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I. Introduction
One of the most commonly litigated issues in federal diversity jurisdiction cases is liability arising from car accidents. If the injured party and the negligent party are from different states and the amount-in-controversy requirement is met, diversity jurisdiction exists. On the other hand, if the two parties are from the same state, the matter must be heard in state court. What if the parties are from the same state, but the injured party's insurance company-which is from another state-sues the negligent driver to recover the proceeds it paid to the injured driver? What if the injured driver is a nondiverse minor, but the suit is brought by a diverse guardian? How does the diversity analysis change if the guardian was selected solely to create diversity? Does it matter whether the diverse party is a real party in interest, such as the driver, or whether he merely has the legal capacity to bring the suit, such as the insurer? Should it matter? Two scholars, surveying the courts' handling of such disputes, noted:
The ultimate determination would in most cases be the same, whether one adopts a capacity or real party in interest criteria. Therefore, there seems to be little reason to delve Pandora-like into new juristic linguistic variations on an old theme. It suffices to say that the various text commentaries, law review excursions, and the case precedents predominantly speak in terms of real party in interest with emphasis on capacity as an important element in determining who is the real party in interest; there seems little reason to stir otherwise calm waters.1
Over fifty years ago, when this observation was written, its premise was probably true. The quoted passage concerns the issue of whether, in deciding whose citizenship controls for the purposes of diversity jurisdiction, the court should merely require that a party have the capacity to sue or should require the party be a real party in interest. Fifty years ago, most courts would look to whether a party was the real party in interest in determining whether to use that party's citizenship.2 More recently though, federal courts have divided over whether to use the real party in interest criteria.3 Opponents argue that the less demanding capacity to sue rule is sufficient...