Lumbermen’s Mut. Cas. Co. v. Elbert, 348 U.S. 48 (1954)

Lumbermen’s Mutual Casualty Co. v. Elbert

No. 11

Argued October 14, 1954
Decided December 6, 1954
348 U.S. 48

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

Under 28 U.S.C. § 1332(a), a Federal District Court in Louisiana had jurisdiction over this suit for damages in excess of $3,000 brought under the Louisiana Direct Action Statute against the alleged wrongdoer’s insurer alone, where diversity of citizenship existed between the claimant and the defendant insurer but not between the complainant and the alleged wrongdoer. Pp. 49-53.

(a) Since the Louisiana courts have construed the Direct Action Statute as creating a separate and distinct cause of action against the insurer which an injured party may elect in lieu of his action against the tortfeasor, the citizenship of the tortfeasor is disregarded for purposes of federal jurisdiction. Pp. 50-51.

(b) Neither under the Louisiana statute and practice nor by federal standards was the tortfeasor an indispensable party to this litigation, and failure to join her as a defendant did not deprive the federal court of jurisdiction. Pp. 51-52.

(c) Notwithstanding the differing standards of review on appeal of a jury verdict in the Louisiana and federal courts, the latter should not decline, as a matter of discretion, to exercise their jurisdiction over a suit such as this against the insurer alone. Pp. 52-53.

201 F.2d 500 affirmed.

This suit in a Federal District Court against a foreign corporation, based on diversity of citizenship, was dismissed for want of jurisdiction, 107 F.Supp. 299, and a motion for a rehearing was overruled, 108 F.Supp. 157. The Court of Appeals reversed, 201 F.2d 500, and denied rehearing, 202 F.2d 744. This Court granted certiorari, 347 U.S. 965. Affirmed, p. 53.