THEIIIST'ORY AND TRADITION OF TH,E
,AM.On,NT IN CONTROVERSY ,REQUmE",
MENT': A ,PROPOSAL TO "UP THE ANTE"
IN DlVERS1TY' JURISDICTION
by
THOMAS E, BA.KER·
Swde'nt$ offede!"al Jurisdiction are
t~milial'with
the genetl\ltaeIUe'.
QXfflpfling stat1sties and issuing dire f)retiIQtions,:about qur ted~a;1courts
bas, h,eeomesoitle:thing of a. e~tta,ge indu.s trJ i'n tne last f~w decades.
The 'futnl'.ei$ p<lmayed ratb.et bleakly: fQr' e~at1lple. one f~deral juruulie.
tions~~r ~11$ \lS, that by tbetwenty"fit$,t eentll~15"OOO~ourt o:t aJ)peals
jlldg:es will .fill ., ~,00() , vQlumes of th~' f$d~ml 1!eporterdisposin.gQf'roore,
than one:mtlliQn; a.'P.Ptu,.Js--ea~4 year. 1 While QthercnnlIl'le,ntators, are.
skeptical 'abtlu.t 'the particular t\,c<!llracyclf:$,Uch DredictiOtl$it Z, most, e~~tY~
one: agree$ tbatthe 'l1"fe.(i'eral c:ourts nowba'Ve more work-than they 'tan
pt()peotlyd(}--i~e]udjngs(}mework that they ~T~nqt ins,titlltionaUy fit' to,
'dO', v a Stati$tiea,l s'umm'arie~a:I'ld$tudies ab,Qund, yet", 'go, unanswered. 4
W'bile the ide:ali~eral juriadictlon reform sbouldbe eomplete. and:
&ystemic" practicf41politieal reRliti~~$uggest that eQogressi.onal tinkering
ilS' an that ~n be exp.eeted fo:rfiGw.,5 TO' ~eknQwledgepolitieal reality,
howe:ver; i&,not to a~ando.n prindple. . ,S~lIeral remedial ,app,[oaehe$ short
of the ,ide:al ,complete review andltEl'V'ision are:a.vailable piecEtmeal and in
.. ASSQ(:ia~ ProfessOl:1 Te~~~ T~ch Uni¥erslty
~b:Q61of LaW4
~·be ala.rm. Se~ g~flen;jJly( e.g.) )la,k;e r" }je.ce~
de.nt . TimesTAt~~ SlllrelJe.cl$i,$ in lhe ,l Jj.
videi/, :Fiffh C(/rC1lli/; '3$ S;W'.L.J. li81. (i9-'1p .
S)tH}81);' BurdJek;Dive.rslty luri$digtion
Vn.tler th~ Am~riiMn La.w . /~tit":te Propos'(lJs.~ . It$ Purpose.llnd It$ '£flec.J on Slatea'tfd'
Feilf!.rlilCt!)urt$, 4B· N.l>ak~L.R-ey~ 1 09,11);
Edwards•. Th4 Ri$,i,ngWork Loa4 4#4 .Per'"'
a'~l 1974~Flbrida St~u~
tJnive:rsity;. ),D';1911;, Holland LawCtn.lerj
Univef$.'Uy of 'Florida.
I. Bar~o~j lJekind Ph., UglllllXp(wiQ1;J,; 27
:Stan.};..R¢;v; 5(/1,561 (1915).
c.rived ''Burl:il,J«¢tat;y'' (1f tlu! F~e"4;1 Cour.ts;·
A Causad(t!1. .l14sed ApprllQi;n tQ' the Sear(fh
1. ~. $alld~t; .V:llrie.Ji.~ :~1 Di$pfi,fe Pt~s!'
iflrg, i~ -;rHE POUNn CONFlll~ENCE; PER-
flJlr j,1ppropritll'e RlJtfJ-~i~. ~. Ia:LR~V.. *11
phmtp-$; Diversii1 Jf4~lli'CtifHl"~
SJ5SCTWESON JU$l'lCJt:· IN IRE ;ro.
to:R.E :a t65, 6s-66
:(196~; ..
CA. Lerin, &I R.Whe-~I~'j
Prob.lems :4,11,,1 (!; Prissi'ble$Q/lI,tirm, 14 'Iol&
c::d$19(9);,
a.. FJUHNDLl. FEi1'!BRAL JURI$DJ(;.
'tlON:. A QE.l'lBIAL VmWl-4(191l);.
3...
do L.;aev. 741 {l,98'3).
,9. ~e,
;t. 't he ;consensus hCl~ ~me:qJ~d evert ti.'t.o tt
drauratrcall¥$jn~e, ludge Fl'iendf1~C>4Qdeff
299
Hill & Baker.
.
1)i.r.tn .FederalJiirjs4i'ft~
riljli4l2 Em(i~ l,.J.31-7:641U~13,). (AdvQcales estabJi:s.hmcntof a. Fed«.af J,urisdic..,
tlonal R~Yiew and R~vi$iQnC.ol.llmissi()n),
300
1.'02 FEDERAL RULES DECISIONS
combination, in(}luding~ inC:t~asing judgepower; improving judieial 'adminiStration; and di:v-e,rting dis,putes to other :fo:ru.ros and away from
Article II! courts. StiIlt one prlneipl~ s];}()uldp.redolDinate any t,eform~
';fGo;ngr~s$$hould reuognize that the Al"tiele Uljudieialpower is:a scaree
re$OQtceand that demand for its use outstripS: its poS'Sible supply.i1Iil n,
genera1! I do not a;dv()t¥aw tha.t Artide In resQurces go unus~d" 'Qnly that
they be.USE':!d wls.-elY. My approach t() shQ(t term and long~t~trnrefQrm is
not to$oea-reb, for cases th~ fede;ralcourt.scan do, withQut. Bather" I
would &amine anew the puxpose those eourt$a:nd their Jurisdictions
se:rveand should serve inourdemoer::tcy:if the federal judicial institution
is to fulfHI it$ ~on$tituti(}nal .rt)le.7 Ultimately, theconstituti.{);nal seheme
requires ~. prope.t jurisdictional balance oetween the fedetalandstate
COllrtSjTstern:s so that Htigatitm is. assigned, to each sy;stemeonsistent
with basie principles of federalism. A Sev~;ralparticula:F problems and
p.t'oposed .solqtiQJl;S und'el' current ~pn:$'ider~tiQn r'aise ~sueh. funda~mental
redeta}isOO issues.' No sin.g1e topic of federal juris4ietion raise'S more
,profound Issues of 'fedetalism than does the g~l'le:ral diversity jll.ris.dfetio.ll
a.nd proposals fijr its reform. 1U
.
Presently, the diversity 'cas~ lQad 'ocenpiesabaut one~fputtb of the
df~trict CQurts' docket$ . and a,bout one.-tenth of' the court O'f ~~~eals'
d.Qckets. 11 Thus, :any turn of' thi:, hea.d pf jutisdiction .is significant
numerically and, obviQusly, 'ffsc~l1y. J2 EVen more profound a.re the
issues -of f~·deraUsm in»:olved. 'Th,e ,debate aver diver&ity jurisdiction has
b~en weighty, ill both seu.se~ of the word. . It is Do.t mypnrpt)se to
chronicle that general debate in this eS$::t.y. My modest ,e ffort here is to
Py{),pO$e ~. ¢ompromise ref'Ql"rn, a s.bort,.ietlll revision long Qverdue.
6.
ld.
at$2\ rnd¢¢.~)sQme ;app~rent.sho:tt­
terIDsC)Jutum.s develop further lQn~'U~fJl'\
prof;>,lc:ms, For examplel a4·i;lln,g j~d8es ('0
~he Fifth Circuit to ~pe wlth · ease load
lO'crea~reS' led to s:uch 'ad.minisJraUve .dlfHcui ties that
divi:~.iQnb.ecamenec~s$atY',
See 1}a~et• .supra: nole ,4". at 69.6-7(lS.
7. $ee: Addr¢$'s. ,~fChief.JusUce Earl Warren
before the.:A.no:t;l~r Me:eting of the:Am~ri-q-an
14w lnsti.lu:.te (M.ay 18, 1960). YeprirU~d, 2S
F.ltD. 213, 217' (.l960).
.
a,
Hill & Baker,
supra
note 4,. at 81-82.
,. E;)t.amples Include recent pr.qPQsalstQ
ehang,e federal juri-sdi(:t,i.c)n ln $"~b 'volatile
areas :a s fedetaJhabeas; corpus .and civil.
ti~ht$ . Ji,tigalj(;lnl . Se~,e.g., Yackl~;
The, Re(p
g4~ Aqm-ittistrDtionsHab~(J.$~()rplLf PrQ·
PfJ)'$4:is;. 68 Iowa L.Rev. ~O~. 6.tO (1983);
Sag,afi·Nlejad'~ P"OjjQ$ed A.mel1dmentsto .s~;.
Jntr()t/uc~d in. the Senate, 27 St.
L.c)'ui:s O.L.Rev. 313(1983). Si!e al$() Pli.·(sY-
lion 1'983
v. ~rdQf Regmts.4S7 U$. 4~~, 102 S.Ct..
255:1; '7 3L. Erl.2d 172 (19$2J {E~haQSlion in
Civil. Rights sul~s); 1fQ$6; y; LundYr 45S u.s.
5()9, l(}2 S.Ct. 11'98;; 11 L.Efl.2d )'79 (1982)
tHabeas corpUS eilthau$tion).
IO~
28 V.S.c. § U3tia)(1) (1976)! ''''rbe dis'
1rrcl ~o~rt$ s.hall ha~e original jutisdiction
of all cIvil ac:tit>ns "Where tbe matter hi
c:anlravet$Y t!lc~d,s the sum at; value .()J
$lO;C)Ot)'~"clu.sive. of interest l:lb(t.cpst'$, and
i$betw~en-{l)ci:ti.~fi~ (if different Slates
.,. I\i * .f' SeeDlv~:F$itYQ:f Citizenship Jurisdic[i~fi--.t9S2: flea.ring on M.Re. 6:69'1
fore the $ubcomm.. on CpUr{s; CMl"l,iber~
.Be.
ties, and the Adrninj'$tration 'Of Justice of
the f.IPu~~ ·Cornm. on the, Judici;tty; 97th,
CQngress. 'Zd Sess~ (l98Z) [ltertinafter cit-
edas 1'982 Rearing].
H. !'9S1ae.at~ng; supra note 10, ·a t9.5-96
(S'tattsHcs Jar tbe ye:ar <:ndil1g June. E,
1980).
12. The Administrative 'Office of tlle Unit~d
Stat.e:s. CQurts estimattrs; ~hal eil¢bye:ar of
diversity jurisdiG:tiQI} ' 90s1$ the federAl
govetnrnctn b¢tw¢en thirty and forty mHli():n ·dQfl~t$. 1rJ. at 1.1 8~
AMOUNT IN CONTROVERSY REQUIREMENT
Clt~ ..
102 F...U. 299
301
There are four methods of reforming diversity jurisdiction and this
essayisahout only one of them. I:! I should explain what this essay 'is
not aboutalongt~eway of introducing . OIyp~oposal. First, this essay is
not about the debate over the abolition af diversity' jurisdiction. Enough
has been sai~ by others pro 'and con. H I have nothing to add to that
debat~ hete, although candor <!otnpels my admission to being a diversity
ahoUtionist. lll Second, this essay is not about ]irnitingptoposals directed
to the parties to the sUit. I ' Third, this essay is not about proposals to
limit diversity jurisdiction by the subject matter or the nature of the
litigation. 17 AU that is left, of course, is increasing the jurisdictional
amount, a.nd that is what this essay is about.
.
One preliminary 'b ut basic observation needs to be made. Once Congress: rejects the two logical extremes, of abolition and implementationtQ
the fullesteJ{tentoft\rticle III diversity jurisdiction, as it .has since 1789,
13. See gen.erally Meador, A N~w Approach
10 Limiting Diversity JurisdlCllQH, 46 A,B.
Jd .• 383 (1960),.
14. Too. muchalteaqy has been: written on
the: suhject:~Q ml:ich that tbe,re are several
canvasses of th~ literature. $ee., e.g., 19132
HeatlJigs, $upranote 10; Committee on
Revl$ion <>f the Federa.l Judicial' System;
United States D.ep'to£ Iustice, Tbe Need$ of
the Federal c.ourts 13-15 (1971); H.
FRI.ENDLY, }ttpra note 3 at U9-S2: C.
WRIGHT,TlIE LAW OF FEDERAL
COURTS § 23 at 127'-"'137 (4th ed.1983}.
15. "Among the critics otdiversity jurisdiction .a resome df the legal profession's most
prominent members." Phillips, supra note
4, at 749 (Naming names). While I am in
good c;Qrnpany,. lam nola devout alx'iIi·
tionist. I would ,re,tain. the Federal Int¢rpleadet Act; 28 U.S.t. § 133,5 (1976)., I
w~uld allow for removal upofian actual
showing of prejudice, althtlUgh ladmtt that
such prior statutory provisions Were none
too successfuL C. WRlGHT. $Ji.pra note 14
at 129 n. 11.
16. Congress
has appli'ed party limits
throuQ.hout the history of diver.sity jurisdiction, Betwe~n 1789 and 1875 one o( the
parti¢$ was required to bea Citizen of the
forum state. .Act of Mar. 3, 187'5•. Ch. .137,
18$ta1. 470 amending Act of September 24.
1789,§ II, 1 Stat. 73,78. The, technique is
still used today. The cuttenl removal stat.
ute limilsaccess to defendants who .a re not
citizens of th¢ foru.m state.. 28 U.S.C.
§ 1441(b) (l976).Fot diversity purposes,
acorporatiotl isdeerned to bea dtizenof
bqth tbe slateQf its incot:poratiO'n .and the
's tate of its 'principal place of business. 28
U.S,C. § '1332(<:) (1958). Propo$als to limH
diversity to plaintiffs who are opt citizens
of the forum state have been Common.
Compare Marbury. Wh;)i Sh(j~ld We Limit
Federal Jurist/ietion?, 46 A.B.A.l.379 (1960)
,-Pro) with MQore & Weekstei.n., Divet.sity
Jurisd:iilt;on: P4,S;i Pre:sentand Fulur.e, '43
te~.L.Rev. t, 33-34 (1964) (Con). Another
frequently propps.ed reform w6uldaholi$h
th¢ pra¢tice by whicb ,at), 6UH)f·$tate aclministl'ator or guardian is .a ppointed to
create diverSe citjtenship. Compare MOore
& We<;kstein, sup:r:Q., at.3$ (Pro) wi.th Farage, Proposed Cd.de Will Emasculate Diversity Juri$iJi('liofl, Trial Magazi11.c at 20
(April/May 1966'), cited in C. WRiGHT,
supra note 14,at 1.30 n. 15 (Con).
