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.

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