Supreme Court decides case on diversity jurisdiction News
Supreme Court decides case on diversity jurisdiction

[JURIST] The US Supreme Court [official website] on Monday held [opinion, PDF] that for the purposes of diversity jurisdiction, citizenship of an investment trust depends on the citizenship of its members, which includes its shareholders. In Americold Realty Trust v. ConAgra Foods [SCOTUSblog backgrounder], Justice Sonia Sotomayor wrote for the unanimous court:

In Maryland, a real estate investment trust is an “unincorporated business trust or association” in which property is held and managed “for the benefit and profit of any person who may become a shareholder.” … These shareholders appear to be in the same position as the shareholders of a joint-stock company or the partners of a limited partnership—both of whom we viewed as members of their relevant entities. We therefore conclude that for purposes of diversity jurisdiction, Americold’s members include its shareholders.

ConAgra Foods sued Americold Realty Trust for breach of contract relating to a warehouse fire. The case was removed to federal court based on diversity jurisdiction. However, because Americold is a real estate investment trust, with possible beneficiaries in multiple places, there exist questions about the requirement of complete diversity. Americold argued that diversity should be based on citizenship of trustees and not beneficiaries, while ConAgra asserted “a trust to be a citizen of every state in which any of the trust’s members, shareholders, or beneficiaries is a citizen.” The United States Court of Appeals for the Tenth Circuit [official website] held in favor of ConAgra [opinion, PDF] last year.

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