Under what condition should a case not be removed based solely on diversity?

The condition under which a case should not be removed based solely on diversity jurisdiction occurs when a defendant is a citizen of the forum state. This principle is rooted in the idea that federal courts should not be utilized to adjudicate disputes where one of the parties is a citizen of the state in which the action was brought, as this could lead to local bias.

Diversity jurisdiction requires complete diversity between the parties, meaning that no plaintiff can be from the same state as any defendant. If any defendant is a citizen of the state where the lawsuit was filed, complete diversity is lacking, and removal to federal court is not permissible on the basis of diversity jurisdiction.

Regarding the other scenarios, a defendant residing in a different state does not prevent removal since it may fulfill the diversity requirement. A case filed in federal court is normally a matter of original jurisdiction, thus the removal criteria regarding diversity does not apply. The presence of multiple defendants does not automatically negate diversity, unless it results in a situation where complete diversity is not established, which is not inherent to the mere existence of multiple parties.