Encontrei a solução nesta postagem do blog: link
If you are trying to use the terminal in OS X to reformat a volume and you are getting “error: does not appear to be a valid volume name for its file system” – You need to capitalize the name of every letter in the name you are trying to specify like this:
diskutil partitionDisk /dev/disk2 1 MBRFormat "MS-DOS FAT32" EDISON 805.30M'