The opinion of the court was delivered by: Louis H. Pollak, United States District Judge
In the above-captioned case, defendant Wal-Mart Stores, Inc.
("Wal-Mart") has filed a summary judgment motion pursuant to Federal Rule
of Civil Procedure 56. After reviewing the parties' submissions, this
court finds itself uncertain whether it has subject-matter jurisdiction.
The summary judgment motion will not be ruled on until the question of
jurisdiction has been resolved.
Factual and procedural background
Plaintiff Che H. Lee originally brought suit in the Court of Common
Pleas of Philadelphia County, based on injuries incurred while on the
premises of one of defendant Wal-Mart's retail locations. On November 11,
2000, Mr. Lee and a yet-unidentified third party had a brief but hostile
encounter in the parking lot of the Wal-Mart while the two were searching
for a parking space. Mr. Lee became angered by the other man's behavior,
which evidently consisted of cutting in front of Mr. Lee's car, driving
into a coveted space very slowly, and casting a "hard look" in Lee's
direction. After less-than-careful reflection, Mr. Lee retaliated to the
third party's apparent posturing with his own salvo: he extended his
middle finger toward the other car.
Once inside the store, Mr. Lee soon discovered that his gesture had
been quite effective in escalating the battle in which he and the other
man had become engaged. Mr. Lee's adversary found him and proposed
continuing the war on a new front, suggesting that the two step outside.
Suddenly convinced of the merits of détente, Mr. Lee adopted a
more peaceable nature and declined to proceed to the proposed venue.
Unfortunately, the other man still smarted from Mr. Lee's parking-lot
volley and chose to press the issue. The two exchanged the obligatory
challenges to each other's sexuality, Mr. Lee's unfriend threw a punch,
and by the time the dust settled, Mr. Lee had suffered injury to his left
Mr. Lee's suit in state court was premised on the theory that Wal-Mart
could have prevented his injuries with proper security precautions. The
complaint, filed in November of 2001, included a demand for judgment "in
an amount in excess of Fifty Thousand Dollars ($50,000.00). On December
13, 2001, Wal-Mart sent to Mr.
Lee's counsel a "Stipulation Limiting
Damages to Avoid Removal of Matter to Federal Court." The letter
accompanying that proposed stipulation advised that if Mr. Lee would
stipulate "that the full amount of any and all damages [that] may be
awarded in this matter, if any, shall not exceed Seventy-five Thousand
Dollars ($75,000.00)," then Wal-Mart would refrain from removing the case
to federal court. By letter, plaintiff's counsel advised that he refused
to sign the stipulation, "due to the nature and severity of [Mr. Lee's]
damages." Soon thereafter, Wal-Mart removed the suit to this court.
As the parties are no doubt aware, 28 U.S.C. § 1332 requires the
satisfaction of two factors before a federal district court may assume
diversity jurisdiction over a civil action such as this one: (1) the
controversy must be between citizens of different states, and (2) the
amount in controversy must exceed $75,000.00. The submissions to this
court in this case give rise to some doubt about the latter requirement.
Although Mr. Lee has not filed a motion to remand the case, this court
can and, indeed, must raise the issue of subject-matter jurisdiction sua
sponte when it appears that said jurisdiction may be lacking. See
Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152 (1908);
Shaffer v. GTE North, Inc., 284 F.3d 500, 502 (3d Cir. 2002).
In its notice of removal, Wal-Mart stated that, based on Mr. Lee's
demand of "in excess of" $50,000.00 and refusal to stipulate that damages
were less than $75,000.00, "defendant has a good faith belief that
plaintiff is seeking damages in excess of $75,000.00." Wal-Mart's strategy
of presenting a plaintiff with an ultimatum — stipulate to a
damages cap or we'll remove — is intriguing. However, several
courts have questioned the propriety of basing federal jurisdiction upon
the negative inference from a plaintiff's refusal to stipulate to damages
less than the jurisdictional minimum. In particular, a recent case from
the Eleventh Circuit gives this court pause, as its facts closely
parallel those here. In Williams v. Best Buy Company, Inc., 269 F.3d 1316
(11th Cir. 2001), the plaintiff had brought suit in state court against
Best Buy for personal injuries suffered in one of the defendant's
stores. Best Buy, in its notice for removal, stated: "Counsel for
Plaintiff and Plaintiff have refused to stipulate that Plaintiff's claims
do not exceed and will not exceed the sum of $75,000.00." Id. at 1318.
The district court, never having received a motion to remand, granted
summary judgment to Best Buy. The plaintiff appealed the summary judgment
ruling, and the Eleventh Circuit raised sua sponte the issue of whether
the amount in controversy was sufficient to sustain diversity
jurisdiction. Observing the defendant's reliance on the plaintiff's
refusal to stipulate to damages not in excess of $75,000, the court noted
that "[t]here are several reasons why a plaintiff would not so
stipulate, and a refusal to stipulate standing alone does not satisfy
[the] burden of proof on the jurisdictional issue." Id. at 1320. The case
was then remanded to the district court "for the limited purposes of
developing the record and making findings of fact with regard to the
amount in controversy at the time of removal." Id. at 1321.
To be sure, courts in the Third Circuit have also had encounters with
the ultimatum tactic employed by Wal-Mart, and have varied in their
responses. Judge Reed of this court addressed the issue in another suit
against Wal-Mart, in which "Wal-Mart removed the case to federal court
after plaintiffs refused to sign a stipulation limiting damages to less
that $75,000." Fosbenner v. Wal-Mart Stores, Inc., No. Civ. A. 01-3358,
1231761, at *1 (E.D.Pa. Oct. 12, 2001). Noting that "Wal-Mart has
produced no evidence beyond the pleadings and plaintiffs' failure to agree
to sign an affidavit," Judge Reed remanded the case to the state court.
Id. at *3. Similarly, Judge Bartle, when presented with the argument that
plaintiff's counsel "refused to stipulate that its [plaintiff's] damages
do not exceed the amount in the complaint" or that "its damages do not
exceed $75,000," commented that he knew of nothing requiring such a
stipulation and remanded the case. TJS Brokerage & Co. v. CRST,
Inc., 958 F. Supp. 220, 222 (E.D.Pa. 1997). Conversely, Judge James
McGirr Kelly found a refusal to stipulate to a damages cap to be "legally
significant." Johnson v. Costco Wholesale, No. Civ. A. 99-CV-3576, 1999
WL 740690, at *3 (E.D.Pa. Sep. 22, 1999).
While a plaintiff's failure to stipulate might provide some evidence
that a claim is truly for more than the jurisdictional minimum, I do not
believe that fact may alone shoulder the burden of § 1332
jurisdiction. My misgivings on the jurisdictional issue are buttressed by
Mr. Lee's pretrial memorandum, which alleges only that "Plaintiff
suffered medical expenses in excess of $5,000.00" and that "[a]s a result
of this incident, he missed thirteen (13) days from work." Given Mr.
Lee's wages of $154.50 a day, the total medical expenses and lost wages
amount to $7,008.50, by my arithmetic.
While it is possible that the damages at issue amount to more than
$75,000.00, that has not been clearly established on the record before
this court. Therefore, the accompanying order directs the parties
— first the defendant, then the plaintiff — to submit
evidence and briefing regarding the amount in controversy here.
Meanwhile, disposition of the pending summary judgment motion will be
held in abeyance.
For the reasons stated in the accompanying opinion, defendant Wal-Mart
is hereby ORDERED to submit to this court, within 30 days of the date of
this order, evidence and briefing regarding the amount in controversy in
this case. Plaintiff Che H. Lee will have 20 days from the date ...