Diversity of citizenship is not found, and federal jurisdiction is not proper, when several parties to a lawsuit each represent a different interest and there is not complete diversity among all the parties representing various interests and their adversaries.
To support diversity jurisdiction, each separate interest represented in a case involving joint interests must be represented by a party that has citizenship different from any party representing an opposing interest. Diversity jurisdiction arises only in cases between citizens of different states or when a foreign national is involved.
In general, this decision means that there must be diversity between each plaintiff and each defendant. (The Court may not have meant to impose such a broad rule at the time.) This creates incentives for parties to add other parties that may not have a strong relation to the claim merely to defeat diversity. The Supreme Court later took a broader approach in State Farm Fire & Cas. Co. v. Tashire (1967), in which it ruled that diversity jurisdiction could arise whenever there was diversity between any plaintiff and any defendant.
If there be two or more joint plaintiffs, and two or more joint defendants, each of the plaintiffs must be capable of suing each of the defendants in the courts of the United States to sustain the jurisdiction of the court.
The Court understands the expressions in the act of Congress giving jurisdiction to the courts of the United States "when an alien is a party, or the suit is between a citizen of the state where the suit is brought, and a citizen of another state" to mean that each distinct interest should be represented by persons all of whom are entitled to sue or may be sued in the federal courts -- that is, where the interest is joint, each of the persons concerned in that interest must be competent to sue or liable to be sued in those courts.
This was an appeal from a decree of the Circuit Court for the District of Massachusetts, which dismissed the complainants' bill in chancery for want of jurisdiction.
The Court has considered this case and is of opinion that the jurisdiction cannot be supported.
The words of the act of Congress are "where an alien is a party or the suit is between a citizen of a state where the suit is brought and a citizen of another state."
The Court understands these expressions to mean that each distinct interest should be represented by persons all of whom are entitled to sue or may be sued in the federal courts. That is, that where the interest is joint, each of the persons concerned in that interest must be competent to sue or liable to be sued in those courts.
and some of those parties are and others are not competent to sue or liable to be sued in the courts of the United States.