Diversity Jurisdiction Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Diversity Jurisdiction, written in plain English, along with examples of how it is used.

What is Diversity Jurisdiction?

“Provision enabling a federal court to rule in a case that involves parties from two different states. However, there must be greater than $75,000 worth of damages being sought.

History and Meaning of Diversity Jurisdiction

Diversity Jurisdiction is a type of subject matter jurisdiction in U.S federal courts to investigate cases between “diverse” citizens of different states. It is described under Article III, Section 2 of the U.S. constitution, which provides for the court system's diversity of citizenship jurisdiction. The purpose of this provision was to encourage impartial proceedings in cases in which a person in a legal dispute may be unfairly treated by the state court of the defendant.

The Federal Judiciary Act of 1789 established diversity jurisdiction in the federal courts. The act allowed cases for people who were residents of different states and involving more than $75,000 in controversy to be heard in the US District Courts. Diversity jurisdiction can help to streamline litigation by ensuring that cases are brought in a forum where neither party has an unfair advantage.

Examples of Diversity Jurisdiction

  1. A New York resident sues a Florida company for breach of contract in a U.S. district court in Florida, seeking damages of $100,000.
  2. A Colorado citizen sues a California citizen for trademark infringement and seeks damages of $150,000. The case is filed in a U.S. district court in Colorado.
  3. A Texas corporation sues a New Jersey corporation for patent infringement in a U.S. district court in Texas, seeking $500,000 in damages.

Legal Terms Similar to Diversity Jurisdiction

  1. Subject Matter Jurisdiction - A court's authority to hear and rule on a particular type of case.
  2. Personal Jurisdiction - A court’s authority over the individuals or companies involved in a case.
  3. Federal Question Jurisdiction - Jurisdiction of federal courts over cases arising under the Constitution, federal law or treaties.