A.F.A. TOURS v. WHITCHURCH
Author: Anon

Facts: A.F.A. Tours (P) claimed that a former tour guide misappropriated confidential info, but the district court dismissed the claim for failure to satisfy the amount-in-controversy requirement.

Rule: The amount-in-controversy requirement for federal diversity jurisdiction is satisfied if the P makes a good faith estimate that the value of the claims, including actual and punitive damages and the value of injunctive relief, meets the required amount.

Analysis: Federal diversity jurisdiction requires that the amount in controversy exceed $50,000.  Dismissal for failing to meet that amount is warranted only where it appears to a legal certainty that the claim is really for less than the jurisdictional amount.  AFA’s (P) claim could have exceeded $50,000, but the district court did not provide AFA’s (P) with ample opportunities to prove this. 

Conclusion:  The district court could not conclude to a legal certainty that the value of AFA’s (P) claims would not exceed the $50,000 amount-in-controversy requirement.,  Reversed.

*If D cannot prove to a legal certainty that the P’s claim is really for less than the jurisdictional requirement, it will go to trial.  However, P’s should be wary of exaggerating their claim just to get into federal court b/c the courts can impose costs upon P if their claim is found to be less than $50,000.