HODGES v. WALGREENS et al
MEMORANDUM AND/OR OPINION RE: PLAINTIFFS' MOTION TO REMAND (DOC. NO.5). SIGNED BY HONORABLE BERLE M. SCHILLER ON 4/25/2012. 4/26/2012 ENTERED AND COPIES E-MAILED.(kk, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
WALGREENS, et al.,
April 25, 2012
Plaintiff Bonnie Hodges brought this action in the Philadelphia County Court of Common
Pleas to recover damages allegedly resulting from an incident that occurred outside a Walgreens
store in Darby, Pennsylvania. Walgreens and Walgreens Eastern Co., Inc. (collectively,
“Walgreens”) removed the case to this Court based on diversity jurisdiction. Presently, Plaintiff’s
motion to remand is before the Court. For the reasons that follow, the Court grants the motion.
On February 1, 2010, Hodges slipped and fell on ice and snow in the parking lot near the
entrance to a Walgreens store in Darby, Pennsylvania. (Compl. ¶ 6.) According to the Complaint,
as a result of this incident, Hodges “suffered various serious and permanent bodily injuries, serious
impairment of body function and/or permanent serious disfigurement, and/or aggravation of preexisting conditions, including, but not limited to: right wrist contusion and sprain, right wrist
dequervein tenosynovitis requiring surgery, and any other ills, injuries, all to plaintiff’s great loss and
detriment.” (Id. ¶ 10.)
Following the incident, on February 17, 2010, Hodges sought medical treatment, complaining
of pain in her right wrist. (Defs.’ Resp. in Opp’n to Pl.’s Mot. to Remand at 2.) She was diagnosed
with a right wrist contusion/sprain and a possible micro-fracture. (Id.) She was prescribed a course
of physical therapy and a right wrist brace. (Id.) Through November 2010, Hodges continued to seek
medical treatment for pain in her right wrist. (Id. at 2-3.) In July 2010, an MRI indicated a partial
tear, and she was subsequently diagnosed with chronic De Quervain tenosynovitis of the right wrist.
(Id. at 2.) In August 2010, Hodges underwent surgery on her right wrist, and her physicians
continued to treat her until November 2010. (Id. at 2-3.)
Hodges brought this action in state court on March 31, 2011, alleging negligence by
Walgreens for a defective condition that existed on its premises. The Complaint included an
ad damnum clause requesting judgment in an amount not in excess of $50,000. On January 26, 2012,
the parties participated in a compulsory non-binding arbitration, which resulted in an award in favor
of Walgreens. (Report and Award of Arbs.; Defs.’ Resp. in Opp’n to Pl.’s Mot. to Remand at 3.)
Hodges filed a Notice of Appeal from the arbitration award on February 22, 2012. On March 5,
2012, Walgreens filed a Notice of Removal pursuant to 28 U.S.C. § 1441 based upon diversity
jurisdiction. On March 14, 2012, Hodges filed a motion to remand the case to state court, arguing
that the amount in controversy is not greater than $75,000.
STANDARD OF REVIEW
Under 28 U.S.C. § 1441(a), defendants in state court may remove “any civil action . . . of
which the district courts of the United States have original jurisdiction . . . to the district court of the
United States for the district and division embracing the place where such action is pending.” Federal
courts possess diversity jurisdiction over all civil actions between citizens of different states if the
amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a)(1). To
determine whether the amount in controversy has been met, a court may consider the complaint, the
notice of removal, and the submissions related to the plaintiff's motion to remand. Clark v. J.C.
Penney Corp., Civ. A. No. 08-4083, 2009 WL 1564175, at *3 (D.N.J. June 1, 2009); Hayes v. Ohio
Nat’l Fin. Servs. Inc., Civ. A. No. 08-3743, 2008 WL 3852241, at *3 (E.D. Pa. Aug. 19, 2008).
In considering a motion to remand, “28 U.S.C. § 1441 is to be strictly construed against
removal so that the Congressional intent to restrict federal diversity jurisdiction is honored.”
Samuel-Bassett v. KIAMotorsAm., Inc., 357 F.3d 392, 396 (3d Cir. 2004) (citation omitted); see also
Abels v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985) (“Because lack of jurisdiction
would make any decree in the case void and the continuation of the litigation in federal court futile,
the removal statute should be strictly construed and all doubts should be resolved in favor of
remand.”). “This policy ‘has always been rigorously enforced by the courts.’” Samuel-Bassett, 357
F.3d at 396 (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1937)).
Therefore, if the court determines that federal subject matter jurisdiction does not exist, the case must
be remanded. 28 U.S.C. § 1447(c).
