Question:
David Singer was injured when his automobile was struck by an uninsured motorist. David was insured against this type of accident up to a policy limit of $30,000 by State Farm Mutual Automobile Insurance Company. When State Farm stalled on paying on his insurance claim, David filed suit in state court, alleging breach of contract and breach of good faith and fair dealing. David did not demand any specified amount of money damages in his complaint because state law prohibited him from so doing. State Farm filed a removal petition in U.S. District Court, alleging that the federal court had subject matter jurisdiction based on diversity of citizenship. The defendant alleged that damages existed in excess of $50,000 (the jurisdictional amount at the time the suit was filed). Has the defendant followed the correct procedure, under these circumstances, for establishing the existence of the jurisdictional amount? How should the U.S. Court of Appeals for the Ninth Circuit rule?