A corporation headquartered in State X is sued by a company based in State Y for breach of contract. The lawsuit is filed in a State X state court, but the defendant seeks to remove the case to federal court. Which of the following conditions would allow the federal court to properly exercise jurisdiction?
The amount in controversy falls below the jurisdictional threshold, even though the corporations are incorporated in different states.
The corporations are incorporated and headquartered in the same state; the lawsuit involves a discussion of federal contract regulations.
The amount in controversy is greater than $75,000, and the two corporations are incorporated and headquartered in different states.
The parties mutually consent to remove the case to federal court and file a formal agreement.
Federal courts assert jurisdiction under 'diversity jurisdiction' if the parties are citizens of different states (complete diversity is required) and the amount in controversy exceeds $75,000. The correct answer satisfies both conditions, showcasing valid diversity jurisdiction. Other options fail because one does not meet the monetary requirement, another incorrectly applies federal question jurisdiction, and the last misinterprets the effect of mutual consent, which cannot independently confer federal jurisdiction.
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