Information Strategies, Inc. v. Dumosch
2014 U.S. Dist. LEXIS 16174
D.C. Cir.2014Background
- InfoStrat sues former employee Dumosch in a breach of contract case under diversity jurisdiction.
- The non-compete and misappropriation of trade secrets are the core disputed covenants claimed by InfoStrat.
- The agreement includes an arbitration clause, with injunctive relief carved out for court resolution.
- InfoStrat seeks injunctive relief, monetary damages, and attorneys’ fees; defendant challenges subject matter jurisdiction under 28 U.S.C. §1332.
- InfoStrat alleges the value of relief and damages exceeds $75,000 and that attorneys’ fees may exceed $75,000; the defendant argues the amount in controversy is below $75,000.
- The court ultimately denies the motion, finding potential aggregation and future costs could meet the threshold.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is subject matter jurisdiction satisfied by the amount in controversy? | InfoStrat may aggregate claims, exceeding $75,000. | Dumosch argues the amount in controversy is below $75,000. | Yes; jurisdiction exists; aggregation and potential future costs prevent a legal certainty of being below $75,000. |
| Does arbitration clause require severing monetary claims from injunctive claims? | Clause allows court to hear the whole suit when seeking injunctive relief. | Monetary claims should be severed and possibly arbitrated. | No, the clause does not compel severance; the court may adjudicate the whole action. |
| Should future attorneys’ fees be counted toward the amount in controversy? | Future fees may be included if provided for by contract or statute. | Future fees should not necessarily count. | Possible to include future fees; their inclusion keeps the amount-in-controversy above $75,000. |
| Can the cost to comply with an injunction push the amount in controversy over $75,000? | Costs to enforce/injunctive relief may exceed $75,000. | Costs could be less than $75,000. | Yes; the potential compliance costs undermine legal certainty that the amount is under $75,000. |
Key Cases Cited
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (U.S. 1938) (the claim controls if in good faith; legal certainty required to dismiss for lack of jurisdiction)
- Smith v. Washington, 593 F.2d 1097 (D.C. Cir.1978) (injunctive relief values may be aggregated similarly to damages)
- Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333 (U.S. 1977) (same standard for declaratory or injunctive relief as damages in amount in controversy)
- Snyder v. Harris, 394 U.S. 332 (U.S. 1969) (aggregation permitted for diversity jurisdiction)
- Premier Industrial Corp. v. Texas Industrial Fastener Co., 450 F.2d 444 (5th Cir.1971) (relevant approach to valuing injunctive relief for jurisdiction)