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In re arbitration between Wells Fargo, N.A., Claimant and WMR e-PIN, LLC et al., Respondents: US District Court : CIVIL PROCEDURE - diversity of citizenship

1
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
In re Arbitration Between
Wells Fargo Bank, N.A.,
Claimant,
and Civil No. 08-5472 (JNE/FLN)
ORDER
WMR e-PIN, LLC, e-Banc, LLC, and
Synoran, Inc.,
Respondents.
On November 26, 2008, the Court noted deficiencies in the jurisdictional allegations of
Wells Fargo Bank, N.A., and ordered Wells Fargo Bank to correct them. After reviewing Wells
Fargo Banks response, the Court afforded it an additional opportunity to clarify the citizenship
of one of the respondents. The information submitted by Wells Fargo Bank reveals that: (1)
Wells Fargo Bank is a citizen of South Dakota; (2) WMR e-PIN, LLC, is a citizen of Ohio and
possibly Maryland; (3) e-Banc, LLC, changed its name to Synoran, LLC; (4) Synoran is
incorrectly identified in the caption as a corporation; and (5) Synoran is a citizen of California,
Delaware, Maryland, Nevada, Ohio, and Oregon. Consequently, Wells Fargo Bank asserts that
there is complete diversity of citizenship.
Disputing that assertion, Respondents contend that Wells Fargo Bank is a citizen of South
Dakota and California. In Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303 (2006), the Supreme
Court held that a national bank is a citizen of the state where its main office, as designated in its
articles of association, is located. 546 U.S. at 307; see 28 U.S.C. 1348 (2006). Wells Fargo
Banks articles of association designate Sioux Falls, South Dakota, as the location of Wells
Fargo Banks main office. Thus, Wells Fargo Bank is a citizen of South Dakota.
2
To support their assertion that Wells Fargo Bank is also a citizen of California,
Respondents cite Mount v. Wells Fargo Bank, N.A., Civ. No. 08-6298, 2008 WL 5046286 (C.D.
Cal. Nov. 24, 2008). In Mount, Wells Fargo Bank removed an action to federal court under the
Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d) (2006). Asserting that Wells Fargo
Bank was a citizen of South Dakota due to the location of its main office under its articles of
association and of California due to the location of its principal place of business, Plaintiffs,
representing a putative class of California residents, moved to remand on the ground that
CAFAs minimal diversity requirement was not satisfied. Concluding that Wells Fargo Bank
was a citizen of California due to the location of its principal place of business, the Central
District of California granted the motion to remand.
Respondents assert that the Court should grant preclusive effect to the Central District of
Californias determination that Wells Fargo Bank is a citizen of California. The Court declines
to give preclusive effect to the Central District of Californias remand order. See Kircher v.
Putnam Funds Trust, 547 U.S. 633, 647 (2006).
To support its conclusion that Wells Fargo Bank is a citizen of California, the Central
District of California relied on cases decided by the Fifth Circuit and the Seventh Circuit before
the Supreme Courts decision in Wachovia Bank. In Horton v. Bank One, N.A., 387 F.3d 426
(5th Cir. 2004), the Fifth Circuit interpreted 28 U.S.C. 1348 to provide that a national bank is a
citizen of the state where its principal place of business is located and of the state specified in its
articles of association. 387 F.3d at 431. In Firstar Bank, N.A. v. Faul, 253 F.3d 982 (7th Cir.
2001), the Seventh Circuit held for purposes of 28 U.S.C. 1348 that a national bank is a citizen
of the state of its principal place of business and of the state listed in its organization certificate.
253 F.3d at 994. In light of the Supreme Courts express distinction of a corporation, which is a
3
citizen of the states of its incorporation and of its principal place of business per 28 U.S.C.
1332(c)(1), from a national bank, whose jurisdictional counterpart, 28 U.S.C. 1348, makes no
reference to a principal place of business, the Court does not find Horton or Firstar persuasive.
See Wachovia Bank, 546 U.S. at 317 n.9; cf. Hicklin Engg, L.C. v. Bartell, 439 F.3d 346, 348
(7th Cir. 2006) (But Wachovia Bank held that national banks are citizens only of the states in
which their main offices are located . . . .); Excelsior Funds, Inc. v. JP Morgan Chase Bank,
N.A., 470 F. Supp. 2d 312 (S.D.N.Y. 2006). Accordingly, the Court concludes that Wells Fargo
Bank does not take the citizenship of the state of its principal place of business. Because Wells
Fargo Bank is not a citizen of California, the Court rejects Respondents assertion that complete
diversity of citizenship does not exist.
Based on the files, records, and proceedings herein, and for the reasons stated above, IT
IS ORDERED THAT:
1. Respondents letter request to dismiss for lack of subject matter
jurisdiction [Docket No. 35] is DENIED.
Dated: December 29, 2008
s/ Joan N. Ericksen
JOAN N. ERICKSEN
United States District Judge
 

 
 
 

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