Waterman and Moore, Circuit Judges, and Tyler, District Judge.*fn* Moore, Circuit Judge (concurring). Tyler, District Judge (concurring).
On November 24, 1961 Mariana Deutsch, while washing dishes, allegedly was injured when, one leg of the kitchen sink in her apartment gave way and fell on her left foot. As a result of this mishap appellant claims she suffered a comminuted fracture of the distal phalanx of the first toe of her left foot with subungual hematoma, extrusion of the nail, swelling, pain, tenderness and discoloration. She further alleges that for some time she was unable to bear weight on the toes of her left foot and that she has continued to suffer pain.
With a view toward opening a small beauty shop upon completion of the prescribed course appellant claims she had been attending a school that trained beauticians. She alleges that as a consequence of the accident she was compelled to abandon her plans to become a beautician because that job requires that one stand for long periods of time. She also claims that for at least one month after the accident she was unable to earn a living as a knitwear mender, the employment she had engaged in prior to her short-lived career as a student beautician. She did, however, return to her job as a knitwear mender in January, 1962, and at present she earns $125 a week performing this work.
Alleging that appellee, Hewes Street Realty Corporation, was negligent in failing properly to maintain her apartment and sink, appellant, on June 28, 1962, commenced this action in the Southern District of New York to recover $25,000 for her alleged personal injuries.*fn1 She also commenced suit for $25,000 on the same claim in the New York state courts. The complaint in the action she began in the federal court stated that the district court had jurisdiction under 28 U.S.C. § 1332(a).*fn2 By its answer the appellee denied the existence of a controversy "in excess of $10,000," the minimum amount required to confer federal jurisdiction in diversity suits,*fn3 and it submitted interrogatories designed to elicit from appellant information concerning the elements of damage for which she sought recovery and the valuation that she placed on those elements. In her replies to these interrogatories appellant claimed special damages totaling only $141.00.*fn4 Moreover, she indicated that she sought recovery for approximately one month's complete disability; a claim which viewed charitably could not possibly have totaled more than $1,500.*fn5 Finally, appellant's replies indicated, albeit vaguely, that the balance of the ad damnum comprised a claim for damages due to the impairment of appellant's future earning capacity.
Appellee moved to dismiss the action on the ground that appellant's claims fell short of the $10,000 jurisdictional requirement, and that the court therefore lacked jurisdiction over the subject matter of the controversy. The district judge considered this motion in connection with appellant's replies to the interrogatories and in a memorandum opinion granted appellee's motion and dismissed appellant's complaint, stating that the complaint had not been made in good faith because "the claimed injuries and the monetary loss allegedly sustained could not justify a recovery in excess of $10,000." The district judge also noted that appellant simultaneously had filed suit in the state courts, a move that he concluded was designed solely to protect against a jurisdictional dismissal in the federal proceeding. Amplifying his decision that appellant's claim could not justify a recovery in excess of $10,000, he further stated that "in the remote unlikely possibility that a jury would return a verdict in the amount of $10,000 or more, the court in good conscience would be required to set it aside." We reverse the dismissal of the action by the district court and remand for further proceedings.
One cannot underestimate the difficulties involved in developing clear and just rules to assist the district courts in determining whether an amount in controversy in a case exceeds $10,000. The problem is especially difficult because the major considerations tug in precisely opposite directions. On the one hand, with mounting federal case loads, as Chief Judge Lumbard recently has stated, "it has become doubly important that the district courts take measures to discover those suits which ought never to have been brought in the federal court and to dismiss them when the court is convinced to a legal certainty that the plaintiff cannot recover an amount in excess of $10,000." Arnold v. Troccoli, 344 F.2d 842, 845 (2 Cir. 1965). On the other hand, we must not permit a preliminary jurisdictional determination regarding recoverable damages to deprive a plaintiff unfairly of a federal court trial of a case on its merits. The Supreme Court has struck the balance between these considerations thus: "The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-289, 58 S. Ct. 586, 590, 82 L. Ed. 845 (1938).
Taking the Court's opinion in St. Paul Mercury Indem. Co., supra, as a point of departure, it might seem that a district court has the power to dismiss diversity suits when the court can conclude either that the sum claimed was not claimed in good faith or that it appears to a legal certainty that the plaintiff cannot recover the amount demanded. The end of clarity will be furthered, however, if the first test is seen to be but a linguistic variant of the second, for, as one authority has noted, "unless it appears to a legal certainty that plaintiff cannot recover the sum for which he prays, how can it be held that his claim for that sum is not in good faith?" Wright, Federal Courts, 95 (1963).
