Jordan D. White, Plaintiff-appellee, v. Commercial Standard Fire and Marine Company, Defendant-appellant, 450 F.2d 785 (5th Cir. 1971)

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US Court of Appeals for the Fifth Circuit - 450 F.2d 785 (5th Cir. 1971) Nov. 4, 1971

Edward R. Finck, Jr., San Antonio, Tex., for defendant-appellant; Clemens, Knight, Weiss & Spencer, San Antonio, Tex., of counsel.

Richard Tinsman, Tinsman & Houser, Inc., San Antonio, Tex., for plaintiff-appellee.

Before WISDOM, COLEMAN and SIMPSON, Circuit Judges.


On or about February 11, 1970, Jordan White, the plaintiff-appellee, an employee covered by the Texas Workmen's Compensation Act, sustained bodily injuries within the course and scope of his employment. In due course, in accordance with Texas procedures, the Industrial Accident Board made an award on the claim, with which White was dissatisfied. He had twenty days in which to seek appropriate redress in the Texas courts or, in case of diversity, in the appropriate United States district court. On April 9, 1971, White filed his original complaint in the United States District Court for the Western District of Texas. He alleged that he was a resident of Texas and that the defendant compensation carrier was "a foreign corporation organized under the laws of a State other than the State of Texas but authorized to do business in Texas" and that the amount in controversy exceeded the sum of $10,000, etc. In other words, the plaintiff invoked the diversity jurisdiction of the federal district court.

It turned out, and the plaintiff so stipulated below, that the defendant compensation carrier was incorporated in the State of Texas and no diversity existed. This, of course, means that the federal district court was, from the very inception of the litigation, wholly without diversity jurisdiction. The plaintiff discovered this unhappy development after it was too late to file his suit in the State Court. He sought to remedy the predicament by moving the district court to remand the case to the state court, contending that since the defendant "purposefully" waited until after the expiration of the Texas statutory twenty days to inform plaintiff's counsel that the insurance carrier was a Texas company, that "it would be equitable to remand this case to the State Court so that plaintiff's cause of action could not be defeated".

The District Court was "of the opinion that justice required that this case should be transferred to the Bexar County District Court", and it was so ordered.

This action of the District Court must be reversed, with directions to dismiss the complaint. See Rule 12(h) (3) of the Federal Rules of Civil Procedure, which expressly provides:

"Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action."

See, also, Atlantic Ship Rigging Company v. McLellan, 3 Cir., 1961, 288 F.2d 589.

This appeal presents no question of "remand" to the State Courts because the case had not been filed there in the first place.

Reversed, with directions.


Rule 18, 5th Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I