Americold Realty Trust v. ConAgra Foods, Inc. (14-1382)

argument 14-1382

Americold Realty Trust v. ConAgra Foods, Inc.

Supreme Court of the United States 43 min 5 speakers 6 chapters transcribed 6 days ago official recording ↗

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What is the central citizenship issue for trusts in this Supreme Court case?

John G. Roberts 0:00

We'll hear argument next in case fourteen thirteen eighty two, Americold Realty Trust versus Conagra Foods. Mr. Paspissel?

Mr. Paspissel 0:09

Thank you, Mr Chief Justice, and may it please the court. The issue before the court today is whose citizenship citizenship controls for purposes of diversity when a trust is a named party to a lawsuit. We believe based upon over two hundred years of jurisprudence from this court, the answer is the trustees. We believe a bright line rule is appropriate in this case that in a lawsuit involving a trust, just as with a trustee, the trustees should be the party of interest and we should be able to do that.

Unknown 0:43

of the trustees there was no complete diversity.

Mr. Paspissel 0:46

Your Honor, that that is correct. However, we do argue and we argued in the tenth circuit it was briefed upon whether or not we could dismiss the de the spoiling non diverse parties. That issue was briefed under Ever uh uh Green case and it was briefed before the tenth circuit. However, the tenth circuit did not address that issue. Uh repo respondents bring it up in their brief now. However, our position is that this court should address the issue that's taken, that's that granted cert on, and send that issue back to the tenth circuit for review. What the tenth circuit held here, the issue that we appealed on, was to look at the beneficiaries as opposed to the trustees. And we would submit to you that that's just not supportable under common law.

Mr. Paspissel 1:26

And it provides w uh results in an unworkable test that is going to create more

Unknown 1:30

confusion than looking at the trustees. At common law, the trustees could sue, couldn't they? They could, Your Honor. And these trustees could not sue, could can they? They cannot, Your Honor, the Mm. creature created by Maryland law. That's correct,

Mr. Paspissel 1:45

Justice Scalia. Maryland law has created a statutory trust, a real estate investment trust. However, our position is that just because that trust can sue and be sued as an entity, that does not change the analysis. There still has to be somebody we look to, some real people that we look to to determine

Samuel A. Alito 2:02

who citizenship controls. Well this new entity is called a trust, but why is it more like a traditional trust than it is like uh another unincorporated artificial entity like an LLC? Your Honor, it's more it's like a trust because there are

Mr. Paspissel 2:17

two attributes that a trust have that have historically had. There is a separation between legal ownership and beneficial or equitable ownership. We have it in this case. If you look at Maryland law, they define REIT as an unincorporated business trust in which property is acquired, held, managed, administered, controlled, invested, or disposed of for the benefit and profit of any person who may become a shareholder. That distinguishes between legal ownership. and equitable ownership. The next step we look at is that the common law, when that's a situation when you have a trust, you look and see do the trustees have the customary power to control to manage and to oversee the assets, also

Unknown 2:59

including to control location. Who owns who owns these assets under Maryland law? Is it the trustees or is it this uh this new Uh corporation type entity. Your

Mr. Paspissel 3:09

Honor

Unknown 3:10

That's the entity that can sue, and I assume that that's the entity that owns the property. It could be both, Your Honor. Under Merrill. And the trustees are sort of in the position of managers. Just as though you you hired a a CEO. I would

Mr. Paspissel 3:22

disagree, Your Honor. Under Maryland law, the assets of a real estate investment trust can be held by the trustees. or the trust. in its entity. And again, I don't think that makes the changes the analysis all is is still what citizenship we would look to.

Unknown 3:39

Trustees can be owned by the entity? It can be okay. Or the or the trustees. That's correct, Your Honor. You mean in

John G. Roberts 3:44

in one case or you can have a different type of Trust. In one

Mr. Paspissel 3:48

case. In one case. In one case, Your Honor. And I will say this, Justice Scalia, that no statute in the country that we have found has ever held that the uh legal ownership goes in the name of a trust beneficiary. The ownership is always in the name of the trust or the trustees.