Court Opinion

ID: 3183082
Source: CourtListenerOpinion
Date Created: 2016-03-07 16:06:40.243157+00
Date Added: 2024-06-11T07:38:59.668597
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2015                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

  AMERICOLD REALTY TRUST v. CONAGRA FOODS,

                 INC., ET AL. 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                 THE TENTH CIRCUIT

   No. 14–1382. Argued January 19, 2016—Decided March 7, 2016
Respondents, corporate citizens of Delaware, Nebraska, and Illinois,
  sued petitioner Americold Realty Trust, a “real estate investment
  trust” organized under Maryland law, in a Kansas court. Americold
  removed the suit to Federal District Court based on diversity-of-
  citizenship jurisdiction. See 28 U.S. C. §§1332(a)(1), 1441(b). The
  District Court accepted jurisdiction and ruled in Americold’s favor.
  On appeal, the Tenth Circuit held that the District Court lacked ju-
  risdiction to hear the suit. Since Americold was not a corporation,
  the court reasoned, its citizenship for diversity jurisdiction purposes
  should be based on the citizenship of its members, which included its
  shareholders. Because no record of those shareholders’ citizenship
  existed, diversity was not proved.
Held: For purposes of diversity jurisdiction, Americold’s citizenship is
 based on the citizenship of its members, which include its sharehold-
 ers. Pp. 2–6.
    (a) Historically, the relevant citizens for jurisdictional purposes in
 a suit involving a “mere legal entity” were that entity’s “members,” or
 the “real persons who come into court” in the entity’s name. Bank of
 United States v. Deveaux, 5 Cranch 61, 86, 91. But for the limited ex-
 ception of jurisdictional citizenship for corporations, see Louisville, C.
 & C. R. Co. v. Letson, 2 How. 497, 558, this Court continues to “ad-
 here to [the] oft-repeated rule that diversity jurisdiction in a suit by
 or against the entity depends on the citizenship of ‘all [its] mem-
 bers,’ ” Carden v. Arkoma Associates, 494 U.S. 185, 195. Applying
 the rule here, Americold possesses the citizenship of all its members,
 who, under Maryland law, include its shareholders. See, e.g., Md.
 Corp. & Assns. Code Ann. §8–101(c). Pp. 2–4.
2      AMERICOLD REALTY TRUST v. CONAGRA FOODS, INC.

                                  Syllabus

       (b) Americold argues that anything called a “trust” possesses the
    citizenship of its trustees alone. Traditionally, a trust was considered
    a “fiduciary relationship” between multiple people and could not be
    haled into court; hence, legal proceedings involving a trust were
    brought by or against the trustees in their own name, Deveaux, 5
    Cranch, at 91. Americold confuses the traditional trust with the va-
    riety of unincorporated entities that many States have given the
    “trust” label. Under Maryland law, the real estate investment trust
    at issue is treated as a “separate legal entity” that can sue or be sued.
    §§8–102(2), 8–301(2). Despite what such an entity calls itself, so long
    as it is unincorporated, this Court will apply the “oft-repeated rule”
    that it possesses the citizenship of all its members. Pp. 4–6.
776 F.3d 1175, affirmed.

    SOTOMAYOR, J., delivered the opinion for a unanimous Court.
                        Cite as: 577 U. S. ____ (2016)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash-
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 14–1382
                                   _________________

    AMERICOLD REALTY TRUST, PETITIONER v.

         CONAGRA FOODS, INC., ET AL. 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

            APPEALS FOR THE TENTH CIRCUIT

                                 [March 7, 2016]

  JUSTICE SOTOMAYOR delivered the opinion of the Court.
  Federal law permits federal courts to resolve certain
nonfederal controversies between “citizens” of different
States. This rule is easy enough to apply to humans, but
can become metaphysical when applied to legal entities.
This case asks how to determine the citizenship of a “real
estate investment trust,” an inanimate creature of Mary-
land law. We answer: While humans and corporations can
assert their own citizenship, other entities take the citi-
zenship of their members.
                             I
  This action began as a typical state-law controversy, one
involving a contract dispute and an underground food-
storage warehouse fire. A group of corporations whose
food perished in that 1991 fire continues to seek compen-
sation from the warehouse’s owner, now known as Amer-
icold Realty Trust. After the corporations filed their latest
suit in Kansas court, Americold removed the suit to the
Federal District Court for the District of Kansas. The
District Court accepted jurisdiction and resolved the dis-
pute in favor of Americold.
2   AMERICOLD REALTY TRUST v. CONAGRA FOODS, INC.

