Diversity Jurisdiction

Overview

Diversity jurisdiction is one of two methods for a federal court to have federal subject-matter jurisdiction over a case (the other being federal question jurisdiction). 

Requirements

To have diversity jurisdiction, there are two requirements:

  1. Jurisdictional Amount Requirement
    1. the jurisdictional amount exceeds $75,000 
  2. Complete Diversity Requirement
    1. no plaintiff shares a state of citizenship with any defendant

Codification

Diversity jurisdiction is codified in Title 28, Section 1332 of the United States Code (28 U.S.C. § 1332(a)).  

Corporate Citizenship

In determining whether there is diversity jurisdiction, a corporation that is a party is considered to be a citizen of both its state of incorporation and its principal place of business.

Class Actions

Diversity jurisdiction is somewhat modified in class action lawsuits. Specifically, the Class Action Fairness Act of 2005 (CAFA) modified the complete diversity requirement. For a federal court to have subject-matter jurisdiction over a class action, the parties need only to satisfy minimal diversity. Minimal diversity is when at least one plaintiff is a resident from a state that is different from at least one defendant. This makes it easier for a class action lawsuit to proceed in federal court than prior to CAFA's enactment. 

Trusts

In Americold Realty Trust v. ConAgra Foods, Inc, 577 U.S. __ (2016), the Supreme Court held that for the purposes of diversity jurisdiction, the citizenship of a trust is based on the citizenship of its members, which includes the beneficiaries as well as the trustees.

Further Reading

For more on diversity jurisdiction, see this University of Florida Law Review article, this University of Minnesota Law Review article, and this Florida State University Law Review article