Diversity jurisdiction requires which of the following?

• A. Federal courts may hear civil actions between citizens of different states and citizens of a state and citizens of a foreign nation, over $75,000 in damages
• B. Only diversity within a single state
• C. Federal courts must always hear these cases
• D. The parties must be residents of the same state

Answer: (A)

Diversity jurisdiction hinges on two requirements: first, the parties must be from different states (or one side a citizen of a foreign nation and the other a citizen of a state), and second, the amount in controversy must exceed $75,000. If both conditions are met, a federal court can hear the civil action under 28 U.S.C. § 1332. The $75,000 threshold is meant to ensure the case involves a substantial claim, and the requirement of different-state or foreign-vs-state citizenship ensures there’s genuine interstate or international interest rather than a purely local dispute. This is why the statement that federal courts may hear such actions over $75,000 where the parties are from different states or one side is from a foreign nation is the correct description. The other options misstate the concept: diversity within a single state doesn’t satisfy the citizenship requirement; federal courts aren’t obligated to hear every such case (jurisdiction must exist); and requiring the parties to reside in the same state would defeat diversity.