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23-8104-cv (L)

Saba Capital Master Fund, LTD. v. BlackRock ESG Capital Allocation Trust

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A 

SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY 

FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN 

CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE 

EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION 

“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON 

ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the 

Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 

26th day of June, two thousand twenty-four. 

Present: 

WILLIAM J. NARDINI, 

STEVEN J. MENASHI,

EUNICE C. LEE, 

 Circuit Judges. 

_____________________________________ 

SABA CAPITAL MASTER FUND, LTD., SABA 

CAPITAL MANAGEMENT, L.P., 

 Plaintiffs-Appellees, 

v. 

BLACKROCK ESG CAPITAL ALLOCATION 

TRUST, MUNICIPAL INCOME FUND, INC., 

ROYCE GLOBAL VALUE TRUST, INC., 

TORTOISE MIDSTREAM ENERGY FUND, 

INC., TORTOISE ENERGY INDEPENDENCE 

FUND, INC., TORTOISE PIPELINE & ENERGY 

FUND, INC., TORTOISE ENERGY 

INFRASTRUCTURE CORP., ECOFIN 

SUSTAINABLE AND SOCIAL IMPACT TERM 

FUND, ADAMS DIVERSIFIED EQUITY FUND, 

INC., ADAMS NATURAL RESOURCES FUND, 

FS CREDIT OPPORTUNITIES CORP., 

 Defendants-Appellants.

*

_____________________________________ 

* The Clerk of Court is respectfully directed to amend the caption as set forth above.

23-8104 (L), 24-79 (CON), 

24-80 (CON), 24-82 (CON), 

24-83 (CON), 24-116 (CON), 

24-189 (CON)
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For Plaintiffs-Appellees: MARK MUSICO (Jacob W. Buchdahl, Brandon H. 

Thomas, on the brief), Susman Godfrey L.L.P., 

New York, NY

For Defendants-Appellants BlackRock 

ESG Capital Allocation Trust and 

Municipal Income Fund, Inc.:

TARIQ MUNDIYA (Sameer Advani, Vanessa C. 

Richardson, Aaron E. Nathan, on the brief), 

Willkie Farr & Gallagher LLP, New York, NY

For Defendant-Appellant Royce Global 

Value Trust, Inc.: 

EAMON P. JOYCE (Alex J. Kaplan, Charlotte K. 

Newell, on the brief), Sidley Austin LLP, New 

York, NY 

For Defendants-Appellants Tortoise 

Midstream Energy Fund, Inc., Tortoise 

Energy Independence Fund, Inc., Tortoise 

Pipeline & Energy Fund, Inc., Tortoise 

Energy Infrastructure Corp., and Ecofin 

Sustainable and Social Impact Term Fund:

JOHN T. PRISBE (Lawrence H. Cooke, II, Jessie F. 

Beeber, on the brief), Venable LLP, Baltimore, 

MD and New York, NY

For Defendants-Appellants Adams 

Diversified Equity Fund, Inc. and Adams 

Natural Resources Fund:

BRIAN D. KOOSED (Tre A. Holloway, on the 

brief), K&L Gates LLP, Charleston, SC and 

Washington, DC

For Defendant-Appellant FS Credit 

Opportunities Corp.: 

Scott D. Musoff, Eben Colby, Marley Ann 

Brumme, Skadden, Arps, Slate, Meagher & Flom 

LLP, Boston, MA and New York, NY

Appeal from a judgment of the United States District Court for the Southern District of 

New York (Jed S. Rakoff, District Judge). 

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND 

DECREED that the judgment of the district court is AFFIRMED. 

