Diversity Jurisdiction and Unincorporated Entities: Recent Developments

There are many benefits to having a case in federal court as opposed to state court. For example, the Federal Rules of Civil Procedure create, for the most part, a streamlined process for a case throughout all stages of litigation. Moreover, in federal court there usually is one judge assigned to a case from start to finish, which allows for a more informed decision maker on the key factual and legal issues. Assuming the amount in dispute exceeds $75,000, a business organization may access the federal courts through diversity jurisdiction, which is dependent upon the organization’s ability to show that none of the plaintiffs share the same citizenship as that of any of the defendants. 28 U.S.C. § 1332. A natural person is a citizen of the state in which he or she is domiciled, and, by legislative act, a corporation is a citizen of its jurisdiction of incorporation and the jurisdiction in which it maintains its principal place of business. Within the last few years, the Supreme Court resolved the question as to which test should be utilized in determining the principal place of business, adopting the “nerve center” test. See Hertz Corp. v. Friend, 559 U.S. 77 (2010). READ MORE