Sharrock v. Walmart, Inc.

Background

Joel Sharrock began the action in the Supreme Court of the State of New York, County of Westchester, against Walmart, Inc., Wal-Mart Stores East, LP, and Wal-Mart Stores East, Inc. He alleged that he was injured in a Walmart store because of a liquid spill. The defendants answered and later removed the case to the U.S. District Court for the Southern District of New York under the federal diversity-jurisdiction statute, 28 U.S.C. § 1332.

The defendants asserted that complete diversity existed because they were citizens of Arkansas and Sharrock was a citizen of New York. They also asserted that the amount in controversy exceeded $75,000, relying on an alleged October 29, 2019 telephone conversation in which Sharrock demanded $200,000 to settle the matter.

Jurisdictional Issue

Federal diversity jurisdiction generally requires both citizenship in different states and an amount in controversy exceeding $75,000, excluding interest and costs. The party seeking federal jurisdiction bears the burden of establishing those requirements. Because New York law does not allow a personal-injury complaint to state a specific damages amount, Sharrock’s complaint said only that his damages exceeded the jurisdictional limits of lower courts.

The court found no written response to the defendants’ discovery demands that specified the amount in controversy. The state-court docket likewise contained no written indication of the amount. The court explained that the Second Circuit uses a rule under which the 30-day removal period begins when the plaintiff serves a paper explicitly specifying the monetary damages sought. District courts in the circuit have held that an oral settlement demand is not sufficient for this purpose.

Ruling

The court held that the defendants failed to establish that the amount in controversy exceeded $75,000. It further held that the alleged oral demand did not start the 30-day removal period. The court therefore concluded that removal from state court was improper and remanded the action to the state court from which it had been removed.

The clerk was directed to send a copy of the order to the Supreme Court of the State of New York, County of Westchester, and to close the federal case. All pending motions were terminated. The opinion addressed federal subject-matter jurisdiction and removal; it did not resolve the merits of Sharrock’s personal-injury claim.