DIVERSITY OF CITIZENSHIP
A phrase used with reference to the jurisdiction of the federal courts which, under the U.S. Constitution, Art. III, § 2, extends to cases between citizens of different states designating the condition existing when the party on one side of a lawsuit is a citizen of one state and the party on the other side is a citizen of another state, or between a citizen of a state and an ALIEN. The requisite jurisdictional amount must, in addition, be met.
Diversity of citizenship is one of the factors
that will allow a federal district court to exercise
its authority to hear a lawsuit. This authority is
called diversity jurisdiction. It means that a case
involving questions that must be answered
according to state laws may be heard in federal
court if the parties on the two sides of the case
are from different states. No matter how many
parties are involved in a lawsuit, there must be
complete diversity in order for the federal court
to exercise this type of authority. If a single
plaintiff is a citizen of the same state as any
defendant, there is no diversity and the case
must be pursued in a state court.
Being a citizen of a state is something more
than simply owning property or being physically
present within the state. Citizenship means that
the individual has a residence in the state and
intends to have that residence as his or her pres-
ent home. Residence plus this intent makes that
place the individual’s domicile, and a party can
have only one domicile at a time. Citizenship
does not mean that the individual must swear
that he or she never intends to move, but the res-
idence and the intent to consider it home are
essential. Students, prisoners, and service per-
sonnel can establish a domicile in a state even
though they are living in it involuntarily or tem-
porarily.
Corporations are citizens of the state in
which they are incorporated and also of the state
where they maintain their principal place of
business. This citizenship in two places has the
effect of narrowing the number of cases that
qualify for a federal court’s diversity jurisdiction
because a corporation’s citizenship is not diverse
from the citizenship of anyone else in either of
those two states.
The citizenship of each party must be deter-
mined as of the time the lawsuit is commenced.
A party’s domicile at the time of the events that
give rise to the CAUSE OF ACTION or a change of
domicile during the course of proceedings does
not affect the court’s jurisdiction. This rule, of
course, gives a person contemplating a lawsuit
the opportunity to change his or her domicile
just before serving legal papers that start an
action. This tactic has been challenged on a few
occasions on the ground that it violates another
federal law that prohibits collusion to create fed-
eral jurisdiction.Generally, the courts have ruled
that a plaintiff ’s motives in moving to a new
state are not determinative, and the only ques-
tion is whether in fact the plaintiff ’s domicile is
different from that of the defendants at the time
the lawsuit begins.
The right of an individual to take his or her
case into a federal court is assured by Article III,
§ 2 of the U.S. Constitution. This provision
extends the federal judicial power to controver-