                     Opinion of the Court

   On appeal, however, the Tenth Circuit asked for sup-
plemental briefing on whether the District Court’s exercise
of jurisdiction was appropriate. The parties responded
that the District Court possessed jurisdiction because the
suit involved “citizens of different States.” 28 U.S. C.
§§1332(a)(1), 1441(b).
   The Tenth Circuit disagreed. The court considered the
corporate plaintiffs citizens of the States where they were
chartered and had their principal places of business:
Delaware, Nebraska, and Illinois. See ConAgra Foods,
Inc. v. Americold Logistics, LLC, 776 F.3d 1175, 1182
(2015); §1332(c)(1) (specifying the citizenship of corpora-
tions for jurisdictional purposes). The court applied a
different test to determine Americold’s citizenship because
Americold is a “real estate investment trust,” not a corpo-
ration. Distilling this Court’s precedent, the Tenth Circuit
reasoned that the citizenship of any “non-corporate artifi-
cial entity” is determined by considering all of the entity’s
“members,” which include, at minimum, its shareholders.
Id., at 1180–1181 (citing Carden v. Arkoma Associates, 494
U.S. 185 (1990)). As there was no record of the citizen-
ship of Americold’s shareholders, the court concluded that
the parties failed to demonstrate that the plaintiffs were
“citizens of different States” than the defendants. See
Strawbridge v. Curtiss, 3 Cranch 267 (1806).
   We granted certiorari to resolve confusion among the
Courts of Appeals regarding the citizenship of unincorpo-
rated entities. 576 U. S. ___ (2015). We now affirm.
                             II
  Exercising its powers under Article III, the First Con-
gress granted federal courts jurisdiction over controversies
between a “citizen” of one State and “a citizen of another
State.” 1 Stat. 78. For a long time, however, Congress
failed to explain how to determine the citizenship of a
nonbreathing entity like a business association. In the
                  Cite as: 577 U. S. ____ (2016)            3

                      Opinion of the Court

early 19th century, this Court took that silence literally,
ruling that only a human could be a citizen for jurisdic-
tional purposes. Bank of United States v. Deveaux, 5
Cranch 61, 86–91 (1809). If a “mere legal entity” like a
corporation were sued, the relevant citizens were its
“members,” or the “real persons who come into court” in
the entity’s name. Id., at 86, 91.
   This Court later carved a limited exception for corpora-
tions, holding that a corporation itself could be considered
a citizen of its State of incorporation. See Louisville, C. &
C. R. Co. v. Letson, 2 How. 497, 558 (1844). Congress
etched this exception into the U. S. Code, adding that a
corporation should also be considered a citizen of the State
where it has its principal place of business. 28 U.S. C.
§1332(c) (1958 ed.). But Congress never expanded this
grant of citizenship to include artificial entities other than
corporations, such as joint-stock companies or limited
partnerships. For these unincorporated entities, we too
have “adhere[d] to our oft-repeated rule that diversity
jurisdiction in a suit by or against the entity depends on
the citizenship of ‘all [its] members.’ ” Carden, 494 U.S.,
at 195–196 (quoting Chapman v. Barney, 129 U.S. 677,
682 (1889)).
   Despite our oft-repetition of the rule linking unincorpo-
rated entities with their “members,” we have never ex-
pressly defined the term. But we have equated an associa-
tion’s members with its owners or “ ‘the several persons
composing such association.’ ” Carden, 494 U.S., at 196
(quoting Great Southern Fire Proof Hotel Co. v. Jones, 177
U.S. 449, 456 (1900)). Applying this principle with refer-
ence to specific States’ laws, we have identified the mem-
bers of a joint-stock company as its shareholders, the
members of a partnership as its partners, the members of
a union as the workers affiliated with it, and so on. See
Carden, 494 U.S., at 189–190 (citing Chapman, 129 U.S.,
at 682; Great Southern, 177 U.S., at 457; and Steelworkers
4   AMERICOLD REALTY TRUST v. CONAGRA FOODS, INC.

