Legal Tidbit No. 1 For Journalists: Understanding Damage Allegations In A Complaint

One of the objectives of this blog is to help my friends in the media understand legal issues that aren’t always clear to people without legal training.  With that objective in mind, I’d like to take a moment to clear up some confusion about the meaning of allegations in a complaint concerning the amount of damages a plaintiff is seeking.  

In recent months I’ve noticed several newspaper articles and TV news stories that have said something like the following: “Judge Judy Sues Connecticut Lawyer for $75,000” or “the lawsuit seeks compensatory and punitive damages ‘in excess of $15,000.‘”  The stories report these figures as if they actually tell us something about the “true” amount of the damages the plaintiff hopes to recover from the defendant.  Therein lies the reporter’s error.

Let me first address this common misunderstanding in the context of a federal lawsuit.  Article III of the United States Constitution and federal law give federal courts jurisdiction (i.e., power or authority) to hear several types of cases, including, but not limited to: 1) cases that involve a “federal question,” such as the meaning of a federal statute or a claimed violation of a federal constitutional right; and 2) cases that do not involve a federal question, but do involve a dispute between citizens of different states.  For example, a plaintiff from Connecticut sues a defendant from Massachusetts.  This is known as “diversity jurisdiction.”

Under federal law, however, a plaintiff cannot file a lawsuit based on diversity jurisdiction unless the “amount in controversy” (i.e., his damages) exceeds the sum of $75,000.  Thus, a simple breach of contract dispute between Connecticut and Massachusetts residents could not be filed in federal court if the contract was only worth, say, $10,000.  

More importantly, for the purpose of this post, federal law also requires the plaintiff in a diversity lawsuit to allege in his complaint  that his damages exceed $75,000.  If that allegation is absent, the lawsuit can be thrown out of court.  This allegation exists solely to satisfy a jurisdictional requirement for filing a lawsuit in federal court.  It usually tells the public nothing about the “true” or “real” amount of damages at issue.  The plaintiff could be seeking millions in damages, but the complaint would still say only that his damages “exceed $75,000.”  So, when Judge Judy sues Connecticut attorney John Hammond in federal court, and alleges in her complaint that her damages “exceed $75,000,” I can assure you that the actual amount of damages she is seeking is a much, much, much bigger number than that.

A similar mistake often occurs when reporting on complaints filed in state court.  A state statute requires a plaintiff seeking money damages (as opposed to an injunction) to state in her complaint whether her damages are: 1) greater than $15,000; 2) between $2,500 and $15,000; or 3) less than $2,500.  This requirement is largely administrative in nature.  Like the $75,000 allegation in a federal lawsuit, an allegation in a state lawsuit that the amount in demand exceeds $15,000 tells the reader almost nothing about amount of damages the plaintiff is really seeking to recover.

I hope this legal tidbit is helpful!