Diversity jurisdiction is referred in legal terms as a subject matter jurisdiction in civil cases. Federal courts in the United States have diversity jurisdiction. These are cases where both the plaintiff and the defendant are not from the same state. Furthermore, the suit filed should exceed $75,000. In the case of Joe and Kay, they entered into a contract before the company was formed. Because the contract is between Kay and Joes and the company is a limited liability, Kay can only sue Joe for breach of contract. The company’s status as a limited Liability means that for Kay to sue the company, she had to enter into an agreement with the company. A limited liability company is a legal person that can sue and be sued on its name,