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September 29, 2014

MSC to clarify the $25k amount-in-controversy limit on district courts’ jurisdiction

Under MCL 600.8301, the district court has jurisdiction over civil controversies involving less than $25,000.  In Moody v. Home Owners Insurance Co., No. 149046, the Michigan Supreme Court granted leave to appeal whether a district court loses its subject matter jurisdiction if the amount in controversy ever exceeds the $25,000 limit.  The Supreme Court will clarify at what point in the proceedings the amount may exceed the $25,000 threshold, if ever.
 
The Court will consider:
  1. whether a district court is divested of subject-matter jurisdiction when a plaintiff alleges less than $25,000 in damages in his or her complaint, but seeks more than $25,000 in damages at trial, i.e., whether the “amount in controversy” exceeds $25,000 under such circumstances; and, if not,
     
  2. whether such conduct nevertheless divests the district court of subject-matter jurisdiction on the basis that the amount alleged in the complaint was made fraudulently or in bad faith.
  
Link: http://publicdocs.courts.mi.gov:81/SCT/PUBLIC/ORDERS/20140926_S149046_92_01_149041_2014-09-26_or.pdf

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