Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-07038/USCOURTS-caDC-12-07038-0/pdf.json

Parties Involved:
Clearbridge, LLC
Appellee
New Mighty Foundation
Appellee
New Mighty U.S. Trust
Appellee
Yueh-lan Wang
Appellant

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 21, 2016 Decided December 9, 2016 

No. 12–7038 

YUEH-LAN WANG, BY AND THROUGH HER ATTORNEY-IN-FACT,

WINSTON WEN-YOUNG WONG, 

APPELLANT

v. 

NEW MIGHTY U.S. TRUST, ET AL., 

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(No. 1:10–cv–01743) 

Mark W. Stoutenburg argued the cause for the appellant. 

Daniel S. Weinberger was with him on brief. Steven M. 

Chasin entered an appearance. 

Clifford M. Sloan argued the cause for the appellees. 

David B. Leland, John Gardiner and Andrew Muscato were 

with him on brief. David E. Carney entered an appearance. 

Before: HENDERSON, KAVANAUGH and MILLETT, Circuit 

Judges. 

Opinion for the Court filed by Circuit Judge HENDERSON. 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 1 of 20
2 

KAREN LECRAFT HENDERSON, Circuit Judge: This case 

presents the question of how to determine the citizenship of a 

trust for diversity subject-matter jurisdiction pursuant to 28 

U.S.C. § 1332(a). In light of the United States Supreme 

Court’s recent decision in Americold Realty Trust v. ConAgra 

Foods, Inc., 577 U.S.__, 136 S. Ct. 1012 (2016), we conclude 

that a so-called “traditional trust” carries the citizenship of its 

trustees. We accordingly reverse the district court’s Rule 

12(b)(1) dismissal and remand for further proceedings. Fed. 

R. Civ. P. 12(b)(1). We also grant the plaintiff’s pending 

motion to substitute as hereinbelow discussed. 

I. BACKGROUND 

The facts giving rise to this lawsuit began over eighty 

years ago and thousands of miles away.1

 In 1935, Yueh-Lan 

Wang (Yueh-Lan)—in whose name this action was 

brought—married Yung-Ching Wang (Y.C.). 2 Perhaps 

presaging the advice given Dustin Hoffman’s eponymous 

character in the 1967 movie The Graduate,

3

 Y.C. went into 

plastics, founding the Formosa Plastics Group in 1954. He 

achieved tremendous success and, by the time of his death in 

 1

 Because the district court dismissed the complaint for lack of 

subject-matter jurisdiction, we take the facts alleged in the amended 

complaint as true, see United States ex rel. Oliver v. Philip Morris 

USA Inc., 826 F.3d 466, 469 n.2 (D.C. Cir. 2016), and draw upon 

other documents as necessary, see Am. Freedom Law Ctr. v. Obama, 

821 F.3d 44, 49 (D.C. Cir. 2016). 

2

 Some of the parties have the surname “Wang” or “Wong.” 

According to the complaint, the alternate spellings refer to the same 

Chinese-language surname. 

3

 “I just want to say one word to you. Just one word . . . . Are 

you listening? . . . . Plastics.” 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 2 of 20
3 

2008, Y.C. was ranked by Forbes magazine as the 178th 

wealthiest person in the world with an estimated net worth of 

up to $6.8 billion. Although Y.C. remained married to 

Yueh-Lan over the course of his life, at the same time he had a 

number of children with two other women, Wang Yang Chiao4

and P.C. Lee. Yueh-Lan helped to rear at least one of those 

children, Winston Wen-Young Wong (Winston), whose 

biological mother was Wang Yang Chiao. According to her 

will, Yueh-Lan considered Winston her son. 

Y.C. died on October 15, 2008. Three years earlier, 

however, allegedly in an effort to reduce Yueh-Lan’s share of 

the marital estate, Y.C. made various distributions and stock 

transfers to, inter alia, the New Mighty U.S. Trust (New 

Mighty), a trust formed under the laws of the District of 

Columbia to hold certain of Y.C.’s assets.5

 In an effort to 

account for and recover Yueh-Lan’s share of the marital estate, 

Winston—a citizen of Taiwan and allegedly acting as 

Yueh-Lan’s attorney-in-fact—brought suit in October 2010 

against New Mighty, along with its trustee, Clearbridge, LLC, 

and the New Mighty Foundation, one of New Mighty’s 

beneficiaries. Up to now, the case has had little to do with the 

legitimacy of Y.C.’s pre-2008 distributions. 

In July 2011, the defendants moved to dismiss the 

complaint on a variety of grounds, including lack of diversity. 