 Defendants-Appellants appeal from a judgment of the United States District Court for the 

Southern District of New York (Jed S. Rakoff, District Judge), entered on January 4, 2024, denying 

Defendants-Appellants’ motions to dismiss and granting Plaintiffs-Appellees’ motion for 

summary judgment. Defendants-Appellants are eleven closed-end funds (“CEFs”) (collectively, 
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the “Funds”) organized under Maryland law.1 Each Fund adopted a resolution to opt in to a 

provision of the Maryland Control Share Acquisition Act (“MCSAA”) (the “Control Share 

Provision”), which provides that “[h]olders of control shares of the corporation acquired in a 

control share acquisition have no voting rights with respect to the control shares” unless approved 

by a two-thirds vote of the other shareholders. Md. Code Ann., Corps. & Ass’ns § 3-702(a)(1). 

Thus, under the Control Share Provision, shares that would place the holder of the shares at 10% 

or more of a Fund’s voting power are presumptively not given voting rights. 

On June 29, 2023, Plaintiffs-Appellees Saba Capital Master Fund, LTD. and Saba Capital 

Management, L.P. (collectively, “Saba”), a hedge fund that owns shares in each of the Funds, sued 

the Funds seeking (1) a declaratory judgment that the Funds’ resolutions violate the equal voting 

rights mandate of Section 18(i) of the Investment Company Act of 1940 (“ICA”), 15 U.S.C. § 80a18(i), and (2) rescission of the resolutions pursuant to Section 47(b) of the ICA, id. § 80a-46(b)(2). 

On the same day that Saba filed suit, it also moved for summary judgment. As relevant here, the 

Funds moved to dismiss for lack of standing, lack of personal jurisdiction, and failure to state a 

claim. The district court denied the Funds’ motions to dismiss and granted Saba’s motion for 

summary judgment, “declar[ing] that the control share resolutions at issue violate Section 18(i) of 

the ICA and order[ing] that those resolutions be rescinded forthwith.” Saba Cap. Master Fund, 

Ltd. v. BlackRock Mun. Income Fund, Inc., No. 23-cv-5568 (JSR), 2024 WL 43344, at *7 

(S.D.N.Y. Jan. 4, 2024). The Funds appealed. We assume the parties’ familiarity with the case.

1 The Defendant-Appellant funds are (1) BlackRock ESG Capital Allocation Term Trust (“ECAT”) and 

BlackRock Municipal Income Fund, Inc.; (2) Royce Global Value Trust, Inc. (“RGT”); (3) Tortoise Midstream Energy 

Fund, Inc., Tortoise Energy Independence Fund, Inc., Tortoise Pipeline & Energy Fund, Inc., Tortoise Energy 

Infrastructure Corp., and Ecofin Sustainable and Social Impact Term Fund (collectively, the “Tortoise Funds”); (4) 

Adams Diversified Equity Fund, Inc. and Adams Natural Resources Fund (collectively, the “Adams Funds”); and (5) 

FS Credit Opportunities Corp.
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I. Standing

The Funds argue that Saba lacks Article III standing to sue them because Saba does not 

have a 10% stake in most of the Funds, which is the threshold at which the Control Share Provision 

takes effect, and therefore Saba will not imminently suffer any injury from the Control Share 

Provision.2

 We address the issue of standing first because “standing is jurisdictional under Article 

III” and is thus “a threshold issue in all cases.” Shearson Lehman Hutton, Inc. v. Wagoner, 944 

F.2d 114, 117 (2d Cir. 1991).3 Here, the Funds’ motion to dismiss under Federal Rule of Civil 

Procedure 12(b)(1) for lack of subject matter jurisdiction was “fact-based” because they 

“proffer[ed] evidence beyond the [p]leading.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 57 

(2d Cir. 2016). “On appeal, if the district court resolved disputed facts, we will accept the court’s 

findings unless they are clearly erroneous. We review de novo the district court’s conclusions of 

law, as well as findings that are based on undisputed facts evidenced in the record and decisions 

in which the district court engaged in no fact-finding in support of its dismissal order.” Id.

