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Jeffrey Wilson v. Thomas Walker

May 17, 2011


The opinion of the court was delivered by: Diamond, J.


Plaintiff has moved to remand this personal injury action to state court, arguing that it does not meet the $75,000 federal jurisdictional threshold because, as stated in his Complaint, he seeks damages of less than $50,000. (Doc. No. 4.) Because state law allows Plaintiff to recover more than $50,000, however, and because the record shows that Plaintiff‟s damages could well exceed $75,000, I conclude that the "amount in controversy" meets the jurisdictional threshold. Accordingly, I will deny Plaintiff‟s Motion to Remand.


Plaintiff Jeffrey Wilson (a Delaware citizen) initiated this action on September 7, 2010 in the Philadelphia Common Pleas Court, alleging that on October 31, 2008, Defendant Thomas Walker (a New Jersey citizen), acting in the course of his employment with Defendant FedEx Custom Critical, Inc. (an Ohio citizen), negligently drove into Plaintiff‟s vehicle. (Doc. No. 1, Ex. A, ¶4-5.) The accident resulted in Plaintiff‟s inability to work and required a host of significant medical treatments. (Id., ¶¶ 6-8.)

Plaintiff demanded judgment "in a sum not in excess of fifty thousand ($50,000.00) dollars." (Id. at 7.) In accordance with Pennsylvania law, the matter was thus subject to compulsory arbitration. See 42 Pa. Const. Stat. Ann. § 7361 (referring matters to compulsory arbitration unless "the amount in controversy, exclusive of interest and costs, exceeds $50,000"). Pennsylvania law also provides that after arbitration either side may seek a de novo trial in Common Pleas Court. § 7361(d).

On March 25, 2011, after learning through discovery that Plaintiff‟s damages could easily exceed $75,000, Defendants removed to this Court, invoking diversity jurisdiction. See 28 U.S.C. §§ 1332; 1446(b). (Doc. No. 1.) In his Interrogatory Answers, Plaintiff stated that at the time of the accident, he owned a franchise, Affordable Dentures. His accident-related injuries prevented him from performing complex dental procedures for five months. (Doc. No. 1, Ex. C.) As a result, Plaintiff‟s accounts receivable dropped by 50% during that period. (Doc. No. 1, Ex.

D.) The low receivables caused Plaintiff to lose his franchise. (Doc. No. 1, Ex. D.) Plaintiff‟s tax returns and W-2 forms (produced in discovery) show that his income dropped from $127,211.51 to $25,120.79 during the period he was out of work due to his injuries. (Doc. No. 1, Ex. E.) In removing, Defendants concluded that this evidence showed that the amount in controversy exceeded $75,000.


Federal courts have subject matter jurisdiction over civil actions between citizens of different states where the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a). An action brought in state court may be removed to the federal district where the action is pending if the district court would have original jurisdiction over the matter. 28 U.S.C. § 1441. "[A] notice of removal may be filed within thirty days after receipt by the defendant . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b) (emphasis added). Evidence received in discovery qualifies as "other paper" under § 1446(b). See, e.g., Judge v. Phila. Premium Outlets, No. 10-1553, 2010 WL 2376122, at *4 (E.D. Pa. June 8, 2010) (collecting cases deeming discovery materials "other paper"); S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494 (5th Cir. 1996) ("[A] transcript of the deposition testimony is "other paper.‟"); see also 14C Charles Alan Wright, Arthur R. Miller, Federal Practice and Procedure § 3731 (4th ed. 2009) ("The federal courts have given the reference to "other paper‟ an expansive construction and have included a wide array of documents within its scope.").

The amount in controversy is generally decided from the face of the complaint. Angus v. Shiley Inc., 989 F.2d 142, 145 (3d Cir. 1993). The plaintiff is the ""master of the case‟ and "may limit his claims . . . to keep the amount in controversy below the [jurisdictional] threshold.‟" Morgan v. Gray, 471 F.3d 469, 474 (3d Cir. 2006) (quoting Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005)). The Third Circuit has cautioned, however, that "plaintiffs in state court should not be permitted to ostensibly limit their damages to avoid federal court only to receive an award in excess of the federal amount in controversy requirement." Morgan, 471 F.3d at 477; see also De Aguilar v. Boeing, Co., 47 F.3d 1404, 1410 (5th Cir. 1995) (noting "the potential for abusive manipulation by plaintiffs, who may plead for damages below the jurisdictional amount in state court with the knowledge that the claim is actually worth more, but also with the knowledge that they may be able to evade federal jurisdiction by virtue of the pleading"). To prevent such abuse, the Third Circuit has established criteria for determining the amount in controversy when a plaintiff seeks to limit damages below the jurisdictional threshold:

1) The party wishing to establish subject matter jurisdiction has the burden to prove to a legal certainty that the amount in controversy exceeds the statutory threshold; 2) A plaintiff, if permitted by state laws, may limit her monetary claims to avoid the amount in controversy threshold; and 3) Even if a plaintiff states that her claims fall below the threshold, this Court must look to see if the plaintiff's actual monetary demands in the aggregate exceed the threshold, irrespective of whether the plaintiff states that the demands do not. Key to the present matter is that the plaintiff's pleadings are not dispositive under the legal certainty test. This Court's task is to examine not just the dollar figure offered by the plaintiff but also her actual legal claims.

Morgan, 471 F.3d at 474-75 (emphasis added); see Samuel-Bassett v. KIA Motors Am., Inc., 357 F.3d 392, 398 (3d Cir. 2004) (setting forth the legal certainty test); see also De Aguilar, 47 F.3d at 1410 ("[W]e hold that if a defendant can show that the amount in controversy actually exceeds the jurisdictional amount, the plaintiff must be able to show that, as a matter of law, it is certain that he will not be able to recover more than the damages for which he has prayed in the state court complaint.").


Plaintiff argues that his Complaint‟s ad damnum clause-in which he limits his demand to "a sum not in excess of fifty thousand ($50,000.00) dollars"-controls the amount-in-controversy calculation here. (Doc. No. 4 at 14.) He relies primarily on post-Morgan decisions that a plaintiff‟s damages limitation below the jurisdictional threshold "would be given effect by Pennsylvania law and so allow the plaintiff "to avoid the amount in controversy threshold‟ for federal diversity jurisdiction." (Doc. No. 4 at 18);see Rutherford v. Progressive N. ...

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