 4

 The defendants refer to Wang Yang Chiao as Yang Jiao 

Wang. See Appellees’ Br. 2. 

5

 The amended complaint alleges that P.C. Lee and members 

of her family—without Y.C.’s knowledge—created several trusts, 

including New Mighty, in order to reduce Yueh-Lan’s share of the 

marital estate. According to the amended complaint, the trusts 

resulted from the undue influence P.C. Lee and her family exerted on 

Y.C. 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 3 of 20
4 

The district court concluded that a traditional trust (like New 

Mighty) is an artificial entity that “assumes the citizenship of 

all of its ‘members’ for purposes of diversity jurisdiction.” 

Wang ex rel. Wong v. New Mighty U.S. Tr., 841 F. Supp. 2d 

198, 205 (D.D.C. 2012). Reasoning that New Mighty’s 

“members” must include its beneficiaries, the court held that, 

because the amended complaint lacked allegations sufficient to 

establish the citizenship of at least some beneficiaries, 

subject-matter jurisdiction could not be determined. Id. at 

206–07. Accordingly, the court instructed the defendants to 

produce a list of all beneficiaries and their citizenship. Id. at 

208. The list revealed that New Mighty’s beneficiaries 

included several entities that were citizens of the British Virgin 

Islands. As a result, complete diversity did not exist: 

defendant Clearbridge was a citizen of Virginia and the District 

of Columbia; defendant New Mighty Foundation was a citizen 

of Delaware and the District of Columbia and defendant New 

Mighty was then deemed a citizen of Delaware, the District of 

Columbia and the British Virgin Islands. With both an alien 

plaintiff and at least one alien defendant, the district court 

found diversity lacking. Winston sought reconsideration, 

arguing that the defendants had to show that the beneficiaries 

in fact received a distribution to qualify as beneficiaries under 

the trust and, therefore, their citizenship was irrelevant without 

such showing. In April 2012, the district court denied 

reconsideration. This appeal followed. 

Shortly after the notice of appeal was filed, however, 

Yueh-Lan died. The appeal was held in abeyance and, 

consistent with this Court’s instructions, Winston filed a series 

of reports on the status of legal proceedings underway in 

Taiwan to appoint an executor of Yueh-Lan’s will. 

Eventually, three persons—Chen-Teh Shu, Dong-Xung Dai 

and Robert Shi—were designated joint executors. Winston 

and the executors moved to substitute the executors as 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 4 of 20
5 

Yueh-Lan’s personal representative pursuant to Federal Rule 

of Appellate Procedure 43(a)(1). The defendants opposed the 

motion, arguing that Winston was not the proper party to have 

initiated the lawsuit in the first place and that it should 

therefore be dismissed and the substitution motion denied. 

Both the substitution and dismissal motions were referred to 

this merits panel for disposition.6 The questions before us, 

then, are whether the district court lacked subject-matter 

jurisdiction and whether the pending motion to substitute 

should be granted.

II. ANALYSIS 

A. SUBJECT-MATTER JURISDICTION

“The judicial Power” of the United States 

“extend[s] . . . to Controversies . . . between a State, or the 

Citizens thereof, and foreign . . . Citizens . . . .” U.S. Const. 

art. III, § 2, cl. 1. Although the Congress has granted the 

district court jurisdiction of a civil action in which “the matter 

in controversy exceeds . . . $75,000 . . . and is between . . . 

citizens of a State and citizens or subjects of a foreign state,” 28 

U.S.C. § 1332(a) (2006), that provision—which requires 

“complete” diversity—does not reach disputes between aliens, 

see Saadeh v. Farouki, 107 F.3d 52, 54–55, 61 (D.C. Cir. 

1997). This lawsuit was originally brought by Winston on 

behalf of Yueh-Lan, a Taiwanese. Whether diversity 

jurisdiction exists depends, first, on correctly identifying the 

defendants and, then, determining their citizenship.

 6

 Shortly after that order issued, Winston and the executors 

filed an emergency motion to stay briefing pending the Supreme 

Court’s Americold decision. The Court granted the motion and held 

the case in abeyance. Shortly thereafter, Americold was decided 

and, on Winston’s and the executors’ motion, the stay was lifted and 

a briefing schedule imposed. 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 5 of 20
6 

Supreme Court Precedent

In determining a trust’s citizenship, we were guided 

pre-Americold by the Supreme Court’s decisions in Navarro 

Savings Association v. Lee, 446 U.S. 458 (1980), and Carden 

v. Arkoma Associates, 494 U.S. 185 (1990). Although neither 

case addressed the issue directly, both informed the Court’s 

analysis in Americold and here, too, they provide a useful point 

of departure. 

