Rouse v. Wachovia Mortgage

For diversity jurisdiction purposes, national bank is a citizen only of the state where its main office is located.

Robert and Victoria Rouse (“the Rouses”) filed suit against Wells Fargo Bank, its Wachovia division, and NDeX West LLC in the Superior Court of the State of California. Wachovia removed the Rouses’ original complaint to federal district court on the basis of federal questions and diversity of citizenship, the district court dismissed the complaint without prejudice for failure to state a claim. The Rouses then then filed a first amended complaint, raising only state claims. At that trial, the district court remanded the case to state court for lack of diversity jurisdiction, holding that, under 28 USC § 1348, a national bank is a citizen in the state where its principal place of business is located and in the state where its main office is located. On appeal, the Ninth Circuit rejected the district court’s interpretation, holding instead that a national bank is a citizen only in the state where its main office is located and therefore complete diversity existed. After an examination of the Supreme Court’s decision in Wachovia Bank, N.A. v.Schmidt, 546 US 303 (2006), and relevant legislative history, the panel concluded that its disparate treatment of jurisdiction for national banks, as governed by §1348, and state-chartered banks, as governed by §1332, was consistent with congressional intent. REVERSED and REMANDED.