What You'll Learn

  • The statutory threshold
  • The legal-certainty test
  • What counts
  • Aggregation rules
  • Exxon and supplemental jurisdiction
  • Worked examples

Educational information only; not legal advice. This article is a general study aid and should be checked against current authority and course materials.

The amount-in-controversy rule is easy to state and easy to misapply. Section 1332 requires more than $75,000, exclusive of interest and costs. The real work is deciding what counts, whether the demand was made in good faith, and which claims may be combined.

1. The Threshold Must Be Exceeded

The matter in controversy must exceed $75,000. A demand for exactly $75,000 is not enough. The amount is ordinarily measured at filing, and a later recovery below the threshold does not retroactively destroy jurisdiction if the original amount was proper.

Key Takeaway

The plaintiff's good-faith amount controls unless it appears to a legal certainty that the plaintiff cannot recover more than $75,000 under the governing law and the pleaded facts.

St. Paul Mercury Indemnity Co. v. Red Cab Co. supplies the classic standard. The court does not conduct a mini-trial on damages at the jurisdictional stage. It asks whether the claimed amount is made in good faith and whether law makes recovery above the threshold legally impossible. A plaintiff cannot create jurisdiction through unsupported arithmetic or damages unavailable under the governing law. On the other hand, uncertainty about the final verdict is not the same as legal certainty that the threshold cannot be met.

3. What May Count

Compensatory damages supported by the claim.

Punitive damages when legally available, not barred, and plausibly placed in controversy. Attorney's fees when a statute or contract makes them recoverable as part of the claim. The value of injunctive or declaratory relief under the valuation approach used by the governing court.

Section 1332 excludes interest and costs in the ordinary sense. Interest that is itself part of the substantive claim can present a different issue, so identify why the amount is sought rather than mechanically deleting every item labeled interest.

4. Aggregation Rules

Configuration May amounts be combined? Rule

One plaintiff v. one defendant Yes. The plaintiff may aggregate all claims against that defendant, related or unrelated.

One plaintiff v. multiple defendants Usually no. Separate liabilities cannot be combined; joint liability or a common undivided obligation can change the result.

Multiple plaintiffs v. one defendant Usually no. Separate and distinct claims cannot be aggregated merely to reach the threshold.

Common and undivided interest Potentially yes. Parties enforcing one shared right may use the value of the common interest.

Permitted

P has a $50,000 contract claim and a $40,000 tort claim against the same D. P may aggregate to $90,000.

Not permitted

P has a $40,000 claim against D1 and a separate $40,000 claim against D2. P ordinarily cannot add them.

Common Mistake

Aggregation and supplemental jurisdiction are different. Aggregation combines amounts to satisfy the original threshold. Supplemental jurisdiction may allow a related smaller claim to accompany another claim that already satisfies jurisdiction.

5. Exxon and Additional Plaintiffs

Exxon Mobil Corp. v. Allapattah Services, Inc. holds that when at least one plaintiff's claim satisfies the amount requirement and complete diversity exists, § 1367 may allow additional diverse plaintiffs with related smaller claims to proceed. The smaller claims do not become large enough through aggregation; they ride through supplemental jurisdiction.

Exxon does not cure a lack of complete diversity. If any plaintiff shares citizenship with any defendant, ordinary § 1332 jurisdiction remains defective.

6. Worked Examples

Exam Tip

A Florida plaintiff sues one Texas defendant for $45,000 in property damage and $40,000 for an unrelated unpaid loan. One plaintiff may aggregate all claims against one defendant. The amount is $85,000, so the threshold is satisfied if the claims are asserted in good faith and complete diversity exists.

Exam Tip

Two Georgia plaintiffs injured in the same accident sue a Florida defendant. P1 seeks $120,000; P2 seeks $25,000. P1 satisfies the amount. P2 cannot aggregate with P1, but P2's related claim may fall within supplemental jurisdiction under Exxon if complete diversity and § 1367 are satisfied.

Exam Tip

A plaintiff seeks $70,000 in compensatory damages and punitive damages, but state law categorically bars punitive damages for the pleaded claim. The unavailable punitive demand cannot rescue jurisdiction. If no other recoverable amount places more than $75,000 in controversy, the legal-certainty test is not satisfied.

7. Exam Checklist

  1. Write "exceeds $75,000," not "$75,000 or more." 2. Identify the amount at filing. 3. Apply good faith and legal certainty. 4. Determine what damages or relief are legally available. 5. Classify the party configuration before aggregating. 6. Keep Exxon supplemental jurisdiction separate from aggregation.

Primary Authorities

  • 28 U.S.C. § 1332(a)-(b).

  • St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938).

  • Snyder v. Harris, 394 U.S. 332 (1969).

  • Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005).

Exam-ready conclusion

Amount-in-controversy questions are relationship questions disguised as arithmetic. Identify who owns each claim, against whom it runs, whether the liability is separate or shared, and whether a smaller related claim relies on § 1367 rather than aggregation.