Friday, May 27, 2005

Ytuarte v. Superior Court (Cal. Ct. App. - May 11, 2005)

This case proves that it's not just law students that sometimes find it difficult to apply properly the amount in controversy requirement. Sometimes judges have similar problems. But, lurking in the backdrop, there's always a kind and studious professor -- or, in this case, a Court of Appeal -- to set the wayward student straight. Which is the role that Justice Woods plays here.

The trial court here reclassified the case (over plaintiff's objection) from an unlimited to a limited civil action on the ground that there was not $25,000 legitimately at stake. The trial court did so notwithstanding the fact that plaintiff claimed over $8500 in past medical expenses, over $10,000 in future medical expenses, and over $25,000 in lost earnings, and also (on the motion to reclassify) supported these claims with some evidence. The trial judge thought that it was exceptionally unlikely that plaintiff would in fact obtain a judgment in excess of $25,000, and on that basis reclassified the case.

Justice Woods (properly) reversed. The California standard for reclassification is, at least after the California Supreme Court's 1991 decision in Walker, very similar to the federal standard for determining the legitimate amount in controversy. As Justice Woods correctly explains, the dispositive inquiry is not whether the judge thinks that a judgment in excess of $25,000 is probable, but rather whether it appears "to a legal certainty" that plaintiff cannot recover more than $25,000. Just like the federal standard for a dismissal for failure to satisfy the $75,000 amount in controversy requirement in diversity cases -- only the number has changed. That's a tough standard. And it's not the one that the trial judge here applied. So Justice Woods reverses and remands.

Not a critical case. But a good discussion of the rule. And a reminder that judges sometimes make mistakes on even basic first-year principles.