On March 7, 2016, the U.S. Supreme Court (the “Supreme Court”) ruled that the citizenship of a Real Estate Investment Entity (“REIT”), for purposes of federal diversity jurisdiction, is based on the citizenship of its members, which includes its shareholders. This pronouncement is significant because it rejects an often commonly-held view that a REIT’s citizenship was based on the citizenship of its trustee or the state under whose laws it was organized.

Factual Background -

The plaintiffs, a group of corporations, filed a lawsuit against Americold Realty Trust (“Americold”) in state court based on a contract dispute. Americold removed the suit to the federal court (the “District Court”), based on diversity of parties. The plaintiffs were corporate citizens of Delaware, Nebraska, and Illinois and Americold was a REIT organized under Maryland law. The District Court accepted jurisdiction and ultimately resolved the dispute in favor of Americold.