Schmidt, a South Carolina citizen, sued Wachovia Bank in a South Carolina state court for fraudulently inducing him to participate in an illegal tax shelter. Wachovia is a national bank with its main office in North Carolina and branch offices in several other states, including South Carolina. Under federal diversity jurisdiction, federal courts can hear cases in which the parties are citizens of different states. Wachovia filed a petition in Federal District Court, seeking to compel arbitration of the dispute. After the petition was denied on the merits, Wachovia appealed to the Fourth Circuit Court of Appeals, which dismissed the case for lack of jurisdiction. Under 28 U.S.C. Section 1348, national banks are "deemed citizens of the States in which they are respectively located." The Circuit Court interpreted "located" to mean any state where the bank has a branch location. Noting that the statute uses both "located" and "established" to refer to the presence of a bank, the Circuit Court determined that a national bank is "established" in the state where its main office is located, and "located" in every state where it has a branch office. Therefore, under the Fourth Circuit's reasoning, Wachovia was "located" in, and a citizen of, South Carolina (as well as several other states with branch offices). Since both parties, Schmidt and Wachovia, had South Carolina citizenship, the Circuit Court dismissed the case for lack of diversity jurisdiction.…