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A. Diversity only:In diversity cases, but not in federal question cases, plaintiff must satisfy an "amount in controversy" requirement. In all diversity cases, the amount in controversy must exceed $75,000. [114]

1. Interest not included:The $75,000 figure does not include interest or court costs.

B. Standard of proof:The party seeking to invoke federal diversity jurisdiction does not have to prove that the amount in controversy exceeds $75,000. All she has to show is that there is some possibility that that much is in question. [115]

1. "Legal certainty" test:To put it another way, the claim cannot be dismissed for failing to meet the $75,000 requirement unless it appears to a legal certainty that the claim is really for less than the jurisdictional amount. [St. Paul Mercury Indemnity Co. v. Red Cab]

2. Eventual recovery irrelevant:The fact that P eventually recovers far less than the jurisdictional amount does not by itself render the verdict subject to reversal and dismissal on appeal for lack of jurisdiction.

a. Discretion to deny costs:But the federal court has discretion to deny costs to P, and even to impose costs on him, if he recovers less than $75,000.

28 U.S.C. §1332(b).

C. Whose point of view followed:The courts are split as to which party’s point of view is to be considered in calculating the amount at stake. Most courts hold that the controversy must be worth $75,000 to the plaintiff in order to satisfy the jurisdictional amount. [115]

D. Aggregation of claims:In multi-plaintiff or multi-claim litigation, you must understand the rules governing when aggregation of claims is permissible for meeting the jurisdictional amount: [116 - 118]

1. Aggregation by single plaintiff:If a single plaintiff has a claim in excess of $75,000, he may add to it any other claim of his against the same defendant, even though these other claims are for less than the jurisdictional amount. This is done by the doctrine of supplemental jurisdiction. [116]

a. No claim exceeds $75,000:Even if a plaintiff does not have any single claim worth more than $75,000, he may add together all of his claims against a single defendant. So long as these claims against a single defendant total more than $75,000, the amount in controversy requirement is satisfied.

b. Additional defendants:But a plaintiff who has aggregated his claim against a particular defendant, usually may not join claims against other defendants for less than the jurisdictional amount.

Example: P has two claims, each for $40,000, against D1. P will be deemed to meet the amount in controversy requirement as to these claims, because they aggregate more than $75,000. But if P tries to bring D2 into the lawsuit, and has a single claim worth $40,000 against D2, most courts will not allow this claim, because P’s total claims against D2 do not exceed $75,000, and the doctrine of supplemental jurisdiction does not apply.

2. Aggregation by multiple plaintiffs:[116 - 118]


At least one plaintiff meets amount:
If one plaintiff meets the jurisdictional amount, it’s not completely clear whether the other plaintiffs may join their related claims against that same defendant. The plaintiffs may probably use the doctrine of "supplemental jurisdiction" so as to enable the low-amount plaintiffs to join their claims together with the high-amount plaintiff.

b. No single claim meets the amount:If no single plaintiff has a claim or claims meeting the jurisdictional amount, aggregation by multiple plaintiffs is not allowed. (Exception: Where two or more plaintiff unite to enforce a single title or right in which they have a common and undivided interest, aggregation is allowed.)

c. Special restrictions for class actions:In class actions, until recently there has been an especially stringent, and clear, rule: every member of the class had to satisfy the jurisdictional amount. This meant that class actions in diversity cases were rarely possible. [Zahn v. International Paper Co.] [117] Some courts, however, have recently ruled that as long as the named class representatives each have a claim in excess of $75,000, the supplemental jurisdiction doctrine applies, so that the unnamed members need not meet the jurisdictional amount. [Free v. Abbott Labs.] [117]

E. Counterclaims:[118]

1. Suit initially brought in federal court:If P sues in federal court for less than the jurisdictional amount, and D counterclaims for an amount which (either by itself or added to P’s claim) exceeds the jurisdictional amount, probably the amount in controversy requirement is not met.

2. Removal by defendant:If P originally sues in state court for less than $75,000, and D tries to remove to federal court, amount in controversy problems work out as follows:

a. Plaintiff removal:The plaintiff may never remove, even if D counterclaims against him for more than $75,000. (The removal statute simply does not apply to plaintiffs, apart from amount-in-controversy problems.)

b. Defendant removal:If the defendant counterclaims for more than $75,000, but plaintiff’s original claim was for less than $75,000, the result depends on the type of counterclaim. If D’s counterclaim was permissive (under state law), all courts agree that D may not remove. If D’s claim was compulsory under state law, courts are split about whether D may remove.

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