Diversity jurisdiction is based on the idea that we can’t trust state courts to be fair to out-of-state defendants, because they’re going to home-town it. It’s right there in the Constitution, but as early as 1789, congress was already limiting it, requiring not just a chance for home-towning it against a party, but also a minimum dollar requirement.
If, say, you are a Louisiana company and you sue a Texas defendant in Louisiana, the Texas defendant, fearful the judge/jury will support the local guy, can remove it to federal court. But you have to have complete diversity - what if you sue a Texas defendant and a Louisiana defendant? No diversity jurisdiction.
But what if you serve the Texas defendant first, and then the Texas defendant removes it before the Louisiana defendant gets served? Seems to go against the thrust of the idea, right?
But here’s what the statute says:
[a] civil action otherwise removable solely on the basis of the jurisdiction under [28 U.S.C. § 1332(a)] may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.
And the Fifth Circuit stuck to the wording in Texas Brine Company. If you serve the Texas company before the Louisiana company, then the Texas company can remove the case and the removal will stick.