9th Circuit Holds Amount in Controversy Determining Diversity Jurisdiction is the Amount at Stake in the Litigation

The U.S. Court of Appeals for the Ninth Circuit recently held in Chavez v. JPMorgan Chase that the amount in controversy to determine diversity jurisdiction is the amount at stake in the litigation at the time of removal to federal court.

While the borrower did not contest removal at the time of removal, the borrower argued on appeal that the amount in controversy does not include any damages incurred after the time of removal, such as her lost earnings from after removal because the amount in controversy is determined as of “the time of removal.”  The court disagreed.  The court concluded that the amount of controversy being assessed at the “time of removal” does not mean that future damages are precluded from being part of the amount in controversy.  Instead, the amount in controversy is what is at stake in the litigation at the time of removal.  In this case, the amount in controversy at stake in the litigation at the time of removal easily exceeded $75,000.  Thus, the federal court had subject matter jurisdiction.