Preston L. Marshall, Individually and as Co-Trustee of the Peroxisome Trust v. Stephen D. Cook, as Co-Trustee of The Marshall Heritage Foundation and Marshall Legacy Foundation

This case concerns the power of federal courts to adjudicate purely state-law claims pursuant to diversity subject-matter jurisdiction under 28 U.S.C. § 1332. In Navarro Savings Association v. Lee, 446 U.S. 458 (1980), this Court held that all eight co-trustees of an express trust were “real parties to the controversy” because they were “active trustees” who shared the same powers to hold and manage trust property and to sue and be sued in their own names. As a result, the Court held that together they could sue in diversity based solely upon the citizenship of the eight co-trustees, ignoring the citizenship of trust beneficiaries. The question presented is: Whether diversity jurisdiction may be created by having one diverse co-trustee bring the lawsuit, strategically excluding all nondiverse co-trustees as parties; or if the citizenship of the nondiverse, nonparty co-trustees must be counted because they all are “real parties to the controversy” by virtue of their equally shared powers to hold and manage trust property and to sue and be sued in their own names – which here would destroy diversity.