Diversity of Citizenship
28 U.S.C. §1332 — Diversity of Citizenship; amount in controversy; costs
(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between—
(1) citizens of different States;
(2) citizens of a State and citizens or subjects of a foreign state, except that the district courts shall not have original jurisdiction under this subsection of an action between citizens of a State and citizens or subjects of a foreign state who are lawfully admitted for permanent residence in the United States and are domiciled in the same State;
(3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and
(4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.
Amount in Controversy Requirement:
The amount in controversy in the case must exceed $75,000.
Complete Diversity Rule:
To be granted diversity jurisdiction in federal court, there must be complete diversity between all plaintiffs and all defendants in the case.
Determining Citizenship of the Parties
Individuals
Domicile Test: If an individual moves to a state with the intent to remain there indefinitely, they have established a new domicile that supersedes their previous domicile in another state.
• Timing Rule: Citizenship is determined by the domicile held by the plaintiff at the time they file their suit in federal court.
• Alienage Rule: Marriage does not automatically confer or remove citizenship from the parties.
Corporations
Corporate Dual Citizenship Rule: A corporation is a citizen of every State and foreign state in which it’s incorporated and has its principal place of business.
Nerve Center Test: A corporation’s “principal place of business” is the place where a corporation’s officers direct, control, and coordinate the corporation’s activities.
• Hertz Corp. v. Friend, 559 U.S. 77 (2010)
Other Business Entities (Partnerships, LLCs, etc.): Unincorporated enterprises are analogized to partnerships, which take the citizenship of every general and limited partner when considering whether diversity jurisdiction applies.
Removal
28 U.S.C. §1441(b) — Removal
Home State Defendant Rule: The defendant may initiate removal based on diversity of citizenship unless they are citizen of the state in which the claim is brought.