Yamuna Bhaskaran | Bloomberg Law Federal courts throughout the country are struggling to interpret 28 U.S.C. § 1348,1 which governs their jurisdiction over national banking associations. The question is whether, for purposes of diversity jurisdiction, a national bank is "located" only in the state in which its main office, as specified in its articles of association, is found, or whether it is also located in the state in which its principal place of business is found. The issue generally arises in the context of attempts to either remove cases to federal court from state court, or to remand cases to state court from federal court. While the issue may seem academic at first blush because, in most instances, a national bank's main office is the same as its principal place of business, the practical implications have revealed themselves in sharp fashion with respect to Wells Fargo, N.A., a branch of the banking conglomerate famous for its California roots. Recent court opinions have held that even though its principal place of business is in California, Wells Fargo is instead a citizen of South Dakota, the location of its "main office," for purposes of diversity jurisdiction. Not all courts concur; some have held that Wells Fargo is citizen of California as well as South Dakota. The rift among the federal circuit courts is growing rapidly, with the Eighth Circuit recently issuing an opinion that conflicted with precedent from the Fifth and Ninth Circuits. Even federal courts within California cannot agree on Wells Fargo's citizenship. Wells Fargo is hardly the only bank that has been subject of these increasing disagreements among federal courts. This article will explore the underlying legal issues and the implications for practitioners.
1863: The "National Association" Is Born
Redefining "Located" as "Main Office"
"Principal Place of Business"
— Reading Tea Leaves: Footnote 9 in Wachovia
— The Rising Tide in Favor of Principal Place of Business
— "Principal Place of Business" Did Not Exist When 1348 Was Amended
Implications for Practitioners
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