Kennedy, Coons introduce bipartisan bill to adjust federal diversity jurisdiction threshold for inflation

WASHINGTON - Sen. John Kennedy (R-La.), a member of the Senate Judiciary Committee, joined Sen. Chris Coons (D-Del.) in introducing the Diversity Jurisdiction Inflation Adjustment Act, bipartisan legislation to raise the dollar threshold for certain state-law lawsuits between parties from different states to be heard in federal court.

Federal diversity jurisdiction allows federal courts to hear state-law disputes between parties from different states. To prevent federal courts from being flooded with lower-value state-law claims, Congress requires these lawsuits to meet a minimum dollar amount, known as the amount in controversy requirement.

Congress last updated that threshold in 1996, when it set the amount at $75,000. Because of inflation, $75,000 in 1996 is worth more than $150,000 today. In fact, the Judicial Conference of the United States, where federal judges meet to discuss policies affecting the courts, recommended the amount be increased to $150,000 back in 2021.

"Federal courts already have enough work to do without Congress letting inflation dump more state-law disputes on their docket. The dollar threshold for these cases has not been updated since 1996. This bipartisan bill would update that threshold, preserve the role of state courts and ensure our federal judiciary is more efficient," said Kennedy.

"Federal courts and judges are already stretched too thin without having to handle low-dollar civil suits that Congress has long intended should be argued in front of state courts," said Senator Coons. Fixing outdated thresholds and indexing them for inflation ensure more cases will end up in front of the judges who are best positioned to hear them, streamlining courts' caseloads and helping justice move faster for every American," said Coons.

Sens. Ted Cruz (R-Texas) and Sheldon Whitehouse (D-R.I.) are cosponsors of the legislation.

"District courts in Texas and across the country are burdened by significant case backlogs because of an outdated amount-in-controversy requirement for diversity jurisdiction, creating delays in resolving complex cases that affect Texans. This legislation will ensure that Texas federal judges have the resources they need to focus on such cases, and I'm proud to join Senator Kennedy in introducing it," said Cruz.

Background:

The Diversity Jurisdiction Inflation Adjustment Act would:

• Raise the amount in controversy requirement from $75,000 to $150,000.
• Index the threshold to inflation every 10 years.
• Help prevent federal courts from being burdened with lower-value state-claims.
• Preserve the balance between state and federal courts by keeping more state-law claims in state courts.
• Improve judicial efficiency by helping federal courts focus on disputes that are more appropriate for federal jurisdiction.

Full text of the Diversity Jurisdiction Inflation Adjustment Act is available here.