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Proposed Change to Federal Rules of Civil Procedure Could Reduce Questions as to Federal Diversity Jurisdiction

At its April meeting, the Advisory Committee on Civil Rules approved a proposed amendment to Federal Rule of Civil Procedure 7.01 that, if adopted, will require that each party to a lawsuit in federal court where jurisdiction is conditioned upon diversity jurisdiction (28 U.S.C. § 1332) file a statement setting forth the information necessary to determine each parties’ citizenship.

For purposes of federal diversity jurisdiction, no plaintiff may have the same citizenship as any defendant. See, e.g., OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007) (complete diversity “exists where no defendant holds citizenship in the same state where any plaintiff holds citizenship.”). In the case of a natural person, one is a citizen of the state in which one is domiciled. Although there can be disputes as to a person’s domicile (see, e.g., Art Van Furniture LLC v. Zimmer, 2019 WL 2433245 (E.D. Mich. June 11, 2019)), seldom will that occur. A corporation (private, nonprofit, professional service, etc.) is a citizen of its jurisdiction of incorporation and a citizen of the state in which it maintains its principal place of business (see 28 U.S.C. 1332(c)(1)), the latter determined under the “nerve center” test. See Hertz Corp. v. Friend, 559 U.S. 77, 130 S. Ct. 1181 (2010) (decision adopting and explaining the “nerve center” test). Although there may be more dispute as to the location of a corporation’s principle place of business than the domicile of an individual, the dispute and confusion is, again, unlikely.

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