In Navarro the question was “whether the trustees of a 

business trust may invoke the diversity jurisdiction of the 

federal courts on the basis of their own citizenship, rather than 

that of the trust’s beneficial shareholders.” 446 U.S. at 458. 

In that case, the plaintiffs—eight individual trustees of Fidelity 

Mortgage Investors (Fidelity), “a business trust organized 

under Massachusetts law”—had lent $850,000 to a Texas firm. 

Id. at 459. In return, the Texas firm provided a promissory 

note payable to the plaintiffs as trustees. Id. The note was, in 

turn, partially secured by a commitment letter under which 

Navarro Savings Association (Navarro)—the 

defendant—agreed to lend the Texas firm $850,000 to cover 

the latter’s obligation. Id. When the plaintiff trustees asked 

Navarro to make the loan, Navarro refused. Id. They 

brought suit in federal district court, invoking its diversity 

jurisdiction. Id. The district court, however, found diversity 

lacking. Id. at 460. In its view, the Massachusetts business 

trust was a citizen of every state in which its shareholders 

resided and, although defendant Navarro was a citizen of Texas 

and all eight plaintiff trustees were citizens of other states, 

some of Fidelity’s shareholders were citizens of Texas and 

therefore defeated diversity. Id. On appeal, the Fifth Circuit 

reversed, reasoning that the trustees—and not Fidelity’s 

beneficial shareholders—were “charged with the power to sue 

and be sued on behalf of the trust, . . . the persons in actual 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 6 of 20
7 

control of the trust and the real parties in interest.” Lee v. 

Navarro Savs. Ass’n, 597 F.2d 421, 425 (5th Cir. 1979). The 

Supreme Court affirmed. Navarro, 446 U.S. at 460. As the 

Court explained, the plaintiff trustees were the “real parties to 

the controversy,” id. at 461, 465; “[t]hey ha[d] legal title; they 

manage[d] the assets; they control[led] the litigation[,]” id. at 

465. 

Navarro contended that Fidelity’s “business trust” status 

“mask[ed] an unincorporated association of individuals who 

make joint real estate investments,” id. at 461, and, therefore, 

as an unincorporated association made up of a “mere 

collection[] of individuals,” id., citizenship of those individuals 

“determines the diversity jurisdiction of a federal court,” id. 

Although the Court concluded that it “need not reject the 

argument that Fidelity share[d] some attributes of an 

association,” it determined that the litigation “involve[d] 

neither an association nor a corporation” but instead “an 

express trust.” Id. at 462. 

Despite its relatively plain holding that Fidelity’s 

trustees—not its shareholders—were the real parties to the 

controversy, Navarro could arguably be read as also laying 

down a rule to determine the non-party trust’s citizenship—as 

was subsequently attempted in Carden. In Carden, plaintiff 

Arkoma Associates (Arkoma), a limited partnership organized 

under Arizona law, sued two individual defendants who were 

citizens of Louisiana, invoking diversity jurisdiction. 494 

U.S. at 186. 7 The defendants unsuccessfully moved to 

dismiss, claiming that one of Arkoma’s limited partners was a 

citizen of Louisiana. Id. The case proceeded to trial and, 

after Arkoma prevailed, the defendants appealed. Id. The 

 7

 Arkoma had both general and limited partners. Carden, 494 

U.S. at 205–06 (O’Connor, J., dissenting). 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 7 of 20
8 

Fifth Circuit affirmed, concluding that Arkoma’s citizenship 

turned on that of its general partners alone, without regard to 

the citizenship of its limited partners. Id. at 187. The 

Supreme Court concluded otherwise. Id. at 198. It began by 

recognizing that complete diversity could exist under either of 

two scenarios. First, diversity could exist if a limited 

partnership is a “citizen” of the state that created it. Id. at 187. 

Second, diversity could exist if it depended on the citizenship 

of the general partners only. Id. The Court rejected both. It 

first determined that, with one exception, 8 the only state 

law-created artificial entity that can be treated as a citizen of 

that state under Supreme Court precedent is the corporation. 

Id. at 187–92. It rejected Arkoma’s argument that Navarro

prescribed a similar treatment for a trust. Id. at 191–92. 

