Diversity Jurisdiction
What does "Diversity Jurisdiction" mean in law?
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).
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.