United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
October 5, 2004
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 03-50865
SARAH JENKINS HORTON;
GEORGE LEON MATASSARIN,
Plaintiffs-Counter Defendants-Appellants,
versus
BANK ONE, N.A.;
Defendant-Counter Claimant-Appellee,
BANK ONE CORPORATION;
BANK ONE WISCONSIN,
Defendants-Appellees.
Appeal from the United States District Court
for the Western District of Texas
Before GARWOOD, HIGGINBOTHAM, and SMITH, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
Sarah Jenkins Horton appeals the district court’s rejection
of her contention that for purposes of its diversity
jurisdiction, a national bank is a citizen of each and every
state in which it has a branch. We affirm.
I
The facts underlying this dispute involve a retail
installment contract for the purchase of a vehicle by Horton. In
2002, Horton filed suit against Bank One in Texas state court
alleging violations of several consumer-protection-type statutes
and asserting several common-law claims. In February 2003,
Horton sent a settlement offer to Bank One. This offer put Bank
One on notice for the first time that the amount in controversy
exceeded $75,000. Bank One immediately removed the case to
federal district court. Horton moved to remand arguing that
there was no federal jurisdiction because complete diversity of
citizenship was lacking. Horton reasoned that, because Bank One
had branches in Texas, it was “located” in Texas and was thus a
citizen of Texas. After rejecting Horton’s reasoning and denying
Horton’s motion to remand, the district court granted her motion
to certify the order for interlocutory appeal and we granted
leave to appeal. The specific issue certified for this appeal is
whether national banking associations are citizens of every state
in which they have a branch.
II
We have jurisdiction1 and we review de novo the district
court’s finding of jurisdiction.2
28 U.S.C. § 1348 provides that for purposes of diversity
jurisdiction, “[a]ll national banking associations shall . . . be
deemed citizens of the States in which they are respectively
located.” We must decide the meaning of “located.” Horton
1
See 28 U.S.C. § 1292(b).
2
Union Planters Bank Nat’l Ass'n v. Salih, 369 F.3d 457, 460
(5th Cir. 2004).
2
argues that Bank One is a citizen Texas because it has branches
in Texas, while Bank One claims that it is a citizen only of
Illinois - the state of its principal place of business and the
state listed in its organization certificate.
Until recently no circuit had addressed the meaning of
“located” in section 1348. Prior to 1992, the “unquestioned” and
“longstanding interpretation” was that “located” did not include
the branches of a national bank.3
From 1992 to 2001, the majority of district courts that
addressed this issue concluded that under section 1348, a
national bank is a citizen of every state in which it has a
branch,4 led by the District of Rhode Island’s opinion in
Connecticut National Bank v. Iacono.5 Pointing to a Supreme
Court case in 1977 and changes in the law involving national
banks, the court in Iacono decided to reexamine the meaning of
“located,” even though a 1943 case “appear[ed] to have settled
the matter.”6 A minority of district courts, however, remained
3
Baker v. First Am. Nat’l Bank, 111 F.Supp.2d 799, 800 (W.D.
La. 2000); see also Fin. Software Sys. v. First Union Nat’l Bank,
84 F.Supp.2d 594, 602 (E.D. Pa. 1999).
4
Firstar Bank, N.A. v. Faul, 253 F.3d 982, 985 (7th Cir.
2001).
5
785 F.Supp. 30 (D.R.I. 1992).
6
Id. at 31-32.
3
unpersuaded by Iacono’s analysis and conclusion.7
In 2001, the Seventh Circuit in Firstar held that “for
purposes of 28 U.S.C. § 1348 a national bank is ‘located’ in, and
thus a citizen of, the state of its principal place of business
and the state listed in its organization certificate.”8 Firstar
analyzed the text, history, and purpose of section 1348 and its
predecessors. While no other circuit has yet ruled on this
issue, every district court that has since confronted it has
agreed with Firstar.9
III
We follow Firstar’s holding that a national bank is not
“located” in, and thus not a citizen of, every state in which it
has a branch.
A
In construing another provision containing “located,” the
Supreme Court recognized that “[t]here is no enduring rigidity
about the word ‘located.’”10 The language of section 1348 is
7
See, e.g., Fin. Software Sys., 84 F.Supp.2d at 602-07;
Baker, 111 F.Supp.2d at 800-01.
