Diversity jurisdiction is a term used in civil procedure to refer to the situation in which a U.S. federal court has subject matter jurisdiction to hear a civil case because the parties are diverse, since they come from different states. Federal law authorizes federal courts to hear cases where the opposing parties are citizens of different states. For a federal court to exercise diversity jurisdiction, there must be “complete” diversity between the parties. The determination of whether a party is indispensable is made by the court following the guidelines set forth in Rule 19 of the Federal Rules of Civil Procedure. “Diversity jurisdiction” enables a federal court to hear cases where there is not a federal question. In diversity cases, the federal court provides a fair forum where citizens of different states can have their cases heard. The federal law governing diversity jurisdiction states that a case must have an “amount-in-controversy” before a federal court can hear a case. There are exceptions to diversity jurisdiction including probate cases and family law cases, which are handled in state courts.
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