Also known as: diversity suits · diversity action · diversity case
Written by attorneys · grounded in primary & secondary sources — see below
A civil action filed in federal district court when the plaintiff and defendant are citizens of different states and the amount in controversy exceeds the statutory minimum.
Devon Drake, a citizen of State A, sued Decker Electronics, a State B corporation, in federal court in State B for breach of contract. Drake sought to join an additional defendant under Federal Rule of Civil Procedure 20. Decker opposed the joinder by citing a stricter State B statute designed to curb forum shopping. The court permitted the joinder because the federal rule governed.
Darius Dixon, a citizen of State A, filed a diversity suit against the Seminole Tribe of Florida in federal court seeking damages under state law. The tribe moved to dismiss on sovereign-immunity grounds. The court granted the motion and dismissed the action.
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Demetrius Douglas, a citizen of State A, brought a diversity class action against Dominion Capital in federal court in State B. Dominion moved for an order requiring the class to post a security bond under state law. After the court denied the motion, Dominion sought immediate review. The appellate court held the order was not appealable at that stage.
Diane Dawson, a citizen of State A, sued Dynamic Solutions, a State B corporation, in federal court in State B for breach of contract. The general limitations period had expired, but a State B tolling rule would have kept the claim alive. The court applied the state tolling rule and denied the motion to dismiss.
Dolores Diaz, a citizen of State A, filed a diversity contract action against Dixon Foods in federal court. After the defendant impleaded a non-diverse third party, Diaz asserted direct state-law claims against that party. The court exercised supplemental jurisdiction over the new claims.
Daniel Diaz, a citizen of State A, sued Decker Electronics in federal court in State A. The defendant moved to transfer the case to State B for convenience. The court granted the motion and the transferee court applied the same choice-of-law rules that the original court would have used.
A valid federal rule controls when it is arguably procedural and was adopted under the Rules Enabling Act. The court applies the federal rule even if a state rule would produce a different result.
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State law applies if disregarding it would encourage parties to choose federal court to obtain a more favorable outcome. The test prevents plaintiffs from using diversity jurisdiction to evade substantive state rules.
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Section 1367(b) bars supplemental jurisdiction over claims by plaintiffs against parties joined under Rule 14 if the claims would destroy complete diversity. The court must also confirm the claims share a common nucleus of operative fact with the original action.
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The court applies state limitations and tolling rules when they are outcome-determinative. Ignoring the state rule would produce a materially different result from the one a state court would reach.
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…is without first asking "important for what purpose?" Erie and its progeny make clear that when a federal court sitting in a diversity case is faced with a question of whether or not to apply state law, the importance of a state rule is indeed relevant, but only in the context of asking whether application of the rule would…