Summary
The United States Court of Appeals for the Second Circuit affirmed the dismissal of Arnold Schneiderman’s disability-discrimination action against the American Chemical Society for lack of subject-matter jurisdiction. The court held that 28 U.S.C. § 1332(c)(1) does not confer state citizenship based solely on principal place of business upon a federally chartered corporation that is not incorporated by a state. The court also upheld the denial of motions seeking reconsideration and reopening for further discovery.
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Practice areas
Questions Presented
- Whether 28 U.S.C. § 1332(c)(1)'s principal-place-of-business provision confers state citizenship for diversity purposes on a federally chartered corporation that is not incorporated by a state or foreign state.
- Whether the district court properly dismissed the action for lack of subject matter jurisdiction.
- Whether the district court abused its discretion by denying reconsideration and declining to reopen the case for further discovery concerning a possible Rehabilitation Act claim.
Holdings
- Section 1332(c)(1)'s principal-place-of-business provision applies only to corporations incorporated by a state or foreign state and does not independently confer state citizenship on a federally chartered corporation that is not incorporated by any state.
- Diversity jurisdiction was not established because ACS was a federally chartered corporation that was not a citizen of any state under § 1332(c)(1).
- The district court acted within its discretion in denying reconsideration and declining to reopen the case for further discovery concerning a possible Rehabilitation Act claim.
Key quotations
“In sum, § 1332(c)(1) does not pertain to federally chartered corporations such as ACS, which are not incorporated by any State.” (4)
“Upon consideration of the text, context, and history of 28 U.S.C. § 1332(c)(1), we conclude that the statute identifies State citizenship for purposes of diversity jurisdiction by reference to a corporation’s principal place of business only for corporations that have been chartered by a State or foreign state, not for federally chartered corporations.” (55)
“Accordingly, we AFFIRM the challenged judgment and order of the district court in all respects.” (56)
Factual background
Schneiderman, a New York citizen, sued ACS, a federally chartered corporation with its principal place of business in Washington, D.C., for alleged disability discrimination. The underlying allegations concerned ACS's failure to provide reasonable accommodations that would have allowed Schneiderman to participate in the New York-based section of the 2014 United States National Chemistry Olympiad. The operative complaint asserted only a New York State Human Rights Law claim and invoked diversity jurisdiction under 28 U.S.C. § 1332.
Procedural history
Schneiderman and his mother initially sued the American Chemical Society under state and federal disability laws. After amendments, the operative third amended complaint asserted only a New York State Human Rights Law claim and relied on diversity jurisdiction. The district court dismissed without prejudice after concluding that ACS, a federally chartered corporation, was not a citizen of any state for diversity purposes, and later denied motions to reconsider and reopen the case. The Second Circuit affirmed both rulings.