Shearman & Sterling LLP multinational law firm headquartered in New York City, United States.

balance scale

Jul 08, 2016

Second Circuit Holds a National Bank’s Citizenship Is Determined Exclusively by Location of Main Office, Not Principal Place of Business

Subscribe

Jump to...

 

For purposes of assessing the existence of federal subject matter jurisdiction based on diversity of citizenship, national banking associations—i.e., corporate entities chartered not by any State, but by the Office of the Comptroller of the Currency, an independent bureau of the US Treasury—are deemed to be citizens of the State in which they are “located.” In 2006, in Wachovia Bank v. Schmidt, the U.S. Supreme Court held that a national bank is “located” in, and thus a citizen of, the State designated in its articles of association as the locus of its designated “main office,” but is not additionally “located” in, and thus a citizen of, every State in which it has established a branch. The Supreme Court, however, left open whether a national bank might also be considered a citizen of the State of its principal place of business, if its principal place of business were located in a different State than its main office, observing that such treatment would be necessary to achieve jurisdictional parity between national and state-chartered banks. In OneWest Bank, N.A. v. Melina, No. 15-3063, 2016 WL 3548346 (2d Cir. June 29, 2016), the Second Circuit agreed with the other Circuit Courts to have considered that question post-Wachovia and held that a national bank is a citizen only of the State listed in its articles of association as its main office, and not also of any other State where it may have its principal place of business. In so holding, the OneWest Court rejected the notion that the concept of jurisdictional parity should be read into the relevant statutes.  As a result, insofar as national banks can be deemed to be a citizen of one and only one State, they will be in a preferred position vis-à-vis state-chartered banks, which can be deemed to be citizens of more than one State, for purposes of invoking diversity jurisdiction within the Second Circuit.

View full memo, Second Circuit Holds a National Bank’s Citizenship Is Determined Exclusively by Location of Main Office, Not Principal Place of Business

Authors and Contributors

Stuart J. Baskin

Partner

Litigation

+1 212 848 4974

+1 212 848 4974

New York

Brian G. Burke

Partner

Litigation

+1 212 848 7140

+1 212 848 7140

New York

Matthew L. Craner

Partner

Litigation

+1 212 848 5255

+1 212 848 5255

New York

Agnès Dunogué

Partner

Litigation

+1 212 848 5257

+1 212 848 5257

New York

H. Miriam Farber

Counsel

Litigation

+1 212 848 5156

+1 212 848 5156

New York

Stephen Fishbein

Partner

Litigation

+1 212 848 4424

+1 212 848 4424

New York

Jerome S. Fortinsky

Partner

Litigation

+1 212 848 4900

+1 212 848 4900

New York

Alan S. Goudiss

Partner

Litigation

+1 212 848 4906

+1 212 848 4906

New York

John Gueli

Partner

Litigation

+1 212 848 4744

+1 212 848 4744

New York

Adam Hakki

Partner

Litigation

+1 212 848 4924

+1 212 848 4924

New York

Daniel H.R. Laguardia

Partner

Litigation

+1 415 616 1114

+1 415 616 1114

San Francisco

Daniel Lewis

Partner

Litigation

+1 212 848 8691

+1 212 848 8691

New York

John A. Nathanson

Partner

Litigation

+1 212 848 8611

+1 212 848 8611

New York

Brian H. Polovoy

Partner

Litigation

+1 212 848 4703

+1 212 848 4703

New York

Jeffrey J. Resetarits

Partner

Litigation

+1 212 848 7116

+1 212 848 7116

New York

William J. F. Roll, III

General Counsel

Litigation

+1 212 848 4260

+1 212 848 4260

New York

Richard F. Schwed

Partner

Litigation

+1 212 848 5445

+1 212 848 5445

New York

Patrick D. Robbins

Partner

Litigation

+1 415 616 1210

+1 415 616 1210

San Francisco

Mark D. Lanpher

Partner

Litigation

+1 202 508 8120

+1 202 508 8120

Washington DC

Reena Agrawal Sahni

Partner

Financial Institutions Advisory & Financial Regulatory

+1 212 848 7324

+1 212 848 7324

New York

Bradley K. Sabel

Of Counsel

Financial Institutions Advisory & Financial Regulatory

+1 212 848 8410

+1 212 848 8410

New York

Timothy J. Byrne

Counsel

Financial Institutions Advisory & Financial Regulatory

+1 212 848 7476

+1 212 848 7476

New York