## Facts

- Elio Del Vecchio held a $5,000 paid-up whole life policy issued by Bankers National Life Insurance Company.
- In 1982, an agent urged Del Vecchio to exchange the paid-up policy for a $10,000 universal life policy, allegedly representing that no further premium payments would be required after an initial payment equal to the surrendered policy’s value ($3,137.27).
- Del Vecchio completed the exchange in 1984 and received policy documents stating that values and projections depended on assumptions, including payment of scheduled premiums.
- In 1985, Del Vecchio received an annual statement indicating, under “current assumptions,” the policy would remain in force with “no future premiums,” while a separate projection under “guaranteed assumptions” suggested a different outcome.
- In 1998, Del Vecchio filed a putative class action in federal court against Conseco, Inc. and affiliated insurers, alleging fraud and related claims under Indiana law and seeking compensatory and punitive damages.
- Del Vecchio invoked diversity jurisdiction under 28 U.S.C. § 1332, asserting the amount in controversy exceeded $75,000 based on aggregated unjust enrichment and potential punitive damages.

## Issues

1. Whether diversity jurisdiction existed where the named plaintiff’s individual claim did not plausibly exceed $75,000 and the plaintiff sought to rely on aggregation of class members’ claims.
2. Whether speculative punitive damages could be counted to satisfy the amount-in-controversy requirement for the named plaintiff.

## Decision

- The Seventh Circuit raised subject-matter jurisdiction sua sponte and required supplemental briefing on the amount in controversy.
- The court held that diversity jurisdiction was lacking because Del Vecchio failed to show his individual claim exceeded $75,000.
- The court rejected aggregation of class members’ separate claims to reach the jurisdictional minimum.
- The court found Del Vecchio’s punitive-damages theory too conjectural to establish the jurisdictional amount.
- The court vacated the district court’s summary judgment on statute-of-limitations grounds and remanded with instructions to dismiss for lack of jurisdiction.

## Legal Principles

- Federal courts must dismiss an action if subject-matter jurisdiction is absent, even after the district court has entered judgment on the merits.
- In class actions, separate and distinct claims generally cannot be aggregated to satisfy § 1332’s amount-in-controversy requirement; each plaintiff must independently meet the jurisdictional minimum unless the class asserts a common, undivided interest.
- The plaintiff bears the burden of showing that the amount in controversy is satisfied.
- Punitive damages may be included in the amount in controversy only if the claim for such damages is supported by a plausible, nonconjectural basis sufficient to show the jurisdictional threshold is met.

## Conclusion

The Seventh Circuit ordered dismissal for lack of diversity jurisdiction because Del Vecchio could not aggregate class members’ claims and did not plausibly show that his own compensatory and punitive damages could exceed $75,000, requiring vacatur of the merits judgment and remand with instructions to dismiss.


Del Vecchio v. Conseco, Inc., 230 F.3d 974 (7th Cir. 2000)