The issue, then, is how best to delimit the rule that the sum claimed by the plaintiff controls unless it appears to a legal certainty that this amount cannot be recovered. We confine our examination of this issue to the present and cognate cases in which a plaintiff is suing for unliquidated damages for an alleged tort.*fn6 Two rules suggest themselves; each finds support in the decided cases. Following Turner v. Wilson Line, 242 F.2d 414 (1 Cir. 1957) at least one other federal court of appeals has held that the district courts have the power to value a plaintiff's claim seeking unliquidated damages and dismiss the plaintiff's case if it does not reasonably appear that the plaintiff can recover in excess of $10,000. See Leehans v. American Employers Ins. Co., 273 F.2d 72 (5 Cir. 1959); Sansone v. Ocean Acc. & Guar. Corp., 228 F. Supp. 554, 558 (E.D.La.1964). In the Third Circuit, however, the rule appears to be that, when unliquidated damages are sought, the district court, except in flagrant cases, should permit the case to proceed rather than attempt to decide the jurisdictional issue in a way that may deprive the claimant of the ordinary incidents of a trial. Wade v. Rogala, 270 F.2d 280 (3 Cir. 1959). At least one court has gone so far as to suggest that in actions at law where trial by jury is a matter of right under the Seventh Amendment the plaintiff is entitled to demand that the issue be submitted to the jury, certainly in cases like the present one in which the problem of evaluation is inextricably bound up with the merits of the case. Shaffer v. Coty, Inc., 183 F. Supp. 662, 666-667 (S.D.Cal.1960); see Smithers v. Smith, 204 U.S. 632, 645, 27 S. Ct. 297, 51 L. Ed. 656 (1907); cf. Byrd v. Blue Ridge Rural Elec. Coop., 356 U.S. 525, 78 S. Ct. 893, 2 L. Ed. 2d 953 (1958). But see Sansone v. Ocean Acc. & Guar. Corp., supra, 228 F. Supp. at 558 n. 5. Although Arnold v. Troccoli, supra, 344 F.2d at 846, suggests that this Circuit follows the rule announced in Wade v. Rogala, supra, our court has not yet squarely chosen one approach rather than the other.*fn7
The approach represented by Wade v. Rogala, supra, seems preferable for several reasons. First, we are impressed by the argument that to allow a district court judge to value a plaintiff's claim in a case which involves a demand for unliquidated damages and in which the jurisdictional issue is inextricably bound up with the merits of the controversy is tantamount to depriving the plaintiff of his present statutory right to a jury trial. See also, Wright, Federal Courts 95 (1963). Second, it should be apparent that within the present statutory framework there can be no brightline solution to this problem. The choice is essentially between a rule on the one hand that allows some cases involving inflated claims for relief to be brought in a federal forum in order to insure access to that forum for all those cases that properly may be brought there, and, on the other hand, a rule that closes the doors to the federal forum in the face of some claims that properly could be brought there in order to insure the denial of the forum to cases involving inflated claims. The present statutory pattern requires that we choose between these alternatives,*fn8 we feel the wiser choice is to choose the former and more liberal rule, as typified by the decision in Wade v. Rogala, supra. If access to federal district court is to be further limited it should be done by statute and not by court decisions that permit a district court judge to prejudge the monetary value of an unliquidated claim.
Of course district courts are not restricted by the rule adopted here from looking further than the plaintiff's complaint in deciding whether a controversy involves recoverable sums in excess of $10,000. For example, dismissal will be proper when, under applicable law, the damages claimed are not recoverable, Parmelee v. Ackerman, 252 F.2d 721 (6 Cir. 1958), or when the damages claimed, even though recoverable, cannot as a matter of law exceed $10,000. See, e.g., Trail v. Green, 206 F. Supp. 896 (D.N.J.1962). Furthermore, flagrant cases may arise in which, even though the complaint demands unliquidated damages in excess of $10,000, dismissal is proper because the district court can justifiably conclude that the amount demanded was inflated solely in order to gain access to the federal courts. This is the purport of Arnold v. Troccoli, 344 F.2d 842 (2 Cir. 1965). There a suit demanding $6,000 in damages was initially filed in what is now the Civil Court of New York City. Nine months after the state suit was filed the plaintiff successfully moved to discontinue that action on the stated ground that a speedier trial might be had in the federal courts. The plaintiff then commenced a suit in the Southern District of New York in which she demanded $15,000. In affirming Judge Levet's dismissal of the federal action our court stated that the dismissal:
Of course such cases should be dismissed; not because the district judge can conclude that a recovery in excess of $10,000 would not be justified but because there is independent evidence in such cases tending to prove that the claim had been inflated solely to exceed the jurisdictional threshold. See Brown v. Bodak, 188 F. Supp. 532 (S.D.N.Y.1960). Dismissal in such cases poses no danger that the judge will pass on the merits of issues that properly should be passed upon by the jury.
In the present case there is no independent evidence tending to establish that appellant's claim was inflated solely in order to gain access to the federal courts. True, appellant also filed suit in the New York state courts, but here, as distinguished from Arnold v. Troccoli, supra, the amount demanded in the state proceeding exceeded $10,000. Surely the simple fact that appellant availed herself of her rightful opportunity to commence suit in both forums cannot support the inference that her claim did not exceed $10,000. There are altogether too many other explanations for such conduct.
Here we have a rather uncomplicated tort case in which appellant seeks unliquidated damages for the alleged impairment of her earning capacity, and the amount she demands seems far in excess of any likely verdict she can obtain. Nevertheless, under applicable New York tort law it appears that one who seriously has been preparing oneself for a change from a present vocation to a more remunerative one may, if the injury has impaired or frustrated the likelihood of success in the new vocation, recover nonspeculative damages for this damage factor based upon the loss of future probabilities of earning capacity. See Grayson v. Irvmar Realty ...