Diversity Jurisdiction

Diversity jurisdiction, codified at 28 U.S.C. section 1332, grants federal district courts original jurisdiction over civil actions where the matter in controversy exceeds $75,000, exclusive of interest and costs, and is between citizens of different states, citizens of a state and citizens or subjects of a foreign state, or citizens of different states with additional foreign parties. The complete diversity rule, established in Strawbridge v. Curtiss (1806), requires that no plaintiff be a citizen of the same state as any defendant.

Citizenship for individuals is determined by domicile, which requires physical presence in a state plus the intent to remain there indefinitely. For corporations, citizenship exists in both the state of incorporation and the state where the corporation has its principal place of business. The Supreme Court in Hertz Corp. v. Friend (2010) adopted the nerve center test for principal place of business, defining it as the place where the corporation's officers direct, control, and coordinate the corporation's activities, typically its headquarters. Unincorporated associations take the citizenship of every one of their members.

The amount in controversy must exceed $75,000 and is assessed from the plaintiff's perspective at the time of filing. A plaintiff's good faith allegation of the amount controls unless it appears to a legal certainty that the claim is really for less than the jurisdictional amount. A single plaintiff may aggregate claims against a single defendant to meet the threshold, but generally may not aggregate claims against multiple defendants or with other plaintiffs, except under supplemental jurisdiction as permitted by Exxon Mobil Corp. v. Allapattah Services, Inc.