Complete Diversity Requirement
Definition
For federal courts to exercise diversity jurisdiction under 28 U.S.C. §1332, complete diversity of citizenship must exist: no plaintiff may share state citizenship with any defendant. Complete diversity is a judge-made gloss on the statute, first articulated in Strawbridge v. Curtiss (1806), and has been maintained by the Supreme Court as the governing standard despite academic criticism.
Elements
Complete diversity rule (Strawbridge v. Curtiss): Every plaintiff must be a citizen of a different state from every defendant. One shared state between any plaintiff and any defendant destroys diversity.
Citizenship standards:
- Individuals: Domicile at the time the action is filed. Domicile = physical presence + intent to remain indefinitely. U.S. citizens domiciled abroad are stateless for §1332 purposes and cannot invoke diversity jurisdiction.
- Corporations (§1332(c)(1)): Citizen of (a) state of incorporation AND (b) state of principal place of business (“nerve center” — Hertz Corp. v. Friend, 2010 — where corporate officers direct, control, and coordinate the corporation’s activities).
- Unincorporated associations (LLPs, LLCs, partnerships): Take citizenship of all members; can be complex for large funds with many partners.
- Legal representatives (§1332(c)(2)): Executor, administrator, or guardian takes citizenship of decedent, infant, or incompetent — not the representative’s own citizenship.
Amount in controversy: Must exceed $75,000 (exclusive of interest and costs). Plaintiff’s good-faith allegation controls unless it is a legal certainty that the claim is for less. Aggregation: one plaintiff may aggregate multiple claims against one defendant; multiple plaintiffs generally may not aggregate claims to reach the threshold.
Anti-manipulation provisions:
- §1359: Court disregards citizenship of parties improperly or collusively made or joined to invoke or defeat diversity jurisdiction.
- §1441(b)(2): Removal based on diversity barred if any properly joined defendant is a citizen of the forum state.
Exceptions
- Domestic relations exception: Federal courts decline to exercise jurisdiction over divorce, alimony, and child custody decrees even if diversity exists (Ankenbrandt v. Richards).
- Probate exception: Federal courts will not probate a will or administer a decedent’s estate, even with diversity.
Policy / Rationale
- Original purpose: protect out-of-state litigants from potential home-state bias in state courts.
- Complete diversity rule criticized as under-inclusive (still possible for diverse parties to share state citizenship with non-diverse parties via intervention) and over-inclusive.
- Class Action Fairness Act (CAFA) modified the rule for class actions: minimal diversity (any plaintiff diverse from any defendant) suffices for CAFA jurisdiction.