Navarro “did not involve the question whether a party that is 

an artificial entity other than a corporation can be considered a 

‘citizen’ of a State,” the Supreme Court explained, but instead 

“the quite separate question whether parties that were 

undoubted ‘citizens’ (viz., natural persons) were the real 

parties to the controversy.” Id. at 191. In then concluding 

that the citizenship of both the limited and the general partners 

of Arkoma counted, the Supreme Court rejected the notion that 

Navarro dealt with a trust’s citizenship. Id. at 192–96. To 

the contrary, “Navarro had nothing to do with the citizenship 

of the ‘trust,’ since it was a suit by the trustees in their own 

names.” Id. at 192–93. The Court “adhere[d] to [its] 

oft-repeated rule that diversity jurisdiction in a suit by or 

against the entity depends on the citizenship of ‘all the 

members,’ ‘the several persons composing such association,’ 

‘each of its members.’” Id. at 195–96 (emphasis added) 

(citations omitted). 

 8

 The one exception is Puerto Rico’s sociedad en comandita. 

Carden, 494 U.S. at 189–90. 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 8 of 20
9 

The holdings in Navarro and Carden are clear enough: the 

citizenship of a Massachusetts business trust’s trustees suing in 

their own names is the determinative citizenship, 

notwithstanding the non-party trust itself has some attributes of 

an unincorporated association, Navarro, 446 U.S. at 462, 465–

66; and diversity in a suit by or against an “artificial entity” 

created under state law is determined by the citizenship of all 

of the entity’s members, Carden, 494 U.S. at 195. Less clear 

is the reach of these holdings and various approaches to 

determining a trust’s citizenship have proliferated. See

Emerald Investors Tr. v. Gaunt Parsippany Partners, 492 F.3d 

192, 201–03 (3d Cir. 2007) (collecting approaches). 

The district court attempted to apply the Navarro and 

Carden holdings. Wang, 841 F. Supp. 2d at 203–05. 

Although it recognized that Navarro “could arguably be read 

to imply that when a trustee possesses certain customary 

powers to hold, manage, and dispose of assets for the benefit of 

others, a court should refer only to the citizenship of the 

trustee,” it also found significant Carden’s declaration that 

“‘Navarro had nothing to do with the citizenship of the 

trust[.]’” Id. at 204 (citation and some internal quotation 

marks omitted) (quoting, inter alia, Carden, 494 U.S. at 192–

93). Even if that language constituted dicta, the district court 

reasoned, Carden persuasively read Navarro to make clear that 

“[d]etermining which parties before the court are the real 

parties and determining the citizenship of a given party . . . are 

distinct questions.” Id. at 205. Believing it faced the latter 

question because New Mighty was named as a party defendant, 

the district court turned to Carden’s membership test. Id. It 

used Carden’s “artificial entity” language, concluded that a 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 9 of 20
10 

trust is an artificial entity and therefore thought it “clear that 

the Carden rule also applies to trusts.” Id.9 

After the district court’s decision, the Supreme Court 

decided Americold. Americold involved a lawsuit brought by 

several corporations against the owner of an underground 

warehouse containing the corporations’ food products; the 

warehouse had been destroyed by fire. 136 S. Ct. at 1014. 

The plaintiff corporations sued in Kansas state court and the 

defendant warehouse owner—Americold Realty Trust 

(Americold), a real estate investment trust (REIT) created 

under Maryland law—removed the lawsuit to federal district 

court, which held for Americold. Id. On appeal, the Tenth 

Circuit sua sponte requested briefing on the district court’s 

diversity jurisdiction. Id. It eventually concluded that the 

plaintiff corporations were citizens of Delaware, Nebraska and 

Illinois and that Americold’s citizenship was determined, per 

Carden, by reference to its members, including its 

shareholders. Id. at 1014–15. Without record evidence of 

Americold’s shareholders’ citizenship, the Tenth Circuit 

decided that the parties had failed to demonstrate that diversity 

of citizenship existed, see id. at 1015, and remanded the case to 

the district court to vacate its judgment and remand the matter 

to state court, ConAgra Foods, Inc. v. Americold Logistics, 

LLC, 776 F.3d 1175, 1182 (10th Cir. 2015). The Supreme 

Court affirmed, relying on Carden to conclude that, under 

Maryland law, the citizenship of a REIT included its 

shareholders. Americold, 136 S. Ct. at 1015–17. In so doing, 

however, the Supreme Court singled out for discussion 

Americold’s argument that, under Navarro, “anything called a 

 9

 The district court reached this conclusion in light of the 

“plain meaning” of “artificial entity,” Wang, 841 F. Supp. 2d at 205, 

Carden’s distinguishing of those artificial entities to which its rule 

did not apply and Carden’s “repeated discussion and differentiation 

of Navarro,” id.

