Federally Chartered Banks Are Citizens Only Of Their Main Branch’s State

A party’s citizenship is a critical issue when federal jurisdiction is being claimed on the basis of diversity. While it is well-settled that, for example, a corporation is a citizen of both the state of its incorporation and the state in which it has its principal place of business, and that limited partnerships are citizens of every state in which each partner is a citizen, the law was not settled concerning national banks.

Congress attempted to provide the answer by statute, but the language of 28 U.S.C. § 1348 (national banks deemed citizens of the state “in which they are respectively located”) has caused a split in the circuits.

In Wachovia Bank, N.A. v. Schmidt, No. 04-1186 (U.S. Jan. 17, 2006), the Court held that Congress intended that a national bank be a citizen only of the state in which its main branch, as specified in the charter, is located. The Court rejected the Fourth Circuit’s position that national banks be deemed citizens of each state in which they have any branch.

Supreme Court to Address Whether Experts' Fees Included In Fee Award

A number of federal statutes permit the district court to award attorneys’ fees and costs to the prevailing party. In Murphy v. Arlington Central School Dist. Bd. of Educ., 402 F.3d 332 (2d Cir. 2005), the court allowed the award not only of attorneys’ fees but also the fees of an expert “educational consultant” under the fee-shifting provisions of the Individuals With Disabilities Education Act.

The U.S. Supreme Court has granted the school district’s petition for certiorari, limited solely to the question of whether the statute allowing the court to “award reasonable attorneys’ fees as part of the costs” to the prevailing party also allows the award of experts’ fees. Arlington Central School Dist. Bd. of Educ. v. Murphy, No. 05-18 (Jan. 5, 2006).

Ninth Circuit Upholds Long-Arm Jurisdiction From Obtaining Foreign Court Orders

A recent Ninth Circuit opinion considered whether long-arm jurisdiction can be triggered through a party’s bringing foreign court proceedings against an American citizen.

In Yahoo! Inc. v. La Ligue Contre Racisme et L’Antisemitisme, No. 01-17424 (9th Cir. Jan. 12, 2006), the popular Internet company Yahoo! brought an action in California federal court seeking a declaration that several orders entered against it in France were of no force and effect. The defendants had obtained orders from a French court finding that Yahoo! had permitted its users to use the site to sell Nazi memorabilia in violation of French law, and requiring Yahoo! to set up filters to prevent users in France from browsing the offending pages.

Eight of the eleven judges on the Ninth Circuit panel agreed that the district court had personal jurisdiction over the French defendants. Applying principles of long-arm jurisdiction, the majority concluded that the defendants “purposefully availed” themselves of the privilege of conducting activities in California and/or “purposefully directed” activities with a California party by bringing proceedings against that party in the French courts.