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By: Justine Baakman
Boilerplate Demands for Relief in Pennsylvania Complaint Alone Sufficient to Support an Amount in Controversy Exceeding $75,000
The Eastern District Court of Pennsylvania recently held that one may waive the right to removal to federal court even when there exists uncertainty as to whether the amount in controversy exceeds the $75,000.00 threshold for diversity citizenship. In Hutchinson v. State Farm Fire & Casualty, on January 17, 2018, the plaintiffs filed a breach of contract suit against the defendant in Pennsylvania state court. In their state action, the plaintiffs sought minimal damages totaling approximately $25,000.00 for specific costs relating to property damage they allege to have suffered. Despite those specifically-pled damages, the complaint included the nearly always pled boilerplate demands in Pennsylvania complaints for compensatory and punitive damages along with interest and attorneys’ fees against the defendant. Moreover, the plaintiffs filed their state court action in the Pennsylvania major trial division, thereby acknowledging the potential for the damages they sought to exceed the Pennsylvania compulsory arbitration cap of $50,000.00.
About three months following initiation of the state action, in April 2018, the defendant served the plaintiffs with requests for admission seeking an admission that the plaintiffs damages either exceeded or did not exceed the $75,000.00 threshold for removal. About one month later, in May 2019, the plaintiffs served their responses to those requests for admission. Although the plaintiffs admitted that their actual damages fell well below the $75,000.00 threshold, they indicated that once punitive damages, interest, and attorneys’ fees were accounted for, “their total damages could very well exceed $75,000.00.”
About one month later, in June 2018, the defendant removed the matter to the Eastern District Court of Pennsylvania. Shortly thereafter, the plaintiffs moved to remand the matter back to state court. The basis for that remand was the defendant’s untimely removal. In support of their request for remand, the plaintiffs argued that the defendant had known since initiation of the action in January 2018 that the amount in controversy exceeded $75,000.00. In arguing so, the plaintiffs focused on the boilerplate language in the complaint wherein they sought punitive damages, interest, and attorneys’ fees. In arguing against remand, the defendant focused on the boilerplate language of the relief sought in the complaint. Specifically, the defendant argued it was not legally certain that the damages the plaintiffs sought exceeded the $75,000.00 threshold until the plaintiffs answered its requests for admission. The Eastern District Court of Pennsylvania ultimately remanded the matter back to state court for the defendant’s failure to timely remove the action.
The impact of the Eastern District Court of Pennsylvania’s ruling on removal of state court actions is yet to be seen. It certainly leaves open the possibility that nearly all state court complaints in Pennsylvania could support a reasonable finding that the amount in controversy exceeds the $75,000.00 threshold for removal based on diversity of citizenship. And, more importantly, that failure to remove Pennsylvania state court actions – most of which are initiated via complaints seeking similar boilerplate relief as was at issue in the Hutchinson matter – within thirty (30) days of service of the complaint could result in waiver of the right to remove.
For additional information related to this topic and for advice regarding how to navigate removal of Pennsylvania state court actions, including torts, products liability, and catastrophic loss litigation, you may contact Justine Baakman at 267-908-7882 or [email protected]