Hain Celestial Group, Inc. v. Palmquist | Case No. 24-724 | Oral Argument Date: 11/4/25 | Docket Link: Here

Question Presented: 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; and 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.

Overview

This episode examines a technical but consequential case about federal court jurisdiction that could affect thousands of removal cases nationwide. The dispute centers on whether federal courts can preserve judgments when they make jurisdictional errors, presenting a fundamental tension between judicial efficiency and strict adherence to jurisdictional limits in our federal court system.

Episode Roadmap

Opening: When Federal Courts Keep Cases They Shouldn't

• November 4th, 2025 oral argument date
• Circuit split requiring Supreme Court resolution
• Stakes: Balance between judicial efficiency and jurisdictional integrity
• Affects every lawsuit involving forum manipulation and removal

Background: A Family Tragedy Becomes a Jurisdictional Mess

• The Palmquist family's baby food poisoning lawsuit in Texas
• E.P.'s severe heavy-metal toxicity from Hain's Earth's Best products
• Complete diversity destroyed by Texas plaintiffs suing Texas defendant Whole Foods
• Defendants' removal strategy and fraudulent joinder claim

Constitutional and Statutory Framework

• 28 U.S.C. § 1332: Complete diversity requirement for federal jurisdiction
• 28 U.S.C. § 1447(c): Mandatory remand when jurisdiction lacking
• "Completely diverse" means every plaintiff from different state than every defendant
• Federal courts as courts of limited jurisdiction

Procedural Journey: From State Court to Supreme Court

• District court's fraudulent joinder ruling dismissing Whole Foods
• Two years of federal litigation and two-week jury trial
• Fifth Circuit reversal: Whole Foods properly joined, judgment vacated
• Case remanded to state court after years of federal proceedings

The Central Legal Questions

• Can jurisdictional "cure" occur through erroneous dismissal?
• Voluntary versus involuntary party dismissals
• When does jurisdictional defect "linger" through final judgment?

Episode Highlights

Petitioners' Three-Pronged Strategy (Hain and Whole Foods)

• Caterpillar Cure Doctrine: Drawing on 1996 precedent arguing jurisdictional defects can be cured by dismissing non-diverse parties before final judgment, tracing principle to 19th-century cases
• Efficiency and Finality: Emphasizing "considerations of finality, efficiency, and economy become overwhelming" once diversity case tried in federal court with state law
• Newman-Green Discretionary Authority: Arguing Fifth Circuit should have dismissed Whole Foods as "dispensable party" under Rule 21 to preserve final judgment

Respondents' Counter-Attack (The Palmquist Family)

• Voluntary vs. Involuntary Distinction: Emphasizing Caterpillar involved voluntary settlement dismissal while here "respondents opposed the dismissal of Whole Foods and never voluntarily abandoned their claims"
• Master of Complaint Principle: Invoking plaintiff's right to "establish—or not—the basis for a federal court's subject-matter jurisdiction" and choose forum
• No Cure Occurred: Arguing jurisdictional defect persisted because "the case has lacked complete diversity at every minute from the moment of its filing"

Key Legal Concepts Explained

• Diversity jurisdiction and complete diversity requirement
• Fraudulent joinder doctrine and removal strategy
• Voluntary versus involuntary dismissals in jurisdictional context
• Newman-Green dispensable party doctrine under Rule 21

Competing Precedential Interpretations

• Caterpillar, Inc. v. Lewis (1996): Battle over whether jurisdictional cure applies to involuntary dismissals
• Royal Canin U.S.A., Inc. v. Wullschleger (2025): Recent decision on voluntary versus involuntary dismissal effects
• Grupo Dataflux v. Atlas Global Group (2004): Limits on Caterpillar's jurisdictional cure doctrine