8
Firstar, 253 F.3d at 994.
9
See, e.g., Adams v. Bank of Am., N.A., 317 F.Supp.2d 935,
941-42 (S.D. Iowa 2004); Evergreen Forest Prods. of Ga., LLC v.
Bank of Am., N.A., 262 F.Supp.2d 1297, 1307 (M.D. Ala. 2003); Bank
One, N.A. v. Euro-Alamo Invs., Inc., 211 F.Supp.2d 808, 810 (N.D.
Tex. 2002) (agreeing with “well-reasoned Firstar Bank-line” of
cases).
10
Citizens & S. Nat’l Bank v. Bougas, 98 S.Ct. 88, 93 (1977).
4
therefore ambiguous, and this court “will look to legislative
history to clarify the purpose” of the statute.11
“When . . . judicial interpretations have settled the
meaning of an existing statutory provision, repetition of the
same language in a new statute indicates, as a general matter,
the intent to incorporate its . . . judicial interpretations as
well.”12 Further, “courts presume that Congress will use clear
language if it intends to alter an established understanding
about what a law means; if Congress fails to do so, courts
presume that the new statute has the same effect as the older
version.”13
B
Firstar found that the history of section 1348 and its
predecessors makes plain Congress’s intent to grant national
banks and state banks and corporations equal access to diversity
jurisdiction.14 When national banks were first created in 1863,
federal courts had jurisdiction over any suit involving a
11
United Servs. Auto. Ass’n v. Perry, 102 F.3d 144, 149 (5th
Cir. 1996) (per curiam).
12
Bragdon v. Abbott, 118 S.Ct. 2196, 2208 (1998).
13
Firstar, 253 F.3d at 988 (citing Cotton Sav. Ass’n v.
Comm’r, 111 S.Ct. 1503, 1508-09 (1991) (stating that by leaving a
statute “undisturbed through subsequent reenactments of the [Act],”
the Court “may presume that Congress intended to codify [the
related] principles” represented by the Court’s contemporary
decisions)).
14
Firstar, 253 F.3d at 988.
5
national bank.15 In 1864, Congress added that any such case
could also be brought in state court.16
In 1882, however, Congress trimmed federal jurisdiction over
cases involving national banks:
[T]he jurisdiction for suits hereafter brought by or against
any association established under any law providing for
national-banking associations, except suits between them and
the United States, or its officers and agents, shall be the
same as, and not other than, the jurisdiction for suits by
or against banks not organized under any law of the United
States which do or might do banking business where such
national-banking associations may be doing business when
such suits may be begun . . . .17
The apparent purpose of the 1882 statute was to “eliminate
automatic federal question jurisdiction over all cases involving
national banks.”18 In 1887, Congress superseded the 1882 Act and
first used the phrase that appears today in section 1348. The
1887 Act proclaimed:
[A]ll national banking associations established under the
laws of the United States shall, for the purposes of all
actions by or against them, real, personal, or mixed, and
all suits in equity, be deemed citizens of the States in
which they are respectively located; and in such cases the
circuit and district courts shall not have jurisdiction
other than such as they would have in cases between
15
Id. at 986 (citing Petri v. Commercial Nat’l Bank of
Chicago, 12 S.Ct. 325, 326 (1892)).
16
Petri, 12 S.Ct. at 326.
17
Act of July 12, 1882, ch. 290, § 4, 22 Stat. 162, 163
(emphasis added).
18
Fin. Software Sys., 84 F.Supp.2d at 600 (citing Leather
Mfrs.’ Nat’l Bank v. Cooper, 7 S.Ct. 777, 778 (1887)).
6
individual citizens of the same State.19
The Supreme Court has concluded that the objective of the
1882 and 1887 Acts was to create jurisdictional parity between
national banks on the one hand and state banks and corporations
on the other. Interpreting the 1882 Act, the Supreme Court
observed that it “was evidently intended to put national banks on
the same footing as the banks of the state where they were
located for all the purposes of the jurisdiction of the courts of
the United States.”20 For jurisdictional purposes, a national
bank was placed “before the law . . . the same as a bank not
organized under the laws of the United States.”21
In the Judicial Code of 1911, Congress changed the structure
of the jurisdictional provision of the 1887 Act, but retained its
language regarding citizenship.22 The design of the change was
merely “to make the purpose of the re-enacted statute clearer”
19
Act of March 3, 1887, ch. 373, § 4, 24 Stat. 552, 554-55
(emphasis added).
