Introduction

Diversity Jurisdiction

Introduction

Suppose a plaintiff domiciled in Ohio is injured in a collision with a driver who lives in Georgia, and wants to sue in federal court rather than in a state court. Nothing in the claim arises under federal law, because it is an ordinary negligence suit. A federal court can still hear it if Congress has authorized federal courts to decide disputes according to who the parties are rather than what the claim is about. Whether that authority exists depends on two facts a lawyer can check before filing: the citizenship of each party and the amount of money at stake.

Diversity jurisdiction has two layers. Article III of the Constitution extends the federal judicial power to controversies between citizens of different states, but that permission is only an outer limit. District courts hear such cases because Congress has conferred jurisdiction by statute, and the statute is 28 U.S.C. § 1332(a), which gives the district courts original jurisdiction of civil actions where the matter in controversy exceeds $75,000, exclusive of interest and costs, and is between the kinds of parties the section lists.¹ The first listed pairing is between citizens of different States.² The next reaches suits between citizens of a State and citizens or subjects of a foreign state, with an exception for foreign citizens lawfully admitted for permanent residence who are domiciled in the same State as their opponent.³

The first analytical step is therefore to sort the parties and the money into the statute's two requirements, because the statute demands both and neither can make up for the other. Imagine that the Ohio plaintiff claims only $40,000 from the Georgia driver. The parties are from different states, but the amount falls short, so the court lacks jurisdiction. Now imagine a $90,000 claim between two Georgia citizens. The amount is sufficient, but the parties share citizenship, so jurisdiction fails again. The chapter follows the statute in order: it begins with how the grant is built, then takes up the rule on how the parties must line up, foreign parties, how citizenship is determined for individuals and for each kind of entity, the moment at which citizenship is measured, the amount requirement, class actions, and finally the neighboring limits on federal courts. The first step is to see how the statutory grant fits together.