Amount in controversy (sometimes called jurisdictional amount) is a term used in
civil procedure
Civil procedure is the body of law that sets out the rules and regulations along with some standards that courts follow when adjudicating civil lawsuits (as opposed to procedures in criminal law matters). These rules govern how a lawsuit or ca ...
to denote the amount at stake in a lawsuit, in particular in connection with a requirement that persons seeking to bring a
lawsuit
A lawsuit is a proceeding by one or more parties (the plaintiff or claimant) against one or more parties (the defendant) in a civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today ...
in a particular
court
A court is an institution, often a government entity, with the authority to adjudicate legal disputes between Party (law), parties and Administration of justice, administer justice in Civil law (common law), civil, Criminal law, criminal, an ...
must be suing for a certain minimum amount (or below a certain maximum amount) before that court may hear the case.
United States
In federal courts
Diversity jurisdiction
In
United States federal courts
The federal judiciary of the United States is one of the three branches of the federal government of the United States organized under the Constitution of the United States, United States Constitution and Law of the United States, laws of the fed ...
, the term currently applies only to cases brought under
diversity jurisdiction
In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction that gives United States federal courts the power to hear lawsuits that do not involve a federal question. For a federal court to have diversity ju ...
, 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 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
The Judiciary Act of 1789 (ch. 20, ) was a United States federal statute enacted on September 24, 1789, during the first session of the First United States Congress. It established the federal judiciary of the United States. Article Three of th ...
, 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.
The use of the word "exceeds" in Section 1332 implies that the amount in controversy must be more than $75,000; a case removed from state court to federal court must be remanded back to state court if the amount in controversy is exactly $75,000.00.
Federal question jurisdiction
Congress did not create a consistent
federal question jurisdiction
In United States law, federal question jurisdiction is a type of subject-matter jurisdiction that gives United States federal courts the power to hear civil cases where the plaintiff alleges a violation of the United States Constitution, feder ...
, which allows federal courts to hear any case alleging a violation of the Constitution, laws, and
treaties
A treaty is a formal, legally binding written agreement between sovereign states and/or international organizations that is governed by international law. A treaty may also be known as an international agreement, protocol, covenant, convention ...
of the United States, until 1875, when Congress created the statute which is now found at : "The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." 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 5–4 decision in ''
Exxon Mobil Corp. v. Allapattah Services, Inc.
''ExxonMobil, Exxon Mobil Corp. v. Allapattah Services, Inc.'', 545 U.S. 546 (2005), was a case in which the Supreme Court of the United States held that 28 U.S.C. § 1367. permits supplemental jurisdiction over joined claims that do not individu ...
'', 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
dismissing a
complaint
In legal terminology, a complaint is any formal legal document that sets out the facts and legal reasons (see: cause of action) that the filing party or parties (the plaintiff(s)) believes are sufficient to support a claim against the party ...
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
At common law, damages are a remedy in the form of a monetary award to be paid to a claimant as compensation for loss or injury. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. To be recognized at ...
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. Several U.S. states prohibit 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 damages numbers that they cannot possibly prove at trial.
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 argue to the federal court that plaintiffs ''could'' theoretically recover a sum in excess of $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
Virginia
Virginia, officially the Commonwealth of Virginia, is a U.S. state, state in the Southeastern United States, Southeastern and Mid-Atlantic (United States), Mid-Atlantic regions of the United States between the East Coast of the United States ...
, 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 between $4,500 and $25,000 for injury to property cases or $4,500 and $50,000 for personal injury and wrongful death cases. The Virginia Circuit Court, in turn, has exclusive jurisdiction where the amount in controversy is greater than $25,000 for injury to property cases or $50,000 for personal injury and wrongful death cases.
A few states like California have decided 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 up to $25,000 are classified as "limited civil cases," which are subject to special simplified procedural rules intended to hold down litigation costs.
[California Code of Civil Procedur]
Sections 90-100
References
{{Authority control
Civil procedure
Jurisdiction