Seventh Circuit Retracts Higher Standard For Diversity Jurisdiction

In Meridian Security Ins. Co. v. Sadowski, No. 05-2855 (7th Cir. Mar. 22, 2006), the Seventh Circuit examined and curtailed the development of a line of cases that had misconstrued a 1993 case to raise the barrier to diversity jurisdiction.

Shaw v. Dow Brands, Inc., 994 F.3d 364, 366 (7th Cir. 1993), had stated that defendants seeking removal must prove that they meet the jurisdictional amount through “proof to a reasonable probability that jurisdiction exists.” This language has since been construed within the Seventh Circuit to mean that uncertainty about the jurisdictional amount must be resolved against the removing defendants.

In Meridian, the court overruled that interpretation, which has not been adopted outside of the circuit. The court held that a proponent of federal jurisdiction must, if material jurisdictional facts are contested, prove those facts by a preponderance of the evidence. Once those facts have been proven, federal jurisdiction is satisfied and any uncertainty about whether the plaintiff will be able to prove its substantive claim has no effect on jurisdiction.