What requirement must be fulfilled for diversity jurisdiction to apply?

Diversity jurisdiction under federal law requires that parties involved in a lawsuit are citizens of different states. The fundamental purpose of this rule is to prevent local bias in state courts. For diversity jurisdiction to apply, it is essential that all plaintiffs are from different states than all defendants. This means that if a plaintiff is a citizen of one state, no defendant can be a citizen of the same state.

In the context of this question, the requirement that all plaintiffs must be from different states than all defendants encapsulates the essence of diversity jurisdiction. It signifies that there must be complete diversity between all parties involved in the litigation.

The other options reflect misunderstandings of the requirements for diversity jurisdiction. For instance, having all defendants from the same state contradicts the principle of diversity, while the requirement regarding the amount in controversy is that it must be greater than $75,000, not less. Lastly, the option regarding only one plaintiff needing to be from a different state does not capture the complete diversity requirement, as all plaintiffs need to meet the diversity condition in relation to the defendants.