Diversity Jurisdiction

In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction in civil procedure in which a United States district court (the trial courts of general jurisdiction in the federal judiciary) has the power to hear a civil case where the persons that are parties are "diverse" in citizenship, which generally indicates that they are citizens of different states or non-U.S. citizens. (Corporations, as legal persons, may also be included.) Diversity jurisdiction and federal-question jurisdiction (jurisdiction over issues arising under federal law) constitute the two primary categories of subject matter jurisdiction in U.S. federal courts.

The United States Constitution, in Article III, § 2, gives the Congress the power to permit federal courts to hear diversity cases through legislation authorizing such jurisdiction. The provision was included because the Framers of the Constitution were concerned that when a case is filed in one state, and it involves parties from that state and another state, the state court might be biased toward the party from that state. Congress first exercised that power and granted federal trial circuit courts diversity jurisdiction in the Judiciary Act of 1789. Diversity jurisdiction is currently codified at 28 U.S.C. § 1332.