20
Leather Mfrs.’ Nat’l Bank, 7 S.Ct. at 778 (emphasis added).
21
Id.; see also Mercantile Nat’l Bank v. Langdeau, 83 S.Ct.
520, 526 (1963) (“Section 4 [of the 1882 Act] apparently sought to
limit, with exceptions, the access of national banks to, and their
suability in, the federal courts to the same extent to which non-
national banks are so limited.” (emphasis added)); Petri, 12 S.Ct.
at 327 (“No reason is perceived why it should be held that congress
intended that national banks should not resort to federal tribunals
as other corporations and individual citizens might.”).
22
Fin. Software Sys., 84 F.Supp.2d at 600.
7
rather than to make a fundamental change.23 Finally, in 1948
Congress amended the Judicial Code and enacted section 1348 in
its present form.24
It is then plain that Congress enacted section 1348 against
a backdrop of equal access to the federal courts for national
banks, state banks, and corporations. Because section 1348 does
not have any language modifying or rejecting the interpretive
understanding that came with its predecessors, this court should
presume that Congress intended to retain and incorporate the
existing interpretive backdrop.25 It follows that we should read
section 1348 as retaining its objective of jurisdictional parity
for national banks vis-à-vis state banks and corporations.
C
We are persuaded that this goal of jurisdictional parity is
best served by interpreting “located” as referring to a national
bank’s principal place of business as well as the state specified
in the bank’s articles of association.26 Since a state bank,
23
Herrmann v. Edwards, 35 S.Ct. 839, 842 (1915). See also Am.
Sur. Co. v. Bank of Ca., 133 F.2d 160, 161-62 (9th Cir. 1943)
(holding national bank with branch in Oregon was not citizen
thereof for diversity purposes under predecessor of section 1348).
24
See Act of June 25, 1948, ch. 646, 62 Stat. 933.
25
See Bragdon, 118 S.Ct. at 2208; Cotton Sav. Ass’n, 111 S.Ct.
at 1508-09.
26
Firstar held that a national bank is located in, and
therefore a citizen of, the state of its principal place of
business and the state listed in its organization certificate.
8
under 28 U.S.C. § 1332(c)(1), may be a citizen of no more than
two states - the state where its principal place of business is
located and its state of incorporation - maintaining
jurisdictional parity between a national and state bank requires
that the national bank have no more than two possible states of
citizenship.27
Horton’s position - that the national bank would be located
in, and therefore a citizen of, each state in which it has a
branch - would restrict a national bank’s access to federal court
Firstar, 253 F.3d at 994. The OCC filed an amicus brief in
Firstar, as it has in this case. Id. at 984. Following Firstar,
the OCC issued an interpretive letter reaffirming its support of
“the interpretation of the statute and fundamental reasoning” of
the Firstar court. OCC Interpretive Letter No. 952, 2002 WL
32072482, at *4 (Oct. 23, 2002).
The OCC, however, indicated that Firstar’s “use of the state
listed in the organization certificate as the analogue to the state
of incorporation was incomplete” and that a more thorough
articulation of the position would be that “a national bank is a
citizen of the state in which its principal place of business is
located and of the state that was originally designated in its
organization certificate and articles of association or . . . the
state to which that designation has been changed under other
authority.” Id.
In a recent case construing section 1348, a district court
held “that a national bank is ‘located’ in, and thus a citizen of,
the state of its principal place of business and the state listed
in its most recent articles of association.” Evergreen, 262
F.Supp.2d at 1307.
While the OCC’s position and Evergreen do represent a more
complete holding than that in Firstar, because Illinois is the
state of Bank One’s principal place of business, the state listed
on its organization certificate, and the state listed in its most
recent articles of association, it is not necessary to decide
whether to use the “organization certificate” test or the “articles
of association” test.
