The Burger Court OpinionWriting Database

Navarro Savings Association v. Lee446 U.S. 458 (1980)

Paul J. Wahlbeck, George Washington UniversityJames F. Spriggs, II, Washington University in St. LouisForrest Maltzman, George Washington University

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CHAMBERS OF

THE CHIEF JUSTICE

May 7, 1980

RE: 79-465 - Navarro Savings Assn.v. Lee

Dear Lewis:

I join.

Regards,

Mr. Justice Powell

Copies to the Conference

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CHAMBERS OF

JUSTICE WN. J. BRENNAN, JR. April 25, 1980

RE: No. 79-465 Navarro Savings Association v. Lee

Dear Lewis:

I agree.

Sincerely,

Mr. Justice Powell

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CHAMBERS Or

JUSTICE POTTER STEWART

April 30, 1980

Re: No. 79-465, Navarro SavingsAssn. v. Lee

Dear Lewis,

I am glad to join your opinionfor the Court.

Sincerely yours,

Mr. Justice Powell

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CHAMBERS OF

JUSTICE BYRON R. WHITE April 26, 1980

Re: No. 79-465 - Navarro Savings Assn. v.Lawrence F. Lee, Jr., et al

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Please join me.

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Mr. Justice Powell

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CHAMBERS OF

JUSTICE THURGOOD MARSHALL

May 14, 1980

Re; No. 79-465 - Navarro Savings Association v, Lee

Dear Lewis;

Please join me.

Sincerely,

T.M.

Mr, Justice Powell

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CHAMBERS OF

JUSTICE HARRY A. BLACKMUN April 25, 1980

Re: No. 79-465 - Navarro Savings Association v. Lee

Dear Lewis:

I find this case much more difficult than your opinion -indicates. While I shall probably end up where you do, Iam contemplating, for now, writing separately. I shallappreciate it if you will give me a few days to make up mymind whether to do this.

Sincerely,

Mr. Justice Powell

cc: The Conference

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SUPREME COURT OF THE UNITED STATES z1-3

No. 79-465

ONavarro Savings Association,

On Writ of Certiorari to thePetitioner,United States Court of -Ap

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peals for the Fifth Circuit.Lawrence F, Lee, Jr. et al. cr,

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MR. JUSTICE BLACKMUN, dissenting.A reader of the Court's conclusionary opinion might wonder

why this heavily burdened tribunal chose to review this case.Most assuredly, we did not do so merely to reaffirm, ante, at

1-14, Mr. Chief Justice Marshall's ruling from the bench in

1-3Chappedelaine v. Dechenaux, 4 Cranch 306. 308 (1808), to theeffect that aliens serving respectively as residuary legatee and )-4representative of an estate, "although they sue as trustees;" cn

were entitled to bring a federal diversity action against aGeorgia citizen. Rather. I had thought that we granted cer-tiorari to resolve a significant conflict among the courts ofappeals concerning the question whether the citizenship ofa business trust, for purposes of establishing diversity jurisdic-tion, is determined by looking to the citizenship of its trusteesor that of its beneficial shareholders.' I believe that the

I Compare the decision below, 597 F. 2d 421 (CA5 1979), rev'g 416 F.Stipp. 1186 (ND Tex. 1976), with Belle View Apartments v. RealtyReFund Trust, 602 F. 2d 668 (CA4 1979), and Riverside MemorialMausoleum, Inc. v. UMET Trust, 581 F. 2d•62 (CA3 1978), aff'g 434 F.Supp. 58 (ED Pa 1977). See also cases cited in n. 6. infra, dealing withan analogous question presented in the context of limited partnerships.

The Court of Appeals' decisicn in this case also conflicts with a sub-stantial body of recent holdings of federal district courts, that uniformly.have looked to the citizenship of the beneficial shareholders, and not thetrustees, in determining the existence of diversity in suits brought by oragainst common-law business trusts. See National City Bank v. Fidelco-

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Navarro Savings Association, r.Petitioner, On Writ of Certiorari to the r-.

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CCMR. JUSTICE BLACKMUN, dissenting.

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I Compare the decision below, 597 F. 2d 421 (CA5 1979), rev'g 416 F. 0Supp. 1186 (ND Tex. 1976), with Belle View Apartments v. RealtyReFund Trust, 602 F. 2d 668 (CA4 1979), and Riverside Memorial

Mausoleum, Inc. v. UMET Trust, 581 F. 2d 62 (CA3 1978), aff'g 434 F. cnSupp. 58 (ED Pa. 1977). See also cases cited in n. 6, infra, dealing withan analogous question presented in the context of limited partnerships.

