Document: 367 U.S. 348 81 S.Ct. 1570 6 L.Ed.2d 890 Emmett HORTON, Petitioner,v.LIBERTY MUTUAL INSURANCE CO. No. 478. Argued May 3, 1961. Decided June 12, Rehearing Denied Oct. 9, See 82 24. Messrs. Joe H. Tonahill, Jasper, Tex., and William VanDercreek, Dallas, for petitioner. Mr. Howell Cobb, respondent. Justice BLACK delivered the opinion of Court. 1 This case raises questions under that part 28 U.S.C. § 1332, as amended in 1958, U.S.C.A. 1332,1 which grants jurisdiction to United States District Courts all civil actions between citizens different 'where matter controversy exceeds sum or value $10,000, exclusive interest costs * *.' 2 Petitioner, Horton, was injured while working an employer Texas insured by respondent, liberty Mutual Insurance Company. Pursuant Workmen's Compensation Law,2 petitioner filed a claim with Industrial Accident Board against his respondent insurance company alleging he had been totally permanently incapacitated claiming maximum recovery law $35 per week 401 weeks, total $14,035. After administrative hearings decided would be disabled only 30 weeks accordingly made award $1,050. Section 5 Art. 8307 Law permits either employee company, if dissatisfied award, 'bring suit county where injury occurred set asides aid final ruling,' event issues shall determined 'upon trial de novo, burden (sic) proof upon party compensation.' but no court allow excess statutory Acting this provision state law, on April 30, 1959, very day diversity Court aside claimed, $14,035, denying entitled recover anything at law. One later petitioner, who also action Board's full that, moved dismiss respondent's federal ground 'matter controversy' amount $1,050, not although contemporaneously filed, subject motion dismiss, what designated compulsory counterclaim3 claimed before State suit. The held $1,050 asked aside. In so holding relied National Surety Corp. v. Chamberlain,4 another reached same conclusion largely basis it deemed have purpose Congress enacting 1958 amendment rather severely cut down Federal Courts, particularly workmen's compensation cases. Appeals reversed,5 we granted certiorari decide important jurisdictional raised amendment.6 3 For reasons stated, hold has controversy. 4 First. It is true, Chamberlain pointed out, effect were reduce congestion Court's partially caused large number cases being brought long-standing $3,000 rule. effort followed years study Judicial Conference Administrative Office well Congress.7 To accomplish took several related steps. requisite from $10,000 question cases; provided corporation citizen incorporated its principal place business; and, most importantly here, first time forbade removal courts Courts. By granting district judges discretionary power impose plaintiff should 'recover less than $10,000,' further manifested congressional discourage trying suits involving courts. discussing cases, Senate Report evidenced concern about problem fedr al courts, burdens claimants might suffer having go due fact are likely closer worker's home may provide him special procedural advantages cases.8 foregoing some appealing considerations led conclude frustrate permit insurers file when deliberately such could removed But after deliberate whole lawyers consideration Judiciary Committee light statistics both removals original filings,9 used language specifically barring left unchanged old just there citizenship prescribed amount. situation must take intent regard filing clearly sets forth. easily bar insurer suits, do still. We therefore present try $10,000. Second. agree determination purposes standards,10 must, course, look determine nature extent right enforced case. controlling here crucial factor allocating among amount-in-controversy originally Board.11 7 general rule long complaint itself, unless appears way shown stated 'in good faith.'12 deciding faith said 'must appear legal certainty really justify dismissal.'13 Court, any liability asking aside, alleges Horton now claims will suffered permanent disability which, give No denial these egations made, attempted disclaimer surrender other showing, let alone showing 'to certainty,' lack $14,035 contradict record allegations say dispute involves $14,035; much; conditional counterclaim created leaves entire open adjudication novo trial, regardless award. Thus us shows beyond doubt challenged parties binding neither; more denies pay all. brings into court, remains same; money adjudicated rules. Unquestionably, therefore, 8 Third. Petitioner contends, however even though nothing appeal order, appellate dismissal supportable ground. contention rests almost entirely Chicago, R.I. & P.R. Co. Stude, 346 574, 581, 74 290, 295, 98 L.Ed. 317, without consider 'taken administratively judicially proceeding.' Aside many relevant distinctions need Stude weight because, Supreme interpretation act: 9 'The board suit, appeal. withdrawn board.'14 10 true conditions precedent ruling decision. proceeding. wholly reference Board.15 11 judgment affirmed. 12 Affirmed. 13 CLARK, whom THE CHIEF JUSTICE, M. BRENNAN STEWART join, dissenting. 14 turns new furrow field today doing, plows quarter century's standing—the determining jurisdiction, 'the controls apparently faith.' St. Paul Mercury Indemnity Red Cab Co., 1938, 303 283, 288, 58 586, 590, 845. Here Company aside' given Board. instead testing sum, looks defendant action, 'will ($14,035) (Emphasis added.) 15 affix prophesying claim, stating itself did claim. generously construing statute, confounds test heretofore applied nullifies result 'years Congress,' page 351, 1572, adoption Act July 25, 72 Stat. 415, increasing Once again flooded cases,1 once obliged amend statute. Moreover, today's decision practically wipes out longexisting distinction declaratory conventional suits. 2201, 2201. I dissent. 