                     Opinion of the Court

v. R. H. Bouligny, Inc., 382 U.S. 145, 146 (1965)).
   This case asks us to determine the citizenship of Amer-
icold Realty Trust, a “real estate investment trust” orga-
nized under Maryland law. App. 93. As Americold is not
a corporation, it possesses its members’ citizenship. Noth-
ing in the record designates who Americold’s members are.
But Maryland law provides an answer.
   In Maryland, a real estate investment trust is an “unin-
corporated business trust or association” in which prop-
erty is held and managed “for the benefit and profit of any
person who may become a shareholder.” Md. Corp. &
Assns. Code Ann. §§8–101(c), 8–102 (2014). As with joint-
stock companies or partnerships, shareholders have “own-
ership interests” and votes in the trust by virtue of their
“shares of beneficial interest.” §§8–704(b)(5), 8–101(d).
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. See Carden, 494 U.S.,
at 192–196; see also §8–705(a) (linking the term “benefi-
cial interests” with “membership interests” and “partner-
ship interests”). We therefore conclude that for purposes
of diversity jurisdiction, Americold’s members include its
shareholders.
                             III
   Americold disputes this conclusion. It cites a case called
Navarro Savings Assn. v. Lee, 446 U.S. 458 (1980), to
argue that anything called a “trust” possesses the citizen-
ship of its trustees alone, not its shareholder beneficiaries
as well. As we have reminded litigants before, however,
“Navarro had nothing to do with the citizenship of [a]
‘trust.’ ” Carden, 494 U.S., at 192–193. Rather, 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—as is true of any natural
                 Cite as: 577 U. S. ____ (2016)           5

                     Opinion of the Court

person. 446 U.S., at 465. This rule coexists with our
discussion above that when an artificial entity is sued in
its name, it takes the citizenship of each of its members.
   That said, Americold’s confusion regarding the citizen-
ship of a trust is understandable and widely shared. See
Emerald Investors Trust v. Gaunt Parsippany Partners,
492 F.3d 192, 201–206 (CA3 2007) (discussing various
approaches among the Circuits). The confusion can be
explained, perhaps, by tradition. Traditionally, a trust
was not considered a distinct legal entity, but a “fiduciary
relationship” between multiple people. Klein v. Bryer, 227
Md. 473, 476–477, 177 A.2d 412, 413 (1962); Restatement
(Second) of Trusts §2 (1957). 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. Glenn v. Allison, 58 Md. 527, 529
(1882); Deveaux, 5 Cranch, at 91. And when a trustee files
a lawsuit or is sued in her own name, her citizenship is all
that matters for diversity purposes. Navarro, 446 U.S., at
462–466. 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 “sepa-
rate legal entity” that itself can sue or be sued. Md. Corp.
& Assns. Code Ann. §§8–102(2), 8–301(2). So long as such
an entity is unincorporated, we apply our “oft-repeated
rule” that it possesses the citizenship of all its members.
Carden, 494 U.S., at 195. But neither this rule nor Na-
varro limits an entity’s membership to its trustees just
because the entity happens to call itself a trust.
   We therefore decline to apply the same rule to an unin-
corporated entity sued in its organizational name that
applies to a human trustee sued in her personal name.
6      AMERICOLD REALTY TRUST v. CONAGRA FOODS, INC.

                       Opinion of the Court

We also decline an amicus’ invitation to apply the same
rule to an unincorporated entity that applies to a corpora-
tion—namely, to consider it a citizen only of its State of
establishment and its principal place of business. See
Brief for National Association of Real Estate Investment
Trusts 11–21. When we last examined the “doctrinal wall”
between corporate and unincorporated entities in 1990, we
saw no reason to tear it down. Carden, 494 U.S., at 190.
Then as now we reaffirm that it is up to Congress if it
wishes to incorporate other entities into 28 U.S. C.
§1332(c)’s special jurisdictional rule.
                          *    *   *
     For these reasons, the judgment of the Court of Appeals
is
                                                  Affirmed.