ArtIII.S2.C1.16.2 Historical Background on Diversity Jurisdiction

Article III, Section 2, Clause 1:

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction; to Controversies to which the United States shall be a Party;—to Controversies between two or more States; between a State and Citizens of another State, between Citizens of different States,—between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

The records of the Constitutional Convention do not shed substantial light on why the Framers included diversity jurisdiction among the judicial powers of the federal courts.1 The traditional explanation most often cited by judges and legal scholars is that the Framers provided diversity jurisdiction to address the concern that state courts would be prejudiced against out-of-state litigants, particularly if one party was an in-state resident.2

Writings and statements of several Framers support this traditional explanation. For instance, at the Virginia Convention, James Madison stated his belief that the diversity jurisdiction clause was “salutary,” citing the possibility that “a strong prejudice may arise in some states, against the citizens of others, who may have claims against them.” 3 In the Federalist Papers, Alexander Hamilton similarly argued that a national Judiciary “ought to preside in all cases in which one State or its citizens are opposed to another State or its citizens” to ensure “the inviolable maintenance of [the] equality of privileges and immunities to which the citizens of the Union will be entitled.” 4 Hamilton contended that a federal court, “having no local attachments, will be likely to be impartial between the different States and their citizens.” 5 Chief Justice John Marshall likewise explained in an early case that, while it might be true that state courts would “administer justice as impartially” as federal courts, “it is not less true that the [C]onstitution itself either entertains apprehensions on this subject, or views with such indulgence the possible fears and apprehensions of suitors” as to warrant the establishment of diversity jurisdiction in the federal courts.6

Historians have proffered other explanations for the Constitution’s diversity-jurisdiction provision.7 As the volume of diversity litigation in federal court has grown over the years, commentators continue to debate the purpose of diversity jurisdiction.8 Given that contemporary society has evolved significantly from the conditions that existed in 1789, questions have arisen periodically concerning the continued need for diversity jurisdiction, including whether to retain, abolish, or curtail to some degree the statutory grant of this form of federal subject matter jurisdiction.9

See Henry J. Friendly, The Historic Basis of Diversity Jurisdiction, 41 Harv. L. Rev. 483, 484 (1928). back
See, e.g., Burgess v. Seligman, 107 U.S. 20, 34 (1883); Barrow S.S. Co. v. Kane, 170 U.S. 100, 111 (1898). See also Friendly, supra note 1, at 492–93; Charles Warren, New Light on the History of the Federal Judiciary Act of 1789, 37 Harv. L. Rev. 49, 82 (1923). back
Reprinted in 3 Elliot’s Debates, The Debates in the Several State Conventions on the Adoption of the Federal Constitution 533 (1836). back
See The Federalist No. 80 (Alexander Hamilton). back
Id. back
Bank of the U.S. v. Deveaux, 9 U.S. 61, 87 (1809). back
See, e.g., Friendly, supra note 1, at 496 (suggesting that “the desire to protect creditors against [state] legislation favorable to debtors was a principal reason for the grant of diversity jurisdiction” ); 13 Wright & Miller, Federal Practice and Procedure: Jurisdiction and Related Matters § 3601 (3d. ed. Apr. 2021) (describing some commentators’ views that the grant of diversity jurisdiction stemmed from “a desire to protect commical interests from class bias” ). back
See, e.g., Lumbermen’s Mut. Cas. Co. v. Elbert, 348 U.S. 48, 54 (1954) (Frankfurter, J., concurring) (commenting on “the mounting mischief inflicted on the federal judicial system by the unjustifiable continuance of diversity jurisdiction” ). back
See Wright & Miller, supra note 7. back