Also known as: diversity case · diversity jurisdiction case · diversity jurisdiction cases · diversity jurisdiction · diversity of citizenship
Written by attorneys · grounded in primary & secondary sources — see below
A federal civil action in which subject-matter jurisdiction rests on the citizenship of the parties in different states together with an amount in controversy exceeding the statutory threshold. Diversity must be complete and must exist when the action is filed. Subsequent changes in citizenship do not divest jurisdiction once properly established.
Diego Duarte, a citizen of State A, sues Dakota Industries, incorporated and headquartered in State B, for breach of a supply contract. Duarte files the complaint while still domiciled in State A. Two weeks later he moves to State B for a new job. The federal court retains jurisdiction because diversity existed at filing.
Deanna Davenport, a citizen of State C, brings a diversity action against Blue Ridge Rural Electrical Cooperative in federal court. The cooperative claims employee immunity under state law. The court must decide the immunity fact question for itself rather than treating a state-court decision as binding.
Select any source to read its text and confirm it supports the definition.
Derek Douglas, a citizen of State D, sues Erie Railroad in federal court on a negligence claim arising in State E. The court applies State E tort law to define the duty and standard of care rather than any general federal common-law rule.
Danielle Dixon, a citizen of State F, files a diversity contract action in federal court in State G after the general limitations period has run but within State G's reliance-tolling window. The court applies the state tolling rule because ignoring it would produce a different result than in state court.
Daphne Doyle, a citizen of State H, commences a diversity action in federal court. The defendant moves to dismiss on statute-of-limitations grounds. The court looks to State H tolling law rather than Federal Rule of Civil Procedure 3 because no federal rule directly addresses the tolling question.
Dynamic Solutions, a citizen of State I, sues a union local in federal court under section 301 of the Labor Management Relations Act. The court fashions and applies federal common law to interpret the collective-bargaining agreement even though the parties are diverse.
Diversity must exist when the suit is instituted. It need not exist when the cause of action arose and is not defeated by later changes in citizenship.
Supporting sources
The court applies state substantive law under the Erie doctrine to avoid different outcomes from those that would obtain in state court.
Supporting sources
The court may decline when the state claims raise novel or complex issues, substantially predominate, or when all claims supporting original jurisdiction have been dismissed.
Supporting sources
When a plaintiff sues a liability insurer without joining the insured, the insurer is deemed a citizen of every state of which the insured is a citizen, which can destroy complete diversity.
Supporting sources
…granted certiorari. First. Swift v. Tyson , 16 Pet. 1, 18, held that federal courts exercising jurisdiction on the ground of diversity of citizenship need not, in matters of general jurisprudence, apply the unwritten law of the State as declared by its highest court; that they are free to exercise an independent judgment as to what the…