Flynn v. Target Corporation
Filing
19
REPORT AND RECOMMENDATIONS RE: 13 First MOTION to Remand to State Court filed by Katherine Flynn.Objections due per 28 U.S.C. § 636(b) and Fed. R. Civ. P. 72.Signed by Hon. Hugh B. Scott on 2/8/2018. (GAI)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
Katherine Flynn,
Plaintiff,
Report and Recommendation
v.
17-CV-565V
Target Corporation,
Defendant.
I.
INTRODUCTION
On October 5, 2016, plaintiff Katherine Flynn (“Flynn”) allegedly suffered injuries at a
Target retail store when a fellow shopper in a motorized shopping cart collided with her. Flynn
commenced suit in state court. When defendant Target Corporation (“Target”) served a demand
for a specific amount of monetary damages, Flynn asserted $100,000 in damages. Target
accordingly removed the case to federal court. Just nine days after serving her initial response and
six days after the removal, Flynn attempted to amend her damages asserted to claim only $75,000.
Flynn then filed a motion to remand the case to state court (Dkt. No. 13, hereafter [13]), asserting
that the Court lacks subject-matter jurisdiction due to an insufficient amount in controversy.
Target responds, in effect, that Flynn is bound to the original response that she gave to a demand
that followed proper procedure.
District Judge Lawrence J. Vilardo has referred this case to this Court under 28 U.S.C.
§ 636. [6.] The Court held oral argument for the pending motion to remand on January 23,
2018. For the reasons below, the Court respectfully recommends denying the motion.
II.
BACKGROUND
This case concerns allegations of a personal injury that occurred at a Target retail store on
October 5, 2016 in Amherst, New York. On that day, around 11:15 AM, Flynn was shopping in
the “air care” section, an area of shelving devoted to products such as air fresheners and scented
candles. [13-6 at 5–7.] What happened next is not clear from the early record in this case, but
according to the Guest Incident Report that the store completed that day, another customer “came
around on [an] electric [i.e., motorized] shopping cart and drove into her.” [13-6 at 8.] Flynn
sustained injuries to her left lower waist and her left upper hip. [Id.]
On February 10, 2017, Flynn sued Target in New York State Supreme Court, Erie County.
[5-2.] The complaint referred to the collision with the shopping cart and contained a single claim
for negligence. As required by New York C.P.L.R. (“CPLR”) 3017(c), the ad damnum clause of the
complaint did not specify a numerical amount of damages sought. Flynn served Target through
the New York Secretary of State on February 21, 2017. [13-2 at 9.]
Target’s desire to pin down a specific number for claimed damages set in motion the events
that led to the pending motion for remand. On or around March 14, 2017, Target served Flynn
with a demand for a specific amount of monetary damages, pursuant to CPLR 3017(c). [13-3 at 2.]
When Flynn did not provide a response, Target sent Flynn a letter dated May 26, 2017 that
threatened a motion to compel a response to the demand for monetary damages. [13-4 at 4.]
Target proceeded to file a motion to compel on or around June 9, 2017. [13-5.] By letter dated
June 9, 2017, Flynn responded to various discovery demands from Target. [13-6.] With respect to
damages, Flynn responded that “[a]t this time, plaintiff’s general and special damages are not
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ascertainable. Further information will be sought during the course of discovery, and answers to
this demand will be supplemented and/or amended as necessary.” [13-6 at 4.] By letter dated June
16, 2017, Target informed Flynn that it would consider withdrawing the motion to compel if she
provided a specific amount of monetary damages as required by CPLR 3017(c). [13-7.] Three days
later (going by the dates on the letters), on June 19, 2017, Flynn complied with CPLR 3017(c) as
follows:
In response to your Demand for Specific Relief, please be advised that
plaintiff hereby demands $100,000.00 for her general and special damages. Please
advise if you will now withdraw your motion to compel.
[13-8 at 2.] Target filed its notice of removal to federal court three days after Flynn’s letter, on June
22, 2017. [1.] On June 28, 2017, just six days after the notice of removal and nine days after her
initial CPLR 3017(c) response, Flynn sent Target the following letter amending her response:
Please be advised that we reduce our demand in this matter to $75,000.00.
