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Mitchell v. Wells Fargo Bank, N.A.

United States District Court, Ninth Circuit

October 10, 2013

ROBERT J. MITCHELL, et al., Plaintiffs,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

ORDER DENYING PLAINTIFFS' MOTION TO REMAND Dkt. No. 9

KANDIS A. WESTMORE, Magistrate Judge.

Plaintiffs Robert and Christine Mitchell filed this case against Defendant Wells Fargo in the Contra Costa County Superior Court on August 1, 2013. Defendant removed the case to this Court on August 28, 2013. On September 5, 2013, Plaintiffs filed a motion to remand the case to state court.

Upon review of the moving papers, the Court finds this matter suitable for resolution without oral argument pursuant to Civil Local Rule 7-1(b), and finds that Wells Fargo is not a citizen of California for diversity purposes, and that the amount in controversy at the time of the removal met the jurisdictional requirement, such that Plaintiffs' motion to remand is DENIED.

I. LEGAL STANDARD

District courts have jurisdiction in civil actions where there is complete diversity of citizenship among the parties and the amount in controversy exceeds $75, 000, exclusive of interest and costs. 28 U.S.C. § 1332(a). There is a "strong presumption against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992). This principle dictates that the removal statute be "strictly construed against removal jurisdiction." Id.

II. DISCUSSION

Plaintiffs maintain that this case should be remanded to state court because Wells Fargo is a citizen of California, and the amount in controversy is less than $75, 000.

A. Citizenship of Wells Fargo for Diversity Purposes

Plaintiffs argue that Defendant Wells Fargo is a citizen of California, and so this case must be remanded to state court on the basis that there is not complete diversity between the parties. Defendant argues that it is a citizen of South Dakota, where its main office is located, but admits that its principal place of business is in California.

District courts in the Ninth Circuit, and other Circuits, are split regarding Wells Fargo's citizenship for diversity purposes. Specifically, whether Wells Fargo is a citizen of only South Dakota, or is a citizen of both South Dakota and California. Defendant's citizenship for diversity purposes is governed by 28 U.S.C. § 1348, which provides that national banks "shall... be deemed citizens of the States in which they are respectively located." The word "located" has recently been interpreted in two ways. Some courts have held that, under § 1348, a national bank is a citizen solely in the state where its main office is located; others have held that, like other corporations, a national bank is a citizen of both the state where its main office is located, and of the state where it has its principal place of business. For the reasons explained below, this Court holds that Wells Fargo is solely a citizen of South Dakota for the purposes of diversity jurisdiction.

In American Surety Co. v. Bank of California, 133 F.2d 160 (9th Cir. 1943)-the only Ninth Circuit case to address the issue-the Court held that, for the purposes of this statute, a national bank is "located" in the state where it maintains its principal place of business. The bank at issue in this case was Bank of California, which maintained its principal place of business- and presumably its main office-in California, but had a branch office in Oregon. The Court rejected the argument that Bank of California should be considered a citizen of Oregon because it had a branch office there. Id. at 162. After noting that no case had defined the word "located, " the Court decided that it was logical to define the word to mean "those states in which [banks'] principal places of business are maintained." Accordingly, the Court found that "defendant is a citizen only of the state in which its principal place of business is located, the State of California." Id. (emphasis added).

More recently, in Wachovia Bank v. Schmidt, the United States Supreme Court held that for purposes of § 1348, a national bank is "located" in the state in which its main office, as designated in its articles of incorporation, is located. 546 U.S. 303, 307 (2006). Like the Court in American Surety, the Supreme Court rejected the argument that a national bank is "located" in each state in which it maintains a branch. Id. The Court noted that the word "located" does not have a "fixed, plain meaning, " but held that under § 1348, "one would sensibly locate' a national bank for... diversity jurisdiction, in the State designated in its articles of association as its main office." Id. at 318.

The Court noted that under § 1332(c)(1), a corporation is considered to be a citizen of the state of its main office and the state of its principal place of business, and discussed the distinction between § 1348 and § 1332(c)(1):

Congress has prescribed that a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.' 28 U.S.C. § 1332(c)(1). The counterpart provision for national banking associations, § 1348, however, does not refer to principal place of business'; it simply deems such associations citizens of the States in which they are respectively located.' The absence of a principal place of business' reference in § 1348 may be of scant practical significance ...

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