Geographic Expeditions, Inc. v. Estate of Lhotka

Geographic Expeditions, Inc. (“GeoEx”), appeals the district court’s dismissal of GeoEx’s petition to compel arbitration for lack of subject matter jurisdiction. Fed. R.Civ.P. 12(b)(1). GeoEx contends subject matter jurisdiction exists under 28 U.S.C. § 1332 (a), which provides federal jurisdiction over disputes between citizens of different states in which the amount in controversy exceeds $75,000 exclusive of interest and costs. The district court held that GeoEx had to establish by a preponderance of the evidence that the amount in controversy exceeded $75,000, and that, because a clause in the arbitration agreement limited damages to $16,831, GeoEx could not meet its burden. We conclude the district court erred both when it applied a preponderance of the evidence standard and when it held that the liability cap precludes federal jurisdiction. We therefore reverse and remand for further proceedings.

I. Factual and Procedural Background

The underlying dispute in this case arose out of a series of events on Mount Kilimanjaro in October 2007. GeoEx, a California corporation with its principal place of business in San Francisco, leads guided expeditions for profit to various…