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In spite of their functional similarity to state-chartered corporations,
federal corporations6 differ from state corporations in one important
respect: their ability to gain access to federal court. Contrary
to what one might expect, many federal corporations actually receive
less favorable jurisdictional treatment than do their state counterparts.
At one point, all federally chartered corporations enjoyed preferred
An early decision from the Supreme Court—indeed, the only Supreme
Court decision to address this issue—stated unequivocally
that a corporation chartered under federal law would be considered a
national citizen only, not a citizen of a particular state, and therefore
would be ineligible for diversity jurisdiction.10
Moreover, even when Congress has stepped in and provided for
state citizenship for certain types of federal corporations (most notably,
national banks and federal savings associations), these statutes
have created new disparities between federal corporations and their
state counterparts.16 The statutes have also led to a wide disparity
between the jurisdictional treatment of federal corporations that are
covered by the statutes and those that are not.17
This Article explores how the current jurisdictional
Among the new government corporations
created during this period were the highly controversial Government
Sponsored Enterprises (GSEs), including Fannie Mae and
Freddie Mac.44 Though purportedly private entities, these
corporations were formed to perform governmental or quasigovernmental
In addition to these numerous and varied government corporations,
Congress has chartered quite a few nonprofit, charitable corporations.
Title 36 of the U.S. Code contains the corporate charters of
over ninety patriotic and national societies.
In America’s earliest years, corporations were completely foreclosed
from invoking diversity jurisdiction.
Prior to the District of Columbia being granted the ability to issue corporate charters in the late 1800s, corporations operating in the District required a congressional charter. With limited exceptions, most corporations created by Congress are not federally chartered, but are simply created as District of Columbia corporations as a result of the enabling law.
Some charters create corporate entities and is akin to being incorporated at the federal level. Examples of such charters are the Federal Reserve Bank, Federal Deposit Insurance Corporation, Fannie Mae, Freddie Mac, and the Tennessee Valley Authority. Other national level groups with such charters are the American Red Cross, National Academy of Sciences, Boy and Girl Scouts, the 4H Club, National Park Foundation and the Disabled American Veterans, National Trust for Historic Preservation, the United States Olympic Committee, the National Conference on Citizenship, or NeighborWorks America.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a federal district to become the national capital as permitted by the U.S. Constitution. The District is therefore not a part of any U.S. state. It was formed from land along the Potomac River donated by the states of Maryland and Virginia; however, the Virginia portion was returned by Congress in 1846.