The Court of Appeals' decision in this case also conflicts with a sub-stantial body of recent holdings of federal district courts, that uniformlyhave looked to the citizenship of the beneficial shareholders, and not thetrustees, in determining the existence of diversity in suits brought by oragainst common-law business trusts. See National City Bank v. Fidelco

SUPREME COURT OF THE UNITED STATES

A reader of the Court's conclusionary opinion might wonderwhy this heavily burdened tribunal chose to review this case.Most assuredly, we did not do so merely to reaffirm, ante, at4, Mr. Chief Justice Marshall's ruling from the bench inChappedelaine v. Dechenaux, 4 Cranch 306, 308 (1808), to theeffect that aliens serving respectively as residuary legatee andrepresentative of an estate, "although they sue as trustees,"were entitled to bring a federal diversity action against aGeorgia citizen. Rather, I had thought that we granted_cer-tiorari to resolve a significant conflict among the Courts ofAppeals concerning the question whether the citizenship ofa business trust, for purposes of establishing diversity jurisdic-tion, is determined by looking to the citizenship of its trusteesor that of its beneficial shareholders.' I believe that the

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d: SUPREME COURT OF THE UNITEDR§TIVEge

No. 79-465 0

Navarro Savings Association,

?3On Writ of Certiorari to thePetitioner, o

United States Court of Ap-v.peals for the Fifth Circuit. oLawrence F. Lee, Jr. et al. oTi

[May —, 1980]

MR. JUSTICE POWELL delivered the opinion of the Court.The question is whether the trustees of a business trust

may invoke the diversity jurisdiction of the federal courts on

the basis of their own citizenship, rather than that of the /-3trust's beneficial shareholders.

1-4

The respondents are eight individual trustees of Fidelity 0

Mortgage Investors, a business trust organized under Massa-chusetts law.' They hold titre to real estate investmentsin trust for the benefit of Fidelity's shareholders.- Thedeclaration of trust gives the respondents exclusive authority

over this property "free from any power and control of the CShareholders. to the same extent as if the Trustees were

the sole owners of the Trust Estate in their own right. .. ." ' °zThe respondents have power to transact Fidelity's business,

1 Fidelity merged . into a Delaware corporation in 1978, but Fed. Rule cn

Civ. Proc. 25 (c) permits the original parties to continue the litigation.Jurisdiction turns cn the facts existing at the time the suit commenced:Louisville, V. A. tt: C. R. Co. v. Louisville Trust Co., 174 U. S. 552, 556(1599).

2 Fidelity Mortgage Investors Fifth Amended and Restated Declarationof Trust (hereinafter Fidelity Declaration of Trust), App. A44–A45.

3 Id, Art. 3.1, App, A49–A50.

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C HAM BEMS OF

JUSTICE LEWIS F POWELL,JR.

April 28, 1980

79-465-Navarro-Savings-Association-v:-•ee

Dear Harry:

Thank you for your note. By all means, take allthe time you need.

Sincerely,

Mr. Justice Blackmun

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SUPREME COURT OF THE UNITED STATES gc-)0

No. 79-465 r-,n1-31--4

Navarro Savings Association, oOn Writ of Certiorari to the Petitioner, m

United States Court of Ap- ov. peals for the Fifth Circuit.

Lawrence F. Lee, Jr. et al.

MR. JUSTICE POWELL delivered the opinion of the Court.The question is whether the trustees of a business trust

may invoke the diversity jurisdiction of the federal courts onthe basis of their own citizenship, rather than that of the 1-4trust's beneficial shareholders.

The respondents are eight individual trustees of FidelityMortgage Investors, a business trust organized under Massa- 1-1

chusetts law.' They hold title to real estate investmentsin trust for the benefit of Fidelity's shareholders. 2 Thedeclaration of trust gives the respondents exclusive authorityover this property "free from any power and control of theShareholders, to the same extent as if the Trustees werethe sole owners of the Trust Estate in their own right. . . ." 3

The respondents have power to transact Fidelity's business,

[May —, 1980]

Fidelity merged into a Delaware corporation in 1978, but Fed. RuleCiv. Proc. 25 (c) permits the original parties to continue the litigation,Jurisdiction turns en the facts existing at the time the suit commenced.Louisville, N. A. ct C. R. Co. v. Louisville Trust Co., 174 U. S. 552, 556(1899).

2 Fidelity Mortgage Investors Fifth Amended and Restated Declarationof Trust (hereinafter Fidelity Declaration of Trust), App. A44–A45.

3 Id., Art. 3.1, App. A49–A50.

May 15, 1980

No. 79-465 Navarro Savings Assoc. v. Lee

Dear Chief:

As I will be at the Fifth Circuit JudicialConference on Monday, I would appreciate your announcing mydecision in the above case.

We affirmed the judgment of the Court of Appealsfor the Fifth Circuit. Mr. Justice Blackmun filed adissenting opinion.

Sincerely,

The Chief Justice

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JUSTICE WILLIAM H. REHNQUIST

April 28, 1980ro

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Re: No. 79-465 - Navarro Savings Assoc. v. Lee

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CHAMBERS OF

JUSTICE JOHN PAUL STEVENS

April 24, 1980

Re: 79-465 - Navarro Savings v. Lee

Dear Lewis:

Please join me.

Respectfully,

Mr. Justice Powell

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