Americold Realty Trust v. ConAgra Foods, Inc.
136 S. Ct. 1012
| SCOTUS | 2016Background
- Corporations (from Delaware, Nebraska, Illinois) sued Americold Realty Trust in Kansas state court over a commercial dispute (warehouse fire); Americold removed to federal court based on diversity jurisdiction.
- District Court exercised diversity jurisdiction and entered judgment for Americold; the Tenth Circuit later questioned jurisdiction and ordered supplemental briefing.
- The Tenth Circuit held Americold (a Maryland real estate investment trust) is an unincorporated entity whose citizenship depends on the citizenship of all its members (including shareholders), and because shareholders’ citizenships were not on the record, federal diversity was not proved.
- The Supreme Court granted certiorari to resolve circuit splits about how to determine the citizenship of unincorporated entities labeled as "trusts."
- The Court examined historical practice and relevant Maryland law governing real estate investment trusts and shareholders’ beneficial interests.
- The Court affirmed the Tenth Circuit: unincorporated entities take the citizenship of all their members, and under Maryland law Americold’s shareholders are its members.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| How to determine citizenship for an unincorporated entity sued in its name | Americold: treat trust like traditional trust; citizenship follows trustees only | Respondents: unincorporated entity takes citizenship of all its members | Court: unincorporated entities take the citizenship of all members (not just trustees) |
| Are shareholders of a Maryland real estate investment trust its "members" for diversity purposes? | Americold: shareholders are not the entity's members for jurisdictional citizenship | Respondents: Maryland law makes shareholders holders of beneficial/membership interests | Court: under Maryland law shareholders are members and their citizenship counts |
| Should the corporate citizenship rule (§1332(c)) apply to unincorporated REITs? | Americold/amicus: apply corporation rule (state of organization and principal place of business) | Respondents: corporate rule is limited to corporations only | Court: §1332(c) applies only to corporations; Congress must extend it to other entities |
| Effect of failing to identify members’ citizenship in the record | Americold: federal court had jurisdiction (implicitly) | Respondents/Tenth Cir.: without members’ citizenship, diversity is not established | Court: because citizenship of all members must be shown and shareholders’ citizenships were not of record, diversity was not demonstrated (supporting Tenth Circuit conclusion) |
Key Cases Cited
- Bank of United States v. Deveaux, 5 Cranch 61 (discussing early rule that only natural persons were "citizens" for jurisdictional purposes)
- Louisville, C. & C. R. Co. v. Letson, 2 How. 497 (establishing corporation-as-citizen exception)
- Carden v. Arkoma Associates, 494 U.S. 185 (holding unincorporated entities’ citizenship depends on citizenship of all members)
- Navarro Savings Assn. v. Lee, 446 U.S. 458 (rule that a trustee suing in her own name has the trustee’s citizenship)
- Strawbridge v. Curtiss, 3 Cranch 267 (unanimity requirement for diversity jurisdiction)