Under 28 U.S.C. § 1332(a)(2), a federal district court has no alienage jurisdiction over a lawsuit between a U.S. citizen and a lawful permanent resident who is domiciled in that same citizen’s state. This carve-out, generally called the domicile exception to alienage jurisdiction, treats what looks like a local dispute as a local dispute and sends it to state court. It is narrow by design, and getting its edges wrong is one of the more common ways attorneys end up with a remand order and a fee award.1Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
The Three Conditions That Trigger the Exception
The exception sits inside § 1332(a)(2) itself. It removes federal jurisdiction only when all three of the following line up:
- The foreign-national party holds lawful permanent resident status in the United States.
- That LPR is domiciled in the same state as the U.S. citizen on the other side of the case.
- The posture is a U.S. state citizen versus the LPR under subsection (a)(2). The exception says nothing about suits brought under other subsections of § 1332.1Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
Miss any one of those and the exception does not strip jurisdiction. All three together, and federal court is unavailable regardless of how much is at stake.
How Courts Decide Where an LPR Is Domiciled
Everything turns on domicile, and domicile is not the same thing as residence. A person can rent apartments in several cities and still have only one domicile. Courts define it as the place where someone lives with the intent to remain indefinitely. Two elements must coincide: physical presence in the state and a genuine intention to make it home for the foreseeable future. Temporary absences for travel, work, or family do not change domicile as long as the person treats the state as their permanent base.
When domicile is contested, judges weigh a mix of evidence:
- Property ties, including a home owned in the state or a long-term lease.
- Financial ties such as state tax returns, local bank accounts, and in-state employment.
- Government records like a driver’s license, vehicle registration, and voter registration.
- Community connections, including church membership, children enrolled in local schools, and professional licenses.
- Statements of intent, both testimony about plans to stay and contradictory evidence like job applications in other states.
No single factor controls. Someone who owns a house in Florida but files taxes in New York, votes in New York, and tells friends they plan to retire in New York is probably domiciled in New York, Florida property or not. Courts look at the totality of the circumstances and tend to be skeptical of last-minute changes that look like jurisdiction shopping.
Who Has to Prove It
The party invoking federal jurisdiction carries the burden of showing it exists, by a preponderance of the evidence if the facts are challenged. Federal courts start from the presumption that a case sits outside their limited jurisdiction. In practice, the plaintiff who files in federal court, or the defendant who removes a case from state court, must show that the domicile exception does not apply. If the domicile evidence is genuinely ambiguous, the case belongs in state court.
When the Exception Does Not Apply
Four scenarios routinely look like domicile-exception cases but are not.
LPR Domiciled in a Different State
A California citizen suing an LPR domiciled in Nevada still has alienage jurisdiction under § 1332(a)(2), assuming the amount in controversy exceeds $75,000. The LPR remains a foreign citizen for jurisdictional purposes, and the different-state domicile preserves diversity.1Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs
Two Foreign Citizens on Opposite Sides
The exception works in one direction only: it blocks federal jurisdiction when a U.S. citizen and a same-state LPR face each other. It does not create jurisdiction where none exists. Section 1332(a)(2) covers suits between “citizens of a State and citizens or subjects of a foreign state.” A lawsuit between two foreign nationals, even if one is an LPR, does not qualify for alienage jurisdiction, because no U.S. citizen is a party. Those disputes go to state court regardless of where either side is domiciled.
Dual U.S.–Foreign Citizens
Someone who holds both U.S. citizenship and citizenship in a foreign country is treated as a U.S. citizen for diversity purposes. Federal courts have consistently held that a person who is a U.S. citizen cannot simultaneously be a “citizen or subject of a foreign state” under § 1332(a)(2). The domicile exception never enters the analysis for dual citizens, because they are not foreign citizens invoking alienage jurisdiction. They are U.S. citizens domiciled wherever they call home.
The Time-of-Filing Rule
Jurisdiction is measured at the moment the complaint is filed. If the LPR is domiciled in the plaintiff’s state on the filing date, the exception applies and federal court is closed, even if the LPR later moves. The reverse also holds: if diversity existed on the filing date, a later move to the plaintiff’s state does not strip the court of jurisdiction. The snapshot is what counts.