Hodges argues that this case must be remanded because the amount in controversy threshold
for diversity jurisdiction is not met. Plaintiff pled that the amount in controversy was “an amount not
in excess of $50,000.00.” (Compl. ¶¶ 14, 21.) Defendants argue that the amount in controversy
requirement is now met because Pennsylvania law allows for Hodges to recover in excess of $50,000
in a de novo appeal from arbitration. See Wilson v. Walker, 790 F. Supp. 2d 406, 409 (E.D. Pa. 2011)
(“Pennsylvania courts . . . have held that in any de novo trial after arbitration, the plaintiff may seek
more than $50,000 in damages.”) (citing Vanden-Brand v. Port Auth. of Allegheny Cnty., 936 A.2d
581, 584 (Pa. Commw. Ct. 2007)). Defendants further contend that the ad damnum clause is not
dispositive and that the Court must look to see if the actual monetary damages exceeds the threshold,
irrespective of Plaintiff’s assertions to the contrary. (Defs.’ Resp. in Opp’n to Pl.’s Mot. to Remand
The burden of demonstrating the existence of federal jurisdiction rests with the party
asserting jurisdiction. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). The
defendant’s right to remove is determined according to the plaintiff’s pleading at the time of the
petition for removal. Angus v. Shiley, 989 F.2d 142, 145 (3d Cir. 1993); see also Meritcare Inc. v.
St. Paul Mercury Ins. Co., 166 F.3d 214, 217 (3d Cir. 1999) (“Even though actual damages may not
be established until later in the litigation, the amount in controversy is measured as of the date of
removal.”). While “plaintiffs may limit their claims to avoid federal subject matter jurisdiction,” the
Third Circuit has emphasized 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 v. Gay, 471 F.3d 469, 474, 477 (3d Cir. 2006).
In the Third Circuit, the amount in controversy requirement is met if the defendant shows to
a “legal certainty” that the amount in controversy exceeds the threshold requirement. Samuel-Bassett,
357 F.3d at 397 (citing Red Cab Co., 303 U.S. at 289). The court must be satisfied to a legal certainty
from the face of the pleadings that the plaintiff cannot recover the amount claimed. Dunfee v. Allstate
Ins. Co., Civ. A. No. 08-1425, 2008 WL 2579799, at *4 (E.D. Pa. June 26, 2008). In Morgan, the
Third Circuit addressed how the legal certainty test would be applied in cases involving ad damnum
clauses where the plaintiff expressly limited the amount in controversy to an amount less than the
threshold required for jurisdiction. Morgan, 471 F.3d at 474-75. The Morgan court held that: (1) the
party seeking to establish federal jurisdiction must prove to a legal certainty that the amount in
controversy exceeds the statutory threshold; (2) a plaintiff, if permitted by state law, may limit his
or her monetary claims to avoid the amount in controversy threshold; and (3) the plaintiff’s pleadings
that the claims are below the jurisdictional threshold is not dispositive, rather, the court must analyze
the claims to determine the amount really at stake in the case. Id.
The Third Circuit further clarified the amount in controversy standard in Frederico v. Home
Depot, 50 F.3d 188 (3d Cir. 2007). The court held that Morgan applies in cases, such as the instant
case, where the complaint limits the amount in controversy to less than the jurisdictional threshold.
Id., at 196-97. In such cases, the removing party has a higher burden and must prove to a legal
certainty that the amount in controversy exceeds the jurisdictional requirement. Id. at 197. In
contrast, Samuel-Bassett applies when the plaintiff has not specified that the amount in controversy
is less than the jurisdictional minimum, and in those cases, remand is appropriate when it appears
to a legal certainty that the plaintiff cannot recover over the jurisdictional requirement. Id.
Applying those principles here, under Federico and the first rule of Morgan, Walgreens, has
the burden, as the party seeking to establish subject matter jurisdiction, to prove to a legal certainty
that the amount in controversy exceeds $75,000. Id.; Morgan, 471 F.3d at 474. While ad damnum
clauses are generally not permitted for unliquidated claims under Pennsylvania law, there is an
exception for complaints filed in counties, such as Philadelphia County, that provide for compulsory
arbitration for claims expressly limiting damages to under $50,000. 42 Pa. Cons. Stat. § 7361(b)(2);
Pa. R. Civ. P. 1021; Phila. Local R. of Civ. P. 1301; Espinosa v. Allstate Ins. Co., Civ. A. No.
07-746, 2007 WL 1181020, at *3 (E.D. Pa. Apr. 16, 2007). Section 7361 merely creates a
jurisdictional trigger and is not a substantive recovery limit. Robert Half Int’l, Inc. v. Marlton Techs.,
Inc., 902 A.2d 519, 529 (Pa. Super. 2006). Under the second rule of Morgan, because ad damnum
clauses are “permitted by state laws,” Hodges “may limit her monetary claims to avoid the amount
in controversy threshold.” Morgan, 471 F.3d at 475; Espinosa, 2007 WL 1181020, at *4. Finally,
because the ad damnum clause is not dispositive under Morgan’s third rule, the 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.” Morgan, 471 Fd at 474-75.
Hodges alleges that she slipped and fell on ice and snow in Defendants’ parking lot, and as
a result, she suffered serious and permanent physical injuries. (Compl. ¶¶ 6, 10.) Hodges claims to
have suffered financially, including loss of earnings and medical expenses, and also seeks to recover
for her pain and suffering. (Id. ¶¶ 11-14.) However, it is unclear to the Court whether Plaintiff’s
actual monetary damages exceed $75,000. Given that “removal statutes are to be strictly construed
against removal and all doubts should be resolved in favor of remand,” the Court is reluctant to find
that Hodges’ injuries exceed the jurisdictional threshold. See Boyer, 913 F.2d at 111 (internal
quotation marks omitted).
