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Supreme Court rules on federal court jurisdiction in diversity lawsuits

[JURIST] The US Supreme Court [official website; JURIST news archive] on Tuesday handed down a unanimous decision in Lincoln Property v. Roche [Duke Law backgrounder], reversing the US Court of Appeals for the Fourth Circuit, holding that a lawsuit filed in state court may be removed to federal court if all parties actually named are diverse. The case involved Virginia renters who sued their landlord, a Texas-based property company, for injuries resulting from exposure to toxic mold. In ruling for the defendant, the Court emphasized that defendants must actually be joined in the suit, not merely a "real party in interest," to destroy complete diversity of citizenship. Justice Ginsburg wrote, "The potential liability of other parties was a matter plaintiffs' counsel might have assiduously explored" through further investigation. The court dismissed as "not live for adjudication" the second issue in the case [SCOTUSblog report], concerning whether a firm that does business in several states must be determined to be a citizen of any state in which one of its entities was located. Read the Court's opinion [text]. AP has more.

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