5.29.2007

E.D. Ky. Discusses Split Re Whose Viewpoint Should Be Considered in Determining the Amount in Controversy

Per Clay v. K. Petroleum, Inc., Slip Copy, 2007 WL 1520925 (E.D. Ky. May 23, 2007):

In actions in which a plaintiff is seeking declaratory or injunctive relief, the amount in controversy is measured by the value of the object of the litigation. Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 347 (1977); see also Columbia Gas Transmission Corp. v. Meadow Preserve York, 2006 WL 1376912 (N.D.Ohio May 18, 2006). Here, the Plaintiffs are seeking monetary damages and declaratory relief. Thus, for purposes of determining the amount in controversy, the Court must consider not only the money judgment sought but also the “value of the object of the litigation.” Hunt, 432 U.S. 333; McNutt v. General Motors Acceptance Corp., 298 U.S. 178 (1936). And while the parties agree that the maximum amount of damages sought by the Plaintiffs is $36,000.00, the Plaintiff contends that the value of the oil and gas lease does not exceed $75,000.00, exclusive of interest and costs.

In addressing the parties' dispute, the Court must first assess whether the monetary value of the lease is calculated from the Plaintiffs' or the Defendants' perspective. The Sixth Circuit has recognized that there is a split of authority regarding whose viewpoint should be considered in determining the amount in controversy in cases such as the present one. Courts have taken three approaches: (1) the plaintiff's perspective, in which the amount in controversy is determined by the amount stated in the complaint or the value of the right plaintiff is asserting; (2) the defendant's viewpoint, which generally considers the defendant's cost of compliance with the requested injunctive relief; and (3) either party's viewpoint.FN1 The Sixth Circuit has acknowledged that the question regarding whose viewpoint should be used to measure to value of the object of the litigation poses a “jurisdictional morass.” However, the court has explicitly declined to decide the issue. Everett v. Verizon Wireless, Inc., 460 F.3d 818, 829 (6th Cir.2006); see also Olden v. Lafarge Corp., 383 F.3d 495, 503 n. 1 (6th Cir.2004).

FN1. There is a circuit split regarding whether a court may determine the amount in controversy from the perspective of the plaintiff, defendant or either party. See e.g., Garcia v. Koch Oil Co. of Tex., Inc., 351 F.3d 636, 640 n. 4 (5th Cir.2003) (applying the “plaintiff's viewpoint” rule); Ericsson GE Mobile Communications, Inc. v. Motorola Communications & Elecs., Inc., 120 F.3d 216, 219-20 (11th Cir.1997) (same); Massachusetts State Pharm. Ass'n v. Fed. Prescription Serv., Inc., 431 F.2d 130, 132 n. 1 (8th Cir.1970) (same); but see In re Ford Motor Co./Citibank, 264 F.3d 952, 958 (9th Cir.2001) (applying the “either viewpoint rule”); In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 609 (7th Cir.1997) (same); Oklahoma Retail Grocers Ass'n v. Wal-Mart Stores, Inc., 605 F.2d 1155, 1159 (10th Cir.1979) (same); Williams v. Kleppe, 539 F.2d 803, 804 n. 1 (1 st Cir.1976) (same); Tatum v. Laird, 444 F.2d 947, 951 (D.C.Cir .1971) (same), rev'd on other grounds, 408 U.S. 1 (1972); but see Hartridge v. Aetna Cas. & Sur. Co., 415 F.2d 809 (8th Cir.1969) (adopting the viewpoint of the party invoking federal jurisdiction approach in dictum); Thomas v. General Elec. Co., 207 F.Supp. 792, 794-95 (W.D.Ky.1962) (same).

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