Americold Realty Trust v. ConAgra Foods - Post-Decision SCOTUScast

On March 7, 2016, the Supreme Court decided Americold Realty Trust v. ConAgra Foods, a case giving rise to a dispute over the scope of federal courts’ diversity jurisdiction. A group of corporations whose food perished in a warehouse fire sued the warehouse owner, currently known as Americold Realty Trust, in Kansas state court. Americold then removed the suit to the U.S. District Court for the District of Kansas, which accepted jurisdiction and resolved the dispute in favor of Americold. On appeal, however, the U.S. Court of Appeals for the Tenth Circuit held that the district court had lacked jurisdiction. Although the parties argued that diversity jurisdiction existed because the suit involved citizens of different states, the Tenth Circuit disagreed. As a trust and not a corporation, the court reasoned, Americold’s citizenship depended on that of its members, including shareholders. Given the lack of evidence regarding the shareholders’ citizenship, the court held, the parties had failed to demonstrate that the plaintiffs were citizens of different states than the defendants. -- By a vote of 8-0, the Supreme Court affirmed the judgment of the Tenth Circuit, holding that for purposes of diversity jurisdiction, the citizenship of an unincorporated entity depends on the citizenship of all of its members. Under Maryland law a real estate investment trust is held and managed for the benefit of its shareholders, the Court explained, so Americold’s members include its shareholders. Justice Sotomayor delivered the opinion for a unanimous court. -- To discuss the case, we have Erik Zimmerman, who is an attorney with Robinson Bradshaw in Chapel Hill, North Carolina.