“To establish standing under Article III of the Constitution, a plaintiff must demonstrate 

(1) that he or she suffered an injury in fact that is concrete, particularized, and actual or imminent, 

(2) that the injury was caused by the defendant, and (3) that the injury would likely be redressed 

by the requested judicial relief.” Thole v. U.S. Bank N.A., 590 U.S. 538, 540 (2020). The primary 

question here is whether the concrete and particularized injury that Saba alleges will occur—

namely, that it will not be able to vote its shares if it acquires more than a 10% stake—is 

sufficiently imminent.

2 Ten of the eleven defendant Funds join the standing argument. ECAT concedes that, at the time of suit, 

Saba had over a 10% stake in ECAT. 3 Unless otherwise indicated, case quotations omit all internal quotation marks, alteration marks, footnotes, 

and citations.
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Saba avers that “[a]s of [June 29, 2023], and given current market conditions, Saba would 

acquire more than a 10% beneficial ownership stake in the Funds (to the extent it has not already) 

were it not for the Funds’ Control Share Provisions and the imminent risk that those Control Share 

Provisions will strip Saba of its equal voting rights.” J. App’x 44, ¶ 27. “When an Article III 

injury hinges on a party’s intent to take some future action, the Constitution requires more than 

mere ‘some day intentions.’” Saba Cap. Cef Opportunities 1, Ltd. v. Nuveen Floating Rate Income 

Fund, 88 F.4th 103, 111 (2d Cir. 2023) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 564

(1992)). “A plaintiff’s few words of general intent, without substantial evidence of plans, do not 

support a finding of an actual or imminent injury.” Id. “That said, the standing requirement does 

not uniformly require plaintiffs to demonstrate that it is literally certain that the harms they identify 

will come about.” Id. “Rather, an allegation of future injury is sufficient where . . . there is a 

substantial risk that the harm will occur.” Id. To survive a fact-based challenge under Rule 

12(b)(1), a plaintiff may either “rely on the allegations in the [p]leading if the evidence proffered 

by the defendant is immaterial because it does not contradict plausible allegations that are 

themselves sufficient to show standing,” or “come forward with evidence of [its] own to controvert 

that presented by the defendant if the affidavits submitted on a 12(b)(1) motion reveal the existence 

of factual problems in the assertion of jurisdiction.” Carter, 822 F.3d at 57. Whether Article III 

standing exists is a “highly fact-specific” inquiry. Nuveen, 88 F.4th at 111 (quoting Carney v. 

Adams, 592 U.S. 53, 63 (2020)). 

Considering the totality of the unique factual circumstances presented here, we determine 

that Saba has Article III standing to sue each of the Funds. Saba has averred that it “would acquire 

more than a 10% beneficial ownership stake in the Funds (to the extent it has not already)” absent 

the Control Share Provisions. J. App’x 44, ¶ 27. This sworn testimony amounts to more than 
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“some day intentions,” Nuveen, 88 F.4th at 111, because it is supported by evidence of investment 

planning. Saba has already acquired sizable stakes in many of the Funds and has a “track record” 

of acquiring large stakes in CEFs. See id. at 112. As the Funds acknowledge, part of Saba’s 

financial strategy is to buy “concentrated” stakes in what Saba perceives to be underperforming 

CEFs. See BlackRock Br. at 12–13 (“Saba buys a concentrated stake in a CEF and then uses its 

outsized influence to cause that CEF to take [certain] actions.”). Thus, Saba’s sworn testimony, 

in combination with Saba’s past actions and concrete plans, establishes that, in this case, Saba 

intends to acquire at least a 10% stake in each of these particular Funds. 

Further, the Funds have not presented any facts to cast doubt on Saba’s intent or ability to 

acquire at least a 10% stake in each of the Funds. The Funds presented evidence that for the Fund 

in which Saba owns the lowest stake, RGT at 2%, it would realistically take Saba over three months

to obtain a 10% stake in RGT. But the fact that it might take a few months to reach the 10% 

threshold does not mean that Saba will not or cannot reach that threshold. Accordingly, there 

exists a substantial risk that the injury will occur here, and that is sufficient to establish Article III 

standing. 

