View source for Diversity of Citizenship Jurisdiction

Article III, Section 2, of the U.S. Constitution provides that the judicial power of the United States shall extend to controversies “between citizen of different states” as well as controversies “between a state, or the citizens thereof, and foreign states, citizens or subjects.” The authority of federal courts to hear the second category of controversies is sometimes described as “alienage jurisdiction,” although federal court power over both of these two categories falls under the umbrella term “diversity jurisdiction.”

Congress first authorized federal courts to exercise diversity jurisdiction in the Judiciary Act of 1789. Although the constitutional and legislative history is not altogether clear, courts and scholars generally agree that the 1789 legislation and the constitutional grant in Article III were motivated by the fear that a federal forum was needed to hear diversity cases because state courts would be prejudiced against out-of-state parties. Federal court jurisdiction was thought necessary to provide a neutral, impartial forum for resolution of the lawsuits.

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! ARTICLE III, SECTION 2, CLAUSE 1
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| ''The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction;—to Controversies to which the United States shall be a Party;—to Controversies between two or more States;—between a State and Citizens of another State;—between Citizens of different States, between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.''
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Modern requirements governing diversity cases appear in federal law (28 U.S.C. §1332), which provides that federal district courts have original jurisdiction over diversity cases in which the amount in controversy exceeds $75,000. In order for a federal court to have jurisdiction to adjudicate cases under this statute, the lawsuit must be a civil action and must be between (1) citizens of different states of the United States; (2) citizens of a state of the United States and citizens or subjects of a foreign state; or (3) citizens of different states of the United States, in which citizens or subjects of a foreign state are additional parties.

Courts have interpreted this section of the law strictly so as not to expand federal court power at the expense of state court power. For example, the U.S. Supreme Court has interpreted the law to require “complete diversity,” and has therefore prohibited diversity jurisdiction where any parties on opposing sides of litigation share common citizenship. Citizenship is determined as of the time that the plaintiff commences the suit. Where a question is present about whether diversity jurisdiction exists in a case, courts resolve all doubt against finding jurisdiction. Consistent with the strict approach to applying this law, federal courts are not bound by the alignment of the parties in the pleadings and may make their own determination about which parties are truly opposing each other. Moreover, parties can neither confer jurisdiction by consent nor waive jurisdictional defects.

Section 1332 lacks any specification about the subject matter of cases for which federal courts may exercise diversity jurisdiction. Nevertheless, the federal courts have long held that they lack jurisdiction in most domestic relations and probate matters, even though the parties are diverse. The law governing in diversity actions is state law, although federal law can be applied to procedural matters. 

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| '''BIBLIOGRAPHY:''' 
Robert N. Clinton, “A Mandatory View of Federal Court Jurisdiction: A Guided Quest for the Original Understanding of Article III,” ''University of Pennsylvania Law Review'' 132 (1984): 741; Henry J. Friendly, “The Historic Basis of Diversity Jurisdiction,” ''Harvard Law Review'' 41 (1928): 483; and James W. Moore et al., ''Moore’s Federal Practice'', 3rd ed. (New York: Matthew Bender, 1997).
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==== Laura E. Little ====

Last updated: 2006

SEE ALSO: [[Citizenship]]