Diversity Jurisdiction
Diversity jurisdiction under 28 U.S.C. Section 1332 grants federal courts power to hear civil cases between citizens of different states when the amount in controversy exceeds $75,000, requiring complete diversity where no plaintiff shares citizenship with any defendant.
Exam Tip
COMPLETE diversity - no plaintiff same state as ANY defendant. Amount >$75K (legal certainty test). Corporations have TWO citizenships. LLCs = all members' citizenships. CAFA = minimal diversity + $5M aggregate.
What is Diversity Jurisdiction?
Diversity jurisdiction allows federal courts to hear state law disputes between parties from different states. Its purpose is to provide a neutral forum free from potential state-court bias against out-of-state litigants.
Statutory Requirements (28 U.S.C. Section 1332)
| Requirement | Standard |
|---|---|
| Complete Diversity | No plaintiff may be a citizen of the same state as any defendant |
| Amount in Controversy | Must exceed $75,000, exclusive of interest and costs |
| Determined When | At time of filing complaint |
Determining Citizenship
| Party Type | Citizenship Rule |
|---|---|
| Individuals | State of domicile (presence + intent to remain indefinitely) |
| Corporations | State of incorporation AND principal place of business ("nerve center") |
| Unincorporated Associations | Citizenship of all members (LLCs, partnerships) |
| Decedents/Minors/Incompetents | Citizenship of represented party |
Amount in Controversy
| Rule | Application |
|---|---|
| Legal Certainty Test | Accept pleaded amount unless legally certain plaintiff cannot recover >$75,000 |
| Aggregation (Single Plaintiff) | May aggregate claims against single defendant |
| Aggregation (Multiple Plaintiffs) | Cannot aggregate separate claims |
| Injunctive Relief | Value to plaintiff or cost to defendant (either viewpoint) |
Exceptions and Special Rules
| Situation | Rule |
|---|---|
| Domestic Relations | Divorce, alimony, child custody excluded |
| Probate | Estate administration excluded |
| Class Actions (CAFA) | Minimal diversity + $5 million aggregate |
Class Action Fairness Act (CAFA)
| Requirement | Standard |
|---|---|
| Diversity | Minimal (any plaintiff different from any defendant) |
| Amount | $5 million aggregate |
| Class Size | 100+ members |
Landmark Cases
- Strawbridge v. Curtiss (1806): Complete diversity rule established
- Hertz Corp. v. Friend (2010): "Nerve center" test for principal place of business
- Mas v. Perry (1974): Domicile requires intent to remain indefinitely
- Exxon Mobil Corp. v. Allapattah (2005): Supplemental jurisdiction over related claims
Study This Term In
Related Terms
Personal Jurisdiction
Personal jurisdiction is the court's power over a particular defendant, requiring that the defendant have sufficient minimum contacts with the forum state such that exercising jurisdiction does not offend traditional notions of fair play and substantial justice under the Due Process Clause.
Venue
Venue under 28 U.S.C. Section 1391 determines the proper geographic location (judicial district) for a federal lawsuit, based on where defendants reside (if all in same state), where events occurred, or as a fallback, where any defendant is subject to personal jurisdiction.