Amount in Controversy

The required monetary amount for purposes of diversity jurisdiction is a straight-forward issue. Even so, there are many testable angles, and the MBE tests them all. It's worth knowing all of the following when preparing for Civil Procedure:

Actions brought in federal court under diversity must be in excess of $75,000, exclusive of interests and costs (more on this later). This amount in controversy is entirely determined by the plaintiff's good-faith allegation. In other words, the complaint can be dismissed on this basis only if it appears that there is no legal possibility of a recovery exceeding $75,000.  And the fact that $75,000 is not ultimately recovered is not dispositive on whether the claim was in good faith.

In determining what should be included in the claim of $75,000, interest and costs are excluded. But it should be noted that interest that constitutes a part of the claim is included. Interest excluded is interest payable by virtue of a delay in payment. Also included are attorneys' fees that are recoverable by contract or by statute as are punitive damages claims permitted under state substantive law.

Importantly, for purposes of satisfying the jurisdictional amount a plaintiff may aggregate all claims against a single defendant. This is entirely different than a plaintiff attempting to aggregate claims against multiple defendants; in those instances, aggregation is allowable only if defendants are jointly liable to plaintiff.  If instead there are several plaintiffs, aggregation is allowable only if the plaintiffs attempting to aggregate are seeking to enforce a single right in which they have a common or undivided interest. It's unlikely that multiple plaintiffs can aggregate.

It'll also be important to understand how supplemental jurisdiction can affect the required jurisdictional amount. Claims that do not meet the $75,000 requirement may still invoke jurisdiction if there is at least one claim that does meet the requirement and if the claims that do not meet the requirement arise from the same "common nucleus of fact" as the claim that satisfies the requirement.