Diversity Of Citizenship Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Diversity Of Citizenship, written in plain English, along with examples of how it is used.
What is Diversity Of Citizenship?
n. A case is placed under federal court jurisdiction because the opposing parties in a lawsuit are citizens of different states or of a foreign country. This includes corporations that are incorporated or doing business in different states and is pursuant to Article III, section 2 of the U.S. Constitution and the federal Judicial Code if the controversial amount is over $10,000.
History and Meaning of Diversity of Citizenship
Diversity of Citizenship refers to a situation or case that arises where the opposing parties present in a case are residents of or come from different states or countries. This legal concept falls under Article III, Section 2 of the US Constitution and the federal Judicial Code. It allows federal courts to have jurisdiction over cases involving out-of-state or foreign entities, even if those cases would usually be handled by state courts.
The idea of Diversity of Citizenship stems from the need for a neutral decision maker in cases that involve parties from different jurisdictions. It ensures that neither party has an undue advantage as the case is prosecuted in a state with which they are familiar. The amount in controversy in a case must be over $10,000 for diversity jurisdiction to be applicable.
Examples of Diversity of Citizenship
A driver from Oregon sues a car manufacturer based in New York for breach of contract. The driver had purchased a car from the manufacturer, which broke down soon after. The repair work costs the driver more than $10,000, and hence the driver files a lawsuit against the manufacturer. Since the two parties are from different states, this case is an example of diversity of citizenship.
A French company files a lawsuit against a Canadian manufacturer for patent infringement. Since the two entities are from different countries, this case falls under the jurisdiction of Federal courts in the US.
A California resident sues a Texas resident over a breach of contract. Since the two parties come from different states, this case has diversity of citizenship and can be filed in Federal court.
Legal Terms Similar to Diversity of Citizenship
Jurisdiction: Refers to the power that a court has to make legal decisions and judgments on a case.
Personal Jurisdiction: Refers to a court's authority over the person or company against whom legal action is being taken.
Subject Matter Jurisdiction: Refers to a court's authority over the type of case or subject matter presented before it.
Venue: Refers to the geographic location where a trial is held.
Forum non conveniens: Refers to a court's power to dismiss a case if it deems that another court or forum would be better suited to hear the case.