17. A freq~e/'l1 pri)PQsal would dell), juris,
diction if a citizen oflhefgrum state sues a
corporation doi'l18 pysiness in the stale and
the dllim ~rose from thecorporaliop's activity there. Clark, Diversity a/Citizenship
JU>rlsdicti(lh 0/ the Federal' Courts. 19 A..a.
A.I. 499 (1933). the subject-matter jurisdictional technique h~$ been used frequcmlly by Congress. See 29 U.S.C.
§§ lOI-115 (1976) (Denying power to issue
injunctions in labor disputes)~ 28 U.S.c.
1342 (1916) ,(same Jor state public. \;1tility
rate orders); 28 U~S.C. § 134-1 (1976)
(same for state ~~~ assessments and coUec~,
tions). See also ~8U.s:C. § 1-445(t) (1976)
(Prohibiting removal Of st.ate workmen's
compensation suits). Judge-madeexc¢plions to (be. dive.r:sily jurisdiction in dome.stic relations and probate matters are of
long ot.i~in. Se.~ ,generally Spindel v. Spin,.
de/, 283 'F.Supp. 797 (E.D.N.Y.1968); Vestal
& Footer, Implied Llmltations on the.Divetsity Jurisdiction of Federal Courts, 41 Minn.,.
L.Rev. 1 (1956); Note, Flt4~ral CQurt Probate Ptoc'eedin,gs, 45 Ind.L.J. 387 (1910).
One pr()rtlinent comment~tor has urged
th~t Congress bar aU persQnal"'injury cases
that a.rise ~olely und~r stat.e law. ~ead6r,
:supra, note. 13.
.102 FEDERAL RULES DECISIONS
302
ju:risdictional lines. must be ,dtawn somewhere. ls 1 believe that the
history and policy of the amount in controversy' requirement establishes
its equal legitimacy asa line to be d,rawn. I propOse that Congress
increase the amount, consistent with the historic theory and contempo~ary reality of diversity jurisdiction.
n
Although any proposal to modify the diversity jurisdiction ultimately
"must depend on the utility of the jurisdiction in today's society," we
must. consider the received wisdom concerning the jurisdictional amount
requirement. As is true of federal jUrlsdiction generally, history and
tradition mark the lin'litsof contemporary' debate. OfcouFSe, the Constitution is silent on the subject. Article III bas no r-equirement that a
certain 'amount be in controversy between the parties before they may
litigate in the federal forum. The congressional dominion to expand and
to contract federal court jurisdiction always has been correctly con:sidered to be a plenary incident of the Article In power to "from time to
time ordain and establish" the H'inferior courts" of the United States. 20
The f~deral concept of a jurisdictional amQunt is as venerable as the
federal courts theml;)clves. as long as we have h.ad federal courts,
Gongres's has 'used the requirement of an amount in cQntrovers~ to limit
original and derivative access to the lower federal courts. Equally
constant have been the increases in the financial threshold. Over the
years, however, three distinct policy rationales have framed the debate
over the legitimacy and the sufficiency of the amount in controversy
requirement: judicial federalism,. cost efficiency, and case load constraints. ~I
I'
In this country, the device of a minimum financial threshold may be
traced to a provision in the New Hampshire Charter which brought
forward an Engli'sh law restriction on the appellate jurisdiction of the
Privy Gouncil dating back to 1572.22 Thus, the framers Were familiar
and comfortable with such a jurisdictional limit when they debated the
18. Meador, supra note 13. at 385. See also
a , FRIENDLY, supra rlQte 3, at 134-38
(Estimating ·a resuhing' 13% reduction in
the civil ca~e load),
19. C. WRIGHT, supra note 14, § 123 at
129.
20. U.S. CaNST. art. III § 1. "Inferior" is,
cof Course" the Constitution's term. $(!e
gen~raJlyJ. MOORE,
J. LUCAS, H. FINK,
& J. WICKSR, '1
MOORE'S FEDERAL PRACTICE U0.90 at
817 (1983); C. WRIGltr, A. MILLER, & E.
COOPER, 14 FEDERAL PRACTICE AND
PROCEDURE § 37Ql at 355 (197iJ).
tl.
WEGKSTE1N,
21. See generally Note, The Federal Jurisdictional Amount and Rule 20 Joinder 0/ Par~
ties: Aggri!ga,tion-()f Claims, S3 Minn.L.'Rev.
94.,96-102 (1968).
.
22. The New Hampshire provisipn Umi'ttd
the appellate jurisdiction of the Privy
Council t(j sujts invQlving more th~n £ 50.
The earliest English provision in 1572 had
first set the amount at £ 7. Note. The
Constitutional Implic(l#ons 0/ the Jurisdic·
tional.AmountPtovis.ion in -Injunction Suits
AgliirtSt Federal Officers, 11 Colum.L.Rev.
1;474, 1474-750.. 8 (1,971) (citing J. SMItH,
APPEALS TO THE PRIVY COUNCIL
FROM THE AMERICAN PLANTATIONS at
13, 81 (1950) .
AMOUNT IN CONTROVERSY REQUlREMENT
303
Cite as 102 F.R.D. 299
limits to be imposed on the newly proposed federal judicial institution.
During the Constitutional Convention, debate was intense over the need
for a complete federal judiciary and its proposed jurisdiction. 2$ Those
who opposed a strong ·federal court system had sought to include a
constitutional amollntin controversy requirement to "prevent an exten·
sion of the federal jurisdiction, which may, and in all probability will,
. . wallow up the state jurisdictions .... "." 24 Nevertheless, the final
versi.Qn was silent. While Article III settled .debate over whethe,r Con.g ress could establish a federal court sy,stem i the debate in tbeFirst
Congress over whether one should be established again polarized the
idealogues. Indeed, the establishment of "the tradition of a system of
inferior federal courts" has been labelled the "transcendent achievelllent" of that first effort.z/) The Same forces in compromise which had
resulted in the Article III empowerment of Congress forged the imple. rnenting legislation, the Judiciary Act of 1789.z6 That "great law"2'1 was
the product of compromise again between those whQ took the pOsition
that Congress should establish the fullest extent ofA'rtic1e III judicial
power and those who wished tQordain the federal courts with as little
power as was possible. 28 Apparently, those favoring a strong. federal
court presence were more fearful of Ideal prejudice in diversity cases
than in federal question. cases and sacrificed. the later jurisdiction to save
the former. D Perhaps, because many of the congressional actors had
been round and round on the issue at the Convention, there was little
discussion of the statutory jurisdictional amount.3D Three otber reasons
for the dearth of discussion suggest themselves. First, in a r,elated
debate, the jurisdictional amount device was the focus of those who
sought to' limit the perceived greater eV'il of appeals to the centraleourt~.
Drafts of the Act were rife with mimmum monetary requirements for
23. See ge'ne1Y:illll l.W. CROSS KEY, fOLITICS AND THE CONSTITUTION IN THE
HISTORY OF THE UNITED STATES 610
(1953); I. FARRAND, TIlE RECORDS OF
THE FEDERAL CONVENTION 104~2S
(rev. ed. 1937); Friendly, The Hiltoric Basis
ofI>i~rsitll Jurisdieti()n, 41 Harv.t.Rev.
483,487-504 (1928); War,ren, New Light on
the Hiltary of the Federal JUdiciary Act Qf
1789, 37 Harv.L.Rev. 40, 49 (1923).
~4.
2 J. ELLIOT. DEBATES 550.-51 (1941).
The Massachusetts delegation's judicial artide proposed II * ... * nqr shall the federal
judicial powers extend (0 any ·actions between citizens of different states. where the
matter in dispute * ** is not of the value
of fifteen bundred dollars. .at least.'" 1 J.
ELLIOT. DEBATES at 323 (1941). th~
Maryland delegation proposed a to-be..determined am.ount. 2 J. ELLIOT. DEBATES
5.50 (1941).
'2.5. F. FRANKFURTER & L. Lt\NDIS. THE
BUSINESS OF THE SUPREME COURT., A
STUDY IN THE FEDERAL JUDICIAL SYSTEMat 4 (1927).
26. Act of September 24. 1789. 1 Stat. 73.
See generaliy 1 Annals of Congo at ix-x.
xxxviii. xxxix-xl (1789) (Index entries);
Warren. supra note 22.
27. F. FRANKFURTER & L. LANDIS. supra
IlOt~ 25. at 4.
28. Warren, supra note 23. at 67-68. See
also generally D. HENDERSON. COURTS
FOR A NEW NATION (1971): Frank. Historical Bases 01 the federal Judicial System
13 L. & Contemp.Prob. 3 (1948).
29. Chadbcmrn & Levin. Original Juri$dic-
tid." (JI Federal Questions. 90 U.Pa,L,Rev.
639,641-42 (1942); Warren, supra note 23.
at 82...,83. Fed.eral question jurisdiction
was I),ot .a dded until 1875. See generally
Note. The Jurisdic#onpl Amount in Contro-
versy.in Suits to EnlorceJ:ederal Rights, 54
Tex.L.Rev. 545 (1916).
3&. Act of September 24" 1789. SeS$. 1.. Ch.
20, 1 Stat.. 73, 78-':79,§§ 1.1 & 12.
304
102 FEDElt!LRULES DECISIONS
moving onto higher levels of the federal courts. 3t Second, many congressional leaders hurried passage of the Act so that they could return to
consideration ot amendments to Article Ill, which, at most, would do
away with federal eourts and, at lea.stJwquld J,imit their power inevety
way imaginable. 32 These efforts included a defeated diversity proposal
to create a constitutional amount in controversy requirement of $1,500.33
Third, some, if not 'most, members of Oongressviewed the First Judiciary Aetand its provisions as very tentative and, hence"malleahle to,
further legislative retooling. One member wrote H[The Act) !II * * will
probably pas,s, as anexpetilnental law, without much debate or amendment" in the confidence that a short experience will make manifest the
proper alteratioO$.H 34 FOl" "whatever reason, the jurisdictional amount: in.
controversy requirement was writte,n :into the original draft and never
much debated for its own sake. 35
How the two ca.npsagreed. on the $500 plus figure is even something
more of .8. mystery.:36 Oliver Ellsworth, wh()was the primary draftsman.,
'tommitted ~o the sum early in the legislative history}? Federalists may
have been disposed to set the amount as low as possible, to provide the
gre.atest: federal protection against local bias. Opponents of the federal
courts tnay have desired a higheramQ1Ultl • but may have been content at
havingu-ndone fecieralquestioD jurisdicti<m, .so long as the diversity
- amount was s~t high. enough to insulate important state court judg31. Warren. supta note 23 at lOl~.102.
Madison. conceding, the unHke,lihooQ that
an appeal be takei1 in a minor dispute,
urged, ~'TYlet 3$ the ·p ossibiHtyof such an
event hasexeited in the minds .or many
ci'tizen$ the greatest ~pprehensi.on that perSOli$ of opulence would carry a cau$e from
thee:xtr~mjties .of the Uni.on tQ th¢ Sl!,preme Court,and t'hereby prevent. the due
'a dministration of justice; it ought to be
guarded again'St." J;itnes Madison quoted
in ieL, at 11~l9. These 1imitati.ons were
the Subject ·of mUch early litigation.. E.g.,
OHV¢f v. A.le~aTlder~6 Pet. 14'3, 8 L.Ed. 349
(1$32). the last remnant of this o.M~ ¢Qmplex system .of ap,pellateamQutl(S in COntroversy was 11 U.S.C. § 47 (197(:i), omitted, Pub.L. 95-598, 92 Stat. 254.9 (1978),
which•. until it pas&e4 fr.o m the scene in
1978, had provided t.hatappeals in bankruptcyc~~scovered by the section wer~
discretionary wilh fheappellate CQUrt if the
jl!dgment "involves less than S$oO.'; P. BATOR, M. MISHKIN', D.. SHAPIRO. & H.
WECHSLER, HART & WECHSLER'S THR
FEUERALCOL1RTS ANn THE FEDERAL
SYSTEMa.l 1141 (2,d ed. 1973).
tween cidz¢AS (If different States, unle'sS
the matter in dispute. whet.h er ileoo~etn$ the <
really orpellsonaltYl be of the
value of ~hree thousand doliars 'at the
least, nor shall the federal judicial p.ow.e,t$ ex:tend to any acti.ons between citizens of -different States where the matter
in dispute, whether it cOncefnS the realty
Qf persortalty, is not .of the v~Jue of fif.
teen hundreddQUars. at the: least; and ,no
part, triable by a juryatcto,ding to the
Coprse of the common law. :shaU beotherwise re-examinable than according to
the ,rules of c.ommon law.
Senate J.ourhal ~Pt. 4" 1789. lst Cong., 1st
Se'$$.
34. Letter from Ames to Mint:!t, Sept. 3,
1789~
quoted in Watren. supra note 23 •• at
125. See also tlm-era/ly l. AMEe. STAtE
'PAP'~RS MISC. No. 1-7 (Dec. 3,1:" 1190) (Att.orne), Genera.l Randolphs' Report on the
fed¢tal judieiarysuggesting reforms).
35.. See F. WHARTON. STAtE tJlIALS OF
THEUNITEl> S1-A.l'ES 38 (1849); N.ote,
supra note 21, n. 17 at 91.
32. Warren, supta note 23, at 119-31.
36.
33. The Senate defeated a prop.osed amendment tQ the conslitutltmai provi-sit):h Qf!divershy jurisdiction ,t hat read as follows:
The Supreme JudidalFetlera] Court
shall have no juri $diction of causes be-
37. Lcuer from. OliYer Ellsworth of April 30,
17lW, ql/.otedin P.WHARTON, STATE TRIALS OF THE UNITED STATES .37-38
(1849).
1 Stat. 73, 78~79 §§t 1 &; .l2 (1789).
AMOUNT IN CONTROVERSY REQUIREMENT
305
Cite as 10l F.R.D.m
ments. 38 Pragmatic considerations surely were part of the congressional
computation. Some opponents of diversity jurisdiction probably agreed
fora reason given by a Virginia Representative in opposing a later
measure to reduce the amount to $400 during consideration of the
famous, short-lived "Law of the Midnight Judges" Act of 1801: 39
[H]e stated that the estate of Lord Fairfax, with the quit rents due
thereon, had been confiscated during the Revolution by the State of
Virginia; notwithstanding the confiscation, the heirs of Lord Fairfax
had sold all their rights, (which the assignees contended remained
unimpaired). It might be their wish to prosecute in a federal court,
expecting to gain advantages in it which could not be had from the
Courts of Virginia. His object was to defeat the purpose by limiting
the Jurisdiction of the Circuit Courts to sums beyond the amount of
quit rents alleged to be due by any individual. 40
Thus, exorcising the ghost of ·Lord Fairfax may have been on the minds
of the framers of the First Judiciary Act.4'
Original concerns for federal·state equilibrium gave rise to the amount
in controversy requirement. u Properly viewed and in context, the requirement was an incident of the Hcompromise between the ex;treme
Federalist view that the full extent of judiCial power granted by the
Constitution should be vested by Congress in the Federal Courts, and the
view· of those who feared the new Government as a destroyer of the
rights of the states, who wished all suits to be decided first in the State
Courts, and only on appeal by the Federal Supreme Court." 43 This
tradition of compromise and accommodation began with Article III and
was carried forward into the First Judiciary Act. Most directly, the
amount requirement affected the relationship between federal and state
courts which has been of significant political consequence throughout
our history.·· The judicial federalism theme behind the original amount
38. See note 29 supra.
39. Act of February 13, 1801, ch. 4, 2 Stat.
89. See generally Surrency, The Judiciary
Act 01 180/, 2 Am.J.Legal aist. 53 (1958);
Turner, The Midnight Judges, 109 V.Pa.L.
