Commercial Litigation and Arbitration

Diversity Jurisdiction: National Bank Is “Located” (28 U.S.C. §1348) in the State Designated in Its Articles of Ass’n As Its Main Office — LLC Has Citizenship of All of Its Members

TD Bank, N.A. v. Bapa, 2018 U.S. Dist. LEXIS 7067 (M.D.N.C. Jan. 17, 2018):

***In this case, the Complaint fails to specify the jurisdictional basis upon which it rests. (See Docket Entry 1, ¶ 6 (stating only that "[t]his Court has jurisdiction over the parties to this action and the subject matter of the claims set forth").) However, the parties treat this action as arising under the Court's diversity jurisdiction, and no discernable basis for federal question jurisdiction appears in the record. (See generally Docket Entries 1, 10, 19, 20, 23-25 (relying on state substantive law).) The Court therefore examines the availability of diversity jurisdiction, remaining mindful that "diversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff," Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373 (1978) (emphasis in original).

According to the Complaint, Plaintiff "is a national banking association organized and existing under the laws of the United States" and "is co-headquartered in Maine [*7]  and New Jersey and conducts business in North Carolina." (Docket Entry 1, ¶ 1.) The Complaint further describes LLC Defendant as "organized and existing under the laws of the State of North Carolina with a principal place of business in Cumberland County, North Carolina." (Id., ¶ 2.) Finally, the Complaint maintains that each Guarantor "is a resident of Lodi, New Jersey." (Id., ¶¶ 3-5.)5 Because the Complaint provided insufficient information for "assessing the citizenship of Plaintiff and [LLC] Defendant" (Docket Entry 26 at 1), the Court ordered the parties to file notices supplying certain citizenship information (see id. at 1-2). According to these notices, Plaintiff's "main office, as designated in its articles of association, is located in the State of Delaware" (Docket Entry 27 at 1) and LLC Defendant "is a North Carolina limited liability company," whose members - the Guarantors - all qualify as residents and citizens of New Jersey (Docket Entry 28 at 1-2).

5 The Answer concedes the accuracy of the jurisdictional allegations regarding Defendants. (See Docket Entry 10, ¶¶ 2-5.)

For diversity jurisdiction purposes, the Court attributes to a limited liability company "the citizenship of all of [*8]  its members." Central W. Va. Energy Co. v. Mountain State Carbon, LLC, 636 F.3d 101, 103 (4th Cir. 2011). Thus, notwithstanding its establishment under North Carolina law, LLC Defendant remains a citizen of New Jersey. As to Plaintiff, "national banking associations shall," for cases of this sort, "be deemed citizens of the States in which they are respectively located."  28 U.S.C. § 1348According to the United States Supreme Court, one "'locates'" a bank for Section 1348 purposes "in the State designated in its articles of association as its main office." Wachovia Bank v. Schmidt, 546 U.S. 303, 318 (2006).6 That view establishes Plaintiff as a citizen of Delaware. (See Docket Entry 27 at 1.) The parties therefore qualify as diverse, bringing this case within the Court's diversity jurisdiction.7

6 In so holding, the Supreme Court distinguished the statute governing corporate citizenship, 28 U.S.C. § 1332(c)(1), explaining that "Congress has prescribed that a corporation 'shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.'" Id.

7 This case satisfies the amount-in-controversy requirements for diversity jurisdiction. (See Docket Entry 1 at 6.)


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