Which statement best describes the diversity threshold?

Which statement best describes the diversity threshold?

• A. The amount in controversy must exceed $50,000 with only one plaintiff and one defendant from different states.
• B. The case must involve a federal question to have diversity jurisdiction.
• C. In diversity, complete diversity exists when no plaintiff shares a state with any defendant, and the amount in controversy exceeds $75,000.
• D. Diversity requires both parties to have citizenship in different continents.

Answer: (C)

Diversity jurisdiction requires complete diversity and a minimum amount in controversy. Complete diversity means no plaintiff is a citizen of the same state as any defendant. The amount in controversy must exceed $75,000, exclusive of interest and costs. When both conditions are met, federal courts can hear the case based on diversity. That explains why the statement describing complete diversity—no plaintiff shares a state with any defendant—and the amount in controversy exceeding $75,000 is the correct description. The other options mix in requirements that don’t apply to diversity: a federal question is not needed for diversity jurisdiction, a $50,000 threshold is incorrect, and citizenship in different continents has no relevance to U.S. diversity rules.

Diversity jurisdiction requires complete diversity and a minimum amount in controversy. Complete diversity means no plaintiff is a citizen of the same state as any defendant. The amount in controversy must exceed $75,000, exclusive of interest and costs. When both conditions are met, federal courts can hear the case based on diversity.

That explains why the statement describing complete diversity—no plaintiff shares a state with any defendant—and the amount in controversy exceeding $75,000 is the correct description. The other options mix in requirements that don’t apply to diversity: a federal question is not needed for diversity jurisdiction, a $50,000 threshold is incorrect, and citizenship in different continents has no relevance to U.S. diversity rules.