Hain Celestial Group, Inc. et al. v. Palmquist et al., No. 24-724 (U.S. Supreme Court 2026); 103 F.4th 294 (5th Cir. 2024)

Beck Redden achieved a unanimous victory at the U.S. Supreme Court for clients Sarah and Grant Palmquist, affirming the Fifth Circuit’s decision to vacate a federal district court judgment in favor of Hain Celestial Group and remand the entire case, including claims against Whole Foods, to Texas state court. The ruling resolves a circuit split, holding that an erroneous interlocutory dismissal of a non-diverse defendant does not cure a lack of complete diversity at the time of removal—a jurisdictional defect that requires vacatur of a subsequent final judgment.

The Palmquists sued Hain, a Delaware/New York manufacturer, and Texas-based Whole Foods in Texas state court in 2021, alleging state-law product liability, negligence, breach-of-warranty, and misrepresentation claims arising from Hain’s “Earth’s Best Organic” baby food being contaminated with toxic heavy metals (arsenic, lead, mercury).  Following a 2021 Congressional report on heavy metals in baby foods, including Hain’s, the Palmquists claimed the baby food, purchased at Whole Foods, had caused their son’s severe developmental disorders. Hain removed to the Southern District of Texas claiming improper joinder of Whole Foods; the district court erroneously dismissed Whole Foods on the theory that there was no viable claim against it, denied remand to state court, and eventually granted Hain judgment as a matter of law at the close of the trial for lack of causation evidence.

On appeal, Beck Redden challenged the improper joinder ruling, demonstrating viable misrepresentation claims against Whole Foods under Texas products liability law. The Fifth Circuit reversed, holding the dismissal erroneous and interlocutory, leaving the jurisdictional defect (lack of complete diversity) uncured through final judgment—distinguishing Caterpillar Inc. v. Lewis where a defect was properly cured pre-judgment. It vacated the merits judgment and remanded the entire case to state court.

The Supreme Court granted certiorari on Hain/Whole Foods’ petition questioning whether a district court’s final judgment as to completely diverse parties must be vacated upon appellate reversal of the erroneous dismissal of a non-diverse defendant. Justice Sotomayor, writing for a unanimous Court (with Justice Thomas concurring), affirmed: erroneous interlocutory dismissals of non-diverse defendants do not create diversity jurisdiction, lingering jurisdictional defects require vacatur, and Fed. R. Civ. P. 21 cannot override plaintiffs’ forum choice by dropping a properly joined non-diverse defendant over the plaintiff’s objection. The Court rejected arguments grounded in efficiency, emphasizing the federal courts’ limited jurisdiction under 28 U.S.C. §1332(a) and the federal scheme.

Beck Redden partner Russell Post served as counsel of record and presented oral argument on November 4, 2025. Partner Owen McGovern assisted in the appeal. This ruling clarifies the limits on removal jurisdiction in diversity cases, reaffirms fundamental principles of federal court jurisdiction, and creates a constructive incentive for federal district courts to proceed cautiously when asked to exercise federal jurisdiction on the premise that an in-state defendant was improperly joined to defeat federal diversity jurisdiction.  Congratulations to the Beck Redden team on this landmark result!