SB71 Increases the Amount in Controversy Limit for Unlimited Civil Claims

In October 2023, Governor Gavin Newsom signed into law a new piece of legislation that increases the “amount in controversy” cap for limited civil cases that are heard in small claims court. Under the new law, small claims courts will have jurisdiction over actions brought by a natural person if the amount does not exceed $12,500; the current maximum amount for this type of claim could not exceed $10,000.

This bill also increases the amount in controversy for an action or special proceeding from $25,000 to $35,000. Under current law, the cap on limited civil cases is $25,000. Thus, under this new law, cases that are claiming up to $35,000 in damages will be considered a “limited civil case.” Cases that are worth more than $35,000 will be sent to unlimited civil dockets.

These changes came about because the bill’s author, Senate Judiciary Committee Chair Tom Umberg, said this increased cap amount for limited civil claims will “provide access to justice to those who don’t have the resources” to pursue a more cost-intensive unlimited civil suit.

Discovery is typically one of the most expensive parts of civil litigation because it is often a long and arduous process. It is also arguably the most important part of a lawsuit because the discovery process has one goal: gathering information from the other side and from other sources to use at trial.

By increasing the dollar amount for limited civil claims, plaintiffs will be able to spend at least a little bit more money to obtain more discovery for their cases. This is particularly important for cases where negligence is a cause of action, or in cases where “willfulness” is needed in order to recover punitive damages. In being able to gather a little more information for these types of cases, a plaintiff’s chances of success in their lawsuit also increase.

Conversely, consumer attorneys may be less willing to take on consumer cases because there is a higher risk of losing, and because of the increased risk of litigation costs and attorney’s fees.