Diversity Jurisdiction and the Meaning of State Citizenship

By Arjan Bir Sodhi for Lex Republica

The Constitution grants federal courts jurisdiction over cases “between citizens of different states.” At first glance, the idea seems straightforward. In practice, it has generated decades of judicial interpretation, particularly around a deceptively simple question: what does it mean to be a citizen of a state? The original purpose of diversity jurisdiction was pragmatic rather than abstract. The Framers were concerned that state courts might favor local litigants, especially when out-of-state parties were involved in commercial disputes. Federal courts, staffed by life-tenured judges appointed by a national government, were thought to provide a more neutral forum. Although critics continue to debate whether this concern remains valid today, diversity jurisdiction remains a central component of the federal judicial system. Because neither Article III nor Congress’s diversity statute fully defines “citizenship,” courts have filled in the gaps. For individuals, the governing concept is domicile, not mere residence. A person may live in many places, but for diversity purposes, they have only one domicile at a time.

Federal courts define domicile as physical presence in a state combined with the intent to remain there indefinitely. This does not require an intent to stay forever. It requires only that the person has no fixed plan to leave at a definite time. The distinction matters because people often live temporarily in places where they have no intention of making a lasting home, such as students, military personnel, or employees on fixed-term assignments.
The case of Gordon v. Steele illustrates how courts apply this standard. Susan Gordon, originally from Pennsylvania, moved to Idaho to attend college and later filed a malpractice suit against Pennsylvania defendants in federal court. The defendants argued that she remained a Pennsylvania citizen, defeating diversity. The court disagreed. Although Gordon retained ties to Pennsylvania, the evidence showed that she did not have a definite plan to leave Idaho. She rented an apartment, integrated into the community, and expressed no intention of returning to Pennsylvania in the foreseeable future.

The court determined that she had been a resident of Idaho at the time she filed the suit, and therefore diversity jurisdiction existed.What Gordon establishes here is that objective facts such as driving licenses, bank accounts, and health plans are not the determinant of domicile. They are merely evidential matters that help indicate domicile through intention. The determination of domicile, in the end, depends on whether one considers a particular location home even if that location does not figure in one’s future plans.
The issue becomes more complex when multiple parties are involved. Under the long-standing rule announced in Strawbridge v. Curtiss, diversity jurisdiction requires complete diversity. No plaintiff may share state citizenship with any defendant. Minimal diversity is not enough. If even one plaintiff and one defendant are citizens of the same state, diversity jurisdiction fails.

The Fifth Circuit’s decision in Mas v. Perry illustrates how this rule operates in cases involving both U.S. and foreign citizens. The plaintiffs were a married couple: Mr. Mas, a French citizen, and Mrs. Mas, an American citizen originally from Mississippi. They sued their Louisiana landlord after discovering he had secretly observed them through hidden mirrors. The jurisdictional question turned on Mrs. Mas’s domicile. If she were a Louisiana citizen, complete diversity would be destroyed.

The court held that she remained domiciled in Mississippi. Although she lived in Louisiana for several years, she was there only as a student and lacked the intent to remain indefinitely.

Importantly, the court rejected the old notion that a woman takes as her domicile the domicile of her husband upon marriage; especially in those circumstances which would create irrational jurisdictional results.

Together, Gordon and Mas highlight both the flexibility and the uncertainty of the domicile test. Indeed, in many instances, the judiciary often falls back on subjective intent, an intent that can be gleaned from imperfect proof, in arriving at the determination that there is federal jurisdiction. The verdicts, in such instances, often present an apparent contradiction, especially with regard to student matters.

To finish, a judicial principle imposes a semblance of order on this lack of certainty. When a claim is filed, the determination of diversity is made. If the parties have diversity on that particular day, even if their citizenship changes, there will be jurisdiction. This is not a perfect philosophy, but it creates efficiency. Without it, a party could litigate a case for several years, only to have its jurisdiction undone because a person changed address.
Diversity jurisdiction is a reminder that constitutional language often operates at a high level of generality. Courts must translate those abstractions into workable legal standards. In doing so, they do not merely apply law.

References

Friedenthal, J. H., Kane, M. K., & Miller, A. R. (2015). Civil Procedure (5th ed.). Thomson Reuters.

Gallagher v. Philadelphia Transportation Co., 185 F.2d 543 (3d Cir. 1950).

Gordon v. Steele, 376 F. Supp. 575 (W.D. Pa. 1974).

Holmes v. Sopuch, 639 F.2d 431 (8th Cir. 1981).

Kline v. Burke Construction Co., 260 U.S. 226 (1922).

Krasnov v. Dinan, 465 F.2d 1298 (3d Cir. 1972).

Leavitt v. Scott, 338 F.2d 749 (10th Cir. 1964).

Mas v. Perry, 489 F.2d 1396 (5th Cir. 1974).

Smith v. Sperling, 354 U.S. 91 (1957).

Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806).

28 U.S.C. § 1332.

U.S. Const. art. III, § 2.

Restatement (Second) of Conflict of Laws § 11 (Am. L. Inst. 1989).