Second Bites at the Jurisdictional Apple: A Proposal for Preventing False Assertions of Diversity of Citizenship

After years of pretrial and trial activities, a large corporate defendant discovers that it is a citizen of the same state as the personal injury plaintiff. It presents this information to the court, which is required to dismiss the case based on the rule that, in federal diversity cases, subject matter jurisdiction may be challenged at any time. All the pretrial work by the parties as well as any prior rulings of the federal court are nullities; years of otherwise valuable litigation are rendered meaningless. Moreover, the personal injury plaintiff may be left without a cause of action if the state statute of limitations on the claim has expired. This Note argues that the original concept of the diversity requirement- as a way to limit the federal courts\u27 exercise of power over state law-has been overshadowed by the modern use of diversity jurisdiction as a tactical device. It concludes that such strategic maneuvering of procedure is an intolerable abuse of our judicial system and stands as an affront to notions of fair play and maintenance of judicial economy. Since diversity jurisdiction appears to be here to stay, this Note proposes that the inflexible rule requiring complete diversity of parties be modified. While allowing for certain exceptions under a Federal Rule 60(b) standard, the author suggests that parties should be estopped from asserting lack of complete diversity in federal suits. The author also addresses both Constitutional and policy arguments that might be made against such modifications to longstanding jurisdictional rules