St. Paul Fire & Marine Ins. Co. v. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa, Am. Home Assurance Co., New Hampshire Ins. Co.

Summary

The Eleventh Circuit vacated and remanded with instructions to dismiss for lack of subject matter jurisdiction, holding that under the realignment doctrine, two excess insurers with coextensive interests—both seeking a declaration that the primary insurer improperly exhausted policy limits—must be aligned as co-plaintiffs. Because realignment destroyed complete diversity (both excess insurer and primary insurer were New York citizens), the district court lacked original diversity jurisdiction, and supplemental jurisdiction could not attach. The case addresses equitable subrogation, primary vs. excess insurance allocation, and the jurisdictional requirement that courts look beyond pleadings to align parties according to their true interests.

Holdings

1. The district court lacked diversity jurisdiction because St. Paul and AGLIC had identical interests in the litigation, requiring AGLIC to be realigned as a plaintiff. Since AGLIC and AIG were both New York citizens, complete diversity was absent, and the district court lacked original jurisdiction.

Questions Presented

1. Whether the district court had diversity jurisdiction over the case, given that the interests of St. Paul and AGLIC were coextensive, requiring realignment of AGLIC as a plaintiff.

Disposition

vacated and remanded with instructions to dismiss