Whether the citizenship of a trustee or an unincorporated entity controls for diversity jurisdiction purposes when an investment advisor controls the entity's litigation strategy

Innovation led to investment advisors controlling unincorporated entities that collectively own trillions in real estate assets. Controversies over those assets are litigated nationwide. Investment advisors name trustees of unincorporated entities as plaintiffs—without disclosing the advisors’ control and trustees’ passivity—to increase the odds of complete diversity. In parallel, divergent interpretations of Navarro Sav. Ass’n v. Lee, 446 U.S. 458 (1980) emerged. Several circuit courts held that Navarro is a complex jurisdictional test: a trustee must have real and substantial control over an unincorporated entity for the trustee’s citizenship to control for diversity. A chasm apart, the First Circuit affirmed a simple test: when a trustee of an unincorporated entity files a lawsuit, only her citizenship matters for diversity purposes. If an investment advisor controls an unincorporated entity and through the entity’s trustee invokes diversity jurisdiction, pursuant to 28 U.S.C. § 1332(a), does the trustee’s or unincorporated entity’s citizenship control? Is Navarro a complex or simple jurisdictional test? @