Rev. 494 (1961). The deciding vote of the
Speaker defeated the $500 amount proposal and the .a mount was set at S400.F.
FRANKFURTER & L. LANDIS, supra note
25, n. 66 at 24-25. The 1801 statute also
provided for original federal question jurisdiction, but was repealed one year later.
Act of March 8, 1802, 2 Stat. 132.
40. Speech of Nichols, Ian. 7, 1801, 6th
Cong., 2nd Sess., quoted in Warren, supra
note 23 at 78; 10 Annals of Congo 896-97
(Jan. 5, 1801). See a.lso 1. AMER. STATE
PAPERS MISC. No. 18.9 (Jan. 31, 1805)
(House Committee Report advising against
the elimination of the S500 requirement
requested by British subjects).
41. Friendly, supra note 23, atS03-.504.
Warren, supra note 23, at 78. Neverthe·
less, the Fairfax devise continued to haunt
Virginia and the federal courts. See Martin v. Hunter's Lessee, 1 Wheat. 304, 4 L.Ed.
97 (1816); Note, Judge Spencer Roane 01
Virginia,' Champion of States' Rights-Foe
.o f John Marshall~ 66 Harv.L.Rev. 1242,
1248~51 (1953). C/. also 10 Annals of Congress at 878-80 (Jan. 5, 1801) (Debate over
the federal court presence in Virginia).
Any issue of federal court jurisdiction
must. ultimately return to concerns for our
federalism. Baker, Constitutional Law, 27
Loy.L.Rev.805, 805 (1981); Hill & Baker,
supra note 5 at 81-82.
42.
43. Warren, supra note 23, at 131.
44. Healy v. Ratta, 292 U.S. 263, 270, 54
5.C1. 700, 703, 78 L.Ed. 1248 (1933); Frankfurter, Distribution 01 Judicial Power Between United States o,nd State Courts, 13
Corn.L.O. 499 (1928). Some commentators have confused the significance of fed-
306
102 FEDERAL RULES DECISIONS
requirement sought to preserve the autonomy of the state courts and
reduce the danger of federalcoutt usurpation of the ,states' judicial
authQrity.
This judicial federalism leitmotif has been shared by Congress and the
courts throughout the history of the jurisdictional amount. Congress'
Succ9$$ive escalations of the amount threshold must be seen as a
legislative commitment to the ,device. 4s - High court interpretatinnof the
statute has stressed this consistent theIne':
Pursuant to tbis policy the jurisdiction of- faderal courts of first
instance has been narrowed by successive acts, of Congress, which
have, prQgre'ssively increased the jurisdictional amount~ The policy of'
the statute calls for its strict construction. The power reserved to the
states, under the Constitution, to ptQvidefor the determination of
controversies in their couns, may be restricted only by the, action of
Congress; in confo.rmity to the judiciary sections of the Constitution.
Due regard :for the rightful independence of state governments, which
should actuate federal coutts, requires that they scrupulously confine
their own jurisdiction to the precise limits which the statute has
defined. 46
Chief Justice Warre.n recognized the ove:rarching role of judicial federalism in the present day when he said: 'tIt is essential that we achieve a
proper jurisdiction,al balance between the Federal and State court systems assigning to each system those cases most appropriate in the light
of the b.asic principles of federalism." ,47 This must be the basic theme.
From time to time; however" two oth.e~ considerations-cost efficiency
and caSe load constraints-,have been emphasized in amount in controversy dehates. The brief history of the jurisdictional amount requirement
w:hich fpllowsmu$tacknowledge these coincident lesser considerationS f
but history, traditiQn, and the Constitution establish judicial :f~deralism
as the first and foremost.
eralism to the federal Judicial institution
with th~suggestion tnat the amount in
controversy reqUirement has not been very
effective in furthering federalism" &e
Shulman & Jaegerman, Some Jwisdie.tional Limitations on FederaJ Procedur~, 45
Yale Ll. 393, 395 (19.l6); Note. Th~ Federal JUri$tii¢(ional Amount Requireme.nland
Joinder of PartieslJnd~t the Fedet'al Rule,s
of Civil Pr()Cedure, 27 Ind.L.Rev. 199, 200
(1952).
4S.&e generally Patillo
Indeed, when
Congress has concluded that the ne¢d for a
federal forum outweighed competing concerns. for federalism, the jurisdictional
amount requirement has: been exempted.
The federalism themebellind the diversity
amount in conlrOVer&y i$taods in bold relief
against theseexceptioll$. The b(!'st legi$lative examples were the many special feder-
al question prowisionsenacled betweenlSV'5 'md 1989 Which, in terms otherwise
identical to the g¢neral statute, granted,jur.
isdiction without an amount requirement.
$ile C. WRIGHT;, supra note 14, § 32 at
177,..8'}..
46. Healy v. Ralfa, 292 U.'S. 263,269, 54
S.Ct~ 700, 703, 78 LEd. 124'8 (1933) (note
an(j citations omitted). See 41so Gay v.
R14ff. 292 U.S. 2S; 36-37, 54 S.Ct. 608. 61)-,
614, 78 L.Ed. 1099 (1934); Kline v. Burke
CfiHst1'. Co., 260 U.S. 226; 234. 43 S.C1. 79)
82,
L.Ed. 226(1'922); Elgin V. Marshall,
106 u.s. 57&,580,1 S.Ct. 484, 4$(), 27 LEd.
249 (1882). See also generally frankfurter,
supta nQte 44, at 500; Note, supra note 2:1,
at 96-98.
in
47. 1959 American Law Institute Proceedings 27, 33.
AMOUNT IN CONTROVERSY REQUIREMENT
307
Cite .. 102 F.R-D. 299
1801 brought the exception that proves the rule. For the first and
only time, the jurisdictional amOunt was reduced (from $500 to $400) as
part of the infamous "Law of the Midnight Judges" Act.~8 Why Congress reduced the amount by $100 is something of a mystery. 49 Perhaps,
flush with, their victory at establishing a general federal question jurisdiction, the political heirs of the federalists became magnanimous in
accepting' a reduction and not insisting on an abolition of the requirement. Certainly, the controversy and attention centered on other portionsof the legislation designed "to provide for a more convenient
organization of the Courts of the United States." 50 FOr whatever
reason, the votes for complete abolition of the amount requirement were
not there. We can be sere, however, that the de.bateredrew the 1789
battle lines. The amount reduction was part of .anenlargem.ent of
fedenal judicial power which was dramatic in extent but not in extant.
The very next year saw the repeal of the Act and the reestablishment of
the $500 requirement. 51 The reestablishment debate shed SOme Hght on
the $100 fight. That difference was enough to move the heirs of Lord
Fairfax .back and forth between state and federal courts. 52 In the repeal
debate, the amount in controversy was the subject of studied silence
against the din of power politics and patronage, but the judicial federalism rhetoric rang out loud and long. 53
The next congressional adjustment in the diversity jurisdictional
amount came in 1887 and·1888. 54 The postwar period was something of
a dark age for federal jurisdiction.55 Greater societal demands on the
federal judicial institution were compounded by broadening jurisdictional
grants by Congress. The federal courts had been "ill-equipped to handle
the pre-Civil War demands)) and ~'nearly ground. to a halt during this
post-war period, buried in work. 56 There was a legislative standoff
I'between those who sought to curtail the jurisdiction of the federal
courts and those who aimed merely to increase the judicial force to cope
48. Act of February 13, 1801, ch.4, 2
89§§ 11 & 13.
49.
S(~t.
See generally note 39, supra.
SO. Act of February 13, 1801, eh. 4, 2 Stat.
89 (tide).
51. Act of March 8, 1802,2 Stat. 132 (Title).
See generally IQ Annals of Congress 878-80
(Jan. S, IB01).
52. See text accompanying note 40, supra.
53. The debate included separation of pow'
ers concernS, charges that each side had
subverted the Constitution, the costs and
benefits of the federal judiciary, and
whether there was sufficient litigative demand for as large a federal judicial institu·
tion as had been created. See generally 11
Annals of Congress 26-41, 46-184 (Jan. 8 &
12~Feb. 3, IB02). There was no sinall
issue of (:onstitutionality in the repeaL See
Baker, supra note 4, at 690 n. 26.
Congress had established a general federal question jurisdiction in 1B75 which
required a corresponding $500 amount in
controversy. Act of March 3, J875, ch.
137, § 1, IB Stat. 470. As has been. often
true with tM diversity counterpart, the leg·
islative history is silent on the issues
whether even to have an amount requiremcnt and how much it should be. See
generally Note, supra note 29, at. 54B; Note,
supra nole 22, at 1475 n. 10; Comment., A
Federal Question Question: Does Priceless
Mean Worthless?, 14 St. Louis LJ. 26B, 269
(1969).
54.
55. The period between IB70and 1891 has
been described by prominent comment~. Lors as "the nadir of federal judicial admin·
istration." H. HART & H. WECflSLER,
supra note 31, at 39.
56. Baker, supra note 4, at 692.
'#
308
l02FEDERALR.ULES DECISIONS
with the increase of judicial business." 57 For two decades, efforts at
reform, both far reaching and more modest proposals to increase the
amount in controversy requirement, were stymied. 68 Moderation eventually won out. In the 1887-88 jurisdiction statutes, Congress raised the
diversity threshold to $2,000. 59 Reasons for the increase were, perhaps,
too obvious to debate at any great length. The amount had not been
increased since 1789 and since then the country's population, considered
an index of court demand, had grown tenfold. 60 A new legislative intent
matured during consideration of the increase. The sponsor of the
legislation emphasized the purpose "to promote the convenience of the
people, and to lessen the burden and expense of litigation." 61 The
Senate debate likewise expressed a concern for "the inconvenience and
wrong of subjecting mere local affairs to the great expense of national
jurisdiction."112 While there seems to have been a consensus to raise the
amount, the Forty-ninth Congress gave the answe.r as to how much-to
$2,OOO-but did not "show its work." The amount was set at a nice.
round figure by some tough and tumble compromise between the House,
which was in favor of a large increase, and the Senate,· which preferred a
lower amount. 63 This cost efficiency concern has historical roots which
go hack to the debates over the. First Judiciary Act. Those earliest
concerns were chiefly about appeals from state courts into the federal
system. The. fear was that the well·to-do litigant would abuse the
federal appellate jurisdiction and impose the hardship and expense of
travel and federal app.ellate litigation on a successful state court opponent." Today, of course, the jurisdictional amount requirement applies
only to federal trial court jurisdiction.65
The cost efficiency policy behind the amount in controversy may be
simply stated: ftLitigation in the federal courts is more expensive in time
and money, and the requirement of a minimum amount in controversy is
designed to confine suits involving small sums to state tribunals."611 The
57. F.FRANKf'URTER & J. LANDIS,
s~pra
note 25. at 88.
58. Id. at 136. see also Frankfurter. supra
note 44, at 513.
59. Act of Match 3. 1887. ch. 37~. §. 1, 2'4
Stat~ 552, as amended, Act ofA'ugust 13,
1888. ch. 866, § 1,25 Stat. 43~, The first
Act accomplished the reform; the second
was passed "merely to correct certainer·
rors In the enrollment of [the first]." 1.8
Cong.Re:c. 6885 (July 26, 1888) (Remarks
of Rep. Lanham).
60. 18 Cong.Rec. 614 (Jan. 13. 1887) (Re·
marks of Rep. Culberson).
Id. at 613 (Remarks of Rep. Culberson).
Besides. raising the jurisdictional amount,
the legislation included restrictions on reo
. moval, assignments and venue. See Moore
& Wecksteirt, supra note 16, at 8.
61.
62. 18 Cong.Ree. 2544 (March 2. 1887) (Re.
marks of Sen . .Edmunds).
63. See id.
64. Friendly, stlpra note 23, at 490-92; Phil·
lips &: Christenson, The Historical .a nd Le·
gal Background of the Diversity Jurisdic·
tion, 46 A.B.A.J. 95.9, 963 (1960); Waliren.
supra note 23, at 67-6.9,123-27. See also I.
AMER. STATE PAPERS MISC. No. 17 at 34
n. 6 (Dec. 31, 1790) ("Without this con·
$truction. courts must be ordained for the
recovery of every t'rifling sum, which the
unavoidable expenses attending it might
exceed tenfold.").
65. See note 31, supra.
66. Note. The Federal Jurisdiciional Amount
Requirement and Joinder of Parties .under
the Fed.Rules of Civil Procedure 27 IND.L.
REV. 198, 201 (1952). 54/! genero,lIy Note,
supra note 21 at 101-102.
AMOUNT IN CONTROVERSY .R EQUlBEMENT309
C.he .. l()2F.a,D.299
idea has enjoyed morec()nsistent sUPPQrt in the past, however, among
commentators 67 and CQurts 611 than among .members of Congress. Furthermore, it is difficult, to give much ~r.edence to this policy today. Of
course,ge:ographie c·Qllvenienc·e 'still plays some role in forum. s.ele.ctiQu.
Modern advances in cQmm1,lnicationand transportation, as a Practical
matter:, have reduced the e;x;pense }inn har~ship ,Of feder.al court litigation.,ascompared with state cQ,u rt litigation, below th~ recognition of our
frontierpredecassors. Seemingly,.
the
purpOse of tnconveniencing the
opposition.is less impo.rtant'in theforunl, chQite than other factors 69 and
less likely to be accomplished today with the statutory transfer provisicln.1Q The commonality of state and federal court rules Qfprocedure
:a.ndevidence also reduces the differences, anG hence, the difficulties. of
federal litigation. It has been suggested that today fees and costs are,
t
cornpar~ble
in the twosysteJns, 71 although intuition suggests that some
econQmic line separates the cost e'fficientsuit in. state court from its
counterpart in federal court.72 Indeed, the jurisdictional amount no
l()nger eausesa. once ironic, hardShip of .substantive law. .'. In Swift v.
Tyson 7a d:ays .sottlethiI1,g ,q f ,a :rever,sehardship .occurr.ed. Plaintiffs who
feared retJ).oval to· fed~ral court and a less hO'E;pltable federal common law
.67. One commentator had a very fandf ul
'View .of this policy whkheiKceeded any
actually expressed congressional statement:
Congress. has always been UIlwilirng to
perrtdt suits f.or sm~lJ$ums to be
brought into its own courts, not because
it eSpe.c iaIly waI1.ted t~ save the CourtS
labor, or even. because it wished to up·
ho14 their dignity, but ptirtcipally, .~f not
solely, for theproteetion of litigants.
