Opinion ID: 71994
Heading Depth: 2
Heading Rank: 1

Heading: Governing Perspective

Text: 5 Whether courts, in determining the amount in controversy, are to measure the value of the object of the litigation solely from the plaintiff's perspective or whether they may also consider the value of the object from the defendant's perspective is considerably less well-established. The Supreme Court has provided no clear guidance on this question, 7 and, as a result, federal courts are divided as to the proper perspective to use in determining the amount in controversy. 8 6 Moreover, district courts in this circuit, reading our prior cases to conflict, have expressed uncertainty as to whether the plaintiff-viewpoint rule governs in this circuit or whether courts are free to consider the value of the object of the litigation to either party. 9 After carefully reviewing this circuit's precedents, however, we find no conflict, and we conclude that this court's predecessor purposefully and conspicuously adopted the plaintiff-viewpoint rule. 10 7 In our view, several cases from the former Fifth Circuit establish the plaintiff-viewpoint rule. In Vraney v. County of Pinellas, a non-resident property owner and taxpayer brought a diversity action to enjoin a county waterworks program. 250 F.2d 617 (5th Cir.1958) (per curiam). Even though the complaint clearly alleged that the value of the waterworks program to the defendant county exceeded the amount in controversy, the court dismissed the action for lack of jurisdiction because there is no averment showing or tending to show that the value to the plaintiff of the object or right sought to be enforced exceeds the sum or value required by the diversity statute. Id. at 618 (emphasis added). The court reiterated that [u]nder the decisions in taxpayers' actions, as well as others, the value of the plaintiff's right sought to be enforced must exceed the jurisdictional amount in order to confer federal jurisdiction. Id. (emphasis added). 8 In Alfonso v. Hillsborough County Aviation Authority, 308 F.2d 724 (5th Cir.1962), this circuit's predecessor again refused to consider the value of the object of the litigation from the defendant's perspective in determining the amount in controversy. In Alfonso, a group of homeowners brought a class action against the county aviation authority seeking to enjoin expansion of the county's airport. Citing Vraney, the Alfonso court stated that [t]he value to the plaintiff of the right to be enforced or protected determines the amount in controversy and concluded that the alleged damage to the homes of the individual plaintiffs was insufficient to satisfy the amount in controversy requirement. 308 F.2d at 726-27 (emphasis added). The court expressly rejected the plaintiffs' contention that the amount in controversy is the value of the air rights to the defendants. Id.; see also Texas Acorn v. Texas Area 5 Health Systems Agency, Inc., 559 F.2d 1019, 1023 (5th Cir.1977) (Surely a plaintiff cannot satisfy the jurisdictional amount any time a private defendant's annual budget exceeds [the requisite amount in controversy].). 11 9 In our view, these cases firmly establish that this circuit has adopted the plaintiff-viewpoint rule. Commentators and other courts likewise have read these cases as endorsing the plaintiff-viewpoint approach. See, e.g., McCarty v. Amoco Pipeline Co., 595 F.2d 389, 392 n. 3 (7th Cir.1979) (citing Alfonso); 14A Charles A. Wright et al., Federal Practice and Procedure, § 3703 at 61 n. 1 (citing Alfonso and Vraney ). 12 Moreover, the Fifth Circuit recently indicated that the plaintiff-viewpoint rule of Vraney and Alfonso is still controlling. See Webb v. Investacorp, Inc., 89 F.3d 252, 257 n. 1 (5th Cir.1996) (stating that because value to plaintiff and defendant was the same, calculation of amount in controversy did not violate plaintiff-viewpoint rule of Alfonso). 10 We do not read Duderwicz v. Sweetwater Sav. Ass'n, 595 F.2d 1008 (5th Cir.1979), on which appellee relies, to disturb or undermine the holdings of the cases discussed above. In Duderwicz, plaintiffs sought to recover interest charged or to be charged by defendant pursuant to allegedly usurious notes. The court first determined that interest contracted for but not yet paid was properly subject to forfeiture under Georgia law. 595 F.2d at 1013. Having made this determination, the only question left for the court to resolve was whether the pecuniary consequence of this forfeiture may be considered as part of the value of the matter in controversy. Id. at 1014. The Duderwicz court held that such a pecuniary consequence provided a proper basis for calculating the amount in controversy. 11 In reaching this conclusion, the Duderwicz court stated that [d]ismissal of a diversity action for want of jurisdiction is justified only where it appears to a legal certainty that plaintiff cannot recover the jurisdictional amount. 595 F.2d at 1012 (emphasis added). It further noted that state law is relevant to define the nature and extent of the right plaintiff seeks to enforce. Id. (emphasis added). This language indicates to us that Duderwicz understood and applied the governing plaintiff-viewpoint rule. 12 Appellee nevertheless relies on the following language from Duderwicz: [T]he value of the matter in controversy is measured not by the monetary judgment which the plaintiff may recover, but by the pecuniary consequence to those involved in the litigation. Id. at 1014. We do not read this language to be inconsistent with the plaintiff-viewpoint rule. Rather, the Duderwicz court simply recognized that the plaintiff's claim for monetary damages need not, by itself, exceed the requisite statutory amount because the immediate financial consequences of the litigation to the plaintiff--in that case, the financial benefit of not having to pay the interest contracted to be charged--may also be considered in calculating the amount in controversy. 13 We therefore do not read Duderwicz to have altered the law of this circuit. 14 13 Although we recognize that there are persuasive arguments to support the adoption of the either-viewpoint rule, 15 as a panel of this court, we remain bound to follow the plaintiff-viewpoint rule regardless of the wisdom we may attach to it. Only an en banc decision of this court or an intervening decision of the Supreme Court can alter the controlling law of this circuit.