Schneiderman v. American Chemical Society
Split Score
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Case Summary
Disposition
Affirmed
The Second Circuit held that 28 U.S.C. § 1332(c)(1) does not make federally chartered corporations citizens of the state where they maintain their principal place of business unless they are also incorporated in a state. Because the American Chemical Society is federally chartered and has no state of incorporation, diversity jurisdiction was lacking, and the district court’s dismissal of Arnold Schneiderman’s disability-discrimination suit was affirmed.
Circuit Split Identified
Legal Issue
Whether the principal-place-of-business clause in 28 U.S.C. § 1332(c)(1) independently confers state citizenship on federally chartered corporations for purposes of diversity jurisdiction when the corporation is not incorporated in any state.
Circuit Positions
§ 1332(c)(1) applies independently; a federally chartered corporation is a citizen of the state where it has its principal place of business.
§ 1332(c)(1) applies conjunctively; without state incorporation the statute does not confer state citizenship, so federally chartered corporations are not citizens of any state.
Conflict Summary
The Fourth Circuit holds that § 1332(c)(1) supplies state citizenship to a federally chartered corporation based solely on its principal place of business, allowing diversity jurisdiction; the Second Circuit (joined by several other circuits) holds that the clause operates only in conjunction with state-of-incorporation language and therefore does not apply to corporations chartered by Congress, leaving such entities ‘stateless’ for diversity purposes absent a separate statutory grant or localization exception.