II. Personal Jurisdiction

Two of the groups of Funds, the Adams and Tortoise Funds, argue that the district court 

could not exercise personal jurisdiction over them. The district court held that it could exercise 

personal jurisdiction under the ICA or, in the alternative, under New York’s long-arm statute. “We 

review a district court’s legal conclusions concerning its exercise of personal jurisdiction de novo, 

and its underlying factual findings for clear error.” Marvel Characters, Inc. v. Kirby, 726 F.3d 

119, 128 (2d Cir. 2013). 
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We agree with the district court that it could exercise personal jurisdiction over the Adams 

and Tortoise Funds under the ICA, and therefore do not address its alternative holding. The Adams 

and Tortoise Funds argue that although the ICA provides for nationwide service of process, see 15 

U.S.C. § 80a-43—meaning that minimum contacts with the United States suffices to establish 

personal jurisdiction, see, e.g., Mariash v. Morrill, 496 F.2d 1138, 1143 (2d Cir. 1974)—such 

nationwide service of process is permitted only if the plaintiff complies with the ICA’s venue 

provision, accord Daniel v. Am. Bd. of Emergency Med., 428 F.3d 408, 424–25 (2d Cir. 2005). 

Assuming (without deciding) that the Adams and Tortoise Funds’ interpretation of the ICA is 

correct, venue was proper in the Southern District of New York (“SDNY”). 

The ICA provides that venue is proper “in the district wherein the defendant is an inhabitant 

or transacts business.” 15 U.S.C. § 80a-43. “The Supreme Court has construed the phrase 

‘transacts business’ . . . to refer to ‘the practical, everyday business or commercial concept of 

doing business or carrying on business of any substantial character.’” Daniel, 428 F.3d at 428 

(quoting United States v. Scophony Corp., 333 U.S. 795, 807 (1948)). Therefore, “the propriety 

of venue turns on the nature of the corporate defendant’s business.” Id. at 429. In other words, 

“the determination whether a defendant transacted business in a district depend[s] on a realistic 

assessment of the nature of the defendant’s business and of whether its contacts with the venue 

district could fairly be said to evidence the practical, everyday business or commercial concept of 

doing business or carrying on business of any substantial character.” Id.

As CEFs, the Adams and Tortoise Funds are “engaged primarily in the business of 

investing in securities.” Inv. Co. Inst. v. Camp, 401 U.S. 617, 625 n.11 (1971). In that context, 

the Adams and Tortoise Funds concede certain contacts with SDNY, including listing their shares 

on the New York Stock Exchange and using New York brokers to carry out their investment 
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transactions. The Adams Funds also concede making payments to “certain data resources, such as 

Bloomberg and S&P Global Market, for purposes of accessing financial and market data.” J. 

App’x at 376. Viewed as a whole, these contacts relate to “the practical, everyday business or 

commercial concept of doing business” as a CEF. Daniel, 428 F.3d at 428. Accordingly, venue 

was appropriate in SDNY, and the district court could exercise personal jurisdiction over the

Adams and Tortoise Funds based on their minimum contacts with the United States.

III. The Control Share Provision 

Lastly, we turn to the merits of Saba’s claim, that is, whether the Control Share Provision

violates Section 18(i) of the ICA. “We review a district court’s grant of summary judgment de 

novo, and will affirm when there is no genuine dispute as to any material fact and the movant is 

entitled to judgment as a matter of law.” Kasiotis v. N.Y. Black Car Operators’ Inj. Comp. Fund, 

Inc., 90 F.4th 95, 98 (2d Cir. 2024). 