Please advise if you will withdraw your Notice of Removal at this time.
[13-10 at 2.] The record does not indicate that any substantive events occurred privately between
the parties between June 19 and June 28, 2017. The docket for this case indicates that nothing
happened in federal court during that time beyond assignment of the case to Judge Vilardo;
issuance of a notice about the option to consent to a Magistrate Judge; and an automatic referral to
mediation.
Flynn filed the pending motion for remand on December 4, 2017. In support of the
motion, Flynn’s counsel filed an affirmation, with exhibits, that summarized the events that the
Court described above. Flynn’s counsel did not file a memorandum of law. Target’s counsel did
file a memorandum of law, along with other papers, in opposition to remand. The core of the
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opposition consists of two principles that intertwine here: that diversity jurisdiction is a snapshot
taken at the time of removal, and that Target followed proper procedure under CPLR 3017(c):
In this case, due to New York’s pleading requirements that prohibit a
plaintiff in a personal injury action from stating the amount demanded in the
complaint, the amount in controversy was established as of Plaintiff’s response to
Demand for Specific Relief Requested pursuant to CPLR §3017(c), (see Exhibit B,
attached to Declaration of James V. Vandette, Esq, dated October 13, 2017, filed
December 4, 2017). Thus, the controlling point in time is when the case became
removable by virtue of Plaintiff’s response to Defendant’s Demand for Specific
Relief Requested. Plaintiff cannot now change course for the sole purpose of
escaping the jurisdiction of the Federal Court. Such conduct is simply not
permitted as demonstrated by all existing case law on the subject.
[15-1 at 4.]
III.
DISCUSSION
A.
Mo tio n s to R em an d Gen erally
The basics of removal and remand are straightforward. District courts have original
jurisdiction over any civil action in which the amount in controversy exceeds $75,000 and the
litigants have diversity of citizenship. See 18 U.S.C. § 1332(a) (Westlaw 2018). For purposes of
diversity and removal, and with exceptions not relevant here, “a corporation shall be deemed to be
a citizen of every State and foreign state by which it has been incorporated and of the State or
foreign state where it has its principal place of business.” Id. § 1332(c)(1). Procedurally, “[a]
defendant or defendants desiring to remove any civil action from a State court shall file in the
district court of the United States for the district and division within which such action is pending
a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and
containing a short and plain statement of the grounds for removal, together with a copy of all
process, pleadings, and orders served upon such defendant or defendants in such action.” Id.
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§ 1446(a). With diversity jurisdiction, “the sum demanded in good faith in the initial pleading
shall be deemed to be the amount in controversy, except that the notice of removal may assert the
amount in controversy if the initial pleading seeks . . . a money judgment, but the State practice
. . . does not permit demand for a specific sum . . .; and removal of the action is proper on the
basis of an amount in controversy asserted under subparagraph (A) if the district court finds, by
the preponderance of the evidence, that the amount in controversy exceeds the amount specified
in section 1332(a).” Id. § 1446(c).
Removal is a unilateral action, but plaintiffs who believe that a removal occurred
improperly can make a motion for remand under 28 U.S.C. § 1447(c). The removing party bears
the burden of proving that remand was proper. “As [a removing party] is seeking relief subject to
this supervision, it follows that he must carry throughout the litigation the burden of showing that
he is properly in court. The authority which the statute vests in the court to enforce the
limitations of its jurisdiction precludes the idea that jurisdiction may be maintained by mere
averment or that the party asserting jurisdiction may be relieved of his burden by any formal
procedure. If his allegations of jurisdictional facts are challenged by his adversary in any
appropriate manner, he must support them by competent proof. And where they are not so
challenged the court may still insist that the jurisdictional facts be established or the case be
dismissed, and for that purpose the court may demand that the party alleging jurisdiction justify
his allegations by a preponderance of evidence.” McNutt v. Gen. Motors Acceptance Corp., 298 U.S.
