28 U.S.C. § 1332(a) Diversity Jurisdiction: Parties, Amount, Removal

To sue in federal court under 28 U.S.C. 1332(a), the diversity jurisdiction requirements are two: every plaintiff must be a citizen of a different state (or country) from every defendant, and the amount in dispute must exceed $75,000, exclusive of interest and costs. Both are measured at the moment the lawsuit is filed, or at the moment of removal if a defendant moves the case out of state court. Miss either one and the federal court has no power to hear the case.¹

Complete Diversity Between the Parties

The rule is strict. Every plaintiff must be diverse from every defendant. If even one plaintiff shares state citizenship with even one defendant, the entire case fails the test. The Supreme Court set this out in 1806 in Strawbridge v. Curtiss, and it has not budged since.²

A Texas plaintiff who sues one California defendant and one Texas defendant cannot invoke diversity jurisdiction. The California defendant’s diversity is irrelevant; the shared Texas citizenship on both sides is fatal.

Timing matters. Diversity is measured when the case is filed (or removed). A party who moves after that does not change the calculus, and a party who was non-diverse at filing cannot manufacture diversity by relocating later.

Citizenship of Individuals

For an individual, citizenship means domicile: the state where you have a permanent home and intend to stay indefinitely. You can have several residences, but only one domicile. Courts look at hard evidence — voter registration, state tax filings, property ownership, employment, where the family lives.

Foreign nationals count as citizens of their home country, and they can sue or be sued by U.S. citizens under 28 U.S.C. 1332(a)(2). A French citizen and an Ohio citizen can face off in federal court if the amount requirement is met. But there is a carve-out: a lawful permanent resident domiciled in the same state as the opposing U.S. party defeats diversity. A German green-card holder living permanently in Ohio cannot use diversity to sue another Ohio citizen.¹

Dual citizens of the United States and another country are treated as U.S. citizens only. The Fifth Circuit applied this in Coury v. Prot, holding that the American nationality is the one that counts and that an American living abroad without a state domicile has no diversity citizenship at all.³

When someone sues on behalf of an estate, a minor, or an incapacitated person, the citizenship that counts is the represented person’s, not the representative’s. Appointing an executor in another state to create diversity does not work.¹

Citizenship of Corporations

A corporation has two citizenships at once: every state where it is incorporated, and the state of its principal place of business.¹ A company incorporated in Delaware and headquartered in Illinois is a citizen of both. If you are a citizen of either, you and that company are not diverse.

The Supreme Court fixed the meaning of “principal place of business” in Hertz Corp. v. Friend, adopting the nerve-center test: the single location where senior officers direct, control, and coordinate the company’s activities, typically the headquarters.⁴ Not where the most employees work, not where the most revenue is earned. Where the top executives sit.

LLCs, Partnerships, and Other Unincorporated Entities

The corporate rule does not apply to LLCs and partnerships. These entities take the citizenship of every member or partner. The Supreme Court confirmed this in Carden v. Arkoma Associates, declining to extend the corporate framework.⁵

An LLC with 200 members across 30 states is a citizen of all 30. And if a member is itself another LLC, you trace through to that entity’s members too. Diversity you thought you had can vanish once you finish mapping the ownership chain.

Amount in Controversy Over $75,000

The claim must exceed $75,000, not including interest and costs. At the pleading stage courts accept the plaintiff’s stated amount. Under St. Paul Mercury Indemnity Co. v. Red Cab Co., the case can be dismissed on this ground only if it appears to a legal certainty that the claim is really worth less.⁶ A plaintiff who genuinely believed the case was worth more than the threshold at filing usually survives even if the eventual recovery falls short. When it does fall short, the statute lets the court deny the winning plaintiff their litigation costs or shift costs to them.¹

Aggregating Claims

One plaintiff can add up multiple claims against one defendant to clear the line. A $50,000 contract claim plus a $30,000 fraud claim against the same defendant reaches $80,000, and the requirement is met.

Multiple plaintiffs generally cannot pool separate claims unless they share a truly joint interest, such as co-owners of one piece of property. Two friends with $40,000 in losses each cannot combine into an $80,000 case. The same logic applies against multiple defendants: claims against each defendant must independently exceed $75,000 unless the defendants are jointly liable for the same obligation.

Non-Monetary Relief

When the suit seeks an injunction or a declaratory judgment rather than money, courts value the relief itself. The measure is usually either what it will cost the defendant to comply or what the relief is worth to the plaintiff. When the complaint gives no specific number, courts look at settlement demands, medical bills, expert estimates, and comparable evidence.

Cases Federal Courts Will Not Hear Even With Diversity

Two judge-made exceptions carve out categories that stay in state court no matter how cleanly the parties satisfy 1332(a).

