(Reuters) - When Dominion Voting Systems last week sued former Trump campaign lawyer Sidney Powell for defamation, just about every headline played up the same number: $1.3 billion.

That's how much Dominion is seeking from Powell – $652 million in compensatory damages plus $652 million as a punitive penalty.

That Powell in all likelihood does not have $1.3 billion is almost beside the point. By asking for such an eye-popping sum, Dominion instantly conveyed its sense of outrage and the gravity of its perceived injuries.

Still, the move got me thinking: What strategic considerations go into putting an up-front number on damages in any new lawsuit? When and why is it advantageous to deviate from the standard "the matter in controversy exceeds the sum or value of $75,000" that's necessary for federal diversity jurisdiction?

There's a clear downside in going too far. As Baker Botts litigator partner Jonathan Shapiro told me, "Nothing says crazy like a trillion-dollar lawsuit over a ham sandwich."

But how close can you get to asking for the moon without sacrificing credibility?

Dominion lawyer Thomas Clare, a former Kirkland & Ellis partner who formed litigation boutique Clare Locke with his wife Libby Locke in 2014, did not respond to my request for comment.

Powell, the founder of Dallas-based Sidney Powell PC, in an email said, "We are looking forward to discovery from Dominion."

In a 124-page, richly-detailed complaint filed Jan. 8 in U.S. District Court for the District of Columbia, Dominion alleged that Powell "falsely claimed that Dominion had rigged the election, that Dominion was created in Venezuela to rig elections for Hugo Chavez, and that Dominion bribed Georgia officials for a no-bid contract."

While the complaint doesn't itemize damages, it does say that Dominion has already spent more than $565,000 on private security to protect its founder and employees from harassment and threats of violence, as well as nearly $1.2 million on attempts to mitigate the harm to its reputation and business.

The complaint also asserts that "current projections show lost profits of $200 million over the next five years, when reduced to present value. In addition, the viral disinformation campaign has irreparably damaged Dominion's reputation and destroyed the resale value of a business that was worth between $450 million and $500 million before the viral disinformation campaign."

This appears to put the $1.3 billion demand on at least somewhat solid ground, said Quinn Emanuel Urquhart & Sullivan partner Mike Lyle, who chairs the firm's Washington, D.C., product liability and mass torts practice and is not involved in the case.

Lyle stressed that when specifying damages in any complaint, "You need a good-faith basis. You can't just make it up out of thin air."

Still, remember the case brought by a former administrative judge in Washington, D.C., who sued his dry cleaner for $67 million for losing his pants? Or the one by Rep. Devin Nunes, who sued Twitter and three users including a fake cow, seeking $250 million in damages for defamation.

The suit by Nunes against Twitter was tossed in June 2020. Nunes did not respond to a request for comment. The ex-judge's suit was unsuccessful as well, and garnered him a 90-day suspension of his law license.

Those cases, to be sure, are extreme. But Lyle cautioned that you don't want to start any litigation "with a demand that is so unrelated to the case that the judge questions your credibility," he told me. If a demand is obviously outrageous, a judge is apt to think, "What else are you telling me that might be inaccurate?" he said.

Dominion may not necessarily care if Powell is good for a nine-figure payout, Lyle added. If victorious, the company could get a judgment against her, take what she has and attach her assets going forward.

That plus the chance to, as Dominion put it in its complaint, "set the record straight" could make the litigation eminently worthwhile to the company.

Indeed, Shapiro of Baker Botts recognizes the "dual purpose" of some complaints. The plaintiff must lay out the basis for bringing the case, of course, but the filing can also serve as a de facto press release, sending "an extra-judicial message through the judicial process," he said.

Shapiro said it can sometimes be advantageous in a complaint to specify "a principled large number" in monetary damages. Doing so in a business dispute can wreak more havoc than simply claiming $75,000-plus in controversy. That's because defendants may be required to alert their insurance carrier, auditor or board of directors about all big-ticket suits, even if they believe the litigation lacks merit. ("If you really want to mess with someone, do it two days before an earnings announcement," he said.)

Still, Shapiro said there's little to be gained by inflating alleged damages in a complaint. "If you're a serious lawyer with a serious case with serious dollars at stake, I wouldn't round up," he said, adding that lawyers can cover their bases by asking for any other relief the court deems appropriate. "Anything else," he said, "really just becomes more noise."