178, 189 (1936); accord Hertz Corp. v. Friend, 559 U.S. 77, 96 (2010) (“The burden of persuasion
for establishing diversity jurisdiction, of course, remains on the party asserting it.”) (citations
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omitted). Parties seeking remand enjoy the benefit of the doubt. “The right to remove a state
court action to federal court on diversity grounds is statutory and must therefore be invoked in
strict conformity with statutory requirements. In light of the congressional intent to restrict federal
court jurisdiction, as well as the importance of preserving the independence of state governments,
federal courts construe the removal statute narrowly, resolving any doubts against removability.”
Somlyo v. J. Lu-Rob Enters., Inc., 932 F.2d 1043, 1045–46 (2d Cir. 1991) (citations omitted),
superseded in part on other grounds by FRCP 5, 83 (1995 amendments), as recognized in Contino v. U.S.,
535 F.3d 124 (2d Cir. 2008).
B.
Am oun t in Co n tro versy an d Tim ing o f Am en ded Mo n etary Dam ages
The unusual fact scenario that this case presents—a change in Flynn’s damages demand just
nine days after serving the original demand, and six days after the notice of removal, with no other
intervening events—warrants a closer look at the principles that determine an amount in
controversy. For purposes of removal and diversity jurisdiction, the amount in controversy is a
snapshot of a plaintiff’s claims at the time of removal. See Scherer v. Equitable Life Assurance Soc’y of
U.S., 347 F.3d 394, 397 (2d Cir. 2003) (“[W]e measure the amount in controversy as of the date of
the complaint.”); Tongkook Am., Inc. v. Shipton Sportswear Co., 14 F.3d 781, 784 (2d Cir. 1994)
(“The amount in controversy is determined at the time the action is commenced.”) (citation
omitted). The time of removal does not have to mean literally the exact moment when the defense
attorney presses a button to submit removal papers to the CM/ECF electronic filing system.
Courts have some leeway to clarify the amount in controversy within a short time after the filing of
removal papers. See Yong Qin Luo v. Mikel, 625 F.3d 772, 775–76 (2d Cir. 2010) (“The district
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court held an initial status conference with the parties, and plaintiff declined to limit her damages
$75,000 or less. Shortly after that conference, Luo’s counsel told defense counsel that Luo’s
demand was $600,000. At the time of removal, then, the amount in controversy exceeded
$75,000.”). Courts assess the amount in controversy from the plaintiff’s view of the claims, to
avoid complications that would arise from factors such as affirmative defenses that could be
waived. See Scherer, 347 F.3d at 398; Kheel v. Port of New York Auth., 457 F.2d 46, 49 (2d Cir. 1972)
(“Generally, for this reason, the amount in controversy is calculated from the plaintiff’s standpoint;
‘the value of the suit’s intended benefit’ or the value of the right being protected or the injury
being averted constitutes the amount in controversy when damages are not requested.”) (citations
omitted); Dimich v. Med-Pro, Inc., 304 F. Supp. 2d 517, 519 (S.D.N.Y. 2004) (“[T]he prevailing
method of calculating value in this Circuit is the ‘plaintiff’s viewpoint’ approach, where one
calculates the value to the plaintiff, not the cost to the defendant.”) (citations omitted). Because
subject-matter jurisdiction should not depend on the usual ups and downs of proving or
disproving the merits of a case, post-removal events generally will not change the snapshot of a case
taken upon removal. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 292 (1938)
(“But the fact that it appears from the face of the complaint that the defendant has a valid defense,
if asserted, to all or a portion of the claim, or the circumstance that the rulings of the district court
after removal reduce the amount recoverable below the jurisdictional requirement, will not justify
remand.”). The following cases, including cases cited in Target’s memorandum of law, provide
examples of post-removal events that changed the merits of a case at a later time but did not alter
the removal snapshot:
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●
Luo, 625 F.3d at 776: Following a status conference that occurred after
removal, plaintiff asserted $600,000 in damages. On appeal, plaintiff
challenged subject-matter jurisdiction for the first time and offered for the
first time to stipulate to no more than $75,000 in damages. By then, the
amount in controversy was established.
