Amount in controversy
Encyclopedia
Amount in controversy is a term used in United States
civil procedure
to denote the amount at stake in a lawsuit, in particular in connection with a requirement that persons seeking to bring a lawsuit
in a particular court
must be suing for a certain minimum amount before that court may hear the case.
, the term currently applies only to cases brought under diversity jurisdiction
, meaning that the court is able to hear the case only because it is between citizens of different states. In such cases, the U.S. Congress has decreed in Title 28 U.S.C. § 1332(a) that the court may hear such suits only where "the matter in controversy exceeds the sum or value of $75,000." This amount represents a significant increase from earlier years.
Congress first established the amount in controversy requirement when it created diversity jurisdiction in the Judiciary Act of 1789
, pursuant to its powers under Article III of the U.S. Constitution, the amount being $500. It was raised to $2,000 in 1887, to $3,000 in 1911, to $10,000 in 1958, to $50,000 in 1988, and finally to the current $75,000 in 1996.
, which allows federal courts to hear any case alleging a violation of the Constitution, laws, and treaties of the United States, until 1875. At that time, such cases had the same amount in controversy requirement as the diversity cases. Congress eliminated this requirement in actions against the United States in 1976 and in all federal question cases in 1980.
a complaint
for lack of meeting the amount in controversy is a rather high one in federal court. In 1938, Justice Owen Roberts set forth the "legal-certainty test", which is still used today:
The validity of the amount of damages
claimed is considered a threshold issue of law
for a judge to decide at the commencement of the case.
The legal certainty test is often heavily litigated in personal injury
or wrongful death cases, in the situation where they are removed
by a defendant to federal court on the basis of diversity jurisdiction, and then the plaintiff moves to remand to state court. Since the 1970s, many states have prohibited plaintiffs in such cases from demanding a specific amount of money in the ad damnum
section of their complaints, because of serious problems with unscrupulous attorneys gaining undue publicity by simply demanding outrageous and unrealistic damage amounts like $1 trillion. Therefore, many such complaints cannot and do not state an amount in controversy on their face, which puts defendants in the awkward position of having to submit evidence to the federal court that plaintiffs could theoretically recover $75,000, while simultaneously maintaining that plaintiffs are not entitled to anything at all.
, the lowest level of court, the Virginia General District Court has exclusive jurisdiction to hear cases where the amount in controversy is $4,500 or less, and shares authority with the Virginia Circuit Court
to try cases involving sums above $4,500 and up to $15,000. The Virginia Circuit Court, in turn, has exclusive jurisdiction where the amount in controversy is greater than $15,000.
A few states like California have recognized that it is more efficient to unify all trial courts so that judges and support staff can be more easily reassigned where needed. However, in California, nearly all lawsuits involving an amount in controversy below $25,000 are classified as "limited civil actions," which are subject to special simplified procedural rules intended to hold down litigation costs.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
civil procedure
Civil procedure
Civil procedure is the body of law that sets out the rules and standards that courts follow when adjudicating civil lawsuits...
to denote the amount at stake in a lawsuit, in particular in connection with a requirement that persons seeking to bring a lawsuit
Lawsuit
A lawsuit or "suit in law" is a civil action brought in a court of law in which a plaintiff, a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant is required to respond to the plaintiff's complaint...
in a particular court
Court
A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...
must be suing for a certain minimum amount before that court may hear the case.
Diversity jurisdiction
In United States federal courtsUnited States federal courts
The United States federal courts make up the judiciary branch of federal government of the United States organized under the United States Constitution and laws of the federal government.-Categories:...
, the term currently applies only to cases brought under diversity jurisdiction
Diversity jurisdiction
In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction in civil procedure in which a United States district court has the power to hear a civil case where the persons that are parties are "diverse" in citizenship, which generally indicates that they are...
, meaning that the court is able to hear the case only because it is between citizens of different states. In such cases, the U.S. Congress has decreed in Title 28 U.S.C. § 1332(a) that the court may hear such suits only where "the matter in controversy exceeds the sum or value of $75,000." This amount represents a significant increase from earlier years.
Congress first established the amount in controversy requirement when it created diversity jurisdiction in the Judiciary Act of 1789
Judiciary Act of 1789
The United States Judiciary Act of 1789 was a landmark statute adopted on September 24, 1789 in the first session of the First United States Congress establishing the U.S. federal judiciary...
, pursuant to its powers under Article III of the U.S. Constitution, the amount being $500. It was raised to $2,000 in 1887, to $3,000 in 1911, to $10,000 in 1958, to $50,000 in 1988, and finally to the current $75,000 in 1996.
Federal question jurisdiction
Congress did not create a consistent federal question jurisdictionFederal question jurisdiction
Federal question jurisdiction is a term used in the United States law of civil procedure to refer to the situation in which a United States federal court has subject-matter jurisdiction to hear a civil case because the plaintiff has alleged a violation of the Constitution or law of the...
, which allows federal courts to hear any case alleging a violation of the Constitution, laws, and treaties of the United States, until 1875. At that time, such cases had the same amount in controversy requirement as the diversity cases. Congress eliminated this requirement in actions against the United States in 1976 and in all federal question cases in 1980.
