recovery of the price of goods is permitted, BMI contends that FMC's complaint fails to state an action for the contract price that it claims is due. BMI further claims that the remedies available to FMC under the U.C.C. are inadequate to meet the $ 50,000 amount in controversy requirement for diversity jurisdiction under 28 U.S.C. § 1332. Therefore, BMI asserts that because FMC's available damages fall short of the $ 50,000 jurisdictional amount, the court lacks jurisdiction over the subject matter of the controversy.
Because federal courts are courts of limited jurisdiction, the court takes the necessary measures to discover and dismiss those suits which should never have been brought in federal court. See Navarro v. Subaru of America Operations Corp., 802 F. Supp. 191, 192 (N.D. Ill. 1992) (district court must jealously guard its jurisdiction); see Bellock v. Orkin Exterminating Co., 754 F. Supp. 122 (N.D. Ill. 1990) (court not bound to accept jurisdictional amount alleged in plaintiff's complaint). Nevertheless, long settled federal precedent holds that the amount in controversy claimed by a plaintiff in good faith will be determinative on the issue of jurisdictional amount, unless it appears "to a legal certainty that the plaintiff's claim is for less than the jurisdictional amount." St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283 (1938); Risse v. Woodard, 491 F.2d 1170, 1173 (7th Cir. 1974); Lichter v. Paine, Webber, Jackson & Curtis, Inc., 570 F. Supp. 533 (N.D. Ill. 1983). The actual burden of proof on the jurisdictional issue always lies with the party invoking federal jurisdiction, which must support its jurisdictional allegations by "competent proof." Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979), citing, McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 80 L. Ed. 1135, 56 S. Ct. 780 (1936) ("the court may demand that the party alleging jurisdiction justify his allegations by a preponderance of evidence"). The plaintiff, however, must be given the benefit of any facts it could conceivably prove in support of its allegations, Lichter, 570 F. Supp. at 536, and the defendant bears the onerous task of demonstrating "to a legal certainty" that the plaintiff's claim is for less than $ 50,000. St. Paul, 303 U.S. at 289. Under these standards, BMI fails in its attempt to challenge FMC's alleged amount in controversy.
FMC's computation of damages is based on BMI's failure to purchase $ 261,792 worth of steel coils pursuant to the purported contract between the parties. If the steel in question, allegedly manufactured to BMI's specifications, has no resale value or a resale value of less than $ 211,792, FMC has a valid claim under the U.C.C. for an amount in excess of $ 50,000. BMI's challenge to the jurisdictional amount consists solely of the imposition of a defense to the recovery of the full price of the steel not purchased. However, BMI has presented no evidence in support of the actual value of the remaining 71 coils of steel, and it is not a legal certainty that FMC could recoup more that $ 211,792 if it successfully resold the coils in question.
The court will not permit a preliminary jurisdictional determination regarding recoverable damages on a facially meritorious breach of contract claim to deprive a plaintiff unfairly of a federal court trial of the case on its merits. As the St. Paul court stated: "the inability of the plaintiff to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust jurisdiction." 303 U.S. at 288. Therefore, FMC has sufficiently pled the amount in controversy and diversity jurisdiction is proper.
For the foregoing reasons, the defendant's motion to dismiss is denied.
IT IS SO ORDERED.
CHARLES RONALD NORGLE, SR., Judge
United States District Court
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