The domestic relations exception blocks federal courts from granting divorces, awarding alimony, or issuing child custody decrees. In Ankenbrandt v. Richards, the Supreme Court confirmed those three categories and no more.⁷ A tort suit between former spouses can still go to federal court.

The probate exception keeps federal courts out of the actual probate of a will and the administration of an estate. In Marshall v. Marshall, the Court read the exception narrowly: a federal court can decide rights in property that happens to be part of an estate, as long as it does not interfere with the state probate court’s control of that property.⁸ A fraud claim over an inheritance can proceed federally even while probate is pending in state court.

Removal From State Court

When a plaintiff files a diversity-eligible case in state court, a defendant can remove it to federal court. Additional constraints layer on top of the 1332(a) requirements.

The Forum Defendant Rule

A diversity case cannot be removed if any properly joined and served defendant is a citizen of the state where the case was filed.⁹ A defendant being sued at home does not face the out-of-state bias diversity jurisdiction was designed to guard against.

The words “properly joined and served” have produced a loophole. Several circuits, including the Second, Third, and Fifth, have allowed a forum defendant to remove the case before service, a tactic known as snap removal. Not every circuit agrees, and legislative fixes have not passed.

Deadlines

A defendant has 30 days from receiving the complaint or being served to file the notice of removal.¹⁰ If the initial complaint does not show removability — for example, because a non-diverse defendant is later dropped — the 30 days runs from the amended filing that first makes the case removable.

Diversity removal has an outer limit of one year from the date the case was originally filed. After that, the case stays in state court. The one exception: bad faith by the plaintiff in concealing the amount at stake or otherwise manipulating the case to defeat removal reopens the window.¹⁰

Proving the Amount on Removal

A removing defendant bears the burden on the amount in controversy. Under Dart Cherokee Basin Operating Co. v. Owens, the notice of removal needs only a plausible allegation that the amount exceeds $75,000, without evidentiary submissions attached.¹¹ If the plaintiff contests it, both sides submit evidence and the court decides by a preponderance whether the threshold is met.

What Happens If Jurisdiction Is Missing

Federal courts have an independent duty to check their own jurisdiction. Rule 12(h)(3) requires dismissal at any point in the case when the court finds that subject matter jurisdiction is absent.¹² The defect cannot be waived. The parties cannot consent to federal jurisdiction that does not exist, and the issue can be raised for the first time on appeal.

Defendants who want to raise the issue early file a Rule 12(b)(1) motion. Courts may take affidavits or financial records to resolve factual disputes about citizenship or amount. A removed case that turns out to lack diversity gets remanded to state court rather than dismissed. A case filed originally in federal court is dismissed, though plaintiffs sometimes try to amend; courts have discretion to reject amendments that appear designed to manufacture diversity after the fact.

Joinder can also destroy jurisdiction. If a party who must be added shares citizenship with someone on the other side, the court has to decide under Rule 19 whether the case can fairly proceed without that person. If not, and the absent party is indispensable, the case is dismissed.¹³ Supplemental jurisdiction under 28 U.S.C. 1367 also cannot be used to smuggle non-diverse claims into a diversity case where doing so would undermine complete diversity.¹⁴

Class Actions Follow Different Rules

Everything above governs standard diversity under 28 U.S.C. 1332(a). Class actions run under subsection (d), added by the Class Action Fairness Act of 2005. There the amount in controversy is $5,000,000 (with individual class members’ claims aggregated to reach it), and only minimal diversity is required: any one class member need only be a citizen of a different state from any one defendant.¹ If your case is a class action, the analysis in this article does not apply.

1
Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
2
Justia. Strawbridge v. Curtiss, 7 US 267 (1806)
3
United States Court of Appeals for the Fifth Circuit. Coury v. Prot
4
Justia. Hertz Corp. v. Friend, 559 US 77 (2010)
5
Justia. Carden v. Arkoma Associates, 494 US 185 (1990)
6
Legal Information Institute. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 US 283 (1938)
7
Legal Information Institute. Ankenbrandt v. Richards, 504 US 689 (1992)
8
Justia. Marshall v. Marshall, 547 US 293 (2006)
9
Office of the Law Revision Counsel. 28 USC 1441 – Removal of Civil Actions
10
Office of the Law Revision Counsel. 28 USC 1446 – Procedure for Removal of Civil Actions
11
Justia. Dart Cherokee Basin Operating Co., LLC v. Owens, 574 US 81 (2014)
12
Legal Information Institute. Rule 12 – Defenses and Objections: When and How Presented
13
Legal Information Institute. Rule 19 – Required Joinder of Parties
14
Office of the Law Revision Counsel. 28 USC 1367 – Supplemental Jurisdiction