On March 7, 2016, in Americold Realty Trust v. Conagra Foods, Inc., the US Supreme Court held that real estate investment trusts (REITs) assume the citizenship of their members for purposes of federal diversity jurisdiction ( (U.S. Mar. 7, 2016)).

The plaintiffs were corporations whose food perished in a 1991 fire at a warehouse owned by the defendant, Americold Realty Trust (Americold). The plaintiffs sued Americold in Kansas state court. Americold removed the action to federal court. The US District Court for the District of Kansas accepted jurisdiction and held in favor of Americold.

On appeal, the Tenth Circuit questioned whether jurisdiction was appropriate. It found that because Americold was a REIT, its citizenship depended on that of its shareholders. Because there was no record of the shareholders' citizenship, the Tenth Circuit remanded the case (see Legal Update, Citizenship of a Trust is Based on All Its Members: Tenth Circuit).

The US Supreme Court granted certiorari to resolve confusion among the US Courts of Appeals regarding the citizenship of unincorporated entities, like REITs. The US Supreme Court affirmed the Tenth Circuit's holding, concluding that because Americold was not a corporation, its citizenship is that of its members. The Court looked to Maryland law to define the term "members," which it held includes Americold's shareholders. The Court then rejected Americold's argument that anything called a "trust" possesses the citizenship of its trustees alone. It held that regardless of what an entity calls itself, if that entity is unincorporated, it possesses the citizenship of its members. The Court therefore expressly declined to apply the same rule to an unincorporated entity sued in its name and to a human trustee sued in her personal name.

The Court did not directly address citizenship of limited liability companies (LLC), the most common type of unincorporated entity. However, the decision implies that the Supreme Court would conclude that the citizenship of an LLC should be decided in the same way as a REIT. Although the Supreme Court has never ruled on this issue in the context of an LLC, the Court noted that, while the U.S. Code allows a corporation to also be considered a citizen of the state where it has its principal place of business, "Congress never expanded this grant of citizenship to include artificial entities other than corporations, such as joint-stock companies or limited partnerships." The Court added that it has in the past "identified the members of a joint-stock company as its shareholders, the members of a partnership as its partners, the members of a union as the workers affiliated with it, and so on." (, at *3.) Therefore, as several Circuit Courts of Appeals have already held, an LLC's citizenship typically depends on the citizenship of its members, rather than the state of the LLC's formation.