Answer:
Generally speaking, it is the requirement for federal court diversity jurisdiction that the parties be from different states. Now this is simple if there are only two parties, but the US Code requires COMPLETE diversity. Here are some examples. Plaintiff from Kentucky sues Defendant from Tennessee
-This is permissible, the parties are from different states.
Plaintiff/Kentucky sues Defendant/TN and Defendant/KY
-This is NOT permissible, because Kentucky is on both sides.
This is an easy way to look at it.
P/KY v. D/TN and D/KY
-If the same state is on both sides of the v., then jurisdiction is defeated.
There are more requirements and restrictions concerning foreign citizens, but in general, it is the requirement that, if the parties are suing for more than 75,000, then a case with completely diverse parties can be heard by a federal court sitting in diversity.