76.
(p. 43)
Marilyn, a resident of Ohio, suffered personal injury while operating her tractor in Ohio.
She filed suit in state court against the manufacturer, Company A, incorporated in Delaware with
its principal place of business in Illinois, and also against the seller, Company B, incorporated in
Ohio with its principal place of business in Ohio. Marilyn and Company B informally agreed to
settle out of court, but the agreement was subject to the agreement of Company B’s insurer.
Before a final agreement was reached in regard to settlement with Company B, Company A filed
a motion in state court to remove the case to federal court. Although Marilyn opposed removal,
the state court granted Company A’s motion. After the case was removed to federal court,
Marilyn and Company B finalized their settlement agreement and Company B was dismissed
from the lawsuit. The federal district court proceeded to hear the case and ruled in favor of
Company A. Marilyn appealed on the basis that because diversity between the parties was
lacking, the federal district court had no jurisdiction over the case. She claims that the case
should be remanded to state court for a new trial. What should the appellate court rule regarding
whether the state trial court properly granted the petition for removal and what will be the likely
outcome on appeal?