May v. Wal-Mart Stores, Inc.
751 F. Supp. 2d 946
E.D. Ky.2010Background
- May sued Wal-Mart in Kentucky state court for injuries from a slip-and-fall; complaint did not specify damages but claimed exceedance of $4,000 threshold; Wal-Mart removed to federal court within three weeks; the removal relied on diversity and potential >$75,000 amount in controversy; the court issued a Show Cause Order requiring jurisdictional evidence; May’s medical expenses totaled about $17,472 and a settlement demand was sent to Wal-Mart’s carrier; Wal-Mart argued jurisdictional discovery should be allowed but the court denied and remanded to state court; the court held removal failed to establish amount in controversy by preponderance; the case is remanded and stricken from the docket.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court has subject-matter jurisdiction at removal | May | Wal-Mart | Remand; no jurisdiction established at removal |
| Whether the demand letter proves amount in controversy exceeds $75,000 | May's damages exceed $75,000 per demand letter | Letter shows potential exceedance but not preponderance | Remand; letter alone not enough to prove jurisdiction by preponderance |
| Whether jurisdictional discovery is appropriate before validating jurisdiction | May | Wal-Mart should be allowed discovery | Denied; jurisdictional discovery inappropriate in removal context |
| What is the proper remedy if jurisdiction is not proven at removal | State court should proceed | Possibly allow discovery to resolve jurisdiction | Remand to state court; discovery in state court may occur before any future removal |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (U.S. 1994) (strictly construe removal jurisdiction; jurisdiction must appear on record)
- Turner v. Bank of North America, 4 U.S. 8 (U.S. 1799) (presumption against federal jurisdiction; burden on party asserting jurisdiction)
- Gold-Washing & Water Co. v. Keyes, 96 U.S. 199 (U.S. 1877) (jurisdictional facts must appear in the record; removal record should show jurisdiction)
- Gafford v. Gen. Elec. Co., 997 F.2d 150 (6th Cir.1993) (burden on removal to prove jurisdiction by preponderance)
- King v. Household Fin. Corp. II, 593 F. Supp. 2d 958 (E.D. Ky. 2009) (amount in controversy not proven; no jurisdiction)
- Posner v. Alabama Power Co., 483 F.3d 1184 (11th Cir. 2007) (jurisdictional discovery denied in removal context)