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The U.S. federal courts have always had jurisdiction over cases between citizens from different states.  This power, called “diversity jurisdiction” is mainly justified by concern that state courts might be biased against out-of-state litigants.  For at least one hundred years, this has been questioned. Does such a bias exist? In this paper, the authors conduct the first experimental test of the existence and extent of bias against out-of-state litigants.  Preliminary results suggest significant bias against out-of-state corporations (damages about fifty percent higher), but no bias against out-of-state individuals.