Legal Memorandum: Diversity Jurisdiction and Corporate Citizenship

Issue: Whether there is a distinction between corporate citizenship for purposes of diversity jurisdiction and corporate residency according to the Judicial Improvements Act.

The Judicial Improvements and Access to Justice Act of 1988 provides (in Title II, which is entitled Federal Jurisdiction—Diversity Reform):

SEC. 202. DIVERSITY IN CASES INVOLVING MULTISTATE CORPORATIONS OR REPRESENTATIVE PARTIES.

(a) IN GENERAL. — [28 U.S.C.] Section 1332(c) is amended to read as follows:

“(c) For the purposes of this section and section 1441 of this title —

“(1) a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business . . . .”

See Judicial Improvements and Access to Justice Act § 202, PL 100–702, Nov. 19, 1988, 102 Stat. 4642; see also 28 U.S.C. § 1332(c)(1) (incorporating same). 

For purposes of diversity jurisdiction, the citizenship of an LLC is based on the citizenship of its members.  See Onepoint Solutions, LLC v. Borchert, 486 F.3d 342 (8^th Cir. 2007); see also 13F Charles A. Wright et al., Federal Practice and Procedure—Jurisdiction § 3630.1 (3d ed. 2011) (stating that the actual citizenship of each of the LLC’s members must be considered in determining whether diversity jurisdiction exists). 

The 1988 Judicial Improvements Act also included the Corporate Venue amendment to 28 U.S.C. § 1391 which provides:  “(c) For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside […]