There is a move that has worked for defendants for a long time, and on February 24, 2026 the Supreme Court unanimously took it away.
The setup is the most ordinary fact pattern in Minnesota product-liability practice. Someone is injured by a product. They sue two defendants: the out-of-state company that made it, and the Minnesota business that sold it. Both are real defendants with real potential liability. And because one of them shares the plaintiff’s citizenship, the case cannot go to federal court.
The manufacturer removes anyway, argues the local defendant was “improperly joined,” gets the local defendant dismissed by the federal judge, and then says: look, complete diversity now exists, we are properly here.
That sequence just stopped working.
What happened in Palmquist
The Palmquists sued the Hain Celestial Group over a product and joined Whole Foods Market, a non-diverse defendant. Hain removed to federal court on diversity grounds. The Palmquists promptly moved to remand. The district court instead invoked the doctrine of improper joinder, dismissed Whole Foods, kept the case, and eventually entered judgment for Hain.
The Fifth Circuit reversed the improper-joinder ruling and vacated the judgment for lack of jurisdiction. The Supreme Court affirmed, 9–0, in an opinion by Justice Sotomayor.
The holding, stated plainly: the erroneous dismissal of a non-diverse party after removal does not permit the federal court to exercise diversity jurisdiction, and the case must be returned to state court. The jurisdictional defect that existed at the moment of removal is not cured by later trimming the party that created it.
The Court’s language on the plaintiff’s side of the ledger is worth reading twice:
The Palmquists exercised their right to choose a state forum by purposefully and properly joining a nondiverse defendant against whom they could not proceed in federal court, and diligently asserted that right by promptly moving to remand the case to state court.
Federal Rule of Civil Procedure 21 — which lets courts add or drop parties — “does not permit a court or a defendant to override their choice in these circumstances.”
Justice Thomas concurred separately to express skepticism of the improper-joinder doctrine itself, noting that it appears to let federal courts enlarge their own jurisdiction by assessing the merits of claims over which they lack jurisdiction. That is a shot across the bow at a doctrine that has never had a clean statutory home.
Note what the plaintiffs actually did right
The holding is not “plaintiffs always win the forum fight.” Read the Court’s sentence again and you will find two conditions doing real work.
“Purposefully and properly joining.” The local defendant has to be a genuine defendant. A Minnesota retailer named solely as a jurisdictional speed bump, with no plausible claim against it, is exactly what the improper-joinder doctrine exists to catch — and Palmquist does not protect that. What it protects is a real claim against a real local party.
“Diligently asserted . . . by promptly moving to remand.” The Palmquists did not sit on it. A plaintiff who lets the case settle into federal court for months and then discovers a jurisdictional objection is in a materially weaker position than one who files the remand motion on schedule.
Both halves matter. The right the Court vindicated is a right that has to be exercised the way a right gets exercised — deliberately, and on time.
Why this is a Minnesota case in everything but the caption
Minnesota plaintiffs join local defendants constantly, and usually for reasons that have nothing to do with federal jurisdiction.
A patron injured on a premises sues the out-of-state parent and the Minnesota operating entity. A borrower sues the national lender and the Minnesota servicer. A buyer sues the out-of-state supplier and the Minnesota distributor that handled the goods.
Product cases deserve a specific warning, because Minnesota law cuts against the assumption that a local retailer is a durable co-defendant. Minnesota has adopted strict liability in tort, but it has also enacted Minn. Stat. § 544.41, which limits the liability of non-manufacturers. A defendant other than the manufacturer must, on answering, file an affidavit certifying the manufacturer’s correct identity — and once the manufacturer has answered, the statute says the court “shall order the dismissal” of the strict-liability claim against the certifying seller. “Shall,” not “may.”
There are exceptions, in subdivision 3: the seller stays in if the plaintiff shows it exercised significant control over design or manufacture, provided instructions or warnings to the manufacturer, had actual knowledge of the defect, or created the defect. And subdivision 2 allows reinstatement if the manufacturer turns out to be time-barred, misidentified, defunct, unservable, beyond jurisdiction, or unable to satisfy a judgment.
So in Minnesota, “sue the store too” is a fact-dependent decision, not an automatic one — and a removing manufacturer can point to § 544.41 as the basis for an improper-joinder argument at the removal stage. Palmquist does not answer that argument. It answers what happens after a district court gets improper joinder wrong.
What Palmquist adds is this: where the joinder is substantive — a real claim against a real local party — the plaintiff’s decision about which courthouse to file in survives the defendant’s decision to test it.
And it pairs with something else from this same term. Two months later, in Enbridge Energy, LP v. Nessel, the Court held that the 30-day removal deadline cannot be equitably tolled. Put them together and the message of October Term 2025 on federal-court access is fairly blunt:
A defendant who wants a federal forum has to establish it correctly, and has to do it fast. It cannot be manufactured after the fact, and it cannot be claimed late.
What it means in practice
If you are a plaintiff. Your choice of a Minnesota state courtroom is more durable than it was. But it depends on your local defendant being a real one and on moving to remand promptly. Both of those are decisions made in the first month of a case, not the sixth.
If you are a defendant. The improper-joinder argument now has to be won at the front end, in the removal posture, on the record as it exists at removal. And the downside of getting it wrong is severe: Palmquist went through a federal jury trial that ended in judgment as a matter of law for Hain when the plaintiffs rested — the defendant won — and all of it was vacated for want of jurisdiction. Years of litigation expense, converted into a fresh start in the state court the plaintiffs picked at the beginning.
That is not a technicality. That is the most expensive procedural error available in civil litigation, and the Court just made it easier to commit.
The underlying idea
Federal courts are courts of limited jurisdiction. That phrase gets recited so often it stops registering, but Palmquist is what it actually means: a federal court either has power over a case or it does not, measured at the moment the case arrives, and no amount of subsequent case management creates power that was absent at the door.
For a person injured in Minnesota by an out-of-state company’s product, that principle has a plain-English translation: if you have a real claim against a Minnesota defendant, the fact that you filed here is not something the other side gets to undo by dismissing that defendant later. Whether you have that real claim — particularly against a retailer, given § 544.41 — is the question worth answering before you file, not after.
If you have been served with a notice of removal, or you are deciding where to bring a claim involving both a Minnesota business and an out-of-state company, the forum decision is made early and is difficult to revisit. Send us a message or call 612-470-6529.
Sources: Hain Celestial Group, Inc. v. Palmquist, 607 U. S. ___ (2026) (Sotomayor, J.), No. 24–724, decided February 24, 2026 (Thomas, J., concurring), affirming and remanding; Fed. R. Civ. P. 21; 28 U.S.C. §§ 1332, 1441, 1447; Minn. Stat. § 544.41 (limit on liability of nonmanufacturers); Enbridge Energy, LP v. Nessel, 608 U. S. ___ (2026). This article is general commentary on a published decision and federal statutes and rules, not legal advice, and reading it does not create an attorney–client relationship. Whether joinder of a particular defendant is proper, and whether a remand motion is timely, depends entirely on the facts of the case. No outcome is promised or implied.