27
Firstar, 253 F.3d at 993; Evergreen, 262 F.Supp.2d at 1307.
9
under diversity jurisdiction, without similarly restricting a
state bank.
D
Horton accepts that parity was intended, but offers a quite
different view of what that parity is. Horton argues that Bank
One does not seek the parity that Congress intended to achieve
with the 1882 and 1887 Acts. Horton points to Mercantile
National Bank v. Langdeau, deciding venue in state courts for
suits against national banks.28 In determining whether the
jurisdictional provisions of the 1882 Act had implicitly repealed
an earlier venue provision, the Supreme Court explained that
“[s]ection 4 apparently sought to limit, with exceptions, the
access of national banks to, and their suability in, the federal
courts to the same extent to which non-national banks are so
limited.”29 In coming to this conclusion, the Court quoted from
the Congressional Record:
The proviso to § 4 of the 1882 Act first appeared as an
amendment offered on the floor of the House by
Representative Hammond, pursuant to the order of the
House fixing the assignment of the bill H.R. 4167 as a
special order. See 13 Cong. Rec. 3900, 3901. Mr.
Hammond succinctly stated the purpose of his amendment
as follows: “My amendment, therefore, declares that the
jurisdictional limits for and as to a national bank
shall be the same as they would be in regard to a State
bank actually doing or which might be doing business by
its side; that they shall be one and the same.” 13
28
83 S.Ct. at 521-22.
29
Id. at 526.
10
Cong. Rec., at 4049. Mr. Robinson then asked, “As I
understand the gentleman’s proposed amendment, it is
simply to this effect, that a national bank doing
business within a certain State shall be subject for
all purposes of jurisdiction to precisely the same
regulations to which a State bank, if organized there,
would be subject.” Mr. Hammond replied, “That is all.”
Ibid.30
Horton argues that this quote from the Congressional Record
evidences Congress’s intent to treat national banks as citizens
of the states in which they are “doing business,” so that
national banks would have jurisdictional parity within a
particular state with the state banks chartered in that state.
“Doing business within a certain State,” according to Horton,
includes the national bank’s branches and would result in the
national bank’s being treated as a citizen of each state where it
has a branch. Horton asserts that this approach achieves the
parity Congress intended: a state bank organized in Texas, being
a Texas citizen, would not be able to invoke diversity
jurisdiction in a suit against a Texas citizen; hence, a national
bank located or doing business in Texas, but presumably with its
principal place of business and organization certificate in
another state, should also not be able to invoke diversity
jurisdiction against a Texas citizen.
Horton’s reading of history is incomplete. At the time of
the 1882 Act, indeed until 1927, national banks were not
30
Id. at 526 n.22 (emphasis added).
11
permitted to engage in branch banking - intrastate or
interstate.31 Therefore, the statement from the Congressional
Record is not evidence that “located,” or “doing business within
a certain State,” means something more than principal place of
business: all national banks in 1882 were doing business only in
the state of their principal place of business.
Horton’s position also ignores the Supreme Court’s
declarations that “[n]o reason is perceived why it should be held
that congress intended that national banks should not resort to
federal tribunals as other corporations” might,32 and that “[a]
national bank was by [the statute of 1882] placed before the law
[for purposes of federal jurisdiction] the same as” non-national
banks.33 A national bank with its principal place of business
and organization certificate in Illinois could hardly be treated
the same before the law if a corporation from Illinois with a
“branch” in Texas could get into federal court when sued by a
citizen of Texas while the national bank, also with a branch in
Texas, could not.
Finally, Horton’s position would lead to a narrow concept of
“parity.” The national bank would enjoy access to diversity
jurisdiction only when sued by or suing a citizen of a state in
31
Bougas, 98 S.Ct. at 93; Fin. Software Sys., 84 F.Supp.2d at
601-02.
32
Petri, 12 S.Ct. at 327.
33
Leather Mfrs.’ Nat’l Bank, 7 S.Ct. at 778.
12
which the bank maintains no branch at all. Corporations and
state banks do not have such a limited access to federal court.
E
Firstar and other courts have addressed the arguments upon
which the Iacono court relied and expressly rejected Iacono’s
reasoning and conclusion.34 Horton does not attempt to resurrect
any of these rejected Iacono arguments, citing Iacono only once -
to argue that Iacono represents the majority view.