When, the i:unq\lfits at iS~Ue are not I~tg¢.
litigation. in the federal courts may 'be
UIlduly
bUi'den~rn¢.
J. ROSE; JURISDICTION AND PROCEDURE IN THE FEDERAL COURTS 2ll
ed.. 1938). Two di$tinguishcd ~orn­
ment.atorsapparently ignored the disthlC-
(5th
pensive proceedings ·of courts of t.he United
States, would he effectually destroy,ed.").
69. Summer's, Analysis 01 Faftqrs that In/lu~nr;e Ch·(}iee of F()f«m il1 Diver$.ity CQ$t:$, 47
la.L.Rey. 933.937-38 (1962);. Note. The
Choice Between State and Federal Cvart in
DiveTSity Cases tn Virginia} 51 Va.L:Rev.
178, 17'1 (19.65).
70. 28 U.S.C. § 1404(a) (1976), provides:
'Por the convenience of parties and witnesses, in the. iI'lterestof j'1,1$t'ite, a district
court m~y transfer anydvil action to any
other district or division where it might
have been brought."
tion between original and appellate jurisdictional amount requirements and aUributedthis purpose to the (;r¢alion of th~
firstjurisdictionaiamount.. Ii. HART & H.
WECHSLER, THE FEDERAL COURTS
AND TBE FEDERAL SYSTEM 39 (1st Ed.
71 •.
1953).
72.. Hearings .Before th,e Subc.omm. on im-
68. See, e.g., Chase v. Sheldon-Roller-Mills
Co., 56F. 625. 62:6 (C.C.N.D.fa.1893) (,'The
pUFp9seof this restriciio'nwas to .fu:event
tbe dQ¢kets. .of 't:h¢. federal c.:ourts fr.oJTi being crQwded with cases involving small
amounts, and to save Jitigants. in such
cases, frllm the increased expense incident
to tri~l$ In the federal C()utts."); AclaniS v.
l>ouglf!.l5 County, 1 F.Cas. 106,107 (C.e.D.
Kan.1868) (No. 52) ("Thus all th~ safeg~ards, 'w hether of proteetionof the courts
against the annoyance of. numerous petty
litigations .or, of parties against being bur;,
deoeQ with the. m4re inqQiWefiient M4 ex-
H~(J.rfng:s Be/O,re $ubc,omm. No. :3 em Jurisdiction of Federal Courts Cancerning Diversity 0/ Citi-zenship 01 the liouse C()tnm.
on. the IttdiCiary;. .85th Cong.." lsISes$.., Set.
S at 12 (1957).
provements in Judicial Mr:u:hin-eyYot the
Sen. C<;imm. on the Judiciary (m the Federal
CQurt lurisdictiOllACI of 197j, 92<:1 CQ.n g.•
1st Sess. at 294-95 (1971) (Testimony .o f
Wayne C. Smith) C'I determined in my
Qwn min.d that at tbat time Unless. 1 had a
lawsuillhat was, worth in .ex(:ess of $.100,00.0* * '" That 1 would not. file. a suit j,n
the Federal cQurt becaus~Qf the vast
amOUJl.t of paper WQr}( that was imposed
u,p on tire lawy.e rs by the .C:'ourt in Qrder t.o
get a case at issue and get it disposed (j['!:).
73. 41 U.S. (16 Pet.}l, 10 t.Ed. 8·05 (1842).
310
102 FEDERAL RULES DECISIONS
were forced to reduce the ad damnum paragraph in their complaint
below the jurisdictional amount and be content with an inadequate
re'cQvery to avoid removal to federal c~ourt}4 This pressure to increase
the jurisdictional amount to protect state court plaintiffs dissipated with
the decision in Erie Railroad Co. v.Tompkins. 75
Thus, the cost efficiency policy highlighted in the 1887-88 increase
looks backwards to an old concern that an unsuccessful state court
litigant could buy federal appellate reversals or expensive delays.76 The
po.licy dims, however, looking forward to trial court jurisdiction and
today must be regarded as hardly tenable. 77 The cost efficiency theme
now plays a small but persistent. tole in debates Over increasing the
jurisdictional amount.'·$ We must continue our histoticalsearch, however, to complete the policy picture of the amount in controversy.
The fourfold increase in the jurisdictiona.Jamount from $500 to $2,.000
had taken nearly a century. Fewer than two score years passed before
Congress next increased the amount by one half. In 1911; the first
'codification of the federal jurisdiction statutes included a provision
raiSing the amount to .$3,000. 79 The 1911 Act carne as the culmination of
12 years' effort to collect and organize the scatte.red statutory fragments
of federal Jurisdiction. so The task was assigned toandaccompIished by the
congressionally appointed Commission on the Revision of tbe LawS. 81
Attention to the jurisdictional amount in Congress durin.g this period was
charaeteri~ed ~y consis~nt hut un~ueeessfuleffort$. to increase the
jurisdictional amount to .$5,000. 82 Advocates for curtailing federal court
jurisdiction offered a myriad of amendments to the Code, . but were
frustrated in most important respects. 83 Their efforts at increasing the
74. M. WENDELL, RELATIONS BETWEEN
THE FEDERAL AN)) STATE COURtS at
101-103 (1949). Thi.s predicament raised
no small issue of federalism 3$ corporate
defendants ¢ouldescape into federal court
and frustrate state efforts at regulation.
Id. at 103. See also Note, Preventing Removal of Causes by Foregoing Part 0/ a
Claim, 15 Corn.L.Q .. 307 (1930).
however, a mere buttressing argumen~.
See Sen.Rep. No. 530. nd Cong., 1st Se$s.
3-4 (1932); 9$ Cong.Rec. 5508 (May 19,
1952) (RelIl@rks of Rep. McCullough); 104
cpng.R.ec. 12683 (Jun¢ 30, 1958) (Remarks
of Rep .. Smith). $ee,a.[sQ .F ridenthal, Nl!w
Limits on federal Jurisdiction, 11 Stan:L.
R.ev. 213, 215 (1959).
.
L.Ed. US8
79. Act of March 3, 1911, ch. 231, ·§ 24, 36
Stat. 1091.
76. Warren, supra note 23. at 118-20. A.
related cost effidenc:y concern played an
in~identalpart in th¢ rheloricof repeal in
the debate over the 1802 statute. That Mbate, however, concerned the large cost$' of
a greatly .ex;panded 1801 federal judiciary
and the corr¢sponding small b~pefits to the
country. See note 53. supra.
80. See F.FIUNKFURTER& ) . LANDIS,
supra note 25, ,at 130-4.5.
75. 304 U.S. 64, 5.8 $ ;Cl.
(1938).
·817~8'2.
77. Note, suprfJ note 21, at 102. Even proponents of diversity consider the cost efficiency rationale no longer viable. . J.
MOORE, J. LUCAS, H. FINK, D. WECKSTEIN & J. WICKER, 1 Mo()Ye's Federal
Practicen 0,90[4] at 835(1983).
78. The concept has fallen from prontinence but npt from usage. It has become,
81. Appropriations Act of 1899, 30 Stat.
1074, 1116 (1899).
82. The perennial efforts of Representative
Moon to raise the jurisdictional amount
arechr·onicled inF.FRANKF'URTER& J.
LANDIS supr4 note 25, at 139 n. 159. See
gener4IJy Speech of Hon. Reuben O. Moon,
Serial No. 6105 at 3 (1911).
83 .. F. FRANKFURTER & J. LANDIS, supra
oPte 25, at 140-41.
AMOUNT IN CONTROVERSY REQUIREMENt
CUe as
un F.R.D. 299
311
jurisdictional amount were based on thefederali$m philosophy that less
was better and on thepraetic:alconcernfor th.e federal courts'increasing
case load. Indeed" during this period we'r e voiced the. first concerns that
the federal courts had too much to do. A proponent of the increased
amount explained in 1911,"The great e,x pansionof the Federal territory"
the opening of new sections of the country, and the stupendoUS increase
in our population has greatly increased the business of the Federal
judiciary.j;,SJ Still while there was agreement tha.t an increase was
needed, there was none as to how much it shQuld be. Theappropriate
level wa.s simply "a question of expediency. "liS Reading On .and betwe.en
the lines, the eclectic debate touched on the cost efficiency policy;!"" the
reverse hard.ship problem,S? and eVen some vague notions of inflation.88
With as much at stake as ·t he entire. federal judicial code, the tug of war
between House efforts to reduce. and Senateeffnrts to ,expand jurisdiction resulted in "the slight lift ofa thousand dollars." lI9 The new $3,000
threshold ca.n be explained only fl$ a politically ~peditious compromise
between the old .$'2,000 figure and the oft~re·sisted$5,OOO proposals.
Once again, efforts to increase were resisted, but not completely, ands.
new amount was set, but theCdll1putationwas snmething of a l1lY$tery---
deja vu.
Between 1911 and the Judicial Code of 1948, federal court politics were
conee,r ned primarily with adding mQxe judges and p~rovidingtheS~pre.me
Court more docket control. 'More generally, the sum of legislation was a
"firmer articulation of the feder-al judicial system."90 Of course, the
general diversity debate continued as it has 'since the inception, but it
was 'more academic than politic. 9l 'Made necessary by the proclivity of
Congress to tinker withcou.r t jurisdiction and the incompleten.e ss of the
1911 Act, the 1948 Code was a grand t~s;k. grandly accQ1I)plished. 92 A$
84. Speech, supra note 82 at 20. See also id.
at H/ 12, 14 Ii 15.
85. 46 Cong.R(;c. 1068 (Jan. 18. 1911) (Rc"
marks of Rep .. Moon). These debates support. thegefieral argument that diversity
jurisdiction was critical to capital development of the South and West. See Co
WRIGHT, supra note .14, § 23a.t 136-37.
86. 5e:e generally 46 C:ong:Rec. 1074
(J~b.
18. 1911) (Remarks of Rep. James); Id. at
1075 (Remarks of R¢p, Sims). See text
acct:lmpanying notes 6.1..78: supra;
87. ftl, at. 1074 (Remarks of Rep. Graham).
See te"l accompanying notes 73--.75 s~pfa.
88~
la.
at 1075 (Remarks of
Rep. Mann).
See text accompanying notes 108-10 infra.
8'. F. FRANKFORTER & J. LANDIS, supra
not~ 25 at 141.
90. I'd.
at 203,
91. See, e.g., BaU. Revision of Federa.l DiverSity lurisdiction 28 IU.L.•Rev. 3:56 (193J)~
Brown. The JurisdiCtion .o f the Feder4/
Courts Hasea QI/ Diversity of Citizenship, 78
U,P4,\•.L. Rev. 179 (1929); Frankfurter. supra
note 44; Howland. Shall Federal lurisdictiono/ COf1trQllersies Between Citizens of
Different Sta.lt:$ Be Preserved?, 18 A.B.A.J.
4990932.).
92. This was SCArcely has.ty, ill-conSidered
legislation. To t'he contrary. it received
close and prol()nged study. Five years of
Cong,ressioil~(att:ention supports the:.
Code. And from the start, Congress o~
tained the most emjpent expert assistaj}(:e available:. The$padework was elV
trUsted to two lawb()f;)k-publish'i ng fir1l'i$,
the staffs of whiCh had unique experi.
encein statutory !:odificatioh and revision. They formed an advisQry Gommittee, including distinguished judges and
members of the bar, and obtained the
services of special con.sultants. "Further..more, an advisory <;pmmittee was ap..
pointed by tbe.JudiciaJ Conferep,(;le. And
312
l02 FEDERAL RULES DECISIONS
far as the jurisdictional amount was concerned, the 1948 Code is another
chapter of mystery in its history. The$3,00Q figure, which even when it
passed in 1911 was under 'p ressure to increase., was carried forward
without a Reviser's word. 93
Ten years passed hefore the oversight was corrected, and when it was,
Congress ushered ill\ the m9'dern era i~ the policy of the jurisdictional
amount. Effurts to reduce a perceJved as overloaded federal judiciary
long have underlain, in part, some efforts at increa$ing the jurisdictional
amount.'I4 What is $ignificant about the 1958 increase debate is that this
concern, buttressed by an inflation argument, screened other more
critical concerns of judicial federalism.
Contemporary commentators hav-e suggested that the chief policy
behind the jurisdictional amount is "to relieve the federal courts from
undue pressure of litigation." 95 As we haVe see·n, this policy jU$tifica~
tion succeeds the policies of judicial federalism and cOst efficiency.
Along the time line of Article III courts, a crowded docket is ar.ecent
phenomenon. Ironically, some experts have explained the early origins
of divetsity jurisdiction itseltas an effort to give the then idle f:ederal
judges something to do. 96 The congressional cotlcern for case load
constraints gained ,prominence in the 1958 Act to inc.r ease the jurisdictionalamount. Most significant for present purposes~ the 1958 consideration focused on the jurisdictional amount device almost exclusively.
Beginning with the 1911 increase, whiCh many in Congress then felt
was too small, pressure develQped and debate ensued from time to time
about raising the federal court threshold again. In the 1930's, for
example, legislation was. proposed that would have raised. the $3,000
figure to $7,500, but no champion came forward and detractors argued
"the i.ncrease would make the federal court 'a rich man's court', while
the p.r esent amQunt [$3,,000] is sufficient to prevent litigation involving
small sums from getting' into district courts.'·1'7 That was enough to end
debate before it began, until after World War II.
A bit of background explains how it came to pass that Congress
renewed its commitment to the jurisdictional amount device. After
World War II, the filings in the district courts increased dramatically, by
to assist with matters relating t'o the jUliscliction of this Court, Chief Justice
Stone appointed an advisory committee,
consisting ofhhnself and Justices Frankfurterand Douglas.
Ex parte Collett, 337 U.S. 55, 6S~6, 69 $.Ct.
944, 949"';950, 93 L.Rd. 1207 (1949). See
genera.lly Barron, The Judicial Code-1948
Revisiof1, S F.R.D. 439 (19.49); :Hollzoff,
The New Pederal Judicial Code, 8 F.RD.
343 (949).
'93. Act of June 25, 1948, ch.646, § 1332.
See Reviser's Note, 28 U.S.C.A. § 1332
(1966).
94. Near the turn of the century this concern became realized for the first Lime.
See riPte60 $upta. Seea/so F. FRANKFURtER & J. lANDIS, supra hote2S,at
89-90; H. HART & H. WECHSLER, supra
note 67 at 45-46 (1953).
95. Shulman & Jargerman, supra n6te 44, at
416; See a/so Moore .& Wickstein, suprfi
Dote 16, at 8"';9; Note. supra note 44, at
200-201 .
%,.
H. FRIE.NDLY, supra npte 3, at 141.
97. BigelQw, Sears, 'E agleton, & Kent, limiting Jurisdiction of Federal Courts-Pending
Bills-Comment by. Members of Chic-ago
University Law Faculty, 31 Mich.L.Rev. 59,
71 (1932).
