Diversity jurisdiction, codified at 28 U.S.C. 1332, lets federal courts hear cases arising purely under state law when the parties come from different states and enough money is on the line. The complete diversity rule, dating to Strawbridge v. Curtiss, requires that no plaintiff share citizenship with any defendant, even one shared citizen on either side destroys diversity entirely, no matter how many other parties are properly diverse. A corporation is treated as a citizen of both its state of incorporation and the state housing its principal place of business, determined under the nerve-center test the Supreme Court adopted in Hertz Corp. v. Friend, while an individual's citizenship turns on domicile rather than mere residence.

The amount in controversy must exceed $75,000, exclusive of interest and costs, and courts generally accept the good-faith amount alleged in the complaint unless it appears to a legal certainty the claim is worth less. Because destroying diversity defeats federal jurisdiction outright, the citizenship of every party gets heavily scrutinized at the pleading and removal stage, plaintiffs sometimes join a non-diverse defendant specifically to keep a case in state court, and defendants respond by arguing that joinder was fraudulent and should be disregarded for jurisdictional purposes.

Diversity jurisdiction exists alongside federal question jurisdiction as one of federal courts' two principal bases for hearing civil cases, but it is procedurally distinct in an important way: a diversity case still applies the substantive law of the relevant state under the Erie doctrine, with federal courts sitting in diversity acting essentially as a state court operating under federal procedural rules. It is also the primary gateway defendants use to remove a state-court case to federal court, subject to the forum-defendant rule limiting removal when a defendant is a citizen of the filing state.

Diversity jurisdiction is a recurring forum-selection battleground: plaintiffs may add an in-state defendant purely to block removal, while defendants scrutinize the complaint's citizenship and damages allegations looking for a path into federal court, where procedural rules, timelines, and perceived jury pools can differ meaningfully from the state system. Juricratic treats this forum question as a modeled input affecting procedural dials, never as a claim that one forum yields a better outcome.