Commercial Litigation and Arbitration

Diversity Jurisdiction — Supreme Court Has Granted Cert to Resolve Circuit Split as to Whether Citizenship of a Trust Is Determined by Citizenship of Controlling Trustees, Trust Beneficiaries or Some Combination of Both

WNWSR, LLC v. Chesapeake Energy Corp., 2015 U.S. Dist. LEXIS 159527 (S.D. Tex. Nov. 19, 2015):

5   The courts of appeals agree that the citizenship of a limited liability company is determined by the citizenship of the company's shareholders. Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 585 n.1 (2004) (noting agreement among courts of appeals); [*14]  see also 15 Moore's Federal Practice § 102.57[8] (3d ed. 2015); cf. Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990) (holding that limited partnerships have citizenship of each general and limited partner). The issue of determining the citizenship of noncorporate entities, however, is not entirely free from doubt. See Americold Logistics, LLC v. ConAgra Foods, Inc., No. 14-1382, 2015 WL 2448969 (U.S. Oct. 1, 2015) (granting certiorari regarding "a pervasive circuit split among the federal circuits regarding whether the citizenship of a trust for purposes of diversity jurisdiction is based on the citizenship of the controlling trustees, the trust beneficiaries, or some combination of both").

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