Claim for Injunctive Relief Has Value in Determining the Amount in Controversy for Diversity Jurisdiction

Claim for Injunctive Relief Has Value in Determining the Amount in Controversy for Diversity Jurisdiction

When you are filing a complaint to federal court, or removing one to federal court, the value of a claim for injunctive relief can be included in determining whether the $75,000 amount in controversy required for diversity jurisdiction under 28 U.S.C. §1332(a) is met.

Today in JTH Tax. Inc. v. Frashier  [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law]  the Fourth Circuit reversed the trial court's sua sponte dismissal of a franchisor's complaint for failing to meet the amount in controversy requirement.

Plaintiff had franchised a tax preparation service to the Defendant.  When Defendant closed the office, Plaintiff sued him for $80,000 and requested injunctive relief enjoining him from competition.  When time for summary judgment rocketed around, Plaintiff requested only $60,000 in damages and the trial court dismissed the complaint on the ground that the required amount in controversy was lacking.

Read this article in its entirety on North Carolina Business Litigation Report, a blog for lawyers focusing on issues of North Carolina business law and the day-to-day practice of business litigation in North Carolina courts.