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 10 of 20
11 

‘trust’ possesses the citizenship of its trustees alone, not its 

shareholder beneficiaries as well.” Id. at 1016. The Court 

first repeated its observation that “Navarro had nothing to do 

with the citizenship of [a] ‘trust.’” Id. (alteration in original) 

(some internal quotation marks omitted) (quoting Carden, 494 

U.S. at 192–93). As the Court explained, “Navarro

reaffirmed a separate rule that when a trustee files a lawsuit in 

her name, her jurisdictional citizenship is the State to which 

she belongs,” a rule that “coexists” with the proposition that 

“when an artificial entity is sued in its name, it takes the 

citizenship of each of its members.” Id. (emphases in 

original). The Court acknowledged, however, that 

“Americold’s confusion regarding the citizenship of a trust is 

understandable and widely shared” and posited that such 

“confusion can be explained, perhaps, by tradition.” Id. It 

elaborated: 

Traditionally, a trust was not considered a distinct 

legal entity, but a “fiduciary relationship” between 

multiple people. Such a relationship was not a thing 

that could be haled into court; legal proceedings 

involving a trust were brought by or against the 

trustees in their own name. And when a trustee files 

a lawsuit or is sued in her own name, her citizenship is 

all that matters for diversity purposes. For a 

traditional trust, therefore, there is no need to 

determine its membership, as would be true if the 

trust, as an entity, were sued. 

Many States, however, have applied the “trust” label 

to a variety of unincorporated entities that have little 

in common with this traditional template. Maryland, 

for example, treats a real estate investment trust as a 

“separate legal entity” that itself can sue or be sued. 

So long as such an entity is unincorporated, we apply 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 11 of 20
12 

our “oft-repeated rule” that it possesses the 

citizenship of all its members. But neither this rule 

nor Navarro limits an entity’s membership to its 

trustees just because the entity happens to call itself a 

trust. 

Id. (emphases added) (citations omitted). 

With respect, the meaning of the highlighted language is 

not easy to ascertain. As the Fourth Circuit recently declared: 

Having settled the diversity of citizenship question for 

real estate investment trusts, perhaps the Supreme 

Court in Americold intended this statement to globally 

resolve the issue for other trusts. However, the 

statement may generate as many questions as it 

answers. Putting aside the lack of a comprehensive 

definition of a “traditional trust,” the “as would be 

true if the trust, as an entity were sued” phrase seems 

open to several interpretations. 

For example, does the phrase mean that there is no 

need to determine entity membership for diversity 

purposes when a “traditional trust” is sued as an 

entity? Or do we read the statement to mean that a 

trust sued as an entity must prove entity membership 

because it is a separate legal person from the 

individual trustees? 

Zoroastrian Ctr. & Darb-E-Mehr of Metro. Wash., D.C. v. 

Rustam Guiv Found. of N.Y., 822 F.3d 739, 749 (4th Cir. 

2016).10 And the parties here too disagree about Americold’s 

 10 In Zoroastrian Center, a nonprofit entity sued a charitable 

trust in state court seeking to renew a lease the trust had allegedly 

terminated. 822 F.3d at 743–44. The trust removed the lawsuit to 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 12 of 20
13 

meaning. 11 According to Winston, Americold means that 

diversity jurisdiction in a suit involving a traditional trust 

depends only on the trustees’ citizenship. According to the 

defendants, Americold distinguishes not between a traditional 

trust and an entity only nominally a trust but instead between a 

suit in which a trust is the named party and one in which the 

trustees are the named parties.12 

Although not all courts have to date read Americold to 

distinguish between traditional trusts and other artificial 

 

federal court and the district court granted summary judgment to the 

trust. Id. On appeal, the plaintiff sought remand to Virginia state 

court on the ground that the trust failed to establish diversity of 

citizenship. Id. at 747. The Fourth Circuit did not resolve the 

Americold question because diversity existed regardless of whose 

citizenship—that of the trustees, the trust beneficiaries or both—was 

considered. Id. at 749–50. 

11 Winston participated as amicus in the Americold

proceedings. Br. of Winston Wen-Young Wong as Amicus Curiae 

in Supp. of Pet’rs at 18, Americold Realty Tr. v. ConAgra Foods, 

Inc., 577 U.S.__, 136 S. Ct. 1012 (2016) (No. 14-1382), 2015 WL 

7732607, at *18 (“[D]iversity of citizenship in a suit by or against a 

traditional trust should be determined by the citizenship of its trustee 

alone . . . .”). 

