ALF Urges Supreme Court To Reject “Post-Judgment Vertical Forum Shopping”
The certiorari petition in Hain Celestial Group, Inc. & Whole Foods Market, Inc. v. Palmquist (24-724) presents an important unresolved question fundamental to ALF’s civil justice mission. The Fifth Circuit’s holding that the district court’s final judgment as to completely diverse parties must be vacated—and that this product liability suit must be remanded in its entirety for de novo adjudication in state court—not only is wrong as a matter of law, but also encourages post-judgment vertical (i.e., state court vs. federal court) forum shopping. Under the Fifth Circuit’s ruling, plaintiffs now have more reason than ever to include a nondiverse defendant at the outset of their state-court suit: They now know that if the suit is removed on diversity grounds, and the district court, after dismissing the nondiverse defendant (here, Petitioner Whole Foods Market) as improperly joined, enters final judgment for the diverse defendant (here, Petitioner Hain Celestial Group), the court of appeals might reverse the improper-joinder ruling and reward them with a total do-over in a more hospitable state trial court.
This state-court mulligan—a second chance to impose liability on a product manufacturer that already has endured the costs and burdens of district court litigation and won on the merits—is especially wasteful, troubling, and unfair where, as here, the district court, after hearing at trial the ambivalent testimony of the plaintiffs’ experts, has concluded that the critical element of general causation is “simply not supported by the science.”
There is no dispute that the plaintiffs’ product liability claims were adjudicated fully and fairly by the district court. In contrast, the post-judgment vertical forum shopping that the Fifth Circuit has authorized—tantamount to double jeopardy—is fundamentally unfair to Hain, which must relitigate in state court (or be forced to settle) a liability suit that it already has won on the merits in federal court. Absent the Supreme Court’s intercession, this unfair do-over of the district court’s merits determination—which the Fifth Circuit did not disturb—also would be a tremendous waste of judicial resources for both federal and state courts, whose dockets are chronically clogged.
The Fifth Circuit’s precedential ruling is particularly troubling in product liability litigation where scientific and/or medical testimony is involved. As the record reflects, the district court, in granting judgment as a matter of law to product manufacturer Hain, carefully considered Respondents’ expert and other trial testimony and concluded that it failed to address, much less demonstrate, the essential element of general causation. Although the court of appeals expressly declined to address the merits of the district court’s conclusion, it has cleared the way for a state trial court to second guess the district court on the adequacy of the causation testimony.
Issue Areas:
Civil Justice, Sound Science
Case:
Hain Celestial Group, Inc. & Whole Foods Market, Inc. v. Sarah Palmquist (24-724) (Supreme Court) (petition)
Read the Amicus Brief:
Question(s) Presented:
1. Whether a district court’s final judgment as to completely diverse parties must be vacated
when an appellate court later determines that it erred by dismissing a non-diverse party at
the time of removal.
2. Whether a plaintiff may defeat diversity jurisdiction after removal by amending the
complaint to add factual allegations that state a colorable claim against a nondiverse party
when the complaint at the time of removal did not state such a claim.
Additional Background:
As the certiorari petition explains, the Fifth Circuit’s opinion deepens an existing split of authority regarding whether a district court’s post-removal final judgment as to completely diverse parties must be vacated if a court of appeals later determines that a nondiverse party was erroneously dismissed on the ground of improper joinder. By answering this remedy-related question affirmatively, and ordering that the case be remanded to state trial court for a total do-over, the Fifth Circuit has given a green light to post-judgment vertical forum shopping. The circuit court’s opinion provides plaintiffs and their counsel in product liability and other types of litigation a significant added incentive (i) for throwing a nondiverse party into the mix; (ii) amending the substantive allegations in their complaint after removal in a further effort to destroy diversity jurisdiction; and (iii) even if remand is denied, district court litigation proceeds through discovery and trial, and final judgment is rendered in favor of the remaining, diverse, defendant, appealing the denial of remand with the hope and prospect of being able to start anew in state court.
ALF’s Amicus Brief:
ALF’s brief explains that when plaintiff-side forum shopping places a defendant at an unfair disadvantage, it offends due process and undermines the nation’s civil justice system. This is the case in the Hain Celestial litigation.
The fact that the litigation was removed to, and fully and fairly adjudicated by, a Texas federal district court—which granted judgment as a matter of law to Hain after dismissing Texas-based Whole Foods as improperly joined and after hearing the plaintiffs’ case against Hain at trial—illustrates the fundamental unfairness of the post-judgment vertical forum shopping that the Fifth Circuit’s opinion has enabled and encouraged. As a practical matter, the court of appeals not only has authorized, but also encouraged, unfair forum shopping. ALF’s amicus brief argues that the Court needs to grant certiorari to ensure that this post-judgment forum shopping—and enormous waste of judicial resources—does not recur.
Status:
Petition-stage briefing is underway.
Contact:
Email ALF Executive Vice President & General Counsel Lawrence Ebner.
Date Originally Posted: February 3, 2025