AMOUNT IN CONTROVERSY REQOIREME.NT318
CUe .. U12F.Jt.D. 2M
as much as 75 percent, and most of the increas,e ,came in diversity cases."
During that postwa:r peri~d,C()~~res$ was adding judgeships at the rate
of ten each year." Still the reque'$ts from the e.ourts and the executive
continued for even In()r~ Judgeship's to cope with the .rising ea$e IQads,loo
Even as Congress acceded to reque:stsfor morejudgepow~r! a plea went
Up 'for some better sQlution. In floor debate on the Judgeship bills, the
ideaofr.a.ising the jurisdictiona,lamount to. $lO~OOO was raised asah
alternative and ?,e~te:r . sQlutiot'). HtlCong.ress became deeply c()ncenled
that the federal ju,dieiary was growing too .£ast. 1tl2 The Judicial Gonference of the UnitedState:$ undertook to appoint a comm.ittee to study the
problem whic:h iss.ued 'a March 1951 Report recotnmendjng,1 'inter aliq;,
that the jurisdi:etionalamount b~rai$~d to$7},:500. I03. The proposal was
increased to ,$10,000 th~ n~,~t year 10.. and was introduced in the 8ard
Congress. .It passed the 'H'Quse .and went without Senate a.etion.105
PropOl1ent~:l of an increas:,e in the Judieial Conference and in Congress
con·tinued to support bills: that falled u,ntilhe.a.l"i:ngswere held in 1957.
, Action W1lS postponed f01'the ~ompletion of. report5"government dOQ,um,ents' and p.ertil1ent data. lQG Consideration of the l~gisla.ti()n which
eventually passed is uniqu.e in the history ()'f th$ jUtls.(iictional ,amount tOr
its thoroughness and compJetenes'$. The e,1ha:ustivereportsanddebate
9.. . ll.R.RCpQrt No.. 1706•.. Jurisdt'ctio~ of
Fe.lJ'eraJ Courts .in Dwersity 0/ ,C1iriQ.J.mhip
and FelieralQqesJifjin (;as.~; aSth CPng." 20
$esS'. a~ ;2 (19$8;) r)iereinafter IUt.Report'
No. 17.06]; Sen~ Report No. 18:3Q; Jurisdic,
tiono! Fed'ertl/ C"Qur($ :iil,/)ivers.iry of Cirizerls},,{ pand Fede.ra.l .Question Cases:.Pi'ohib,'ting tht .Rt11!lo,v:al to [)i$trictCt:>.urtt of
tnt! lJhil~4$(4(t!5 at Actians. Commenced in
$.tJl.te. Courts Under State Workmtii.$ t;brn.
pe'tlsatidn Laws, 1J5th COl)g.:; ild $ess.., at ;2...,)
(1958J [llcreinaft¢t Sen. Report No,18301
99~
H.R.:Report No.. 1106, supra
note 98. al
2; Sen. Report N.j), lS,JO, supra note 98,al
2, U.$:CQde C.ong. &. Admin.News 1958, p.
3099.
100.· 96 Cong.Rec. 10'7'45 (JuJy 20, 19'50)
('L etter ftOri;i ludges, United States :District
CQ\l!1 :0£ lllinois);ld.at 1.0685 (July 24,
};950,) (tetter .from. PeytonF<ord).
un.
9.6 Cong.Rec. 1.074,1 (July 2(); 19$.0) (~e.
mar~s qf R¢p. Keadng);
friat 10871 (July
20, 1950) (Rem_rks .of Mr. Jacobs); Id, at
12149 ,~August. 17, 1950) (Rema,ik$Q! Reps,.
Hobb~;
K.eatio,g, aacl $,mit.h). No reason
was·given for the amount.. of the propo.se<i
increase beyond genl!!:tal lnfl~~.iofi and th¢
<ieslre to
1()741,
U~ ~
I'big S}.lm <)f ,money." let at
lOi.. Id. at 1.0740 (July 20, 1950)
tO~. H.R,RePQtll'io. 1706, $upranote ~8,at
~,...3, 28-2.9; Sen. ~ep'ort No" .183'0. supra,
:note 98. at 3, 31··32. The Jud~~'$~ CQJ'h:riUtJ'
t.eesother recommendall.c)'ns ioyolyed,pre·
serVing: divetshy juris.d1clionand revising
tbe ~,tb;efl,sl:Up tuleS' for corporations.
liM., .•n.R.RepQrt .NQ. "1706, $l,4pranQte 98, at
7; . Sen., Re.,PQrt~Q •.1830,. ,~~pra . note 98, at
10, U.s:C(J~e Cong. & Admin.News 195'8J p.
3 lOS.
lOS. lt..R.Report N.o.. 3D98; 83rd Cong.; lst
$ess', (1952,). House debate (lEthe doomed
;measure is instructive. The prevailing sen~
ti metit was rc; s¢ltht figure at '3 .suhstantial
aO\oun't. c;Oi)sidel"ing past :a nd future :in£la·
tion.Par:t of thee:oncern was to sl~w
down thect eation of fede,ra.L jtl~ge$hi,s.
Opject.ions were rai$e<i th~l the increase
was too high. blrll al11¢l'ldmenlS to raise the
H$1lte tQ $7,,500iJntl $8,:500 failed. The
$lQ.OOQ figure, the House passed was an
overt
(:ompJ:.Qmi:se~
Proposa15rafig~d a~
higbas $l5.000and, as low as $7.;$'00, al-
though, ani:tlcr.ease based ott imlation
alone would hav6.placed t.he figure nearer
tl}¢ low¢r end pfthat ra"ge.. SeegenerlllJy
9,SQ:>ng.R¢c. 550'2-55.09 {May 19. 19521.
Se.e a'IsQ Ii.R.Rep. N.o. 17Q6; suprtl, note 98.
at 14; sen.Rep. No. 18',)'0, :;tt.ptanote 98, at
17.
~
(Rernai"k~
of Rep. lCeating); Id. at 10868 (July 24,
19,5.0) 'Remarks of Rep. Keating}.
.1I1ft. H.1Uteport No. 1106, sttprll nQte 98 at
3, 29; Sen. Report No. I8la, Sttprll .note 9.8,
at 1, 32, U,S;Ci)(ie- Cj)ng. & Admin.News
19S~, pp, 31Ot. 3,134·.
314
illuminate the contours of the rood~:t'n policy of :case, load cQnstraints and
reveal the coll'te,mpQtary formula: f(lr setting the threshold.
While CQngre$$ 'aeem:ed CQurmiti;ed to: incteasing the Jurisdictional
am(lunt as a.me~na to reduce the ,federal court work load; the practical
limits of the device were well,.'recogni~ed. Indeed, the Oommittees ree~
Q,mmending the increase conceded the limited .impact to be expe:cted from
the increase; to$:10,OOQ.l07 ThiscQncession 'best may be understood to
narrCl'Ws()mewhat the modern ratjonaleof the ease load constraint policy
from, overcoming federal docket conge.stion, per se to .e.liminating the
congestion caused by p'etty, less important ca$t~s. The tnethodof calcula.,.
trOD'of the 1958 increase~e()nsidered nex~ $upportsthiS characterization.,
The 1958 increase may be attributed to a neat Httl~ syllogism. The
major premise of the jUrlsdictionalamQunt was tbat the figure s'hould be
"'$lib$tantial" :
[T]he amount: should he ,fixed at a, sum of money that will make
junsdictionavailable in aU substantialcontroversieSwbere other elenitl,n mof Federal jurisdiction are present. The jurisdictional 'amount
sho:uldnot 'be, 'so high as to 'convert:the Fe:de.ral Courts into coults o,f
big business nor so low as to fritter away their time in the trial of
pettyeontro'Versies. )118
The, mi.rtOl" In-e.mis'e w;as that $3,00'0 w'as Hsubstantial" in 1911. The
~onolusiQn was that nearly 50 yeats and 150 plus pel'cent inflation later,
$10;,O()() w~as iJsubstantial'" in 195B.lll~ Asstr;1\ghtfotW'at"d a'S thissyllogism appears., the mathemat~'s and politics in. se,tting the new figure are,
them$.elv-es more iustruc·tiye.
The l:egislative:g,oal Was to "bring the tninitnum amount incQntroversy
uptQa reasonable level ,by , contemporary "standards." 1'0 " As ".with
inc:~eas:es, 111.
and intervening proposals for an .increase111t ,the
ralse the a.m·();u,rft as. muah as
pOSSible. to limit diversity and those who wouJdexpand the jurisdiction.11!
earlier
debate. was. between those whO wanted to
107~
"YourCQrnmittee does not thhtl~ tMt
lhi$ra.isi:ng .p f , the juri$dictiQ.nala.mount
wO'uld appreciably lessenihe load of work
of the Feder~1 C.Ol;l,r"tS<," H.R.Rep.• ;NQ. 1.706,
su,ptanQfe 9$, a'( 19: Sen.Rep.. No. 1.8.30;
su,pra nO'te 98. at 22! u.s. Code Congo 8{
Admin.News 1958,p. 3121. S~e also Heat-
ingsBef'ore$uQ¢O,mm. No. 1
tW!Q
('lote 98..3t 18.. U.S. Code Congo &A:dmin.
News 195'8, p.31.17. see note 78. supra.
HO. It.RepJteport N:o. 1706, supra. note 98,
at 3; Sen.ReportNo. 1830"supranQte98.
.at ,3 ,, (empbasisa~ded), ,t1,SIC<;;de
Admin. N~ws 1958. p. 31:Q1.
CQng~
&
Oip Juri$d1~"
of Fec:l¢raJC.ij~rts C<lncetnin~ Diversi-
ty of Citizenship of the House Comm.on
the Judiciary. '85th Cang;, lst Sess<, s.er. 5,
at J. Note; supra note 21.. af99~WO.
l08 .. " U.R,.ep.Repott N(). '~7()6, ,$~pranQ~e 9$,
at 3; Seo',RepQrt NQ. 1830' ,sp,prq npte ~$r'
a1 3.-4, U.S.Code Cong.& Admin.News
}1. 31 OJ.
lU.$ee
te~ta~0'n'lpan~1ng i:\ot~s 36. 6.3. "
>83, $#jiY,fi.
1U.
See te,ct actotnpanyitignQte 91, supra..
11~. , It is important lO', nQ,te thataltho~~h
the :19S81ntreaS~al$9 I,lm~Cted t'he general
federal question jurisdiction, the effect was
considered of little conseq,uence. This was
so because by then most federal qu¢stiJ,)os
109. Id. Cost efficiency and litigant conv£)fell under spe'Cific grantsQf jlltl$~i¢tjon,
nienceonce again c()unt~ as buttressing '. . 'wi'rhoul anam0iIntrequ':t~(:nt and mpst
CQl1Cerns. H:Rep.RepOfl No. 11{)(). $upra
of the g~ner~l f~detalql;lestions C<\se$ in·
nolt93:, ·at 1St Sen..ltepprt No. 1830.5.lJprQ,
volved more than $10',000. H.Re.p .Report
1958,
AMOUNT IN CONTROVERSY REQUIREMENT
315
Cite as 102 F.R-D. 299
Statistics played a prominent role. Past statistics see:med to s,u ggest
that an increase would bring little net reduction in case load. The
Committees' work here was very rudimentar:y.1l4 First, only gross total
filings were: evaluated without any diversity category breakdown, per..
haps understandably, because better statistics were unavailable. Second, andinexpUcably, sOllleof the wrong statistics were considered. The.
gross figures for 187~79 we.r e used with the explanation that the
amount was quadrupled in 1877.. Ot CQurse:,the increase from $500 to
$2,000 came in 1887, eight years afte.r the compiled fi,g ures. This error
along with the realization of the· profound impact of the 1875 gene.t al
federal question jurisdiction seriously flaws the Committees' 'work. As
for the 1911 increase from $2,000 to $3,000, even the gross. figures did
shoW' a drop-off auda suhsequent slower incr.ease:in filings during an
otherwise expansive era, which must be attributabl~, a.t least in part, to
the relatively meager $1,000 increase. Thus, part of the pe.$siroism
about, the impact of an increase is directly ~tt;ributable to error and
careless analysis in 1958. The Committees' efforts at predictive statis~
tics were much betteI', perhaps, because by 1958 judieialstatistics had .
beeo,me more c'omplete, and more sophisticated. In any event, detailed
reduetionestirnates were' made in number. of flUngs and percentage of
civil case load ~or each level o£ increase to $7 ,500 (2,690, f).oro), to '$10,000
(3,181, 7,.210), and to $15,000 (5,408, 12.2%).11$ !twas conceded that the
greater impact would b~ felt in suits .for liquidated damages as opposed
to unliquidated damages actions, for theobviousreas()n that the plaintiff's speculation is freer in the latter. HS If the goal is to reduee civil
filings these predictions were to be considered modest. If the goal
narrows to redudng congestion causedhy petty cas.es, the numbers did
then and dO' today take on new meanillg. It must be remembered that
diversity cases were then and continue to be a major drain on fede.ral
judicial resources. The category then aCC,Qunted for about one~third of
the total civil cases and more than one-half ()f the district cou,rts' time,
due, in part, to their complexity and a higher rate of jury trials.Il7
Following the legislative precedent for rough,:a nd ready mathematics,
Congress set QU't to compute the 1958 figure for "substantiality..." 118 The
Committees hedged sotnewhat on the figure. If $~,OOO was the smallest
amount considered "substantial" in 1911, inflation alone called for roughNo. 1706. supra note 98, at 5: sen. Report
No. 1830. supra .note98, at -6. U.s.Code
Congo & AdmiP.N'ews 19S8~ p. ·atOl.
lt4. H,.Rep.Report No. 1706, supra note 98.
at 2(l; S~.Report No.1830,supra note 98.
at 23., U.S.Code Congo & Admin.News 1958.
p. 3123.
us.
a.Rep.Report No. 1706, supra. note 9,8,
at 19, Z3-26j Sen. Report No, 1830, supra
note 98, at 22.23.26-.30, U.S.Code Congo &
Admin.News 19.58, pp. 3122,3123, 3127-31.
116. H.Rep.}teport No. 1706, supra. note 98,
at 19....20; $en.Report No. 1$30-, supra nole
98.a123. U.s.Code Cong.& Admin.News
1958, p.3123. 0f course. there is a ,partial
.solution to the problem 01 overstatement
of a.d darfmum clauses. Part of the 1958
reform provided for withht:dding or imposing costs asa sanction for bad faithpleQd.
ing.P.L. 8$-5$4, 72 Stat. 415 § 2,
H7. H.Rep.Roeport No. 17-06. $Upra note 98.•
~t 11; Se.n.Rep. No. 1830, s~pra note 98. at
23, U.S.Code Cc»og., & Admin.News, 1958, p.
3122,
ttS. See lext accompanying note 108 $UptQ.