The ICA provides, in relevant part, that “[e]xcept as provided in subsection (a) of this 

section, or as otherwise required by law, every share of stock hereafter issued by a registered 

management company . . . shall be a voting stock and have equal voting rights with every other 

outstanding voting stock.” 15 U.S.C. § 80a-18(i). Although the ICA does not define “voting 

stock,” the ICA defines a “voting security” as “any security presently entitling the owner or holder 

thereof to vote for the election of directors of a company,” id. § 80a-2(a)(42), and a “security” to 

include “stock,” id. § 80a-2(a)(36).

 In Nuveen, Saba challenged under the ICA a provision substantially similar to the Control 

Share Provision at issue here. See 88 F.4th at 109. Specifically, the amended bylaws of Nuveen, 

a CEF, “included a Control Share Amendment (the ‘Amendment’) that limited the ability of 

shareholders with holdings greater than 10% in any particular fund, like Saba, to vote any 
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additional shares purchased.” Id. This Court held that Nuveen’s control share provision violated 

the ICA in two ways: (1) it violated Section 80a-2(a)(42) “because under [the Amendment], if an 

owner of Nuveen stock cannot ‘presently’ vote their stock, the stock loses its function and is not 

‘voting’ stock,” id. at 117; and (2) it also violated “Section 80a-18(i) because it deprives some

shares of voting power but not others—contrary to the provision’s guarantee of ‘equal voting 

rights,’” id. (quoting 15 U.S.C. § 80a-18(i)). 

The Funds’ only argument to distinguish the present case from Nuveen is that here, the 

Control Share Provision does not violate the ICA because it is “otherwise required by law,” 15 

U.S.C. § 80a-18(i), that is, Maryland law. The Funds argue that although opting into the Control 

Share Provision was a voluntary act, once they did so, the Control Share Provision became required 

by Maryland law. But the Funds cannot simply disregard the optional nature of that portion of the 

MCSAA because the MCSAA does not require a CEF to opt into the Control Share Provision. 

Rather, as stated expressly in the MCSAA, the Control Share Provision does not apply to a CEF

unless its “board of directors adopts a resolution to be subject to” it. Md. Code Ann., Corps. & 

Ass’ns § 3-702(c); accord Boulder Total Return Fund, Inc., SEC No-Action Letter, 2010 WL 

4630835, at *4 n.17 (Nov. 15, 2010) (“A CEF is not required to opt in to the [MCSAA]’s 

provisions; the MCSAA is an optional defensive device, and there is no requirement under 

Maryland law that a CEF avail itself of its protection.”). Thus, the Control Share Provision is not 

“required by law,” and consistent with Nuveen, violates Section 18(i) of the ICA.

The Funds further argue that even if the Control Share Provision violates the ICA, the 

district court abused its discretion by granting summary judgment—and ordering rescission of the 

offending resolutions—without first allowing for discovery under Federal Rule of Civil Procedure 

56(d). The Funds argue that discovery was necessary to show that the district court should deny 
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rescission on equitable grounds under Section 47(b)(2) of the ICA. “We review the denial of Rule 

56(d) discovery for abuse of discretion.” Elliot v. Cartagena, 84 F.4th 481, 493 (2d Cir. 2023). 

Section 47(b)(2) of the ICA provides that if a contract, including a corporation’s bylaws, 

violates the ICA, then “a court may not deny rescission at the instance of any party unless such 

court finds that under the circumstances the denial of rescission would produce a more equitable 

result than its grant and would not be inconsistent with the purposes of this subchapter.” 15 U.S.C. 

§ 80a-46(b)(2). Thus, although “a court may not deny rescission” unless it finds that the two 

conditions of Section 47(b)(2) have been satisfied, “[e]quitable balancing is not required to grant

rescission.” Nuveen, 88 F.4th at 120 n.16. Accordingly, the district court did not abuse its 

discretion by granting rescission of the Funds’ resolutions without first allowing for discovery.

* * * 

We have considered all of the Funds’ remaining arguments and find them unpersuasive. 

For the reasons stated above, we AFFIRM the judgment of the district court. 

 FOR THE COURT:

 Catherine O’Hagan Wolfe, Clerk