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Liberty Mutual case returned to state court after defective removal
An Eighth Circuit decision left the remand largely unreviewable, underscoring that insurer removals can fail when all defendants do not unanimously consent.
Liberty Mutual attempted to move a $150 million collection dispute into federal court, but a co-defendant’s actions kept the fight in state court, according to Insurance Business.
After a January 2025 lawsuit in state court added equitable garnishment claims against the homeowners insurer, Liberty Mutual Fire Insurance Company, Liberty Mutual removed the case on Jan. 31 citing diversity of citizenship.
The removal ran into a unanimity problem: federal removal requires every defendant’s agreement, but one individual defendant had not been served when the insurer removed the case. When that defendant later entered the case weeks afterward, he sided with the plaintiff and asked to return the matter to state court, and the district court remanded it as procedurally defective.
Liberty Mutual’s appeal did not change the outcome, with the Eighth Circuit ruling that federal law generally prevents appeals courts from reviewing most remand orders, meaning the insurer could not readily undo the state-court return. A dissent argued the objection should have been raised earlier, but the majority’s framework still limited review of the remand order.