Commercial Litigation and Arbitration

In Determining Amount in Controversy, Both Punitive Damages and Attorneys’ Fees Are Considered

From West County Motor Co. v. Talley, 2011 U.S. Dist. LEXIS 109485 (E.D. Mo. Sept. 27, 2011):

The FAA itself is not jurisdictional. Hall Street Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 581-82 (2008). Thus, West County's action is dependent on some other independent jurisdictional basis. Id. As West County premises federal jurisdiction on diversity of citizenship, the $75,000 amount-in-controversy requirement for diversity jurisdiction must be met. Given the procedural posture of this action, this requirement is met if West County can show that it does not appear "to a legal certainty" that Talley could not recover in excess of $75,000 in the underlying arbitration proceeding. See Advance Advance Am. Servicing of Ark., Inc. v. McGinnis, 526 F.3d 1170, 1173-74 (8th Cir. 2008). The "legal certainty" test has recently been characterized by the Eighth Circuit as a "legal impossibility" test. See Schubert v. Auto Owners Ins. Co., F.3d , 2011 WL 3518174, at *3 (8th Cir. 2011).

In determining the amount in controversy, both punitive damages and statutory attorney's fees are considered. Allison v. Security Benefit Life Ins. Co., 980 F.2d 1213, 1215 (8th Cir. 1992) (punitive damages); Capitol Indem. Corp. v. Miles, 978 F.2d 437, 438 (8th Cir. 1992) (attorney's fees). The Court concludes that a close question is presented here as to whether West County has met its burden to show that the jurisdictional amount is met here. But the Court is reluctant to hold that it would be a "legal impossibility" for Talley to recover more than $75,000 against West County, especially in light of Talley's refusal to stipulate that she would not demand more than that amount for her individual claims.

Share this article:

Facebook
Twitter
LinkedIn
Email

Recent Posts

(1) Appellate Review of Inherent Power Sanctions (7th Circuit): Factual Findings Reviewed for Clear Error, Choice of Sanction for Abuse of Discretion — 4-Element Test for Reversal; (2) Sanctions and Class Actions: Monetary Sanctions Properly Imposed on Defendants for Improper Communications with Class Members (Represented Parties) — “[I]f The Class And The Class Opponent Are Involved In An Ongoing Business Relationship, Communications From The Class Opponent To The Class May Be Coercive” (Good Quote); (3) Monetary Sanctions under Goodyear v. Haeger: If Same Fact-Gathering Would Have Been Conducted Absent The Misconduct, No But-For Causation — But Only “Rough Justice” Required, “Not Accountant-Like Precision” (Good Quote) — Once Misconduct Is Clear, Time Spent Ferreting It Out Compensable under Goodyear; (4) Goodyear Did Not Overrule Long-Standing Rule That Courts May Impose Modest Civil Monetary Sanctions to Curb Litigation Abuse; (5) Appellate Jurisdiction Lacking Where Sanctioned Attorney Fails to File Notice of Appeal and Lawyer’s Intent to Appeal Not Apparent from Client’s Notice; (5) Rule 11 Improper Purpose — Party May Have Many Purposes for Pursuing Claim — As Long As Claim Is Supported by Good Faith Belief in the Merits, “A Parallel Reason Does Not Violate Rule 11” — To Deny A Motion for Sanctions, The District Court Need Not Address Every Argument: “Arguments Clearly Without Merit Can, And For The Sake Of Judicial Economy Should, Be Passed Over In Silence” (Good Quote); Non-Monetary Sanction on Counsel: Complete Twice The Required Amount Of Professional Responsibility Hours For Her Next Continuing Legal Education Cycle Imposed By The State Bar

Archives