●
Hall v. EarthLink Network, Inc., 396 F.3d 500, 506 (2d Cir. 2005): The
District Court dismissed consequential damages claims on summary
judgment, and then dismissed the actual damages claim for lack of subjectmatter jurisdiction, because those damages fell below the jurisdictional
threshold. The Second Circuit decided that “a summary judgment
dismissing one or more aggregated claims does not defeat jurisdiction even
when it reduces the amount in controversy to below the jurisdictional
1
threshold.”
●
Scherer, 347 F.3d at 399: Res judicata is a waivable affirmative defense; a
collateral court’s verdict on liability, therefore, did not change the amount
in controversy at the time of removal.
●
Wolde-Meskel v. Vocational Instruction Project Cmty. Servs., Inc., 166 F.3d 59,
63 (2d Cir. 1999): This is another case in which the post-removal event in
question was summary judgment to the defense for one of the affirmative
defenses. “Wolde–Meskel’s breach of contract claim was defeated by the
legal defenses adduced by VIPCS, and by Wolde–Meskel’s inability to prove
that the totality of the circumstances created an implied employment
contract. Summary judgment on Wolde–Meskel’s breach of contract claim
was therefore appropriate. But while that ruling reduced the amount in
controversy, it did not establish the quite distinct proposition that the
amount claimed was never in controversy.”
●
Tongkook, 14 F.3d at 785: Plaintiff sued defendant for breach of a sales
contract and asserted at the outset that the amount owed was $117,621.05.
One year into the litigation, the parties discovered a failure to credit
defendant with a payment of $80,760, meaning that the actual amount in
controversy was $36,861.05. The District Court asserted that it retained
subject-matter jurisdiction because plaintiff had asserted the larger amount
in good faith. The District Court took the case through a one-day bench
trial that ended in plaintiff’s favor. The Second Circuit vacated the
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Interestingly, the Second Circuit nonetheless affirmed dismissal of the entire case because
of a procedural quirk. Plaintiff in Hall failed to preserve the jurisdictional issue on appeal.
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judgment with instructions to dismiss for lack of subject-matter jurisdiction;
despite plaintiff’s good faith, the inability to cross the jurisdictional
threshold was a legal certainty that existed at the time of removal.
●
Coventry Sewage Assocs. v. Dworkin Realty Co., 71 F.3d 1, 8 (1st Cir. 1995):
“In the instant case, an independent third party with otherwise no
connection to the case made an apparently non-obvious error so that the
amount-in-controversy at the time of filing, in fact, exceeded the
jurisdictional minimum. Coventry had no reason to know that its claimed
amount of damages was in error. Moreover, the reduction of the amount in
controversy resulted from acts occurring wholly after the action
commenced. We hold that, under these extraordinary circumstances, the
district court’s jurisdiction was not disturbed by the subsequent reduction
of the amount in controversy.”
●
St. Paul, 303 U.S. at 295–96: An initial complaint asserted an abovethreshold amount of damages for workers’ compensation benefits. A
second amended complaint attached documentary exhibits, obtained during
discovery and after the original complaint, showing that actual damages fell
below the threshold (then $3,000). The Supreme Court nonetheless held
that subject-matter jurisdiction existed: “Not until the second amended
complaint was filed in the United States court, in November 1934, did the
respondent furnish a statement of the particulars of its claim. That
statement is not inconsistent with the making of a claim in good faith for
over $3,000 when the suit was instituted. Nor is there evidence that the
petitioner when it removed the cause knew, or had reason to believe, that
the respondent’s claim, whether well or ill founded in law or fact involved
less than $3,000. On the face of the pleadings petitioner was entitled to
invoke the jurisdiction of the federal court and a reduction of the amount
claimed after removal, did not take away that privilege.”
●
Barash v. Ford Motor Credit Corp., No. 06CV6497(JFB)(ARL), 2007 WL
1791656, at *7 (E.D.N.Y. June 20, 2007): A pro se plaintiff sued four
defendants under federal and state fair-credit laws; he claimed no actual
damages but $100,000 from each defendant for punitive damages. When
defendants removed to federal court, plaintiff tried to claim that his
estimate of punitive damages was “arbitrary” and tried to amend his
complaint to assert a below-threshold amount. The District Court found
that it had subject-matter jurisdiction because punitive damages were
available under state law and because plaintiff could not show to a legal
certainty that punitive damages would fall below $75,000.
