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Chapter 3


ChapterScope This Chapter examines “subject matter jurisdiction,” that is, the court's power to adjudicate the kind of controversy before it. The most important concepts in this Chapter are:

  • Two basic types: In the federal courts, there are two basic kinds of controversies over which the federal judiciary has subject matter jurisdiction: (1) suits between citizens of different states (so-called diversity jurisdiction); and (2) suits involving a “federal question.”
  • Diversity suits: In diversity suits:
    • An amount in excess of $75,000 must be in dispute. This is the “amount in controversy” requirement. (In federal question cases, there is no amount in controversy requirement.)
    • “Complete diversity” is required. That is, it must be the case that no plaintiff is a citizen of the same state as any defendant.
    • A corporation is deemed a citizen of any state where it is incorporated and of the state where it has its principal place of business. In other words, for diversity to exist, no adversary of the corporation may be a citizen of the state in which the corporation is incorporated, or of the state in which it has its principal place of business.
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