adjudication. The court saw no way that relief could be fashioned to avoid the resulting prejudice to Hartford if not joined.
The court noted that the supplemental jurisdiction statute could not be invoked to preserve jurisdiction because 28 U.S.C. § 1367(b) precludes such jurisdiction over claims by persons seeking to intervene as plaintiffs when exercising such jurisdiction would be inconsistent with the requirements of the diversity statute.
The court remanded the case with instructions to dismiss for lack of subject matter jurisdiction and remand to state court.