in brief: Ninth Circuit clarifies the Tosco "substantial predominance" test for corporate operations in Davis v. HSBC Bank Nevada, N.A., et al.

Ninth Circuit SealIf you spend any time litigating class actions, CAFA almost guarantees that some of that time will be spent in federal court. Thus, the citizenship of the defendant(s) is a significant issue. In Davis v. HSBC Bank Nevada, N.A., et al. (February 26, 2009), the Ninth Circuit interpreted and limited the “substantial predominance” analysis for the “principal place of business” test, as it was described in Tosco Corp. v. Communities for a Better Env't, 236 F.3d 495 (9th Cir. 2001). In brief, the Court held that the “substantial predominance” of activities is tested against national activities, not the next largest state, but a per-capita analysis is not required.