Federal Diversity Jurisdiction Modernization Act of 2026
- Sponsor
- Rep. Lee, Laurel M. [R-FL-15]
- Committees
- Judiciary Committee (primary)
- Last action
- Apr 22, 2026
Bottom line
This bill significantly raises the financial threshold for federal diversity jurisdiction, aiming to reduce federal court caseloads and emphasize state court authority over state law disputes.
What it actually does
This bill proposes to significantly increase the minimum amount in controversy required for federal courts to exercise diversity jurisdiction, raising it from the current $75,000 to $500,000. This change would reduce the number of state law cases that can be heard in federal courts, effectively shifting a substantial portion of such litigation back to state judicial systems. The amendment would apply to any civil action commenced on or after the bill's enactment date.
Proponents argue
Proponents argue that increasing the amount in controversy requirement will alleviate the burden on the federal judiciary, allowing federal courts to focus on cases involving federal law and constitutional issues. They contend it will streamline the federal court system, reduce delays, and respect the primary role of state courts in adjudicating state law matters, especially for disputes that are not financially substantial enough to warrant federal intervention. This adjustment is also seen as a necessary modernization given inflation since the last change.
Opponents contend
Opponents might argue that this increase could limit access to federal courts for certain litigants, particularly those involved in moderately sized disputes where diversity jurisdiction might be crucial for perceived neutrality or efficiency. They may contend that it could disproportionately affect individuals or businesses seeking to avoid potential biases or delays in state court systems, effectively closing off a traditional avenue for dispute resolution for many claims between $75,000 and $500,000.
The bill text is extremely short and easy to read, allowing for quick comprehension of its core change.
Section 2(a)
Adjustment to Diversity Jurisdiction Amount in Controversy
This provision amends Section 1332(a) of Title 28, United States Code, to increase the minimum monetary threshold for federal courts to hear cases based on diversity of citizenship. Currently set at $75,000, the bill raises this amount to $500,000. This means that for a federal court to have jurisdiction over a civil case where the parties are from different states, the amount of money or value of property in dispute must exceed $500,000. This change aims to reduce the number of state law cases adjudicated in federal courts.
Supporters argue
Supporters argue this change will allow federal courts to focus on federal questions and constitutional matters, which are their primary purpose. It respects states' rights by ensuring state courts handle a greater share of state law disputes. It could also lead to more efficient federal dockets by reducing the volume of cases.
Critics contend
Critics contend this significantly limits access to federal courts, which are often perceived as more neutral or efficient in certain types of cases, especially for out-of-state litigants. It could force parties into state court systems that may have longer delays or perceived biases, particularly for cases in the $75,000 to $500,000 range, thereby impacting access to justice.
Tradeoffs
The bill balances the desire to reduce federal court caseloads and reinforce state court authority against concerns about limiting litigant choice and access to a potentially more neutral forum for interstate disputes. It trades off federal judicial efficiency for potentially increased burdens on state judiciaries and restricted litigant options.
The amendment made by this Act shall apply to any civil action commenced on or after the date of enactment of this Act.
Section 2(b)
Why it matters:This is standard legislative practice to clarify the effective date and scope of the amendment, ensuring legal certainty and avoiding retroactive application.
Case for: Applying the change only to new cases avoids disrupting ongoing litigation, ensuring a smooth transition for the judiciary and litigants. It prevents confusion and potential challenges to cases already in progress.
Case against: No significant case against this standard practice. Retroactive application would create chaos and undermine judicial efficiency.
Estimated impact: Ensures legal certainty for cases filed before the enactment date, while immediately impacting all new filings. This prevents a sudden shift in jurisdiction for existing cases.