12 The defendants claim that Winston waived his “traditional 

trust” argument. There is good reason to conclude, however, that 

Winston did not waive the argument; in any event, we can 

appropriately determine this “important[] and recurring question of 

federal law” resulting in part from “an intervening change in the 

law.” Roosevelt v. E.I. Du Pont de Nemours & Co., 958 F.2d 416, 

419 n.5 (D.C. Cir. 1992) (noting that, in such circumstances, 

appellate court can exercise discretion to consider issues raised for 

first time on appeal). 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 13 of 20
14 

entities, some have done so. See Juarez v. DHI Mortg. Co., 

No. CV H-15-3534, 2016 WL 3906296, at *2 (S.D. Tex. July 

19, 2016) (“Americold provides that if the trust itself is suing or 

being sued, then further analysis is required to determine 

whether the trust is a traditional trust . . . or a business 

entity . . . .”); Wells Fargo Bank, N.A. v. Transcon. Realty 

Investors, Inc., No. 3:14-CV-3565-BN, 2016 WL 3570648, at 

*3 (N.D. Tex. July 1, 2016) (“The citizenship of a trust may 

depend on whether it is a traditional trust or what some have 

called a business trust.”), appeal docketed, No. 16-11167 (5th 

Cir. July 29, 2016); cf. Sutter Ranch Corp. v. Cabot Oil & Gas 

Corp., No. CIV-16-42-M, 2016 WL 3945834, at *1 (W.D. 

Okla. July 19, 2016) (“[T]he United States Supreme Court has 

recently held that the citizenship of a trust, in particular a 

business type trust, is the citizenship of all of its members, i.e., 

its beneficiaries.”). 

We think Winston’s reading of Americold—that is, the 

citizenship of a traditional trust depends only on the trustees’ 

citizenship—is the better one.13 First, Americold is clear that 

 13 Moreover, Supreme Court precedent predating Navarro, 

Carden and Americold considered the citizenship of a trust 

beneficiary immaterial in determining diversity of citizenship. See

Bullard v. City of Cisco, Tex., 290 U.S. 179, 190 (1933) (“As the 

transfers under which the plaintiffs held the bonds and coupons were 

made to them as trustees, were real . . . and invested them with the 

full title, they were entitled, by reason of their citizenship and of the 

amount involved, to bring the suit in the federal court. The 

beneficiaries were not necessary parties and their citizenship was 

immaterial.”); Bonnafee v. Williams, 44 U.S. 574, 577 (1845) 

(“Where the citizenship of the parties give[s] jurisdiction, and the 

legal right to sue is in the plaintiff, the court will not inquire into the 

residence of those who may have an equitable interest in the claim. 

They are not necessary parties on the record. A person having the 

legal right may sue, at law, in the federal courts, without reference to 

the citizenship of those who may have the equitable interest.”). 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 14 of 20
15 

“[m]any [s]tates . . . have applied the ‘trust’ label to a variety 

of unincorporated entities that have little in common with th[e] 

traditional template” for a trust. 136 S. Ct. at 1016. And 

Americold is equally clear that, “[s]o long as such an entity is 

unincorporated, [courts] apply [the] ‘oft-repeated rule’ that it 

possesses the citizenship of all its members.” Id. (quoting 

Carden, 494 U.S. at 195). Because Americold involved an 

entity to which the Court applied the Carden test, see id. at 

1015–16, and because, “[t]raditionally, a trust was not 

considered a distinct legal entity,” id. at 1016, we believe 

Americold would not apply the Carden test to a traditional 

trust, as it is not an entity. Second, and relatedly, the Supreme 

Court was clear that, “[t]raditionally, a trust was . . . not a thing 

that could be haled into court.” Id. We doubt that the 

Supreme Court envisaged a test by which a court decides that a 

party that traditionally cannot be brought into court, see id., can 

nevertheless be “sued as an entity,” Appellees’ Br. 32 

(emphasis omitted). 

New Mighty Qua Traditional Trust 

With these principles in mind, we must decide whether 

New Mighty is in fact a traditional trust. We conclude that it 

is. New Mighty is a creature of D.C. law. See Joint 

Appendix 469. As both parties recognized at oral argument, 

see Recording of Oral Argument at 21:20–23, 38:26–36 (Sept. 

21, 2016), New Mighty is governed by Title 19 of the D.C. 

