Legal Memorandum: Diversity Jurisdiction – Amount in Controversy

Issue: Under federal law, how does a court determine whether the amount in controversy over is $75,000 for purposes of diversity jurisdiction under 28 U.S.C. 1332?

I.       Burden of Proof

Person removing or otherwise invoking federal court jurisdiction has burden of proving, by a preponderance of the evidence, that amount in controversy exceeds $75,000.

·         St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250 (5th Cir. 1998).

·         State v. Western Sur. Co., 51 F.3d 170 (8th Cir. 1995).

·         Gober v. Allstate Ins. Co., 855 F. Supp. 158 (S.D. Miss. 1994).

II.        Time at Which Amount Is Determined

The amount in controversy is determined at the time the complaint is filed.

·         Watson v. Blankinship, 20 F.3d 383 (10th Cir. 1994).

·         L & L Oil Co. v. Hugh Mac Towing Corp., 859 F. Supp. 1002 (E.D. La. 1994).

·         Carlough v. Amchem Prods., Inc., 834 F. Supp. 1437 (E.D. Pa. 1993).

III.       Present Value

·         Sarnoff v. American Home Prod. Corp., 798 F.2d 1075 (7th Cir. 1986), on remand, 666 F. Supp. 137 (N.D. Ill. 1987) (when future benefit is claimed, valuation of claim for purposes of jurisdiction requires discounting future benefit to its present value).

·         Burton v. Terrell, 368 F. Supp. 553 (W.D. Va. 1973) (amount in controversy is determined exclusive of interest and costs).

IV.       Face Value

·         Guardian Life Ins. Co. v. Muniz, 101 F.3d 93 (11th Cir. 1996) (face value of insurance policy determines amount in controversy, as that is the only fixed and definite liability […]