Opinion ID: 2783175
Heading Depth: 2
Heading Rank: 1

Heading: Diversity Jurisdiction and Removal

Text: The Brookses’ initial argument rests on two facts: first, the estate, also a defendant, did not consent to removal; second, both the Brookses and the estate, by virtue of Lawrence’s citizenship, are citizens of Missouri for purposes of diversity, see 28 U.S.C. § 1332(c)(2) (deeming estates to have the same state citizenship as decedents). The Brookses thus challenge removal and jurisdiction. See 28 U.S.C. §§ 1332(a)(1) (requiring diversity of citizenship); 1441(a) (requiring federal courts to have “original jurisdiction” for removal); 1446(b)(2)(A) (requiring all properly joined and served defendants to “join in or consent to the removal of the action”). Though we generally must look to all defendants in assessing diversity and consent to removal, “the presence of nominal or formal or unnecessary parties has no controlling significance for removal purposes,” Bradley v. Md. Cas. Co., 382 F.2d 415, 419 (8th Cir. 1967), and “may be ignored in determining whether diversity jurisdiction exists,” Slater v. Republic-Vanguard Ins. Co., 650 F.3d 1132, 1134 (8th Cir. 2011). In a classic enunciation of this rule, Justice Story wrote for the Supreme Court: “This Court will not suffer its jurisdiction to be ousted by the mere joinder or non-joinder of formal parties; but will rather proceed without them, and decide upon the merits of the case between the parties, who have the real interests before it, whenever it can be done without prejudice to the rights of others.” Wormley v. Wormley, 21 U.S. (8 Wheat.) 421, 451 (1823) (emphasis added). A party therefore “‘may be ignored’” for diversity and removal purposes if that party is not a “‘real -4- party in interest.’” Cascades Dev. of Minn., LLC v. Nat’l Specialty Ins., 675 F.3d 1095, 1098 (8th Cir. 2012) (quoting Iowa Pub. Serv. Co. v. Med. Bow Coal Co., 556 F.2d 400, 404 (8th Cir. 1977)). The Brookses maintain “the Estate . . . was not a nominal party . . . because the [UIM endorsement] required The Estate’s presence in the litigation.” The Brookses’ only basis for this assertion is policy language requiring them to “exhaust[]” the underinsured motorist’s liability coverage and prove they are “legally entitled” to recover from the motorist. Neither policy condition demands the estate’s presence in the lawsuit, nor would the requirement of such a procedural formality give the estate any real interest in the dispute between the Brookses and Midwestern. In Bradley, we addressed whether removal was proper despite the absence of consent from two third-party defendants when the parties to the third-party action all stipulated “as to the compromise and settlement of the third-party action.” Bradley, 382 F.2d at 419. As then-Judge Blackmun wrote for the panel, the third-party defendants, “[f]or all practical purposes, . . . went out of the lawsuit when that stipulation was executed.” Id. “Their interest in the suit from that point on was a fragile one,” and were therefore ignored “for removal purposes.” Id.; see also R.C. Wegman Constr. Co. v. Admiral Ins. Co., 629 F.3d 724, 726 (7th Cir. 2011) (“[A] party isn’t permitted to destroy federal diversity jurisdiction by naming as a defendant someone against whom he does not seek relief.” (citing Walden v. Skinner, 101 U.S. 577, 589 (1879))). The situation here is precisely the same: through the settlement, the Brookses waived all their claims against the estate and its insurer. We agree with the district court that “once the claims against [the estate] were settled the continuation of the suit against [it] was a nullity; the addition of Midwestern Indemnity was the equivalent of taking a new dispute against a new party and placing it in the shell that was the original suit against [the estate].” Thus, diversity jurisdiction exists and removal was proper. -5-