American Fire & Cas. Co. v. Finn
341 U.S. 6 (1951)

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U.S. Supreme Court

American Fire & Cas. Co. v. Finn, 341 U.S. 6 (1951)

American Fire & Casualty Co. v. Finn

No. 252

Argued December 7, 1950

Decided April 9, 1951

341 U.S. 6

Syllabus

In a suit brought in a Texas court by a resident of that State to recover for a loss by fire, the complaint named as defendants two foreign insurance companies (one of which is the petitioner here) and a resident agent of the companies. The single wrong for which relief was sought was the failure to compensate for the loss, and the three defendants were joined because of uncertainty as to who was liable. After September 1, 1948, petitioner removed the case to the Federal District Court, which rendered judgment against petitioner and absolved the other defendants. Petitioner thereafter moved to vacate the judgment and to remand the case to the state court.

Held:

1. In the light of the allegations of the complaint in this case, separate and independent causes of action were not stated; and, under 28 U.S.C. § 1441(c), there was no right of removal of the case from the state court to the federal court. Pp. 341 U. S. 9-16.

(a) In adopting the "separate and independent claim or cause of action" test for removability, 28 U.S.C. § 1441(c) (1948), Congress intended to avoid the difficulties experienced in determining the meaning of the former provision of 28 U.S.C. § 71, and to limit removal from state courts. Pp. 341 U. S. 9-10.

(b) A separable controversy is no longer an adequate ground for removal unless it also constitutes a "separate and independent claim or cause of action." Pp. 341 U. S. 11-12.

(c) The phrase "cause of action," as used in § 1441, must be given a meaning which will accomplish the congressional purpose of limiting and simplifying removal. Pp. 341 U. S. 12-13.

(d) Where a plaintiff seeks relief for a single wrong, arising from an interlocked series of transactions, there is no "separate and independent claim or cause of action" under 28 U.S.C. § 1441(c). Pp. 341 U. S. 13-14.

2. Because of the presence of a citizen of Texas on each side, the District Court would not have had original jurisdiction of this suit, either as stated in the complaint or in the posture of the case at the time of judgment. Therefore, the judgment of the District Court must be vacated. Pp. 341 U. S. 16-19.

Page 341 U. S. 7

(a) To permit a federal trial court to enter judgment in a case removed without right from a state court where the federal court could not have original jurisdiction of the suit, even in its posture at the time of judgment, would, by the act of the parties, work a wrongful extension of federal jurisdiction and give district courts power that Congress has denied them. Pp. 341 U. S. 17-18.

181 F.2d 845, reversed.

In a suit removed by petitioner from a state court, the District Court entered judgment against petitioner. The District Court's denial of petitioner's subsequent motion to vacate the judgment and remand the case to the state court was affirmed by the Court of Appeals. 181 F.2d 845. This Court granted certiorari. 340 U.S. 849. Reversed and remanded, p. 341 U. S. 19.

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