Code, which title includes D.C.’s version of the Uniform Trust 

Code (UTC), see D.C. CODE §§ 19-1301.01 et seq.; compare 

also D.C. CODE § 19-1304.01(2) (trust may be created by 

“[d]eclaration by the owner of property that the owner holds 

identifiable property as trustee.”), with Joint Appendix 461 

(“Clearbridge LLC, as Trustee[,] declares a trust over one 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 15 of 20
16 

hundred U.S. dollars ($100.00).”).14 Although Americold did 

not provide a comprehensive definition of a “traditional trust,” 

it did consider instructive section 2 of the Second Restatement 

of Trusts,15 136 S. Ct. at 1016, a source to which D.C. courts 

have also turned, see Cabaniss v. Cabaniss, 464 A.2d 87, 91 

(D.C. 1983). 16 According to Americold as well as the 

Restatement, a traditional trust for diversity generally 

describes a fiduciary relationship regarding property where the 

trust cannot sue and be sued as an entity under state law. 

More broadly, we conclude that a traditional trust is a trust that 

 14 The parties do not dispute that New Mighty is not a statutory 

trust within the meaning of Title 29 of the D.C. Code. Enacted 

several years after New Mighty’s 2005 formation, see 58 D.C. Reg. 

1720–21, 2157–79 (Mar. 11, 2011), D.C.’s “Uniform Statutory Trust 

Entity Act of 2010”—contained in Title 29—requires that, “[t]o 

form a statutory trust, a person shall deliver a certificate of trust to 

the [m]ayor for filing,” see D.C. CODE §§ 29-1201.01, 

29-1202.01(a). The record contains no such certificate. 

15 Section 2 of the Restatement provides: 

A trust, as the term is used in the Restatement of this 

Subject, when not qualified by the word “charitable,” 

“resulting” or “constructive,” is a fiduciary relationship 

with respect to property, subjecting the person by whom 

the title to the property is held to equitable duties to deal 

with the property for the benefit of another person, which 

arises as a result of a manifestation of an intention to create 

it. 

RESTATEMENT (SECOND) OF TRUSTS § 2 (1959). 

16 The enactment of the UTC did not replace all of D.C.’s 

common law of trusts. See D.C. CODE § 19-1301.06 (unless 

modified by D.C. law, “[t]he common law of trusts and principles of 

equity supplement [the UTC]”). 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 16 of 20
17 

lacks juridical person status. Whether a particular trust has or 

lacks juridical person status can be determined by reference to 

the law of the state where the trust is formed. New Mighty is 

not a juridical person. Under D.C. law, New Mighty is a 

donative trust governed by Title 19, chapter 13 of the D.C. 

Code and, thus, New Mighty cannot sue and be sued as an 

entity under D.C. law. See, e.g., Matijkiw v. Strauss, 139 

Daily Wash. L. Rptr. 1345, 1349, 1351 (D.C. Super. Ct. July 1, 

2011); In re Nat’l Student Mktg. Litig., 413 F. Supp. 1159, 

1160 (D.D.C. 1976). It is, therefore, a traditional trust. 

For their part, the defendants suggest that New Mighty’s 

structure makes it other than traditional, pointing to the 

amended complaint’s allegation that “Defendant New Mighty 

Trust is a trust structure that includes a trust formed under the 

laws of the District of Columbia and a trust formed under the 

laws of the Cayman Islands pursuant to the Special Trusts 

Alternative Regime.” Appellees’ Br. 24–25 (emphasis and 

internal quotation marks omitted) (quoting Am. Compl. ¶ 60). 

In their view, “[w]hatever is meant by a ‘traditional trust,’ it 

certainly cannot include trusts formed pursuant to a foreign 

statutory regime that was promulgated in 1997.” Id. at 25. 

The allegation the defendants rely on, however, does not refer 

to New Mighty alone; the amended complaint uses the phrase 

“New Mighty Trust” to refer to all of the defendants 

collectively—that is, New Mighty, the New Mighty 

Foundation and Clearbridge. Whether these three defendants 

collectively make up a “trust structure” that includes a trust 

formed under Cayman Islands law is not the same question as 

whether New Mighty itself is a traditional trust. And on the 

latter point, the amended complaint expressly alleges that New 

Mighty “is a trust formed under the laws of the District of 

Columbia.” Am. Compl. ¶ 14. We conclude, then, that New 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 17 of 20
18 

Mighty is a traditional trust 17 and therefore assumes its 

trustees’ citizenship for diversity jurisdiction.18

Having established that New Mighty is a traditional trust, 

we conclude complete diversity of citizenship exists. 

Yueh-Lan, Y.C.’s now-late widow, was a citizen of Taiwan.19 

 17 The trust declaration describes New Mighty’s purpose “to 

hold, manage and administer interests in . . . member[s] of the 

Formosa Plastics Group of companies[] for the benefit of [certain 

entities] pursuant to the Founders [sic] Vision for the betterment of 

mankind.” Joint Appendix 461. 