Iacono relied heavily on Citizens & Southern National Bank
v. Bougas,35 in which the Supreme Court read “located,” for
purposes of a venue provision of the National Banking Act to
include the location of the bank’s branches.36 Bougas, however,
does not construe section 1348 and merely points out in a
footnote, with no further comment, that section 1348 uses the
word “located.” Because “[v]enue is distinct from
jurisdiction,”37 and because Bougas expressly limits its opinion
to how the federal statute applied in determining state court
34
Firstar, 253 F.3d at 989-93; Fin. Software Sys., 84
F.Supp.2d at 604-07.
35
98 S.Ct. 88 (1977).
36
Iacono, 785 F.Supp. at 32-34 (stating that Bougas’s mention
of section 1348 suggested that the Supreme Could would construe
“located” in section 1348 as is had in Bougas); Bougas, 98 S.Ct. at
89-94.
37
Driscoll v. New Orleans Steamboat Co., 633 F.2d 1158, 1159
n.1 (5th Cir. 1981).
13
venue, using Bougas to interpret “located” in a jurisdictional
statute is of questionably validity, if applicable at all.38
Iacono also failed to recognize that the provision
interpreted in Bougas was included in the National Banking Act,39
and that section 1348 is found in the Judicial Code and Judiciary
Act.40 This undermines the rationale for using the venue
provision construed by Bougas to aid in the interpretation of a
jurisdictional statute, particularly when the same word can have
different meanings - even within the same act.41 Bougas itself
recognized that “[t]here is no enduring rigidity about the word
‘located,’” thus significantly weakening the interpretative
applicability of the same word in a different act and in a
different context.42
Iacono made an erroneous inference from a 1982 amendment to
the venue provision.43 Following Bougas’s holding that state
court venue for a national bank could be in any county in which
38
Firstar, 253 F.3d at 989-91.
39
12 U.S.C. § 21, et seq.
40
28 U.S.C. § 1, et seq.; see also Firstar, 253 F.3d at 990.
41
See Atl. Cleaners & Dyers v. United States, 52 S.Ct. 607,
608-09 (1932) (“Most words have different shades of meaning, and
consequently may be variously construed, not only when they occur
in different statutes, but when used more than once in the same
statute or even in the same section.”).
42
Bougas, 98 S.Ct. at 93.
43
See 12 U.S.C. § 94.
14
the bank had a branch, Congress amended the relevant venue
provision to limit venue to the location of the bank’s principal
place of business.44 Congress, however, did not change section
1348 at that time. This congressional inaction, according to
Iacono, meant that Congress implicitly approved of the Bougas
Court’s definition of “located” for purposes of section 1348.45
However, “no basis exists for inferring that Congress
intended for ‘located’ in 28 U.S.C. § 1348 to be interpreted in
accord with Bougas.”46 As Firstar observed, the venue and the
jurisdiction statutes for national banks are found in different
acts and serve distinct purposes.47 Further, there had been no
cases prior to Iacono in 1992 suggesting that a national bank was
a citizen of every state in which it had a branch. We are
unwilling to infer from Congress’s inaction with respect to
section 1348 any intent to accept the Bougas definition of
“located.”
In Iacono, the district court maintained that because
section 1348 used both “established” and “located,” Congress must
have intended for the two words to have different meanings.48
44
Firstar, 253 F.3d at 992.
45
Iacono, 785 F.Supp. at 33.
46
Firstar, 253 F.3d at 992.
47
Id.
48
Iacono, 785 F.Supp. at 33.
15
The court then explained that this supported the holding that
“established” meant principal place of business while “located”
meant where the bank had branches.49
While the Iacono interpretation seems reasonable, it does
not take into account that when Congress enacted the predecessor
of section 1348, “established” and “located” would have been
functionally equivalent for jurisdictional purposes because
national banks had no branches.50 As we have explained, national
banks were not permitted to have interstate branches at the time
of the 1882 and 1887 Acts that serve as the backdrop for section
1348. It is then difficult to conclude that Congress intended
for the two words to have the different meanings that the Iacono
court suggests. In any case, where it is not clear that the two
words were intended to have different meanings, “the words should
reflect the congressional goal of jurisdictional parity with
state banks and corporations” rather than a meaning that
overrides this goal.51
F
Horton makes a number of additional arguments, including the
following: (1) Texas law determines that Bank One is a Texas
domiciliary, and thus a Texas citizen for diversity purposes; (2)
49
Id.
