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OMEGA SPORTS, INC. v. SUNKYONG AMERICA

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


January 4, 1995

OMEGA SPORTS, INC., Plaintiff,
v.
SUNKYONG AMERICA, INC., Defendant.

The opinion of the court was delivered by: J. CURTIS JOYNER

MEMORANDUM AND ORDER

 Joyner, J.

 This civil matter is before the Court by motion of the plaintiff, Omega Sports, Inc. (Omega), which asks us to remand the case to the Court of Common Pleas for Lancaster County, Pennsylvania and award it sanctions under Fed. R. Civ. P. 11. For the reasons that follow, we will grant Omega's motion to remand, but deny its request for Rule 11 sanctions.

 I. BACKGROUND

 This action was initiated when Omega filed a Writ of Summons in equity in the Court of Common Pleas naming Sunkyong America, Inc. (Sunkyong) as defendant. On October 12, 1994, Omega served pre-complaint discovery upon Sunkyong, seeking the production of documents relating to a contract entered into between Omega and Sunkyong on July 18, 1989. Pursuant to the contract, Sunkyong had agreed to pay commissions to Omega for the sale of athletic shoes by Sunkyong to Meldisco, Inc. (Meldisco), the footwear division of K-Mart. Omega also sought the production of documents relating to the sale of all footwear, including athletic shoes, by Sunkyong to Meldisco.

 Upon review of the request for production of documents, and before a complaint had been filed, Sunkyong reasoned that the lawsuit probably centered on the payment of commissions called for in the contract. Sunkyong applied the commission rate to the volume of all footwear sales by Sunkyong to Meldisco to arrive at an amount in controversy of close to $ 132,000. Thereafter, on October 21, 1994, Sunkyong filed a notice of removal in this Court pursuant to 28 U.S.C. ยง 1441, *fn1" contending that this Court has original jurisdiction over the matter by virtue of our diversity jurisdiction, in that the parties are of diverse citizenship and the amount in controversy exceeds $ 50,000. *fn2"

 Omega now brings this motion to remand the matter to the Court of Common Pleas for Lancaster County, and argues that the figure calculated by Sunkyong is of little help in determining the true amount in controversy in that it is based upon the total volume of shoe sales between Sunkyong and Meldisco. *fn3" Omega notes that the contract at the center of the dispute is concerned only with the sale of athletic shoes, and asserts that Sunkyong has been reluctant to provide information concerning the volume of athletic-shoe sales by Sunkyong to Meldisco. Further, Omega seeks Rule 11 sanctions, arguing that Sunkyong's removal of the action was without a basis in either law or fact. These requests will be addressed in turn.

 II. ANALYSIS AND CONCLUSION

 A. Motion to Remand

 The issue for this Court, then, is whether the jurisdictional amount has been satisfied. When presented with this issue, courts have generally held that the amount pleaded by the plaintiff controls as long as it is made in good faith. Thus, dismissal is justified only when it appears "'to a legal certainty that the claim is really for less than the jurisdictional amount.'" Corwin Jeep Sales v. American Motors Sales Corp., 670 F. Supp. 591, 595 (M.D. Pa. 1986)(quoting St. Paul Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288-89, 82 L. Ed. 845, 58 S. Ct. 586 (1938)). In cases such as this one, however, where the complaint does not contain a specific disputed amount, and the removability of the case is contested by a timely motion to remand, the court is obliged to make a factual inquiry into the amount in controversy issue. 670 F. Supp. at 596 (citations omitted). Courts approach this issue mindful of the rule that the party alleging the sufficiency of the amount in controversy bears the burden of proving that the jurisdictional minimum has been met. Hunter v. Greenwood Trust Co., 856 F. Supp. 207, 219 (D.N.J. 1992); Corwin Jeep Sales, 670 F. Supp. at 595 (quoting United Jersey Bank Southwest v. Keystone Collision, Inc., 482 F. Supp. 71, 72 (E.D. Pa. 1979)).

 In the present case, we find that Sunkyong has failed to meet its burden of demonstrating that the amount in controversy exceeds $ 50,000. We first note that since the contract at issue deals only with sales of athletic footwear, Sunkyong's contention that the commission on sales of all footwear by it to Meldisco exceeds the jurisdictional minimum is simply of no help to us in deciding whether an amount in excess of $ 50,000 is in dispute. We are aware that evidence may arise to show that the amount in controversy does meet the $ 50,000 threshold. Should such evidence be presented, Sunkyong may properly exercise its right to remove the case to the federal court. *fn4" In the absence of such information, however, this Court cannot conclude that Sunkyong has proved that a sum in excess of $ 50,000 is at issue. Accordingly, this Court lacks jurisdiction over the subject matter and must remand the case to the Court of Common Pleas for Lancaster County.

 B. Rule 11 Sanctions

 Omega has included a request for Rule 11 sanctions along with its motion to remand. Since Omega itself has failed to comply with Rule 11 in seeking these sanctions, however, its request will be denied. The recently amended Rule 11 requires that a motion for sanctions be made by a separate motion and that it be served 21 days before it is filed with the court. Rule 11(a)(1)(A). Omega has failed to comply with these steps, and as a result, any award of sanctions in its favor would be unwarranted. Accordingly, we will deny Omega's request for sanctions pursuant to Rule 11.

 An appropriate order follows.

 ORDER

 AND NOW, this 4th day of January, 1995, upon consideration of the Plaintiff's Motion to Remand and for sanctions pursuant to Fed. R. Civ. P. 11, and the Defendants' Response thereto, it is hereby ORDERED, for the reasons set forth in the preceding memorandum, that the Plaintiff's Motion to Remand is hereby GRANTED. The matter is hereby REMANDED to the Court of Common Pleas for Lancaster County, Pennsylvania. It is further ORDERED that Plaintiff's request for Rule 11 sanctions is hereby DENIED.

 BY THE COURT:

 J. Curtis Joyner, J.


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