Furthermore, the proponent of federal jurisdiction, Walgreens, has failed to prove to a legal
certainty that the amount in controversy in this case exceeds $75,000. Specifically, in Walgreens’
Notice of Removal, they state, “[a]llegations of injuries and damages, similar to those alleged by
Hodges, have been held to establish, on their face, that the amount in controversy exceeds the
jurisdictional requirements.” (Notice of Removal ¶ 10 (citing cases).) However, none of the cases
cited by Defendants provides guidance to the Court because the cases did not address the amount in
controversy requirement based on damages sustained from a slip and fall. See Samuel-Bassett, 357
F.3d 392 (involving consumer protection law, UCC, and warranty claims); Feld v. Allstate Ins.
Corp., Civ. A. No. 03-4024, 2003 WL 22271674 (E.D. Pa. Aug. 4, 2003) (involving water damage
under a homeowners’ insurance policy); Ferketich v. Carnival Cruise Lines, Civ. A. No. 02-3019,
2002 WL 31371977 (E.D. Pa. Oct. 17, 2002) (involving personal injuries from a fall down a flight
of stairs, but only addressing the defendant’s reliance on a forum selection clause).
Defendants’ reliance on Angus v. Shiley Inc., 989 F.2d 142 (3d Cir. 1993), is also misplaced.
In Angus, the plaintiff claimed damages in excess of $40,000, including severe mental anguish and
psychiatric distress, which required the plaintiff to pay for medical attention, impaired her lifestyle,
and caused her to suffer a loss of life’s pleasures. The court permitted removal, finding the amount
in controversy exceeded the then-$50,000 jurisdictional threshold for removal. However, unlike here,
in Angus, the plaintiff alleged a lower limit of damages of “at least $40,000” and did not specify an
upper limit in its request for damages. Id. at 145. Here, there was no lower limit on damages, and
thus Angus does not support Defendants’ position.
Of the cases cited by Walgreens, only Carroll v. United Air Lines, Inc., 7 F. Supp. 2d 516
(D.N.J. 1998), sheds any light on what allegations of injury satisfy the amount in controversy
requirement. The plaintiff in Carroll was disabled after she fell while deplaning. The court
concluded that the complaint alleged sufficient damages to put the defendant on notice that the
amount in controversy exceeded $75,000. However, Carroll is distinguishable because the court only
had to conclude that removal was improper when it appeared to a legal certainty that the plaintiff
could not recover an amount over $75,000, whereas here, under Morgan, removal is proper only
when it appears to a legal certainty that the plaintiff could recover over $75,000.
Defendants have offered no support for their position that Hodges’ injuries exceed $75,000.
Given the earlier arbitration, Defendants had ample opportunity to discover evidence demonstrating
that Plaintiff’s injuries exceed the amount in controversy requirement. However, Walgreens failed
to provide the Court with any evidence in its Notice of Removal and instead merely included the
arbitrators’ award, which found in favor of Defendants and against Plaintiff. Walgreens also failed
to cite any analogous situations with similar injuries that exceeded the jurisdictional threshold.
Defendants’ bare assertion and mere speculation falls short of establishing to a legal certainty that
the amount in controversy does exceed $75,000. Resolution Mgmt. Consultants, Inc. v. Hickey, Civ.
A. No. 10-6243, 2011 WL 2609854, at *8 (D.N.J. June 29, 2011) (“[I]f this Court has to guess at
whether the jurisdictional threshold has been met, then the defendant has not proved its point.”)
(internal quotation marks omitted).1
Because the Court finds that Defendants fail to establish the amount in controversy
requirement is met for diversity jurisdiction, the Court need not address the timeliness of
Defendants’ Notice of Removal following the arbitration. The Court also need not determine
whether the pre-Morgan cases that permitted removal following an appeal from an arbitration,
see, e.g., Foster v. Home Depot Inc., Civ. A. No. 05-1999, 2006 WL 470596 (E.D. Pa. Feb. 24,
2006), are still good law now that it is clear that cases limiting damages to a sum less than the
amount in controversy threshold can nonetheless be removed at the time the complaint is filed,
see, e.g., Wilson v. Walker, 790 F. Supp. 2d 406 (E.D. Pa. 2011); Howard v. Wal-Mart
Supercenter, Civ. A. No. 09-4530, 2009 WL 4362856 (E.D. Pa. Nov. 30, 2009).
Hodges properly limited the amount of damages in the ad damnum clauses to an amount
below the $75,000 jurisdictional threshold, and Defendants have not shown to a legal certainty that
the amount in controversy exceeds $75,000. This Court therefore lacks jurisdiction over the action
and grants Plaintiff’s motion to remand. An appropriate Order will be docketed separately.
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