Diversity Jurisdiction

Definition

Diversity jurisdiction is a form of subject matter jurisdiction that allows federal courts to hear cases where the parties are from different states or countries and the amount in controversy exceeds $75,000. This type of jurisdiction is designed to provide a neutral forum for parties who may not receive an unbiased trial in their own state courts.

5 Must Know Facts For Your Next Test

1. Diversity jurisdiction can only be invoked when no plaintiff shares a state of citizenship with any defendant, which is known as complete diversity.
2. The $75,000 threshold for the amount in controversy does not include interest or costs, and plaintiffs can aggregate claims from multiple defendants to meet this requirement.
3. In cases involving corporations, citizenship is determined by both the state of incorporation and the principal place of business.
4. Diversity jurisdiction does not apply in cases solely involving divorce, alimony, child custody, or guardianship, as these matters are traditionally governed by state law.
5. Parties seeking to remove a case from state court to federal court must ensure that diversity jurisdiction is properly established for the case to be heard in federal court.

Review Questions

• How does diversity jurisdiction ensure fairness in legal proceedings among parties from different states?
  • Diversity jurisdiction helps maintain fairness by allowing parties from different states to bring their disputes to a neutral federal court rather than a potentially biased state court. This mechanism reduces concerns about local prejudices that might affect the outcome of the case. By providing a federal forum, parties can expect a more impartial evaluation of their claims, fostering confidence in the judicial process.
• Discuss the significance of complete diversity in establishing diversity jurisdiction and how it relates to corporate citizenship.
  • Complete diversity is crucial because it ensures that no plaintiff shares a state of citizenship with any defendant, which is a key requirement for invoking diversity jurisdiction. In terms of corporate citizenship, a corporation is considered a citizen of both its state of incorporation and its principal place of business. This dual citizenship means that if any plaintiff is from either of those locations, complete diversity is defeated, and the case cannot proceed in federal court under diversity jurisdiction.
• Evaluate how the requirements for diversity jurisdiction impact strategic decisions made by litigants in choosing their forum for litigation.
  • The requirements for diversity jurisdiction significantly influence litigants' strategic choices regarding where to file their lawsuits. Plaintiffs may seek to file in federal court to take advantage of perceived benefits such as more favorable procedural rules or jury pools. Conversely, defendants might attempt to move cases to federal court based on diversity arguments when they believe it would result in a more favorable outcome. Understanding these dynamics allows litigants to assess risks and opportunities associated with their chosen forum, ultimately shaping their litigation strategy.

Related terms

Complete Diversity: Complete diversity requires that all plaintiffs be from different states than all defendants, ensuring no connection between the parties for jurisdictional purposes.

Amount in Controversy: The amount in controversy refers to the minimum dollar value of claims that must be met for a case to be heard under diversity jurisdiction, set at $75,000.

Federal Question Jurisdiction: Federal question jurisdiction allows federal courts to hear cases arising under federal law, as opposed to diversity jurisdiction which focuses on state law issues.