Innovative Fibers LLC, et al. v. Parker O'Neil Wideman, et al.
This case concerns whether a federal court sitting in diversity may entertain state law claims that a state statutory scheme mandates be brought in state administrative proceedings (and not in court). The Fourth Circuit held that a federal court may entertain state workers' compensation claims, notwithstanding the decision of the South Carolina Legislature to remove those claims from court. The Fourth Circuit sought to "align itself' with the Third, Sixth, Seventh, and Ninth Circuits, which the Fourth Circuit described as holding that "state workers' compensation statutes do not deprive federal courts of subject matter jurisdiction." That holding directly conflicts with decisions of at least two other circuits—the Second and Eleventh Circuits—which have held that federal courts should not entertain state law claims that state legislatures provide may not proceed in court—including in the workers' compensation context.
Whether federal courts sitting in diversity jurisdiction may entertain state law workers' compensation claims that a state legislature has mandated must be brought in state administrative proceedings