Judge Paul Engelmayer
Lawyer Carling’s June 2010 suit against Connecticut citizen Peters sought $200,700 damages on fraud and contract breach claims. Damages in Carling’s July 2010 first amended complaint totalled $161,850. In response to a magistrate judge’s May 30, 2012, show cause order, Carling’s May 31, second amended complaint (SAC) sought $41,750 in compensatory damages for Peters’ alleged fraud, and $11,850 for her breach of the duty of good faith and fair dealing. Rejecting Carling’s objections to the magistrate’s report, the court dismissed Carling’s SAC for lack of subject matter jurisdiction. He , not even you, failed to meet the jurisdictional $75,000 "amount in controversy" threshold. Carling was not entitled to punitive damages on his contract breach or fraud claims, nor could the jurisdictional amount be met by taking into account Peters’ compulsory counterclaims. Noting that courts within the Second Circuit have reached a consensus that, in a removal context, compulsory counterclaims may not be used to satisfy the amount in controversy requirement, the court observed that if a defendant cannot propel a case into federal court on the basis of her compulsory counterclaims, it logically follows that a plaintiff, who has initiated the lawsuit, cannot do so either.
