The Trust as an Entity and Diversity Jurisdiction: Is Navarro Applicable to the Modern Business Trust?

Abstract

Unincorporated organizations present special problems in the application of the rules of diversity jurisdiction. The business trust has been particularly troubling, yielding different rules as to whether the suit involved only the trustees as such or rather the trust as a whole. Of more recent vintage is the “statutory trust,” a “trust” in which title to the assets of the venture is not vested in the “trustees” that has the capacity, as a legal entity, to sue and be sued in its own name. Herein we explore the application of the rules of diversity jurisdiction to the statutory trust, recommending a rule in which the citizenship of the beneficial owners, but not that of the trustees qua trustees, should be attributed to the statutory trust.