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Diversity Takes More Than $118.05

01 May 2003

Plaintiff, Darrell Evans, sued American Bankers Life Assurance Company of Florida, American Bankers Insurance Company of Florida, and Lowe™s Home Centers, Inc. seeking to represent a class of Lowe™s credit card holders for a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The two "American" Defendants petitioned the court to compel Evans to arbitrate his claims under the contract, governed by the Federal Arbitration Act, between Evans and the Defendants. The district court dismissed American™s petition for lack of subject matter jurisdiction. The parties were of diverse citizenship; however, although the complaint alleged that damages would exceed $75,000, Evans™ claim was for only $118.05. The trial court was correct in ignoring the amount alleged, but instead looked to the claim™s actual value. Without more than "the theoretical availability of certain categories of damages," a punitive award 635 times greater than the actual damages is not sufficient to meet the $75,000 jurisdictional amount for federal court. American Bankers Life Assurance Co. v. Evans, No. 02-2500, 319 F.3d 907 (7th Cir. Feb. 11, 2003).

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