Pleading the Jurisdictional Amount in Federal Court: What Insurance Adjusters Should Know

Not every lawsuit can be filed in federal court. Unlike state courts, federal courts have limited jurisdiction, meaning they can only hear cases that fall within specific categories.

One of the most common ways a case ends up in federal court is through diversity jurisdiction under 28 U.S.C. § 1332(a). In addition to requiring that the parties be citizens of different states, the statute requires that the amount in controversy exceed $75,000.

For insurance adjusters, understanding how courts evaluate this jurisdictional threshold can help explain why some cases remain in federal court while others are remanded to state court.

When a plaintiff specifically alleges that more than $75,000 is in controversy, that allegation is generally accepted if it is made in good faith. Courts will not second-guess the amount unless it appears to a legal certainty that the claim is actually worth less than the jurisdictional minimum. This standard comes from the U.S. Supreme Court’s decision in St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938), and has been consistently applied by the Eleventh Circuit.

In other words, simply claiming damages in excess of $75,000 is often enough to satisfy the pleading requirement—provided there is a good-faith basis for doing so.

However, many complaints, do not specify the amount of the damages being sought. When that happens, the plaintiff must demonstrate that it is more likely than not that the amount in controversy exceeds $75,000. This is known as the preponderance of the evidence standard. See Fastcase, Inc. v. Lawriter, LLC, 907 F.3d 1335, 1342 (11th Cir. 2018).

Application of this preponderance standard does not depend upon the type of relief sought but rather upon “the specificity with which the plaintiff pleads the amount in controversy.” Id. at 1342 n.5. Ultimately, the court will have jurisdiction over Plaintiffs’ claims “[i]f the jurisdictional amount is…stated clearly on the face of the documents before the court, or readily deducible from them.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1211 (11th Cir. 2007).

Insurance coverage disputes often involve requests for declaratory judgments rather than direct claims for damages. In these cases, the amount in controversy is measured by the monetary value of the object of the litigation from the declaratory action plaintiff’s perspective. See Federated Mut. Ins. Co. v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003).

For example, if the Insurance company  seeks a declaration of coverage for a claim exceeding $75,000, then the value of that coverage dispute may satisfy the jurisdictional requirement.

“Although the plaintiff bears the burden of establishing the amount-in-controversy requirement, this burden is not onerous. It merely requires that [the plaintiff convince this [c]ourt that it is more likely than not that the pleading satisfies the jurisdictional minimum.” See State Farm Mut. Auto. Ins. Co. v. Complete Care Centers, LLC, No. 6:24-CV-379-JSS-EJK, 2024 WL 4504356, at *5 (M.D. Fla. Oct. 16, 2024), quoting Co. Prop. & Cas. Ins. Co. v. Metal Roofing Sys., No. 13-60659-CIV, 2013 WL 5770730, at *3 (S.D. Fla. Oct. 24, 2013). “[D]istrict courts are permitted to make reasonable deductions and reasonable inferences and need not suspend reality or shelve common sense in determining whether the face of the complaint…establishes the jurisdictional amount.”) (ellipsis in original) (internal quotation marks omitted) (quoting Pretka v. Kolter City Plaza II, Inc., 608 F.3d 744, 770 (11th Cir. 2010)).

Jurisdictional disputes frequently arise in insurance litigation, particularly in coverage actions and first-party property cases. Whether a case remains in federal court may depend on how the complaint is drafted and whether the plaintiff can demonstrate that the amount in controversy exceeds the statutory threshold.

Ultimately, federal courts look beyond labels and focus on the practical value of the controversy. If the pleadings and evidence show that the dispute is more likely than not worth more than $75,000, the jurisdictional requirement will generally be satisfied. Compare Smith v. Daffin, No. 3:24-CV-691-SJH, 2025 WL 217771, at *3 (M.D. Fla. Jan. 16, 2025)(The plaintiff’s complaint alleged an indeterminate amount of damages, alleging only that the damages exceeded $75,000, with no further information to support the amount of damages. The Middle District of Florida held that vague and conclusory allegations unaccompanied by sufficient factual allegations to allow for a damage assessment was insufficient to support the jurisdictional threshold.).

Take away— when filing an action in federal court under diversity jurisdiction, make sure the complaint includes specific allegations regarding the nature of the injuries/damages at issue, and any information as to bills or costs, so that there is specific information to support the jurisdictional amount. (i.e. include that  claim involves a fractured leg requiring surgery at an estimated cost of $100,000, or the claim involves water damage to newly installed wood floors throughout a 5,000 square foot home with an estimated replacement cost of $150,000.