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The parties dispute the legal effect of a contested transaction. A complaint pleaded state claims, anticipated a federal defense, and joined a nondiverse related party. The decision maker must choose between a categorical shortcut and a fact-sensitive standard. The parties disagree about the legal effect of those facts. Which option gives the best analysis?

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The court should resolve the dispute by applying the operative rule to the material facts: The answer should identify the governing rule for Subject Matter Jurisdiction and apply it to the operative facts. Assume the doctrine applies because one element appears satisfied, even if the remaining elements are contested. Reject the claim or defense solely because the opposing party disputes a required fact. Resolve the dispute on equitable fairness alone without identifying the governing doctrine or its limits.

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