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Simple English definitions for legal terms
amount in controversy
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A quick definition of amount in controversy:
Amount in controversy: The amount of money a person is asking for in a lawsuit. This can also include the value of non-monetary things like an injunction. If someone wants to sue in a court that handles cases between people from different states, they need to ask for more than $75,000. The court will believe them unless the other side can prove they can't get that much. Sometimes, people can add up multiple claims to reach the $75,000. Class action lawsuits need to ask for more than $5,000,000. Some state courts have their own rules about how much money someone can ask for.
A more thorough explanation:
Amount in controversy refers to the amount of money or value of a non-monetary remedy that a plaintiff seeks in a lawsuit. It is important because it determines whether a case can be heard in a particular court.
For a case to be heard in district court on grounds of diversity jurisdiction, the amount in controversy a plaintiff pleads must exceed $75,000. This means that if a person is suing someone from a different state, they can only do so in federal court if they are seeking more than $75,000. For example, if someone from California is suing someone from New York for $100,000, they can file their lawsuit in federal court.
John, who lives in California, is suing Jane, who lives in New York, for $80,000. John can file his lawsuit in federal court because the amount in controversy exceeds $75,000.
As established by the Class Action Fairness Act, a district court only has jurisdiction over a class action if the amount in controversy exceeds $5,000,000. This means that if a group of people are suing a company for damages, they can only do so in federal court if the total amount they are seeking exceeds $5,000,000.
A group of 500 people are suing a company for $10,000 each, for a total of $5,000,000. They can file their lawsuit in federal court because the amount in controversy exceeds $5,000,000.
State courts also have amount in controversy requirements, usually appearing in the form of tiered court systems. This means that depending on the amount being sought, a case may only be heard in a certain court.
In Massachusetts, small claims court only has jurisdiction over cases where the amount in controversy does not exceed $7,000. This means that if someone is seeking damages of $10,000, they cannot file their lawsuit in small claims court.