As my Civ Pro colleagues periodically remind me, we're likely overdue for an increase to jurisdictional thresholds. Even if they're correct, however, what might be the expected (and unexpected) consequences of various increases to jurisdictional thresholds? A recent paper by Steven Gensler (Oklahoma) and Roger Michalski (Oklahoma), The Million Dollar Diversity Docket, puts these counter-factual questions to data. And what they find should interest more than procedeuralists.
The authors hand-coded data from five (non-randomly selected) federal districts (Minnesota, Georgia Northern, New Jersey, Texas Northern, and Utah). From each of these districts they selected a random draw of diversity jurisdiction cases based on Federal Judicial Center (“FJC”) data on cases completed in 2018, resulting in 2,896 usable cases. The paper's methodological move involves substituting the temporal component in survival analysis with a measure of jurisdictional amount. That is, instead of asking on which day a machine fails, we ask at which jurisdictional amount a case fails. To do so, the authors estimated modified KaplanMeier survival functions and Cox Proportional Hazard Regression models.
The paper's main takeaway is that jurisdictional amounts "are not neutral throttles. They do not modulate all cases evenhandedly. Instead, different areas of law, different parts of the country, and different litigants are more affected by changes in the jurisdictional amount than others." The abstract follows.
"What would happen if Congress raised the jurisdictional amount in the diversity jurisdiction statute? Given that it has been almost 25 years since the last increase, we are probably overdue for another one. But to what amount? And with what effect? What would happen if Congress raised the jurisdictional amount from the current $75,000 to $250,000 or, say, $1 million?
Using modified Kaplan-Meier survival functions and Cox Proportional Hazard Regression models to analyze a novel hand-coded data set of pleadings in 2900 cases, we show that the jurisdictional amount is not a neutral throttle. It does not modulate all cases evenhandedly. Instead, different areas of law, different parts of the country, and different litigants are more affected by changes in the jurisdictional amount than others. As such, setting the amount in controversy at any level entails normative choices about which cases to bless and curse with a federal forum.
Our findings implicate not only policy discussions about diversity jurisdiction in general, but also debates currently underway in Congress to utilize modifications of the jurisdictional amount requirement to channel COVID-19 related litigation into federal courts. We hope our empirical work will inform these debates and enable a new wave of scholarship on the basic functions and functioning of the federal diversity docket. We outline some beginnings of this type of work by exploring radically different avenues of thought that develop and re-imagine the diversity docket anew. They range from incremental inflation-adjustments, to carve-outs, experiments with lotteries, and the radical replacement of an amount in controversy minimum with a maximum."
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