This bill, the "Diversity Jurisdiction Inflation Adjustment Act," raises the minimum amount in controversy required for diversity jurisdiction in federal court from \$75,000 to \$150,000 and mandates future automatic inflation adjustments to that threshold.
John Kennedy
Senator
LA
This bill, the "Diversity Jurisdiction Inflation Adjustment Act," raises the minimum amount of money required for certain cases to be heard in federal court from $\$75,000$ to $\$150,000$. It mandates automatic adjustments to this threshold every ten years based on inflation, measured by the Consumer Price Index. The legislation also clarifies when federal courts may charge plaintiffs with costs if they fail to meet the minimum amount in controversy.
Federal Court Entry Fee Doubles to $150,000: New Bill Limits Lawsuit Access for Mid-Sized Claims.
The Diversity Jurisdiction Inflation Adjustment Act is a major gatekeeper move for the federal court system. Right now, if you want to sue someone from a different state in federal court rather than state court—a process called 'diversity jurisdiction'—your claim generally has to be worth more than $75,000. This bill effectively doubles that cover charge, raising the minimum threshold to $150,000. It doesn't stop there; starting in 2030, this number will automatically climb every ten years based on the Consumer Index Price. Essentially, it’s putting federal litigation on an escalator that many regular folks and small business owners might not be able to afford to ride.
The New Math of Justice
Under the current rules, a small business owner suing an out-of-state supplier for $100,000 in damages could choose to take that fight to federal court. If this bill passes, that same business owner is stuck in state court because their claim doesn't hit the new $150,000 floor. By Section 2 of the bill, the threshold will be rounded to the nearest $25,000 every decade. This means the 'entry fee' for federal justice will keep moving further out of reach for middle-class disputes, potentially leaving federal judges to handle only the most expensive corporate battles while state courts—which are often already backlogged—absorb the rest.
The High Cost of Falling Short
There is a hidden sting in this legislation for those who do manage to get through the door. If a plaintiff files a case in federal court claiming $160,000 but the judge or jury ultimately decides they are only owed $140,000, they have technically fallen below the jurisdictional minimum. According to the bill, the court then has the power to deny that plaintiff their court costs and can even force them to pay the other side’s costs. It’s a massive financial gamble: if you overestimate your damages by even a small margin, you could win your case but still end up in the red because of these penalties.
Clearing the Federal Calendar
The main goal here is to thin out the federal docket. By offloading 'smaller' cases (which, to be clear, $140,000 is not small to most of us), federal courts can focus on high-stakes litigation and constitutional issues. While this might make the federal system more efficient for those who can still afford it, it creates a two-tiered system of justice. If you’re a contractor stiffed on a $100,000 job by a national firm, you lose the option of a federal forum, while a multi-million dollar corporation keeps its VIP pass. It’s a practical shift that prioritizes judicial speed over broad access.