Plaintiff bank, incorporated under the laws of the state of Hawaii, brought an action in the United States District Court for the District of Hawaii against defendants, residents and citizens of the Republic of the Marshall Islands (RMI). One of the defendants, Imata Kabua, moved to dismiss the complaint for lack of subject matter jurisdiction on the ground that diversity of citizenship did not exist because defendants were not citizens of a “foreign state” within the meaning of 28 U.S.C. §1332(a)(2). The district court (per King, J.) denied the motion and held that diversity jurisdiction exists because the RMI, although technically retaining membership in the Trust Territory of the Pacific Islands (TTPI), has de facto become a foreign state.
