A Penny Short, Lawsuit Dismissed

A Penny Short, Lawsuit Dismissed

According a recent decision of the United States Court of Appeals for the Sixth Circuit: “The penny is easily the most neglected piece of U.S. currency. Pennies tend to sit at the bottom of change jars or vanish into the cracks between couch cushions. Vending machines and parking meters will not accept them. Many people refuse to bend down to pick up a penny off the ground, deeming the reward not worth the effort. And a member of Congress even introduced legislation that would effectively eliminate the penny by requiring merchants to round their prices to the nearest nickel.”

However, the penny has became very important in a recent Appeal of a personal injury and death case involving a motor vehicle accident in Ohio.  The Estate of a deceased husband and wife sued Liberty Mutual Fire Insurance Co. over Uninsured/Underinsured (UM/UIM) Motorists coverage.  The lawsuit alleged that under a recent Ohio State Supreme Court decision the Uninsured Motorists coverage amount should have been $100,000.00 instead of $25,000.00.

Removal from State Court to Federal Court – Certain Requirements Must Be Met

Liberty Mutual removed the lawsuit from the Ohio State Court to the Federal District court based upon the “diversity” of the litigants provision. Article III of the Constitution authorizes federal jurisdiction in all controversies where the parties are “citizens of different states.” U.S. Const. art. III, § 2.

Amount in Controversy Must be at Least $75,000.01

The U.S. District Court granted Liberty Mutual’s Motion for Summary Judgment, and the Plaintiffs appealed.  However, when the lawsuit was considered by the Court of Appeals it was dismissed.  The diversity provision of the Constitution is limited by Congress.  In order for the Federal Court to consider a case which involves only state law, and no federal question is presented, the amount in controversy between the parties must be more than $75,000.00.

In this case, the disputed amount is exactly $75,000.00 — Liberty Mutual claims the Uninsured Motorists coverage amount is $25,000.00 the Plaintiffs claim $100,000.00 is the correct amount.  The difference or amount in controversy equals exactly $75,000.00 which is not more than $75,000.00.

The Court held that the jurisdictional provision requires that the amount in controversy in any lawsuit must exceed $75,000.00 exclusive of court costs, and other legal fees.  If the amount was $75,000.01 the Court would have jurisdiction to hear the case.  Accordingly, the case was dismissed from the Federal Court because of one little insignificant penny.

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