50
See Fin. Software Sys., 84 F.Supp.2d at 604.
51
Id.
16
since Firstar, the OCC has issued an interpretation of “located”
that supports Horton’s position; (3) certain sections in the
National Banking Act use the term “located” to include location
of branches; and (4) the Firstar result conflicts with Texas
consumer protection laws and is bad policy.
The parties dispute which, if any, of these were properly
raised before the district court. “[A]rguments not raised in the
district court cannot be asserted for the first time on
appeal.”52 However, “an argument is not waived on appeal if the
argument on the issue before the district court was sufficient to
permit the district court to rule on it.”53 Regardless of
whether Horton sufficiently raised these additional arguments,
they are without merit.
First, Horton argues that the Firstar analysis ignores state
law and its impact on the scope of diversity jurisdiction and
does not account for federalism concerns. Horton specifically
argues that under Texas law, Bank One is a Texas domiciliary and,
therefore, cannot be diverse. As the “determination of one’s
State Citizenship for diversity purposes is controlled by federal
law, not by the law of any State,” Texas law does not control
52
In re Liljeberg Enters., Inc., 304 F.3d 410, 427 n.29 (5th
Cir. 2002).
53
Id.
17
here.54
Second, Horton claims that since the Firstar opinion, the
OCC has changed its position.55 This argument lacks merit. The
Corporate Decision upon which Horton relies was issued prior to
an Interpretative Letter56 that reaffirmed OCC’s agreement with
Firstar. Furthermore, the Corporate Decision concerns the
location of national banks for purposes of mergers and does not
purport to interpret section 1348 - or even refer to it.
Third, Horton points to portions of the National Banking Act
that arguably deem a national bank to be located wherever it has
branches; Horton contends that “located” in section 1348 must
have the same meaning. The OCC readily concedes that “[f]or some
statutes a national bank may . . . be located in states in which
it has branches.”57 A “normal rule of statutory construction” is
that “identical words used in different parts of the same act are
intended to have the same meaning.”58 This principle does not
apply here, however, because the statutes cited by Horton are
54
Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir. 1974).
55
See OCC Corporate Decision No. 2001-29, 2001 WL 1502558
(Sept. 28, 2001).
56
See OCC Interpretative Letter No. 952, 2002 WL 32072482
(Oct. 23, 2002).
57
Id. at *3 n.8.
58
Gustafson v. Alloyd Co., 115 S.Ct. 1061, 1067 (1995)
(emphasis added) (internal quotation marks and citations omitted).
18
from the National Banking Act while section 1348 is found in the
Judicial Code.59 This argument also fails.
Finally, Horton argues that viewing “located” in a manner
that increases the scope of federal diversity jurisdiction makes
Texas consumer protection remedies “difficult or remote.” The
rule, however, is that “[c]ontrol over the scope of diversity
jurisdiction rests with Congress,” and any related policy
determinations are for Congress to make.60 Relatedly, state law
does not determine the scope of federal diversity jurisdiction.61
Horton’s argument is, therefore, unavailing.
IV
We construe section 1348 in light of Congress’s intent to
maintain jurisdictional parity between national banks on the one
hand and state banks and corporations on the other. We hold that
the definition of “located” is limited to the national bank’s
principal place of business and the state listed in its
organization certificate and its articles of association. This
results in a national bank’s having access to federal courts by
diversity jurisdiction to the same extent as a similarly situated
state bank or corporation. It follows that, under section 1348,
a national bank is not necessarily “located” in each and every
59
Firstar, 253 F.3d at 990.
60
Bianca v. Parke-Davis Pharm. Div. of Warner-Lambert Co., 723
F.2d 392, 396 & n.4 (5th Cir. 1984).
61
Mas, 489 F.2d at 1399.
19
state in which it has a branch, and the district court did not
err in so holding.
AFFIRMED.
20