316
102 FEDERAL RULES DECISIONS
ly a 1S2% increase, to about $7,500. t19Pragmatism and compromise
came in here.12~ In a normative accounting, the Committees explained:
"To most persons and businesses a controversy involving more or
slightly less than $10,000 is a serious one." lZ1 Inflation levels during-the,
pendency of the legislation explain part of the gap between the mathernatical $7,500 and the political $10,000. 122 In the past spirit and tradition
of setting the jurisdictional amount, the $10,000 figure was deemed a
moderate 'Compromise level within the rang~ of figures proposed. and
considered. Thus, the floor debate makes clear that Cong'r ess intended
to raise the amount requirement to the 1958 equivalent of the 1911
figure plus an increase for good measure. 123 The "plus factorn must be
attributed directly to political compromise. Also likely relevant was the
realization that the 1911 increase had been too meager, even when it was
passed.lz4 FinaIly, Congress must have anticipated more future inflation
and set the amount higher in ali ~ffort to insure a realistic threshold for
some time to come. 125
The 1958 increase to the present $10,000 level is very significant to this
discussion. First, Congress once again renewed its historic commitment
to the jurisdictional amount devi<!~. Second, the modern search for case
load constraints per se was not the key policy, but rather Congress
computed an amount deemed substantial enough to screen out relatively
marginal cases which were not mert:lybythe accident of diversity
themselves deemed sufficiently federal to justify allocation of the scarce
judicial resource of Article III courts. Third, intervening and anticipated
inflation plus a normative additur justified a more than threefold
increase, the largest since the fourfold increase in 1887-:88. Thus, from
the earliest days of the Republic down to contemporary- times, access to
federal court has been authorized only if the suit involved a substantial
money value in current economic terms. 126 Each increase alleviates the
pressure to r(l,ise the amount, which immediately begins to build again.
As a result, increasing the amount threshold has been one federal
U9. The CQn$umers' Price Tndex since 1913
then showed a 152% increase. H.Rep.R~
port No. 1706, supra note 98. at 18.; Sen.
Report No. 1830, supra note 9'8, at 21.
U.S.Code Congo & Admin.News 1958, p.
3121.
t20. Friedenthal, supra note 78, at 214-15.
See also note 123 infra.
t21. H.Rep.R~p6rt No. 1706, supra note 98,
at 18; Sen.Report No. 1830, supra note 98
at21, U.S.CQde Congo & Admin.News 1958,
p.3121.
t22. As of
t957~ the dollar's purchasing
power was estimated ata ' 'little more thati
one-third of the value for the dollar when
the * * * U,OOO minimum was fixed."
H.Rep.Report No. 1706, .supra note 98, at
11; Sen.Report No. 1830, supra note 98, at
14, U.S.Code Congo & Admin.News 1958, p.
3112.
123. The House struggled with the computation. 104 Cong.Rec. 12683-12690 (June 3Q,
1958). The Senate did not debate the issue. 104 Cong.Rec. 13794 (July 15, 1958).
Two r easons for the paucity of debate
suggeSt themselves. First, the Committees'
Reports were unusually complet¢. Second, Congress had much debated the. iSiUes
on earHer bills,. See, e.g;; 98 Cong.Ret.
5502-5509' (May 19, 1.952).
124. See text accompanying notes 79-89 supra.
125. See 98 Cong.Rec. 5506 (May 19, 1952)
(Remarks- of Rep. Thompson) (Debating
H.R~ 309~, 815t Cong., 1st Sess. (1952».
126. D. CURRIE, FEDERAL COURTS 357
(3d ed. 1982).
AMOUNT IN CONTROVERSY REQUIREMENT
317
Cheul02F.R.D.Z99
jurisdiction constantin the 'Past and, we can expect, will continue as a
valid and important adjusting meehanism in thefu~ure; Since 1958, the
jurisdictional amount has gained little attention. 127
As we have seen" justificati<lnS for the amount 1n controversy have
been offered from time· to time which, .a t once., coineide and conflict.
ConcerDsfor judicial federalism, C.o st efficiency and ease load constraints
support the . principle of a jurisdictional amount hut are not always
harmonious in deciding the wisdom of raising the figure at a particular
time or computing a :particular increase. For example, thecostefficiency policy usually favors' havin.g a higher federal court threshold when the
controversy is of relatively little consequence, but a higher figure
actually may disadvantage SOme' of those litigants sought to be protected.
by forcing them to, undervalue their claim and avoid removal even in oUr
'erieantompkinated' days." 128.. Gross consid~rations o.fcas.e load constraints in federal courts would instructQn the subject that Jlif som.e is
good then more is better." Yet,. having .recognized th¢ finite nature of
the Articl~ Ulresou.F ceand the .reality that · demand always outstrips
supply, mQre mode.r ate increaseswilI $creenout the petty, Ol't a.t leastJ
the most petty cases and allow in thos.e possessed of a greater federal
legitimacy. Finally, while federalism may mean all things to all people,
any approach to the jurisdictional amount must begin and end with this
first principle. Cost efficiency cannotoontrol. Gase load constraints
cannot control. Certainly, efforts at protecting federal court litigants
and federal courts fro.m unneces's ary expe,nse and undu.e congestion are
valid. Such efforts, however, are flawed and incomplete even as they
necessarily" but i.ndirectly, c.o nsidet the appropriate nature of federal
court business:. Too often have we mistakenly narrowed our inquiry to
the effectiveness of judicial administratil)n in the. federal courts. The
proper inquiry must be broader to be constitutionally sound. We must
consider and conl:!ta.utly reassess Hthe allotment of the common fund of
litigation available for distribution between the state and the United
States courts.1t 129 Each adjustment in jurisdictionbeeomel:! a new distribution of power between state and nation. We should not ask which
cases can the federal courts do without. We must ask which cases ought
t4
1,27. The debate .o ver d:i\'ersity jurisdkt:ion .
or special .sigr)ifiCance for present. puritself has. warmed and CQQlcQ as proposals
pose'S, a 1973 bill would have tai$cd the
for abolition were intrQduc~d and defeatamount to $15,000. S. 1'876,930 Cong., 1st
ed. E.g., ll.R. 9~l2, 95th Cong., 1st Sess.
Sess. (1973). Typi¢ally, however, the
(1977) (passed HQuse 124 Cong;Rec. 5008
atnQuot in controversy issue has be¢,n lost
(l978»~ S. 419, 96thCo:ng., 1st Siess.
in the larger debate over divers ity. Re(1979); R.R, 130, 96'th Cong.) 1st S~SS.
cently, thc isSue :has assumed a promi"
(1979); J:{,R.. 2202, 96tb Cong., 1st $~s$..
nence. reminiscent of '1958, Se~ 'tlote 166
(1979). 'the .American Law Institu~e pr9infra.
J>Osal for reform alone resulted in ~v~ral
bills. E.g:, S. 1876, 92nd Cong., l$t S~SS.
128. Clark, State lAw in the Fede.ral Courts:
(1971);. H.R. 5546, 95-th Cang., lst$e,$s.
The Draodirzg Omt1~presefu:e pi En'e,. v.
(1977). For a .partial hibli()graphy on the
Tompkins., 55 Yale L.J. 267, 269 (1946)
A.L.I. proposal, see Note, Eliminating Di(Quotin~ Judge Lc;;trned Hand;).
versity Jurisdiction: A$hgrt Term Sol~tion
to a Long Term Problem, 9 TQI.L.Rev~ 896.
129~ Fra:nkfurtet, $u]ml.note 4~jat501. See
909 .n. 68 (1978). See a4Q Phillips, s.u.pr.a,
als€f 1Ii'1I & Bake!"', supra note 5~ at 7Q--;&7.
n<>te 4,3t 149-50.
318
102 FEDERAL RULES D)}CISI()NS
the federal courts do. This ultimate notion of federalism must be
brought to hear on the current issue of the jurisdictional amount.
III
Today in considering whether an increase. in the jurisdictional amount
is premature, timely, or overdue? we must consider wba't has gone hefore
by wa;yof tradition and history~ We must ~sk ourselves if the device is
still viable" if it has been and if it willeo:ntinue to beeffe.ctive, if an
increase is appropriate and, if SQ, how much should the increase be.
A
Despite the imprimatur of the fram,e rs in the First Judiciary Act 130
and the nihil ob$tat of nearly on,e hundred congresses and two jurisdictional codifications,not eve,r yone is convinced of the wisdom of having :a
jurisdictio,nal amOll.nt in the first place. Some oth~rwise distinguished
commentators have urged the .a:bolition of the amount in controversy
requirement. 13' Their reasoning is straightforward: (1) the Constitution
does not require a jurisdictional amount; (2) the device does not work
well, if at all; (3) determination of the juri'sdictional issue. itself wastes
reS'ources of courts and litigants; (~) the federal courts will not be
deluged by ab()litton because lawyers, and litigants will exercise self-restraintand common sense in selecting a fo.rum; (5) if t~levant at all, the
amount in controversy should only be a procedural requirement in
awarding costs a.nd attorneys'fees.
Color me unconvinced. The history and tradition of having a jurisdic~
tionalaro()unt must be worth something; at least, that the burden must
be on the amount abolitionists. I do not, believe that they ha.ve carried
the burden...The Constitution does not require .a whote. hosto:f sacred
cows in :federal jurisdiction. 132 That the Constitution does not impose an
amount ,r equirement is, at most, a neutral principle which has been
exercised in favor of the device since 1789. Too much has been lnade of
the '"'complexity" and "difficulty" of determining the trueafUQUnt in
controversy. If anytbing,the 'well-developed rules :make for a simple and
Wisconsin v. Pi!licart. Ins. Co., 127 U.S.
of ~rcrowded Federal CoUri3.48 Brook-
265, 297, S S.Ct. 1310; 1377, 32 LEd. 239
(888) (The Act "was passed by the first
congress assernbl.edunder the constitutiPh,
many of whQse members had taken part in
framing that instrumeht, aQd is contemporaneous and weighty evidence of its true
meaning."). But ct. Marbury v. Ma.dison! 5
U.s. (l Cranch) 131,2 LEd. 60 (1803)
(Declati))g Section 13 oaf the Act unc(>oSfitutionaJ).
lyn L.Rev. 197, 224-25 (1982);, Moore &
130.
131. See ge'nerally J.MOORE, supra note
20, 11 0.90[4] at 833-85, 838; Currie, .TheFe'(ierol Ci')i;J;/rl$ a1td the A'meri.can U1J) 1it8#tu:te (11), $6 U.Chi.L.Re1T .. 268,2,1-98 (1$69);
Marsh, <Diversity Juti'$dtction: Scapegoat
Weckstein, supra note 16, .a t3S; Moor~ &
Wicket'F.~deralJUrisdiction: A Proposal
toSimpli/tl the System td Me~tth:e Needs
of a Complex 80ciet.1I, IF1a.St.U.L.Rev. 1,
11-14 (1973); l}jca., - The JUri$(ljction,al
Amount: An Unreasonable Limitq,ti'On 'On
Divttsity· Jurisdie:iion,6S· lI1.13J. 78, 86
(1,976). .
132. Eg.,
Louisville .~
N.R. Co.v. Mottl¢"
.211 U.s. 149, 2' S.Ct. 42, 51 'L.Ed. 126
(1908) ("We.lI-pleaded complaint" rule in
federal questions):$trawbridge v. Curtls$,
7U.$. (~ Cranch) 267! 2 L.Ed. 43$ (1806)
(Rule of "complete diversity"); 28U.s.C.
§ 14'41 (1976) (RernQv~.1 jurisdiction).
AMOUNT IN CONTROVERSY REQUIREMENT
319
Cit, ~ un f .•.D. 'l tt
cases. i !!! I simply
easy m~as:'Urementin most
do not believe that lawyers
and, litigants who have fought so fiercely to perpetuate a choice of .a
federal forum will not exercise the privilege and, without some s.anction,
not ever abuse it.13~:B'e'Sjdes, their argument must be purespeeulation
since we have never had a system without ail am.ount requireroent.
Finally, impositioh of costs and fees for court abuse seems more justified
based, as pr:esently I on a jurisdictional principle. I d()not understand
what WQuld be g·ainedftom d6wnpJaying the requirement. and upgrading
the sanction for faihlxe; tosatis£y it. If anything., our experience with
the offered substitute has he-en Ie$-$ than Qptimum. 135 We 'c annot expect
more if the principle is -downplayedeven further. It se.ems to rne that
elimination of the amount ,r equirement in federal que.stioll cases has
stolen mlit:h of these c,Qmmentatnrs" thunder in div~rsity jurisdlction. 13~
r find the amount abolitio.n argument implausible, as a. result. Proponents of abolition have not convinced me of the argument's internal
validity or contemporary political viability, Abolition of the amount in
cnntrovetey likely would work ~ prOfound e,nlargement of the, diversity
jurisdiction and thus be ~ontrary to the clear j'urisdie;tional trend and.
~l1ing historical. and contemporary debate. We have had an amount
requirement for a longtime and no. threat,a.cademi'C or political, se,e ms
destined to elimm"ate it in the ' jurisdictional future. la7
.
B
The. atnQU,n t abolitionists' onbr serious challenge is that the amount in
controversy require,ni e;nt has not. served f~de·ral jurisdiction goals. We
must appraise the past and potential efficacy of the device before' we
may go on to consider proposals for an increa.se, Mote of a useless. thing
is not any better in federal jurisdiction than it is in other matters. While.
history and traditionp'lt\ce the, burden of proof on the abolitionists, today
there are-articulable and persuasive arguments for once again r:enewing
O\l,r commitment to the amount in controversy requirement.
133. &e gentrally 1 J. Moore. J~ Lucas. R
,Fink, D. W¢~kstein. &- J.Wicker, Mf)Q.res
Federal Prl,lctke. utl 0.91--0.99 (1983) . C.
WRIGHT. ~upr(l note 1.4, § 33-37 at
181-208.
134.
see note 69. $l;I.pra.
in~6j'isistency. lel
me elaborate. The existing ai'l~ a..v.ailahl.e
Sa,nctions bave notachiev~d their pc;>te,ntlal.
i believe. due in most pa..tt t.o a judicial
reticence toward enfor()~rnent.
They
promise to be more. effecdVe given hardening judicial attitudes and reinfor,cing r.o,
form efforts. Seenot~ 158· in/r(l,.
,35. To avoid a seeming
136. See A.L.I. STUpy OF THE DIVISION
OF JURISDICTION BETWEEN STATE
AND ,FEDERAL
at 172, 4:89
(1968). BttJ. ;eeJ.MOORE. ,8:upra 1I.0.9Q[4]
couars
at 834 (Straining in 8;t.i';ij'aguidedattempt to
extend the ab()litjoqr~tiQnaleforf.ederal
questions to diversity cas,es).
