Schmidt, Sethi & Akmajian Blog

(520) 790-5600

Diversity Jurisdiction: Amount in Controversy

Posted by Ted A. Schmidt | May 09, 2018 | 0 Comments

Jurisdiction 20amount 20in 20controversy

Diversity Jurisdiction: Amount in Controversy

Chavez v. JP Morgan Chase & Co., No. 16-55957 (9th Cir., April 20, 2018) (J. Bybee)

AMOUNT IN CONTROVERSY FOR DIVERSITY JURISDICTION DETERMINATION IS NOT LIMITED TO DAMAGES INCURRED AT TIME OF REMOVAL BUT IS DETERMINED BY THE OPERATIVE COMPLAINT AT THE TIME OF REMOVAL AND DISCOVERY

Plaintiff brought a wrongful discharge claim in California state court against her employer alleging damages in her complaint to include “loss of earnings” and “loss of earning capacity,” as well as “medical expenses,” “reasonable attorneys' fees and costs,” “prejudgment interest,” “punitive and exemplary damages,” “a $750.00 penalty, pursuant to California Labor Code § 226(f),” and injunctive relief. The defendant removed the action to federal court which plaintiff did not initially contest. Ultimately the trial court granted defendant summary judgment on all counts. Plaintiff appealed claiming the Federal District Court lacked diversity jurisdiction because the damages she had sustained at the time of removal did not exceed the jurisdictional amount of $75,000.

 The ninth circuit found that in determining the amount in controversy in support of diversity jurisdiction the court should consider the damages alleged in the complaint at the time of removal as well as evidence that is part of the record in support of, or in opposition to a motion for summary judgment.  Here the court found the plaintiff had conceded the jurisdictional amount by not contesting the removal  initially, but independent of that found diversity based upon her deposition testimony that her  salary as a mortgage banker was greater than $39,000 a year and that she had intended to continue working for another nine years. Plaintiff further agreed that, if victorious, California  law could entitle her to over $350,000 in lost wages. The court rejected plaintiff's argument that diversity must be determined by the amount of damages actually incurred at the time of the removal. Rather past, present and prospective damages as alleged in the complaint and confirmed in discovery are the proper measure.

About the Author

Ted A. Schmidt

Ted's early career as a trial attorney began on the other side of the fence, in the offices of a major insurance defense firm. It was there that Ted acquired the experience, the skills and the special insight into defense strategy that have served him so well in the field of personal injury law. Notable among his successful verdicts was the landmark Sparks vs. Republic National Life Insurance Company case, a $4.5 million award to Ted's client. To this day, it is the defining case for insurance bad faith, and yet it is only one of several other multi-million dollar jury judgments won by Ted during his career. He is certified by the State Bar of Arizona as a specialist in "wrongful death and bodily injury litigation".

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Schmidt, Sethi & Akmajian

Schmidt, Sethi & Akmajian is one of the most experienced, successful personal injury law firms in the Tucson area. Established in 1995, our firm has a long history of success, as seen in our many victories.

Menu