16 workman, allowable recovery, (401 week). Board, hearing, awarded ($35 weeks). Within hours insurer, literally raced pursuant Vernon's Tex.Ann.Civ.Stat. 8307, 5, allows (where) Upon petitioner's motion, dismissed jurisdiction. reversed. 17 limits bounded one side Constitution enactments Congress. Only judicial expressly statute exercised nisi prius Lockerty Phillips, 1943, 319 182, 63 1019, 87 1339; Kline Burke Construction 1922, 260 226, 43 79, 67 226; Sheldon Sill, 1850, How. 441, 1147. history, repeatedly narrowly interpreted. policy (diversity) calls strict construction.' Healy Ratta, 1934, 292 263, 270, 54 700, 703, 78 1248. City Indianapolis Chase Bank, 1941, 314 63, 62 15, 86 47; supra. 18 argument inapposite here. As points whether comes within 'is standards.' 352, 1573. 'which nationwide operation, intended uniform application, unaffected local definition characterization applied.' Shamrock Oil Gas Sheets, 313 100, 104, 61 868, 870, 85 1214. Regardless method amounts scrupulously apply standard 19 conferring diverse those 1332(a), 1332(a). exceedingly simple, e.g., liquidated damages. However, relief sought difficult define terms money, differing parties, does admit ready application. clarify situations, supra, stated: '(U)nless gives rule, 20 application rules results simple solution. At complaint, enforceable If defaulted, lost counterclaim, counterclaimed controverted cognizable court. seems impossible avoid allowing predicated possibly Even 'disclaimer (a) claim' change insistence looking alleged minimum. Apparently require 'denial allegations' limit considering prayer source 353, Not patent conflict distorts meaning Rule Rules Civil Procedure, states, '(a) commenced court.' evidently holds insufficient meet standards, possible sufficient defendant, attaches. Certainly never permitted acquire 1331(a), 1331(a)2 allege raise issue. '(W)hether (involving question) necessarily plaintiff's statement own bill declaration, unaided anticipation avoidance defenses thought interpose.' Taylor Anderson, 1914, 234 74, 75—76, 34 724, 1218. Skelly Phillips Petroleum 1950, 339 667, 70 876, 94 1194; First Bank Canton, Pa. Williams, 1920, 252 504, 40 372, 64 690; Louisville N.R. Mottley 1908, 211 149, 29 42, 53 126. procedure unbalance pattern. 21 essence, turn meeting requirements Declaratory Judgments Act. That provides '(i)n actual States, appropriate pleading, declare rights relations interested seeking declaration 22 styled seek relief. More importantly, succeeded avoiding element discretion Brillhart Excess Ins. 1942, 316 491, 1173, 1620. remedy construction matter. Aetna Life Hartford, Conn. Haworth, 1937, 300 227, 57 461, 617. Whether depend exercise their grant situation.3 Differing factors pertinent decisions two separate systems, federal. latter system, refusal entertain frequently occurs Alabama Federation Labor, etc. McAdory, 1945, 325 450, 65 1384, 89 1725. questionable satisfied requirement actions. Travelers Greenfield, Cir., 154 F.2d 950; New York 953; Commercial Casualty Fowles, 884, 165 A.L.R. 1068; Moyle, 116 434. affects clear. 'To sanction merely because artful pleading anticipates defense based contravene trend legislation Congress, disregard effective functioning system distort limited Judgment Act.' pages 673—674, 880. 23 Finally effectively emasculates recent attempt especially order decrease workload courts,' 'has greatly increased urged passage curren legislation. S.Rep. 1830, 85th Cong., 2d Sess. 7, U.S.Code Cong. Adm. News p. 3105. singled dealt they 'arise exist virtue laws. involved cases.' Id., 8, 3106. desired restricting minimum Corporations forbidden. 24 enacted 1332(b), 25 files finally adjudged computed entitled, plaintiff.' 26 makes little sense approved obtain sought, namely, 'vacated, voided declared force effect,' clear assessed 1332(b). produces anomalous implicitly approve. Respondent hope cost obtains measured 'without regard' Horton's counterclaim. strange met yet 1332(b) liable failing requirements. 27 expressed problems '(S)ome (workmen's compensation) statutes venue accident workman's residence. When provisions cannot applied. Very often workman travel distances bring witnesses great expense. places undue settles afford luxury While 1332 prohibit clearer expression dislike saddling hardly imagined. should, therefor, wherever possible. fail this, goes defeat intent. option court,' 3106, longer correct. unequal race courthouse door—a invariably win, since resident counsel Austin (the location Board) quickly secure news awards thus enabled 'beat' choice forums. Thus, Court—contrary intention Congress—grants companies going attendant difficulties already overburdened judiciary impecunious workman. differently 1957, refused 'read legil ation jaundiced eye,' saying 'it tell 'We see you driving use words describe your purpose." Union Pacific R. 353 112, 118, 77 685, 687, 693. closed back door locked tight break front hang welcome sign. 415. Arts. 8306-8309. With exceptions relevant, 13(a) requires arising transaction occurrence opposing party's 171 F.Supp. 591. 275 148. 364 814, 46. H.R.Rep. 1706, Sess.; Sess., Adm.News 3099; Hearings H.R. 2516 4497, Subcommittee House Judiciary, 1st particular 104 Cong.Rec. 12689—12690; 9; Annual Proceedings 15. pp. 8—9. See, id., 8. Booth Employers' Ass'n, 132 Tex. 237, 252, 123 S.W.2d 322, 331. Cob. 845, cited. 289, 590. Bell Preferred Assurance Society, 320 238, 240, 6, 88 15; Flowers, 330 464, 468, 798, 800, 91 1024. 246, 328. character lawfuit illuminated becomes vacated unenforceable acquired cause voluntary nonsuit taken merits. Zurich General Liability Rodgers, 128 313, 97 674; Reciprocal Ass'n Leger. 319, 677. automatically novo. 2,147 Texas. wherein costs, arises Constitution, laws, treaties States.' (because moment is, reality, proceeding establish liability), coupled leads abandonment established allegation prior extrajudicially, equal

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