137. The genesis of the abolition argument
appe.ars to be with professo.r Moore. See
note IJO, supra. Prc;,iessor Wright ;t$T~¢$
withm~; "There is enough u)1~s.iness
abou:tdiversity jurisdktjdli generally. howeyer. (hat it is hardly €ionceivable that Congress woul4 expan'd the jurisdicti()Q to
op¢n tbe fe·d eral court door toa multitude
of small claims," C. WRIGHT, supra note
14,§:32 at 181. See .a llo C: WRIGlIT; A,
MILLER & E. COOPER, FED/PRAL .'PIlA.CTICE AND PROCEDURE • 3701 at 369
(1976}, A.L.!. STUDY § 1301(a) (Retaining
the requirement fQr dJven.ity jurisdictiop).
320
lo.2FEDERAL RULES nECISIONS
Initially, the surface lo,gic of our present system is that if we hold
constant the body of law developed for ascertaining the !i.mount in
controversy, then any increase in the jllrisdictional 'minimum will de,.
Cl"e:aSe the, number of diversity filin,gs brought and ,allowed to stay in
federal courts. la8 As we have, seen, however" poUcies beyond logic
inforrn any study of federal jurisdiction... . Our.first principle of judicial
federalism seems weIl-servedby the device. In drawing the jurisdictional boundary betwee.n state (!Outbs and federal courts, Cotl,g resshas
always applied, a minimum amount. To say that the amount incontro-versy does :notalways accurately reflect the im,p OrUnceof a federal
deeision~aker in a suit is not to say that it never does. The, propo,nents
'of ama:ximum model of federal juriadicti'on, which "would go to the full
sweep of constitutionalpo'We:r"under Article In, have neve~even w(Jn
the day let alone the st;atu,te"U9 State courtsalw~y$have tried s.u its
between diverse parties involving les:s than the jUrisdictional amountplus
those· involving more that are not ~i1ed ill or removed to federal court..
There has' never been a. seri9usc1ahn that thishiswrlc division has
resulted in some untoward effect. loin No one but an amQunt abolitionist
. would ever$osnrrnise. The judicial federaJistn measure is easily tak~n.
If more 15 at stake in the suit, then there is more· incentive to manipUlate
and. rely on 10.ca1 prejudice and more harm occut's with thesuocess of
those efforts. Thus are legitimated. the: requirement a.nd further incre~$­
es. Any Hrealistic federalism u pr<lvides foJ' coneurrentstate and federal
jurisdiction only when some important purpose is served. Prin¢ipIes of
federalism cautiOtlagainst federal court aggrandizement at the expense
of state courts just as .against()thel" federal as~ump.tions of respoI)sibUiti~5 and functions {)ther'wisa within tbeprovince of the state s:overeigns.14l Whe~ les,s is at stake, there IS less oppoxtunity and le&B
incentive for the kind of prejudice thatcre·ates a fede.ral interes't in
diverse partysuits.T'hus,. in matters of judicial fede,ralism" it seems 't hat
the somewhatarbitral"Y d~vice of a ·mi'n.imum. amount in controversy is
Has likely as any other method to result in selection of those cases
having a more legitimate de11'landupon federal court resources."" 1(2
,Considering the second policy of costefficitmcy puts me in the position
of answering thos:e who say the device cannot work by resp<)nding
simply; HYes it can, yes it carl, yes it can11' 14!l The requirement always
has been a factor in 'f(>,rll.mselection. It must be assum.ed that some
indeterminable number Qf cases are brQugbt and s'tay instate:cOlfrt$: a$a
138. Cowen• .Feaerlll Juri$diotiCi11 Am.ended
44 Va.L.Rev.971. 91l C195S}.
139. Fl., FRIENOVt. st(pra note 3. .at6-J4.
140. . Bt!arings on H.R. 6,691, supra o{)te 10.
at 408;· ,Repprfof the Department of Jus..
ti'CeCommitteeon the Revision M t11~
:Fed,
Ofl
S. 1876-.The
Feden# CourtJurisdi'Ction
1st Bess. 'at 95. 183
Act o/19tJ. 92d 'Cong .•
(1.971), (Statement of H. Wecb$'ler).
142. NOle, Federal luri$r;licJiQnal Amount:
l)etermtnqt'~Qi1, Qf the Matter in ConlfOveT'sy,
; 73 Harv.LRev. 1369, 13:69 (1960).
eral Judicial System, The Ji(eel/$ 'i;)ll:heFtfd:·
,eral Courts; 14-15 (19771.
. 143. Cf. L Bei'U~. "Anything You 'C an Do."
from Ann.ie Get Your Gun (:194.6).
1.4t.Hearings lJeflJre; fh(! $ubcQmmitte.eon
Irflpn)vem~nts:
Iii J.udirial Machinery of the
C(jrtunitleebn the Judici4.r yo!.ihe Senate
AMOUNT IN CONTROVERSY REQUIREMENT
321
<:Ue ... 102 F.Il.D. 2~
direct economic conse.quence· of the amount requirement. 144 Thewell-developed federal 'c ourt precedents on determining the amo.unt incontr<r
versy themselves are evidence that numerO'us plaintiffs and defendants
have, had enQugh at stake to litigate the issue.145 This commitment of
private resources indicates that the: costsa,nd .benefits .of d.iversity
jurisdictio.n havebe:en very important to those who. would use and those
who. Wo.uld avo.id the federal courts. Eliminating the jurisdictional
amount requirement WQuld t,ake away a self-directing f.actor from both
those who want in and tho.se wh.Q want .out of federal court.Wbatever
the viability of the cost efficiency policytQday, a substantial jurisdidional amount serves its purpose. In fact,. the amount in co.ntroversy
requirement is the sole fo.rmal devie,e dire,ctly serving the cost ~f{iciency
policy.u6 Maintaining the require,ment at 11 substantial level rejnfQ,rce,s
the incentive fo.r private ordering of the forum selection process consist;.
ent with i.ndividual and societal economies.
Finally, consider the third policy of alleviating case IQad co.nstraints.
As we have seen, the proper apprQach here is no.t to asK' what eases we,
can rid from the feQeral dockets,but rather to ask which eases belong.
The amount requirement is not designed to eliminate aU congestion.
Rather, the jurisdictional amQunt culls out the, petty cas'es and their
marginal (!ontribution to the congestion in our federal judicial institutio.n,
which in light of their relative unimportance is too hurdensome. If
federal courts are tOO' busy to handle all diversity cas,es along with the
o.ther heads of jurisdiction, then "it makes sense to exclude those in
which state co.urt errO'.r 0.1" prejudice will do the least damage, and money
may be as good a gauge. of damage as. we can practicably apply. n l47 If,
as some contend, the federal jlldicial institution. would be greatly improved by the total abolition of dive13ity Jurisdictio.n, we may assume
that having an amO'unt in controversy requirement and setting it at a
s'ubstantial sum keeps Qut marginal suits and there:fore has positive side
effects for federa1 practice and prQcedure,.1411
Logic and normative Po.licies ,are no.t out o.nly measure$of efficacy of
the amount requirement. Statistics have beco.me an indispensib1e too.l
for any study in fede.r al jurisQicti()n.149 We have seen the pro.minent role
144. M. WEN.DELL, supra ,nole 74,. at .249.
Research into such assumptions holds the
promise of' ,m ore informed decision making in tnattersQf jurisdiction. See Trubek,
Sarat~ F.els:tiMr, & Grossman, The Costsot
Ordinary Litiga~ion, 31 U~C.L.A.L_ReV', 72
(l983).
'
145. M. WENDELL, supra note 74, at 249.
See generoll1l14 C. WRIGHT, A. )llLLE:R
&. E, CObPER.FEDER'4L PRACTICE
AND PROCEDURE§§ 87Q2-3712 (1976).; 1
J.MOORE,~. LUCAS, It FINK, D. WEeKSTEIN & J. WICKER, MOORE'S FEVeR·
AL PRACTICE Tm 0.91-0:99 (1988). See atnote 154 infra.
146~ See text accompanying notes 54-71, su-
'0
,pra.
147. Currie., supra, Dole 130, at 2,93.
Uxa, supra note 130, at 83-86.
But see
148. See Rowe, Abolishing Diversity Jurisdicti"On: i!o.$.itiye Side Effects and Potential lor:
Further Reforms, 92 HaIlY.L.Rev. 963
(1979).
149. See Shafroth. Federal Judicial S(alis'
tiC$, 24 Ha~tings I..J. 201 (1948l: Sp~ck,
StalisUcs lor the Ul1ittd Stales Courts: An
Indispensable TMi lor Judicial Managem~nt, 38 . A.B.A.J.936 (1952); Note, The.
Effect of Diversity 1~r4rJiction on State Litigation, 40 Ind.L.1. 566 (1965).
322
102 FEDERAL RULES DECISIONS
statistics played in the 1958 increase to the present, $lO~OQO level. l50 That
experience is instructive here. The 1958 episode was the first congressional effort to quantify the impact of the amount in controversy statute
and proposed increases. Having obtained and compiled data 011 case
filings l , the Committees' proleeted the impant of .a lternativeincreases in
the amount. lSI Doubters of the amount requirement suggest that the
1958 increase failed to achieve, a more balanced distribution in federal
state judicial business. 152 They 'frequently point to the preliminary
,assessment of failure offered by Chief Justice Warren in 1960. 153 They
have not he-en careful. The Chief J u.stice him$·elf concluded. that the
increase had had a "very slight" neteffect.t~4 Statistics available for the
two years before and after the increase show a dramatic decline of mote
than a third. in diversity jurisdiction filings. IS!; It worked. Considering
the geometric expansion of modern federal court case loads in the
post-World War 11 era, the. 1958 increase. worked quite welV 56 Given our
more co:mpleteand more sophistieated statistical ability today, we can
hope for even more accurate an assessment of proposals to incre'ase the
jurisdicti.onal amount. My thesis thus may be put to the statistical test.,
.The coUective resources of the Administrative Office of the Federal
Courts., the American Bar Association,. The American Law' Institute, the
D-epartment of Justice, the Federal Judicia1 Center, the Judicial Confer~
ence of the United States., and the JudiciaryCommitteesoi both Houses
are surely equal to the task.157 Once statistics are cQmpiled and reduction estimates are computed" I am confident that th,e contemporary
viability of the amount in controversy requirement will be established
beyond peradventure·.
150.
See text accompanyi'ngnQtes.
108-25
Ut. The Committees" efforts at developing
hist6rical data,however, were seriuusly
flawed. The 1887-88 increase inexplicably
was eva.Iuated by using 1876--7.9 .figures.
The-meager 1911 inCirease was evaluated in
terms of gross filings and no recognition
was. giv.en the braking eff¢c~ on .a federal
jurisdicti()n then approaching a critical
ma$s. Si!£ text accompanying notes 110-17
suprQ..
MQORE,; MQQRE'' S$EDEllAL
PRActICE ~ 0.90[4] .a t835--36 (1983); c.
WRIGHT, A. MILLER &;E,. COOPER, FEDERAL PRACtICE AND PROCEDURE
152. J.
§ 3701 at ,368-69 (1976);
U)C&, .8upra~.Qte
130 «t8S-.;s6; Note. w-:pra note 21
15-3. Addre's$'d{ Chief-
, the then pressing problems of federal juris--
dktioll.
supra.
Justic~
at 99---'100.
Earl Warren ·
before the Annual Meeting Qf the American
Law InM'i tute (Ma): l8. 1.9.60), reprinted. 25
F.R.D. 213 (1960).
.
1'55.
Year
DiversitY
1957
23.223
195.8
25,709
1959
1'Z~342
1960
17,048
Nqte, supra note 2.1, at 100 n.29 (citing
'Table e-;2, Director of the Administrative
Office 9£ lbellnited Slat~$Courts Ann,Rep.
(19$7~(»).The federal question decline
was relatively ncgUgent and tewporary for
the same periQd.. fa.. Thisi$e~p{ainable
by the then limited scope of the general
fe<;ietaL que.stion st~tute. By 1-958, most
federal questions were cognizable Without
a minimum in controversy.
156. SeeR. FR1ENDLY, supra nole 3, at 15;
NOte. New Fe.der-al Juri$dictionat Statutes
Aehieves Early .Success J.~ Reducing .Numher of District C(Jurt Case Filings But
Pr(J$,e nts Interpretive Difficultit$, 58 Col.L.
Rev. 1287 (958).
154. Iii. at 213. The address itself was
something Qf a call to anils for more stl\dy
and moteaggressive'efforts to deal With
157. See Hill & Baker, supra nate 4, at 8586..
AMOUNT IN CONTROVERSY REQUIREMENT
323
Cite as 102 F.ILD.l99
Two further observations about efficacy buttress my conclusion that
the device is viable today. First, we have developed a detailed and stable
body of law on valuing the amount in controversy. ISS Keeping the
formula constant while raising the threshold obviously contributes to the
efficacy of the device. Second, available and proposed sanctions may be
imposed on those who persist in jurisdictional amount gamesmanship. 159
Thus, any increase has been and will be taken seriously. One cannot
help but conclude that increasing the minimum amount requirement is an
effective and proven means to accomplish substantial jurisdictional goals
consistent with policies of judicial federalism, cost efficiency, and case
load constraints.
c
Having demonstrated the continued legitimacy of the jurisdictional
amount, we must ask whether the present $10,000 level, established in
1958, should be increased and, if so, by how much. As if it were not
settled by the court of history, the constitutional issue is made of straw.
The greater power to abolish diversity jurisdiction includes the lesser
power to set the jurisdictional amount at any level, and both completely
"fall within the generous power of Congress to regulate the jurisdiction
of the federal courts." 160 On the legislative level, history teaches that
congressional commitment to the device is much stronger than many
courts and commentators have assumed. 161 In context with congressional alternatives to increase judgeships or to exclude whole categories of
cases or litigants, using the amount in controversy is to be preferred
even by diversity supporters. 162 Finally, as we have seen, the jurisdictional amount serves important policies of judicial federalism, cost efficiency and case load constraints. While the requirement itself has been
158. See, e.g., Islen & Sardell, The Monetary
Minimum in Federal Court Jurisdiction (I)
& (1/), 39 St. John's L.Rev. I, 183 (1954 &
1955); Kennedy, Valuing Federal Matter in
Controversy: An Hohleldian Analysis in
Symbolic Logic 35 Tenn.L.Rev. 423 (1968);
Note, Federal Jurisdictional Amount: Determination 01 the Matter in Controversy, 73
Harv.L.Rev. 1369 (1960); Note. Interest
and Costs in Determining Federal Jurisdiction, 94 U.Pa.L.Rev. 401 (1946); Note, Jurisdictional Amount in the Federal District
Courts, 4 Vand.L.Rev. 146 (1950).
159. See H. HART & H. WECHSLER'S su-
pra note 31. at 298 (Supp.1981); Comment.
/958 Amendment to the United States Judicial Code Relative to the Denial 01 Costs to
a Plaintilt 21 La.L.Rev. 783 (1961). Recent amendments of the Federal Rules of
Civil Procedure are based on such a deter·
rent rationale. See Fed.R.Civ.P. 7, 11, 16.
