Which description best defines diversity jurisdiction?

• A. It requires at least two parties from different states
• B. It involves only state residents
• C. It involves parties from different states and an amount in controversy exceeding a minimum
• D. It applies to all federal cases regardless of subject matter

Answer: (C)

Diversity jurisdiction is the federal court authority that applies when the parties are citizens of different states and the amount in controversy exceeds a statutory minimum. The key idea is to combine two elements: complete diversity of citizenship between all plaintiffs and all defendants, and a claim value above the threshold (historically $75,000). This ensures the dispute is truly interstate and substantial enough to justify federal oversight. If there are multiple parties, every plaintiff must be diverse from every defendant. Federal jurisdiction based on diversity is not invoked if those elements aren’t met, and it isn’t used for all federal cases—many arise under other bases like federal question. The option described captures both the interstate nature and the required dollar threshold.