From Hood v. AstraZeneca Pharm., LP, 2010 U.S. Dist. LEXIS 107411 (N.D. Miss. Oct. 7, 2010):

***Congress has not empowered the federal courts to exercise diversity jurisdiction over the states. That is, it is beyond peradventure that "a State is not a 'citizen' for purposes of the diversity jurisdiction." Moor v. Alameda Cnty., 411 U.S. 693, 717, 93 S. Ct. 1785, 36 L. Ed. 2d 596 (1973). By the express terms of the statute, the diversity jurisdiction does not ever extend to the states. See 28 U.S.C. § 1332. As such, the question before the Court is whether the State of Mississippi's lack of citizenship destroys complete diversity.

The Supreme Court has held that the grant of diversity jurisdiction does not extend to actions in which a state is a party in interest because "a state cannot in the nature of things, be a citizen of any state." Stone v. South Carolina, 117 U.S. 430, 433, 6 S. Ct. 799, 29 L. Ed. 962 (1886). Thus, "[ojrdinarily, '[i]n an action where a state is a party, there can be no federal jurisdiction on the basis of diversity of citizenship because a state is not a citizen for purposes of diversity jurisdiction.'" Louisiana v. Union Oil Co. of California, 458 F.3d 364, 366 (5th Cir. 2006) (quoting Texas Dep't of Housing and Cmty. Affairs v. Verex Assurance, Inc., 68 F.3d 922, 926 (5th Cir. 1995)). There is an exception when the state is merely a nominal party, but that is not this case here. *** Consequently, even if [the other defendant] Employees Plan is also a real party to this controversy, the Court nonetheless lacks subject matter jurisdiction over the lawsuit under Section 1332 because complete diversity is destroyed by the presence of the State of Mississippi.

Defendants rely heavily on the Fifth Circuit's decision in Hussain v. Boston Old Colony Ins., Co., 311 F.3d 623 (5th Cir. 2002) for the proposition that the presence of a state as a party may be disregarded for the purpose of determining complete diversity. This Court agrees with the court in Hood v. Hoffman-La Roche, Ltd., and is

disinclined . . . to adopt the analysis in Hussain because it is dicta offered in a footnote addressing jurisdiction over an 'interpleader-like action' subject to 28 U.S.C. § 1441 (involving foreclosure actions against the United States) . . . and, more importantly, it conflicts with the more recent and well-reasoned decisions in In re Katrina Canal Litig. Breaches, 524 F.3d 700 (5th Cir. 2008), and Union Oil Co. of California, 458 F.3d 364 (5th Cir. 2006).

639 F. Supp. 2d 25, 34 n. 10 (D.D.C. 2009).***