Thurgood Marshall

“ This case presents the question whether the "direct action" proviso of 28 U.S.C. § 1332 (c) (1982 ed.) -which provides that in a direct action against a liability insurer, the insurer shall be deemed a citizen of the same State as the insured for purposes of diversity jurisdiction-applies to a workers' compensation action brought in federal court by an insurer. The Fifth Circuit held that the proviso applied so as to bar a diversity action brought by an Illinois insurer of a Texas corporation against a Texas employee. ”

“ A direct action, according to petitioner, is a suit in which a party claiming injury seeks relief from the liability insurer of the party legally responsible for the injury; in such an action, the injured party neither joins nor first obtains a judgment against the legally responsible party. Petitioner contends that a workers' compensation suit against an employer's insurer is not a direct action in Texas because employers are not legally responsible for workers' compensation benefits under Texas law. ”

“ Yet it is difficult to see how the nonresident insurer's interest in a federal forum is any greater when it brings the action than when an injured resident does. It therefore seems somewhat anomalous for Congress to retain original diversity jurisdiction over actions by out-of-state insurers while withdrawing removal jurisdiction. ”