The U.S. Supreme Court case Caterpillar Inc. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America in 1997 revolved around the issue of whether a federal court could exercise jurisdiction over a lawsuit when the plaintiff's complaint did not present any federal claim at the time it was filed but later amended to include one after removal from state court. The dispute began with Caterpillar Inc.'s decision to lay off several employees during an ongoing labor strike which led to two lawsuits being filed by union members - one for breach of collective bargaining agreement (a federal claim) and another for wrongful termination under Illinois law (a state claim). Both cases were consolidated into one suit in Federal District Court despite objections from plaintiffs that there was no basis for federal jurisdiction on their wrongful termination claims. In its ruling, the Supreme Court held that even though a valid defense based on terms of collective-bargaining agreements may exist against state-law actions brought by workers or unions, this does not automatically transform such suits into ones arising under §301(a) of Labor Management Relations Act thereby allowing them to be removed from State Courts as per §1441(a). Therefore, it concluded that Federal District courts lacked subject-matter jurisdiction at time complaints were filed and hence erred in consolidating both suits.

In the dissenting opinion for Caterpillar Inc. v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (1997), Justice Ginsburg argued that the majority's decision to allow a federal court to retain jurisdiction over a case removed from state court on the basis of diversity was incorrect because it violated statutory requirements for removal. She contended that at the time of removal, there was no complete diversity between parties as required by 28 U.S.C §1332(a) since both plaintiffs and defendants included citizens from Delaware; hence, she believed that this lack of complete diversity should have prevented federal courts from taking jurisdiction over this case in first place. Furthermore, she disagreed with majority’s view about “curing” defects in subject-matter jurisdiction post-removal or post-judgment arguing such approach undermines Congress’ intent behind statutes governing federal-court jurisdiction and encourages manipulative litigation tactics.