Civil Procedure
Diversity Jurisdiction
Definition
Diversity jurisdiction under 28 U.S.C. Section 1332 allows federal courts to hear cases between citizens of different states where the amount in controversy exceeds $75,000. Complete diversity is required — no plaintiff may be a citizen of the same state as any defendant. For individuals, citizenship is determined by domicile; for corporations, by the state of incorporation and the principal place of business (the 'nerve center' test from Hertz Corp. v. Friend).
Example
A New York citizen sues a Texas citizen for $100,000 in a contract dispute. Because the parties are diverse and the amount exceeds $75,000, there is diversity jurisdiction.