Insurance lawyers and lawyers who practice law in Federal Court know the requirements for a case to be in Federal Court. Most of the time, lawyers representing clients who are suing an insurance company try to stay out of Federal Court.
Pursuant to 28 U.S.C., Section 1332(a), for an insurance company to have a case be tried in Federal Court it must be proven that the parties are citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs. When a case is removed premised upon diversity jurisdiction, courts determine the amount in controversy in light of “the claims in the state court petition as they existed at the time of removal.” As a general rule, the amount in controversy alleged in the State Court petition determines the amount in controversy so long as it was pled in good faith.
This issue arose in a case in the Southern District of Texas, Houston Division. The case is styled, Nicolas Martinez v. Liberty Insurance Corporation.