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Federal Appellate Court Says Franchisor's Claims Belong in Federal System

By J. Todd Kennard
December 21, 2010

The U.S. Court of Appeals for the Fourth Circuit recently reversed a district court's dismissal of a franchisor's claims, notwithstanding the fact that the franchisor submitted a summary judgment filing that requested less in money damages than the $75,000 referenced in Section 1332(a) of Title 28 of the United States Code. See JTH Tax, Inc. v. Frashier, 2010 WL 4486746 (4th Cir. Nov. 10, 2010).

JTH Tax stands as an important reminder of principles that some federal courts apply in analyzing the amount in controversy requirement. Of particular note is the potential value that requested injunctive relief can play in conducting the analysis, including possible “reputational value” that may be at issue, depending on the specific circumstances of a given case.

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