Diversity jurisdiction was one of the easier concepts in law school. At least at its most basic level. For example, it's not hard to remember that you've got to have complete diversity of citizenship. A concept like that is likely to be on the test, and is (fairly) easily remembered.
But the details are often incredibly difficult. How one treats corporations wasn't that hard -- place of incorporation and principal place of business -- though figuring out the latter wasn't invariably easy. But then you've got associations, and insurers, and executors, and things like that. All these artificial entities for which there are separate rules.
My guess is that your eyes pretty much glazed over when you got down to that level. With the totally understandable approach of "Well, I get the basics fairly well, so let's move on."
Which is fine for law school. But then, once you become a lawyer, when you have a case in which you have to actually confront (and brief) the issue, well, sorry. You're stuck.
Today's (sole) Ninth Circuit opinion delves into the complicated issue of how you treat "trusts" in determining diversity jurisdiction; in particular, trusts created my mortgage securitization. Do you just look at the citizenship of the trustee? Or do you look at the citizenship of the beneficiaries (or both)? After all, it's the latter who really care about the lawsuit. Even though the former is the nominal defendant and legally represents the latter. Who counts?
It's not an easy question. Particularly since (1) the Supreme Court has been slowly changing all these diversity rules, at least at the margins, and (2) the number and complexity of artificial legal entities keeps increasing over time (which in turn partially explains (1)). So does the rule remain the "usual" one: that it's just the trustee that counts? Or is this more like REITs and other trusts, where, under evolving law, it's the beneficiaries (at least in part) that matter?
Ultimately, the Ninth Circuit decides to just dance with the person who brung 'em. It sticks with the traditional rule. Only the trustee counts.
If the Supreme Court wants to change the rule, it's up to them.