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●
Flynn v. Schwan’s Consumer Brands Inc., No. 15 CIV. 4509 CM, 2015 WL
4560870, at *2–3 (S.D.N.Y. July 27, 2015): Plaintiff sued a frozen-pizza
manufacturer for product liability in the amount of $150,000. After
defendant removed, plaintiff filed an amended complaint reducing the
damages claimed to under $74,000. The District Court nonetheless found
the case properly removed and found that it had subject-matter jurisdiction,
citing St. Paul and other cases cited in Target’s memorandum of law.
After reviewing the above cases, and again noting Flynn’s decision to submit no supporting
authority through a memorandum of law, the Court has decided that Target’s argument is the
better approach. The cases discussed above involved longer passages of time, and more significant
post-removal events, than what happened here. This case is a close call because Flynn changed
course quickly, within a matter of days, and before anything happened that would cause Target
prejudice, apart perhaps from the removal fee. Nonetheless, Flynn has made no showing at all that
she fell victim to bad faith or some kind of mistake that existed to a legal certainty as of the time of
removal. Flynn filed a complaint that asserted injuries but avoided an exact amount of damages in
accordance with CPLR 3017(c). Target followed proper procedure in using CPLR 3017(c) to
demand a damages amount. Flynn had plenty of time to estimate the amount of damages and
asserted an amount of $100,000. Flynn knew, or should have known, why Target was asking about
the amount of damages; she could have asserted a below-threshold amount and backed up her
assertion with medical or other documentation of her injuries. Flynn knowingly asserted an
amount that created diversity jurisdiction. Target then followed proper procedure in filing a
notice of removal.
In short, Target did everything right based on information that Flynn gave it in good faith;
this Court has cautioned attorneys before about the importance of clarifying damages before
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removing cases. See Ortiz v. JCPenney, No. 16-CV-569W, 2016 WL 6694249, at *6 (W.D.N.Y. Nov.
15, 2016), report and recommendation adopted, No. 1:16-CV-0569 EAW, 2016 WL 7131559
(W.D.N.Y. Dec. 6, 2016). The use of formal procedure to ascertain damages, and the absence of
documentation about Flynn’s injuries, distinguish this case from a case that this Court reviewed a
few years ago, in which a stipulation to a sub-threshold amount helped resolve uncertainty that the
defendant fostered by not using CPLR 3017(c). See Burg v. Primal Vantage Co., No. 13-CV-1121S,
2014 WL 448519, at *5 (W.D.N.Y. Feb. 4, 2014), report and recommendation adopted, No.
13-CV-1121S, 2014 WL 1609658 (W.D.N.Y. Apr. 22, 2014). To override the use of proper
procedure, simply because Flynn might not have realized what Target was doing, would come too
close to the hazard that the Supreme Court described in St. Paul: “If the plaintiff could, no matter
how bona fide his original claim in the state court, reduce the amount of his demand to defeat
federal jurisdiction the defendant’s supposed statutory right of removal would be subject to the
plaintiff’s caprice.” St. Paul, 303 U.S. at 294 (1938).
IV.
CONCLUSION
For all of the foregoing reasons, the Court respectfully recommends denying Flynn’s
motion to remand. [13.]
V.
OBJECTIONS
A copy of this Report and Recommendation will be sent to counsel for the parties by
electronic filing on the date below. Any objections to this Report and Recommendation must be
electronically filed with the Clerk of the Court within 14 days. See 28 U.S.C. § 636(b)(1); Fed. R.
Civ. P. 72. “As a rule, a party’s failure to object to any purported error or omission in a magistrate
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judge’s report waives further judicial review of the point.” Cephas v. Nash, 328 F.3d 98, 107 (2d
Cir. 2003) (citations omitted).
SO ORDERED.
__/s Hugh B. Scott________
Honorable Hugh B. Scott
United States Magistrate Judge
DATED: February 8, 2018
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