The United States Court of Appeals for the Second Circuit issued a decision today in the case of OneWest Bank, N.A. v. Robert W. Melina, No. 15-3063 (2d Cir. June 29, 2016) holding that a national bank is a citizen only of the state in which its main office is located, as stated in the bank’s articles of association.

…the U. S. Supreme Court held that, for purposes of diversity jurisdiction, a bank is a citizen of the state designated in its articles of association as the home of its main office; not in every state in which it has branch offices.

OneWest Bank, N.A. (“OneWest’), a bank with its main office in California commenced a collection action against its borrower, Mr. Melina, a resident of Brooklyn, New York in the United States District Court for the Eastern District of New York (the “District Court”).  In filing its action in the District Court, OneWest invoked diversity jurisdiction under 28 U.S.C. § 1332, i.e., where the federal courts have jurisdiction to hear cases where the plaintiff and defendant are not citizens of the same state.  Generally speaking, a corporation’s principal place of business is where the corporation maintains its headquarters, but can be where it transacts the most amount of business. However, the rule is different for national banks because 28 U.S.C. § 1348 provides that national banks shall “be deemed citizens of the States in which they are respectively located.”  In  Wachovia Bank v. Schmidt, 546 U.S. 303 (2006), the U.S. Supreme Court held that, for purposes of diversity jurisdiction, a bank is a citizen of the state designated in its articles of association as the home of its main office; not in every state in which it has branch offices.  However, the Supreme Court left open the question of whether a bank is a citizen of the state that is home to its principal place of business, if that state is different than the state designated in the articles of association as the main office.

Mr. Melina sought dismissal of the action claiming that the District Court lacked diversity jurisdiction trying to argue OneWest, for a number of reasons, was a citizen of New York.  This argument was rejected by the District Court, and now affirmed by the U.S. Court of Appeals for the Second Circuit.  Joining a number of its sister circuits who have since ruled on this issue since Wachovia Bank, the Second Circuit held today that, for purposes of federal diversity jurisdiction, a national bank is a citizen only of the state listed in its articles of association as home of its main office; not also of the state of its principal place of business.