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Case Law Update: Diversity Jurisdiction

Schur v. L.A. Weight Loss Centers, Inc, No. 07-3761 (8/14/09) found that the district court lacked diversity jurisdiction to enter summary judgment in state-court wrongful death action that had been removed to federal court. While parties were completely diverse at time of removal, Magistrate Judge granted plaintiff’s motion to add two non-diverse defendants, which therefore required remand of case to state court. Moreover, while Dist. Ct. had authority to review sua sponte propriety of order adding said non-diverse defendants, Dist. Ct. erred in finding that fraudulent joinder doctrine applied so as to permit Dist. Ct. to disregard said defendants and retain jurisdiction of case since state law actually gave plaintiff cause of action against said defendants. Additionally, plaintiff’s motion to add said parties was not untimely where said motion was filed within two months after plaintiff had learned through discovery of roles played by said defendants. This case will impact all Illinois cases.

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