26 (Effective Aug. 1, 1983). Recent decisions suggest a hardening of judicial attitudes. E.g., Bums v. Anderson, 502 F.2d
102 F.R.D.-13
970 (5th Cir.1974); Sanders v. Hiser, 479
F.2d 71 (8th Cir.1973).
160. Hearing Before
the Subcomm. on
Courts, Civil Liberties, and the Administration 01 Justice 01 the Committee on the
Judiciary 01 the House of Representatives
on H.R. 669i-Diversity of Citizenship Juris.diction, 97th Cong., 2d Sess., Ser. 93. at 332
(1982) (Letter of Lawrence G. Sager). See
M. REDISH, FEDERAL JURISDICTION:
TENSIONS IN THE ALLOCATION OF JUDICIAL POWER 21 (1980); Shapiro, Federal .Diversity Jurisdiction: A Survey and a
Proposal, 91 Harv.L.Rev. 317 n. 107 (1977).
See also text accompanying note 20. supra.
161. The resistance to abolition of the jurisdictional amount in general federa,l questions proved as much. See Note. supra
note 29, at 550.
162. Curie, supra note 130, at 293; see Edwards, supra note 4 at 896-97.
324
lIT2- FEDE.RAL RULES DECISIONS
aeonsta.:nt~ a coroIlary has been to increase the mintmutIl QJ1 each
legislative. review., with ,a single e'x'cepti.on for one. year's dUrat.ion, for ·the
l~s:t two centuries. Therefox,~J, the only probl~m remaining is to calculate
the next fncl'~ase.l~
Dlldng the' last decade"effo~t$ at ab:olishingor seV'ere:ly Jimiting
divexs-ity jurisdiction,began. to differentiate thetnseJvesto include proposals to 'increase the ,juri$d:jetiun~l amount.l~41 Perhaps freed by t;lt~eUmi­
.nation of the, ge·ne,ral federalqt;lestibnamount ,requirement, 11,5 these
;proposalsmaotured during the 9'Sth Gongre~s. During the last session"
,Representative Kastenmeiert the Ghairmanof the lIouae Subcommittee
onCourbs; Giv:il Libettie$'" 'and,the Administr,ation ofJl,lstiee of the Hhn~~
:CQmmi~tee on the Jlldlciary, and a longtim,e foe Qf aiv~rs:ity ja~~d:i~'"
tiQIl"I66. intr.odneed two 'bills that would inC'tease 'the amount in contrQver'"
sy tenfGld, to $lQQ"OQO}67 Unlike the perennial .efforts to ,abolish diversi~
ty Jqti$dicti~nI 168 these, prop,osal$ will 'be ,s.e'tiouslyeonsidered and 'stand a
chance Qf p:assnge..,
'What abouta.$100,000 arno1;fnt incQutroV'ersy? Your anSwer depends
large,ly. -on what you think of' diversity jurisdiction.. One rather nnsati$factory way to s-et, the, amount is to pun a, 'nice round figure out of' th.e
air. If We 'took a poll of federil ;~lt4ges! ,for €-x;3mple, we: would se,t the
sum at about $50,OOO.l'9 A b'(ltterstarting place, 'a t lea'st the one
historically ~~efetted .an(l" trad.itionally .,.relied 'on, is to . consider th~
establish.ed figur~ and ask wbat has happened since Congress last
adjusted. th~ a:rnQunt.17D :The 196$ in¢reaSe. is' precedent 'for eQn~idering'
the: impact of inflation., as wel1. 17J The ,assumption th(m WaS that the
ea,rlie,r :$8;000 figure wa$ ~pl>t():pria:te in 19i1 as a measure of "sllb:s.tantia.lity}'t As the eg;dier dis,eussione:x.plain:ed, the 1958 Congress relied
beavily Oh the 152r6 incre~se in,theCor):suroe.r' Price Index sine.e: 1913, the
l63. H.FRISNDLY; Supr4 ftP~e3, at: l21.
164. ~~~.
96tl, '5th Cong., 1:st Sess. (fiJ77);;
S. 1$76, 93d' C,o ng.! 1st S-es·s. (197:l). See
ltu.nt~r! Fl{tieraJ Diversity Jun$qil1(i(:Jrz: ., the
'fJtmece,ssary PreCai4tibh~.
U.MJ~.;C,L.Rev:,
alseQ getteralty
t)fl lJ,R•. 6691, su;pra note 10.
J4j~ 3S5~5.6 (Uml).
.Hearth~$
4~
$~e
165. Much hOsfmty.h«a~q On t.ne' jurlsdictlonal .a'm ount d¢ViG¢W,fl$ aiOlcdat the
genera] fei,i'eralql.les!ion portion. E.g"
Butk~l What Price. Juris:dicli'o11Jt rhe lutils,,dicnQrUll: Amount in IttjU/if/fi'V¢Suits
Against Fedf!r~l Officer:s; 24, ltas.tings, L.J.
215 ([77') ; W¢tbsle.r, F~derallurisdicti(jn
and th~ R~visiQn ,o.f the ludi'ciai Code.; 13 L.
~ Colitemp.Prob-. 2l6 225~26 (1948).
J
diUona:lly jlfi(X)$.es3tQifration .as a c,o ndi..
tii;>Q QJ a federal trial d.e novd). Rel\tre~Jl~­
alive l<~t~mn:der intt.oduced tbree other
bills prQposlng changes ili. diver$.itj' j.!l:risdiction: (ll H.R .),689. 98th Cpu,S", 1st Sess.
(1983) (EJimhian~s diversity jurisdiction for
:<1 five,.year peripd)j (2) .1I.R. 3690, ~at:h
,Cong•• 1St S~ss. (1983) (Abo]Yshe$ ,all cliver·
sity ~ jurisdic..tion, ,e·x cept ·intlltipany tol,'t
ce:;ases):; (3) .R .&. 36.93. P8th Cpog., 1st Sess.
(1983} (Bats ~tC:tte .i'tS,:tdenl' from federal
C.o u'tts 10 divei'~i;tiY caSes for five yea!'s:}~
,}68. See genel'aU, He~l'jngs (in
supra .haW '1 Q..
:a.R.
6691,
169. Shapiro, FederallJiver#ty lurl$dictio.n:
A Survey ahd a. PropiM~/,9l
Harv.L.Rev.
317, 3340.-,$8 ,(1971).,
166.. St!e J(astentT:r~ier &:Remington" LOUT't
Re!tmn, 4nd Acc~ to Jusace:
Per5p~ctive,
;it
Legisiiuive
1-6 H.arv.J.Legis. ~Ol, ' 3f1 - Hi
tl979).
167.
H.R.
3$91" 98th Cong., 1st Sess. (1983):
a.R, 3692, 98th Cong., 1st $,ess. (19,83) (Ad-,
ct.
1'10,
1l. HART & H. WECIjf$L.ER•. $.uprQ'
note 61, at 982. Snell W3$ the approach to
past incr.ease's.$e~' genera/fyPart 11.. ,supra,
J71.
Se~
SUpra;,
tc"t
acc.o Olpanying not~$
118-25
AMOUNT IN CONTROVERSY REQUIREMENT
Clte -.. 102 F.R.D. 299
325
first year the Index was computed and only two years after the ,increase
from $2,000 to $3,000. Congress increased the amount to $10,000,
howevei'tadding a bit to the $7,500 mathematical extrapolation. The
additional increment may have been attributable to any number of
factors, including a mistrust of the data, political compromise, the
anticipation of additional inflation, and an implicit conclusion that the
1911 figure was set too low to keep out sOme marginal litigation deemed
petty in 1958.1'12 Anyone who has lived in this country du_ring the period
has a good idea of what the Consumer Price Index has done since 1958.
Based On available indices, 10,000 1958 dollars would be worth approximately 35,000 1983 doUars.113 Adding a "plus faetor" and complying
with the congressional penchant for round figures, yields a new figure of
.$40,000, le.ss than one:-half of Representative KasteI'nneier~s figure. As I
haveex:plained, raiSing the amount to somewhere between the mathematical $40,000 and the Kastenmeier figure of $100,000 would s.erve, in
varying degrees, our three policies of judicial federalism, cost efficiency
and case load constraint, 174 Additionally, an increase would undo the
effect of inflation. Since 1958, inflation has in effect lowered the
amount in controversy below the 19B., $8,000 figure. 175 As a consequence, diversity cases occupy the. time and talents of the federal courts
far out of proportion to their judicial federalism significa.nce ac.cording to
the 1911 and 1958 Congresses, without regard to cost efficiency, and in
frustration of efforts to control the federal dockets. 176
Such Q. large absolute increase of four or even tenfold may be
mistaken for a reduction in the number of diversity cases to one-fourth
or one-tenth the present number. That is not the way to consider the
'72. See Cowen, supra note 137, at 973;
Friedenthal, supra note 78, at 214; Note,
supra note 2i,at 1289-90; Note, Valuation
of a Business or Intangible ASset to Determine Federal Jurisdictional Amount, 4$ Ie).
L.Rev. 591, 592 n. 7 (1960).
While contemporaneous data was not
kept, rett93ctive calculations provide us
with a common .index; Computed on a
1'967 = 100 index, the Consumer Price Index (all items) for the years 1911, 1958 and
1983 (NQvember) were respectively 28.4,
86.6, and 303.1. Economic Indicators at 23
(Government Printing Office De(;" 1,983);
Hand/xJok of L4bor Statistics J969~ Table
108 at 282.
$3,000 - 1911 .~t In controversy
21.4 C,I far 1911
"x" 1958 dollars
~.6 CPI
fOr 1958
173. Relying on the available economic
data, noteln, supra:
841.6 CPI rc.19!i8
x= '$35,OOO
174.
"x" 1983 dol...
303.ICPUorl983
see Part II.B, supra.
175. Relying on the avallable e'c onomic
data, note 172, supra:
'10,000 - 1983 amount In CQfttl'<lverv
"x"l~doJI~
3Q3.l CPI for 1983
X
x= $8;1.1."
'10,000 - 1!!li8 .mount in controveflY
Congress could index the amount in controversy requirement to the cost pf living.
Such jln approach while obviously not to
be expected. would not be such a good
idea. The task is complicated and reliant
on factors wholly divorced from federal
jurisdiction. More frequent congr~ssional
readjustments are lobe preferred. See Indexing with the Consumer Price Index:
Problems and Alternatives (June 1,981).
=$U61.14 ~· I958 do.lIar.
'10,000- 1983 amount in controversy
"x" 1811 dollars
303.1 CPt for 1983
2ft CPUor 1911.
x=
'93~.8e -
I!U I dolws
176. See Hearings on H.R.6691, s14pranote
10 at 11-12, 59, 85, 89, 91 & 118.
326
102 FEDERAL RULES DECISIONS
impact of such an increase. 177 Rather, current statistics must be COIDpiled which will show the case load effeetif the <amount was set at
various, levels between $40,'ODO a.nd$10Q,OOO}78 'Thes.,e figures have yet
to be cmnpiled. In considering Representative Kastenmeier's proposals
and anticipated political compromises., such figures are essential. By my
reckoning, an inc.r ease in the jurisdictional amount is called for,; less
clear is how much the increase ·should· be. Any increase would be
rational, clear, consistent with sound judicial administration, and, most
importantly, would reduce a category affrictive cases between our state
and fede.r al systems.179 Congress should proceed apa.ce.
IV
Diversity jurisdiction always bas been and will continue to be contro-versial. A lasting solution does not seem likely~ nor should one be
:expected. Revision of federal jurisdiction should be constant in our
federal jurisdiction .formula. l80 From the very beginning, the amount in
controve_rsy requirement has been important in the debate over the
federal judicial institution generally and ov~r the diversity jurisdiction in
particular. Lately, the general diversityde:b ateand the amount in
controversy issue have gained a special prominence:. The rece:p t attention likely is the result of the dratnatic recent growth in diversity cases.
Since the late seventies, the number of diversity cases filed in the district
courts has risen at an alarming rate.l~l This has contributed greatly to a
federal courtbackl'og in the first few yeats (),f this de.cade now approaching serious dimensions. 182 As has been always true in matters of federal
jUrisdiction, legislative pressures have been building fOr some time now
with signs that a statute will soon break loose. The amount in controversyr-eq'uire.m enthas been ignored too long,.
I have chronicled the history of the amount in controversy requirement. Underlying that history are three great traditions of judicial
177. M. WENDELL. supra note 74.
at 250.
178. See. tex.t accompanying note 156, supra.
New techniques for evaluating such are
being deVeloped. See generally Trubek. et
0.1., SUprlJ note 143.
119. See Wright. RestpUc(uring Federal'urisdiction; 36 Wash. & LeeL.Rev'. 185. 16~87'
(1969). The tran,sfer of tbe caS¢s.o the
state courts would hardly be noticed. .Burdick. supra note 4; McGowan. Federal Jurisdiction: Legislativean.d Judicial Change,
28 Case Wes.L.Rev. 517. 526-,27 (1978).
180; It i:s proper to Inquire into the appro-
priateness of the existing distribution of
judicial power. just as the subslance of
law is t¢vised from time to time; in respon$C J() new n.eeds. Whatever survives
sll.ch. Iiln inquiry . can bnly help to
strengthe,n the judiCial system. Especially is this true of the federal judiciary.
Like all courts, the federal courts are
iO$truments fbrsecuring justice through
But unlike most courts;, (hey also
serve a far-reaching political function.
They are a means. and an essential one,
for achieving the adjustments upon
which the life <of a federated nation rests.
The happy relation of 'states to nationour abiding PQlitkal probJ~m.:--is in no
small measure dependent on the wisdom
with which t.h escope and limits of the
federal courts are determined.
Frankfurter, SJ4pr:a .note 44 • .at. 500.
law.
181. 'Hearing on H.R. 6691, supra. note 10,
at 59.
filinp rose 16.8 pe.r cent and
the backlog of three-year-old case$ 8.5 percent in 1983. F~deta.l Judicial WorklO4t1
St'(lli$tics at 7. 11 (Administrative Office of
the U.S. Courts 1983).
182• .Diversity
AMOUNT IN CONTROVERSY REQUIREMENT
327
Cite as 102 F.R.D. 299
federalism, cost efficiency and case load constraint. These policies
legitimate the requirement and support an increase at least to 1958 levels
and, perhaps, beyond. As had become so important and apparent at the
last increase, nearly a quarter of a century ago, an increase now "is
certainly desirable as a recognition of the economic situation." 183 If
$10,000 was substantial in 1958, it surely is not substantial today. An
increase will be a significant interim step toward diversity reform and
will be legitimate in and of itself. Postponing an increase any longer is
at odds with the history and tradition of our federalism. 184 Congress, the
time has come and the time is now.
183. Cowen. supra note 137. at 978.
184. In the debate over the last increase one
exchange encapsulated the ongoing need
for revision in all matters of federal jurisdiction:
Mr. Cellar: Did the gentleman ask me to
yield to him?
Mr. Hoffman: I wanted to find out how
long it will be before you lawyers get this
thing settled.
Mr. Cellar: Never
104 Cong.Rec. 12686 (June 30, 1958).