Shamrock Oil & Gas Corp. v. Sheets
Facts
Respondent, a Texas citizen and defendant in Texas state court, filed a counterclaim or cross-action against petitioner, the non-citizen plaintiff, seeking more than $3,000 in damages for breach of a contract separate from the debt alleged in petitioner’s original suit. Petitioner removed the entire cause to federal district court on diversity grounds. For purposes of decision, the Court assumed the removal proceedings were timely and regular, that the counterclaim was an independent cause of action, and that the amount in controversy requirement was satisfied. The only question was whether a plaintiff against whom such a counterclaim is asserted may remove as a "defendant" under the removal statute.
Issue
Whether a state-court plaintiff may remove a suit to federal district court under § 28 of the Judicial Code on diversity grounds when the state-court defendant files a counterclaim asserting an independent cause of action and seeking affirmative relief against the plaintiff.
Rule
Under § 28 of the Judicial Code, removal on the grounds there specified is available only to the "defendant or defendants" in the suit. A plaintiff who chose the state forum does not become a removable "defendant" merely because the opposing party files a counterclaim against it, and the removal statute must be construed according to federal criteria, strictly and independently of state characterizations of parties or claims.
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Assuming diversity and amount in controversy are otherwise satisfied, may Lakeview remove the case to federal court under the ordinary removal statute solely because it is now defending against Benton's counterclaim?