## Facts

- Jacob Traber Burns sued David L. Anderson and Anderson’s liability insurer, United States Fidelity & Guaranty Company, after an automobile accident in which Burns’s car was struck by Anderson’s vehicle.
- Burns filed in the U.S. District Court for the Eastern District of Louisiana and invoked diversity jurisdiction, which at the time required an amount in controversy exceeding $10,000.
- Burns alleged $1,026 in lost wages and medical expenses and sought an additional $60,000 for pain and suffering.
- Burns’s principal injury from the May 26 accident was a broken thumb.
- In his deposition, Burns testified that he returned to hard manual labor as a carpenter’s assistant on June 21 or 22—less than one month after the accident.
- The jurisdictional challenge was evaluated after a pretrial conference and considerable discovery, including Burns’s deposition and testimony from three treating physicians.
- The medical evidence showed a rapid recovery: by the end of July Burns reported no pain, by mid-August only very minimal disability remained, and by December even that minor condition had disappeared.
- Based on the developed record, the district court dismissed the action for lack of subject-matter jurisdiction, finding to a legal certainty that the amount in controversy was less than $10,000.
- Burns appealed the dismissal to the U.S. Court of Appeals for the Fifth Circuit.

## Issues

1. May a federal court dismiss a diversity personal-injury case for lack of subject-matter jurisdiction when, after discovery, the evidence shows to a legal certainty that the plaintiff cannot recover more than the statutory jurisdictional minimum, despite a higher demand in the complaint?

## Decision

- The Fifth Circuit affirmed.
- Applying the St. Paul Mercury “legal certainty” test, the court held that the district court could look to the extensive evidentiary record and conclude, as a matter of law, that Burns’s claim could not satisfy the $10,000 amount-in-controversy requirement.
- Given the limited nature of the injury, the short recovery period, and the absence of lasting impairment, the court agreed that the pleaded amount for pain and suffering could not support federal jurisdiction on this record.

## Legal Principles

- In diversity cases, the plaintiff’s good-faith amount-in-controversy allegation controls unless it appears to a legal certainty that the claim is really for less than the jurisdictional minimum. *St. Paul Mercury Indem. Co. v. Red Cab Co.*, 303 U.S. 283 (1938).
- The “legal certainty” inquiry is objective; when jurisdictional facts are disputed, a court may consider evidence beyond the pleadings, including discovery materials and testimony, to determine whether the jurisdictional amount can be met.
- Once it becomes clear as a matter of law that the claim cannot reach the statutory threshold, the federal court must dismiss for lack of subject-matter jurisdiction.
- Allegations of large non-economic damages do not establish diversity jurisdiction when the developed record shows only minor, temporary injury and no meaningful lasting disability.
- The amount-in-controversy requirement limits federal diversity jurisdiction; federal courts are not required to function as small-claims forums for cases that cannot legally meet the statutory minimum.

## Conclusion

The Fifth Circuit held that, although a plaintiff’s pleaded demand is generally accepted in good faith, the district court properly dismissed Burns’s diversity personal-injury action after discovery showed—based on the medical testimony and Burns’s quick return to heavy work—that it was legally impossible for the case to exceed the then-required $10,000 amount in controversy.


Burns v. Anderson, 502 F.2d 970 (1974)