HR-8449-119
Referred to the House Committee on the Judiciary.
Sponsored by Laurel Lee (R-FL)
What it does
This bill would amend federal law to raise the minimum dollar amount a lawsuit must involve — called the "amount in controversy" — for federal courts to hear cases between citizens of different states (known as "diversity jurisdiction"). The threshold would increase from $75,000 to $500,000. The change would apply to all civil cases filed on or after the date the bill is enacted.
Who benefits
State courts, which would gain jurisdiction over a large volume of civil cases currently handled by federal courts, potentially reducing their backlogs. Defendants in mid-range civil disputes (those between $75,000 and $500,000) who prefer their home state courts, since plaintiffs from other states would lose the option to remove cases to federal court. Large corporations and well-resourced litigants who are more comfortable navigating state court systems in their home jurisdictions. Federal courts and federal judges, who would see reduced caseloads and may be able to devote more resources to remaining cases.
Who is hurt
Individual plaintiffs — particularly consumers, employees, and small businesses — with claims between $75,000 and $500,000 who currently rely on federal courts as a neutral forum when suing out-of-state defendants. Out-of-state plaintiffs who distrust local state courts for perceived home-court bias in favor of in-state defendants. Attorneys and law firms whose practices are built around federal diversity litigation in the mid-range claim tier. Litigants in states with slower, more backlogged, or less predictable state court systems who use federal courts as an alternative.
Supporters argue
Supporters argue that the $75,000 threshold has not been updated since 1996 and has been significantly eroded by inflation — adjusted for inflation, $75,000 in 1996 is worth roughly $150,000–$160,000 today, meaning the real threshold has effectively been cut in half. They contend that federal courts were never intended to handle routine mid-range civil disputes between private parties, and that the current low threshold floods federal dockets with cases that state courts are fully equipped to resolve, delaying justice for litigants in cases that genuinely belong in federal court.
Opponents argue
Opponents argue that the $500,000 threshold — more than six times the current level — goes far beyond an inflation adjustment and would strip federal court access from the vast majority of diversity cases, including legitimate disputes involving consumers, employees, and small businesses. They contend that diversity jurisdiction exists precisely to protect out-of-state parties from potential local bias in state courts, and that eliminating federal access for claims under $500,000 would leave many plaintiffs without a genuinely neutral forum, particularly in states where judicial elections or local politics may influence outcomes.
Constitutional context
Article III of the Constitution grants federal courts jurisdiction over disputes between citizens of different states, but Congress has broad authority to set the conditions — including minimum dollar thresholds — under which that jurisdiction is exercised. No active constitutional tension exists here; this is a straightforward exercise of Congress's power to define the scope of lower federal court jurisdiction, which it has done repeatedly since the Judiciary Act of 1789.
Checks and balances
Congress gains authority to narrow federal court access; the federal judiciary loses a portion of its civil docket, with no direct check on Congress's power to set jurisdictional thresholds beyond Article III's outer limits.
Historical precedent
Congress has adjusted the diversity jurisdiction amount-in-controversy threshold multiple times, most recently raising it from $50,000 to $75,000 in the Federal Courts Improvement Act of 1996.