Compulsory arbitration cases historically posed problems for diverse defendants seeking to remove a personal injury case to federal court. Specifically, some plaintiffs personal injury attorneys may file a case initially as an arbitration matter and then either transfer the case to major jury after the 30-day period for removal has expired, or simply file a de novo appeal to the award since the arbitration limit no longer applies to any resulting jury verdict. In other cases, a plaintiffs attorney may attempt to transfer a major case to the arbitration program when threatened with removal. At the moment, we will put to one side whether the use of the arbitration program for the purpose of defeating federal jurisdiction is clever lawyering or bad faith, and refer to these herein as an incongruous arbitration case.
Regardless of how the tactic is characterized, the arbitration limits in Pennsylvania state courts are universally below $75,000; thus, an initial pleading demanding arbitration theoretically does not satisfy the amount in controversy requirement to invoke federal diversity jurisdiction. To add to the ambiguity, plaintiffs attorneys may demand arbitration on the cover sheet of the pleading, but craft their damage averments and ad damnum clauses in some ambiguous fashion to argue later the initial pleading did in fact provide notice to the defendant that damages exceeded $75,000. Accordingly, a defense attorney presented with such a pleading faces the dilemma of either prematurely removing a case that may not initially satisfy federal jurisdiction (potentially subjecting himself or herself to sanctions if the case is remanded); or waiving removal by failing to timely file the notice of removal within 30 days of the filing of the ambiguous pleading.
