## Facts

- Coventry Sewage Associates and Woodland Manor Improvement Association (collectively, Coventry) owned and operated a private sewer line and pumping station serving a supermarket operated by The Stop & Shop Supermarket Company on property owned by Dworkin Realty Co. (collectively, Stop & Shop).
- The parties executed a Sewer Connection Agreement (June 1992) requiring Stop & Shop to pay a service fee based in part on water consumption, measured by invoices from the Kent County Water Authority (KCWA).
- KCWA sent invoices to Stop & Shop, which forwarded them to Coventry for use in calculating sewer fees.
- A dispute arose in early 1994 after Coventry increased the service fee under its reading of the contract; Stop & Shop refused to pay at the increased rate, and unpaid charges accumulated.
- Coventry filed a diversity action in federal court in October 1994 seeking $74,953 plus contractual attorneys’ fees, based on KCWA invoices and Coventry’s asserted rate; Coventry’s jurisdictional allegation was made in good faith.
- After suit was filed, KCWA discovered it had misread Stop & Shop’s water meters and issued corrected invoices, sharply reducing Coventry’s claimed damages; Stop & Shop paid the undisputed portion, leaving a small balance.

## Issues

1. Whether a federal court lacks diversity jurisdiction when a plaintiff’s good-faith, time-of-filing amount-in-controversy allegation exceeding $50,000 is later reduced below the jurisdictional minimum due to corrected third-party billing errors discovered after filing.

## Decision

- The First Circuit reversed the district court’s dismissal for lack of subject matter jurisdiction and remanded.
- The court held that the amount in controversy is assessed at the time of filing, and post-filing events that reduce the recoverable amount do not divest jurisdiction when the initial allegation was made in good faith.
- Because it was not legally certain at filing that Coventry’s claim was below the jurisdictional threshold, jurisdiction properly attached.

## Legal Principles

- In diversity cases, the amount in controversy is generally determined as of the time the complaint is filed.
- Jurisdiction exists unless it appears to a legal certainty that the claim is really for less than the jurisdictional amount.
- Post-filing reductions in the amount in controversy—whether from payments, corrections, or other later developments—do not defeat jurisdiction that was proper at filing, absent bad faith or manipulation to create federal jurisdiction.
- A plaintiff’s reasonable reliance on contractually specified third-party data can support a good-faith amount-in-controversy allegation even if later corrections show the damages are far smaller.

## Conclusion

The First Circuit held that diversity jurisdiction was proper because Coventry’s complaint alleged more than $50,000 in good faith at filing; KCWA’s later correction of meter-reading errors reduced potential recovery but did not retroactively eliminate federal subject matter jurisdiction.


Coventry Sewage Assocs. v. Dworkin Realty Co., 71 F.3d 1 (1st Cir. 1995)