Beware The Dissolved Corporation: Issues Affecting Diversity Jurisdiction

Rebecca M. Plasencia is a partner in Holland & Knight's Miami office.

All litigators know the general rule that a corporation is deemed a citizen of both its state of incorporation and the state in which the corporation has its principal place of business.¹ Where a plaintiff and a defendant are citizens of different states and the amount in controversy exceeds $75,000, a federal district court can exercise subject-matter jurisdiction over the case because there is complete diversity of citizenship between the parties.² But what happens when either the plaintiff or defendant corporation is defunct, inactive, or dissolved? The U.S. Supreme Court has yet to resolve a decades-long split of authority among the Circuit Courts of Appeals on this issue.