Post-Removal Settlement Offers Do Not Defeat Diversity Jurisdiction: In-Depth Commentary on Sergei Kovalev v. WalMart Inc. (3d Cir. 2025)

1. Introduction

The United States Court of Appeals for the Third Circuit, in Sergei Kovalev v. WalMart Inc., clarified several recurring procedural and substantive questions:

• Whether a plaintiff’s post-removal offer to settle below the jurisdictional minimum divests a federal court of diversity jurisdiction.
• The scope of a district court’s discretion in policing discovery deadlines, especially when a pro se litigant requests last-minute extensions.
• The evidentiary showing required at summary judgment for negligence claims brought under Restatement (Second) of Torts § 344 (premises liability – duty to protect business invitees from third-party misconduct).

The appeal arose from an incident in which Sergei Kovalev alleged he was struck by another customer’s cart inside a Philadelphia Walmart. He sued three Walmart entities and their security contractor, Brosnan Risk Consultants, asserting an assortment of tort and consumer-protection claims and demanding $1 million in punitive damages. After removal to federal court, the District Court (1) dismissed all but the § 344 negligence claim, (2) enforced a discovery schedule, (3) denied late motions to compel and to extend discovery, and (4) entered summary judgment for defendants. The Third Circuit affirmed in full.

2. Summary of the Judgment

Key holdings of the Third Circuit’s per curiam opinion:

1. Diversity Jurisdiction Confirmed. Complete diversity existed (Pennsylvania plaintiff vs. out-of-state defendants), and Kovalev’s initial demand for $1 million satisfied the amount-in-controversy requirement. A later settlement offer of $74,999 did not deprive the District Court of jurisdiction.
2. Discovery Discretion Upheld. Denial of untimely motions to compel and Rule 56(d) requests for additional discovery was not an abuse of discretion.
3. Summary Judgment Proper. Kovalev produced no evidence that Walmart/Brosnan had notice of a foreseeable risk of cart collisions or customer violence – an essential § 344 element – so his negligence claim failed as a matter of law.

3. Analysis

3.1 Precedents Cited

• Celotex Corp. v. Catrett, 477 U.S. 317 (1986) – burden-shifting framework at summary judgment.
• Huber v. Taylor, 532 F.3d 237 (3d Cir. 2008) – punitive damages count toward amount in controversy when not patently frivolous.
• Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir. 2002) – amount in controversy assessed at the moment of removal; post-removal events cannot reduce jurisdiction.
• Crosbie v. Highmark Inc., 47 F.4th 140 (3d Cir. 2022) – party requesting Rule 56(d) relief must show how additional discovery will create a genuine issue of material fact.
• Restatement (Second) of Torts § 344 & cmt. f – premises owner’s duty toward invitees vis-à-vis third-party misconduct, predicated on notice or foreseeability.

These authorities furnished the scaffolding for the panel’s reasoning: jurisdictional doctrine from Werwinski, the discovery standard from Crosbie, and the substantive negligence framework from § 344.

3.2 Legal Reasoning

3.2.1 Jurisdictional Ruling

1. Amount in Controversy. The Court reiterated that the jurisdictional amount is fixed at the time of removal. Because Kovalev’s complaint demanded punitive damages of $1 million, the § 1332 threshold was met.
2. Post-Removal Settlement Offer. Accepting Kovalev’s subsequent $74,999 offer would allow plaintiffs to manipulate jurisdiction retroactively, an outcome foreclosed by precedent. The Court relied on Werwinski and aligned with the Supreme Court’s broader principle in St. Paul Mercury Indem. Co. v. Red Cab Co. (1938) that “events occurring subsequent to removal which reduce the amount recoverable do not oust jurisdiction.”

3.2.2 Discovery Management

The District Court’s scheduling orders set a clear May 28, 2023 deadline. Kovalev’s motions to compel were filed after the deadline and months after defendants produced documents. Under Fed. R. Civ. P. 16(b)(4) a schedule may be modified only for “good cause”; Kovalev’s delay, coupled with two failures to appear for his own deposition, undercut any showing of diligence—the core of “good cause.” The Third Circuit found no abuse of discretion.

3.2.3 Summary Judgment

Under § 344 a business is liable for third-party misconduct only if it:

1. Knows or by exercise of reasonable care should know that the misconduct is occurring or is imminent (notice/foreseeability); and
2. Fails to take reasonable steps—guards, surveillance, employee intervention—to prevent or mitigate the harm.

Kovalev offered no admissible evidence (incident reports, prior similar events, expert opinions, deposition testimony) to establish that Walmart had notice of a risk of customer cart assaults. Mere allegations in a pro se complaint cannot substitute for evidence under Rule 56. Applying the burden-shifting matrix from Celotex, the Court held that Kovalev failed to demonstrate a genuine issue of material fact.

3.3 Potential Impact

Although labeled “Not Precedential,” Third Circuit I.O.P. 5.7 allows parties and courts to cite such opinions for their persuasive value. This case will likely influence:

• Removal Practice. Defendants confronted with tactical post-removal settlement offers can confidently rely on Kovalev and Werwinski to resist remand motions.
• Discovery Enforcement. District courts within the Circuit may invoke Kovalev to affirm stringent adherence to scheduling orders, emphasizing that pro se status does not excuse dilatory conduct.
• Premises Liability Litigation. Plaintiffs alleging negligent security under § 344 must marshal concrete evidence of notice; bare assertions of risk will not survive summary judgment.

4. Complex Concepts Simplified

• Diversity Jurisdiction (28 U.S.C. § 1332): Federal courts can hear cases between citizens of different states if the amount in dispute exceeds $75,000.
• Amount in Controversy: The monetary value of the lawsuit judged at the moment it enters federal court; later changes are irrelevant.
• Restatement (Second) of Torts § 344: An influential legal summary stating that businesses must protect customers from foreseeable third-party harm on their premises.
• Rule 56(d) Motion: A request to delay summary judgment so a party can obtain discovery it reasonably needs to oppose the motion.
• Summary Judgment: A procedure for disposing of claims without trial where no reasonable jury could find in favor of the non-moving party based on the evidence.
• Not Precedential Opinion: Under the Third Circuit’s rules, such opinions are not binding authority but may be cited for their persuasive power.

5. Conclusion

Sergei Kovalev v. WalMart Inc. offers a crisp reaffirmation that (1) post-removal attempts to reduce the amount in controversy cannot oust diversity jurisdiction, (2) strict enforcement of discovery deadlines applies equally to pro se litigants, and (3) premises-liability plaintiffs must provide concrete evidence of foreseeability to survive summary judgment. While non-precedential, the decision is a practical roadmap for litigants and courts navigating removal strategy, discovery management, and § 344 negligence claims in the Third Circuit and beyond.