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contractplaintiffjurisdictiondamagesappeal
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Laughlin v. Kmart Corp., 50 F.3d 871, 129 Lab.Cas. P 57,867

Facts

In January of 1993, Mr. Laughlin, a former employee of Kmart, filed a petition in Oklahoma state district court alleging a breach of his employment contract and wrongful constructive termination. Mr. Laughlin's petition alleged damages for each claim 'in excess of $10,000.' Kmart subsequently filed a notice of removal to federal court. The notice itself did not refer to an amount in controversy, although Plaintiff's petition was attached as an exhibit. Mr. Laughlin neither objected to removal nor questioned the amount in controversy.

In January of 1993, Mr. Laughlin, a former employee of Kmart, filed a petition in Oklahoma state district court alleging a breach of his employment contract and wrongful constructive termination. Mr. Laughlin's petition alleged damages for each claim 'in excess of $10,000.' Kmart subsequently filed a notice of removal to federal court.

Issue

Whether the federal district court had subject matter jurisdiction based on the amount in controversy required for diversity jurisdiction.

Whether the federal district court had subject matter jurisdiction based on the amount in controversy required for diversity jurisdiction.

Rule

In order for a federal court to have original jurisdiction in a diversity case, the amount in controversy must exceed $50,000. Subject matter jurisdiction cannot be conferred or waived by consent, estoppel, or failure to challenge jurisdiction early in the proceedings.

In order for a federal court to have original jurisdiction in a diversity case, the amount in controversy must exceed $50,000.

Analysis

The court analyzed the removal notice and the plaintiff's petition, concluding that neither established the requisite jurisdictional amount. The petition only alleged damages in excess of $10,000 for each claim, and the notice of removal did not specify an amount in controversy. The court emphasized that the burden was on Kmart to demonstrate that the amount in controversy exceeded $50,000 at the time of removal, which it failed to do.

Neither Laughlin's petition nor Kmart's notice of removal establishes the requisite jurisdictional amount in this case.

Conclusion

The Court of Appeals held that the federal district court lacked subject matter jurisdiction and remanded the case with instructions to vacate the judgment and return the action to state court.

We remand to the district court with instructions to vacate its judgment and remand the action to state district court.

Who won?

Kmart prevailed in the case because the Court of Appeals determined that the federal court lacked subject matter jurisdiction due to insufficient evidence of the amount in controversy.

Kmart prevailed in the case because the Court of Appeals determined that the federal court lacked subject matter jurisdiction due to insufficient evidence of the amount in controversy.

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