Question: For purposes of federal diversity jurisdiction, is a national bank a citizen of every state where it has a branch office? Answer: No; only the state where its main office is located, according to the Supreme Court in Wachovia Bank National Association v. Schmidt __ U.S. __, 06 C.D.O.S. 444 (Jan. 17, 2006). In this case, a national bank had its main office in North Carolina and branch offices in many states, including South Carolina. When it was sued in state court in South Carolina, the bank removed the case to federal court on grounds of diversity, arguing that it was not a citizen of South Carolina. On appeal, the Fourth Circuit construed the federal diversity statute, which provides that national banking associations are deemed citizens of the states in which they are respectively “located,” to mean that a national bank is a citizen of every state where it maintains a branch office. Hence, the bank was a citizen of South Carolina and could not remove the case to federal court. The Supreme Court reversed, holding that for purposes of diversity jurisdiction, a national bank “is a citizen of the State in which its main office, as set forth in its articles of association, is located.” In so holding, the Court recognized that “located” is not a word of “enduring rigidity,” and that to hold otherwise would mean that the “access to the federally chartered bank to a federal forum would be drastically curtailed in comparison to the access afforded state banks and other state-incorporated entities.” Comment: Expect to see a lot more removal petitions from national banks. Click here for an electronic copy of the opinion.