Bar Exam — MBE (Multistate Bar Exam)Civil ProcedureEasy
A plaintiff, a citizen of State A, filed a lawsuit in federal court in State A against a defendant, a citizen of State B, alleging breach of contract. The plaintiff sought $80,000 in damages. The contract was negotiated and executed in State C, and the alleged breach occurred in State D. The defendant moved to dismiss the case for lack of subject matter jurisdiction. How should the federal court rule on this motion?
- ADeny the motion because the plaintiff is a citizen of State A and the defendant is a citizen of State B.
- BDeny the motion because the diversity of citizenship requirement is met.
- CGrant the motion because the amount in controversy does not exceed $75,000.
- DGrant the motion because the contract was negotiated and executed in State C, and the breach occurred in State D.
Show answer & explanationAnswer & explanation
Correct answer: A. Deny the motion because the plaintiff is a citizen of State A and the defendant is a citizen of State B.
Diversity jurisdiction requires complete diversity of citizenship and an amount in controversy exceeding $75,000. Here, the parties are citizens of different states, and the plaintiff seeks $80,000, satisfying both requirements.
Why the other options are wrong
- B. While diversity of citizenship is met, the explicit reason to deny the motion should also acknowledge the amount in controversy.
- C. This is incorrect because $80,000 *does* exceed $75,000, meeting the amount in controversy requirement.
- D. The location of contract negotiation, execution, or breach is generally irrelevant to subject matter jurisdiction based on diversity of citizenship.
Diversity Jurisdiction
Federal courts have subject matter jurisdiction over cases between citizens of different states where the amount in controversy exceeds $75,000.
- Requires complete diversity (no plaintiff shares citizenship with any defendant).
- Amount in controversy must be greater than $75,000.
- Established by 28 U.S.C. § 1332.
Memory trick: Federal courts have a 'Subject' they can 'Matter' about.