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Without opening the floodgates to removal of class actions to federal courts, limited use of the either-viewpoint rule would be salutary
FROM THEIR first day in law school, students are taught the distinctions between law and equity. Nonetheless, many of them become accustomed to the notion that in the merger, equity took a backseat to law and stayed there. Noting this, the creators of the Federal Rules of Civil Procedure designed the system of rules to allow more equity into the system, specifically to prevent the rise of form over substance.1
DIVERSITY JURISDICTION REQUIREMENT
The amount-in-controversy requirement of the U.S. diversity of citizenship statute highlights the tension between law and equity, a tension that if left unresolved will continually lead to inconsistent and unfair results. The U.S. Supreme Court had a rare opportunity recently to ease the tension between law and equity by selecting a fair method for calculating the required amount-in-controversy for federal diversity jurisdiction, now $75,000, in Ford Motor Co. v. McCauley, but after granting certiorari, the Court dismissed the writ as improvidently granted.2
In order to invoke federal court diversity jurisdiction or to remove a state law claim from state to federal court, 28 U.S.C. sect; 1332 requires a showing of complete diversity between the parties and an amount in controversy that exceeds $75,000. While the rationale for diversity jurisdiction in federal court has never been clearly expressed, many legal scholars claim the purpose to be two-fold: to allow out-of-state defendants to escape state bias and to allow well-resourced federal courts to handle large cases better.3 The amount-in-controversy requirement, which has been increased by Congress over the years, seems designed to strike a balance between keeping smaller cases from federal courts, while at the same time allowing large, nationally important interstate cases to be decided by federal courts.
Ford Motor Co. v. McCauley focuses on the inclusion of injunctions in calculating the amount-in-controversy requirement to establish federal jurisdiction over class actions. A defendant's cost of complying with an injunction sought by a class action should satisfy the amount-in-controversy requirement, when the compliance will cost the defendant more than $75,000, whether it covers the entire class or a single member of the class.4 In other words, courts must look to the cost...