The Million-Dollar Diversity Docket

Authors

Steven Gensler
Roger Michalski

Abstract

Congress has always imposed an amount in controversy requirement for general diversity jurisdiction. Congress initially set the jurisdictional amount at $500 in 1789 and has raised it six times, most recently in 1996 to its current $75,000 threshold. That requirement has been described as ensuring that the federal courts not become bogged down by “petty” or “insubstantial” state-law cases. Given that it has been twenty-five years since the last increase, we are probably overdue for another one. But to what amount? For what purpose? And with what effects on the size and composition of the diversity docket? What would happen if Congress raised the jurisdictional amount from the current $75,000 to, say $250,000? How many cases would that eliminate, and which ones? Would it affect some types of cases, or some types of litigants, more than others? And what if Congress took a much bolder step and raised the jurisdiction amount to $500,000 or even $1 million? Using a novel hand-coded data set of pleadings in 2,900 cases, we predict the likely effect of increases to the jurisdictional amount at three levels: $250,000, $500,000, and $1 million. Our analysis shows that, while increases do (as they must) result in fewer diversity cases, the decline is neither extreme nor linear, with more than half of the current docket remaining even with an increase to $1 million. Our analysis also shows that the jurisdictional amount is not a neutral throttle. Instead, different areas of law, different parts of the country, and different litigants are more affected by changes in the jurisdictional amount than others. Our findings provide new guidance for Congress to consult when evaluating proposed changes to the amount threshold. Informed by how increases to the jurisdictional amount affect both the size and composition of the diversity docket, Congress can determine whether proposed increases achieve legislative goals and serve or disserve jurisdictional policy. For scholars, our empirical work provides a new lens into the ongoing debates about the basic functions and functioning of the federal diversity docket.

Rights

© 2022 Brigham Young University Law Review

Recommended Citation

Steven Gensler and Roger Michalski, The Million-Dollar Diversity Docket, 47 BYU L. Rev. 1653 (2022).
Available at: https://digitalcommons.law.byu.edu/lawreview/vol47/iss6/5