The Court of Appeals for the Ninth Circuit held that for purposes of diversity jurisdiction the citizenship of a corporation established by tribal law is where that corporation has its principal place of business, not where the tribe has its headquarters. In Cook v. Avi Casino Enterprises, Inc. ____F.3d ____ (9th Cir. 2008) (2008 WL 4890167 (C.A.9 (Arix.)) plaintiff was seriously injured when an employee of an Indian casino crossed the center line of a road and struck his motorcycle. The employee had attended a birthday party where employees of the casino gave her free drinks and then drove her to her car. Minutes later the accident occurred.
The casino was operated by a tribal corporation and plaintiff sued it and several of the employees alleging negligence and dram shop liability. The plaintiff was a citizen of California and defendants in moving to dismiss for lack of subject matter jurisdiction argued that the corporation was a citizen of California because it was incorporated under tribal law and the Tribe’s headquarters were in Needles, California. The court agreed and dismissed the lawsuit for lack of subject matter jurisdiction.
In reversing the district court’s decision which was based on the fact that the tribe under whose law the corporation was formed had its principal place of business in California the appellate court held that a corporation is not a citizen of “any state where it was incorporated” but rather, a corporation is a citizen of the “state by which it has been incorporated”. The casino which the corporation operated was in the state of Nevada and therefore the corporation is a Nevada citizen because its principal place of business is there. The court said:
“We hold that, for diversity purposes, a tribal corporation formed under tribal law is not a citizen of a state merely because its incorporation occurred inside that state. ACE is thus only a citizen of Nevada, the location of its principal place of business. We therefore conclude that we have subject matter jurisdiction over this case because none of the defendants are citizens of California.”