What happens if a complaint is amended to add a new party when it violates diversity requirements?

When a complaint is amended to add a new party and it violates diversity requirements, the court can still hear the case if it has proper supplemental jurisdiction. Supplemental jurisdiction allows a federal court to hear claims that are related to claims that fall within its original jurisdiction, even if those additional claims might not independently meet the criteria for federal jurisdiction, such as diversity or federal question.

In cases where a new party is added to the complaint—especially in situations involving diversity jurisdiction—the amendment might destroy the complete diversity required for federal jurisdiction if the new party is from the same state as one of the original parties. However, if the added claim arises from the same transaction or occurrence as the original claim, the court may exercise supplemental jurisdiction over that claim, thus allowing the case to proceed despite the diversity issue.

This principle is rooted in the idea of judicial economy, preventing the need for separate litigation in state courts for related claims. Therefore, as long as the relationship between the claims is strong enough, the new party's inclusion does not automatically dismiss the claim but can be accommodated under the umbrella of supplemental jurisdiction.