In the 1939 case Colorado National Bank of Denver v. Bedford, the U.S Supreme Court was tasked with deciding whether a national bank could be sued in a state where it is not located but does business. The plaintiff, Bedford, had filed suit against Colorado National Bank of Denver in Missouri courts for alleged breach of contract and negligence related to securities transactions. The bank argued that under federal law (specifically section 24 of Judicial Code), it could only be sued in the district or county where it was established - which was Colorado. The court ruled unanimously in favor of the bank stating that national banks are "federal instrumentalities" created for public purposes and their activities should not be impeded by suits brought outside their home states unless Congress explicitly allows such actions. This decision reinforced previous rulings limiting jurisdiction over nationally chartered banks to their home states.

The dissenting opinion in the case of Colorado National Bank of Denver v. Bedford argued that the majority's decision was an overreach and misinterpretation of federal jurisdiction, particularly regarding diversity cases. The dissent emphasized that a national bank is not a citizen within the meaning of U.S Constitution Article III, Section 2 or Judiciary Act Section 24; hence it cannot be treated as such for purposes of determining diversity jurisdiction. They contended that Congress did not intend to extend federal court access to national banks beyond what is granted to state banks and corporations when they enacted Revised Statutes § 1348 (28 USC § 1348). Therefore, according to them, treating national banks as citizens would unjustifiably expand their rights while potentially limiting those of other entities. This could lead to unfair advantages in litigation for national banks at the expense others' right to fair trial.