O'Neill v. Michaels Companies, Inc.

Background

Deborah O’Neill sued Michaels Companies, Inc. d/b/a Michaels in the Supreme Court of the State of New York, County of Westchester. Her complaint alleges that she suffered serious personal injuries after tripping and falling over a defective and dangerous carpet runner in the exit lobby of a store that Michaels owned and operated. She alleged negligence but did not state a specific amount of damages.

On June 10, 2025, Michaels removed the case to the U.S. District Court for the Southern District of New York. Michaels asserted that the federal court had diversity jurisdiction, which can apply when parties are citizens of different states and more than $75,000 is in dispute. Michaels relied on the complaint’s statement that the damages were greater than the jurisdiction of all lower courts.

Court’s Analysis

The court explained that the party seeking removal bears the burden of establishing federal jurisdiction. Because the complaint did not state a specific damages amount, Michaels had to show by a preponderance of the evidence—that it was more likely than not—that the amount in controversy exceeded $75,000.

The court found that Michaels had not met that burden. Neither the complaint nor the notice of removal provided enough information about the nature and extent of O’Neill’s injuries to support a reasonable inference that more than $75,000 was at issue. Michaels also did not provide any written indication of the amount in controversy, and the court’s review of the state-court docket found none.

Ruling

Judge Philip M. Halpern concluded that Michaels failed to establish that the amount-in-controversy requirement was satisfied. The court ruled that removal was improper and remanded the action to the Supreme Court of the State of New York, County of Westchester. The Clerk was directed to send that court a copy of the order and close the federal action; all pending matters were terminated. The order did not decide the merits of O’Neill’s negligence allegations.