Aggregation of claims
Where a single plaintiff has multiple unrelated claims against a single defendant, that plaintiff can aggregate those claims - that is, add the amounts together - to satisfy the amount in controversy requirement. In cases involving more than one defendant, a plaintiff may aggregate the amount claimed against multiple defendants “only if the defendants are jointly liable.” Middle Tennessee News Co., Inc. v. Charnel of Cincinnati, Inc., 250 F.3d 1077, 1081 (7th Cir. 2001). However, “if the defendants are severally liable, plaintiff must satisfy the amount in controversy requirement against each individual defendant.” The recent 5-4 decision in Exxon v. Allapattah, 545 U.S. 546 (2005), held that a federal court has supplemental jurisdiction over claims of other plaintiffs who do not meet the jurisdictional amount for a diversity action, when at least one plaintiff in the action does satisfy the jurisdictional amount.Legal certainty test
The standard for dismissingInvoluntary dismissal
Involuntary dismissal is the termination of a court case despite the plaintiff's objection.In United States Federal courts, involuntary dismissal is governed by Federal Rules of Civil Procedure Rule 41....
a complaint
Complaint
In legal terminology, a complaint is a formal legal document that sets out the facts and legal reasons that the filing party or parties In legal terminology, a complaint is a formal legal document that sets out the facts and legal reasons (see: cause of action) that the filing party or parties In...
for lack of meeting the amount in controversy is a rather high one in federal court. In 1938, Justice Owen Roberts set forth the "legal-certainty test", which is still used today:
It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal. The inability of plaintiff to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust the jurisdiction. Nor does the fact that the complaint discloses the existence of a valid defense to the claim. But if, from the face of the pleadings, it is apparent to a legal certainty that the plaintiff cannot recover the amount claimed or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount, and that his claim was therefore colorable for the purpose of conferring jurisdiction, the suit will be dismissed.
The validity of the amount of damages
Damages
In law, damages is an award, typically of money, to be paid to a person as compensation for loss or injury; grammatically, it is a singular noun, not plural.- Compensatory damages :...
claimed is considered a threshold issue of law
Question of law
In jurisprudence, a question of law is a question which must be answered by applying relevant legal principles, by an interpretation of the law. Such a question is distinct from a question of fact, which must be answered by reference to facts and evidence, and inferences arising from those facts...
for a judge to decide at the commencement of the case.
The legal certainty test is often heavily litigated in personal injury
Personal injury
Personal injury is a legal term for an injury to the body, mind or emotions, as opposed to an injury to property. The term is most commonly used to refer to a type of tort lawsuit alleging that the plaintiff's injury has been caused by the negligence of another, but also arises in defamation...
or wrongful death cases, in the situation where they are removed
Removal jurisdiction
In the United States, removal jurisdiction refers to the right of a defendant to move a lawsuit filed in state court to the federal district court for the federal judicial district in which the state court sits. This is a general exception to the usual American rule giving the plaintiff the right...
by a defendant to federal court on the basis of diversity jurisdiction, and then the plaintiff moves to remand to state court. Since the 1970s, many states have prohibited plaintiffs in such cases from demanding a specific amount of money in the ad damnum
Ad quod damnum
Ad quod damnum or ad damnum is a Latin phrase meaning "According to the harm" or "appropriate to the harm." It is used in tort law as a measure of damage inflicted, and implying a remedy, if one exists, ought to correspond specifically and only to the damage suffered. It is also used in pleading,...
section of their complaints, because of serious problems with unscrupulous attorneys gaining undue publicity by simply demanding outrageous and unrealistic damage amounts like $1 trillion. Therefore, many such complaints cannot and do not state an amount in controversy on their face, which puts defendants in the awkward position of having to submit evidence to the federal court that plaintiffs could theoretically recover $75,000, while simultaneously maintaining that plaintiffs are not entitled to anything at all.
In state courts
Each state has the power to set its own amount in controversy requirements for its own courts, but every state must offer some outlet for citizens to sue for violations of their rights, even if they are seeking no money. Most states have several levels of trial courts, with different amount-in-controversy requirements which must be met to gain access to higher levels of courts. For example, in the state of VirginiaVirginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
, the lowest level of court, the Virginia General District Court has exclusive jurisdiction to hear cases where the amount in controversy is $4,500 or less, and shares authority with the Virginia Circuit Court
Virginia Circuit Court
The Virginia Circuit Courts are the state trial courts of general jurisdiction in the Commonwealth of Virginia. The Circuit Courts have jurisdiction to hear civil and criminal cases. For civil cases, the courts has authority to try cases with an amount in controversy of more than $4,500 and has...
to try cases involving sums above $4,500 and up to $15,000. The Virginia Circuit Court, in turn, has exclusive jurisdiction where the amount in controversy is greater than $15,000.
A few states like California have recognized that it is more efficient to unify all trial courts so that judges and support staff can be more easily reassigned where needed. However, in California, nearly all lawsuits involving an amount in controversy below $25,000 are classified as "limited civil actions," which are subject to special simplified procedural rules intended to hold down litigation costs.