Also known as: amount in controversy test · amount-in-controversy requirement · amount in controversy · AIC requirement · amount in controversy threshold
Written by attorneys — see sources below.
A statutory threshold requiring that the value of a plaintiff's claim in a diversity action exceed seventy-five thousand dollars exclusive of interest and costs to establish federal subject-matter jurisdiction. The plaintiff's good-faith allegation in the complaint ordinarily controls unless it appears to a legal certainty that the claim cannot reach the required amount. Courts apply the test at the time of filing and reassess it upon challenge or changed circumstances such as dismissal of an anchor claim.
Azure Solutions sued Alpine Mining in federal court alleging breach of a supply contract and seeking $180,000 in damages. During discovery Alpine moved for a protective order limiting document requests concerning internal cost data. The court weighed the amount in controversy against the burden of production and narrowed the requests to invoices and payment records only.
Abigail Alvarez, a citizen of State A, sued Apex Dynamics, a citizen of State B, for $90,000 on a contract claim that satisfied the amount-in-controversy requirement. She later joined an additional plaintiff whose related claim totaled only $40,000. The court exercised supplemental jurisdiction over the smaller claim because it shared a common nucleus of operative fact with the anchor claim.
Arthur Abrams served broad interrogatories on Ashford Manufacturing in a $120,000 contract dispute. Ashford's counsel certified the responses after considering the amount in controversy and concluded that answering every interrogatory would be unduly burdensome. The court upheld the certification because the responses were proportional to the stakes of the case.
Adrian Aguilar filed a diversity action against a corporate defendant seeking $50,000 in compensatory damages plus punitive damages that the complaint valued at $30,000. The defendant moved to dismiss for lack of subject-matter jurisdiction. The court granted the motion because the pleaded amount failed to meet the statutory threshold even after including the punitive claim.
Citizens for a Better Environment, an association of individuals interested in environmental protection, sued Steel Company, a small manufacturing company located in Chicago, alleging that Steel Company had failed since 1988 to complete and submit the annual hazardous-chemical inventory forms and toxic-chemical release forms required by the Emergency Planning and Community Right-To-Know Act of 1986. The forms must list the name and location of the facility, the name and quantity of each specified chemical on hand, the waste-disposal method employed, and the annual quantity of toxic chemicals released into each environmental medium, with inventory forms due each March 1 and release forms due each July 1. In 1995 the association sent the required 60-day notice to Steel Company, the EPA Administrator, and Illinois authorities, accurately alleging that Steel Company had never filed the required forms. Upon receiving the notice, Steel Company filed all of the overdue forms with the appropriate agencies. The EPA took no enforcement action, and after the waiting period expired the association filed its complaint in federal district court. The complaint, brought on behalf of the association and its members, sought a declaratory judgment that Steel Company had violated EPCRA, authorization for periodic inspections of Steel Company's facility and records at Steel Company's expense, an order compelling Steel Company to provide the association with copies of all compliance reports submitted to the EPA, civil penalties of $25,000 per day for each violation, and an award of the association's investigation and litigation costs including reasonable attorney and expert witness fees. The district court agreed with Steel Company on both points and dismissed the complaint. The United States Court of Appeals for the Seventh Circuit reversed, and the Supreme Court granted certiorari to resolve a conflict with the Sixth Circuit's decision in a factually indistinguishable case.
Austin Abbott and other merchants each asserted claims under $10,000 against American Express. The company invoked an arbitration clause that barred class proceedings. The court enforced the clause because no individual claim satisfied the amount-in-controversy requirement on its own and the clause prevented aggregation.
