Diversity Jurisdiction Law and Legal Definition

Diversity jurisdiction refers to a federal court's exercise of authority over a case involving parties who are citizens of different states and an amount in controversy greater than a statutory minimum. This is known as "diversity jurisdiction", because the plaintiff and the defendant have different, or diverse, state citizenships. There must be complete diversity in order for the federal court to exercise this type of authority. For example, if a citizen of Alabama filed a lawsuit in federal court suing three defendants - a citizen of Kentucky, a citizen of Alabama, and a citizen of Michigan, the federal court would not have jurisdiction because there would be citizens of Alabama on both sides of the lawsuit. There would not be complete diversity between the plaintiff and all of the defendants which is prerequisite for applying diversity jurisdiction.