A runner from State A sues a manufacturer (State B and State C) and retailers (State D and State E) in federal court, alleging class-wide injuries from a drug. The runner is the only named plaintiff. The runner, manufacturer, and retailers seek more than $75,000 in damages. The manufacturer and retailers move to dismiss all claims for lack of subject-matter jurisdiction based on diversity. Should the court grant the motion?

A runner from State A sues a manufacturer (State B and State C) and retailers (State D and State E) in federal court, alleging class-wide injuries from a drug. The runner is the only named plaintiff. The runner, manufacturer, and retailers seek more than $75,000 in damages. The manufacturer and retailers move to dismiss all claims for lack of subject-matter jurisdiction based on diversity. Should the court grant the motion?

• A. Yes, because all class members must be diverse from the defendants.
• B. Yes, because the named runner is not diverse from all defendants.
• C. No, because only federal courts may hear class action suits.
• D. No, because the runner is from State A, different from the manufacturers and retailers.

Answer: (D)

Diversity jurisdiction is satisfied here because federal courts can hear a class action if the named plaintiff is from a state different from every defendant and the amount in controversy meets the statutory minimum. The runner is from State A, while the manufacturer and retailers are from States B, C, D, and E. No defendant shares the runner’s state, so there is complete diversity between the named plaintiff and all defendants. The stated amount of relief sought exceeds $75,000, so the amount-in-controversy requirement is met under 28 U.S.C. §1332(a). CAFA’s higher threshold would apply only if the class had at least 100 members and at least $5 million in controversy; that threshold isn’t met here, so CAFA does not override this analysis. Thus the court should not dismiss for lack of subject-matter jurisdiction. The fact that there are many potential unnamed class members from various states does not defeat jurisdiction so long as the named plaintiff is diverse from the defendants and the amount in controversy is met.

Diversity jurisdiction is satisfied here because federal courts can hear a class action if the named plaintiff is from a state different from every defendant and the amount in controversy meets the statutory minimum. The runner is from State A, while the manufacturer and retailers are from States B, C, D, and E. No defendant shares the runner’s state, so there is complete diversity between the named plaintiff and all defendants. The stated amount of relief sought exceeds $75,000, so the amount-in-controversy requirement is met under 28 U.S.C. §1332(a).

CAFA’s higher threshold would apply only if the class had at least 100 members and at least $5 million in controversy; that threshold isn’t met here, so CAFA does not override this analysis.

Thus the court should not dismiss for lack of subject-matter jurisdiction. The fact that there are many potential unnamed class members from various states does not defeat jurisdiction so long as the named plaintiff is diverse from the defendants and the amount in controversy is met.