A.F.A. Tours, Inc. v. Whitchurch
United States Court of Appeals for the Second Circuit
937 F.2d 82 (2d Cir. 1991)
AFA (plaintiff) sued its former employee Whitchurch (defendant) for misappropriating trade secrets, claiming damages exceeding $50,000 (the diversity jurisdiction threshold at the time) plus punitive damages of at least $250,000. At oral argument on Whitchurch's unrelated motion to dismiss, the district court raised the amount-in-controversy issue on its own and, without prior notice, dismissed the case for lack of jurisdiction at the close of that same argument, reasoning AFA couldn't prove more than $50,000 in damages.
Whether dismissal of a federal diversity suit for insufficient amount in controversy is premature when the issue is raised sua sponte at oral argument, without prior notice, and the court dismisses immediately afterward.