LLCs and Partnerships With LPR Members
Corporations have their own citizenship rule under § 1332(c): they are citizens of both the state of incorporation and the state where they maintain their principal place of business. That rule is self-contained and does not depend on who owns the shares.
Unincorporated entities are different and more demanding. An LLC takes on the citizenship of every one of its members, and if a member is itself an LLC, the analysis drills further down. An LLC whose sole member is an LPR domiciled in Texas is treated, for jurisdictional purposes, as a foreign national domiciled in Texas. If the opposing party is a Texas citizen, the domicile exception can shut down federal jurisdiction over the whole case. This is worth thinking about at the entity-formation stage, not when litigation arrives.
Removal and Motions to Remand
The exception shows up most often on a motion to remand. A defendant who removes a case under 28 U.S.C. § 1441 must establish federal subject matter jurisdiction, which includes showing that the domicile exception does not apply. If the plaintiff responds by showing the LPR defendant is domiciled in the plaintiff’s state, the federal court sends the case back.
Because the removing party bears the burden and courts resolve doubts in favor of remand, the posture favors the plaintiff. A credible argument that the LPR shares the plaintiff’s domicile is often enough to force the removing defendant to prove otherwise by a preponderance of the evidence.
What a Wrong-Court Filing Costs
Getting this analysis wrong carries real consequences.
When a federal court remands a removed case, it has authority to order the removing party to pay the opposing side’s reasonable costs and attorney fees caused by the removal.2Office of the Law Revision Counsel. 28 USC 1447 – Procedure After Removal Generally Courts do not award fees automatically, but they do so regularly when the basis for removal was objectively unreasonable. Removing a case despite knowing the LPR defendant has lived in the plaintiff’s state for a decade invites that result.
Rule 11 is the other exposure. The rule requires a reasonable inquiry before filing. Filing a complaint or removal notice in federal court without investigating whether the domicile exception applies can draw sanctions ranging from a reprimand on the record to a fee award, and in serious cases referral to disciplinary authorities.3Federal Judicial Center. The Rule 11 Sanctioning Process
The most dangerous consequence is the claim itself. If a federal case is dismissed for lack of subject matter jurisdiction and the limitations period has run while the case sat in the wrong forum, the plaintiff may be unable to refile. Whether limitations tolls during the federal case depends on the jurisdiction and the circumstances, and federal law on the point is not consistent across circuits. Filing in the correct court the first time is the safe move; so is filing a protective action in state court if there is any real doubt.
How the Current Rule Replaced the 1988 Deeming Clause
Older cases talk about this issue in different terms, and it helps to know why. In 1988, Congress added a sentence to § 1332(a) stating that “an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.”4Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs That language was broad. It treated an LPR as a state citizen for every diversity purpose, not only alienage cases, which produced some odd results: two LPRs from different countries but domiciled in the same state could end up classified as co-citizens of that state, destroying diversity in a case that was, in substance, between two foreigners.
The Federal Courts Jurisdiction and Venue Clarification Act of 2011 struck that deeming clause and replaced it with the narrower exception now built into § 1332(a)(2).5Congress.gov. Federal Courts Jurisdiction and Venue Clarification Act of 2011 The new provision only blocks jurisdiction in citizen-versus-LPR cases under subsection (a)(2) and does not pretend to make the LPR a state citizen for anything else. The inquiry shifted from “what state citizenship should we assign this LPR?” to the simpler “are these two parties domiciled in the same state?” If a pre-2011 opinion discusses an LPR being “deemed” a citizen of their state of domicile, that reasoning no longer controls.
Checklist Before Filing
Before filing a case involving an LPR in federal court, confirm three things: the LPR is actually a party, not a witness or related person; the LPR is domiciled in a different state from every U.S. citizen on the opposing side; and the amount in controversy exceeds $75,000. If the LPR lives in the same state as the opposing party, state court is the only option. Domicile depends on where the person actually lives and intends to stay, not on what the green card says or where they last entered the country. When domicile is genuinely uncertain, the party seeking federal jurisdiction should be ready to prove it with documentary evidence rather than assumptions.