A more thorough explanation:

Definition: Complete diversity refers to the requirement that all parties in a lawsuit must be from different states or countries in order for the case to be heard in federal court based on diversity of citizenship.

Example: If a person from California sues a person from New York in federal court, the case can only proceed if there are no other parties involved who are from California or New York. If a third party from California is added to the lawsuit, complete diversity is lost and the case must be heard in state court instead.

This example illustrates how complete diversity is necessary for a case to be heard in federal court based on diversity of citizenship. If there is not complete diversity, the case must be heard in state court instead.