Michael Ashford, et al. v. Aviation Technical Services, Inc.

The purpose of the realignment analysis is to ensure that there is an actual, substantial controversy between citizens of different states and avoid an unwarranted exercise of federal jurisdiction over business that belongs in state court. In City of Indianapolis v. Chase Nat’l Bank of New York, 314 U.S. 63 (1941), this Court realigned a defendant as a plaintiff, which had the effect of placing citizens of the same state on both sides of the lawsuit and destroying diversity jurisdiction. City of Indianapolis was not a removed case; it was filed in federal court. Here, on the other hand, the lower courts used a realignment analysis to create ostensible diversity jurisdiction and allow removal on that basis. Despite there being an actual case and controversy existing between Louisiana plaintiffs and their former Louisiana employer—a case that ultimately led to imposition of money judgments against the employer—the defendant-employer was realigned as a plaintiff. And, because that realignment then gave the appearance of complete diversity, federal jurisdiction was exercised over the case, including the plaintiffs’ claims against the non-diverse defendant. The question presented is: Whether realignment can be used to create diversity jurisdiction in a removed case notwithstanding the presence of an actual case and controversy between the plaintiffs and a non-diverse defendant.