18 At oral argument, New Mighty’s counsel posited that the 

District of Columbia added “significant . . . variations” to the model 

Uniform Trust Code, making it difficult to differentiate a traditional 

trust from a statutory trust. He argued that, under D.C. Code 

§ 19-1301.03(11), “[p]erson” is defined to include a trust and that, 

per D.C. Code § 19-1304.18, a trust can hold property. We think 

New Mighty’s reliance on these provisions misplaced. Other 

provisions of D.C. law make clear that New Mighty is a traditional 

trust. Compare, e.g., D.C. CODE § 19-1308.09 (“A trustee shall 

take reasonable steps to take control of and protect the trust 

property.”), and D.C. CODE § 19-1308.11 (“A trustee shall take 

reasonable steps . . . to defend claims against the trust.”), with

RESTATEMENT (SECOND) OF TRUSTS § 175 (“The trustee is under a 

duty to the beneficiary to take reasonable steps to take and keep 

control of the trust property.”), and RESTATEMENT (SECOND) OF 

TRUSTS § 178 (“The trustee is under a duty to the beneficiary to 

defend actions which may result in a loss to the trust estate, unless 

under all the circumstances it is reasonable not to make such 

defense.”). 

19 All parties look to Yueh-Lan to determine citizenship on the 

plaintiff’s side. See, e.g., Saadeh, 107 F.3d at 57 (“[D]iversity of 

citizenship is determined at the time the complaint is filed.”). 

Winston brought suit as Yueh-Lan’s attorney-in-fact; when 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 18 of 20
19 

On the other side of the litigation, the amended complaint 

alleges that the New Mighty Foundation is a citizen of the 

District of Columbia and the State of Delaware and 

Clearbridge, New Mighty’s trustee, is a citizen of the 

Commonwealth of Virginia and the District of Columbia. 

Because New Mighty is a “traditional trust,” it is its trustee 

Clearbridge’s citizenship that is determinative. To the extent 

New Mighty itself is a named party to the lawsuit, it is only a 

nominal one, see Navarro, 446 U.S. at 461 (“[A] federal court 

must disregard nominal or formal parties and rest jurisdiction 

only upon the citizenship of real parties to the controversy.”).20

B. WINSTON’S MOTION TO SUBSTITUTE AND DEFENDANTS’

MOTION TO DISMISS

As noted earlier, Winston and the three joint executors of 

Yueh-Lan’s will moved to substitute the three executors in 

place of Yueh-Lan pursuant to Federal Rule of Appellate 

Procedure 43(a)(1). 21 The defendants raise a host of 

objections in response, primarily relating to the allegedly 

defective power of attorney Winston exercised in bringing suit, 

which, in their view, should result in dismissal. It is “our 

 

Yueh-Lan later died, Winston and the three executors assumed the 

citizenship of the decedent. See 28 U.S.C. § 1332(c)(2). 

20 We do not reach Winston’s alternative argument that New 

Mighty should be dismissed as a dispensable party pursuant to 

Federal Rule of Civil Procedure 21. 

21 “If a party dies after a notice of appeal has been filed or 

while a proceeding is pending in the court of appeals, the decedent’s 

personal representative may be substituted as a party on motion filed 

with the circuit clerk by the representative or by any party.” Fed. R. 

App. P. 43(a)(1). 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 19 of 20
20 

usual . . . practice” to “declin[e] to address arguments 

unaddressed by the district court,” Pollack v. Hogan, 703 F.3d 

117, 121 (D.C. Cir. 2012) (per curiam), and we follow that 

practice here—the district court should consider the 

defendants’ arguments in the first instance. Accordingly, we 

grant the substitution motion without prejudice to the 

defendants’ ability to renew in district court those arguments 

they have pressed before us. See Appellees’ Br. 41–55; 

Appellees’ Resp. to the Mot. of Winston-Wen-Young Wong 

and Chen-Teh Shu, Dong-Xung Dai and Robert Shi.22 

For the foregoing reasons, we reverse the district court’s 

dismissal, grant the Rule 43(a)(1) substitution motion and deny 

without prejudice the defendants’ motion to dismiss. We 

remand for further proceedings consistent with this opinion. 

So ordered. 

 22 We note Yueh-Lan’s counsel’s acknowledgement at oral 

argument that the defendants’ arguments are unaffected by our grant 

of the Rule 43(a)(1) motion. 

USCA Case #12-7038 Document #1650232 Filed: 12/09/2016 Page 20 of 20