Civil Procedure Multistate Bar Practice Exam

What is the 'complete diversity rule' in relation to federal court cases?

1. Diversity exists if at least one plaintiff is from the same state

2. Complete diversity is necessary for jurisdiction

3. Diversity only applies if the defendants are from different states

4. Counts of diversity are assessed throughout the litigation

The correct answer is: Complete diversity is necessary for jurisdiction

The complete diversity rule is a key requirement for federal court jurisdiction based on diversity of citizenship as set forth in 28 U.S.C. § 1332. According to this rule, federal courts may assert jurisdiction over civil lawsuits where the parties are citizens of different states only if there is complete diversity. This means that no plaintiff can be a citizen of the same state as any defendant. When assessing complete diversity, it is crucial to ensure that every plaintiff's residence differs from every defendant's residence. If even one plaintiff shares a state with any defendant, complete diversity is lost, and the federal court lacks the necessary jurisdiction to hear the case based on diversity grounds. Understanding this rule helps clarify why the other choices provided do not reflect the accurate application of the complete diversity principle. For instance, having at least one plaintiff from the same state as any defendant directly contradicts the requirement for complete diversity and hence would not establish the necessary jurisdiction for a federal court. Similarly, the idea that diversity only applies if the defendants are from different states misinterprets the rule, as it also involves the residency of the plaintiffs. Lastly, counting diversity throughout the litigation period does not align with how jurisdiction is determined, as it is assessed at the time the action is initiated