2 versions

CosmeticWhat changed in ENGROSSED IN SENATEcompared with INTRODUCED IN SENATE (Jun 22, 2026)

Technical corrections only. The changes reflect the bill's passage through the Senate, updating its designation from "A BILL" to "AN ACT" and removing introductory text about its introduction. No substantive policy changes were made to the text of the bill itself.

S. 4850119th CongressIntroduced Jun 22, 2026

Diversity Jurisdiction Inflation Adjustment Act

Passed SenateLawMajor

View bill text

Sponsor: Sen. Kennedy, John [R-LA]
Committees: Judiciary Committee (primary)
Last action: Aug 10, 2026

Bottom line

This bill doubles the financial threshold for federal diversity jurisdiction and implements a decennial inflation adjustment, aiming to reduce the federal courts' caseload of smaller disputes.

What it actually does

This bill significantly raises the minimum amount in controversy required for federal diversity jurisdiction from $75,000 to $150,000, exclusive of interest and costs. It also establishes a mechanism for this threshold to be automatically adjusted for inflation every ten years, starting in 2030, based on changes in the Consumer Price Index. The Director of the Administrative Office of the United States Courts is tasked with determining and publishing these adjustments.

Proponents argue

Proponents argue this adjustment is long overdue to reflect inflation since the last change in 1996, thereby reducing the federal courts' caseload of smaller disputes and allowing them to focus on cases with greater financial stakes or federal questions. They contend it preserves judicial resources and encourages more cases to be resolved in state courts, which are often better equipped for local disputes.

Opponents contend

Opponents might argue that raising the threshold restricts access to federal courts for individuals with legitimate claims that fall between the old and new thresholds, potentially disadvantaging plaintiffs seeking a federal forum due to perceived biases or procedural differences in state courts. They may also contend that it disproportionately affects certain types of cases or litigants by limiting their forum options.

The bill is exceptionally short and its provisions are clearly stated, making it very accessible for a quick and thorough understanding of its direct effects.

Section 2, amending 28 U.S.C. 1332(a) and (b)

Increase and Indexing of Diversity Jurisdiction Amount in Controversy

prominently featuredstraightforward

This provision raises the minimum monetary value a lawsuit must involve to be heard in federal court solely based on the diversity of citizenship between the parties. It increases the threshold from $75,000 to $150,000, excluding interest and costs. Furthermore, it establishes a system for this $150,000 threshold to be automatically adjusted every ten years, starting January 1, 2030, based on changes in the Consumer Price Index, ensuring the amount keeps pace with inflation.

GroupImpactMechanismScale

GroupFederal CourtsImpactReduced caseload for diversity jurisdiction cases.MechanismHigher monetary threshold for entry into federal court.ScalePotentially significant reduction in smaller diversity cases, freeing up judicial resources.

GroupLitigants (Plaintiffs and Defendants)ImpactRestricted access to federal courts for cases valued between $75,000 and $150,000.MechanismIncreased amount in controversy requirement.ScaleAffects a subset of civil litigation, potentially altering forum selection strategies.

GroupState CourtsImpactIncreased caseload for cases that no longer meet federal diversity jurisdiction.MechanismCases diverted from the federal system.ScalePotentially minor to moderate increase in state court dockets, depending on the volume of affected cases.

Supporters argue

Supporters argue this change modernizes the diversity jurisdiction threshold, which has not been significantly updated for decades, and aligns it with current economic realities. They contend it will allow federal courts to focus on more substantial disputes and federal questions, improving judicial efficiency and resource allocation.

Critics contend

Critics might argue that this increase limits access to federal courts for a segment of the population, potentially forcing litigants into state court systems that may have different procedural rules, jury pools, or perceived biases, which could impact the fairness or outcome of their cases.

Tradeoffs

The bill balances the goal of reducing federal court caseloads and updating monetary thresholds for inflation against concerns about potentially limiting access to federal courts for certain litigants and shifting judicial burdens to state court systems.

About this analysis. AI-Generated from the official bill text and available committee reports. Gaps in available data are noted explicitly. Verify important details with the official Congress.gov record.