S. 4850: Diversity Jurisdiction Inflation Adjustment Act
Sponsor
John Kennedy
Republican · LA
Federal court gets harder to access
Why it matters
The bill would double the minimum size of many cross-state federal lawsuits from $75,000 to $150,000. If your dispute falls in that gap, you'd likely have to sue in state court instead.
S. 4850 would immediately raise the federal diversity-jurisdiction threshold from $75,000 to $150,000, blocking many mid-sized cross-state disputes from federal court.
That matters if you are suing — or being sued by — someone from another state. Today, a qualifying case can usually get into federal court once more than $75,000 is at stake. Under this bill, you'd need at least $150,000, not counting interest and court costs.
A $120,000 dispute clears today's bar but would miss the new one, pushing that case to state court unless another federal basis applies.
The bill also makes future increases automatic. Starting January 1, 2030, the threshold would be adjusted for inflation every 10 years using the Consumer Price Index, then rounded to the nearest $25,000.
The federal court system would have to calculate each new amount and publish it by November 15 before the change takes effect. And if you file in federal court but ultimately recover less than the required minimum, the judge could deny your costs or make you pay costs.
Bill Progress
Latest Action · Aug 10, 2026
Passed the Senate, received in House
S. 4850 Bill Summary
What S. 4850 actually does.
Mid-sized cross-state cases lose a federal forum
The bill raises the minimum amount at stake for diversity cases from $75,000 to $150,000, excluding interest and costs.
Inflation raises the bar automatically
Beginning January 1, 2030, the threshold would increase every 10 years based on inflation instead of waiting for Congress to revisit it.
Future jumps come in $25,000 chunks
Each inflation update would be rounded to the nearest $25,000, with halfway amounts rounded up.
Federal courts must publish the new threshold
The Administrative Office of the U.S. Courts would calculate each adjustment and publish the new amount by November 15 before it takes effect.
Plaintiffs risk costs if they fall short
If someone files in federal court and ends up recovering less than the required minimum, the judge may deny that plaintiff's costs or impose costs on the plaintiff.
Who benefits from S. 4850?
Defendants trying to keep smaller disputes out of federal court
If the amount at stake is above $75,000 but below $150,000, those cases would generally stay in state court instead of moving into the federal system.
Federal courts with crowded dockets
A higher filing threshold could reduce the number of diversity cases, especially mid-sized business and civil disputes that currently clear the $75,000 bar.
Lawyers and litigants who want predictable updates
Instead of waiting decades for Congress to act again, everyone would know the threshold is set for inflation review every 10 years.
Who is affected by S. 4850?
People with cross-state disputes worth $75,000 to $149,999
This is the group most directly squeezed. Cases that can reach federal court now would generally have to proceed in state court under S. 4850.
Small and mid-sized businesses in interstate contract fights
A business with a six-figure dispute that lands below $150,000 could lose a federal venue option and have to rethink litigation strategy.
Plaintiffs choosing where to file
Anyone planning to file under diversity jurisdiction would need to clear the higher threshold and consider the risk of paying costs if the recovery comes in too low.
Defense lawyers deciding whether removal is possible
A higher threshold means fewer state cases would qualify for a federal diversity forum, which changes early case strategy.
What Congress Is Saying
S. 4850 has come up 4 times in the Congressional Record so far.
S. 4850 also appeared in 1 more Senate floor reference and 1 routine cosponsor filing.
S4850 Legislative Journey
House: Action Taken
Aug 10, 2026
Held at the desk.
Passed 4550-4551
Aug 7, 2026
Passed Senate without amendment by Unanimous Consent. (consideration: CR S4550-4551; text: CR S4551)
+3 more actions this day
Committee Action
Jun 22, 2026
Read twice and referred to the Committee on the Judiciary.
About the Sponsor
John Kennedy
Republican, LA · 9 years in Congress
Committees: Banking, Housing, and Urban Affairs, the Budget, the Judiciary
View full profile →
Cosponsors (4)
This bill has 4 cosponsors: 3 Democrats, 1 Republican, reflecting bipartisan support. Cosponsors represent 4 states: Delaware, Illinois, Rhode Island, and 1 more.
Committee Sponsors
Judiciary Committee
4 of 21 committee members cosponsored
10 Republicans across this committee haven't cosponsored yet. Mobilize their constituents
S. 4850 Quick Facts
- Committee
- Judiciary
- Chamber
- Senate
- Policy
- Law
- Introduced
- Jun 22, 2026
Passed the Senate, received in House
Aug 10, 2026
Official Sources
Official bill page with status, text, and actions for the Diversity Jurisdiction Inflation Adjustment Act.
This is the federal diversity-jurisdiction statute that S. 4850 would amend by raising the amount-in-controversy threshold.
The bill assigns the Director of the Administrative Office of the U.S. Courts to calculate and publish future inflation-adjusted thresholds.
Under the bill, the new adjusted threshold would be submitted for publication in the Federal Register before taking effect.
The bill uses the Consumer Price Index for All Urban Consumers, published by the Department of Labor, to calculate future threshold increases.
Explains the role of federal district courts, which hear diversity cases affected by the bill’s higher amount-in-controversy requirement.
Official government source for the U.S. Code collection, including title 28 provisions governing federal court jurisdiction.
S. 4850 Common Questions
What does S. 4850 change?
It raises the minimum amount for many diversity cases in federal court from $75,000 to $150,000, not counting interest or court costs.
If my cross-state lawsuit is worth $100,000, can I still file in federal court?
Not under diversity jurisdiction alone. Under S. 4850, a $100,000 dispute would generally be below the new $150,000 threshold.
Does S. 4850 affect every federal lawsuit?
No. It targets diversity jurisdiction — cases between parties from different states. Lawsuits based on other federal grounds would follow their own rules.
When would the threshold start rising with inflation?
The first automatic inflation update would take effect on January 1, 2030. After that, the threshold would be updated every 10 years.
How would future increases be calculated?
The bill uses the Consumer Price Index for All Urban Consumers and rounds each new threshold to the nearest $25,000. Halfway amounts round up.
Who announces the new threshold amount?
The Administrative Office of the U.S. Courts would calculate it and publish the new amount by November 15 before the change takes effect.
Can I be penalized for filing in federal court and winning less than the minimum?
Yes. If you file there originally and recover less than the required amount, the judge may deny your costs or make you pay costs.
Is S. 4850 already law?
No. Congress.gov says S. 4850 was introduced in the Senate and later held at the desk. It would need to pass Congress and be signed to take effect.
Based on S. 4850 bill text
S. 4850 Bill Text
“To amend title 28, United States Code, to adjust thresholds relating to jurisdiction for inflation.”
Source: U.S. Government Publishing Office
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