Liberty Mutual loses jurisdictional dispute by a penny
Betty Freeland and her husband loaned their minivan to their son, John. John drove through a traffic signal with his wife and three kids in the van, and struck another vehicle broadside. He and his wife were killed and the kids were hurt. Mrs. Freeland and her husband made claim against their insurer, Liberty Mutual, for $100,000.00 of uninsured motorist benefits payable to the kids and their mother's estate (because John did not own a vehicle and was "uninsured" under Ohio law. Liberty Mutual argued that the family was entitled to only $25,000.00, total, and removed the Freeland family's lawsuit to Federal District Court.
The Sixth Circuit noted that a question of Ohio insurance law was at issue and the only basis for Federal Court jurisdiction was the diversity of citizenship between Liberty Mutual and the Freelands (the family and the insurer came from different states). Since a diversity claim can be removed to Federal Court only if there is more than $75,000.00 at issue, the Sixth Circuit held that the case was improperly removed to the federal court: the federal court lacks jurisdiction to hear the matter which must involve more than $75,000.00 exclusive of costs and interest. The case was therefore sent back to the Ohio state court system where the Freelands originally filed.