405 U.S. 699 (1972), 71-257, Grubbs v. General Electric Credit Corp.

Docket Nº:No. 71-257
Citation:405 U.S. 699, 92 S.Ct. 1344, 31 L.Ed.2d 612
Party Name:Grubbs v. General Electric Credit Corp.
Case Date:April 18, 1972
Court:United States Supreme Court

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405 U.S. 699 (1972)

92 S.Ct. 1344, 31 L.Ed.2d 612



General Electric Credit Corp.

No. 71-257

United States Supreme Court

April 18, 1972

Argued March 23, 1972




Respondent, a New York corporation, brought suit for $66,000 on a promissory note against petitioner, a citizen of Texas, in a Texas state court, and petitioner filed a cross-action for $25,000 seeking damages for slander, conversion, and conspiracy in restraint of trade. A later cross-action included the United States, which held a judgment against petitioner, as a party defendant. The action was removed to the Federal District Court for trial of the issues, on petition of the United States. The District Court, without objection, considered all the issues and awarded petitioner $20,000 judgment against respondent. The Court of Appeals, sua sponte, held that the District Court lacked jurisdiction, and ordered the case returned to the state court.

Held: Where, after removal, a case is tried on the merits without objection, and the federal court enters a judgment, the issue on appeal is not whether the case was properly removed, but whether the District Court would have had original jurisdiction if the case had been filed in that court. Here there was diversity jurisdiction in the District Court if the action had been brought there originally. Pp. 702-706.

447 F.2d 286, reversed and remanded.

REHNQUIST, J., delivered the opinion for a unanimous Court.

REHNQUIST, J., lead opinion

MR. JUSTICE REHNQUIST delivered the opinion of the Court.

Petitioner recovered a money judgment against respondent in the United States District Court for the

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Eastern District of Texas, and respondent appealed to the United States Court of Appeals for the Fifth Circuit. That court held the District Court lacked jurisdiction of the case, and reversed the judgment with instructions that the case be remanded to the Texas state court, whence it had been removed. This Court granted certiorari, 404 U.S. 983. We have concluded that, whether or not the case was properly removed, the District Court did have jurisdiction of the parties at the time it entered judgment. Under such circumstances, the validity of the removal procedure followed may not be raised for the first time on appeal, and we accordingly reverse the judgment of the Court of Appeals.

In September, 1964, respondent General Electric Credit Corp. (GECC) commenced a lawsuit against petitioner Grubbs by the filing of a petition in the Texas state trial court. The petition sought recovery upon a promissory note claimed to have been previously executed by petitioner to GECC in the principal sum of some $66,000. Two years later, petitioner Grubbs filed an amended answer and "cross-action," seeking damages from respondent and from the General Electric Co. (GE) by reason of alleged slander, conversion, and conspiracy in restraint of trade.1 GE appeared in the state court in answer to petitioner's cross-action against it, and respondent likewise filed an answer.

The following year, petitioner filed a second amended answer and cross-actions, one of which included the United States as an added party defendant. The basis asserted by petitioner for naming the United States as a party was the fact [92 S.Ct. 1347] that the latter held an outstanding

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