Respondents Italian Colors Restaurant and other merchants who accept American Express cards entered into agreements with petitioners American Express and its subsidiary. These agreements required that all disputes be resolved by arbitration and provided that there shall be no right or authority for any claims to be arbitrated on a class action basis. The agreements also included a jury trial waiver and specified that New York law would govern. Respondents filed a class action complaint in the United States District Court for the Southern District of New York. They alleged that American Express violated section 1 of the Sherman Act by using monopoly power in charge cards to force acceptance of credit cards at rates about 30 percent higher than competitors, seeking treble damages under section 4 of the Clayton Act for the class. Petitioners moved to compel individual arbitration under the Federal Arbitration Act. The district court granted the motion and dismissed the lawsuits. On appeal, the Court of Appeals for the Second Circuit reversed, holding the class-action waiver unenforceable because respondents had shown through an economist's declaration that expert analysis costs would be at least several hundred thousand dollars while individual recovery would be at most $38,549 after trebling. The Supreme Court granted certiorari, vacated the judgment, and remanded for consideration in light of Stolt-Nielsen S.A. v. AnimalFeeds International Corp. The Second Circuit stood by its reversal, then reconsidered sua sponte in light of AT&T Mobility LLC v. Concepcion but again reversed. It denied rehearing en banc, after which the Supreme Court granted certiorari to address whether the FAA permits invalidation of arbitration agreements that do not permit class arbitration of federal claims.
Aaron Adams, a union member, sued an employer in federal court under a collective-bargaining agreement seeking $80,000 in back wages. The employer challenged jurisdiction on the ground that the claim sounded only in state contract law. The court retained the case because the pleaded amount exceeded the diversity threshold and the claim arose under federal common law.
In 1953 the Textile Workers Union of America entered into a collective bargaining agreement with Lincoln Mills of Alabama. The agreement was to run for one year and from year to year thereafter unless terminated on specified notices. It contained a no-strike clause and established a multi-step grievance procedure whose final step, available to either party, was arbitration. Several grievances concerning work loads and work assignments arose under the agreement. The union processed the grievances through every step of the contractual procedure, after which the employer denied them. The union then requested arbitration, but the employer refused. The union filed suit in federal district court seeking an order compelling the employer to arbitrate the grievances. The district court held that it possessed jurisdiction and directed the employer to comply with the arbitration provisions of the agreement. On appeal the Court of Appeals reversed by a divided vote, concluding that the district court lacked authority under either federal or state law to grant the requested relief. The Supreme Court granted certiorari. After the Court of Appeals decision but before oral argument, Lincoln Mills terminated its operations, ceased all work at the mill in March 1957, and contracted to sell its mill properties. Some of the grievances sought back pay for increased workloads, and the collective bargaining agreement authorized the arbitration board to adjust compensation retroactively.
Federal courts accept the plaintiff's good-faith allegation unless it appears to a legal certainty that the claim cannot reach the jurisdictional amount. Concrete allegations of tuition losses and career harm suffice even if the precise figure is uncertain.
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…"[a]ny individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may…
…the district court has original jurisdiction, without carving out an exception for claims that do not independently satisfy the amount-in-controversy requirement. This reading is supported by the statute’s structure and by its legislative history, which indicates that Congress intended to overrule Zahn v. International Paper Co. , 414 U. S. 291,…
…on 28 U. S. C. § 1343 (3), this case presents no problem of aggregation of claims in an attempt to satisfy the requisite amount in controversy of 28 U. S. C. § 1331 (a). Cf. Zahn v. International Paper Co. , 414 U. S. 291 (1973); Snyder v. Harris , 394 U. S. 332 (1969). Although the complaint did not so specify, the absence…
…the ATS became largely superfluous as of 1875, when Congress granted general federal-question jurisdiction subject to a $500 amount-in-controversy requirement, Act of Mar. 3, 1875, § 1, 18 Stat. 470, and entirely superfluous as of 1980, when Congress eliminated the
…after creating the cause of action, went on to say that "[t]he district courts shall have jurisdiction, without regard to the amount in controversy
Once the anchor claim is dismissed, the district court should decline to exercise supplemental jurisdiction over remaining state-law claims between non-diverse parties under 28 U.S.C. § 1367(c)(3).
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Yes. The notice of removal may assert the amount in controversy when the initial pleading seeks non-monetary relief or an unspecified amount, provided the district court finds by a preponderance of the evidence that the requirement is met.
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Interest that constitutes part of the claim itself, such as interest accrued on a note, is included in the calculation. Interest sought merely as delay damages is excluded.
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