While first-year law students are taught that the most common justification for federal diversity jurisdiction involves concerns about potential bias against out-of-state litigants in state courts, empirical attention to whether these bias concerns are warranted is comparatively underdeveloped.
In Diversity Jurisdiction and Out-of-State Bias: Experimental Evidence, Daniel Klerman (USC) and Jonathan Nash (Emory) report results from experiments designed to detect out-of-state bias. What they find, at bottom, is that their results do not “provide uniformly solid evidence for the existence of bias or of federal courts (at least as they are currently constituted) reducing that bias through the policing of lawyer appeals to bias.” The paper's abstract follows.
“Federal diversity jurisdiction (jurisdiction over cases involving citizens of different U.S. states) is primarily justified by concern that state courts might be biased against out-of-state litigants. For at least one hundred years, however, this justification has been questioned by distinguished judges and academics, who have doubted whether such a bias exists or ever existed. This Article contains experimental evidence suggesting the existence of some bias against out-of-state defendants. The experimental evidence is bolstered by survey evidence showing that people admit that they prefer people from their own state and think out-of-state corporations are less concerned about safety. A survey of federal and state judges also shows that federal judges are more likely to police lawyer arguments that appeal to bias against out-of-state parties, which may help explain how federal diversity jurisdiction protects out-of-state litigants. Nevertheless, the evidence of bias and of differences between federal and state judges is not large or entirely consistent, suggesting that the bias rationale for federal jurisdiction is not strong."